” Congressional Record UN UM E PLURIBUS United States of America PROCEEDINGS AND DEBATES OF THE 104th CONGRESS, SECOND SESSION b This symbol represents the time of day during the House proceedings, e.g., b 1407 is 2:07 p.m. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. H9379 House of Representatives Vol. 142 WASHINGTON, WEDNESDAY, JULY 31, 1996 No. 115 The House met at 10 a.m. and was called to order by the Speaker pro tem- pore [Mr. HEFLEY]. f DESIGNATION OF THE SPEAKER PRO TEMPORE The SPEAKER pro tempore laid be- fore the House the following commu- nication from the Speaker: WASHINGTON, DC, July 31, 1996. I hereby designate the Honorable JOEL HEFLEY to act as Speaker pro tempore on this day. NEWT GINGRICH, Speaker of the House of Representatives. f PRAYER The Chaplain, Rev. James David Ford, D.D., offered the following pray- er: As the rain waters the grass and the crops bring forth their fruit, and the light of the Sun makes clear the path and Your Spirit, O God, flows from on high, so nourish our spirits and make clear our path this day. Without Your light, O gracious God, and without the nurture of Your abiding presence, how will we know the way and the truth. So we pray, O God, that Your blessings will abound in our hearts and minds and spirits that we will be Your people and do those good things that honor You and serve people in their need. This is our earnest prayer. Amen. f THE JOURNAL The SPEAKER pro tempore. The Chair has examined the Journal of the last day’s proceedings and announces to the House his approval thereof. Pursuant to clause 1, rule I, the Jour- nal stands approved. Mrs. SCHROEDER. Mr. Speaker, pur- suant to clause 1, rule I, I demand a vote on agreeing to the Speaker’s ap- proval of the Journal. The SPEAKER pro tempore. The question is on the Chair’s approval of the Journal. The question was taken; and the Speaker pro tempore announced that the ayes appeared to have it. Mrs. SCHROEDER. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present. The SPEAKER pro tempore. Evi- dently a quorum is not present. The Sergeant at Arms will notify ab- sent Members. The vote was taken by electronic de- vice, and there were\u2014yeas 302, nays 85, answered ”present” 1, not voting 45, as follows: [Roll No. 373] YEAS\u2014302 Allard Andrews Archer Armey Bachus Baesler Baker (CA) Baker (LA) Ballenger Barcia Barr Barrett (NE) Barrett (WI) Bartlett Barton Bass Bateman Beilenson Bentsen Bereuter Berman Bevill Bilbray Bilirakis Bishop Bliley Blumenauer Blute Boehlert Boehner Bonilla Borski Boucher Brewster Browder Bryant (TN) Bryant (TX) Bunning Burr Buyer Callahan Calvert Camp Campbell Canady Cardin Castle Chabot Chambliss Chenoweth Christensen Chrysler Clement Clinger Coble Coburn Collins (GA) Combest Condit Conyers Cooley Cox Cramer Crane Crapo Cremeans Cubin Cummings Cunningham Danner Davis de la Garza DeLay Dellums Deutsch Dickey Dicks Dingell Dixon Doggett Dooley Doolittle Dreier Duncan Dunn Edwards Ehlers Ehrlich Eshoo Ewing Farr Fawell Fields (LA) Fields (TX) Flanagan Foley Forbes Fowler Franks (CT) Franks (NJ) Frelinghuysen Frisa Frost Furse Gallegly Ganske Gejdenson Gekas Gilchrest Gilman Goodlatte Goodling Gordon Goss Graham Greene (UT) Greenwood Hall (TX) Hamilton Hancock Hansen Hastert Hastings (WA) Hayes Hayworth Hefley Herger Hobson Hoekstra Hoke Holden Hostettler Houghton Hoyer Hyde Inglis Jackson-Lee (TX) Johnson (CT) Johnson (SD) Johnson, E. B. Johnson, Sam Johnston Kaptur Kasich Kelly Kennedy (MA) Kennelly Kildee Kim King Kingston Kleczka Klink Klug Knollenberg Kolbe LaHood Lantos Largent LaTourette Laughlin Lazio Leach Lewis (CA) Lightfoot Linder Lipinski LoBiondo Lofgren Lucas Luther Manton Manzullo Markey Martinez Martini Mascara Matsui McCarthy McCollum McHale McHugh McInnis McIntosh McKeon McKinney Meek Metcalf Meyers Mica Millender- McDonald Miller (CA) Miller (FL) Minge Mink Moakley Molinari Mollohan Montgomery Morella Murtha Myers Myrick Nadler Nethercutt Neumann Ney Norwood Nussle Obey Olver Orton Owens Oxley Packard Parker Pastor Paxon Payne (VA) Peterson (FL) Peterson (MN) Petri Porter Portman Pryce Quillen Quinn Radanovich Rahall Rangel Reed Regula Rivers Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Roukema Roybal-Allard Royce Salmon Sanford Sawyer Saxton Scarborough Schaefer Schiff Schumer Seastrand Sensenbrenner Shadegg Shaw Shays Shuster Skeen Skelton Slaughter Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Souder Spence Stark Stearns Stenholm Stokes Studds Stump Stupak Tanner Tate Tauzin Tejeda Thomas Thornberry Thornton Thurman Tiahrt Torres Towns Traficant Upton Velazquez Vucanovich Walker Walsh Wamp Watt (NC) Waxman Weldon (FL) Weldon (PA) White Whitfield CONGRESSIONAL RECORD \u2014 HOUSEH9380 July 31, 1996 Wicker Williams Wilson Woolsey Wynn Zeliff NAYS\u201485 Abercrombie Baldacci Becerra Bonior Brown (CA) Brown (FL) Brown (OH) Bunn Clay Clyburn Collins (IL) Costello Deal DeFazio DeLauro Doyle Durbin English Ensign Evans Everett Fattah Fazio Filner Foglietta Fox Funderburk Gephardt Geren Gibbons Green (TX) Gutierrez Gutknecht Hall (OH) Hastings (FL) Hefner Heineman Hilliard Hinchey Hutchinson Jackson (IL) Jacobs Jefferson Jones Kennedy (RI) LaFalce Latham Levin Lewis (GA) Lewis (KY) Lowey Maloney McDermott McNulty Menendez Neal Oberstar Pallone Payne (NJ) Pickett Pomeroy Poshard Ramstad Rose Rush Sabo Sanders Schroeder Scott Skaggs Stockman Taylor (MS) Thompson Torkildsen Vento Visclosky Volkmer Ward Waters Watts (OK) Weller Wise Wolf Yates Zimmer ANSWERED ”PRESENT”\u20141 Harman NOT VOTING\u201445 Ackerman Bono Brownback Burton Chapman Clayton Coleman Collins (MI) Coyne Diaz-Balart Dornan Engel Flake Ford Frank (MA) Gillmor Gonzalez Gunderson Hilleary Horn Hunter Istook Kanjorski Lincoln Livingston Longley McCrery McDade Meehan Moorhead Moran Ortiz Pelosi Pombo Richardson Riggs Roth Serrano Sisisky Spratt Talent Taylor (NC) Torricelli Young (AK) Young (FL) b 1021 So the Journal was approved. The result of the vote was announced as above recorded. f PLEDGE OF ALLEGIANCE The SPEAKER pro tempore (Mr. HEFLEY). Will the gentleman from Ohio [Mr. CHABOT] come forward and lead the House in the Pledge of Allegiance. Mr. CHABOT led the Pledge of Alle- giance as follows: I pledge allegiance to the Flag of the United States of America, and to the Repub- lic for which it stands, one nation under God, indivisible, with liberty and justice for all. f MESSAGE FROM THE SENATE A message from the Senate by Mr. Lundregan, one of its clerks, an- nounced that the Senate had passed without amendment a bill of the House of the following title: H.R. 3663. An act to amend the District of Columbia Self-Government and Govern- mental Reorganization Act to permit the Council of the District of Columbia to au- thorize the issuance of revenue bonds with respect to water and sewer facilities, and for other purposes. The message also announced that the Senate had passed, with an amendment in which the concurrence of the House is requested, a bill of the House of the following title: H.R. 3816. An act making appropriations for energy and water development for the fis- cal year ending September 30, 1997, and for other purposes. The message also announced that the Senate insists upon its amendment to the bill (H.R. 3816) ”An act making ap- propriations for energy and water de- velopment for the fiscal year ending September 30, 1997, and for other pur- poses,” requests a conference with the House on the disagreeing votes of the two Houses thereon, and appoints Mr. DOMENICI, Mr. HATFIELD, Mr. COCHRAN, Mr. GORTON, Mr. MCCONNELL, Mr. BEN- NETT, Mr. BURNS, Mr. JOHNSTON, Mr. BYRD, Mr. HOLLINGS, Mr. REID, Mr. KERREY, and Mrs. MURRAY to be con- ferees on the part of the Senate. The message also announced that the Senate disagrees to the amendments of the House to the bill (S. 1260) ”An act to reform and consolidate the public and assisted housing programs of the United States, and to redirect primary responsibility for these programs from the Federal Government to States and localities, and for other purposes,” agrees to a conference asked by the House of Representatives on the dis- agreeing votes of the two Houses there- on, and appoints Mr. D’AMATO, Mr. MACK, Mr. FAIRCLOTH, Mr. BOND, Mr. SARBANES, Mr. KERRY, and Ms. MOSELEY-BRAUN to be the conferees on the part of the Senate. f PERSONAL EXPLANATION Mr. NADLER. Mr. Speaker, on roll- call vote 359 I was incorrectly recorded as voting ”no.” I intended to vote ”aye.” f ANNOUNCEMENT BY THE SPEAKER PRO TEMPORE The SPEAKER pro tempore. The Chair will entertain fifteen 1-minutes per side. f REFORM WELFARE NOW (Mr. CHABOT asked and was given permission to address the House for 1 minute.) Mr. CHABOT. Mr. Speaker, in 1992, Bill Clinton portrayed himself as a new Democrat. One of the things that was supposed to set him apart from the old Democrats was the belief shared by many people of goodwill that the wel- fare system was a mess, that it was broken and needed to be fixed. After two vetoes, we are now told that Bill Clinton may finally be pre- pared to sign a welfare reform package. If that is true, it is a very positive de- velopment. America needs, no, Ameri- cans demand serious, genuine welfare reform, and I frankly do not care who gets the credit. I do not care if it is the Republican Party or the new Demo- crats or the old Democrats or the blue dogs or the yellow dogs or the man on the moon. That part of it does not mat- ter and does not change the fact that we desperately need to change welfare so that it honors family and it honors work. Mr. Speaker, reforming welfare is the right thing to do, it is the com- monsense thing to do, and I say let us get it done now, no matter who gets credit for it. f COMMEMORATING THE F 111 (Mr. PETE GEREN of Texas asked and was given permission to address the House for 1 minute.) Mr. PETE GEREN of Texas. Mr. Speaker, I rise to commemorate the end of an era in U.S. aviation history. This past weekend at a ceremony in Fort Worth, TX, the F 111 was retired and officially named the ”Aardvark,” the nickname given it by the pilots that flew it. This ceremony commemo- rated the accomplishments of this great aircraft from its first flight in 1964 to its honorable service in the gulf war and its revolutionary impact on military aviation technology around the world. The F 111 served this Nation in the war in Vietnam, the bombing of terror- ist targets in Libya, and during Oper- ation Desert Storm. In November 1966, the F 111 set a record for the longest low-level supersonic flight, and it was the first tactical aircraft to fly across the Atlantic Ocean without refueling. Additionally, the F 111 was the first plane equipped with swing wing tech- nology that allowed it to take off and land on a short 2,000-foot runway while still being able to reach supersonic speeds at a variety of altitudes with wings swept back. Mr. Speaker and my colleagues, join me in celebrating the men and women who built this great aircraft, a bird that served our Nation and the free world for over 30 years and now takes its place among other great Texas built military aircraft like the B 24 Lib- erator and the B 58 Hustler. f PRESIDENT SHOULD SIGN WELFARE REFORM BILL (Mr. CHRYSLER asked and was given permission to address the House for 1 minute.) Mr. CHRYSLER. Mr. Speaker, wel- fare cases in Michigan are down signifi- cantly, but more importantly, parents are working to provide for their own families in setting examples for their children to follow. Currently the State of Michigan is waiting on 76 additional waivers from the President to fully im- plement their welfare plan. The enactment of the Personal Re- sponsibility and Work Opportunity Act would largely end the need for these waivers and allow Michigan to proceed with their reforms, truly helping the disabled and the people that need our help in restoring the basic human dig- nity and pride that comes from bring- ing home a paycheck and providing care for your family. However, if the President fails to ap- prove these reforms for the third time, it is the children who will suffer and CONGRESSIONAL RECORD \u2014 HOUSE H9381July 31, 1996 these children should not be left hos- tage any longer to elected officials breaking their promises. Mr. Speaker, I urge the President to sign the welfare reform today and truly end welfare as we know it. f PRESIDENTIAL CANDIDATES SHOULD FOCUS ON REAL IS- SUES, NOT NEGATIVE CAMPAIGN ADS (Mr. SANDERS asked and was given permission to address the House for 1 minute.) Mr. SANDERS. Mr. Speaker, at a time when this country has the lowest voter turnout of any major country and millions of Americans are giving up on the political process, it is imper- ative that the presidential candidates in this election focus their attention on the real issues facing the middle class and the working families and not devote their energy to negative 30-sec- ond television ads. b 1030 This country has some terribly seri- ous problems, and the American people want to hear those problems discussed. For example, why does this Nation have the most unfair distribution of wealth and income of all industrialized nations on Earth? Why is the gap be- tween the rich and the poor growing wider while the middle class continues to shrink? What do we do to reverse the trend by which real wages for working people continue to decline and today are 16 percent less than they were 20 years ago with workers now working longer and longer hours just to provide for their families? What do we do about the reality that most of the new jobs that are being created are poverty level jobs? Let us talk about the real issues. f CHILDREN ARE WAITING FOR WELFARE REFORM (Mr. BARTLETT of Maryland asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) Mr. BARTLETT of Maryland. Mr. Speaker, how much longer should America wait before we rescue the mil- lions of children who are trapped in poverty by the current welfare system? Shouldn’t we be encouraging work, marriage, and family instead of dis- couraging them? How many more children, commu- nities, and cities must we lose to pov- erty and violence before we say enough is enough? When it comes to welfare reform, President Clinton has become the maybe man. Maybe he’ll end welfare as we know it and maybe he won’t. Should we trust what the President has said? Or should we judge the President by what he’s done? The President’s record on welfare is two vetoes and delays and denials of waivers for States to pursue innovative solutions. This week Congress will pass welfare reform for the third time. Will the third time prove the charm . . . or will the President strike out? The children are waiting. f A NEW WAR ON TERRORISM (Mrs. SCHROEDER asked and was given permission to address the House for 1 minute and to revise and extend her remarks.) Mrs. SCHROEDER. Mr. Speaker, America’s communities are being ter- rorized by lunatics. Our law enforce- ment officers are the ones who are on the front line trying to bring back some tranquility to America’s public places. Our law enforcement officers today look like Wyatt Earp. They real- ly do not have any more technology than Wyatt Earp had except they have a car instead of a horse. We could fix that. We have all sorts of cold war tech- nology taxpayers have paid for that should be opened up to law enforce- ment and move out there so we fight crime much smarter. If we could trace everything in the world, we ought to be able to trace explosives, and we know how to trace explosives. It is outrageous that this Congress might think about going home before we deal with this issue. One of the pri- mary reasons for the Congress, accord- ing to the Constitution, is to deal with the domestic tranquility. Let us deal with that before we adjourn. Let us open up that wonderful storehouse of research and development that we have paid for for the cold war for this new war on terrorism. f COMMONSENSE WELFARE REFORM (Mrs. SEASTRAND asked and was given permission to address the House for 1 minute and to revise and extend her remarks.) Mrs. SEASTRAND. Mr. Speaker, when President Bill Clinton says that the welfare system is broken, he’s ab- solutely right. Every year, the Govern- ment spends more and more money on welfare. Today, Government spends 1,600 per- cent more on welfare than they did in 1950 while the population of this coun- try has only increased 72 percent. Mr. Speaker, it all boils down to common sense. Common sense tells us that welfare has been a colossal failure\u2014as Presi- dent Clinton says, the system is bro- ken. Common sense also tells that money is simply not the answer\u2014wel- fare may give people money but it takes away something far more pre- cious. It is now time for this Government to exercise a little common sense of its own. Congress will soon give the Presi- dent a genuine welfare reform package. It is real; it is common sense; and it honors the basic values of work, fam- ily, and personal responsibility. We hope that Bill Clinton will do the right thing and sign commonsense wel- fare reform. f THE ISSUE OF TERRORISM (Mr. PALLONE asked and was given permission to address the House for 1 minute.) Mr. PALLONE. Mr. Speaker, this Friday Congress is scheduled to go into recess, but I do not think we should be recessing unless we address or until we address the issue of terrorism. I have to tell you that right now my constitu- ents in the phone calls to my office are overwhelming that people are con- cerned and want the Congress and the President to get together on a biparti- san basis to address the issue. It is not something that is just in other countries now. Clearly, because of the TWA crash, because of the explo- sion in Atlanta at the Olympics, people feel, and I think rightly so, that they cannot be safe and that we need to ad- dress the issue of terrorism. Basically, the President this week convened a bipartisan leadership meet- ing to discuss the steps that are nec- essary to fight against terrorism. As was mentioned by some of the previous speakers, we do have certain tools at hand which we really have not used and we can use on the Federal basis to try to get at the problem. Mentioned was the expanding the power to use wire tapping, also certain tracers or taggants, as they are called in explosives. These things need to be addressed, and we have to do them be- fore we recess. f THE WELFARE REFORM BILL (Mr. DUNCAN asked and was given permission to address the House for 1 minute and to revise and extend his re- marks.) Mr. DUNCAN. Mr. Speaker, last night, each Member had the August 12 issue of the New Republic delivered to our offices. As everyone knows, the New Repub- lic is a very liberal magazine. Yet this magazine had a lead edi- torial entitled ”Sign It,” urging the President to sign the welfare reform bill. The President earlier vetoed a wel- fare reform bill that passed the Senate 87 to 12. The current bill passed the Senate 74 to 24 and passed by a very large margin in this House. The New Republic says this bill ”will, finally, start the process by which America’s underclass problem can be solved.” The editors said the block grant structure of this bill ”is likely to point the way to ending the ‘culture of pov- erty.’ ” This is a really significant endorse- ment, Mr. Speaker. CONGRESSIONAL RECORD \u2014 HOUSEH9382 July 31, 1996 The New Republic ended its editorial with these words: The continuing agony of the underclass is destroying our cities, our race relations, our sense of civility, our faith in the possibilities of government. It’s worth taking some risks to end it. I urge the President to sign the wel- fare reform bill. f TERRORISM (Mr. DURBIN asked and was given permission to address the House for 1 minute and to revise and extend his re- marks.) Mr. DURBIN. Mr. Speaker, the image of terrorism are ingrained in our minds. What was often seen as someone else’s problem is now our problem. If America is being terrorized with- out and within, this Congress should not be terrorized by special interest groups opposed to legislation which would protect us. When Congress passed its antiterrorism bill, the gun lobby opposed a provision which would have required tracer particles in explo- sives so that law enforcement could track the source of terrorist bombs. Sadly, more than 200 Members of Con- gress bowed to the NRA and voted to deny the FBI this important tool to fight terrorism. Now we are being asked to pass addi- tional antiterrorism legislation in light of the recent tragedies. But the gun lobby has once again made it clear that it will oppose any effort to put tracers in explosives. As America would not be intimidated by terrorists, this Congress should not be intimidated by the gun lobby. Be- fore we go home this week, let us pass an antiterrorism bill that will protect American families, not protect special interest groups. f LEGITIMATE WELFARE REFORM (Mr. ENSIGN asked and was given permission to address the House for 1 minute and to revise and extend his re- marks.) Mr. ENSIGN. Mr. Speaker, using common sense, would we set up a wel- fare system that told a pregnant teen- age mom, Listen, do not live with your parents; we will get you an apartment; do not get a job; do not save any money; you can have any man live with you except for the father of the child and, by the way, if you want more money, have another child out of wedlock? Let us put party politics aside here. Let us let the American people win for the first time in a long time. Let us pass this legitimate welfare reform bill that we have on the House floor today. If you are an able-bodied American, you are going to be required to work. We are going to provide child care money for you to transition from wel- fare to work, and we are going to pro- vide job training. We have a program in Las Vegas called Opportunity Village. It is a pro- gram for mentally disabled people. We have enough compassion in Las Vegas to help people that are mentally dis- abled get into a job. Let us have enough compassion on welfare recipi- ents to help them get into a job. f THE NRA (Mr. MILLER of California asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) Mr. MILLER of California. Mr. Speaker, if you are involved in a hit- and-run accident today, the police can trace the paint on your car to the exact day it was painted, to where it was painted, to the gallon of paint used and where that car was sold and who owns it. Today if you use your phone in the commission of a crime, they can trace your calls back to that. But if you blow up the World Trade Center or you blow up the TWA airline or you blow up the park in Atlanta, the NRA will not let them trace the powder in those explo- sives back to the point of purchase and manufacture to expedite the investiga- tion of who those people were that en- gaged in this terrorism against Amer- ican cities and against American citi- zens. That is an outrage. A few months ago, 200 Members in this Congress voted to deny the alco- hol, tobacco bureau the efforts to make that investigation, the FBI to make those investigations. We should now understand that these tools should be available to the FBI. They should be available to the alcohol, tobacco bu- reau. They should be available for the investigation to protect American lives. f PRESIDENT CLINTON ON WELFARE REFORM (Mr. BAKER of California asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) Mr. BAKER of California. Mr. Speak- er, speaking to the National Governor’s Association 2 weeks ago, Bill Clinton sounded like a Republican. He talked about getting tough on irresponsible fathers; he talked about cutting red- tape; he talked about work; he talked about strong families; he even talked about imposing time limits on welfare benefits. This week, Congress will send the White House the third welfare reform bill that addresses all the concerns raised by the President. It will have real work requirements and real time limits. It is genuine welfare reform; it is common sense; and it will move peo- ple from dependence to work and inde- pendence. As Bill Clinton said in one of his radio addresses: ”No challenge is more important than replacing our broker welfare system.” Mr. Speaker, he’s right. But changing something as big and as entrenched as the welfare sys- tem requires commitment, it requires honesty, and it requires that politi- cians keep their promises. We can only hope Bill Clinton will do the right thing and sign the bill. f A POLITICAL ANSWER TO TERRORISM (Mr. SCHUMER asked and was given permission to address the House for 1 minute and to revise and extend his re- marks.) Mr. SCHUMER. Mr. Speaker, the No. 1 question I was asked when I talked to my constituents on the phone last night and this morning is, why the heck would anyone oppose putting taggants, little tracers in explosives so that we can find those who commit ter- rorism. There is no good answer. There is no good substantive answer. There is a po- litical answer. The reason this House is not going to address the issue of putting taggants, tracers explosives is three letters: NRA. We all know it is the right thing to do. In fact, at all the hearings our com- mittee held, there were only two groups of people who were against put- ting these taggants in explosives. Those were either explosive manufac- turers or the gun lobby. But the NRA is making a serious mistake here. The average gun owner does not agree with it. The average gun owner, who has a few hunting rifles or, in the city, carries a gun around for self-de- fense, they do not see that it is the NRA’s business that explosives are tagged so we can find terrorists. Congress, get with it. Stand up to the NRA and let our law enforcement be able to trace explosives with taggants. f GENUINE WELFARE REFORM (Mr. BALLENGER asked and was given permission to address the House for 1 minute.) Mr. BALLENGER. Mr. Speaker, lib- eral Democrats love to portray them- selves as the great champions of Amer- ica’s children. The President has even threatened to veto welfare reform for the third time unless, and I quote, it ”protects children.” For the last year, Bill Clinton has stood in the way of genuine welfare re- form. He seems incapable of showing any determined leadership on any of the pressing social or economic issues facing this Nation. When he does act, he always hides behind children or some other alleged victim. If Bill Clinton were truly concerned about children and those in need, he would have kept the promises he made in his campaign. He would have kept his promise to end welfare as we know it. He would have kept his promise to balance the budget in 5 years. The list of broken promises goes on and on. The children of America don’t need pandering they need a President who is willing to stand by his word, do the CONGRESSIONAL RECORD \u2014 HOUSE H9383July 31, 1996 right thing, and sign commonsense welfare reform. f THE SPIRIT OF THE OLYMPICS (Mr. LEWIS of Georgia asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) Mr. LEWIS of Georgia. Mr. Speaker, yesterday I attended the reopening of the Olympic Centennial Park in At- lanta. Tens of thousands of people, from all over the country and the world, turned out for a memorial serv- ice in honor of those killed and injured in the bomb blast that exploded early Saturday morning, shattering the tran- quility of the Olympic games. They also turned out to demonstrate that they will not bow to the fear and in- timidation of terrorism. Mr. Speaker, the Olympic games rep- resent the best of the human spirit, and in many ways the response of the people in Atlanta to this vicious act truly represented the Olympic spirit. Yesterday, the people of Atlanta, of Georgia, of our Nation, and the world came together in prayer and solidarity. It was a beautiful and moving experi- ence to be in a crowd representing the true brotherhood of nations. Mr. Speaker, I want to take this op- portunity to commend the many people who acted heroically in the wake of this terrorist attack: the medical per- sonnel, the law enforcement officials and the thousands of volunteers who averted an even greater disaster. Make no mistake, Mr. Speaker, the person who carried out this hideous crime will be found and prosecuted to the full extent of the law. In the mean- time, we in the Congress should do ev- erything in our power to pass legisla- tion that will protect our citizens from such attacks in the future. f b 1045 WELFARE SHOULD NOT BE A WAY OF LIFE (Mr. BASS asked and was given per- mission to address the House for 1 minute and to revise and extend his re- marks.) Mr. BASS. Mr. Speaker, between 1965 and 1994 $5.4 trillion has been spent on welfare. Federal, State, and local wel- fare spending rose from $158 billion in 1975 to $324 billion in 1993. Now, my colleagues may think that welfare is thought of as providing short-term relief. Well, the fact is that the average stay on welfare today is 13 years. Now, since 1950 the population of the United States has increased 72 percent, from 151 million to 260 million. At the same time, total welfare spending by Federal, State, and local governments has increased by 1,623 percent. Mr. Speaker, today the House will pass a historic welfare reform bill that requires work and personal responsibil- ity and lifts families from lives of de- spair and hopelessness. Mr. Speaker, welfare should not be a way of life. Commonsense welfare re- form will help end the vicious cycle of welfare dependency. Mr. Speaker, I urge the President to sign this historic welfare proposal. f LET US DO THE JOB RIGHT ON ANTITERRORISM LEGISLATION (Ms. MCKINNEY asked and was given permission to address the House for 1 minute.) Ms. MCKINNEY. Mr. Speaker, as a Member of Congress from the Metro- Atlanta area I, like the rest of the Na- tion, was horrified by the senseless bombing of innocent civilians at the Olympic Park. As Americans, we have had a false sense of security that we are somehow immune to terrorism on our soil. How- ever, Mr. Speaker, we have always had terrorist acts committed against Americans in the United States\u2014we just did not call it terrorism. Whether it was lynchings, church burnings, abortion clinic bombings, and now attacks by antigovernment groups, terrorism has, unfortunately, always been with us. Mr. Speaker, it is time now that we dealt with all terrorist acts head on. Although the House passed the Presi- dent’s antiterrorism bill, it was wa- tered-down to the point where it is al- most ineffectual. Now we have an opportunity to re- introduce the antiterrorism tools stripped from the legislation. Let us do the job right this time. f THIS IS THE SPIRIT OF THE OLYMPICS (Mr. MANZULLO asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) Mr. MANZULLO. Mr. Speaker, Theo- dore Roosevelt once said the credit be- longs to the one who is actually in the arena and who spends time in a worthy cause. This is the spirit of the Olym- pics. Shining examples of this indomitable spirit are Judy Wilmarth from Leaf River, IL, and Stephanie Brooks from Algonquin, IL. Judy helped carry the Olympic torch in Illinois, chosen be- cause of her devotion to service to the needy and distribution of food. Four- teen-year old Stephanie Brooks is com- peting in the Paralympics in Atlanta. She is qualified for the 50- and the 100- meter free style and the 50-meter but- terfly swimming events. She competes in these games as an elite athlete. These accomplishments stand in the face of the fact that Stephanie was born with spina bifida which has caused her to lose the use of her legs. Mr. Speaker, let me take this oppor- tunity to salute these two Olympic champions: Judy Wilmarth and Steph- anie Brooks. FOLLOWING THE ORDERS OF THE NATIONAL RIFLE ASSOCIATION MUST STOP (Mrs. LOWEY asked and was given permission to address the House for 1 minute and to revise and extend her re- marks.) Mrs. LOWEY. Mr. Speaker, it is time to give law enforcement officials the tools they need to prevent terrorist at- tacks in America. The Republican lead- ership must schedule a vote imme- diately on stronger measures to fight terrorism. These proposals\u2014requiring taggants in explosives and enhanced wiretapping authority\u2014are absolutely critical in the war against terrorism. These provisions should already be law, but were dropped from the original antiterrorism bill that Congress passed earlier this year. They were dropped because this Re- publican Congress followed the orders of the National Rifle Association and took them out. That was unacceptable then and it is unacceptable now. Speaker GINGRICH must not allow the NRA to hold up swift passage of tough antiterrorism legislation. The Repub- lican leadership must choose the safety and welfare of the American people over the objections of the NRA. This Republican Congress has spent the last 17 months following the orders of the NRA and it must stop. Congress must take a united stand against terrorism both foreign and do- mestic now. We must make it very clear that we will use all the resources at our disposal to prevent and punish acts of terror. f NOT ONE LOGICAL REASON FOR THE PRESIDENT NOT TO SIGN CONGRESS’ THIRD WELFARE RE- FORM BILL (Mr. SMITH of Texas asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) Mr. SMITH of Texas. Mr. Speaker, our children are our country’s most precious resource. They are the hope of the future. But today many children will grow up in a cycle of poverty and dependence, and that is a tragedy, Mr. Speaker. Many of us came to Congress on a promise to do something about the failed welfare state. We want to end de- pendency, we want to encourage per- sonal responsibility, we want to honor work so that welfare does not become a way of life. President Clinton has already vetoed two welfare reform bills despite the promise during his campaign to, ”end welfare as we know it.” the jury is still out on whether or not the President will sign Congress’ third effort to re- form the welfare system. Personally, I cannot imagine one logical reason why Mr. Clinton would not sign the current bill. CONGRESSIONAL RECORD \u2014 HOUSEH9384 July 31, 1996 Mr. Speaker, it is a good bill. It is based on common sense. It honors work, family, and personal responsibil- ity. f WE MUST NOT LEAVE FOR AU- GUST RECESS WITHOUT PROVID- ING ANTITERRORISM LEGISLA- TION (Ms. DELAURO asked and was given permission to address the House for 1 minute and to revise and extend her re- marks.) Ms. DELAURO. Mr. Speaker, I was in Atlanta this past weekend, and I felt the aftershocks of the pipe bomb explo- sion in Centennial Park. The true spir- it of the games, the athletes, and the spectators shone through, and every- one agreed that the games must go on and that we should not bow to hostile acts of terror; but people also felt equally strongly that Congress must act to prevent this violence. The American people do not feel safe, and part of that is because we are good at catching criminals after the fact, but we are not good at preventing them from acting. The American people want the Gov- ernment to have the tools that it needs to prevent these bombings. President Clinton has asked the Congress this week to act on much-needed antiterrorism proposals like putting tracers in explosives, in gunpowder, a tool that is needed to be able to pre- vent acts of terror; but the NRA is op- posed to these tracers. Their opposition is wrong. We cannot in good faith leave for the August recess without passing legisla- tion that will give the Federal Govern- ment the tools that it needs to stop terrorism in this country. We need and we must act in good faith. We must leave in August and provide people with the peace of mind that they need so that we can keep this country free of terrorism. f CONGRESS PROVIDED ANTITERRORISM RESOURCES; THE ADMINISTRATION SITS ON ITS HANDS (Mr. MICA asked and was given per- mission to address the House for 1 minute and to revise and extend his re- marks.) Mr. MICA. Mr. Speaker, I was abso- lutely astounded this morning to learn that this administration was provided $80 million within the last 2 years to establish a terrorism center, and it has sat on its hands for the last 24 months and not done anything to institute ac- tion against terrorism. This Congress has already provided resources; this ad- ministration has not done a thing about this. I was stunned to find this out. Now, the FBI can find time and re- sources to hand over and provide files on Republicans. The FBI, as I learned in shock last weekend when the gen- tleman from Pennsylvania [Mr. CLINGER] came to the floor, can send agents to harass our witnesses in con- gressional hearings, but they cannot find the time and the resources that this Congress gave them to fight ter- rorism. We must act together to fight terror- ism and we have provided the re- sources. f WE SHOULD NOT RECESS UNTIL WE ACT ON TERRORISM (Mrs. MALONEY asked and was given permission to address the House for 1 minute and to revise and extend her re- marks.) Mrs. MALONEY. Mr. Speaker, do- mestic terrorism is becoming the greatest threat to our domestic tran- quility. It marred the Olympics, it hor- rified us in Oklahoma City and with the World Trade Center, and it may have destroyed TWA Flight 800. That tragedy touched me deeply and personally. Three nights before the tragedy I spent the evening with my neighbor and friend Judith Connelly Delouvier, who was on that flight. Three days later she was dead. She will never see her two children and husband again. Her family deserves action now. We should not recess until we take legisla- tive action on tracing explosives; we must take on the NRA; we must work on programmatic changes. Mr. Speaker, we should not recess until we act on terrorism. We cannot wait until September. f IN FIGHTING ANTITERRORISM WE MUST ALSO PROTECT OUR CIVIL LIBERTIES (Mr. MCINTOSH asked and was given permission to address the House for 1 minute and to revise and extend his re- marks.) Mr. MCINTOSH. Mr. Speaker, let me rise and say I agree we need to take ac- tion in order to address antiterrorism in this country. We have all been horri- fied by the bombing at the Olympics and among our civil aeronautics. I want to urge the President to go ahead and spend that $80 million and build the antiterrorism center at the FBI so that Americans can be safer in our travel. Second, we need to also protect civil liberties in this country, and I am troubled by President Clinton’s request for secret wiretap authority. As my colleagues know when the President has 900 FBI files in the White House basement on his political opponents and still refuses to release the list of 200,000 Americans that he keeps track of in his big brother database, I am not sure that we can trust him with more authority to wiretap Americans who may be innocent of any crime. We need to work to fight terrorism, but we also need to protect civil lib- erties in this country and make sure that we are not giving our Government authority to harass innocent Ameri- cans. SUPPORT H.R. 43, THE BOMBING PREVENTION ACT (Ms. SLAUGHTER asked and was given permission to address the House for 1 minute and to revise and extend her remarks.) Ms. SLAUGHTER. Mr. Speaker, the United States suffered a terrible loss with the recent bombing in Centennial Park in Atlanta. We lost our innocence and our faith it will never happen here. It is becoming increasingly probable that black or smokeless powder was in- volved in the construction of this dead- ly pipe bomb. I have introduced legislation during the last two Congresses that would help identify the perpetrators of this act. The Bombing Prevention Act, H.R. 43, would avert future deaths, save lives, and prevent families and our Na- tion as a whole from going through the anguish that terrorism leaves in its wake. Specifically, my bill would require every person who purchases explosives including more than five pounds of black or smokeless powder to hold a Federal permit. They would have to provide their name and address to the vendor, and indicate the purpose of the explosives purchase. This information would be invaluable to law enforce- ment officials investigating terrorism. Under current law, any purchase of less than 50 pounds of black powder is ex- empt from Federal oversight. This is crazy\u201450 pounds can unleash dreadful destruction. It would be a crime in itself if this Congress were to adjourn on Friday and go home without addressing this issue that has terrified every American from sea to shining sea. f ANTITERRORISM IS A BIPARTISAN MATTER (Mr. KINGSTON asked and was given permission to address the House for 1 minute and to revise and extend his re- marks.) Mr. KINGSTON. Mr. Speaker, as my colleagues know, last Friday I was on my way to Atlanta, and I was told to go see Tom Davis who was the FBI agent in charge of Centennial Park be- cause his father-in-law, Floyd Thaxton, works for us in our State’s Bureau of- fice. Well, needless to say something dramatically changed in the early hours of the morning, and I was unable to see Mr. Davis, who was one of the heroes and was injured by the bomb, but led the successful evacuation of many, many people. b 1100 Mr. Speaker, Mr. Davis is a hero to us. In his honor, I have to refute some of the things that are going on on this terrorism discussion today. I have the vote list on the terrorism bill, and many of the speakers today from the Democratic side voted against the only terrorism bill we had. To my knowledge, none of them of- fered amendments. There may have CONGRESSIONAL RECORD \u2014 HOUSE H9385July 31, 1996 been a few, but it is kind of interesting to hear these people talking about we need a terrorist bill by the end of the week, and yet they had their chance. For a year and a half we debated this, and most of them did not offer amend- ments. Just about all of them voted no. I have a copy of the vote list, it is kind of interesting, it is almost rollcall, from the people we have been hearing from. We have to work on a bipartisan basis. We want to continue working with the President. We want to solve this problem. We owe it to the Tom Davises of the world. f MEDICARE AND MEDICAID HAS DRASTICALLY REDUCED THE POVERTY RATE FOR AMERICA’S SENIOR CITIZENS (Mr. GENE GREEN of Texas asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) Mr. GENE GREEN of Texas. In quick response, Mr. Speaker, to my col- league, the gentleman from Georgia, he knows who controls the rules on the floor. If we could have submitted amendments we probably would, but the Committee on Rules typically has closed rules, and the gentleman’s col- league from Georgia prohibited them with his amendment, most of them. What I am really here to talk about this week, we are celebrating the 31st anniversary of Medicare. We are look- ing back on a time that has seen dras- tic reductions in the number of seniors in poverty. As a result of Medicare, the poverty rate among America’s senior citizens has dropped from 30 percent in 1966 to 12 percent in 1993. Before 1966 only 51 percent of American seniors had health insurance. Today, thanks to Medicare, 99 percent of America’s sen- iors have health car. This is a program that America needs, not only in 1965, but today and tomorrow. Contrary to sentiments ex- pressed by my Republican colleagues, Medicare should not be allowed to wither on the vine or be limited to pay for tax cuts, or, as one of our former colleagues said, ”I was there fighting the fight voting against Medicare, 1 out of 12, because we knew it would not work in 1965.” Celebrating Medicare’s 31st birthday this week, we as Democrats are taking actions to ensure its success in the fu- ture. f REQUEST FOR PERMISSION TO AD- DRESS THE HOUSE FOR 1 MINUTE AND TO USE EXHIBIT Mr. DOGGETT. Mr. Speaker, I ask unanimous consent to address the House 1 minute and for use of this chart. The SPEAKER pro tempore. Is there objection to the request of the gen- tleman from Texas? Mr. VOLKMER. Mr. Speaker, pursu- ant to rule XXX, I object to the gentle- man’s use of the exhibit. The SPEAKER pro tempore (Mr. HEFLEY). This objection is not debat- able. Pursuant to rule XXX, the question is: Shall the gentleman from Texas [Mr. DOGGETT] be permitted to use the exhibit? The question was taken; and the Speaker pro tempore announced that the noes appeared to have it. Mr. VOLKMER. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present. The SPEAKER pro tempore. Evi- dently a quorum is not present. The Sergeant at Arms will notify ab- sent Members. The vote was taken by electronic de- vice, and there were\u2014yeas 386, nays 28, answered ”present” 2, not voting 17, as follows: [Roll No. 374] YEAS\u2014386 Abercrombie Andrews Archer Armey Bachus Baesler Baker (CA) Baker (LA) Baldacci Ballenger Barcia Barr Barrett (NE) Barrett (WI) Bartlett Barton Bass Bateman Becerra Beilenson Bereuter Berman Bevill Bilbray Bilirakis Bishop Bliley Blumenauer Blute Boehlert Boehner Bonilla Bonior Bono Borski Boucher Brewster Browder Brown (CA) Brown (FL) Brown (OH) Brownback Bryant (TX) Bunn Burr Burton Calvert Camp Campbell Canady Cardin Castle Chabot Chambliss Chenoweth Christensen Chrysler Clay Clayton Clement Clinger Clyburn Coble Coburn Coleman Condit Conyers Cooley Costello Cox Coyne Cramer Crane Crapo Cremeans Cubin Cummings Cunningham Danner Davis de la Garza DeFazio DeLay Dellums Deutsch Diaz-Balart Dickey Dicks Dingell Dixon Doggett Dooley Doolittle Dornan Doyle Dreier Duncan Dunn Durbin Edwards Ehlers Ehrlich Engel English Ensign Eshoo Evans Farr Fattah Fawell Fazio Fields (LA) Fields (TX) Filner Flanagan Foglietta Foley Forbes Fowler Fox Frank (MA) Franks (CT) Franks (NJ) Frelinghuysen Frisa Frost Funderburk Furse Gallegly Ganske Gejdenson Gekas Gephardt Gibbons Gilchrest Gillmor Gilman Gonzalez Goodlatte Goodling Gordon Goss Graham Green (TX) Greenwood Gutierrez Gutknecht Hall (OH) Hall (TX) Hamilton Hancock Hansen Harman Hastings (FL) Hastings (WA) Hayes Hayworth Hefley Hefner Heineman Herger Hilliard Hinchey Hobson Hoekstra Holden Horn Hostettler Houghton Hoyer Hutchinson Hyde Inglis Istook Jackson (IL) Jackson-Lee (TX) Jacobs Jefferson Johnson (CT) Johnson (SD) Johnson, E. B. Johnson, Sam Johnston Jones Kanjorski Kaptur Kasich Kelly Kennedy (MA) Kennedy (RI) Kennelly Kildee Kim King Kingston Kleczka Klink Klug Knollenberg Kolbe LaFalce Lantos Largent Latham LaTourette Laughlin Leach Levin Lewis (CA) Lewis (GA) Linder Lipinski LoBiondo Lofgren Longley Lowey Lucas Luther Maloney Manton Manzullo Markey Martinez Martini Mascara Matsui McCarthy McCollum McCrery McDermott McHale McHugh McInnis McIntosh McKinney McNulty Meehan Meek Menendez Metcalf Meyers Mica Millender- McDonald Miller (CA) Miller (FL) Minge Mink Moakley Mollohan Montgomery Moorhead Moran Morella Myers Myrick Nadler Neal Nethercutt Ney Nussle Oberstar Obey Olver Ortiz Orton Owens Oxley Packard Pallone Parker Pastor Paxon Payne (NJ) Payne (VA) Pelosi Peterson (FL) Peterson (MN) Petri Pickett Pomeroy Porter Portman Poshard Pryce Quillen Quinn Radanovich Rahall Ramstad Rangel Reed Regula Rivers Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Rose Roukema Roybal-Allard Royce Rush Sabo Salmon Sanders Sanford Sawyer Saxton Scarborough Schiff Schroeder Schumer Scott Seastrand Sensenbrenner Serrano Shaw Shays Shuster Sisisky Skaggs Skeen Skelton Slaughter Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Spence Spratt Stark Stearns Stenholm Stockman Stokes Studds Stump Stupak Talent Tanner Tate Tauzin Taylor (MS) Taylor (NC) Tejeda Thomas Thompson Thornberry Thornton Thurman Tiahrt Torkildsen Torres Torricelli Towns Traficant Upton Velazquez Vento Visclosky Volkmer Vucanovich Walker Walsh Wamp Ward Waters Watt (NC) Watts (OK) Waxman Weldon (FL) Weldon (PA) White Whitfield Wicker Williams Wilson Wise Wolf Woolsey Wynn Yates Young (AK) Zeliff NAYS\u201428 Allard Bentsen Bryant (TN) Bunning Buyer Collins (GA) Combest Deal Everett Ewing Geren Greene (UT) Hastert Hilleary Lazio Lewis (KY) Lightfoot McKeon Molinari Murtha Neumann Norwood Pombo Schaefer Shadegg Souder Weller Zimmer ANSWERED ”PRESENT”\u20142 Hoke LaHood NOT VOTING\u201417 Ackerman Callahan Chapman Collins (IL) Collins (MI) DeLauro Flake Ford Gunderson Hunter Lincoln Livingston McDade Richardson Riggs Roth Young (FL) b 1122 Mr. BUYER, Ms. GREENE of Utah, and Mr. ALLARD changed their vote from ”yea” to ”nay.” Messrs. SPRATT, BALDACCI, PORTMAN, and FLANAGAN changed their vote from ”nay” to ”yea.” So the gentleman was permitted to use the exhibit in question. CONGRESSIONAL RECORD \u2014 HOUSEH9386 July 31, 1996 The result of the vote was announced as above recorded. Mr. WISE. Mr. Speaker, I move to re- consider the vote that was just taken. MOTION TO TABLE OFFERED BY MR. CASTLE Mr. CASTLE. Mr. Speaker, I move to lay the motion to reconsider the vote on the table. The SPEAKER pro tempore (Mr. HEFLEY). The question is on the motion offered by the gentleman from Dela- ware [Mr. CASTLE] to lay on the table the motion to reconsider the vote of- fered by the gentleman from West Vir- ginia [Mr. WISE]. The question was taken; and the Speaker pro tempore announced that the noes appeared to have it. RECORDED VOTE Mr. CASTLE. Mr. Speaker, I demand a recorded vote. A recorded vote was ordered. The vote was taken by electronic de- vice, and there were\u2014ayes 232, noes 181, not voting 20, as follows: [Roll No. 375] AYES\u2014232 Allard Archer Armey Bachus Baker (CA) Baker (LA) Ballenger Barr Barrett (NE) Bartlett Barton Bass Bateman Bentsen Bereuter Bilbray Bilirakis Bliley Blute Boehlert Boehner Bonilla Bono Brownback Bryant (TN) Bunn Bunning Burr Burton Buyer Callahan Calvert Camp Campbell Canady Castle Chabot Chambliss Chenoweth Christensen Chrysler Clinger Coble Coburn Collins (GA) Combest Cooley Cox Crane Crapo Cremeans Cubin Cunningham Davis Deal DeLay Diaz-Balart Dickey Doggett Doolittle Dornan Dreier Duncan Dunn Ehlers Ehrlich English Ensign Everett Ewing Fawell Flanagan Foley Forbes Fowler Fox Franks (CT) Franks (NJ) Frelinghuysen Frisa Funderburk Gallegly Ganske Gekas Gilchrest Gillmor Gilman Goodlatte Goodling Goss Graham Greene (UT) Greenwood Gutknecht Hamilton Hancock Hansen Hastert Hastings (WA) Hayes Hayworth Hefley Heineman Herger Hilleary Hobson Hoekstra Hoke Horn Hostettler Houghton Hunter Hutchinson Hyde Inglis Istook Johnson (CT) Johnson, Sam Kasich Kelly Kim King Kingston Klug Knollenberg Kolbe LaHood Largent Latham LaTourette Laughlin Lazio Leach Lewis (CA) Lewis (KY) Lightfoot Linder Livingston LoBiondo Longley Lucas Manzullo Martini McCollum McCrery McHugh McIntosh McKeon Metcalf Meyers Mica Miller (FL) Molinari Moorhead Morella Myers Myrick Nethercutt Neumann Ney Norwood Nussle Orton Oxley Packard Parker Paxon Petri Pombo Porter Portman Pryce Quillen Quinn Radanovich Ramstad Regula Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Roukema Royce Salmon Sanford Saxton Scarborough Schaefer Schiff Seastrand Sensenbrenner Shadegg Shaw Shays Shuster Skeen Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Souder Spence Stearns Stockman Stump Talent Tate Tauzin Taylor (MS) Taylor (NC) Thomas Thornberry Tiahrt Torkildsen Upton Walker Walsh Wamp Watts (OK) Weldon (FL) Weldon (PA) Weller White Whitfield Wicker Wilson Wolf Young (AK) Zeliff Zimmer NOES\u2014181 Abercrombie Andrews Baesler Baldacci Barcia Barrett (WI) Becerra Beilenson Berman Bevill Bishop Blumenauer Bonior Borski Boucher Brewster Browder Brown (CA) Brown (FL) Brown (OH) Bryant (TX) Cardin Clay Clayton Clement Clyburn Coleman Condit Conyers Costello Coyne Cramer Cummings Danner DeFazio DeLauro Dellums Deutsch Dicks Dingell Dixon Dooley Doyle Durbin Edwards Engel Evans Fattah Fazio Fields (LA) Filner Foglietta Frank (MA) Frost Furse Gejdenson Gephardt Geren Gibbons Gonzalez Gordon Green (TX) Gutierrez Hall (OH) Hall (TX) Harman Hastings (FL) Hefner Hilliard Hinchey Holden Hoyer Jackson (IL) Jackson-Lee (TX) Jacobs Jefferson Johnson (SD) Johnson, E.B. Johnston Kanjorski Kaptur Kennedy (MA) Kennedy (RI) Kennelly Kildee Kleczka Klink LaFalce Lantos Levin Lewis (GA) Lipinski Lofgren Lowey Luther Maloney Manton Markey Martinez Mascara Matsui McCarthy McDermott McHale McKinney McNulty Meehan Meek Menendez Millender- McDonald Miller (CA) Minge Mink Moakley Mollohan Montgomery Moran Murtha Nadler Neal Oberstar Obey Olver Ortiz Owens Pallone Pastor Payne (NJ) Payne (VA) Pelosi Peterson (FL) Peterson (MN) Pickett Pomeroy Poshard Rahall Rangel Reed Rivers Rose Roybal-Allard Rush Sabo Sanders Sawyer Schroeder Schumer Scott Serrano Sisisky Skaggs Skelton Slaughter Spratt Stark Stenholm Stokes Studds Stupak Tanner Tejeda Thompson Thornton Thurman Torres Torricelli Towns Traficant Velazquez Vento Visclosky Volkmer Ward Waters Watt (NC) Waxman Williams Wise Woolsey Wynn Yates NOT VOTING\u201420 Ackerman Chapman Collins (IL) Collins (MI) de la Garza Eshoo Farr Fields (TX) Flake Ford Gunderson Jones Lincoln McDade McInnis Richardson Riggs Roth Vucanovich Young (FL) b 1140 Ms. SLAUGHTER changed her vote from ”aye” to ”no”. So the motion to table the motion to reconsider was agreed to. The result of the vote was announced as above recorded. The SPEAKER pro tempore (Mr. HEFLEY). The gentleman from Texas [Mr. DOGGETT] is recognized for 1 minute and is permitted to use the ex- hibit. f MOTION TO ADJOURN Mr. VOLKMER. Mr. Speaker, I have a privileged motion at the desk. The SPEAKER pro tempore. The Clerk will report the motion. The clerk read as follows: Mr. VOLKMER moves that the House do now adjourn. The question was taken; and the Speaker pro tempore announced that the noes appeared to have it. RECORDED VOTE Mr. VOLKMER. Mr. Speaker, I de- mand a recorded vote. A recorded vote was ordered. The vote was taken by electronic de- vice, and there were\u2014ayes 76, noes 344, not voting 13, as follows: [Roll No. 376] AYES\u201476 Abercrombie Beilenson Bishop Blumenauer Bonior Brown (CA) Brown (FL) Brown (OH) Bryant (TX) Clay Clyburn Collins (MI) Conyers Coyne DeFazio Dellums Dicks Dingell Engel Fazio Filner Foglietta Frank (MA) Frost Gephardt Hastings (FL) Hilliard Hinchey Hoyer Jefferson Johnson, E. B. Johnston Kennedy (MA) Kennedy (RI) LaFalce Lantos Lewis (GA) Lowey Maloney Manton Markey Martinez Matsui McDermott McNulty Meek Millender- McDonald Miller (CA) Mink Moakley Neal Oberstar Obey Olver Owens Pastor Payne (NJ) Pomeroy Rangel Reed Rush Sabo Schroeder Serrano Slaughter Spratt Stark Stokes Thompson Torricelli Towns Volkmer Waters Watt (NC) Waxman Wilson NOES\u2014344 Ackerman Allard Andrews Archer Armey Bachus Baesler Baker (CA) Baker (LA) Baldacci Ballenger Barcia Barr Barrett (NE) Barrett (WI) Bartlett Barton Bass Bateman Becerra Bentsen Bereuter Bevill Bilbray Bilirakis Blute Boehner Bonilla Bono Borski Boucher Brewster Browder Brownback Bryant (TN) Bunn Bunning Burr Burton Buyer Callahan Calvert Camp Campbell Canady Cardin Castle Chabot Chambliss Chenoweth Christensen Chrysler Clayton Clement Clinger Coble Coburn Coleman Collins (GA) Combest Condit Cooley Costello Cox Cramer Crane Crapo Cremeans Cubin Cummings Cunningham Danner Davis de la Garza Deal DeLauro DeLay Deutsch Diaz-Balart Dickey Dixon Doggett Dooley Doolittle Dornan Doyle Dreier Duncan Dunn Durbin Edwards Ehlers Ehrlich English Ensign Eshoo Evans Everett Ewing Fattah Fawell Fields (LA) Fields (TX) Flanagan Foley Forbes Fowler Fox Franks (CT) Franks (NJ) Frelinghuysen CONGRESSIONAL RECORD \u2014 HOUSE H9387July 31, 1996 Frisa Funderburk Furse Gallegly Ganske Gejdenson Gekas Geren Gibbons Gilchrest Gillmor Gilman Gonzalez Goodlatte Goodling Gordon Goss Graham Green (TX) Greene (UT) Greenwood Gutierrez Gutknecht Hall (OH) Hall (TX) Hamilton Hancock Hansen Harman Hastert Hastings (WA) Hayes Hayworth Hefley Hefner Heineman Herger Hilleary Hobson Hoekstra Hoke Holden Horn Hostettler Houghton Hunter Hutchinson Hyde Inglis Istook Jackson (IL) Jackson-Lee (TX) Jacobs Johnson (CT) Johnson (SD) Johnson, Sam Jones Kanjorski Kaptur Kasich Kelly Kennelly Kildee Kim King Kingston Kleczka Klink Klug Knollenberg Kolbe LaHood Largent Latham LaTourette Laughlin Lazio Leach Levin Lewis (CA) Lewis (KY) Lightfoot Lincoln Linder Lipinski Livingston LoBiondo Lofgren Longley Lucas Luther Manzullo Martini Mascara McCarthy McCollum McCrery McHale McHugh McInnis McIntosh McKeon McKinney Meehan Menendez Metcalf Meyers Mica Miller (FL) Minge Molinari Mollohan Montgomery Moorhead Moran Morella Murtha Myers Myrick Nadler Nethercutt Neumann Ney Norwood Nussle Ortiz Orton Oxley Packard Pallone Parker Paxon Payne (VA) Pelosi Peterson (FL) Peterson (MN) Petri Pickett Pombo Porter Portman Poshard Pryce Quillen Quinn Radanovich Rahall Ramstad Regula Riggs Rivers Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Rose Roth Roukema Roybal-Allard Royce Salmon Sanders Sanford Sawyer Saxton Scarborough Schaefer Schiff Schumer Scott Seastrand Sensenbrenner Shadegg Shaw Shays Sisisky Skaggs Skeen Skelton Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Souder Spence Stearns Stenholm Stockman Studds Stump Stupak Talent Tanner Tate Tauzin Taylor (MS) Taylor (NC) Tejeda Thomas Thornberry Thornton Thurman Tiahrt Torkildsen Torres Traficant Upton Velazquez Vento Visclosky Vucanovich Walker Walsh Wamp Ward Watts (OK) Weldon (FL) Weldon (PA) Weller White Whitfield Wicker Williams Wise Wolf Woolsey Wynn Yates Young (AK) Zeliff Zimmer NOT VOTING\u201413 Berman Bliley Boehlert Chapman Collins (IL) Farr Flake Ford Gunderson McDade Richardson Shuster Young (FL) b 1159 Messrs. CUMMINGS, JACKSON of Il- linois, GEJDENSON, DORNAN, MORAN, GUTIERREZ, BENTSEN, and WISE changed their vote from ”aye” to ”no.” So the motion was rejected. The result of the vote was announced as above recorded. FURTHER MESSAGE FROM THE SENATE A further message from the Senate by Mr. Lundregan, one of its clerks, an- nounced that the Senate had passed without amendment a concurrent reso- lution of the House of the following title: H. Con. Res. 203. Concurrent resolution providing for an adjournment of the two Houses. The SPEAKER pro tempore. The gen- tleman from Texas [Mr. DOGGETT] is recognized for 1 minute and he may use the chart. f TERRORIST LEGISLATION Mr. DOGGETT. Mr. Speaker, Amer- ica takes justifiable pride in the strength and determination of our Olympic athletes. America respects the strength and determination of the criminal investigators who are seeking to determine who and how these incidences were caused by. But now America has good cause to ask whether this Congress has the strength and de- termination to deal with terrorists. Chemical markers called taggants could allow investigators of terrorist bombings to trace bomb materials and more quickly identify terrorists. But unfortunately, the same lobby group that stripped this provision from the antiterrorist legislation in the spring is now trying to block antiterrorist legislation again. Their senseless slogan now appears to be, ”bombs don’t kill people, people with bombs kill people,” and those bombers have the right to remain anonymous. Let us not side with these special in- terest lobbyists to protect the bomb- ers. Enact antiterrorist legislation now. f MOTION TO ADJOURN Mr. SKAGGS. Mr. Speaker, I offer a privileged motion. The SPEAKER pro tempore (Mr. HEFLEY). The Clerk will report the mo- tion. The Clerk read as follows: Mr. SKAGGS moves that the House do now adjourn. The SPEAKER pro tempore. The question is on the motion to adjourn offered by the gentleman from Colo- rado [Mr. SKAGGS]. The question was taken; and the Speaker pro tempore announced that the noes appeared to have it. RECORDED VOTE Mr. SKAGGS. Mr. Speaker, I demand a recorded vote. A recorded vote was ordered. The vote was taken by electronic de- vice, and there were\u2014ayes 57, noes 357, not voting 19, as follows: [Roll No. 377] AYES\u201457 Bonior Brown (CA) Brown (FL) Brown (OH) Clay Clyburn Coleman Collins (MI) Conyers Coyne DeFazio Dellums Dicks Dingell Engel Fazio Filner Foglietta Gephardt Hastings (FL) Hinchey Hoyer Jefferson Johnson, E. B. Kennedy (MA) LaFalce Lantos Lewis (GA) Markey Matsui McDermott McNulty Meek Millender- McDonald Mink Moakley Neal Oberstar Obey Olver Owens Pastor Payne (NJ) Pomeroy Schroeder Skaggs Slaughter Stockman Thompson Torres Torricelli Towns Volkmer Waters Watt (NC) Waxman Wilson NOES\u2014357 Abercrombie Ackerman Allard Andrews Archer Armey Baesler Baker (CA) Baker (LA) Baldacci Ballenger Barcia Barr Barrett (NE) Barrett (WI) Bartlett Barton Bass Bateman Becerra Beilenson Bentsen Bereuter Berman Bevill Bilbray Bilirakis Bishop Bliley Blumenauer Blute Boehlert Boehner Bonilla Bono Borski Boucher Brewster Browder Brownback Bryant (TN) Bryant (TX) Bunn Bunning Burr Burton Callahan Calvert Camp Campbell Canady Cardin Castle Chabot Chambliss Chenoweth Christensen Chrysler Clayton Clement Clinger Coble Collins (GA) Combest Condit Cooley Costello Cox Cramer Crane Crapo Cremeans Cubin Cummings Cunningham Danner Davis de la Garza Deal DeLauro DeLay Deutsch Diaz-Balart Dickey Dixon Doggett Dooley Doolittle Dornan Doyle Dreier Duncan Dunn Durbin Edwards Ehlers Ehrlich English Ensign Eshoo Evans Everett Ewing Fattah Fawell Fields (LA) Fields (TX) Flanagan Foley Forbes Fowler Fox Frank (MA) Franks (CT) Franks (NJ) Frelinghuysen Frisa Frost Funderburk Furse Gallegly Ganske Gejdenson Gekas Geren Gibbons Gilchrest Gillmor Gilman Gonzalez Goodlatte Goodling Gordon Goss Graham Green (TX) Greene (UT) Greenwood Gutierrez Gutknecht Hall (OH) Hall (TX) Hamilton Hancock Hansen Harman Hastert Hastings (WA) Hayworth Hefley Hefner Heineman Herger Hilleary Hilliard Hobson Hoekstra Hoke Holden Horn Hostettler Houghton Hyde Inglis Istook Jackson (IL) Jackson-Lee (TX) Jacobs Johnson (CT) Johnson (SD) Johnson, Sam Johnston Jones Kanjorski Kaptur Kasich Kelly Kennedy (RI) Kennelly Kildee Kim King Kingston Kleczka Klug Knollenberg Kolbe LaHood Largent Latham Laughlin Lazio Leach Levin Lewis (CA) Lewis (KY) Lightfoot Lincoln Linder Lipinski Livingston LoBiondo Lofgren Longley Lowey Lucas Luther Maloney Manton Manzullo Martinez Martini Mascara McCarthy McCollum McCrery McHale McHugh McInnis McIntosh McKeon McKinney Meehan Menendez Metcalf Meyers Mica Miller (CA) Miller (FL) Minge Molinari Mollohan Montgomery Moorhead Moran Morella CONGRESSIONAL RECORD \u2014 HOUSEH9388 July 31, 1996 Murtha Myers Myrick Nadler Nethercutt Neumann Ney Norwood Nussle Ortiz Orton Oxley Packard Pallone Parker Paxon Payne (VA) Pelosi Peterson (FL) Peterson (MN) Petri Pickett Pombo Porter Portman Poshard Pryce Quillen Quinn Radanovich Rahall Ramstad Rangel Reed Regula Riggs Rivers Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Rose Roth Roukema Roybal-Allard Royce Rush Salmon Sanders Sanford Sawyer Saxton Scarborough Schaefer Schiff Schumer Scott Seastrand Sensenbrenner Serrano Shadegg Shaw Shays Shuster Sisisky Skeen Skelton Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Souder Spence Spratt Stark Stearns Stenholm Stokes Studds Stump Stupak Talent Tanner Tate Tauzin Taylor (MS) Taylor (NC) Tejeda Thomas Thornberry Thornton Thurman Tiahrt Torkildsen Traficant Upton Velazquez Vento Visclosky Vucanovich Walker Walsh Wamp Ward Watts (OK) Weldon (FL) Weldon (PA) Weller White Whitfield Wicker Wise Wolf Woolsey Wynn Yates Young (AK) Zeliff Zimmer NOT VOTING\u201419 Bachus Buyer Chapman Coburn Collins (IL) Farr Flake Ford Gunderson Hayes Hunter Hutchinson Klink LaTourette McDade Richardson Sabo Williams Young (FL) b 1221 Mr. DAVIS changed his vote from ”aye” to ”no.” So the motion was rejected. The result of the vote was announced as above recorded. f WAIVING REQUIREMENT OF CLAUSE 4(B) OF RULE XI WITH RESPECT TO CONSIDERATION OF A CERTAIN RESOLUTION Mr. MCINNIS. Mr. Speaker, by direc- tion of the Committee on Rules, I call up House Resolution 492 and ask for its immediate consideration. The Clerk read the resolution, as fol- lows: H. RES. 492 Resolved, That the requirement of clause 4(b) of rule XI for a two-thirds vote to con- sider a report from the Committee on Rules on the same day it is presented to the House is waived with respect to a resolution re- ported before August 1, 1996, providing for consideration or disposition of a conference report to accompany the bill (H.R. 3734) to provide for reconciliation pursuant to sec- tion 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997. MOTION TO ADJOURN Mr. BONIOR. Mr. Speaker, I offer a preferential motion. The SPEAKER pro tempore (Mr. HEFLEY). I offer a preferential motion. The Clerk read as follows: Mr. BONIOR moves that the House do now adjourn. The SPEAKER pro tempore. The question is on the motion offered by the gentleman from Michigan [Mr. BONIOR]. The question was taken; and the Speaker pro tempore announced that the noes appeared to have it. Mr. BONIOR. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present. The SPEAKER pro tempore. Evi- dently a quorum is not present. The Sergeant at Arms will notify ab- sent Members. The vote was taken by electronic de- vice, and there were\u2014yeas 50, nays 350, answered ”present” 1, not voting 32, as follows: [Roll No. 378] YEAS\u201450 Abercrombie Bonior Brown (OH) Clay Clyburn Collins (MI) Conyers Coyne Dellums Dicks Dingell Engel Fazio Filner Foglietta Frank (MA) Gephardt Hastings (FL) Hinchey Hoyer Jefferson Johnson, E. B. Johnston Kennedy (MA) LaFalce Lantos Lewis (GA) McDermott McNulty Millender- McDonald Miller (CA) Mink Moakley Neal Oberstar Olver Pastor Payne (NJ) Rush Schroeder Slaughter Stockman Thompson Towns Velazquez Volkmer Waters Watt (NC) Waxman Wilson NAYS\u2014350 Ackerman Allard Andrews Archer Armey Bachus Baesler Baker (CA) Baker (LA) Baldacci Ballenger Barcia Barr Barrett (NE) Barrett (WI) Bartlett Barton Bass Bateman Becerra Beilenson Bentsen Bereuter Berman Bevill Bilbray Bilirakis Bishop Bliley Blumenauer Blute Boehlert Boehner Bonilla Bono Borski Boucher Brewster Browder Brown (FL) Brownback Bryant (TN) Bryant (TX) Bunn Bunning Burr Burton Callahan Calvert Camp Campbell Canady Cardin Castle Chabot Chambliss Chenoweth Christensen Chrysler Clayton Clement Clinger Coble Coburn Coleman Collins (GA) Combest Condit Costello Cramer Crane Crapo Cremeans Cubin Cummings Cunningham Danner Davis de la Garza Deal DeLauro Deutsch Diaz-Balart Dixon Doggett Dooley Doolittle Dornan Doyle Dreier Duncan Dunn Durbin Edwards Ehlers Ehrlich English Ensign Eshoo Evans Everett Ewing Farr Fattah Fawell Fields (LA) Fields (TX) Flanagan Foley Forbes Fowler Franks (CT) Franks (NJ) Frelinghuysen Frisa Frost Funderburk Furse Gallegly Ganske Gejdenson Geren Gibbons Gilchrest Gillmor Gilman Gonzalez Goodlatte Gordon Goss Graham Green (TX) Greene (UT) Greenwood Gutierrez Gutknecht Hall (OH) Hall (TX) Hamilton Hancock Hansen Harman Hastert Hastings (WA) Hayworth Hefley Hefner Heineman Herger Hilleary Hilliard Hobson Hoekstra Hoke Holden Horn Hostettler Houghton Hunter Hyde Inglis Jackson (IL) Jackson-Lee (TX) Jacobs Johnson (CT) Johnson (SD) Jones Kanjorski Kaptur Kasich Kelly Kennedy (RI) Kennelly Kildee Kim King Kingston Kleczka Klink Klug Knollenberg Kolbe LaHood Largent Latham Laughlin Lazio Leach Levin Lewis (CA) Lewis (KY) Lightfoot Lincoln Linder Lipinski Livingston LoBiondo Lofgren Longley Lowey Lucas Luther Maloney Manton Manzullo Markey Martinez Martini Mascara Matsui McCarthy McCollum McCrery McHale McHugh McInnis McKeon McKinney Meehan Meek Menendez Metcalf Meyers Mica Miller (FL) Minge Molinari Mollohan Moorhead Morella Murtha Myers Myrick Nadler Nethercutt Ney Norwood Nussle Obey Ortiz Orton Oxley Packard Pallone Parker Paxon Payne (VA) Pelosi Peterson (FL) Peterson (MN) Petri Pickett Pombo Pomeroy Porter Portman Poshard Pryce Quillen Quinn Radanovich Rahall Ramstad Rangel Reed Regula Riggs Rivers Roberts Roemer Rohrabacher Ros-Lehtinen Rose Roth Roukema Roybal-Allard Royce Sabo Salmon Sanders Sanford Sawyer Saxton Scarborough Schaefer Schiff Schumer Scott Seastrand Sensenbrenner Serrano Shadegg Shaw Shays Shuster Sisisky Skaggs Skeen Skelton Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Spence Spratt Stark Stearns Stenholm Stokes Studds Stump Stupak Talent Tanner Tate Tauzin Taylor (MS) Taylor (NC) Tejeda Thomas Thornberry Thornton Thurman Tiahrt Torres Traficant Upton Vento Visclosky Vucanovich Walker Walsh Wamp Ward Watts (OK) Weldon (FL) Weldon (PA) Weller White Whitfield Wicker Wise Wolf Woolsey Wynn Yates Young (AK) Zeliff Zimmer ANSWERED ”PRESENT”\u20141 DeFazio NOT VOTING\u201432 Brown (CA) Buyer Chapman Collins (IL) Cooley Cox DeLay Dickey Flake Ford Fox Gekas Goodling Gunderson Hayes Hutchinson Istook Johnson, Sam LaTourette McDade McIntosh Montgomery Moran Neumann Owens Richardson Rogers Souder Torkildsen Torricelli Williams Young (FL) b 1243 Mr. BUNN of Oregon changed his vote from ”yea” to ”nay.” So the motion to adjourn was re- jected. The result of the vote was announced as above recorded. PERSONAL EXPLANATION Mr. FOX of Pennsylvania. Mr. Speaker, on rollcall No. 378, I was in the Banking Commit- tee hearing and I did not hear the pager. Had I been present, I would have voted ”Nay.” The SPEAKER pro tempore (Mr. HEFLEY). The gentleman from Colorado [Mr. MCINNIS] is recognized for 1 hour. CONGRESSIONAL RECORD \u2014 HOUSE H9389July 31, 1996 Mr. MCINNIS. Mr. Speaker, for the purpose of debate only, I yield the cus- tomary 30 minutes to the gentleman from Massachusetts [Mr. MOAKLEY], pending which I yield myself such time as I may consume. During consider- ation of this resolution, all time yield- ed is for the purpose of debate only. (Mr. MCINNIS asked and was given permission to revise and extend his re- marks and include extraneous mate- rial.) Mr. MCINNIS. Mr. Speaker, House Resolution 492 is an extremely narrow resolution. The proposed rule merely waives the requirement of clause 4(b) of rule XI for a two-thirds vote to con- sider a report from the Committee on Rules on the same day it is presented to the House for a resolution reported from the committee before August 1, 1996, which provides for consideration or disposition of a conference report to accompany H.R. 3734, The Personal Re- sponsibility and Work Opportunity Act. This narrow, short-term, waiver will only apply to special rules providing for the consideration or disposition of a conference report to accompany the bill H.R. 3734, nothing else. Mr. Speaker, House Resolution 492 was reported by the Committee on Rules by unanimous voice vote. The distinguished Member, Mr. MOAKLEY, stated in the Committee on Rules that he had no objections to this rule. The committee recognized the need for ex- pedited procedures to bring the welfare reform conference report forward as soon as possible. Mr. Speaker, I include the following extraneous material for the RECORD: [From the U.S. News & World Report, June 3, 1996] THE END OF WELFARE AS WE KNOW IT? (By David Whitman) Bertha Bridges is still waiting for the end of welfare as she knows it. Bridges and her three children have been on and off welfare since the early 1980s, and she has been unable to hold a job in recent years because school administrators often call several times a week to ask her to pick up her disruptive, se- verely depressed 13-year-old son for fighting and disobeying teachers. Seventeen months after U.S. News first interviewed her for a cover story on welfare reform, matters have only worsened for the Detroit resident. Several weeks ago her son let three strangers into her house, and they promptly stole Bridges’s money, jewelry, clothing, dishes and videocassette recorder. Her son is now back in a psychiatric hos- pital, his younger sister is starting to imi- tate him by refusing to complete school as- signments and Bridges doesn’t know where to turn for help. ”I’m living a nightmare,” she says. Last week, President Clinton and Bob Dole jousted to claim the title of welfare aboli- tionist\u2014and to deny the other guy credit for overhauling a welfare system that still does little to encourage self-reliance. But while the candidates feud, many of the 4.6 million families on Aid to Families with Dependent Children are living out nightmares like that of Bridges. Clinton claims that waivers granted by his administration to 38 states to conduct dem- onstration programs have led to a quiet rev- olution. ”The state-based reform we have en- couraged,” he said in his May 18 radio ad- dress, ”has brought work and responsibility back to the lives of 75 percent of the Ameri- cans on welfare.” Yet according to federal statistics, only 13 percent of AFDC adults participated in any education, training or work program in a typical month in 1994, up a hair from 12 percent in 1992. At present, less than 1 in 100 AFDC parents toils each month in workfare programs in exchange for a relief check, a number that has remained constant since Clinton came to office. Thanks largely to an improved economy, the number of Americans on AFDC\u201412.8 mil- lion\u2014was 9 percent lower in January than three years earlier. Yet the rolls are still at historically high levels, and 1 in 5 American children still lives below the poverty line. In 1992, 13.5 percent of the nation’s children re- ceived AFDC; in 1995, 13.4 percent of the country’s children did so. One in seven kids in the United States is now on the dole. According to the Department of Health and Human Services, 75 percent of AFDC re- cipients could be affected in an average month by at least one provision of the 61 waivers granted by the Clinton administra- tion. That seems to be the basis for the president’s claim that his waivers have re- introduced work and responsibility to the vast majority of AFDC recipients. But many of the waivers are for modest reforms. Such as allowing recipients to keep more earned income before their welfare checks are re- duced. The most far-reaching waivers permit states to impose time limits, usually two years. On how long a family can receive AFDC. According to a soon-to-be-released study by the Center for Law and Social Pol- icy (CLASP), HHS has authorized 11 states to run statewide programs with full-family cash-aid cutoffs and two more states’ appli- cations are pending. Awaiting results. It is too early to tell whether the new time limits will fundamen- tally alter welfare. Since it takes years for recipients to use up their cash aid, time lim- its so far have affected few families. With the exception of Chicago, none of the na- tion’s 10 largest cities is in a full-family time-limit state\u2014and the new CLASP report indicates that 91 percent of AFDC recipients in Illinois are exempt from the time limits because they apply there only to families whose youngest child is 13 or older. Other states provide narrower exemptions and extensions than Illinois but still have protective loopholes. One of the biggest: HHS has insisted that no state can remove a fam- ily from the AFDC rolls if the mother has complied with program rules and failed to find a job despite her best efforts. CLASP’s Mark Greenberg worries that the new time limits could throw many needy women and children off welfare. ”If there are visible catastrophes,” he says, ”other states may be reluctant to move forward. But if the catastrophes are largely invisible, the na- tion’s safeguards for protecting children will start to unravel.” In Washington, mean- while, the politicians are still fiddling. Mr. Speaker, I reserve the balance of my time. Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I did make the state- ment that I had no objection to the rule. That was based on the promise that we were going to have the bill at 8 p.m. last night. But we do not have the bill, so I do object to this rule. Mr. Speaker, I yield 3 minutes to the gentleman from Kentucky [Mr. WARD]. Mr. WARD. Mr. Speaker, I have here a presentation. Ms. DELAURO. Mr. Speaker, pursu- ant to rule XXX, I object to the gentle- man’s use of the exhibit. The SPEAKER pro tempo. Does the gentleman plan to use this exhibit? Mr. WARD. Yes, Mr. Speaker, I do. The SPEAKER pro tempore. Pursu- ant to rule XXX, the question is: Shall the gentleman from Kentucky [Mr. WARD] be permitted to use the exhibit? The question was taken; and the Speaker pro tempore announced that the ayes appeared to have it. Ms. DELAURO. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present. PARLIAMENTARY INQUIRY Mr. WELDON of Pennsylvania. Mr. Speaker, I have a parliamentary in- quiry. The SPEAKER pro tempore. The gen- tleman will state it. Mr. WELDON of Pennsylvania. Mr. Speaker, under paragraph 803 of Jeffer- son’s Rules there is a provision, section 10, that states that no dilatory motion shall be entertained by the Speaker. This particular section of the rules is very explicit. It goes through to pro- claim that the clause was adopted in 1890 to make permanent a principle al- ready enunciated in a ruling of the Speaker, who had declared that the ”object of a parliamentary body is ac- tion, not stoppage of action.” Mr. Speaker, we have seen several motions to adjourn, one of which was offered by a colleague who then voted against that motion to adjourn. We now have the second case, Mr. Speaker, of a chart being put up that is blank, that in fact has no substance. The Speaker, has declined on a num- ber of occasions in the history of this body or refused to allow procedures to continue that in effect stop the orderly process of business in this body. I ask the Speaker, to rule on that section that, in fact, prohibits dilatory action. I ask the Speaker to rule on the parliamentary stature of an attempt to basically stop the action of the House through what in my opinion may be considered as a dilatory action under this particular rule of the operations of this body. POINT OF ORDER Mr. DOGGETT. Mr. Speaker, I have a point of order. The SPEAKER pro tempore. The gen- tleman will state his point of order. Mr. DOGGETT. Mr. Speaker, a vote is in order. This is not really even a le- gitimate parliamentary inquiry. I raise a point of order that with a vote al- ready under way, this parliamentary inquiry is out of order and would ask that the Chair proceed with the vote previously ordered. The SPEAKER pro tempore. The Chair is prepared to address the in- quiry made by the gentleman from Pennsylvania [Mr. WELDON]. The rule XXX question is not a mo- tion. The rule XXX question is in the nature of a point of order. CONGRESSIONAL RECORD \u2014 HOUSEH9390 July 31, 1996 The gentlewoman from Connecticut [Ms. DELAURO] objects to the vote on the ground that a quorum is not present and makes the point of order that a quorum is not present. Evidently a quorum is not present. The Sergeant at Arms will notify ab- sent Members. The vote was taken by electronic de- vice, and there were\u2014yeas 351, nays 53, answered ”present” 2, not voting 27, as follows: [Roll No. 379] YEAS\u2014351 Abercrombie Ackerman Andrews Archer Armey Bachus Baesler Baker (CA) Baker (LA) Barcia Barrett (NE) Barrett (WI) Bartlett Bass Bateman Becerra Beilenson Bereuter Bevill Bilbray Bishop Bliley Blumenauer Blute Boehlert Boehner Bonilla Bonior Bono Borski Boucher Brewster Browder Brown (FL) Brown (OH) Brownback Bryant (TX) Bunn Burton Callahan Calvert Camp Campbell Canady Cardin Castle Chabot Chambliss Christensen Chrysler Clay Clayton Clement Clinger Clyburn Coble Coburn Coleman Collins (MI) Condit Conyers Cooley Costello Cox Coyne Cramer Crane Crapo Cremeans Cummings Danner Davis de la Garza DeFazio DeLay Dellums Deutsch Diaz-Balart Dicks Dingell Dixon Doggett Dooley Doolittle Dornan Doyle Dreier Duncan Dunn Durbin Edwards Ehlers Ehrlich Engel English Eshoo Evans Ewing Farr Fattah Fawell Fazio Fields (LA) Fields (TX) Filner Flanagan Foglietta Foley Forbes Fowler Fox Frank (MA) Franks (CT) Franks (NJ) Frelinghuysen Frisa Frost Funderburk Furse Gallegly Ganske Gejdenson Gekas Gephardt Gilchrest Gillmor Gilman Gonzalez Goodlatte Goodling Gordon Goss Graham Green (TX) Gutierrez Gutknecht Hall (OH) Hall (TX) Hamilton Hancock Hansen Harman Hastings (FL) Hastings (WA) Hayworth Hefley Hefner Heineman Herger Hilliard Hinchey Hobson Hoekstra Holden Horn Hostettler Houghton Hoyer Hutchinson Hyde Inglis Istook Jackson (IL) Jackson-Lee (TX) Jacobs Jefferson Johnson (SD) Johnson, E.B. Johnston Jones Kanjorski Kaptur Kasich Kelly Kennedy (MA) Kennedy (RI) Kennelly Kildee Kim King Kingston Kleczka Klink Klug Knollenberg Kolbe LaFalce Lantos Largent Latham LaTourette Laughlin Leach Lewis (CA) Lewis (GA) Lincoln Lipinski Livingston LoBiondo Lofgren Lowey Lucas Luther Maloney Manton Manzullo Markey Martini Mascara Matsui McCarthy McCollum McCrery McDermott McHale McHugh McIntosh McKinney McNulty Meehan Meek Menendez Metcalf Mica Millender- McDonald Miller (CA) Miller (FL) Minge Mink Moakley Molinari Mollohan Montgomery Moorhead Morella Murtha Myers Myrick Nadler Neal Nethercutt Neumann Ney Norwood Nussle Oberstar Obey Olver Ortiz Orton Owens Oxley Pallone Parker Pastor Paxon Payne (NJ) Payne (VA) Pelosi Peterson (FL) Peterson (MN) Petri Pickett Pomeroy Porter Poshard Pryce Quillen Quinn Rahall Reed Regula Riggs Rivers Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Rose Roybal-Allard Royce Rush Sabo Salmon Sanford Sawyer Saxton Schiff Schroeder Schumer Scott Seastrand Sensenbrenner Serrano Shaw Shays Shuster Sisisky Skaggs Skeen Skelton Slaughter Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Spence Spratt Stark Stearns Stenholm Stokes Studds Stupak Talent Tanner Tate Taylor (MS) Taylor (NC) Tejeda Thomas Thompson Thornton Thurman Torres Upton Velazquez Visclosky Volkmer Vucanovich Walker Walsh Wamp Ward Waters Watt (NC) Waxman Weldon (PA) White Whitfield Wicker Williams Wilson Wise Wolf Woolsey Wynn Young (AK) Zeliff NAYS\u201453 Allard Baldacci Ballenger Bentsen Bilirakis Bryant (TN) Bunning Buyer Collins (GA) Combest Cubin Cunningham Deal DeLauro Ensign Geren Greene (UT) Hastert Hilleary Hoke Johnson (CT) Johnson, Sam Lazio Levin Lewis (KY) Lightfoot Linder McInnis McKeon Packard Pombo Radanovich Ramstad Rangel Sanders Scarborough Schaefer Shadegg Souder Stockman Stump Tauzin Thornberry Tiahrt Torkildsen Towns Traficant Vento Watts (OK) Weldon (FL) Weller Yates Zimmer ANSWERED ”PRESENT”\u20142 Everett LaHood NOT VOTING\u201427 Barr Barton Berman Brown (CA) Burr Chapman Chenoweth Collins (IL) Dickey Flake Ford Gibbons Greenwood Gunderson Hayes Hunter Longley Martinez McDade Meyers Moran Portman Richardson Roth Roukema Torricelli Young (FL) b 1309 Ms. DELAURO changed her vote from ”yea” to ”nay.” Ms. FURSE, Ms. RIVERS, Mr. HALL of Ohio, and Mr. SPENCE changed their vote from ”nay” to ”yea.” So the gentleman was permitted to use the exhibit in question. The result of the vote was announced as above recorded. Mr. MCDERMOTT. Mr. Speaker, I move that we reconsider the vote. MOTION TO TABLE OFFERED BY MR. LARGENT Mr. LARGENT. Mr. Speaker, I move to lay the motion to reconsider on the table. The Speaker pro tempore (Mr. HEFLEY). The question is on the motion offered by the gentleman from Okla- homa [Mr. LARGENT] to lay on the table the motion to reconsider the vote offered by the gentleman from Wash- ington [Mr. MCDERMOTT]. The question was taken; and the Speaker pro tempore announced that the ayes appeared to have it. RECORDED VOTE Mr. MCDERMOTT. Mr. Speaker, I de- mand a recorded vote. A recorded vote was ordered. The vote was taken by electronic de- vice, and there were\u2014ayes 239, noes 172, not voting 22, as follows: [Roll No. 380] AYES\u2014239 Allard Archer Armey Bachus Baker (CA) Baker (LA) Ballenger Barr Bartlett Barton Bass Bateman Bereuter Bilbray Bilirakis Bliley Blute Boehlert Boehner Bonilla Bono Brewster Brownback Bryant (TN) Bunn Bunning Burr Burton Buyer Callahan Calvert Camp Campbell Canady Castle Chabot Chambliss Christensen Chrysler Coble Coburn Collins (GA) Combest Condit Cooley Cox Crane Crapo Cremeans Cubin Cunningham Davis de la Garza Deal DeLay Diaz-Balart Dickey Doggett Doolittle Dornan Dreier Duncan Dunn Durbin Ehlers Ehrlich English Ensign Everett Ewing Fawell Fields (TX) Flanagan Foley Forbes Fowler Fox Franks (CT) Franks (NJ) Frelinghuysen Frisa Funderburk Gallegly Ganske Gilchrest Gillmor Gilman Goodlatte Goodling Gordon Goss Graham Greene (UT) Gutknecht Hall (TX) Hamilton Hancock Hansen Hastert Hastings (WA) Hayworth Hefley Heineman Herger Hobson Hoekstra Horn Hostettler Houghton Hutchinson Hyde Inglis Istook Jacobs Johnson (CT) Johnson, Sam Jones Kasich Kelly Kim King Kingston Klug Knollenberg Kolbe LaHood Largent Latham LaTourette Laughlin Lazio Leach Lewis (CA) Lewis (KY) Lightfoot Lincoln Linder Livingston LoBiondo Longley Lucas Manzullo Martini McCollum McCrery McHugh McInnis McIntosh McKeon Metcalf Mica Miller (FL) Molinari Moorhead Morella Myers Myrick Nethercutt Neumann Ney Norwood Nussle Orton Oxley Packard Parker Paxon Peterson (MN) Petri Pombo Porter Pryce Quillen Quinn Radanovich Rahall Ramstad Regula Riggs Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Roth Roukema Royce Salmon Sanford Saxton Scarborough Schaefer Schiff Scott Sensenbrenner Shadegg Shaw Shays Shuster Sisisky Skeen Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Souder Spence Stearns Stenholm Stockman Stump Talent Tate Tauzin Taylor (MS) Thomas Thornberry Thornton Tiahrt Torkildsen Traficant Upton Vucanovich Walker Walsh Wamp Weldon (FL) Weldon (PA) White Whitfield Wicker Williams Wilson Wise Wolf Young (AK) Zeliff Zimmer CONGRESSIONAL RECORD \u2014 HOUSE H9391July 31, 1996 NOES\u2014172 Abercrombie Ackerman Andrews Baesler Baldacci Barcia Barrett (NE) Barrett (WI) Becerra Beilenson Berman Bevill Bishop Blumenauer Bonior Borski Boucher Browder Brown (CA) Brown (FL) Brown (OH) Bryant (TX) Cardin Chapman Clay Clayton Clement Clyburn Coleman Collins (MI) Conyers Costello Coyne Cramer Cummings Danner DeFazio DeLauro Dellums Deutsch Dicks Dingell Dixon Dooley Doyle Edwards Engel Eshoo Evans Farr Fattah Fazio Fields (LA) Filner Foglietta Frank (MA) Frost Furse Gejdenson Gephardt Geren Gibbons Gonzalez Green (TX) Gutierrez Hall (OH) Harman Hastings (FL) Hefner Hilliard Hinchey Holden Hoyer Jackson (IL) Jackson-Lee (TX) Jefferson Johnson (SD) Johnson, E. B. Johnston Kanjorski Kaptur Kennedy (MA) Kennedy (RI) Kennelly Kildee Kleczka LaFalce Levin Lewis (GA) Lipinski Lofgren Lowey Luther Maloney Manton Markey Martinez Mascara Matsui McCarthy McDermott McHale McKinney McNulty Meehan Meek Menendez Millender- McDonald Miller (CA) Minge Mink Moakley Mollohan Montgomery Moran Murtha Nadler Neal Oberstar Obey Olver Ortiz Owens Pallone Pastor Payne (NJ) Payne (VA) Pelosi Peterson (FL) Pickett Pomeroy Poshard Rangel Reed Rivers Rose Roybal-Allard Rush Sabo Sanders Sawyer Schroeder Schumer Serrano Skaggs Skelton Slaughter Spratt Stark Stokes Studds Stupak Tanner Tejeda Thompson Thurman Torres Torricelli Towns Velazquez Vento Visclosky Volkmer Ward Waters Watt (NC) Watts (OK) Waxman Weller Woolsey Wynn Yates NOT VOTING\u201422 Bentsen Chenoweth Clinger Collins (IL) Flake Ford Gekas Greenwood Gunderson Hayes Hilleary Hoke Hunter Klink Lantos McDade Meyers Portman Richardson Seastrand Taylor (NC) Young (FL) b 1330 Mr. POMBO changed his vote from ”no” to ”aye.” So the motion to table the motion to reconsider was agreed to. The result of the vote was announced as above recorded. PERSONAL EXPLANATION Mr. PORTMAN. Mr. Speaker, due to a pre- vious speaking commitment located off Capitol Hill earlier today, I missed votes on rollcall No. 379, to permit the use of an exhibit, and roll- call No. 380, to table the motion to reconsider. Had I been present, I would have voted ”yes” on rollcoll No. 379 and ”yes” on rollcall No. 380. Mr. MOAKLEY. Mr. Speaker, re- claiming time I yielded to the gen- tleman from Kentucky [Mr. WARD], I yield myself such time as I may consume. I thank my colleague and my friend, the gentleman from Colorado [Mr. MCINNIS], for yielding me the cus- tomary half hour. Mr. Speaker, today, we are consider- ing this rule waiving the two-thirds re- quirement for same day consideration because my Republican colleagues didn’t finish the welfare bill until mid- night last night. And last evening, I agreed to this two-thirds rule because I was told this welfare bill would be available by 8 last night. But, Mr. Speaker, we did not get the bill until quarter of one in the morning and that is completely unacceptable. Because, Mr. Speaker, this issue is very very important and 434 Members of Congress are going to be asked to vote on this enormous bill and the ink isn’t even dry yet. This bill is no small potatoes. It rep- resents a major change in our welfare system which will affect millions and millions of Americans, most of those Americans, Mr. Speaker, are children. For that reason I think no amount of time is too much. We have a very seri- ous responsibility to the 9 million chil- dren who are supported by aid to fami- lies with dependent children and those children are depending on us to do it right. I urge my colleagues to oppose this two-thirds rule. Congress hasn’t had anywhere enough time to consider this bill and it will affect far too many chil- dren to be rushed through the Con- gress. Mr. Speaker, I reserve the balance of my time. Mr. MCINNIS. Mr. Speaker, I yield myself such time as I may consume. First of all, I am pleased to announce that we now understand that the Presi- dent is going to have a press conference here in about 81\u20442 minutes where he will announce that he is in support of this bill. I am also pleased to announce they have located Leon Panetta, so we can now proceed to the substance of this issue that we have sitting right here in front of us. The substance is very simple. That is, we have to change welfare in this country. The welfare bill originally went out of here with bipartisan sup- port. It is going to go to the President of the United States with bipartisan support, and it is going to be signed by the President. The gentleman from Massachusetts brings up a valid point. The problem is it is somewhat exaggerated. The gen- tleman shows a huge bill over there, as that is the bill that has been given to him in the last several hours or early this morning to read. That is correct. That particular bill was given to him. But about 99.9 percent of that bill is what has been previously contained. The only changes really were two- fold: First, on the family cap and, sec- ond, dealing with Medicaid. So that probably consumes maybe 20, 30 pages out of that entire bill. Yes, we have asked that Members here on the House floor take time this morning during their workday to read that 20 to 40 pages or whatever was necessary to be briefed by their staff. We are trying to get this bill to the President. For the first time in a long time, we have general agreement on a major, major issue. We have got Demo- crat and Republican support on the House side. We have got Democrat and Republican support on the Senate side. We have got a Democratic President that is willing to sign it. That means that we should expedite the movement of this bill. That means that this rule should pass. By the way, upstairs this bill was voted out of com- mittee on a unanimous vote, no dissen- sion upstairs. I think it is now an ap- propriate time for us to move on, pass this rule so that we can get to the meat of the conference committee re- port and send this bill to the President for signature. Mr. Speaker, I reserve the balance of my time. Mr. MOAKLEY. Mr. Speaker, I yield 5 minutes to the gentleman from Mis- souri [Mr. VOLKMER]. (Mr. VOLKMER asked and was given permission to revise and extend his re- marks.) Mr. VOLKMER. Mr. Speaker, I thank the gentleman for yielding the time to me. Mr. Speaker, it is not any great pleasure that I come here today to be able to address the rule that is now be- fore us. This is a rule that, when we as Democrats were in the majority, known as basically martial law, that we only used at the end of the session, usually the last 3 days, in order to fa- cilitate the passage of conference re- ports in those last few days. Yet under this leadership and this majority, this year alone this martial law type of rule has been in effect longer than any time if you added up all of my previous 19 years here. So in 1 year, this year, this session, we have used it more than I did in the previous 19 years. Now, that tells me a little bit about the running of the House and procedures in the House. This is not necessary. This rule is not necessary. If we follow the normal rules of the House, the rule to take up the welfare bill, it would be reported in a day, be taken up tomorrow in the normal course, be passed. The welfare bill will be taken up and passed. But for some reason or other, it has been dictated by on high, and that is what I did say, dictated by on high, the major- ity, the Speaker and the floor leader, the leadership of the Republicans have decided we are going to do it today. They wanted to do it early this morning. They wanted to do this right away before any of us even had a chance to look at the bill. The chairman, the ranking member of the committee has a copy of the bill there, and there is a copy right over here. I dare say on the gentleman’s side and my side there is not 10 percent of the Members that have even read that bill. Now, they have a general idea of what is in it, but that is all. CONGRESSIONAL RECORD \u2014 HOUSEH9392 July 31, 1996 A lot of them were willing to vote for it because I talked to Members on both sides. They are willing to vote for it, either for or against it this morning without knowing the details. Just the idea of what is in there. That gives me a great deal of con- cern, that we have here representatives of the people in the U.S. House of Rep- resentatives that are willing to vote on a far-reaching piece of legislation that will impact on millions of people and yet doing it without knowing exactly what is in it. That gives me a great deal of concern about the Members of the U.S. House of Representatives, not as great a deal as the policy that is being followed of, again, dictating to the Members of the House. That is ba- sically what we are seeing here, is a dictatorial policy, autocratic. The leadership knows better than anybody else. We are going to do it their way or no way, and that is what we are up against today. It is that policy that I think has led us to a lack of bipartisanship in this House. It is the Republican leadership, in my opinion, Speaker GINGRICH, Floor Leader DICK ARMEY, that are re- sponsible for the highly partisanship feeling that pervades this House today. It is not only just on this side. It is on the majority side, too. I hear it con- stantly, about the partisanship. Yet ev- erybody stands up and says, We ought to be bipartisan; we need to be biparti- san. How can we be bipartisan when the hand is never reached out to the other side to say, hey, what can we do to- gether on this. That hand is never reached out. Instead, it is just like this legislation, this rule, it is dictated from above. It is toned down. Take it or leave it. That is the way it is. There is no bipartisanship. There is no at- tempt to be bipartisan in this House. I hope that somewhere between now and the end of this session the major- ity leadership under the Speaker would see fit to not be so autocratic, not to be so dictatorial, but to reach out that hand to Members on this side and say, let us work together the rest of the year on legislation and let us be bipar- tisan. There is not much bipartisanship here today. Mr. MCINNIS. Mr. Speaker, I yield myself such time as I may consume. First of all, to the gentleman from Missouri, I wanted to caution him a lit- tle on the utilization of the word ”dic- tatorship.” I do not think that adds to the comity on the floor. I think we should approach those kind of terms with some trepidation. Let me address the other point. That is, I do not want the gentleman from Missouri, because I have great respect for the gentleman, to continue to use inaccurate facts. The gentleman stated to our body here that when they were in control we did not see these kind of rules until the end of the session. I do not know why this keeps coming up, but time after time after time, when we deal with a rule, Mr. Speaker, we have to repudiate that. I have got the facts right here. I would be happy, if the gentleman would like to come over here, we will show him the statistics. Let me cover very briefly 1993. It was not near the end of the session when his side utilized this rule. In fact, it was in February, in March, in March, in March, in March, in March, in March, and then, of course, we had some throughout the rest of the ses- sion, too. I just want to make sure that we are accurate on our facts. The final thing I would caution the gentleman from Missouri, his state- ments about this is not bipartisan. In fact, I think this bill right here, No. 1, both Democrats and Republicans and unaffiliated and reform party people from across this country acknowledge that welfare needs to be changed. The system does not work. All of the incen- tive on this system is to stay on it, not to get off it. The system helps people that do not need help and does not help the people that really do need help. Since I have been up here, I do not think I know such a major piece of leg- islation that has had more joint effort. Certainly the last 3 or 4 hours, I was somewhat amused when the gentleman said this morning, this morning es- caped from us because, frankly, there was a lot of partisanship delay this morning. But we have gotten past that. The bill itself, the substance of this bill is a bipartisan product, a Democrat and Republican product. Certainly. It has been brought up by the Republican leadership. It is a Republican part of our contract. It was one of our biggest efforts, but we have had lots of help and we have appreciated that. b 1345 It is bipartisan, and at 2 o’clock and 15 minutes, the President of this coun- try is going to hold a press conference where we anticipate that he is going to agree to sign this bill. Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania [Mr. FOX]. Mr. FOX of Pennsylvania. Mr. Speak- er, I thank the gentleman from Colo- rado [Mr. MCINNIS] for extending the time because today, Mr. Speaker, we have an opportunity to pass a stark welfare reform that requires work and personal responsibility and lifts fami- lies from lives of despair and hopeless- ness. I think we should especially look to the fact that for able-bodied individ- uals this Congress and this Govern- ment will make sure that we have job training and job placement for the able-bodied, and for those that truly are in need, just seeking it, we will be there. The fact is that on child nutrition programs we are talking about block- granting the States, which is a great benefit because right now on child nu- trition programs we are spending 15 percent to administer those programs, and the States, only 5 percent for ad- ministration. With the extra 10 percent they will receive from the Federal Gov- ernment, they must feed more children more meals by our great standards. The States will follow the Federal standards. On child support enforcement, we are going to make sure that all of those in- dividuals and families that do not now have, for many deadbeat dads and other parents, the funds they need to make sure that the children are pro- tected. They will have to adopt in each State programs like they have in Maine where they had 21,000 people who had not paid their child support; and when they said they could lose their driver’s license, they in fact, 95 percent within 30 days, paid their child support payment. So we see a program that is going to become more modern, more sensitive, and make sure that we take care of those in need, and we make sure that the welfare reform that we have craft- ed here is bipartisan and worthy of the votes of both sides of the aisle in both Chambers and, hopefully, as well, with our President. Mr. MOAKLEY. Mr. Speaker, I yield back the balance of my time. Mr. MCINNIS. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the res- olution. The previous question was ordered. The resolution was agreed to. A motion to reconsider was laid on the table. f CONFERENCE REPORT ON H.R. 3734, PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILI- ATION ACT OF 1996 Mr. SOLOMON, from the Committee on Rules, submitted a privileged report (Rept. No. 104 729) on the resolution (H. Res. 495) waiving points of order against the conference report to ac- company the bill (H.R. 3734) to provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997, which was referred to the House Cal- endar and ordered to be printed. Mr. SOLOMON. Mr. Speaker, I call up the resolution (H. Res. 495) waiving points of order against the conference report to accompany the bill (H.R. 3734) to provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997 and ask for its immediate consid- eration. The Clerk read the resolution, as fol- lows: H. RES. 495 Resolved, That upon adoption of this reso- lution it shall be in order to consider the conference report to accompany the bill (H.R. 3734) to provide for reconciliation pur- suant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997. All points of order against the conference re- port and against its consideration are waived. The conference report shall be con- sidered as read. The yeas and nays shall be considered as ordered on the question of adoption of the conference report and on any subsequent conference report or motion to CONGRESSIONAL RECORD \u2014 HOUSE H9393July 31, 1996 dispose of an amendment between the houses on H.R. 3734. Clause 5(c) of rule XXI shall not apply to the bill, amendments thereto, or conference reports thereon. The SPEAKER pro tempore (Mr. HEFLEY). The gentleman from New York [Mr. SOLOMON] is recognized for 1 hour. Mr. SOLOMON. Mr. Speaker, for the purposes of debate only, I yield the cus- tomary 30 minutes to the gentleman from Massachusetts [Mr. MOAKLEY], pending which I yield myself such time as I might consume. During consider- ation of the resolution, all time yielded is for the purpose of debate only. Mr. Speaker, this rule waives all points of order against the conference report to accompany H.R. 3734, the Per- sonal Responsibility and Work Oppor- tunity Reconciliation Act of 1996, and against its consideration. Additionally, the rule provides that the conference report shall be consid- ered as read. The rule also orders the yeas and nays on the adoption of the conference report and on any subse- quent conference report or motion to dispose of an amendment between the Houses. Finally, the rule provides that the provisions of clause 5(c) of rule XXI re- quiring a three-fifths vote on any in- come tax rate increase shall not apply to the bill, amendments thereto, or to the conference report thereon. Mr. Speaker, this rule is customary for conference reports. I urge support for the rule in order that we might send this legislation on to the Presi- dent swiftly, since he now has decided he is going to sign this vital piece of legislation. Mr. Speaker, in March 1995, I called up the rule that provided for consider- ation of the first welfare reform bill. Sixteen months, two bills, and two Presidential vetoes later we stand on the precipice of enacting real com- prehensive, compassionate welfare re- form legislation. Throughout the passionate debate on this subject we have held firm on our principles to enact a reform to the Na- tion’s welfare system which requires work, which imposes time limits on benefits for welfare recipients, and which allows for innovative State solu- tions to help the underprivileged in our communities. We have not departed from these principles throughout the confusing dialog with the President. These principles are embodied in the conference agreement before the House today. Mr. Speaker, these principles are not implemented in a vacuum. The con- ference package addresses concerns as- sociated with a radical overhaul of the Nation’s welfare programs. First and foremost, it should be made perfectly clear that this bill takes care of unfortunate people who are disabled, and able-bodied people are taken care of as well on a temporary basis, but the key word is temporary. After being taken care of on a limited basis, these people are going to have to go to work. The legislation contains valuable re- forms to the food stamp program, de- signed to curb fraud and abuse and re- quiring work for those food stamps. The agreement authorizes $22 billion in child care funding over the next 6 years, which is more than $3 billion over current law. Finally, the legislation contains tough measures to crack down on dead- beat dads who abrogate their moral re- sponsibility to their children; and, Mr. Speaker, in contrast to the bold and honest proposals that Congress has put forward to reform welfare, the Presi- dent has acted with characteristic te- merity. The alleged welfare reform that the Clinton administration says it has achieved is in actuality a fraud. It just is not there, and the savings show it. The President asserts that he has achieved a degree of welfare reform by granting waivers from his bureaucrats for States to experiment in this area. The reality is that we have heard tes- timony on this floor from State after State that the waiver process is that thoughtful and experimental governors must troop to Washington DC, hat in hand, and request permission to reform low-income programs at home. The waiver request is then subject to end- less debate by bureaucrats and subject to negotiation and even change by the Federal departments involved. Mr. Speaker, my State of New York has several waiver requests pending for low-income programs, and New York certainly needs flexibility for budg- etary purposes, and we are being stonewalled by this administration be- cause none of those waivers have been granted in a State that is overburdened with welfare problems today. Thank- fully, this Byzantine procedure will be relegated to the dust bin of history upon enactment of this legislation. The citizens of the States, in whom I have the utmost confidence, will be finally free to use local solutions to help low- income families in their neighbor- hoods. Mr. Speaker, I was raised to treat the less fortunate in our society with com- passion, as most Americans are. The way to effect change for those who suf- fer in poverty is certainly not addi- tional handouts and entrapment in the current cycle of dependency that has bred second- and third- and now fourth- generation welfare recipients. Rather, we should emphasize welfare as a tem- porary boost from despair to the sense of self-worth inherent in work. Mr. Speaker, that is what we ought to be doing, that is what we can do here today. This legislation gives the single moms and kids, who are the vast majority of welfare recipients, an op- portunity to escape a life of relying on government benefits. A vote against this package is a vote to deny kids on welfare hope to escape a life of welfare dependency. Mr. Speaker, this House will today once again pass comprehensive welfare reform by a wide bipartisan margin. The Senate is likely to do the same be- fore we recess this Friday. I sincerely hope the President lives up to his an- nouncement a few minutes ago and agrees with the bipartisan majorities in both houses of Congress and over- whelming public sentiment and he signs the legislation into law. If he does, the status quo goes out the win- dow, and finally, we are going to do something about this ever, ever-in- creasing welfare load in our country. I strongly urge passage of the bill. Mr. Speaker, I reserve the balance of my time. Mr. MOAKLEY. Mr. Speaker, I yield 4 minutes to the gentleman from Wash- ington [Mr. MCDERMOTT]. (Mr. MCDERMOTT asked and was given permission to revise and extend his remarks.) Mr. MCDERMOTT. Mr. Speaker, we started this Congress with the major- ity indicating that they were going to follow new procedures, and they made a big show of all the rules changes we were going to have, but here we are ramming through the biggest change of policy toward children in this country with a bill that has been in our hands for a little more than 12 hours. This 1,200- or 1,500-page bill was de- livered to the Members of Congress last night at 1 o’clock in the morning. All that is being characterized as partisan fighting out here is basically a resist- ance to having something like this rammed through the Congress with a lot of good rhetoric wrapped around it, but the facts belie what is being said. Now, the gentleman from New York [Mr. SOLOMON] has started to debate the bill and said this is a bill about work, but if my colleagues take this bill, and they go to page 80 under sec- tion 415, it is the section called waiv- ers, and if my colleagues can wade through this language, and I will read it for them: Except as provided in subparagraph (B), if any waiver granted to a State under section 1115 of this Act or otherwise which relates to the provision of assistance under a State plan under this part (as in effect on Septem- ber 30, 1996) is in effect as of the date of the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, the amendments made by the Personal Responsibility and Work Opportunity Rec- onciliation Act of 1996 (other than by section 103(c) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996) shall not apply with respect to the State before the expiration. Let me tell my colleagues what that means. That means that in 43 States there is no requirement for work. Every bit of work requirement in this bill is a fraud because with that waiver on page 80, section 415, we allow any State who has a waiver now in effect, and there are 43 of them in, if they are in effect, they can waive the work re- quirements. b 1400. There are only seven places in the United States making up 5 percent of the welfare load; that is Alaska, Idaho. CONGRESSIONAL RECORD \u2014 HOUSEH9394 July 31, 1996 Rhode Island, Kansas, Kentucky, New Mexico, and Nevada that do not have waivers. If we read that section fur- ther, all they have to do is get a waiver from the Federal Government and those seven States can be out. There is no requirement for work in this bill, because they write all the perfect lan- guage, spend 50 pages saying work, work, work, and then at the bottom, they give a waiver. If there is a waiver, Mr. Speaker, in their State, their State does not have to provide a job. Let me tell the Members what it is like in Washington State, because I know the situation there. We have 100,000 people on public assistance. We have 125,000 people who have been drawing unemployment benefits. That is 225,000 people in the State of Wash- ington who do not have work. If tomorrow, with this bill passed, every one of them showed up and said, ”I want a job,” the State of Washing- ton could say, ”We do not have any re- sponsibility for you. We have a waiver. The State of Washington has a waiv- er.” Even if they were going to be re- sponsible, even if the State of Washing- ton said, ”We really care about these 225,000 people and their families,” last year, and the State of Washington, Members have to remember, is the fifth most rapidly growing State economi- cally. We are at the top in this coun- try. In our State last year we provided 44,000 new jobs. Mr. Speaker I urge people to vote against this bill. It is bad. It is a fraud. Mr. SOLOMON. I yield myself such time as I may consume. I am a little concerned, Mr. Speaker, I want to take just a minute to tell the gentleman, I think he is on the Com- mittee on Ways and Means. As a mat- ter of fact, at 12 o’clock last night this report was filed. There were those of us who were here and saw to it that the report was delivered to the minority at that hour. However, earlier in the day, in the morning yesterday, this report was complete and given to the minor- ity. I do not know why the gentleman from Washington did not see it. His own staff on the Committee on Ways and Means had possession of this re- port, so the gentleman should have done his due diligence and he would have had that information. Mr. Speaker, let me just say one thing about the work requirements. I am a little concerned with the bill, be- cause it has been watered down so much. As a matter of fact, when the bill left this House we had a family cap, which meant young girls that con- tinue to have baby after baby after baby could not just continue to have more and more and more welfare bene- fits given to them. Unfortunately, that was dropped. A phrase was put in that would allow States to opt in, or rather, would allow States to opt out, as op- posed to opting in. Let me tell the Members what hap- pens in a State like New York State, where we have had for years now the Cadillac of welfare programs and the Cadillac of Medicaid programs, where- by New York State has exercised their option to opt in for all of these various programs above and beyond the base coverages for welfare and Medicaid. In our State, we do not stand any chance of being able to change that law, so if we had arranged to have them be able to opt in, as opposed to opt out, then we could have expected some real change. So I am concerned about that, but we will live to fight that battle another day. Mr. Speaker, as the gentleman’s President is saying, this is a work-for- welfare program. I am surprised to hear the gentleman from Washington try to refute that. Mr. CAMP. Mr. Speaker, will the gen- tleman yield? Mr. SOLOMON. I yield to the gen- tleman from Michigan. Mr. CAMP. Mr. Speaker, I thank the chairman of the committee for yielding to me. Mr. Speaker, I know there has been some issue raised regarding the waivers for the work requirement. The waivers are all drawn more strictly than cur- rent law. I think that is an important point to make. The waivers that have been given by the administration are more strict than current law. The cur- rent waivers do not apply to the per- centage work requirement in the legis- lation. I think that is another impor- tant point to make. I thank the gen- tleman for yielding to me. Mr. SOLOMON. Mr. Speaker, I re- serve the balance of my time. Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from Texas [Mr. COLEMAN]. (Mr. COLEMAN asked and was given permission to revise and extend his re- marks.) Mr. COLEMAN. Mr. Speaker, I thank the gentleman from Massachusetts for yielding me this time. Mr. Speaker, I think it is important to point out, regardless of the politics of welfare reform, the issue ought to be what does the bill do. Regardless of whether or not a past President or a sitting President would sign or veto a bill, it should have nothing to do with the legislative branch priority and pre- rogative to pass good legislation. Mr. Speaker, I know many have worked long and hard on this bill and others like it over the past year and a half and longer. In fact, the discussion of welfare reform has been debated since I came here 14 years ago. I need to say, however, to my colleagues that it is not enough to play the politics with welfare reform that we are at- tempting to do today. I certainly do not intend to support welfare reform and then go home and applaud myself and tell people, are you not proud we have welfare reform? We have to look at what we are doing to children. More than 1 million children will be thrown off the welfare rolls. What kind of Nation is it that says, ”We care about what is in front of your name: Documented child, undocu- mented child, poor child, rich child”? What difference does that make to a great Nation? I submit to the Members, it should make none. All of us here in this country understand that we ought to care for children regardless of their station in life, regardless of the coun- try from which they came. To suggest that we should do this in this legisla- tion is plain wrong. I know all of the 50 States are great- ly benevolent. By the way, that re- minds me, why did we take over this program in the 1960’s in the first place up here at the Federal level? As I re- call, we had a patchwork, quiltwork of 50 different programs, some good to the poor, some bad to the poor, some harsh, causing people, of course, to mi- grate from State to State, based upon the benefits that they or their children could receive during tough economic times. This legislation also does not deal with tough economic issues the way it should. Mr. MOAKLEY. Mr. Speaker, it gives me great pleasure to yield 5 minutes to the distinguished gentleman from New York [Mr. RANGEL]. (Mr. RANGEL asked and was given permission to revise and extend his re- marks.) Mr. RANGEL. Mr. Speaker, let me thank the gentleman from Massachu- setts [Mr. MOAKLEY] for giving me an opportunity to speak out on this. I am going to say what is on everybody’s mind. It is just so close to the election, I suppose, on both sides of the aisle we get blinded about substance in our con- cern as to what is it that the pollsters really want. A lot of concern has been in the White House and on the Hill as to whether or not the President would breach his promise to change welfare as we know it. I would think that the chairman of the Committee on Rules, notwithstanding how diligently the Committee on Rules has worked on this legislation, would have to agree that there is no urgency in terms of Members understanding the work that was done in conference. This is not an unusual thing, unless it has something to do with the fact that we are going into recess, and that this will be a po- litical issue back home. Other than that, it seems to me if we are talking about millions of children, children who would be Democrat, Re- publican, Christians, Jews, black, white, Americans, and certainly the lesser among us, that all of us would want to make certain that we are doing the right thing; and really, not even push the President into making a hasty decision, when at least the last position he took was that he appre- ciated the direction in which the legis- lation was going and he saw some im- perfections which could be worked out. But it was he who said that he want- ed to change welfare as we know it. What is welfare? What is this obsession about putting people to work? Every- one agrees if you are able to work, you CONGRESSIONAL RECORD \u2014 HOUSE H9395July 31, 1996 should be working. Every taxpayer should be angry and annoyed to find people slipping back on their respon- sibilities and not working. Are we talking about just women, or are we talking about women that have children? I pause, because it is not a rhetorical question. The bills that I know of say aid for dependent children. I think what we are saying, I would say to the gentleman from New York [Mr. SOLOMON], is that that child will be held responsible for any conduct that we politically do not like about the mother. We are going even further, not as far as the gentleman would like, but I think even the President agrees with the gentleman’s posture, that if after 5 years or 4 or 3 or 2 or whatever the Governors decide, I think the minimum is 2 years, that if for any reason at all, there are no jobs available, and if the mother played by the rules, signed up, went into training, did all of the Amer- ican things in order to show that she wanted to maintain her dignity, she wanted her family not to stay on wel- fare, she wanted to go into the private sector and contribute, if all of those things are established, it is my under- standing it really does not make any difference. Playing by the rules does not make a difference, in election years, because we said it does not make any difference what the heck you have tried to do; the question is, are you working. Quite frankly, I believe that the mother could vote with her feet if she does not like the situation employ- ment-wise. I am mean enough to be with you. I am a politician, too. My problem is the child. What did the child have to do with the fact that the moth- er wanted to work, did not want to work, jobs were there, jobs were not there? Do Members know what the po- litical question is? The Republicans will throw 2 million people, children, into poverty, and my President will only throw 1 million into poverty. Mr. Speaker, I do not want to get in- volved in religion around here, but there is not a denomination of people that do not believe that the helpless of this country\u2014just being an American means you are supposed to help them. You do not send a 2-year-old child or a 2-month-old child out to get a job. Someone has to be responsible. Some- one has to be responsible for that child. Do not ask the child for its identifica- tion, and ask whether or not it is a cit- izen. Do not ask the child whether, by choice, the mother is a bum. Do not ask the child what the unemployment statistics are. As Americans we believe in taking care of our children. This is a political bill. It should not be passed into law. It should not be passed here. The President should not sign it if you do shove it down his throat. Mr. SOLOMON. Mr. Speaker, I yield 2 minutes to the distinguished gentle- woman from Jacksonville, FL, Mrs. TILLIE FOWLER, who has been a real leader in this effort. (Mrs. FOWLER asked and was given permission to revise and extend her re- marks.) Mrs. FOWLER. Mr. Speaker, the American welfare system was intended to be a safety net for those who fall on hard times. Unfortunately, it has be- come an overgrown bureaucracy which perpetuates dependency and denies people the chance to live the American dream. I am pleased the President has just announced that he would sign the Re- publican welfare bill. We knew when it got this close to the election this President would choose the path of po- litical expediency, as he always does. But this legislation is not about saving money, it is about saving hope and sav- ing lives while reforming a broken sys- tem and while preserving the safety net. This bill encourages work and inde- pendence and discourages illegitimacy. I urge my colleagues to vote for fair- ness, compassion, and responsibility, and pass a conference agreement on H.R. 3437. Mr. MOAKLEY. Mr. Speaker, I yield 3 minutes to the gentleman from Cali- fornia, the Honorable GEORGE MILLER, the ranking member on the Committee on Resources. (Mr. MILLER of California asked and was given permission to revise and ex- tend his remarks.) Mr. MILLER of California. Mr. Speaker, today is a serious and sad day. Not only are we presented with a welfare bill by the Republicans that for the first time in history does a great deal of harm to children in this coun- try, but we have learned in the last few minutes that the President of the Unit- ed States, Mr. Clinton, now says that he will sign that bill. This is a President who, along with the First Lady, have spent much of their public life trying to help chil- dren. Now he says he will sign a bill that, for the first time, knowingly, he knowingly, he has been presented the evidence by his own Cabinet, he has been presented the evidence by the Urban Institute and others, that will knowingly put somewhere around 1 million children who are currently not into poverty, into poverty. Almost half of those children are in families that are working, where peo- ple get up and they go to work every day. But at the end of the year, they are poor. This bill puts those children into poverty. That cannot be a proper purpose of the U.S. Congress, and that cannot be a proper endorsement for the President of the United States. b 1415 It is against the interest of our chil- dren. Yes, this program was started many years ago to try and save the children. For many, many years we have lifted those children out of pov- erty, not as well as we have done for the seniors, but it was a national goal. This bill now for the first time, again knowingly, the evidence is in front of us, and yet we are being asked to make a decision to reverse that trend and to once again put children into poverty. They can lose their benefits under this with nobody having offered their par- ents a chance to work or requiring them to do so, because in the 11th hour those same Governors who boasted about their desire to put people to work came in and got loopholes put into this bill so they do not have to meet the very standards that they said they were prepared to change this pro- gram from welfare to work. So how did they achieve the budget savings, then? They achieved the budg- et savings by going after children, by going after women. I grew up, and I think most people in this country be- lieve that when you said women and children first, what you were saying is you wanted to care for those individ- uals. This legislation suggests that they will be the first to be harmed and that is what this legislation allows. I appreciate all of the theory in the legislation, but the fact of the matter is every time that the pedal meets the road here, what we see is that in fact they are sacrificed. These children now pay to provide the $60 billion in savings that the majority says that they want. We cannot allow that to happen. this President should be demanding that this bill simply do no harm to those children. You can get all of the welfare reform you want and still do no harm to the children. But unfortunately this President has joined the Republicans now in making the children the very victims of the system he said he want- ed to reform. ANNOUNCEMENT BY THE SPEAKER PRO TEMPORE The SPEAKER pro tempore (Mr. HEFLEY). The Chair will make a brief statement in clarification of his re- sponse to the parliamentary inquiry propounded by the gentleman from Pennsylvania [Mr. WELDON] during the consideration of House Resolution 492. In that response, the Chair merely intended to indicate that, in the discre- tion of the Chair, the objection by the gentlewoman from Connecticut under rule XXX was not then a dilatory mo- tion. Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, in response to the pre- vious speaker for whom I have a great deal of respect, he came to this body about 20 years ago and I do not know what experience he had in previous government, but when he is critical of the Governors of these States, I look at my own Governor, Gov. George Pataki. He is probably one of the most knowl- edgeable people in America today about what it means about jamming things down the throats that we do here in Washington, sending it back to the States and local government. George Pataki was a town mayor be- fore he became a State assemblyman in the lower house and then before he be- came a State senator and now Gov- ernor. Believe me, he knows what un- funded mandates mean to a State like CONGRESSIONAL RECORD \u2014 HOUSEH9396 July 31, 1996 ours where we have seen job after job after job chased out of our State be- cause we just could not afford to do the things for business and industry that were necessary because of the terrible welfare burden. That is all changing now and it will change with the adop- tion of this legislation. We are once and for all going to be able to let those people who have the experience, those people down at the local levels of gov- ernment who have to deal with the wel- fare recipients day in and day out, let them come up with the solutions. That is what this debate is all about. Mr. Speaker, I yield 2 minutes to the gentlewoman from Columbus, OH [Ms. PRYCE], a member of the Committee on Rules. Ms. PRYCE. Mr. Speaker, I thank the distinguished chairman of the Rules Committee for yielding me this time. I rise in strong support of this fair rule to bring about real welfare reform. Mr. Speaker, a generation ago, Amer- icans began a much-celebrated war on poverty in the hope of creating a Great Society. But nearly 30 years and more than $5 trillion later, what we are left with is a failed welfare system that has deprived hope, diminished opportunity, and literally destroyed precious lives. Our country, and the future genera- tions of Americans who will lead her, deserve a better system. Today we will consider a conference report that replaces a welfare system debilitated by strict Federal control with a system based on innovation and flexibility at the State and local level. Instead of promoting dependency and illegitimacy, this conference agree- ment is built on the dignity of work and the enduring strength of families. By taking the Federal bureaucracy out of welfare, this legislation promotes creative solutions closer to home and offers a real sense of hope to the truly needy and the less fortunate. Mr. Speaker, despite the comments we will hear today, this is a compas- sionate bill. Helping those who by no fault of their own have fallen on hard times is the right thing to do. This bill responds to that in the finest American tradition. But when we help people that are able-bodied, when we just hand them a check, those people who make little or no effort to help them- selves, we risk destroying the Amer- ican spirit and undermining our soci- ety at large. This conference agreement rep- resents a true bipartisan attempt to change welfare as we know it. I hope the President will not shy away again from this historic opportunity for change. In closing, Mr. Speaker, I urge my colleagues to have the courage to set aside the status quo, to think of the children and families of this Nation and to embrace real reform. I urge a ”yes” vote on both sides of the aisle for this rule and the conference report. Mr. MOAKLEY. Mr. Speaker, I yield 21\u20442 minutes to the gentlewoman from Florida [Mrs. MEEK]. (Mrs. MEEK of Florida asked and was given permission to revise and extend her remarks.) Mrs. MEEK of Florida. Mr. Speaker, both times I have risen, I have risen in strong opposition to the rule and I will be doing so, I feel, to the conference re- port. Mr. Speaker, I do not think many people in this Congress really under- stand the effects of welfare. I think that the system should be reformed. I am sure that there are many people who still abuse this system. We have not yet changed to any great extent the enforcement, to be sure, that peo- ple who do not deserve welfare are on it and those who are abusing it get pun- ished for being so. Mr. Speaker, I contend that this con- ference report does not meet the needs of the people they are hoping that it will meet. We are still going to have hungry children, children who are not taken care of by their States. I served as a State legislator. We still did not give matching funds for the funds that the Federal Government gave us. Now that we are cutting the funds, are they going to do any better? My answer is no. The real world will teach everyone in this Congress that you are hurting children. It seems to me that you are doing it deliberately because many of us have said to you and shown you evi- dence that it is going to do it. OMB has done it. Several agencies with whom you have great credibility have shown the same. It permits the States to ex- periment with our children in order to save $40 to $60 billion in Federal funds. Why save it when you are losing your main human resources, your children? Almost one-third of these cuts come from mistreating the children of immi- grants. Do you feel that the legal im- migrant children in this country should be treated any less? Would you want your children to be treated any less than when they go down to get health care and they tell them they cannot be treated because their parents have been here 16 years or more paying taxes into the American Government, their sons and daughters have gone to war for this country? Are you going to say to those children, No, you can’t get any more treatment. Go to the State. Go to the county. When they get to the counties and they get to the States, there is no money. I have been there and I know there is none. The Republican majority is going to ban food stamps and SSI for some chil- dren, particularly those that are dis- abled and those that are poor. It bars Medicaid for legal immigrants. Is that going to make them any less ill be- cause we are barring it in this bill which we are using here in a vacuum? We have done perhaps no impact study. We do not know how this is going to impact on States like Florida and California. I say, Mr. Speaker, that this is wrong and that the Republican majority should realize what they are doing. Otherwise in the end the people will speak, and I hope they do. Mr. Speaker, I rise in strong opposition to the rule and the conference report itself. This rule is designed to prevent both the Members and the public from learning the details of this fatally flawed bill. This bill permits the States to experiment with our children in order to save $60 billion in Federal funds. Almost one-third of these cuts\u2014$18 billion\u2014come from treating the chil- dren of immigrants more harshly than other children. The Republican majority bans food stamps and supplemental security income payments for virtually all legal immigrants. The bill bars Medicaid for legal immigrants who are elderly or disabled. These immigrants the Republican majority wants to penalize are legally here. They played by the rules. They meet every require- ment of the law. They live and work hard; they pay taxes; they serve in the military. They will not vanish simply because the majority passes this bill. What will happen is that these costs now paid by the Federal Government will be un- fairly shifted to States like Florida, and coun- ties like Dade, that have a high number of legal immigrants. Let me give the House a concrete idea of how unfair this bill really is. My own State of Florida estimates that it will lose more than $300 million a year in Federal funds because of this bill. Who ends up paying? My constituents in Dade County and the State of Florida. The bill instructs States to deny school lunches to undocumented immigrants. The chairman of the Dade County School Board says that one-quarter of the children in the Dade schools were born in a foreign country. The Dade County schools would have to col- lect information from every single child in order to determine which ones can get sub- sidized lunches. The Republican majority is trying to balance the budget and cut taxes for the wealthy by creating local paperwork and higher local taxes. It is wrong and it is unfair for the Republican majority to force State and local govern- ments\u2014meaning our taxpayers back home\u2014 to pay for legal immigrant residents who are in this country because they complied with the immigration laws that previous Congresses have enacted. I urge my colleagues to vote against this rule and against the conference report. Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, one of my colleagues just approached me, and they said they hope the American people that might be watching on C SPAN would ask the question of all of us: Are you satisfied with the status quo? That seems to be what I hear from the other side of the aisle, even though the President is going to sign this bill, that they are satisfied with the status quo. The people I represent are not sat- isfied with that status quo. Mr. Speaker, I yield 1 minute to the gentleman from Erie, PA [Mr. ENG- LISH], one of the outstanding freshman Members of this body. Mr. ENGLISH of Pennsylvania. Mr. Speaker, I rise in strong support of this rule and in strong support of this con- ference report, the most sweeping wel- fare reform legislation this country has seen since the Great Society. CONGRESSIONAL RECORD \u2014 HOUSE H9397July 31, 1996 As Franklin Delano Roosevelt warned in the late 1930’s, giving perma- nent aid to anyone destroys them. By creating an underclass culture of pov- erty, dependency, and violence, we have been destroying the very people we have been claiming to help. How many more families will be trapped in the current welfare system while we waste time in Washington? I am delighted to see that the Presi- dent has indicated he may support this conference report, which will require for the first time ever able-bodied wel- fare recipients to work for their bene- fits. Every family receiving welfare must work within 2 years or lose bene- fits, and lifetime benefits are limited to 5 years. This is a balanced, mainstream ap- proach that links welfare rights to per- sonal responsible behavior. I urge the House to adopt this rule and lay the groundwork for passage of this con- ference report. Mr. SOLOMON. Mr. Speaker, I yield such time as he may consume to the gentleman from Sanibel, FL [Mr. GOSS]. (Mr. GOSS asked and was given per- mission to revise and extend his re- marks.) Mr. GOSS. Mr. Speaker, I rise in strong support of this rule and this bill because we all know that the era of big government is indeed over. Mr. Speaker, I thank my friend, the distin- guished chairman of the Rules Committee, for yielding me this time. The wisdom of SOLOMON has been in great demand these last few days, and once again he has delivered a fair and workable rule to this body. Our Rules Committee labored diligently yesterday evening and this morning to accommodate both the strong desire of the majority of Ameri- cans that we end welfare as we know it\u2014and the legitimate efforts that have been underway among Members of Congress and the admin- istration to negotiate a final product. For that reason, we brought two rules, in order to give the conferees as much time as possible to complete their work while getting welfare re- form to the President this week. This rule al- lows the House to consider a milestone bill\u2014 one that lays to rest 30 years of big-govern- ment policies that have cost $5.5 trillion but failed to win the war on poverty. I must say I am disturbed by the hand-wringing and dema- goguery that is emanating from some mem- bers of the minority. Their assurances that they do want to reform welfare, but they just don’t want to do it in this way, ring quite hol- low. Remember that they had the opportunity when they controlled both Houses of Con- gress and the White House for 2 years\u2014an opportunity they refused to capitalize on. So now, with a President who has pledged to end welfare as we know it, and a congressional majority committed to dismantling the Big Brother, Washington-knows-best bureaucracy that has made welfare a dependency trap\u2014we are finally going to make welfare reform hap- pen. I am sorry that the ultraliberal wing of the Democrat Party in this House is having trouble with that result\u2014but it’s one the American people are demanding. If those in the minority succeed in their carefully orchestrated attempt to delay enactment of this bill, I suspect they will have to answer to their constituents for de- nying poor Americans a fighting chance to break out of poverty and become productive members of this society. Mr. Speaker, this leg- islation unleashes the creativity of our States to solve problems or poverty at home. It unshackles them from the burdens of costly and micromanaging Federal regulation\u2014while providing significant resources for children and job programs. It allows those precious Federal dollars that are so desperately needed by our Nation’s poor to bypass the grossly inefficient Federal bureaucracy. And it emphasizes work for those who can, along with compassion for those who can’t. This is a balanced bill\u2014and it’s time for the defenders of the status quo to get with the program and heed the words of the President. Support this rule and the bill. Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, the chairman of the Rules Committee just said if people are opposed to this rule and this bill that they are for status quo. That is abso- lutely incorrect. The people who are opposed to this bill are opposed to it because it puts another 1 million children into poverty and does not go far enough. Mr. Speaker, I yield 3 minutes to the gentleman from Indiana [Mr. ROEMER]. (Mr. ROEMER asked and was given permission to revise and extend his re- marks.) Mr. ROEMER. Mr. Speaker, this bill, this conference report that we will soon vote on, represents the biggest change to our social policy in the last 60 years. We have moved from the New Deal to the New Frontier to the Great Society, and now hopefully to the fair deal. Where have we gone in this debate over the last year? We started with H.R. 4, a bill that I think was terrible for this Nation and for our children, that was mean to our children, that was unfair to the people that we want- ed to give skills to go to work, that was not fair to our parents who had children home from child care. That bill has been vastly changed. Just re- cently we voted for a bill to come out of the House, and 30 of us Democrats voted to move the process along and improve the bill in the Senate and House conference, where it has been improved, and I will vote to support this conference. President Clinton deserves credit for his willingness to sign this bill, and he deserves praise for his determination to change previous bills that were mean to children and that did not give the resources to our workers to stay off welfare. Let us move forward in a bipartisan way to continue to modify what can be a better and better bill, through Execu- tive order, through legislative change, and through bipartisan work. Let us march forward together, Democrats and Republicans, to change the status quo and move to the fair deal for our taxpayers, and for those recipients of welfare and those children that are being raised from generation to genera- tion in welfare. We can work together. We can and must work together for the recipients of welfare and for the tax- payers of this country. Again, President Clinton will sign this bill, according to all the reports, and he has indicated a willingness to work in a bipartisan way. I am glad that the President changed the first bill, H.R. 4. I am glad that the Presi- dent vetoed those initial bills that were mean to children and were not fair to get people permanently off wel- fare. I hope to continue to work across this middle aisle, Democrats and Re- publicans, reaching out to join hands and to claim back a system for the tax- payer and the American people and our children, so that we do have the big- gest change in social policy in the last 60 years, moving from the New Deal to the fair deal for our taxpayers. b 1430 Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume to say that my good friend from Boston, MA, Mr. MOAKLEY, made the statement that he is not for the status quo but he is opposed to this bill. We hear that so many times, but, but, but, but, but. No- body is ever ready to put themselves on the line for welfare reform. Today we have it. Mr. Speaker, I yield 2 minutes to the gentleman from Claremont, CA, Mr. DAVID DREIER, my good friend and member of the Committee on Rules. (Mr. DREIER asked and was given permission to revise and extend his re- marks.) Mr. DREIER. Mr. Speaker, I rise in strong support of this rule and the con- ference report. The gentleman from New York [Mr. SOLOMON] is absolutely right when he says that it is very easy to find things in this measure which we do not all support. I admit I have some concerns about some provisions as they impact my State of California. But the fact of the matter is, ending welfare as we know it is what the President said that he wanted to do when he was a candidate back in 1992. My friend, the gentleman from Illinois [Mr. MANZULLO], just re- minded me that it has gotten to the point where a Republican Congress has been able to do what a Democratic Congress did not do in the first 2 years of the President’s term, and that is end welfare as we know it. So we have finally gotten to the point where we are looking at the fact that over the last 3 decades we have ex- pended $5.3 trillion on welfare pay- ments of all kinds and we have seen the poverty rate move from 14.7 percent to 15.1 percent. So everyone, Democrats and Republicans alike, as the gen- tleman from New York [Mr. SOLOMON] just said, and the gentleman from Mas- sachusetts [Mr. MOAKLEY], our friend from south Boston, acknowledges he does not want to support the status quo and we must change the welfare system. Now, earlier today, when the chair- man of the Subcommittee on Human CONGRESSIONAL RECORD \u2014 HOUSEH9398 July 31, 1996 Resources, the gentleman from Florida [Mr. SHAW], was before the Committee on Rules, he talked about the fact that we will most likely, in the 105th Con- gress, need to make some sort of modi- fication to this measure, but if we de- feat this conference report there will be no welfare reform. We have gotten a measure, and the President has finally gotten to the point where he has agreed to sign it. That is why, as my friend, the gen- tleman from Indiana [Mr. ROEMER], said, we need to move ahead with bi- partisan support so we can try our darnedest to address a system which is broke. There are many more things that need to be done. Entitlement reform is something that is important, so that we are not simply, as many are label- ing this thing, attacking those who are less fortunate. We need to realize that this measure is designed not just to help those taxpayers who are shoulder- ing the responsibility but also to do ev- erything we can to help people get out of that generational cycle of depend- ence. Support the rule and support the con- ference report. Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume. It has been referred to some people on my side as being for the status quo. Two weeks ago we voted for the Tan- ner-Castle bill, which was a reform bill. It had much more reform than this. So it is not that we are for the status quo. We want a real reform bill. This is not it. Mr. Speaker, I yield 2 minutes to the gentlewoman from North Carolina [Mrs. CLAYTON]. Mrs. CLAYTON. Mr. Speaker, I think that the conference report will pass and, therefore, there will be reform be- cause the majority of our Members truly think they are reforming the wel- fare system. But reforming the welfare system means that we would have pro- visions in there that would ensure we were decreasing dependency, we would encourage work and we would be sup- portive to families. Those kind of structures are not present. I know everyone has good intentions, and certainly reform is because we are trying to reduce a big deficit, because we know already the amount of money we spend on welfare is really insignifi- cant to the total amount that we spend. If we wanted to reduce the budg- et, we would be reforming other things. Like the gentleman has just said, enti- tlements would be that issue. Hopefully, we can understand that those of us who will vote against this are really making a statement. We care about children too much to rob Paul to pay Peter. We are not willing to rob children of their opportunity and their future in order to provide other people an opportunity to live. Also we say we are about teenage pregnancy prevention, and yet this House last month had the opportunity just to appropriate $30 million to pre- vent teenage pregnancy. We know over a half million young people become pregnant every year. We spend annu- ally $6.5 billion, yet we will not put a small amount of money to encourage young people to do the positive behav- ior activity so they will not lead a life of dependency. We say we want to decrease depend- ency. We want to give kids stepping stones, but we put these stumbling blocks in their way. Mr. Speaker, this is not supportive of children, and I give no bad intents to anyone, but this con- ference bill, and I hope I am wrong, I hope I am wrong. I hope, indeed, mil- lions of children do not suffer, but I could not vote in good conscience for a bill that I am not assured of that. Reform means encouraging young people for support, decreasing depend- ency and making provisions for work. Vote against this conference bill. Mr. SOLOMON. Mr. Speaker, I yield 1 minute to the gentleman from Egan, IL, Mr. DON MANZULLO, an outstanding Member. (Mr. MANZULLO asked and was given permission to revise and extend his remarks.) Mr. MANZULLO. Mr. Speaker, in the last 31 years this country has spent over $5.4 trillion on the welfare system, and what do we have to show for it? We have generation after generation locked in a seemingly endless cycle of destitution and poverty. They are the lost forgotten statistics, dependent on the Federal entitlement trap that strips them of their dignity, destroys families, damages our work ethic, and destroys the self-esteem of those trapped in the system. Cruelty is allowing this destructive system to continue. By passing this welfare reform bill we will restore hope and opportunity by making work, and not welfare, a way of life. Our current welfare system has not only failed those in the system, but it has also failed those who have been supporting it, the hard working tax- payer. It has failed the forgotten Amer- ican, the one who gets up in the morn- ing, packs a lunch, sends the kids off to school. That person is working harder than ever to make ends meet, and the typical American family is paying over $3,400 a year in taxes for welfare pay- ments to perpetuate a failed system. Mr. Speaker, we should pass this bill and pass it swiftly. Mr. SOLOMON. Mr. Speaker, I yield 21\u20442 minutes to the gentlewoman from Kansas [Mrs. MEYERS], one of the truly outstanding Members of this body, who is retiring at the end of this year. She has been such a great Member, and we are going to miss her. (Mrs. MEYERS of Kansas asked and was given permission to revise and ex- tend her remarks.) Mrs. MEYERS of Kansas. Mr. Speak- er, I thank the gentleman for those comments. Mr. Speaker, I support this rule and urge my colleagues to support it. The Personal Responsibility Act is a good start toward reforming our welfare sys- tem. Because of the block grant, the entitlement nature of the program is ended. We ask able-bodied people between 18 and 50 who receive food stamps to do some work for their benefits. We re- form the SSI program to help stop monthly checks from going to pris- oners and checks that were going to healthy children. And we finally tell recent immigrants that the promise of America does not automatically in- clude a welfare check. But many issues remain unaddressed, and I believe the most serious is the ever-increasing illegitimacy rate. In 1994, one-third of our children were born into homes where no father ever lived. And by the year 2000, 80 percent of minority children and 40 percent of all children in this country will be born out of wedlock. Unfortunately, the conference report does nothing to require that fathers be identified. States who currently do nothing to identify fathers can con- tinue to do nothing, and those States who continue to reward teenage preg- nancy can continue to do so. Finally, there is no effort to enforce a family cap, even though we know that the family cap has reduced a drop in additional children in New Jersey, where it is now statewide policy. To repeat, this bill is a good start, but I believe we cannot reform our wel- fare system until we address the growth in illegitimacy. The link be- tween our ever-increasing illegitimacy rates and the growth in AFDC rolls are not casual. They are cause and effect. Why is it too much to ask that chil- dren have two responsible adults as parents? Sadly, we continue to encour- age the opposite. A previous speaker said that the cost of welfare was very modest in this country. The cost of AFDC alone, I am not talking about SSI or illegal aliens or legal aliens or anything else, just AFDC, is $70 billion a year because it is $16 billion a year AFDC, it is one- fourth of Medicaid, half of food stamps, about a third of housing plus all of the training and day care programs. It is between $70 and $80 billion a year. Mr. MOAKLEY. Mr. Speaker, I yield 1 minute to the gentleman from Penn- sylvania [Mr. FATTAH]. Mr. FATTAH. Mr. Speaker, I rise in opposition to the rule. This rule and this bill, this conference committee, is built on the biggest lie that has ever been told to the American people, and that is that we are spending too much as a country to help poor people. There is no calculation that any le- gitimate analysis of a Federal budget would tell us that we spent $5 trillion on the war on poverty. It is all made up out of whole cloth. It includes items like the Pell grants and all kinds of other programs, and education. The AFDC payments are about a little more than one penny out of every dol- lar that this Government spends to help poor children. CONGRESSIONAL RECORD \u2014 HOUSE H9399July 31, 1996 We have gotten everybody convinced that we are spending just too much money on poor people, and now we have convinced them that Speaker GINGRICH and the Republican majority are coming to help these poor children, that this is just a major effort to really help poor children, and cutting $60 bil- lion is just the best way to help them find their way to the American dream. This rule, this conference committee, the Washington Post in its editorial today said it was a bad idea. They said it was a defining moment of where this country was headed. And there will be Members who will come to the floor today, because they want to be re- elected and will vote for it, but out into the future there will be days that they will truly regret that they did not have the courage to stand up and op- pose this hideous proposal. Mr. SOLOMON. Mr. Speaker, I yield 1 minute to the former governor of Dela- ware, MIKE CASTLE, one of the people that probably knows best about the real problems or how this ought to be dealt with, and who knows that one of the reasons the welfare system in this country has failed miserably is because we inside the beltway have tried to dic- tate back to the States and local gov- ernments. Mr. CASTLE. Mr. Speaker, I thank the gentleman for yielding me this time. Mr. Speaker, I support the rule and the bill. We stand today at a historic divide, a defining moment that sepa- rates the past from the future, one which pits personal responsibility, work, and State flexibility against the largely failed welfare policies and prac- tices of the past. Today marks a turn- ing point for all of us, the Congress, our constituents, and perhaps most im- portantly, those welfare recipients. I am pleased that the bipartisan Cas- tle-Tanner reform proposal has pro- vided some very positive changes and provisions that will help shame welfare reform for the better. Perhaps the most important provision we helped retain was current law on guaranteeing Med- icaid eligibility to all welfare recipi- ents and those who may be eligible in the future. Also, the food stamp op- tional block grants and the child wel- fare block grants were dropped, thus retaining minimum Federal standards and preserving these national safety nets. On balance, we have achieved what we can all support. With this legisla- tion we have finally begun the process by which America’s underclass problem can be solved, and break a generational cycle and culture of dependency and poverty. Congress is now the shepherd of wel- fare reform, not the President, and it is up to us to review and improve upon this proposal. I, for one, stand ready and committed to revisit it, if need be, to make sure welfare reform is going to work. Mr. Speaker, we stand today at a historic di- vide, a defining moment that separates the past from the future; one which pits personal responsibility, work, and State flexibility against the largely failed welfare policies and practices of the past. Today marks a turning point for all of us\u2014the Congress, our constitu- ents, and perhaps most importantly, those welfare recipients. Just as our Nation was formed, we stand ready to forward a bold experiment in reform- ing our Nation’s welfare system. But like most experiments, we will most certainly have to re- visit our decisions. Though we have tried, there may not be enough resources for chil- dren’s care, or to adequately fund the work program that is the centerpiece of this legisla- tion. There most likely will be economic downturns that force Governors and the Con- gress to reevaluate. States may require more flexibility in meeting the stringent work require- ments. There are innumerable potential pit- falls. As a coauthor of the bipartisan Castle-Tan- ner welfare reform proposal, JOHN TANNER and I have helped forward some very positive changes and provisions that will help shape reform welfare for the better. Perhaps the most important provision I helped retain was current law on guaranteeing Medicaid eligibility to all welfare recipients, and those who may be eligible in the future. The food stamp optional block grant and the child welfare block grant were dropped, thus retaining minimum Federal standards and pre- serving these national safety nets. Protecting children in families that lose cash assistance is a high priority. Although I would have preferred mandatory in-kind assistance after a 5-year time limit on cash assistance, I am mostly satisfied that a provision could be added that would ensure that States can uti- lize Federal funds from the social services block grant for the care of the child. Further- more, we were successful in ensuring that a higher State maintenance of effort on State spending could be included in the conference report. We also were successful in including language that would require that Congress re- view in 3 years the work program to ensure its success. Last, Castle-Tanner has had a mod- erating impact on the burdens that the nonciti- zen provisions will put on our Nation’s future citizens, primarily in the health care area. While Castle-Tanner included stronger protec- tions for children and families under the cash block grant, increased funding for the welfare- to-work programs, significantly smaller food stamp cuts, and less severe immigrant cuts, its fingerprints can be readily identifiable on this conference report. Nevertheless, on balance, we have achieved what we all can support: with this legislation, we have finally begun the process by which America’s underclass problem can be solved, and break a generational cycle and culture of dependency and poverty. This is not a perfect experiment, but then experiments usually aren’t. Congress is now the shepard of welfare reform\u2014not the Presi- dent\u2014and it is up to us to review and improve upon this proposal. I, for one, stand ready and committed to revisit this as it is implemented, and as we gain empirical evidence that our ef- fort can be successful in making work pay more than welfare. And only then will we be truly able to say that we have ”ended welfare as we know it.” It’s worth taking some risks to end it. Mr. MOAKLEY. Mr. Speaker, I yield 1 minute to the gentleman from South Carolina [Mr. CLYBURN]. Mr. CLYBURN. Mr. Speaker, I rise today in opposition to the conference agreement. Being a slightly better op- tion than the House passed version of the bill does not mean this is a good piece of legislation. Welfare should be a temporary tran- sition from welfare to work. Unfortu- nately this is 1996, an election year, and we have entered the ”silly season.” Rather than being a constructive de- bate, the welfare reform debate has be- come, for the most part silly talk of budgetary savings and time limits\u2014not helping those in need of assistance learn how to help themselves. I think the designers of this legisla- tion have forgotten a valuable lesson: If you give a man a fish, you feed him for a day but if you teach that man how to fish, he can feed himself for a lifetime. This conference report would consist of a check for 2 years and then a re- quirement for work programs for only 50 percent of families receiving welfare payments\u20146 years from now. The Republicans have forgotten the parable about feeding a family for a lifetime but instead have decided that it is much cheaper to write a check to a welfare family than provide the nec- essary training to ensure that another check never has to be written to that family. And under the guise of welfare re- form even these checks are becoming smaller. Under the House passed ver- sion of this conference agreement the average annual cut per food stamp household in South Carolina would be $265, and this cut would grow to $394 by 2002. Under the Senate version of the bill, food stamp households in South Carolina stand to lose even more. While it is not clear what the actual cut would be for South Carolina fami- lies under the conference agreement, it is clear that my State’s most vulner- able households would be between the proverbial rock and a hard place with little or no hope of any training to help them lift themselves permanently out of poverty. With the talk of personal responsibil- ity being tossed around, I find it ironic that at the same time our Nation’s most vulnerable families are being re- quired to do more for themselves, our States are being asked to do even less. In this conference agreement, unlike the Tanner-Castle substitute bill I sup- ported earlier this month, States are required to spend only 75 percent of what they spent in 1994 in return for a block grant check from the Federal Government. At the same time, it is projected that as a result of this legis- lation 8,170 children in my state of South Carolina will be pushed into pvoerty. I urge my colleagues not to support this agreement. Although it may be the lesser of two evils, it is not the best we can do nor is it the best we can af- ford to do. CONGRESSIONAL RECORD \u2014 HOUSEH9400 July 31, 1996 b 1445 Mr. HALL of Ohio. Mr. Speaker, I yield 1 minute to the gentlewoman from Texas [Ms. JACKSON-LEE]. (Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.) Ms. JACKSON-LEE of Texas. Mr. Speaker, the politic thing to do today is to get in the well of the House and hit your gavel down and say I am against the deadbeat on welfare, and I am right with you for welfare reform. As America watches those of us who have a difference of opinion, we will get castigated and accused as support- ing those who would not work. But I come today to oppose this rule. I hope that those who have goodwill and understand what America is all about will realize that I believe in wel- fare reform but I do not believe in put- ting 1 million children in the streets. I do not believe in a weak work program where States will not have the work to give to those who are on welfare. I do not believe in a shortened contingency fund so that, when the 5 years comes, those who have not been able to bridge themselves out of welfare will not have the support that they need. I do not believe in sending legal im- migrants into war, but yet when they need a helping hand this Nation will say you can fight for us but we do not have any support for you and your chil- dren. I do not believe in dispossessing the disabled. I do not believe in deny- ing SSI benefits to 300,000 children. Oh, we could be politic today and many will do that. But it does not mat- ter to me because there are people in this country who need our help. This is a bad welfare reform. Vote against it. Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, if my colleagues want to take child abuse out of the welfare families, the best thing to do is to bring these people up out of the pov- erty system and given them meaning- ful jobs. That is what this legislation is meant to do. Mr. Speaker, I yield 2 minutes to the gentleman from Florida [Mr. WELDON], someone I am very proud of because he gave up a very lucrative medical prac- tice to come here and try to do some- thing for America. Mr. WELDON of Florida. Mr. Speak- er, I thank the distinguished gen- tleman for yielding, and it has been a pleasure for me to be here and advocate for the people in my district, who have been calling out for welfare reform for many years. Mr. Chairman, they know that the current welfare system is broken. The people in my district know that the rate of poverty has not decreased since welfare has been enacted. The average stay on welfare is 13 years, and today illegitimacy rates among many welfare families approach 50 percent. Mr. Speaker, I rise in strong support of the bill, and strong support of this rule. H.R. 734 will truly finally end wel- fare as we know it. It did not take a Republican Congress to end welfare as we know it. This bill makes welfare a helping hand, not a lifetime handout. It places 5-year lim- its on collecting AFDC benefits. For hardship cases States can exempt 20 percent of their case load from the 5- year limit, and able-bodied people must work after 2 years or lose their bene- fits. It cuts taxpayer financed welfare for noncitizens and felons. It returns power and flexibility to the States. It ends numerous redundancies within the welfare system by giving block grants to the States and rewards States for moving families from welfare to work. It seeks to halt the rising illegit- imacy rates. Moms are encouraged for the first time to identify the father or risk losing benefits by as much as 25 percent. It increases efforts to make deadbeat dads pay child support. And these, of course, are men who father children but then have shirked their fi- nancial responsibility for caring for them. It gives cash rewards to the top five States who make the most successful improvement in reducing illegitimacy. As we know, fatherlessness is linked to high juvenile crime rates, high drug abuse rates, and declining educational performance. Support the rule and sup- port the bill. Mr. Speaker, I rise in strong support of H.R. 3734 the Personal Responsibility and Work Opportunity Act. This historic welfare reform bill will end welfare as we know it. During the past 30 years, taxpayers have spent $5 trillion on failed welfare programs. What kind of re- turn have the taxpayers received on their in- vestment? The rate of poverty has not de- creased at all. Furthermore, the average length of stay on welfare is 13 years. Today’s illegitimacy rate among welfare families is al- most 50 percent and crime continues to run rampant. Current programs have encouraged dependency, trapped people in unsafe hous- ing, and saddled the poor with rules that are antiwork and antifamily. Clearly, those trapped in poverty and the taxpayers deserve better. This bill overhauls our broken welfare sys- tem. This plan makes sure welfare is not a way of life; stresses work not welfare; stops welfare to felons and most noncitizens; re- stores power and flexibility to the States; and offers States incentives to halt the rise in ille- gitimacy. By imposing a 5-year lifetime limit for col- lecting AFDC, this bill guarantees that welfare is a helping hand, not a lifetime handout. Rec- ognizing the need for helping true hardship cases, States would be allowed to exempt up to 20 percent of their caseload from the 5-year limit. In addition, H.R. 3734 for the first time ever requires able bodied welfare recipients to work for their benefits. Those who can work must do so within 2 years or lose benefits. States will be required to have at least 50 per- cent of their welfare recipients working by 2002. To help families make the transition from welfare to work, the legislation provides $4.5 billion more than current law for child care. Under this bill future entrants into this coun- try will no longer be eligible for most welfare programs during their first 5 years in the Unit- ed States. Felons will not be eligible for wel- fare benefits, and State and local jails will be given incentives to report felons who are skirt- ing the rules and receiving welfare benefits. Our current system has proven that the one- size-fits-all welfare system does not work. H.R. 3734 will give more power and flexibility to the States by ending the entitlement status of numerous welfare programs by block grant- ing the money to the States. No longer will States spend countless hours filling out the re- quired bureaucratic forms hoping to receive a waiver from Washington to implement their welfare program. States will also be rewarded for moving families from welfare to work. Finally, this bill addresses the problem of il- legitimacy in several ways. H.R. 3734 author- izes a cash reward for the five States most successful in reducing illegitimacy. It also strengthens child support enforcement provi- sions and requires States to reduce assist- ance by 25 percent to individuals who do not cooperate in establishing paternity. Lastly, this bill mandates an appropriation grant of $50 million annually to fund abstinence education programs combating teenage pregnancy and illegitimacy. The sad state of our current welfare system and the cycles of poverty and hopelessness it perpetuates are of great concern to me. I be- lieve this bill goes to the heart of reforming the welfare system by encouraging and helping in- dividuals in need become responsible for themselves and their family. I wholeheartedly support this bill because it makes welfare a helping hand in times of trouble, not a hand out that becomes a way of life. I truly believe that this reform will give taxpayers a better re- turn on their investment in helping those in need. Mr. SOLOMON. Mr. Speaker, I yield 2 minutes to the gentleman from Maine [Mr. LONGLEY], another outstanding new Member of this body. I particu- larly like him because he is a former Marine. (Mr. LONGLEY asked and was given permission to revise and extend his re- marks.) Mr. LONGLEY. Mr. Speaker, I want to compliment the gentleman from New York [Mr. SOLOMON], chair of the Committee on Rules, and also members of the committee for bringing this im- portant legislation to the floor, bring- ing this rule to the floor. This has been delayed far too long. This is a bill that is about child abuse. It is drug abuse. It is crime and violence and the fact that, for too many Americans who are trapped in this system, the American dream has become the American nightmare. I do not argue with the fact that the welfare system is a hand in need to those who need it. But for too many it has become a prison. This is about women and children who are suffering under this system as well as the social workers and the law enforcement offi- cers who are forced to deal with the ramifications of the aspects of the sys- tem that do not work. Mr. Speaker, for too long we have been delaying this. We have delayed this vote for most of the day. The fact of the matter is that welfare reform is at the door. It has been knocking for CONGRESSIONAL RECORD \u2014 HOUSE H9401July 31, 1996 almost 30 years, and it is finally here today. This afternoon, hopefully, it will be voted on and we will send it to a President who will endorse it. I think that is a tremendous accomplishment for the people of this country. I would also say it is a first step. The system has become so complex between the different aspects of service and how they are available to help people, that even the people running the system have difficulty understanding it, let alone those who have need for assist- ance. So, it is a first step in the direc- tion of reform, in the direction of pro- viding an American dream for more Americans and getting rid of the Amer- ican nightmare. Mr. SOLOMON. Mr. Speaker, I yield 1 minute to the gentleman from Texas [Mr. SMITH], an outstanding Member who has dealt with the immigration problem in this country. Mr. SMITH of Texas. Mr. Speaker, I rise in strong support of the rule and the Personal Responsibility Act. Wel- fare has harmed our children, families, and taxpayers. It has created a culture of dependency that saps people’s desire to better their lives. And welfare has undermined America’s longstanding immigration policy. America has always welcomed new citizens with the energy and commit- ment to come to our shores to build a better future. We’ve always ensured that immigrants are self-reliant\u2014not dependent on American taxpayers for support. Since 1917, noncitizens who have become public charges after they enter the United States have been sub- ject to deportation. Welfare undermines this policy and harms immigrants. Rather than pro- moting hard work, welfare tempts im- migrants to come to America to live off the American taxpayer. Noncitizen SSI recipients have increased 580 per- cent over the past 12 years, and will cost American taxpayers $5 billion this year alone. H.R. 3734 restores America’s historic immigrants policy and ends the cruel welfare trap. It ensures that sponsors, not taxpayers, will support new immi- grants who fall on hard times. Just as deadbeat dads should support the chil- dren they bring into this world, dead- beat sponsors should support the immi- grants they bring into our country. I urge my colleagues to support this rule and vote for this bill. Mr. SOLOMON. Mr. Speaker, I yield 2 minutes to the gentleman from Savan- nah, GA [Mr. KINGSTON]. Mr. KINGSTON. Mr. Speaker, I thank the gentleman from New York for yielding. It is interesting we have heard from the Democrats a number reasons why they are not going to support this bill today. One of their reasons was they have not had time to look at it. I am a relatively new Member of Congress. I have been here 4 years. We have been debating welfare for 4 years. I know that for a fact. I have been here. If they have not read the bill by now and have not been following the debate, that is not the fault of the Republican Con- gress. The second reason they say that is that welfare does not cost that much. If you add in all the Federal Govern- ment welfare programs, the cost is $345 billion, which is ore than we spend on defense. I am not sure what they con- sider money if $345 billion is not. We spent $5 trillion since LBJ’s Great So- ciety programs, and that is enough money. That is more than we spent on World War II. The final reason they are saying is that it is cruel to children. Nothing is more cruel than having a welfare sys- tem that traps children in poverty, that makes children and families break up, that makes them live in housing projects where the dad cannot be at home, where there is high drug use, where there are teenage dropout rates and teenage drug abuse. I do not see why they think that is compassion. Our program sends $4 billion more on child care than the Democrat proposal. And that is using their frame of think- ing that is more compassion than what they have. Welfare reform is family friendly. Welfare should not be a life style. It should be something that soci- ety gives people a temporary helping hand, not a permanent handout, not a hammock forever to swing in but a temporary safety net so that people can get back into the socioeconomic mainstream and enjoy the American dream just like the rest of us. Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I want to begin by re- minding my colleagues of one very im- portant fact. Today 9 million children depend upon Aid to Families With De- pendent Children for their survival. When we are talking about reforming welfare, we are talking about these 9 million American children, and we need to be very, very careful on what changes we make. Mr. Speaker, this is not to say that I am opposed to welfare reform. In fact, I am very much in favor of welfare re- form. I have seen too many children growing up surrounded by violence. I have seen too many fathers completely abandon their responsibilities. And I have seen too many single mothers too dejected and overwhelmed to look for jobs. These days being poor is not what it used to be. It used to be that families stuck together. It used to be if you worked hard enough you could support your family. But, Mr. Speaker, unfor- tunately times have changed. I agree with the editorial in the Au- gust 12 issue of the New Republic which says that, although our current welfare system may not have created the cur- rent underclass, it certainly sustains it. I agree that welfare reform is one of the most important issues that we can take up in this Congress. Today’s Bos- ton Globe says that under this bill, poverty will grow with welfare done on the cheap. We need to be very careful, Mr. Speaker, how we change AFDC and not do it on the cheap. This bill, Mr. Speaker, is not the way to do it. I hoped that after this bill came out of conference, I would be able to support it. But after looking at it, I cannot because, Mr. Speaker, I cannot vote for a bill that will push 1 million additional children below the poverty level. I cannot vote for a bill that may not guarantee health care to poor chil- dren and a conference committee that cuts food stamps. I cannot vote for a bill that will provide no protection for bad times. If there is a recession, mil- lions of people will be completely des- titute. And, Mr. Speaker, I cannot vote for a bill that allows States to take at least one-half of their Federal money and spend it on something other than children. This Gingrich welfare bill, Mr. Speaker, is too tough on children. It is weak on work, and it is soft on dead- beat parents. Mr. Speaker, as I said, two out of every three people on wel- fare is a child, and we have a respon- sibility to those children. We have a re- sponsibility to make sure that under no circumstances whatsoever will they be hurt. We have a responsibility, Mr. Speaker, to make sure that their health and their safety is placed far above any jockeying for political ad- vantage. So I urge my colleagues to oppose this rule and oppose the conference committee bill and I yield back the balance of my time. b 1500 Mr. SOLOMON. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, did I hear the gen- tleman right when he said, the Ging- rich welfare bill? Is that not strange? I thought it was the Gingrich-Clinton welfare bill, because the President has just announced he is going to sign the bill. Mr. Speaker, colleagues, I would just say to you, what is compassionate about locking poor people into a life- time of welfare dependency? That is what this debate is all about. If you are really sincere, if you really care about poor people in America, do something for them. Change the status quo which has failed miserably. I see my good friend, the gentleman from Texas [Mr. STENHOLM], sitting over here, came here with me 18 years ago. He came before the Committee on Rules about an hour or so ago and he said, JERRY, this a bipartisan bill. He said, we Democrats have had input to it. It is a compromise. It is a step in the right direction. Mr. Speaker, what I was hearing is, no more ifs, ands and buts. This is the compromise. This is the step in the right direction we need to move in. Let us vote for this bill now. Vote for the rule and the bill and let us get on with trying to change the welfare sys- tem in America for the good of the poor. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution. CONGRESSIONAL RECORD \u2014 HOUSEH9402 July 31, 1996 The SPEAKER pro tempore (Mr. RIGGS). The question is on ordering the previous question. The question was taken; and the Speaker pro tempore announced that the ayes appeared to have it. Mr. MOAKLEY. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present. The SPEAKER pro tempore. Evi- dently a quorum is not present. The Sergeant at Arms will notify ab- sent Members. Pursuant to clause 5 of rule XV, the Chair will reduce to 5 minutes the min- imum period of time within which a vote by electronic device, if ordered, will be taken on the question of agree- ing to the resolution. The vote was taken by electronic de- vice, and there were\u2014yeas 259, nays 164, not voting 10, as follows: [Roll No. 381] YEAS\u2014259 Allard Archer Armey Bachus Baesler Baker (CA) Baker (LA) Ballenger Barr Barrett (NE) Bartlett Barton Bass Bateman Bereuter Bilbray Bilirakis Bishop Bliley Blute Boehlert Boehner Bonilla Bono Brewster Browder Brownback Bryant (TN) Bunn Bunning Burr Burton Buyer Callahan Calvert Camp Campbell Canady Castle Chabot Chambliss Chapman Chenoweth Christensen Chrysler Clinger Coble Coburn Collins (GA) Combest Condit Cooley Cox Cramer Crane Crapo Cremeans Cubin Cunningham Davis Deal DeLay Diaz-Balart Dickey Dicks Dooley Doolittle Dornan Doyle Dreier Duncan Dunn Ehlers Ehrlich English Ensign Everett Ewing Fawell Fields (TX) Flanagan Foley Forbes Fowler Fox Franks (CT) Franks (NJ) Frelinghuysen Frisa Funderburk Gallegly Ganske Gekas Geren Gilchrest Gillmor Gilman Goodlatte Goodling Goss Graham Greene (UT) Greenwood Gutknecht Hall (TX) Hamilton Hancock Hansen Hastert Hastings (WA) Hayes Hayworth Hefley Heineman Herger Hilleary Hobson Hoekstra Hoke Holden Horn Hostettler Hunter Hutchinson Hyde Inglis Istook Johnson (CT) Johnson, Sam Jones Kasich Kelly Kim King Kingston Kleczka Klug Knollenberg Kolbe LaHood Largent Latham LaTourette Laughlin Lazio Leach Lewis (CA) Lewis (KY) Lightfoot Lincoln Linder Lipinski Livingston LoBiondo Longley Lucas Manzullo Martini McCollum McCrery McDermott McHugh McInnis McIntosh McKeon Metcalf Meyers Mica Miller (FL) Molinari Montgomery Moorhead Morella Myers Myrick Nethercutt Neumann Ney Norwood Nussle Orton Oxley Packard Parker Paxon Payne (VA) Peterson (FL) Peterson (MN) Petri Pickett Pombo Porter Portman Poshard Pryce Quillen Quinn Radanovich Ramstad Regula Riggs Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Rose Roukema Royce Salmon Sanford Saxton Scarborough Schaefer Schiff Seastrand Sensenbrenner Shadegg Shays Shuster Skeen Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Souder Spence Stearns Stenholm Stockman Stump Talent Tanner Tate Tauzin Taylor (MS) Taylor (NC) Thomas Thornberry Tiahrt Torkildsen Traficant Upton Vucanovich Walker Walsh Wamp Watts (OK) Weldon (FL) Weldon (PA) Weller White Whitfield Wicker Wolf Young (AK) Zeliff Zimmer NAYS\u2014164 Abercrombie Ackerman Andrews Baldacci Barcia Barrett (WI) Becerra Beilenson Bentsen Berman Bevill Blumenauer Bonior Borski Boucher Brown (CA) Brown (FL) Brown (OH) Bryant (TX) Cardin Clay Clayton Clement Clyburn Coleman Collins (IL) Collins (MI) Conyers Costello Coyne Cummings Danner de la Garza DeFazio DeLauro Dellums Deutsch Dingell Dixon Doggett Durbin Edwards Engel Eshoo Evans Farr Fattah Fazio Fields (LA) Filner Foglietta Frank (MA) Frost Furse Gejdenson Gephardt Gibbons Gonzalez Gordon Green (TX) Gutierrez Hall (OH) Harman Hastings (FL) Hefner Hilliard Hinchey Hoyer Jackson (IL) Jackson-Lee (TX) Jacobs Johnson (SD) Johnson, E. B. Johnston Kanjorski Kaptur Kennedy (MA) Kennedy (RI) Kennelly Kildee Klink LaFalce Lantos Levin Lewis (GA) Lofgren Lowey Luther Maloney Manton Markey Martinez Mascara Matsui McCarthy McHale McKinney McNulty Meehan Meek Menendez Millender- McDonald Miller (CA) Minge Mink Moakley Mollohan Moran Murtha Nadler Neal Oberstar Obey Olver Ortiz Owens Pallone Pastor Payne (NJ) Pelosi Pomeroy Rahall Rangel Reed Rivers Roybal-Allard Rush Sabo Sanders Sawyer Schroeder Schumer Scott Serrano Sisisky Skaggs Skelton Slaughter Spratt Stark Stokes Studds Stupak Tejeda Thompson Thornton Thurman Torres Torricelli Towns Velazquez Vento Visclosky Volkmer Ward Waters Watt (NC) Waxman Williams Wilson Wise Woolsey Wynn Yates NOT VOTING\u201410 Flake Ford Gunderson Houghton Jefferson McDade Richardson Roth Shaw Young (FL) b 1521 Mrs. KENNELLY and Mr. JOHNSON of South Dakota changed their vote from ”yea” to ”nay.” So the previous question was ordered. The result of the vote was announced as above recorded. The SPEAKER pro tempore (Mr. RIGGS). The question is on the resolu- tion. The question was taken; and the Speaker pro tempore announced that the ayes appeared to have it. Mr. MOAKLEY. Mr. Speaker, on that I demand the yeas and nays. The yeas and nays were ordered. The vote was taken by electronic de- vice, and there were\u2014yeas 281, nays 137, not voting 15, as follows: [Roll No. 382] YEAS\u2014281 Allard Archer Armey Bachus Baesler Baker (CA) Baker (LA) Ballenger Barcia Barr Barrett (NE) Bartlett Barton Bass Bateman Bentsen Bereuter Bilbray Bilirakis Bishop Bliley Blute Boehlert Boehner Bonilla Bono Boucher Brewster Browder Brownback Bryant (TN) Bunn Bunning Burr Burton Buyer Callahan Calvert Camp Campbell Canady Castle Chabot Chambliss Chapman Chenoweth Christensen Chrysler Clement Clinger Coble Coburn Collins (GA) Combest Condit Cooley Costello Cramer Crane Crapo Cremeans Cubin Cunningham Danner Deal DeLay Deutsch Diaz-Balart Dickey Dicks Dingell Dooley Doolittle Dornan Doyle Dreier Duncan Dunn Durbin Edwards Ehlers Ehrlich English Ensign Everett Ewing Fawell Fields (TX) Flanagan Foley Forbes Fowler Fox Franks (CT) Franks (NJ) Frelinghuysen Frisa Frost Funderburk Gallegly Ganske Gekas Geren Gilchrest Gillmor Gilman Goodlatte Goodling Gordon Goss Graham Greene (UT) Greenwood Gutknecht Hall (OH) Hall (TX) Hamilton Hancock Hansen Harman Hastert Hastings (WA) Hayworth Hefley Hefner Heineman Herger Hilleary Hobson Hoekstra Hoke Holden Horn Hostettler Hunter Hutchinson Hyde Inglis Istook Jacobs Johnson (CT) Johnson (SD) Johnson, Sam Jones Kasich Kelly Kennelly Kim King Kingston Kleczka Klug Kolbe LaHood Largent Latham LaTourette Laughlin Lazio Leach Levin Lewis (CA) Lewis (KY) Lightfoot Lincoln Lipinski LoBiondo Longley Lucas Luther Manzullo Martini Mascara McCarthy McCollum McCrery McHugh McInnis McIntosh McKeon Metcalf Meyers Mica Miller (FL) Minge Molinari Montgomery Moorhead Morella Myers Nethercutt Neumann Ney Norwood Nussle Orton Oxley Packard Parker Paxon Payne (VA) Peterson (FL) Peterson (MN) Petri Pickett Pombo Porter Portman Poshard Pryce Quillen Quinn Radanovich Ramstad Regula Riggs Rivers Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Rose Roukema Royce Salmon Sanford Saxton Scarborough Schaefer Schiff Seastrand Sensenbrenner Shadegg Shaw Shays Shuster Sisisky Skeen Skelton Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Souder Spence Spratt Stenholm Stockman Stump Talent CONGRESSIONAL RECORD \u2014 HOUSE H9403July 31, 1996 Tanner Tate Tauzin Taylor (MS) Thomas Thornberry Tiahrt Torkildsen Torricelli Traficant Upton Volkmer Vucanovich Walker Walsh Wamp Watts (OK) Weldon (FL) Weldon (PA) Weller White Whitfield Wicker Williams Wilson Wolf Young (AK) Zeliff Zimmer NAYS\u2014137 Abercrombie Ackerman Andrews Baldacci Barrett (WI) Becerra Beilenson Berman Bevill Blumenauer Bonior Borski Brown (CA) Brown (FL) Brown (OH) Bryant (TX) Cardin Clay Clayton Clyburn Coleman Collins (IL) Collins (MI) Conyers Coyne Cummings Davis de la Garza DeFazio DeLauro Dellums Dixon Doggett Engel Eshoo Evans Farr Fattah Fazio Fields (LA) Filner Foglietta Frank (MA) Furse Gejdenson Gephardt Gibbons Gonzalez Green (TX) Gutierrez Hastings (FL) Hilliard Hinchey Hoyer Jackson (IL) Jackson-Lee (TX) Jefferson Johnson, E. B. Johnston Kanjorski Kaptur Kennedy (MA) Kennedy (RI) Kildee Klink LaFalce Lantos Lewis (GA) Lofgren Lowey Maloney Manton Markey Martinez Matsui McDermott McHale McKinney McNulty Meehan Meek Menendez Millender- McDonald Miller (CA) Mink Moakley Mollohan Moran Murtha Nadler Neal Oberstar Obey Olver Ortiz Owens Pallone Pastor Payne (NJ) Pelosi Pomeroy Rahall Rangel Reed Roybal-Allard Rush Sabo Sanders Sawyer Schroeder Schumer Scott Serrano Skaggs Slaughter Stark Stokes Studds Stupak Taylor (NC) Tejeda Thompson Thornton Thurman Torres Towns Velazquez Vento Visclosky Ward Waters Watt (NC) Waxman Wise Woolsey Wynn Yates NOT VOTING\u201415 Cox Flake Ford Gunderson Hayes Houghton Knollenberg Linder Livingston McDade Myrick Richardson Roth Stearns Young (FL) b 1530 So the resolution was agreed to. The result of the vote was announced as above recorded. A motion to reconsider was laid of the table. PERSONAL EXPLANATION Mr. KNOLLENBERG. Mr. Speaker, on roll- call No. 382. I was in the Rayburn Room. The beeper and the bells failed to function and I missed the above vote. Had I been present, I would have voted ”yea.” PERSONAL EXPLANATION Mr. HOUGHTON. Mr. Speaker, I was inad- vertently delayed while attending an Inter- national Relations Committee hearing with Secretary Christopher, and missed voting on rollcalls No. 381 and No. 382. Had I been there, I would have voted ”yea” on 381 and ”yea” on 382. Mr. KASICH. Mr. Speaker, pursuant to House Resolution 495, I call up the conference report on the bill (H.R. 3734) to provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997. The Clerk read the title of the bill. The SPEAKER pro tempore. Pursu- ant to House Resolution 495, the con- ference report is considered as having been read. (For conference report and state- ment, see Proceedings of the House of Tuesday, July 30, 1996, at page H8829.) The SPEAKER pro tempore. The gen- tleman from Ohio [Mr. KASICH] and the gentleman from Minnesota [Mr. SABO] will each be recognized for 30 minutes. The Chair recognizes the gentleman from Ohio [Mr. KASICH]. Mr. KASICH. Mr. Speaker, I yield 4 minutes to the gentleman from Kansas [Mr. ROBERTS], the distinguished chair- man of the Committee on Agriculture. (Mr. ROBERTS asked and was given permission to revise and extend his re- marks.) Mr. ROBERTS. Mr. Speaker, I thank the gentleman for yielding time to me, and I thank my colleagues for their re- luctant attention. Mr. Speaker, in a year that has been described by many as one of gridlock and finger-pointing and wheel-spinning and even-numbered year partisan rhet- oric, we are about to achieve a remark- able accomplishment. This House and the Senate, and now finally the Presi- dent, have responded to the American public. Simply put, this conference re- port represents real accomplishment, real welfare reform. We urged the President to sign this conference report. He has. There are good reasons why. Seventy-five percent of the food stamp reforms in this con- ference report represent the same things that were proposed by this ad- ministration. I do not care whether we are talking about budget savings, the work requirement, the program sim- plification, the tougher penalties for fraud and abuse, or keeping the pro- gram at the Federal level as we go through the welfare reform transition. We have tried to work with the admin- istration. We have done that. The President will sign the bill. Mr. Speaker, this road has not been easy. We have been working in this House for 18 months. The very first hearing held by me in the Committee on Agriculture was on fraud and abuse, and the critical and urgent need for re- form of the Food Stamp Program. The new Inspector General at the Depart- ment of Agriculture showed a video- tape of organized crime members trad- ing food stamps for cash, and eventu- ally using that cash for drugs and guns. That tape made national news, and it confirmed the suspicions of many tax- payers and citizens. Following that hearing, our late col- league and dear friend, the chairman of the subcommittee, Bill Emerson, held four extensive hearings and formulated the principles that guided the reform that is now before us. First, the original Republican plan was to make sure that as we go through welfare reform, no one would go hungry, that we would keep a re- formed Food Stamp Program as a safe- ty net so food can and will be provided while States are undergoing this tran- sition. Second, we wanted to eliminate as much paperwork and redtape and regu- lation as possible. We wanted to har- monize the welfare and the Food Stamp Program requirements. This bill does that. Third, having seen the program costs soar from $12 to $27 billion in 10 years, regardless of how the economy has per- formed, we wanted to take the program off of automatic pilot. We have done that. Fourth, the food stamps must not be a disincentive to work. In this bill, able-bodied participants, those from ages of 18 to 50 with no dependents, no kids, no children, only the able-bodied, these folks, less than 2 percent of those on food stamps, they must work in pri- vate sector jobs and not be rewarded for not working. Fifth, after hearing firsthand from the Inspector General, we tightened the controls on waste and abuse. We stopped the trafficking with increased and tough penalties. Mr. Speaker, these principles do rep- resent real reform of the Food Stamp Program. All are incorporated in the conference agreement. I urge my col- leagues to vote ”yes.” I want to thank my colleagues for a tremendous team effort, more espe- cially the gentleman from Ohio [Mr. KASICH], more especially the gen- tleman from Texas [Mr. ARCHER], more especially the gentleman from Penn- sylvania [Mr. GOODLING], and more es- pecially, underscored three times, the gentleman from Florida [Mr. SHAW], who said the work we have accom- plished is significant. We have true re- form. We have a real welfare reform bill. But now the work really starts. This bill is not perfect. We have a lot ahead of us and a lot of challenges. I urge a ”yes” vote on the conference re- port. Mr. SABO. Mr. Speaker, I yield 2 minutes to the distinguished gen- tleman from Tennessee [Mr. TANNER]. (Mr. TANNER asked and was given permission to revise and extend his re- marks.) Mr. TANNER. Mr. Speaker, I am happy today for several reasons. I think Congress has come together with the administration to take a step for- ward on certainly what is a pressing national social problem. That is wel- fare reform. We started out, as the pre- vious speaker said, almost 2 years ago to try to bring together something that could be signed and enacted into law so we could actually change the system that is broken, according to ev- eryone who has observed it, and actu- ally do something about it now. I want to thank the gentleman from Florida [Mr. SHAW], the gentleman from Ohio [Mr. KASICH], the gentleman from Minnesota [Mr. SABO], and many others here. I particularly want to CONGRESSIONAL RECORD \u2014 HOUSEH9404 July 31, 1996 thank the gentleman from Delaware, MIKE CASTLE, who came together with me to put together something that would be bipartisan so we could get off of this partisan gridlock that we have been suffering from. Mr. Speaker, in our motion to in- struct conferees we asked for two or three things: One, a safety net for kids. That has been accomplished with Med- icaid and food stamps. The safety net is there for children. The unfunded man- date problem has been partially taken care of, with the States being allowed to continue with waivers, and also be- cause the Medicaid situation is intact, there will not be a lot of costs trans- ferred to county hospitals across our country. We also asked that savings go to the debt. That has not been accom- plished, but as the previous speaker said, we will continue to work on that. The most important difference be- tween the conference agreement and the two bills that have previously been vetoed, in my judgment, is that we pro- tect innocent children. This bill no longer treats a 4-year-old child like he or she is a 24-year-old irresponsible adult. To me that was critical. That is not a part of welfare reform. That is just compassionate public policy. This bill has done that. I once again thank the Republican conferees for their hard work, the gen- tleman from Florida [Mr. SHAW] and others. I also urge a ”yes” vote. Let us make this a red letter day. Mr. CAMP. Mr. Speaker, I yield such time as she may consume to the gen- tlewoman from New Jersey [Mrs. ROU- KEMA]. (Mrs. ROUKEMA asked and was given permission to revise and extend her remarks.) Mrs. ROUKEMA. Mr. Speaker, I rise in support of this legislation, and want to associate myself with the statement of the chairman of the Committee on Agriculture, the gentleman from Kan- sas [Mr. ROBERTS], particularly as it applied to the Food Stamp Program. My opposition and stated principle in the last round of this bill before it went to conference was expressing a concern of what it did to innocent chil- dren in that regard. I rise in support. It has been corrected, and I support the conference agreement. Mr. Speaker, as someone who has ad- vocated a ”tough love” approach to welfare reform legislation, this goes a long way toward reforming our broken welfare system as we return the system to its original purpose\u2014a temporary safety net, not a way of life. Furthermore, as a pioneer in the bat- tle to also reform our child support en- forcement system, I am very pleased to see that the reforms I have been push- ing for almost 4 years now\u2014which rep- resent the heart and soul of the U.S. Interstate Commission on Child Sup- port’s final report\u2014have been included in the package before us today. Ensuring that these child support en- forcement reforms were included in this bill acknowledges what I’ve been saying for years: Effective reform of our interstate child support enforce- ment laws must be an integral compo- nent of any welfare reform plan that the 104th Congress sent to President Clinton. Research has found that somewhere between 25 and 40 percent of welfare costs go to support mothers and chil- dren who fall onto the welfare rolls precisely because these mothers are not receiving the legal, court-ordered support payments to which they are rightfully entitled. With the current system spending such a large portion of funding on these mothers, children are the first victims, and the taxpayers who have to support these families are the last vic- tims. The plan before us also puts teeth into the laws that require unwed moth- ers to establish paternity of their chil- dren at the hospital, thereby laying the groundwork for claiming responsibility for their actions and families. The core of the welfare reforms in- corporated into this bill are clearly de- fined work requirements for welfare beneficiaries\u2014which is essential to moving people off of the welfare rolls\u2014 strict time limits\u2014thereby giving wel- fare recipients a strong incentive to find a job\u2014and more flexibility for States to design welfare programs that fit the needs of their people. In addition, this welfare reform plan protects the safety net for children by including a rainy day fund to help the families in States suffering from reces- sion or economic downturns. The enhanced flexibility that States will receive under this plan is meritori- ous, provided that the safety net is maintained in order to protect families who truly need temporary assistance\u2014 not a lifetime of handouts generation after generation. For example, while I support the con- cept of giving States more flexibility in designing their own welfare pro- grams, I am very pleased to see that this bill contains strong maintenance of effort provisions which will require States to continue their commitment to the Nation’s safety net. Under no circumstances should a block grant reform allow States to simply administer welfare or any other program using only Federal moneys\u2014 this bill avoids that problem with its tough maintenance of effort language. I was very distressed by the fact that House version of this bill opened a sig- nificant loophole in the Food Stamp Program by giving States the option of using block grants for this critically- important aspect of our Nation’s safety net. Given that I was deeply concerned about giving a blank check to the Gov- ernors for the Food Stamp Program would result in innocent children going hungry, I opposed the House plan last week. But again I am very pleased to see that, once again, the Senate has saved the House of Representatives from it- self by rejecting this proposal, and suc- cessfully retaining its position on this issue in the final bill. Additionally, this legislation does take a modest step in the right direc- tion by allowing States to use their own money, or social services block grant funds\u2014to provide families on welfare with vouchers\u2014instead of cash benefits\u2014to pay for essential services needed by the family, that is, medicine, baby food, diapers, school supplies\u2014if a State has terminated the family’s cash benefits as part of its sanction pro- gram. This is the right thing to do because even if a welfare recipient is playing by all of the rules and has not found a job when the time limits become effective, the use of vouchers for services plays an important role in helping the family and its children keep their head above the water-line. There should be no question that we must enact strong welfare reform legis- lation this year. The American people are correctly demanding that we re- store the notion of individual respon- sibility and self-reliance to a system that has run amok over the past 20 years. Although I have strongly supported some welfare reforms that have been described as ”tough love” measures for several years now, I want to reiterate that my goal has always been to re- quire self-reliance and responsibility, while ensuring that innocent children do not go hungry and homeless as a re- sult of any Federal action. Finally, I am most supportive of the improvements the conference gave to the Medicaid Program. This is an en- lightened and humane response to gen- uine medical needs. Mr. Speaker, this bill is not perfect. But, it represents the first major re- form of our broken-down welfare sys- tem in generations. We have been given a historic opportunity that I hope and trust we will not squander. We owe no less to our children. I urge my col- leagues to join me in voting for final passage of this monumental reform package. Mr. CAMP. Mr. Speaker. I yield my- self such time us I may consume. (Mr. CAMP asked and was given per- mission to revise and extend his re- marks.) Mr. CAMP. Mr. Speaker, I rise in sup- port of the conference agreement. Today, the Congress is again presented with the opportunity to adopt meaningful wel- fare reform. Over the past 19 months, my col- leagues and I have written, debated, and adopted proposals to reform our current wel- fare system. Our efforts, however, were twice vetoed by the President. Since launching the war on poverty in 1965, over $5 trillion has been spent to eliminate poverty in America. Some 31 years later and despite billions and billions of dollars, poverty in America has worsened and our children grow and mature in an environment with little hope and opportunity. The proposal before us today reforms a wel- fare system that has trapped millions in a CONGRESSIONAL RECORD \u2014 HOUSE H9405July 31, 1996 cycle of poverty. Our current welfare system punishes families and children by rewarding ir- responsibility, illegitimacy and destroying self- esteem. For too long, the Federal Government has defended the current system and turned away as millions of families and children be- came trapped in a cycle of despair, depend- ence, and disappointment. This bill accomplishes several important goals. First, it time limits welfare to 5 years. The Federal and State governments have an obligation to assist those in need but our cur- rent system has become a way of life instead of a temporary helping hand for those experi- encing hard times. Second, our bill requires work. The Wash- ington welfare system has also robbed recipi- ents of their self-esteem by merely providing a check. This proposal requires each recipient to work for their benefits, thereby instilling the pride of employment and allowing each recipi- ent to earn a paycheck. This sense of accom- plishment and independence increases the in- dividual’s self-esteem and often influences the children who can see firsthand the benefits of a strong work ethic. For those continuing to experience hard times, however, the bill allows States to exempt up to 20 percent of the wel- fare caseload from the time limit. Most importantly our bill helps those families and individuals working to improve their lives. We provide more funding for child care than current law and more than requested by the President. This funding is extremely important in allowing families to work while ensuring their children receive the proper care. We also protect our children by ensuring eligibility for Medicaid. For those families moving from wel- fare to work, we continue assistance so they don’t have to worry about losing health care coverage if their incomes increase. Compassion is not the sole property of Washington and our bill creates a Federal- State partnership in meeting the needs of wel- fare recipients. States will have the power and opportunity to design and implement new in- novative programs that best meet the needs of residents. I urge my colleagues to support the conference report. Mr. Speaker, I ask unanimous con- sent that the gentleman from Florida [Mr. SHAW] be allowed to control the time and to yield. The SPEAKER pro tempore (Mr. RIGGS). Is there objection to the re- quest of the gentleman from Michigan? There was no objection. Mr. SHAW. Mr. Speaker, I yield 1 minute to the gentlewoman from Washington [Ms. DUNN], a member of the Committee on Ways and Means. Ms. DUNN of Washington. Mr. Speak- er, this is a good bill. I am very pleased that the President has announced that he is going to sign this bill. I want to commend Members on both sides of the aisle for their hard work. We have worked for a long time to put a good bill together. To those who are concerned with pro- tecting the children, so were we. We spent a lot of time, a lot of thought, a lot of effort on protecting the children. We have come up with a bill that in the child care portion of the bill provides over $4 billion more to help those mothers who are trying to get off wel- fare into the workplace, with the peace of mind to know their children will be taken care of, $4 billion more than in the current welfare system. On the child support portion of the legislation, where we all know that in this Nation today $34 billion are owed, ordered by the court to be paid to cus- todial parents, we have tightened up this system. Those children are often the children that go on welfare\u201430 per- cent of their parents leave the State to avoid paying money to support their own flesh-and-blood children. We have solved this problem. So it is my great joy to say support this bill, and thanks for all the help. Mr. SABO. Mr. Speaker, I yield 11\u20442 minutes to the distinguished gentle- woman from California [Ms. WOOLSEY]. (Ms. WOOLSEY asked and was given permission to revise and extend her re- marks.) Ms. WOOLSEY. Mr. Speaker, we all agree that the welfare system does not work for the welfare recipients and for the taxpayers. The challenge we face as lawmakers is to improve the system so we can invest in getting families off welfare and into jobs that pay a liveable wage, and also to answer the ”what ifs”. What if a mother on wel- fare cannot find a job? What if she is not earning enough to take care of her family? What if she cannot find child care for her 6-year-old? Unfortunately, this conference report will not ensure families can live on the jobs that they get, that they will earn a liveable wage, and this conference has made sure that it does not answer our ”what ifs”. It kicks families off of assistance, even if parents are trying hard to find a job. It does not even in- vest in the education and training par- ents need to get jobs that pay an ac- tual liveable wage. Even though the House and Senate agreed that single parents with kids under 11 should not leave their children home alone if there is no child care, the majority went ahead without dis- cussion and lowered that age to under 6. b 1545 How many of my colleagues would leave their 6-year-old home alone? I ask my colleagues, do not take this vote lightly. Do not leave any child be- hind. The lives of millions of children are at stake. It will be too late tomor- row if the what-ifs are not answered today. Mr. SHAW. Mr. Speaker, I yield 2 minutes to the gentleman from Penn- sylvania [Mr. GOODLING], the chairman of the Committee on Economic and Educational Opportunities. (Mr. GOODLING asked and was given permission to revise and extend his re- marks.) Mr. GOODLING. Mr. Speaker, as I have said many times, you cannot fix something, you cannot change some- thing unless you first admit it is bro- ken and first admit that you need to change it. Finally, both sides of the aisle came forward and indicated that we do have a broken system, that we have as a matter of fact put millions of Americans into a bind and took away their opportunity to ever have a chance at the American dream. Now, the tough part then came as to how do you fix it. Of course we had dif- fering opinions. Our committee started out with the idea that welfare must be a safety net, not a way of life; there must be a very clear emphasis on work and on getting those on welfare into work. There must be a strong measure to stop abuses of the system. We need to return power and flexibility to the States. Welfare should not encourage, it should discourage destructive per- sonal behavior that contributes so clearly not only to welfare dependence but to a host of social problems. Mr. Speaker, this is a good, balanced welfare reform bill. We have been very generous in providing money for child care. We have protected the nutrition program. We have established strong work requirements. And we have at long last addressed the tremendous problem of out-of-wedlock births and absentee fathers. Mr. Speaker, I commend all those who have worked so hard to bring about this welfare reform effort. I want to especially mention from the Com- mittee on Economic and Educational Opportunities, the gentleman from California [Mr. CUNNINGHAM], the gen- tleman from Delaware [Mr. CASTLE], the gentleman from Arkansas [Mr. HUTCHINSON], the gentleman from Mis- souri [Mr. TALENT], and the gentle- woman from Kansas [Mrs. MEYERS]. I strongly support the legislation. I urge all to vote for it because at long last we move forward in transforming wel- fare to a program of work and oppor- tunity. Mr. SABO. Mr. Speaker, I yield 2 minutes to the gentleman from Texas [Mr. STENHOLM]. (Mr. STENHOLM asked and was given permission to revise and extend his remarks.) Mr. STENHOLM. Mr. Speaker, I rise in support of this conference report. In doing so, I want to pay particular thanks to the gentleman from Florida [Mr. SHAW] for making this an inclu- sive conference, at least from the per- spective of those of us on this side of the aisle, and also the gentleman from Louisiana [Mr. MCCRERY] and the gen- tleman from Delaware [Mr. CASTLE]. They have been very good to work with, at least in listening to those of us on this side of the aisle who had major problems with previous bills before the House and thought we had constructive suggestions of how to make it better. We were listened to, and many of the proposals we made are included, of which we are grateful. To those that suggest that somehow the State waivers portion of this is contrary to the best interest of the work programs of somehow guts work requirements, I only suggest that they read the bill. Read the language which is available, and they will see. Far CONGRESSIONAL RECORD \u2014 HOUSEH9406 July 31, 1996 from gutting it, it makes it much more workable. For States like mine, Texas, Utah, Michigan, and others that have already begun experimenting with work pro- grams, this bill, I believe, allows those States and all of us who are interested in making this bill work as we say we wish it to, it allows the flexibility to allow States to experiment, to do pilot projects and pilot programs. In this case it is already happening in my State. Some of the concerns that we had with unfunded mandates, they have been alleviated as best as can be pos- sible under a conference report. For that we are grateful. In the area of health care providers, protection of children, this is moved in the direction that we feel is much, much more pref- erable than the bill that originally passed the House. While this welfare reform conference report is far from perfect, it is clearly preferable to continuing the current system and preferable to welfare legis- lation considered earlier. For these reasons I support the wel- fare reform conference report. I am ex- tremely pleased that the President has agreed to sign it, and I commend those who have worked so hard for so long in order to bring us to this day. Mr. Speaker, while some of the comments I’ve heard this afternoon have tended toward the hyperbolic, it truly is the case that the im- portance of what we are doing today should not be minimized. When this welfare reform proposal is signed into law, the status quo will be fundamentally changed. This kind of change does not happen by chance. More people than I can mention de- serve credit, but in addition to the obvious leadership of President Clinton, Chairman SHAW, and other members of the leadership, I want to express my thanks for the bipartisan efforts of MIKE CASTLE, JOHN TANNER, JOHN CHAFEE, SANDY LEVIN, NANCY JOHNSON, and others. One of the major reasons I opposed pre- vious welfare reform proposals, and specifi- cally the bill that was most recently before the House, was because of the restrictions it would have placed on the State of Texas. Ear- lier this year I worked extensively with Gov- ernor Bush and the White House to obtain ap- proval of the Texas welfare waiver which in- cludes the best plans of our State for moving people from welfare to work. President Clinton already has approved waivers allowing 41 States to implement inno- vative programs to move welfare recipients to work. The House’s welfare reform bill would have restricted those State reform initiatives by imposing work mandates that are less flexi- ble than States are implementing. Over 20 States would have been required to change their work programs to meet the mandates in that earlier House bill or face substantial pen- alties from the Federal Government. The conference report now allows States that are implementing welfare waivers to go forward with those efforts. Specifically, the conference report allows those States to count individuals who are participating in State-au- thorized work programs in meeting the work participation rates in the bill, even work pro- grams which otherwise do not meet the Fed- eral mandates in the bill. I know that some of my colleagues on my side of the aisle have been critical of the State waiver provisions included in this conference report. I must respectfully and forcefully dis- agree with that sentiment and say that in vir- tually all cases, I think that conversations with officials from their own States would lead them to supporting this waiver provision. I am convinced that these various State plans are precisely the best experiments for determining how to put people to work. Frank- ly, I think the State plans generally are more realistic about the work requirements and are more solidly grounded in the possible, rather than the hypothetical. Some of us around here have gotten carried away with our rhetoric about being tough on work by getting into a bidding war over who can have work requirements that sound tough- er. Our rhetoric about being tough on work has led us to impose work requirements in this bill that virtually no State can implement. The only work requirements that are mean- ingful are the work requirements that actually can be met by States. When I have said that previous welfare reform bills were weak on work, I have meant that the bills would not give States the resources to put welfare recipi- ents into work. The mandates in the bill passed by the House would force States such as Texas to make changes in the plans passed by the State legislature or face severe penalties from the Federal Government. The important State waiver change included in the conference report gives States nec- essary additional flexibility in implementing programs to move welfare recipients to work even if they don’t meet the mandates in this bill. The additional flexibility that this bill gives to States in developing work programs will re- duce the pressure on States to cut benefits or restrict eligibility for assistance in order to meet the work requirements of the bill. The Congressional Budget Office has reported that States would be forced to tighten eligibility for assistance to needy families or by reducing the size of benefits in order to offset the un- funded mandate in the work programs. Mem- bers who are concerned about the impact that welfare reform will have on children should strongly support giving States this flexibility and reducing the unfunded mandates. Despite some reservations I have about this conference report, I believe it is critical that welfare reform be enacted this year. Failure to do so will signal yet another wasted oppor- tunity to make critically needed reforms. We should enact this conference report and fix the current system now, moving towards a system that better promotes work and individual re- sponsibility. Mr. SHAW. Mr. Speaker, I yield 11\u20442 minutes to the distinguished gen- tleman from Nevada [Mr. ENSIGN], a valued member of the Subcommittee on Human Resources of the Committee on Ways and Means. (Mr. ENSIGN asked and was given permission to revise and extend his re- marks.) Mr. ENSIGN. I thank the chairman for yielding me the time, and I thank him for all the work he has done on be- half of the welfare recipients in the country. Mr. Speaker, today is truly independ- ence day for welfare recipients. It is the first day to redefine compassion in America. In Las Vegas, we have a pro- gram known as Opportunity Village. It is an incredible program for the men- tally disabled. It is a public-private partnership. The primary premise for the program is that it is compassionate enough to care enough about mentally disabled people to where the commu- nity works together to find these peo- ple jobs. It is an incredible situation to walk down there and to see the joy that these people have in being able to work every day so that they do not become a drain on society. They feel good about themselves. Today is the first day wel- fare recipients are going to start feel- ing good about themselves, and the children are going to start feeling good about their parents. My mom, when I was young, was di- vorced, supporting three kids, with very little money, just virtually no child support. I watched her every sin- gle day get up and go to work. She taught me a work ethic that has car- ried through my entire life with myself and my brother and sister. We have robbed that of welfare families. This bill starts giving that work ethic back to the American people. The Wall Street Journal did a poll. Ninety-five percent of all presidents of companies had their first job by the time they were 12 years of age. Com- passion, work ethic, today; vote for this bill. It is a good bill for America, and today is a great day for America. Mr. SABO. Mr. Speaker, I yield 1 minute to the distinguished gentle- woman from California [Ms. WATERS]. Ms. WATERS. Mr. Speaker, someday more politicians will approach tough decisions such as welfare reform with more care and integrity. This is not that day. Someday politicians will place children above politics. This is not that day. Someday politicians will place truth above personal gain. This is not that day. Too many Democrats and Repub- licans will run for reelection on this so- called welfare reform legislation. The truth is this bill does nothing to train mothers for work, to develop jobs, to help recipients become independent. This bill is welfare fraud, not welfare reform. This bill penalizes poor work- ing families and will drive more chil- dren into poverty. Only time will re- veal the shame of what happened this day, and only history will record the blatant lack of courage to simply do the right thing. Mr. SABO. Mr. Speaker, I yield 1 minute to the distinguished gentle- woman from Florida [Mrs. MEEK]. (Mrs. MEEK of Florida asked and was given permission to revise and extend her remarks.) Mrs. MEEK of Florida. Mr. Speaker, let no one fool you. This bill is not about reforming welfare. It is not about that. It is about saving money and trying your very best to influence CONGRESSIONAL RECORD \u2014 HOUSE H9407July 31, 1996 the American public that we have bal- anced the budget. I would not mind this. I want to see welfare reform. But this is not the way to do it. What we are doing here is hurting children. Every time I stand here, I talk about that. These are all children. The con- ference report did much worse than the Senate. You allow the States, and I come from a State that will, you are allowing a State to cut 25 percent of their 1994 spending levels without any penalty. When the Florida legislature gets ready to cut, they are going to cut this particular program. The parents of children ages 6 to 11 will have to work without assurance of child care at all. Who is going to take care of the chil- dren? Are they going to run all over the world and get into trouble? Yes. The transfer of funds from transfer as- sistance to work, the Senate bill did better than that. The conference bill allows them to divert funds. I am hoping that people listen to this bill because what this conference bill does is worse than the Senate bill and it should not be passed. Mr. Speaker, this is a travesty to the American pub- lic. Mr. SHAW. Mr. Speaker, I yield 2 minutes to the gentlewoman from Con- necticut [Mrs. JOHNSON], a distin- guished member of the Committee on Ways and Means. Mrs. JOHNSON of Connecticut. I thank the gentleman from Florida for yielding me the time and commend him on his extraordinary leadership now over 4 years in getting this bill to the President. Mr. Speaker, this bill is about work, responsibility, hope, and opportunity. I wish I had the time here today to an- swer some of the concerns that have been raised about day care and jobs and all of those things. I think this bill ad- dresses them. But I would like to dis- cuss two issues that have not received much attention but are integral to our underlying goal of helping families be- come self-sufficient: Child support en- forcement and Medicaid. First, I am very pleased to say that this bill retains current eligibility standards for families on Medicaid. All families now on Medicaid will continue to get Medicaid. Furthermore, all fami- lies in the future that meet today’s cri- teria will continue to get Medicaid even if their State redefines their wel- fare program with more constricted criteria. Regarding the Medicaid transition period, under current law when a fam- ily leaves the welfare rolls to work, they are guaranteed 1 year’s transi- tional Medicaid benefit. In the future, this will be absolutely true. We retain current law in this regard. Medical cov- erage is often one of the biggest bar- riers to families leaving welfare, espe- cially since lower paying jobs are less likely to have employer-provided health coverage. By keeping the transi- tion period policy constant, we are ena- bling families to go to work without worrying about losing their medical benefit. Second, this bill contains landmark child support provisions. Today in America 3.7 million custodial parents are poor; of those 3.7 million, fully three-quarters receive no child support. Of those who have child support orders in place, which is only 34 percent of the women, only 40 percent receive the payment they should receive. This is catastrophic for women and children, and this bill fixes that system, an enor- mous advance for women and children and a way off welfare. Mr. SABO. Mr. Speaker, I yield 1 minute to the distinguished gentle- woman from Florida [Mrs. THURMAN]. Mrs. THURMAN. I thank the gen- tleman from Minnesota for yielding me this time. Mr. Speaker, I rise today to con- gratulate my friends from the other side of the aisle for their wisdom in adopting the position of the bipartisan Castle-Tanner coalition in maintaining the Federal commitment to food stamps. My colleagues were right to elimi- nate the optional block grant that would have forced States to turn away hungry families with children. They were right to modify the Kasich food stamp amendment in favor of a provi- sion that provides assistance to laid-off and downsized workers. Of course, I still believe it would have been more beneficial if this bill realized that people who cannot find jobs still need to eat. But my col- leagues have come a long way, and it is significant improvement over the first attempt at welfare reform. I am happy that my friends from the other side of the aisle listened to us and made these important changes along with others such as Medicaid coverage and vouch- ers. I look forward to the opportunity for us to continue in a bipartisan spirit to look at the future of these programs and to ensure that people that we are trying to help to get to work are able to do so. My colleagues so aptly put in a provi- sion so that we do a review every 3 years. We need to make sure we follow through with that. Mr. SHAW. Mr. Speaker, I yield 11\u20442 minutes to the distinguished gen- tleman from Florida [Mr BILIRAKIS], a valued member of the Committee on Commerce. (Mr. BILIRAKIS asked and was given permission to revise and extend his re- marks.) Mr. BILIRAKIS. Mr. Speaker, as rep- resentatives of the people we do not get as many opportunities as we would like to do something that would truly help improve the lives of the people we serve. This bill presents us with just such an opportunity. This conference report is more than just a prescription for much needed welfare reform, how- ever. It is what I hope will be the first step in our bipartisan efforts to im- prove the public assistance programs on which disadvantaged families de- pend. After all, welfare as we know it means more than AFDC. It includes food stamps, housing assistance and energy assistance, and it includes med- ical assistance. That is right. For mil- lions of Americans, Medicaid is wel- fare. That is because income assistance alone is not sufficient to meet the pressing needs of disadvantaged fami- lies. For States, too, Medicaid is welfare. In fact, it makes up the largest share of State public assistance funding. As a share of State budgets, Medicaid is four times larger than AFDC. b 1600 If President Clinton does the right thing and signs this welfare reform bill into law, Medicaid will still be caught up in the choking bureaucratic red tape of Federal control, and that is why the Medicaid Program must be re- structured if States are to fully suc- ceed in making public assistance pro- grams more responsible and effective. Mr. Speaker, I commend my col- leagues on both sides of the aisle for their commitment to true welfare re- form, and I look forward to continuing our efforts to making all sources of public assistance work better for those who need a helping hand up. Mr. SABO. Mr. Speaker, I yield such time as he may consume to the gen- tleman from Illinois [Mr. JACKSON]. (Mr. JACKSON of Illinois asked and was given permission to revise and ex- tend his remarks.) Mr. JACKSON of Illinois. Mr. Speaker, I rise in strong opposition to this deadly and Draco- nian piece of garbage which will do nothing to reform the conditions of poverty and unem- ployment suffered by our Nation’s most vulner- able. As I listen to the debate on the floor of this body today, I felt compelled to make clear to the American people exactly what this bill will do to our Nation’s families and our Nation’s fu- ture. Despite the deceptive rhetoric that we have heard on the floor today, let us be clear\u2014at its core, this bill unravels a 60-year guarantee of a basic human safety net for our Nation’s poorest and most vulnerable children and their families. The President and many Members of the 104th Congress have decided to cut welfare as they know it\u2014to children, immigrants and the poorest Americans\u2014but they have left in- tact welfare as we know it\u2014welfare to Ameri- ca’s largest corporations. We cannot and must not balance the budget on the backs of the least of these. Mr. Speaker, I have heard Members on this floor urge support of this deadly measure, cloaking its defense in terms like ”This is for the good of the poor.” How can this be any- thing but bad for the poor, when we know that in my Home State of Illinois alone, 55,800 chil- dren will be pushed below the poverty line as a result of this bill, and 1.3 million children will be similarly impacted nationwide. Please know, Mr. Speaker, that I will not join demopublicans and republicrats in this mean-spirited attack. you can rest assured that I will work to continue to provide equal protection under the law for our Nation’s poor, our disabled, our immigrants and our children. Posturing tough on welfare mothers is viewed as good politics at least by a press CONGRESSIONAL RECORD \u2014 HOUSEH9408 July 31, 1996 corps that admires cynicism. But ending wel- fare as I know it is a good idea if done well. So before you push more poor kids and their mothers out on the streets let’s apply ”Two Years and You’re Off” to dependent corpora- tions and find a real jobs program for all Americans. Perhaps conservative Republicans and Democrats and posturing Presidents should begin to beat up on the welfare king for a change. Mr. SABO. Mr. Speaker, I yield 1 minute to the distinguished gentle- woman from New York [Mrs. MALONEY]. Mrs. MALONEY. Mr. Speaker, this conference report is dangerous and un- realistic. I do not believe the American people will tolerate a policy of ending support to a single mom who has played by the rules, tried to find a job for 2 years and could not. Our unemployment rate is over 5 per- cent, and that does not include mil- lions of welfare recipients. This con- ference report does not require the Government to create jobs. The result will be the world’s wealthiest nation putting families out on the street to fend for themselves. Will we tolerate destitution and call it reform? Republicans say the States will solve these problems. Already Philadelphia, as reported yesterday in the paper, has stopped providing shelter beds for sin- gle homeless people due to Federal and State welfare cuts. I am not predicting that Republican welfare reform will put people out on the street. I am pointing out that it already has. Oppose this conference report. Mr. SHAW. Mr. Speaker, I yield 1 minute to the distinguished gentleman from Delaware [Mr. CASTLE], who has done a great deal in this conference in bringing the two sides together. Mr. CASTLE. Mr. Speaker, I cannot thank the gentleman from Florida [Mr. SHAW] enough. At a time when some- body had to listen, he did. We do not always do that in this building, and it is just a tremendous honor to him that we are passing this bill today. I thank the gentleman from Ten- nessee, Congressman JOHN TANNER, not a finer person to work with I know in the House, who acted in a bipartisan way when I think we needed that in order to bring this bill into line. I thank the President, who I under- stand is going to sign this legislation. I believe he is doing the right thing for a variety of reasons. I believe the safety net was put back into place that we have talked about in several ways in the area of Medicaid, food stamps, and the ability of States to set up voucher systems after 5 years. I think they can deal with that. I have believed strongly, in my fight for welfare reform for 12 years now, that this is the opportunity. Everyone talks about this in a very draconian sense. I believe this is opportunity for women, for children, in some instances for men, and for families. It is oppor- tunity because we are going to take people who have not had a true chance to live the American life in terms of their education and background and we are giving them that chance. It is an experiment. We may have to come back to it, but I congratulate ev- erybody. Mr. SABO. Mr. Speaker, I yield 1 minute to the distinguished gentleman from South Carolina [Mr. CLYBURN]. Mr. CLYBURN. Mr. Speaker, I thank the ranking member for yielding me this time. Mr. Speaker, 2 years and you are out is not a bad proposition in and of itself, but in this bill it relies on that tried- and-true adage if you give a man a fish you may feed him for a day, if you teach a man how to fish he may feed himself for a lifetime. In this bill, Mr. Speaker, only 50 per- cent of those 2-years-and-you-are- outers can reasonably expect any chance at training. In this era of per- sonal responsibility, this legislation asks our most vulnerable citizens to do more, but our States are being required to do less. Mr. Speaker, this is not the best we can do, and it is not the best we can af- ford. I urge a no vote, Mr. Speaker. Mr. SABO. Mr. Speaker, I yield 1 minute to the distinguished new mom from Arkansas, Mrs. LINCOLN. (Mrs. LINCOLN asked and was given permission to revise and extend her re- marks.) Mrs. LINCOLN. Mr. Speaker, I thank the gentleman for yielding me this time and for his kind remarks. I think we can find that no one will argue that our current welfare system needs changed and today we have the opportunity to pass legislation that will hopefully move our Nation’s low- income citizens from passively accept- ing a welfare check to actively earning a paycheck. Welfare reform has been one of my top priorities since first coming to Congress, especially reform of the SSI disability program or the crazy check problem. I have worked diligently with mem- bers of the Blue Dog Coalition, with the Chairman of the Subcommittee on Human Resources, the task force, and with Members of both sides of the aisle to find a reasonable solution to those who truly need SSI assistance and wel- fare reform, hoping we can crack down on the abuse in the system while mak- ing provisions for those who need it. Although this conference report is not a perfect bill, it represents a sig- nificant improvement over our status quo. No one should get something for nothing, and if the American people are going to be generous with their tax dollars, they should get something in return. Mr. Speaker, this legislation provides responsible reform through the three main goals we started with: State flexi- bility, personal responsibility, and work. I urge my colleagues to support this provision, a lot of hard work in a bipartisan spirit. Mr. SHAW. Mr. Speaker, I yield such time as he may consume to the gen- tleman from Virginia [Mr. GOODLATTE]. (Mr. GOODLATTE asked and was given permission to revise and extend his remarks.) Mr. GOODLATTE. Mr. Speaker, I thank the gentleman for yielding me this time, for his fine work on this bill, and I rise in strong support of the wel- fare reform conference report. Mr. SABO. Mr. Speaker, I yield 1 minute to the distinguished gentle- woman from Hawaii [Mrs. MINK]. Mrs. MINK of Hawaii. Mr. Speaker, I thank the ranking member of the Com- mittee on the Budget for yielding me this time. I intend to vote against this con- ference report. The Urban Institute tells us that over a million children will be put into poverty as a result of this legislation. We are told by our own Republican Congressional Budget Of- fice that it is underfunded insofar as the work requirements. If indeed we want our people on wel- fare to go to work, is it not fair to ex- pect that there will be dollars there to provide them jobs, not to cut them adrift after 2 years without any cash support whatsoever? That is what the consequence of this bill will do. It will force people out on the streets, literally, with no cash as- sistance whatsoever and without the promise of any assistance in finding jobs. The women on welfare want to work. Look at any study that has been is- sued. These studies tell us that over 60 percent of the young mothers on wel- fare are out there looking for jobs and half of them do find them and they get off welfare. These people who say that the women stay there 13 years on wel- fare are simply not telling the truth. Mr. SHAW. Mr. Speaker, I yield 11\u20442 minutes to the gentlewoman from North Carolina [Mrs. MYRICK], the former mayor of Charlotte. Mrs. MYRICK. Mr. Speaker, the President’s decision to sign this wel- fare reform bill is really great news for working Americans and for people in need. The welfare bill will really re- form and empower the States to be cre- ative in solving their own problems and it will help end the cycle of dependency and poverty, which really truly helps millions of children with a decent ful- filling future. As a former mayor, I know firsthand these ideas work because we had pilot programs in our area where we were moving people out of public housing and into home ownership and off of welfare with child care help and really giving them their dignity back again. It is a sin not to help someone who genuinely, truly needs that help through no fault of their own, but it is also a sin to help people who do not need help. So this bill is going to en- courage that personal responsibility that we are all so proud of and give people their dignity back. Mr. SABO. Mr. Speaker, I yield 1 minute to the distinguished gentleman from North Dakota [Mr. POMEROY]. Mr. POMEROY. Mr. Speaker, I rise to support this legislation. I believe this CONGRESSIONAL RECORD \u2014 HOUSE H9409July 31, 1996 bill is clearly an improvement over the current system. I voted against the previous GOP bills because I believed they inad- equately protected children and were weak on work. Unlike those bills, this conference report does not deprive kids on Medicaid of their health care cov- erage. The conference report allows States to provide vouchers for children’s ne- cessities when their parents reach the time limit on benefits. The conference report removes the optional food stamp block grant and provides families with high rent or utility bills an adjustment for more grocery money than the ear- lier House versions allowed. I remain concerned that funding for job training may not be adequate yet, and that may need to be addressed in the future. A lot of us have worked hard to im- prove the various welfare reform pro- posals we have considered. Real welfare reform has meaningful protections for children, has a tough work require- ment and demands personal respon- sibility. While this bill is not perfect, it fits those parameters and begins a process of reforming welfare. Mr. SHAW. Mr. Speaker, I yield 1 minute to the gentleman from Louisi- ana [Mr. MCCRERY], a most valuable member of the Subcommittee on Human Resources of the Committee on Ways and Means. Mr. MCCRERY. Mr. Speaker, I thank the chairman of the subcommittee for yielding me this time and congratulate him on the great work in getting this welfare reform bill to the floor today. I also commend the President today for agreeing to sign this most historic bill. I want to talk for just a second about a part of the bill that I helped write, and I have gotten several calls today and yesterday, and some of my col- leagues have, regarding the SSI for children’s provisions in this bill. I want to assure all those teachers who brought this problem to my atten- tion and to the attention of other of my colleagues this is being taken care of in this welfare reform bill. We do away with a very subjective qualifying criteria that allows children to qualify for a disability when they really should not be on the program and replaces it with very definitive medical criteria that will be much, much superior to the current system. So I want to thank the gentlewoman from Arkansas, BLANCHE LAMBERT LIN- COLN, the gentleman from Wisconsin, GERALD KLECZKA, and others who helped me to bring to the attention of this body the very serious problems with the SSI disability for children. Mr. SABO. Mr. Speaker, I yield 1 minute to the gentleman from Califor- nia [Mr. FARR]. In addition, Mr. Speaker, I ask unan- imous consent to yield the remainder of the time on our side to the gen- tleman from Florida [Mr. GIBBONS] and that Mr. GIBBONS be permitted to man- age that time and to yield time to oth- ers. The SPEAKER pro tempore (Mr. MCINNIS). Is there objection to the re- quest of the gentleman from Min- nesota? There was no objection. The SPEAKER pro tempore. The gen- tleman from California [Mr. FARR] is recognized for 1 minute. (Mr. FARR of California asked and was given permission to revise and ex- tend his remarks.) Mr. FARR of California. Mr. Speaker, everybody in this Congress wants wel- fare reform. That is not the debate. But not everybody in the Congress wants to shift the cost from Federal Government to local government. We usually ask ourselves as law- makers to look before we leap. I do not think we have done that here on the welfare reform bill. We have asked to be quoted by Governors, but Governors do not administer welfare, commu- nities do. Counties and cities do. Has anyone asked the mayors and county supervisors? Well, I did. In California we are going to shift 230,000 people who are legal residents of the United States who are disabled. They are cut off. They live in our com- munity. Where are they going to go? What will this bill do to help them? This bill goes on. It hurts the people in our neighborhoods, people who go to school with our children. What can we do with a bill that hurts children, that hurts the disabled, that hurts the el- derly? In the Congress of the richest Nation in the world, what we can do is vote ”no” on this bill and say we can do a better job. We want welfare reform, but a wel- fare reform bill that just plows the problem on the community is not re- form at all. I ask for a ”no” vote. Mr. Speaker, I insert the following material for the RECORD: COUNTY OF SANTA CRUZ, HEALTH SERVICES AGENCY, Santa Cruz, CA, July 17, 1996. Re recommendation to oppose H.R. 3507 and S. 1795 denying eligibility for federal pro- grams for legal immigrants. Hon. SAM FARR, U.S. House of Representatives, Washington, DC. DEAR CONGRESSMAN FARR: On behalf of Santa Cruz County, we are asking for your assistance and intervention in deleting from H.R. 3507 and S. 1795, requirements which deny eligibility for federal programs to legal immigrants. These two bills are moving for- ward under the heading of welfare reform and in their present form, are expected to save the Federal government $23 billion over seven years. At least $9 billion of this total would be achieved by eliminating services to legal immigrants in California. Santa Cruz County with less than 1% of the state’s popu- lation, because of its population history, de- pendence on agriculture and demographics, expects an adverse financial impact far in excess of its population share. While the federal budget will experience some relief, the budgets of local govern- ments, especially over-taxed budgets such as Santa Cruz’s, will be severely impacted. These important issues demand thoughtful, coordinated planning and implementation to assure the least negative impact on those taxpayers who fund local government serv- ices and those residents who look to local government for care. These two legislative proposals, regardless of their noble intent, will savage local gov- ernment and cause severe personal and soci- etal disruption. For these reasons, we urge that you oppose these measures as long as they contain these unacceptable provisions which deny eligibility for legal immigrants. Very truly yours, CHARLES MOODY, Health Services Ad- ministrator. WILL LIGHTBOURNE, Human Resources Agency Adminis- trator. CALIFORNIA LEGISLATURE, Sacramento, CA, July 18, 1996. Hon. SAM FARR, U.S. House of Representatives, Washington, DC. DEAR REPRESENTATIVE FARR: We are writ- ing to convey major concerns raised by the most recent proposed welfare legislation cur- rently being considered by Congress. SERVICES FOR AGED AND DISABLED LEGAL IMMIGRANTS Denying Federal benefits to legal immi- grants disproportionately harms California communities. Over 230,000 non-citizen legal immigrants currently receive SSI in Califor- nia, excluding refugees. This aid is provided to the aged, blind and disabled, who could not support themselves by going to work if their SSI benefits ended. Under H.R. 3507, SSI and Food Stamps would be denied to non-citizens already legally residing in Cali- fornia as well as to new legal entrants, un- like the immigration reform legislation cur- rently under consideration in Congress, which permits continued benefits for exist- ing legal residents. The proposed bar on SSI and Food Stamps for all legal immigrants, and the denial of other Federal means-tested programs to new legal entrants for their first five years in the country would have a devastating effect on California’s counties, which are obligated to be the providers of last resort. It is esti- mated that these proposed changes would re- sult in costs of $9 billion to California’s counties over a seven-year period. At a mini- mum, the very elderly, those too disabled to become citizens and those who become dis- abled after they arrive in this country should be exempted from the prohibition on SSI\u2014if for no other reason than to lessen to counties the indefensible cost of shifting care from the Federal government to local taxpayers for a needy population admitted under U.S. immigration laws. PROTECTION OF CHILDREN While we agree that welfare dependence should not be encouraged as a way of life, it is essential in setting time limits on aid that adequate protections be provided for chil- dren once parents hit these time limits. Some provision must be made for vouchers or some other mechanism by which the es- sential survival needs of children such as food can be met. The Administration has suggested this sort of approach as a means of ensuring adequate protection for children whose parents hit time limits on aid. California’s child poverty rate was 27 per- cent for 1992 through 1994, substantially above the national rate of 21 percent. H.R. 4, which was vetoed by the President, would have caused an additional 1.5 million chil- dren to become poor. Though estimates have not been produced for H.R. 3507, it is likely that it also would result in a significant ad- ditional number of children falling below the poverty level. ADEQUATE FUNDING FOR CHILD CARE Funds provided for child care are essential to meet the needs of parents entering the CONGRESSIONAL RECORD \u2014 HOUSEH9410 July 31, 1996 work force while on aid and leaving aid as their earnings increase. For California to meet required participation rates, about 400,000 parents would have to enter the work force and an additional 100,000 would have to increase their hours of work. Even if only 15 percent of these parents need a paid, formal child care arrangement, California will need nearly $300 million per year in new child care funds. Thank you for your consideration of these concerns. If your staff have any questions about these issues, they can contact Tim Gage at (916) 324 0341.Sincerely, Bill Lockyer, President Pro Tem- pore, California Sen- ate. RICHARD KATZ, Democratic Floor Leader, California Assembly. NATIONAL IMMIGRATION LAW CENTER\u2014OVERVIEW OF CURRENT LAW AND WELFARE REFORM IMMIGRANT RESTRICTIONS\u2014104TH CONGRESS Current Law Welfare Reform Reconciliation Act of 1996 (H.R. 3734)as passed by the House Personal Responsibility, Work Opportunity Act of 1966 (H.R. 3734) as passed by the Senate Differences\/Comments Programs barred to most legal immigrants includ- ing current residents None Denied until citizenship: SSI, Food Stamps, and Medic- aid. Denied until Citizenship: SSI, and Food Stamps. Medicaid: House bars Medicaid to most legal immi- grants. Senate imposes lesser restrictions on immi- grant access to Medicaid. The Senate Medicaid provi- sions affect about half as many people after six years. Current recipients: phased in over one year. Current recipients: phased in over one year. Exemptions Refugees, asylees, withholding of deportation during 1st 5 years only. Veterans and family members. Immigrants who work 40 ”qualifying quarters” (as defined for Title II Social Security) and did not re- ceive any means-tested assistance in any of those quarters. Minor children get credit for quarters worked by par- ents; spouses get credit for work if still married or if working spouse is deceased. Exemptions Refugees, asylees withholding of deportation during 1st 5 years only. Veterans and family members. Immigrants who work 40 ”qualifying quarters” (as defined for Title II Social Security) and did not re- ceive any means-tested assistance in any of those quarters. Minor children get credit for quarters worked by par- ents; spouses get credit for work if still married or if working spouse is deceased. Refugees\/Asylees: Most refugees and asylees have been here more than five years and would be subject to the bar. State option to bar current legal residents and future legal immigrants. States may not discriminate against legal immigrants in the provision of as- sistance. Programs: State have option to bar both current resi- dents and new immigrants from: AFDC, title XX, and all entirely state funded means-tested programs. Programs: State option to bar both current residents and new immigrants from: Medicaid, AFDC, title XX, and all entirely state funded means-tested programs. Identical provisions. The definitions of ”means-tested” programs was de- leted from the Senate bill because of the ”Byrd rule”. Five Year prospective bar (on future legal immi- grants). None. Provision: Bars AFDC and most federal means tested programs to legal immigrants who come after date of enact- ment for 1st 5 years after entering the U.S. Exceptions: Emergency Medicaid. Immunizations & testing and treatment of the symp- toms of communicable diseases. Short-term non-cash disaster relief. School Lunch Act programs. Child Nutrition Act programs. Title IV foster care and adoption payments. Higher education loans & grants. Elementary & Secondary Education Act. Head Start. TPA. At AG discretion, community programs (such as soup kitchens) that do not condition assistance on individ- ual income or resources and are necessary to protect life or safety. Provision: Bars AFDC and most federal means tested programs to legal immigrants who come after date of enactment for 1st 5 years after entering the U.S. Exceptions: Emergency Medicaid. Immunization & testing and treatment of commu- nicable disease if necessary to prevent the spread of such disease. Short-term non-cash disaster relief. School Lunch Act programs. Child Nutrition Act programs. Certain other emergency food and commodity pro- grams. Title IV foster care and adoption payments. Higher education loans & grants (including those under the Public Health Services Act). Elementary & Secondary Education Act. At AG discretion, community programs (such as soup kitchens) that do not condition assistance on individ- ual income or resources and are necessary to protect life or safety. Communicable Diseases: House permits doctors to be reimbursed for treating symptoms of communicable diseases even if the disease later turns out not to have been communicable. Nutrition: Senate permits food banks and others who administer emergency food programs to avoid spend- ing volunteer resources to verify citizenship. Head Start and ITPA: House does not restrict legal im- migrant access to these programs. Student Assistance Under the Public Health Services Act: These programs were added to the Senate bill by floor amendment sponsored by Senator Paul Simon (D-IL). The definition of ”means-tested” programs was de- leted from the Senate bill due to the ”Byrd rule.” Programs restricted by deeming (impacts most family-based immigrants). AFDC, Food Stamps, and SSI. Provision: Virtually all federal means-tested program must deem future immigrants. Provision: Virtually all federal means-tested programs must deem future immigrants. Identical provisions. Exempted programs: Same programs exempted from deeming as from the 5-year prospective bar (see above). Exempted programs: Same programs exempted from deeming as from the 5-year prospective bar (see above). Neither bill exempts non-profit organizations from bur- densome verification requirements (as does the Sen- ate immigration bill). State and local programs: Programs that are entirely state funded may deem (or ban) current legally resi- dent immigrants as well as future legal immigrants (except for those exempt from federal deeming and programs that are equivalent to federal programs ex- empted from deeming). State and local programs; Programs that are entirely state funded may deem (or ban) current legally resi- dent immigrants as well as future legal immigrants (except for those exempt from federal deeming and programs that are equivalent to federal programs ex- empted from deeming). Length of deeming period\/ retroactivity. 3 years (SSI 5 years until 10\/1\/96). Current residents: same as current law. Current residents: same as current law. Identical provisions. Future immigrants: until citizenship unless an exemption applies (e.g. 40 quarters). Future immigrants: until citizenship unless one of the exemptions applies (e.g. 40 quarters). Immigrants exempt from deeming. Disabled after entry (SSI only). Immigrants who work 40 ”qualifying quarters” (as de- fined for Title II Social Security) and did not receive any means-tested assistance in any of those quar- ters. Immigrants who work 40 ”qualifying quarters” (as de- fined for Title II Social Security) and did not receive any means-tested assistance in any of those quar- ters. Identical provisions. Sponsor is receiving Food Stamps (Food Stamps only). Minor children get credit for quarters worked by parents; spouses get credit for work if still remarried or if working spouse is deceased. Minor children get credit for quarters worked by parents; spouses get credit for work if still married or if work- ing spouse is deceased. About half of the legal immigrants who will be cut off of SSI under these bills have been in the U.S. more than ten years. Veterans, exempt from SSI, Medicaid and Food Stamp bar, are not exempt from deeming. Veterans, exempt from SSI, Medicaid and Food Stamp bar, are not exempt from deeming. There is no exemption for battered spouses or children in either bill. Affidavits of support provi- sion. Affidavits of support are unenforceable against the sponsor. Enforceable to recover money spent on most means- tested programs. Enforceable to recover money spent on most means- tested programs. The requirement that only the petitioner may be the sponsor precludes all other close relatives from obli- gating themselves to support the immigrant. Sponsor liable for benefits used until citizenship, unless immigrant works 40 ”qualifying quarters” is credited for work of spouse or parent. For definition of ”quali- fying quarter,” see Immigrants Exempt from Deeming above. Sponsor liable for benefits used until citizenship, unless immigrant works 40 ”qualifying quarters” is credited for work of spouse or parent. For definition of ”quali- fying quarter,” see Immigrants Exempt from Deeming above. This entire section was deleted from the Senate bill be- cause of the Byrd rule. Enforceable against sponsor by sponsored immigrant or government agencies until 10 years after receipt of benefits. Sponsor fined up to $5,000 for failure to notify when sponsor moves. Enforceable against sponsor by sponsored immigrant or government agencies until 10 years after receipt of benefits. Sponsor fined up to $5,000 for failure to notify when sponsor moves. Only the petitioner may qualify as a sponsor. Only the petitioner may qualify as a sponsor. Treatment of ”Not qualified” immigrants. Eligibility of classes of im- migrants the INS does not plan to deport varies by program. Definition: ”Not qualified” = all but LPR, refugee, granted asylum, deportation withheld, parolee for > 1 year. Definition: ”Not qualified” = all but LPR, refugee, granted asylum, deportation withheld, parolee for > 1 year. Child Nutrition: The House would require the schools, churches, charities, and clinics that operate school lunch programs and WIC clinics to verify immigration status and turn away ineligible children. The Senate exempts child nutrition programs from these require- ments. Undocumented immigrants ineligible for cash as- sistance and all major federal programs. Ex- emptions include: emer- gency Medicaid, public health, child nutrition, Child care, child protec- tion, and maternal care, emergency services. Prohibition: Not qualified barred from: Social Security (affects new applicants only), unemployment, all fed- eral needs-based programs, and any governmental grant, contract, loan, or professional or commercial license (nonimmigrants may receive license or con- tract related to visa.) Prohibition: Not qualified barred from: Social Security (affects new applicants only), unemployment, all fed- eral needs-based programs, and any governmental grant, contract, loan, or professional or commercial license (nonimmigrants may receive license or con- tract related to visa.) CONGRESSIONAL RECORD \u2014 HOUSE H9411July 31, 1996 NATIONAL IMMIGRATION LAW CENTER\u2014OVERVIEW OF CURRENT LAW AND WELFARE REFORM IMMIGRANT RESTRICTIONS\u2014104TH CONGRESS\u2014Continued Current Law Welfare Reform Reconciliation Act of 1996 (H.R. 3734)as passed by the House Personal Responsibility, Work Opportunity Act of 1966 (H.R. 3734) as passed by the Senate Differences\/Comments Exceptions: Emergency Medicaid. Short-term emergency relief. Immunizations and testing and treatment of the symptoms of communicable diseases. Exceptions: Emergency Medicaid. Short-term emergency relief. Immunizations and testing and treatment of com- municable disease if necessary to prevent the spread of such disease. School Lunch Act programs. Child Nutrition Act programs. Certain other emergency food and commodity pro- grams. No Battered Women’s Exception: Beneficiaries of the Vio- lence Against Women Act (VAWA) self-petitioning pro- visions are treated the same as persons who are un- lawfully in the U.S. Current recipients of housing or community development funds. At AG discretion, community programs (such as soup kitchens) that do not condition assistance on individual income or resources and are necessary to protect life, or safety. Current recipients of housing or community development funds. At AG discretion, community programs (such as soup kitchens) that do not condition assistance on individual income or resources and are necessary to protect life, or safety. State and Local Programs: Immigrants who are not law- fully present may not participate in state or locally funded programs unless the state passes a law after enactment affirmatively providing for such eligibility (state has no option to provide assistance to ”not qualified” immigrants who are here lawfully). State and Local Programs: Immigrants who are not law- fully present may not participate in state or locally funded programs unless the state passes a law after enactment affirmatively providing for such eligibility (state has no option to provide assistance to ”not qualified” immigrants who are here lawfully). Verification and reporting. Agencies such as battered women’s shelters, hos- pitals, and law enforce- ment agencies may keep immigration information confidential if they feel such confidentiality is advisable given their mission. For example, a law enforcement agency may assure a timid wit- ness that he or she will not be deported as a re- sult of coming forward to report a crime. No Confidentiality: No state or local entity may ”in any way” restrict the flow of information to the INS. No Confidentiality: No state or local entity may ”in any way” restrict the flow of information to the INS. Identical provisions. Required Verification: All federal, state and local agen- cies that administer non-exempt federal programs must verify immigrant eligibility ”to the extent fea- sible” through a computerized database. Required Verification: All federal, state and local agen- cies that administer non-exempt federal programs must verify immigrant eligibility ”to the extent fea- sible” through a computerized database. The no confidentiality provision endangers witness pro- tection programs and all other endeavors in which confidentiality is necessary to encourage cooperation or participation. Required Reporting: SSI, Housing, and AFDC agencies must make quarterly reports to INS providing the name and other identifying information of persons known to be unlawfully in the U.S. Required Reporting: SSI, Housing, and AFDC agencies must make quarterly reports to INS providing the name and other identifying information of persons known to be unlawfully in the U.S. Mr. SHAW. Mr. Speaker, I yield 1 minute to the distinguished gentleman from California [Mr. RIGGS]. Mr. RIGGS. Mr. Speaker, I thank the gentleman for yielding me this time and for his hard work on this very his- toric and very important legislation. This legislation curtails food stamp fraud, it limits the access of resident aliens to welfare programs, which just might persuade some visitors to our country who did not come here to work to return home, but, more importantly, it is another step in the process of de- volving or sending social services back to the States and getting control back in the hands of local managers who are closer to the problems of the poor. It addresses a fundamental fairness issue in American society, and that is the resentment of working individuals toward able-bodied individuals who refuse to get off the dole. Most impor- tantly, in my mind, it addresses the problem of welfare dependency and welfare pathology in this country, which has led to soaring rates of family disintegration, illegitimacy in Amer- ican society, and the other con- sequences, like youth crime. This is indeed an historic day in this body and a very, very important piece of legislation, in my view the most im- portant legislation we will enact in the 104th Congress. b 1615 Mr. GIBBONS. Mr. Speaker, I yield myself 1 minute. Mr. Speaker, let me say first of all that there are some good things in this legislation that could have and should have become law without being tied to the rest of this fundamentally flawed package. The President has made a mistake in endorsing this legislation and the Congress will make a mistake in passing it. Essentially, Mr. Speaker, this legis- lation reduces assets that we need to help those who are the most vulnerable in our society. Seventy percent of all the people on welfare are infants and children. The rest are so disabled one way or another, and they cannot make a go of it. This bill reduces their assets, reduces the assets of the people who we are trying to help to improve and bet- ter their situation. For some reason that we do not thor- oughly understand, the bottom three- fifths of all the people in the United States have not made any progress in the last 20 years, economically speak- ing. The bottom one-fifth have lost 18 percent of their resources that are available to them. This bill further ex- acerbates that problem and will hurt infants and children. It should not be- come law. It should be vetoed. Mr. SHAW. Mr. Speaker, I yield 11\u20442 minutes to the distinguished gen- tleman from Connecticut [Mr. SHAYS], a member of the Committee on the Budget. Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding. Mr. Speaker, politicians are elected by adults to represent the children. We need to save our children from crip- pling national debt, Government debt. We need to make sure that our trust funds, like Medicare, are there for our children. And most importantly, we need to enable, we need to help our children become independent citizens of this great and magnificent country. This bill helps to transform our care- taking, social and corporate welfare state into a caring opportunity society. I extend tremendous admiration to the gentleman from Florida, [Mr. SHAW] for not giving into those who wanted to weaken the bill so that it would end up not doing anything. We have a caring bill that does this. In the final analysis, it is not what you do for your children but what you have taught them to do for themselves that will make them successful human beings. It ends this caretaking society and moves toward a caring society where we teach our children and the adults who raise our children how to grow the seeds, how to have the food. Mr. GIBBONS. Mr. Speaker, I yield 2 minutes to the gentleman from New York [Mr. RANGEL]. (Mr. RANGEL asked and was given permission to revise and extend his re- marks.) Mr. RANGEL. Mr. Speaker, what time is it? It is time for us to get on with our conventions. We better get on with the Democratic Convention and Republican Convention. What do we want to say that we are for? Reform. What is a nagging sore in everyone’s problem? Welfare. People who do not work. What is the bill all about? Well, the bill is supposed to be to protect chil- dren. I heard the previous speaker say that. He said that this child will be cut off of welfare if the mother does not CONGRESSIONAL RECORD \u2014 HOUSEH9412 July 31, 1996 get a job in 2, 3, 4 or 5 years. He did not say it, but I know he read the bill. The winners in this are the Gov- ernors. There is nothing to tell the Governors what to do, and they will be the losers in the long run, but not as bad as the children. They can do what they want with immigrants and with little kids because for 60 years we have said there is a safety net for children. But not before this election. Who won? Bob Dole? Oh, yes, he said it already. He shoved this one down the President’s throat. Three strikes and the President would have been out so he wins because what the heck, he forced the issue. And who is another winner? My President. He is a winner. He has re- moved this once again. Everything you come up with, my President says, oh, no you do not. And so here again he is a winner. So when we look at it, this is a big political victory. The Democrats are happy in the White House. The Repub- licans are happy because they made him do it. The Governors are happy. They begged for the opportunity to do it their way after all. They are closer to the problem. And the only losers we have now are the kids. The got no one there to protect them. The religious leaders came out. Obviously they are not as highly reg- istered as some other people, but they said do not do this to our children. They are the weakest. They cannot vote. If my colleagues do not like their mothers and their fathers and their neighborhoods, then get involved in education and job training and make them work. But there are winners and losers and the kids are the losers. Mr. SHAW. Mr. Speaker, I yield 3 minutes to the distinguished gen- tleman from Texas [Mr. ARCHER], the distinguished chairman of the Commit- tee on Ways and Means. Mr. ARCHER. Mr. Speaker, I thank the gentleman for yielding. Mr. Speaker, the only way we can change people’s behavior is by chang- ing the system. Franklin Roosevelt warned that giving permanent aid to anyone destroys them. By creating a culture of poverty and a culture of vio- lence, we have destroyed the very peo- ple we are claiming to help. Can any serious person argue that the fed- eralization of poverty by Washington has worked? Government, since 1965, has spent over $5 trillion on welfare, more than we have spent on all the wars that we have fought in this century. And we have lost the war on poverty. With this bill, we can begin to win the war. We need to come to the realization that dollars alone will not solve the problem. We need to give unemployed people hope and equip them for work so they will be better able to help them- selves. As our colleague, the gentleman from Oklahoma, J.C. WATTS, says, they are eagles waiting to soar. Today we will ask those now receiv- ing welfare to make a deal with the taxpayer. We will provide you with temporary help to get you through the hard times and we will help you feed your family and get the training you need, and in exchange, we ask that you commit yourself to find a job and move back into the economy. I am pleased to see that the Presi- dent has finally agreed to join us in our fight to overhaul the broken-down wel- fare system. It has been a long, ardu- ous road since 1988 when Ronald Reagan first made the effort to do something about work fare and finally we are here. Mr. President, the poor have suffered long enough and now we have the op- portunity to change it all and help the hard-working taxpayers as well. Mr. GIBBONS. Mr. Speaker, I yield 2 minutes to the gentlewoman from Con- necticut [Mrs. KENNELLY]. Mrs. KENNELLY. Mr. Speaker, we all can be proud of the record that many of us have in working on this bill to protect children. Eight months ago we had a welfare conference report on the floor that would have blocked fos- ter care or would have made foster care a block grant, and also food stamps. Today’s legislation retains the Federal guarantee for these services. Eight months ago we had Federal welfare legislation on this floor that would have cut severely disabled chil- dren by 25 percent. Today we do not have that flawed two-tiered system. Eight months ago we considered leg- islation that would have denied mil- lions of Americans Medicaid because they lost welfare eligibility. Today’s legislation, the legislation before us, guarantees continual health coverage for those who are currently entitled to these services. Eight months ago we voted on legis- lation that would have underfunded child care. This bill has $4.5 billion in it for child care. I am not suggesting the legislation is perfect. Most legislation is not perfect. But I predict we will be back on this very floor finding more answers and better answers than we have today. If that is there, I will be involved in these changes. But today we have to decide if this legislation as a whole represents an improvement over the status quo. My answer is: Yes, it does. While some of the changes here being suggested pose risks, so does the cur- rent system. Welfare is clearly broken, offering more dependence than oppor- tunity. We can vote today to at least begin to transform the welfare system. Today we can begin welfare reform, those of us who have worked hard over the months to make the bill, working with those who have had the bill. We now have the bill. We should vote for the bill and get on with welfare reform. Mr. SHAW. Mr. Speaker, I yield 2 minutes to the gentleman from Texas [Mr. DELAY], the distinguished Repub- lican whip. Mr. DELAY. Mr. Speaker, I am very pleased to hear that President Clinton has endorsed the welfare bill that will pass the House today. Clearly, the time has come to end welfare as we know it. The welfare system as we know it has been a disaster. The only thing great about the Great Society was the great harm it has caused our children. With this bill, Mr. Speaker, we make commonsense changes long requested by the American people. Common sense dictates that able- bodied people work. Common sense dictates that only Americans should receive welfare bene- fits in this country. Common sense dictates that incen- tives to keep families together. Common sense dictates that welfare should not be a way of life. Now liberal Democrats will vainly challenge these simple truths, and even the President could not help himself and has challenged some of these truths, but time and experience has proven them wrong. Welfare has not worked for the people it was supposed to help. Everybody knows that fact. Now is the time to change that system. Some well-meaning people will once again make the claim that welfare re- form is mean-spirited. Well, I disagree. We reform welfare not out of spite but out of compassion. We change this system not because we want to hurt people, but because we want to help people help themselves. And we change this system not to throw children into the streets, but to give children a greater chance to realize the American dream and still maintain a safety net for those truly in need. Mr. Speaker, I am proud of this Con- gress for the great work on this his- toric legislation, and I am pleased that President Clinton has agreed to finally live up to his campaign promise. Mr. GIBBONS. Mr. Speaker, I yield 1 minute to the gentleman from New York [Mr. NADLER]. (Mr. NADLER asked and was given permission to revise and extend his re- marks.) Mr. NADLER. Mr. Speaker, sadly, it seems clear that this House today will abdicate its moral duty and knowingly vote to allow children to go hungry in America. Sadly, our President, a mem- ber of the Democratic Party, the party of Franklin Roosevelt and John Ken- nedy and Lyndon Johnson, will sign this bill. Does this bill allocate sufficient funds to provide employment for peo- ple who want to work? No. Does this bill provide adequate child care so parents can leave their children in a safe environment and earn a liv- ing? No. Does this bill ensure that people leaving welfare can take their kids to a doctor when they get sick? No. Does this bill do anything to raise wages so people who work hard to play by the rules will not have to see their children grow up in poverty? No. Does this bill reduce the value of food stamps for children of the poorest working people to push these children into poverty and hunger? No. CONGRESSIONAL RECORD \u2014 HOUSE H9413July 31, 1996 Mr. Speaker, I know that scapegoating poor children is politi- cally popular this year, but it is not right. We must stand up for our coun- try’s children. I urge my colleagues to reject this immoral legislation. Mr. GIBBONS. Mr. Speaker, I yield 2 minutes to the gentleman from Geor- gia [Mr. LEWIS]. Mr. LEWIS of Georgia. Mr. Speaker, the bill we are considering today is a bad bill. I will vote against it and I urge all people of conscience to vote against it. It is a bad bill because it pe- nalizes children for the actions of their parents. This bill, Mr. Speaker, will put 1 million more children into pov- erty. How, how can any person of faith, of conscience vote for a bill that puts a million more kids into poverty. Where is the compassion, where is the sense of decency, where is the heart of this Con- gress. This bill is mean, it is base, it is downright low down. We are a great nation. We put a man on the Moon. We have learned to fly through the air like a bird and swim like a fish in the sea. We are the world’s only superpower. We did not do this by running away\u2014by giving up. As a nation, as a people\u2014as a govern- ment\u2014we met our challenges\u2014we won. This bill gives up\u2014it throws in the towel. We cannot run away from our challenges\u2014our responsibilities\u2014and leave them to the States. That is not the character of a great nation. I ask you, Mr. Speaker, What does it profit a great nation to conquer the world, only to lose it’s soul? Mr. Speaker, this bill is an abdication of our responsibility and an abandonment of our morality. It is wrong, just plain wrong. It was Hubert Humphrey, who said: We can judge a society by how it treats those in the dawn of life, our children, those in the twilight of life, our elderly and those in the shadow of life, the sick and the dis- abled. I agree with Hubert Humphrey, my colleagues. What we are doing here today is wrong. I say to you, all of my colleagues, you have the ability, you have the ca- pacity, you have the power to stop this assault, to prevent this injustice. Your vote is your voice. Raise your voice for the children, for the poor, for the dis- abled. Do what you know in your heart is right. Vote ”no.” b 1630 Mr. GIBBONS. Mr. Speaker, I yield 2 minutes to the gentleman from Michi- gan [Mr. LEVIN]. (Mr. LEVIN asked and was given per- mission to revise and extend his re- marks.) Mr. LEVIN. Mr. Speaker, the status quo is gone. The current system does not meet the American values of work, oppor- tunity, responsibility, and family. We have been wrestling for a long time with what should replace it. The key always has been the linkage of welfare to work, within a definite time structure, and with sensitivity to the children of the parent who needs to break out of a cycle of dependency, for her\/his good, for the child’s and for the taxpayer. The challenge has been to find a new balance, that combines State flexibil- ity with national interest. The first two bills vetoed by the President failed to address effectively work and dealt insensitively with chil- dren. If the AFDC entitlement was going to be replaced by a block grant\u2014which was already beginning to happen through Federal waivers\u2014after the ve- toes we successfully pressured the Re- publican majority to make substantial improvements in day care, health care, benefits for severely disabled children and to retain the basic structure of fos- ter care, food stamps and the school lunch program. In a word, this is a different bill than those vetoed by the President. The bill before us is at its very weak- est in two areas essentially unrelated to AFDC\u2014food stamps and legal immi- grants. Reform was needed in these areas, but surely not punishment nor a mere search for dollars, as was true of the majority’s approach. The question is whether the defects in those areas should sink changes in our broken welfare system. On balance, I believe it is better to proceed today with reforms in the wel- fare system, with a commitment to re- turn on a near tomorrow to the defects in this bill. I hope in the next session there will be a Congress willing to address these legitimate concerns with President Clinton. Mr. SHAW. Mr. Speaker, I yield 30 seconds to the distinguished gentleman from Louisiana [Mr. HAYES], a valued member of the Committee on Ways and Means. Mr. HAYES. Mr. Speaker, folks at home simply wonder if they can tell the difference between a disabled vet- eran from a real war and someone who has become disabled because of a fake war on poverty, converting food stamps into drugs, why cannot the Govern- ment. They want to know, if they can tell the difference between a young woman whose husband has walked out on them, leaving them a child with no recourse, and a teen who becomes preg- nant because of a system that rewards it, why cannot the Government? Today this body answers that it can tell the difference. The Senate can tell the difference. And I am very pleased to understand that the President is going to sign the bill that allows peo- ple at home to at least know we have that judgment to make that difference. Mr. GIBBONS. Mr. Speaker, I yield such time as he may consume to the gentleman from Maryland [Mr. HOYER]. (Mr. HOYER asked and was given permission to revise and extend his re- marks.) Mr. HOYER. Mr. Speaker, I rise in support of the bill. America’s welfare system is at odds with the core values Americans believe in: Responsibil- ity, work, opportunity, and family. Instead of rewarding and encouraging work, it does little to help people find jobs, and penalizes those who go to work. Instead of strengthening fami- lies and instilling personal responsibility, the system penalizes two-parent families, and lets too many absent parents off the hook. Instead of promoting self-sufficiency, the culture of welfare offices seems to create an expectation of dependence rather than inde- pendence. And the very ones who hate being on welfare are desperately trying to escape it. As a society we cannot afford a social wel- fare system without obligations. In order for welfare reform to be successful, individuals must accept the responsibility of working and providing for their families. In the instances where benefits are provided, they must be tied to obligations. We must invest our resources on those who value work and responsibility. Moreover, we must support strict requirements which move people from dependence to inde- pendence. Granting rights without demanding responsibility is unacceptable. The current system undermines personal re- sponsibility, destroys self-respect and initiative, and fails to move able-bodied people from welfare to work. Therefore, a complete over- haul of the welfare system is long overdue. We must create a different kind of social safe- ty net which will uphold the values our current system destroys. It must require work, and it must demand responsibility. Today, the House will take a historic step as it moves toward approving a welfare reform conference report which takes significant steps to end welfare as we know it. The bill is not perfect. But, at the insistence of the President and congressional Democrats, significant im- provements to require work and protect chil- dren have been made. It is because of these important changes that I will vote in favor of this bill. This bill requires all recipients to work within 2 years of receiving benefits. The bill requires teen parents to live at home or in a supervised setting, and teaches responsibility by requiring school or training attendance as a condition of receiving assistance. When the House Ways and Means Commit- tee marked up its first welfare bill 11\u20442 years ago, Democrats proposed an amendment to exempt mothers of young children from work requirements if they had no safe place for their children to stay during the day. The amendment was defeated by a unanimous Republican vote. I am pleased that the con- ference report prohibits States from penalizing mothers of children under 6 if they cannot work because they cannot find child care. A year and a half ago, Ways and Means Committee Republicans defeated Democratic amendments to strengthen child support en- forcement provisions, because committee Re- publicans felt those sanctions were ”too hard” on deadbeat dads. I am pleased that this con- ference report includes every provision in the President’s child support enforcement pro- posal, the toughest crackdown on deadbeat parents in history. A year and a half ago, the Republican wel- fare bill included a child nutrition block grant that would have caused thousands of children in Maryland to lose school lunches\u2014for some of those children, the only meal they would re- ceive in a day. I am pleased that the con- ference report maintains the guarantee of school meals for our neediest kids. CONGRESSIONAL RECORD \u2014 HOUSEH9414 July 31, 1996 As recently as last week, the House Repub- lican bill eliminated the guarantee of food stamps for poor children and assistance for children who had been neglected or abused. I am pleased that this bill prohibits the block grants which dismantle food stamp and child protection assistance. Like many Americans, I continue to have concerns about some of the provisions in this bill. We must be certain that both the Federal and State governments live up to their respon- sibilities to protect children who may lose as- sistance through no fault of their own. We must make sure that legal immigrants, who have paid taxes and in some cases defended the United States in our armed services, are not abandoned in their hour of need. And it is not enough to move people off of welfare\u2014we must move them into jobs that make them self-sufficient and contributing members of so- ciety. This bill supports the American values of work and personal responsibility. It has moved significantly in the direction of the welfare re- form proposals made by Congressman DEAL and Congressmen TANNER and CASTLE, both of which I supported. I applaud this important step to end welfare as we know it, and intend to vote in favor of this bill. Mr. GIBBONS. Mr. Speaker, I yield 1 minute to the gentleman from Rhode Island [Mr. KENNEDY]. Mr. KENNEDY of Rhode Island. Mr. Speaker, just hearing my colleague, the gentleman from Georgia, JOHN LEWIS, speak so passionately, I think should move anyone who listened to his speech. Over 30 years ago it was JOHN LEWIS who was fighting against States rights, States rights meaning justice dependent on geography. How you were treated depended on what State you lived in. And yet our Republican friends who are offering this welfare reform, as they call it, are willing to embrace States rights; what their block grant plan means is that again justice will depend on geography. In my State of Rhode Island, over 40,000 kids in pov- erty are going to be put at a disadvan- tage under the block grant system be- cause when you take away the money that is entitled to kids based upon their poverty, you leave it to the whim of the States. I can tell you, each State is under pressure to lower the bar so that you can squeeze people even more. This is wrong. When Mr. SHAW and Mr. ARCHER say that dollars will not do it alone, I want to ask the Republicans, what are they going to substitute when a poor child needs food, what are they going to sub- stitute for the money that they are supposed to be providing through these programs? Mr. SHAW. Mr. Speaker, I yield 1 minute to the gentlewoman from Cali- fornia [Ms. PELOSI]. Ms. PELOSI. Mr. Speaker, I thank the gentleman for yielding the time. I rise in opposition to the welfare bill. If this bill passed today, it will be a victory for the political spin artists and a defeat for the infants and chil- dren of America. We all agree that the welfare system must be reformed. But we must make sure that that reform reduces poverty, not bashes poor people. The cuts in this bill will diminish the quality of life of children in poor families in America and will have a devastating impact on the economy of our cities. Food and nutrition cuts will result in increased hunger. Local government will be forced to pay for the Federal Government’s abdication of respon- sibility. How can a country as great as America ignore the needs of America’s infants and children who are born into poverty? The Bible tells us that to minister to the needs of God’s children is an act of worship; to ignore those needs is to dis- honor the God who made them. Mr. Speaker, let us not go down that path today. Mr. GIBBONS. Mr. Speaker, I yield such time as he may consume to the gentleman from New York [Mr. TOWNS]. (Mr. TOWNS asked and was given permission to revise and extend his re- marks.) Mr. TOWNS. Mr. Speaker, vote no on this pain and shame that we are inflict- ing on young people, a garbage bill. This agreement along with the other vetoed welfare bills amount to nothing short of a roll- call of pain and shame that will be dumped on those Americans who are clearly in need of a social service safety net. And to add to that pain, legal immigrants will bear 40 percent of the cuts in welfare even though they make up only 5 percent of the population receiving welfare benefits. No one is satisfied with the way welfare pol- icy is constructed or practiced. The Federal Government doesn’t like it; the local adminis- trators don’t like it; the social workers don’t like it; the majority of the taxpayers don’t like it and the recipients don’t like it. There is no doubt that the welfare system in this country needs to be changed. Clearly reform is nec- essary. However, the overall scope of the pro- posed reforms will victimize those Americans most in need of assistance. I urge a ”no” vote on this conference agree- ment. Mr. GIBBONS. Mr. Speaker, I yield 45 seconds to the gentlewoman from Flor- ida [Ms. BROWN]. Ms. BROWN of Florida. Mr. Speaker, this was a bad House bill, a bad Senate bill and the conference report did not fix it. It is still bad. You can judge a great society by how it treats its children, its senior citi- zens. This bill guts our future. I urge my colleagues to vote against it. Mr. Speaker, I rise to oppose this con- ference report. The House welfare reform bill was a bad bill, the Senate bill was a bad bill and the conference report does not fix it. This legislation is so bad that it can’t be fixed. This bill will have a horrible impact on the children in my State. In Florida, at least 235,000 children would be denied benefits under this legislation. In Florida alone, 48,000 would be pushed deeper into poverty. Children will be hungrier if this bill becomes law. In Florida, 111,926 children would be denied aid in the year 2005 because of the 5 year time limit. In Florida, 42,714 babies would be denied cash aid in the year 2000 because they were born to families already on welfare. In the year 2000, 80,667 children in Florida would be denied benefits if the State froze its spending on cash assistance at the 1994 lev- els. In addition to the travesty this bill does to our children, this bill will pull the rug out from under our seniors who are legal immigrants. For a State like Florida whose population has such a large number of legal immigrants, the impact will be extremely high. There is another troubling aspect of this bill we need to look at. No victim of domestic vio- lence, no matter how abused nor how des- perate, could know that if she left her abusive spouse, that she would be able to rely upon cash assistance for herself or for her chil- dren\u2014even for a short period of time until she was able to secure employment. I have always believed that the sign of a great society is how well it treats its most vul- nerable\u2014children and seniors. Our children are America’s future. This bill prevents the fu- ture generation from meeting its potential to contribute to American society and instead dooms today’s poor children to deeper poverty and no chance to take their place as produc- tive members of our society. Mr. SHAW. Mr. Speaker, I yield my- self 3 minutes. Mr. Speaker, I come over here to do something I have never done before; that is, to trespass on the Democrat side. I hope that they will give me their understanding in my doing so, be- cause I do not do it out of smugness or arrogance. I do it out of coming to- gether. We have heard a lot of name calling, a lot of rhetoric, a lot of sound bites that we have heard all through this de- bate. We have come down a long road together. It was inevitable that the present welfare system was going to be put behind us. Today we need to bring to closure an era of a failed welfare system. I say that and I say that from this side of the aisle because I know that the Democrats agree with the Republicans. This is not a Republican bill that we are shoving down your throats. We are going to get a lot of Democratic sup- port today. I think the larger the sup- port, the more chance there is for this to really work and work well. The degree of the success that we are going to have is going to be a victory for the American people, for the poor. It is not going to be a victory for one political party. It is time now for us to put our hands out to one another and to come together to solve the problems of the poor. Without vision, the people will per- ish. Unfortunately, we have not had vi- sion in our welfare system now for many, many years. It has been allowed to sit stagnant. We have piled layer upon layer of humanity on top of each other. We have paid people not to get married. We have paid people to have children out of marriage. We have paid people not to work. This is self-destructive behavior. We know that. We all agree with that. CONGRESSIONAL RECORD \u2014 HOUSE H9415July 31, 1996 I know we have heard many, many speakers: My friend, the gentleman from Georgia, JOHN LEWIS, thinking that we are going the wrong way; my friend, the gentleman from New York, CHARLIE RANGEL, saying that we are going the wrong way. I also see some of my colleagues who have fought for different changes with- in the welfare bill within the Sub- committee on Human Resources of the Committee on Ways and Means, now coming to closure, where they do not believe this is a perfect bill. And I can stand here and say it is not a perfect bill, but it is as good as this Congress can do. It is as good as we can come to- gether. We have included the Governors in balancing out their interests and in seeing what they have been successful with and how they feel that they can be successful. We have talked to many of the Members on the Democrats’ side, and to my Republican colleagues I say, we are not through. We have another long road ahead of us. We need to get to a technical corrections bill as we see problems arise within this bill that we are going to be passing today. It was unexpected to hear that the President was going to endorse this bill and announced his signature of it. But let us now be patient with each other. Let us work with each other and let us bring this awful era of a failed welfare system to closure. Mr. GIBBONS. Mr. Speaker, I yield the balance of my time to the gen- tleman from Maryland [Mr. CARDIN]. The SPEAKER pro tempore (Mr. MCINNIS) The gentleman from Mary- land [Mr. CARDIN] is recognized for 21\u20442 minutes. Mr. CARDIN. Mr. Speaker, I thank the gentleman from Florida [Mr. GIB- BONS] for yielding me the time. Let me say to my friend, the gen- tleman from Florida [Mr. SHAW], first, congratulations on a job very well done and come on back over on this side of the aisle a little bit more frequently. I think that if we would have started working together in a bipartisan spirit, we could have had a better bill today, and we could have gotten here a little bit sooner. But I thank the gentleman very much for the way in which he has provided leadership on this issue. I know it has been heartfelt, and I know he has worked very, very hard. b 1645 Mr. Speaker, I support the conference report because I think it is important that we return welfare to what it was originally intended to be, and that is a transitional temporary program to help those people that are in need. The current system does not do that. We cannot defend the current system. But let me make it clear to my col- leagues, the bill before us is a far bet- ter bill than the bill that was origi- nally brought forward by the Repub- licans 2 years ago, the bill that was ve- toed twice by the President. We have a better bill here today. It is a bill that provides for major improvement in child support enforce- ment, something all of us agreed to; provides protective services for our children, which was not in the original bill; provides health insurance to peo- ple coming off of welfare, something that is very important; day care serv- ices, another important ingredient that people are going to get off welfare to work. Food stamps are in much better condition than the bill that was vetoed by the President. There is a Federal contingency fund in case of a downturn of our economy, and we have mainte- nance of effort requirements on our States so we can assure that there are certain minimum standards that are met in protecting people in our society. The bottom line is that this bill is better than the current system. It could have been better, and I re- gret that. I am not sure there is enough resources in this bill to make sure that people get adequate education and job training in order to find employment, and I look forward to working with the gentleman from Florida [Mr. SHAW] to make sure that this becomes a reality. But I do urge my colleagues to sup- port the conference report because bot- tom line: It is far better than the cur- rent system. Yes, we are going to take a risk to get people off of welfare to work, but the current system is not fair either to the welfare recipient or the taxpayer. This conference report is far better, and I urge my colleagues to support it. Mr. SHAW. Mr. Speaker, I yield the balance of my time to the distin- guished gentleman from Ohio [Mr. KA- SICH], chairman of the Committee on the Budget. The SPEAKER pro tempore (Mr. MCINNIS) The gentleman from Ohio is recognized for 53\u20444 minutes. Mr. KASICH. Mr. Speaker, I would like to initially congratulate the gen- tleman from Florida [Mr. SHAW] for his relentlessness in being able to pursue welfare reform and he deserves the lion’s share of the credit, along with the gentleman from Texas [Mr. AR- CHER], who has done an outstanding job, and although I do not see him on the floor, our very able staff director, Ron Haskins, who has probably lived with this bill for about a decade, feel- ing passionately about the need to re- form welfare. As my colleagues know, it was pretty amazing today to watch the President of the United States come on television and say that he was going, in fact, to sign this welfare bill. The reason why it is so amazing today is that because the American people, during all of my adult lifetime, have said that they want a system that will help people who cannot help themselves, but they want a system that is going to ask the able-bodied to get out and begin to work themselves. This has been de- layed and put off, with a million ex- cuses as to why we could not get it done. I just want to suggest to my friends who are in opposition, and I respect their opposition; many of them just did not talk; many of them were not able to talk, as they were beaten in the civil right protests in this country. I respect their opposition. But the simple fact of the matter is that this program was losing public support. Mr. Speaker, the cynicism connected to this program from the folks who get up and go to work every day for a liv- ing, and I do not mean the most fortu- nate, I mean those mothers and fathers who have had to struggle for an entire lifetime to make ends meet, they have never asked for food stamps, the have never asked for welfare, they have never asked for housing, and they are struggling. They are counting their nickels. They do not take the bus transfer because it costs a little extra money, and they walk instead so they can save some more money to educate their children. These people were be- coming cynical, they were being poisoned in regard to this system, and they were demanding change. Mr. Speaker, we all know here, as we have watched the Congress, the history of Congress over the decades, that when the American people speak, we must deliver to them what they want. They said they wanted the Vietnam war over. It took a decade, but they got it, and public cynicism and lack of support was rising against this pro- gram. It was necessary to give the peo- ple a program they could support. But I also want to say that the Amer- ican people have never, if I could be so bold as to represent a point of view, have never said that those who cannot help themselves should not be helped. That is Judio-Christianity, something that we all know has to be rekindled. Our souls must once again become at- tached to one another, and the people of this country and Judeo-Christianity siad it is a sin not to help somebody who needs help, but it is equally a sin to help somebody who needs to learn how to help themselves. But I say to my friends who oppose this bill: This is about the best of us. This is about having hopes and dreams. After 40 or 50 years of not trusting one an- other in our neighborhoods and having to vacate our power and our authority to the central government, to the Washington bureaucrats, this is now about reclaiming our power, it is about reclaiming our money, it is about re- claiming our authority, it is about re- building our community, it is about re- building our families, it is about ce- menting our neighborhoods, and it is about believing that all of us can march to that State capitol, that all of us can go into the community organi- zations and we can demand excellence, we can demand compassion, and that we can do it better. We marched 30, 40 years ago because we thought people were not being treated fairly, and we march today for the very same reason. What I would say, and maybe let me take it back and say many of my friends marched. I was CONGRESSIONAL RECORD \u2014 HOUSEH9416 July 31, 1996 too young, but I watched, and I respect it. What I would suggest at the end of the day, however, is that we all are going to have to stand up for those who get neglected in reform, but frankly this system is going to provide far more benefits, far more hope, restore the confidence in the American people that we have a system that will help those that cannot help themselves and at the same time demand something from able-bodied people who can. It will benefit their children, it will help the children of those who go to work. America is a winner in this. The President of the United States has rec- ognized that. He has joined with this Congress, and I think we have a bipar- tisan effort here to move America down the road towards reclaiming our neighborhoods and helping America. And I would say to my friends, we will be bold enough and humble enough when we see that mistakes are being made, to be able to come back and fix them; but let us not let these obstacles stand in the way of rebuilding this pro- gram based on fundamental American values. Support the conference report. Mr. BENTSEN. Mr. Speaker, I rise in sup- port of this welfare reform conference report. This bill is far from perfect, but it does move us down the road toward reforming the welfare system to help families in need. I have long advocated and agree with provi- sions requiring work and encouraging self-suf- ficiency and personal responsibility. This legislation is an improvement over more extreme earlier bills. It includes nec- essary provisions which I and others fought for during the last 2 years because they are im- portant to working families, children, and fast- growing states such as Texas. It provides some transitional health care benefits and child care assistance. It retains the Federal guarantee of health care and nutritional assist- ance for children. It eliminates the Repub- licans’ proposal to raise taxes on working fam- ilies by cutting the earned income tax credit. It provide a safety net, albeit minimal, for high growth states such as Texas, Florida, and California and for recessions. It lets States give noncash vouchers to families whose wel- fare eligibility has expired, so they can buy es- sentials for children. None of these provisions were contained in previous so-called welfare reform. While I am supporting this legislation, I am troubled by the elimination of benefits for legal immigrants who have participated in the workforce and paid taxes. Harris County, TX, which I represent, currently faces a measles epidemic. Future prohibitions on Medicaid for such instances would result in the State and county facing tremendous cost increases. I have no doubt that Congress will be forced to revisit this issue in part at the behest of States as we may be creating huge unfunded man- dates. Unfortunately, while this bill contains many positive reforms which I support, it also contains many misguided provisions for which the only motivation is monetary, not public pol- icy. Mrs. FOWLER. Mr. Speaker, the American welfare system was intended to be a safety net for those who fall on hard times. Unfortu- nately, it has become an overgrown bureauc- racy which perpetuates dependency and de- nies people a real chance to live the American dream. I am pleased that President Clinton has just announced he would sign the Republican wel- fare bill. We knew that when it got this close to the election, this President would choose the path of political expediency, as he always does. This legislation is not about saving money, it is about saving hope and saving lives, while reforming a broken system and preserving the safety net. The bill encourages work and independ- ence, and discourages illegitimacy. I urge my colleagues to vote for fairness, compassion, and responsibility. Pass the conference agree- ment on H.R. 3437. Mrs. SMITH of Washington. Mr. Speaker, I strongly support the Personal Responsibility and Work Opportunity Act of 1996 (H.R. 3734). This landmark piece of welfare reform legislation emphasizes responsibility and com- passion. It provides a helping hand and not a handout. Americans today want a future filled with hope. Parents want to be able to take care of themselves and their children. They want to teach their kids how to take respon- sibility for their lives. This legislation reverses welfare as we know it. Today, the average length of stay for families on welfare in 13 years. The cycle of dependency must stop. Congress’ welfare reform legislation also has tough work requirements. Families must work within 2 years or lose their benefits. Work is the beginning of dignity and personal responsibility. Single mothers who desire to work but cannot leave their children home alone will be provided with child care assist- ance. In fact, the Personal Responsibility and Work Opportunity Act provides $14 billion in guaranteed child care funding. Two parent families are encouraged through this plan. It takes two people to make a baby. Strong paternity requirements and tough child support measures ensure that deadbeat par- ents will take responsibility for their actions. This welfare reform package is estimated to save the American taxpayers $56.2 billion over the next 6 years. It is a balanced ap- proach that gives the States more autonomy and flexibility in crafting solutions. The Per- sonal Responsibility and Work Opportunity Act promotes work while also guaranteeing fami- lies adequate child care, medical care, and food assistance. It is compassionate while pro- moting the dignity of Americans through an honest day’s work. I urge my colleagues to support this bill. Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today to speak out against a great injus- tice, an injustice that is being committed against our Nation’s children, defenseless, nonvoting, children, I am referring of course to the conference agreement on H.R. 3734, the Personal Responsibility and Work Opportunity Act. We speak so often in this House about fam- ily values and protecting children. At the same time however, my colleagues on the other side of the aisle, have presented a welfare reform bill that will effectively eliminate the Federal guarantee of assistance for poor children in this country for the first time in 60 years and will push millions more children into poverty. A recent study by the Urban Institute esti- mated that the welfare legislation passed by the House would increase the number of chil- dren in poverty by 1.1 million, or 12 percent. The analysis estimated that families on wel- fare would lose, on average, about $1,000 a year once the bill is fully implemented. More than a fifth of American families with children would be affected by the legislation. This partisan legislation is antifamily and antichild. The Republican bill continues to be weak on work and hard on families. Without adequate funding for education, training, child care and employment, most of our Nation’s poor will be unable to avoid or escape the welfare trap. Even before the adoption of amendments increasing work in committee, the Congressional Budget Office [CBO] esti- mated that the Republican proposal is some $9 billion short of what would be needed in fis- cal years 1999 through 2002 to provide ade- quate money for the States to carry out the work program. Furthermore, the increase in the minimum work hours requirement, without a commemsurate increase in child care funding, will make it almost impossible for States to provide child care for families making the tran- sition from welfare to work. True welfare re- form can never be achieved and welfare de- pendency will never be broken, unless we pro- vide adequate education, training, child care, and jobs that pay a living wage. I am particularly concerned that, like the House bill, the conference agreement prohibits using cash welfare block grant funds to pro- vide vouchers for children in families who have been cut off from benefits because of the 5-year limit. We must not abandon the chil- dren of families whose benefits are cut off. We must continue to ensure that they will be pro- vided for and not punished for the actions of their parents. Many more children will be hurt by the bill’s denial of benefits to legal immigrants. Low-in- come legal immigrants would be denied aid provided under major programs such as SSI and food stamps. States would also have the option of denying Medicaid to legal immi- grants. They would also be denied assistance under smaller programs such as meals-on- wheels to the homebound elderly and prenatal care for pregnant women. Under this bill, near- ly half a million current elderly and disabled beneficiaries who are legal immigrants would be terminated from the SSI Program. Similarly, the Congressional Budget Office estimated that under the House bill, which is similar to the conference agreement, approximately 140,000 low-income legal immigrant children who would be eligible for Medicaid under cur- rent law would be denied it under this legisla- tion. Most of these children are likely to have no other health insurance. I cannot believe we would pass legislation that would result in even one more child being denied health care that could prevent disease and illness. This bill also changes the guideline under which nonimmigrant children qualify for bene- fits under the SSI Program. As a result, the CBO estimates that by 2002, some 315,000 low-income disabled chil- dren who would qualify for benefits under cur- rent law would be denied SSI. This represents 22 percent of the children that would qualify under current law. The bill would reduce the total benefits the program provides to disabled children by more than $7 billion over 6 years. Mr. Speaker, mandatory welfare-to-work programs can get parent off welfare and into jobs, but only if the program is well designed CONGRESSIONAL RECORD \u2014 HOUSE H9417July 31, 1996 and is given the resources to be successful. The GOP bill is punitive and wrongheaded. It will not put people to work, it will put them on the street. Any restructuring of the welfare system must move people away from depend- ency toward self-sufficiency. Facilitating the transition off welfare requires job training, guaranteed child care, and health insurance at an affordable price. We cannot expect to reduce our welfare rolls if we do not provide the women of this Nation the opportunity to better themselves and their families through job training and edu- cation, if we do not provide them with good quality child care and, most importantly, if we do not provide them with a job. Together, welfare programs make up the safety net that poor children and their families rely on in times of need. We must not allow the safety net to be shredded. We must keep our promises to the children of this Nation. We must ensure that in times of need they receive the health care, food, and general services they need to survive. I urge my colleagues to oppose this dangerous legislation and to live up to our moral responsibility to help the poor help themselves. Mr. BLILEY. Mr. Speaker, it is with pleasure that I take this opportunity to address the wel- fare reform conference report before us today. This measure will do exactly what its name promises: promote personal responsibility and work opportunity for disadvantaged Ameri- cans. More important, it will replace the de- spair of welfare dependency with the pride of independence. This measure is critical to welfare reform ini- tiatives taking place in the States. In my State, the Virginia Independence Program has al- ready helped two-thirds of all eligible welfare recipients find meaningful jobs and restore hope to their lives. This legislation will enable Virginia to con- tinue its highly successful statewide reform program. And it will allow other States to cre- ate similar initiatives\u2014without having to waste time and money seeking a waiver from the Federal Government. I am also proud of the role that the Com- merce Committee has played in crafting this landmark initiative. Although the Medicaid re- form plan designed by the Nation’s Republican and Democrat Governors is not a part of this legislation, the conference report does include important Medicaid provisions. In particular, the conference report guaran- tees continued coverage for all those who are eligible under the current AFDC Program. It also ensures that eligible children will not lose the health coverage they need. And it requires adult recipients to comply with work require- ments in order to remain eligible for Medicaid benefits. Mr. Speaker, I would like to close by con- gratulating all those who helped to shape this historic measure. It deserves our full support, and it should be signed by the President. Mr. COSTELLO. Mr. Speaker, today this body will take a large step in making sweeping reform in our welfare system. By passing the welfare reform agreement, we move toward a system that emphasizes work and independ- ence\u2014a new system that represents real change and expanded opportunity. Although this bill is not perfect, it is our best chance in years to enact welfare reform that represents an opportunity to improve the current system. Sadly, our current system hurts the very people it is designed to protect by perpetuat- ing a cycle of dependency. For those stuck on welfare, the system is not working. It is clear that we cannot and should not continue with the status quo. The status quo has fostered an entire culture of poverty. Our current sys- tem does little to help poor individuals move from welfare to work. It is clear the best antipoverty program is a job. To that end, this bill encourages work. It requires welfare recipients to work after 2 years and imposes a 5-year lifetime limit on welfare benefits. The bill turns Aid to Families with Dependent Children [AFDC] into a block grant program, allowing States to create their own unique welfare programs to best serve their residents. The bill maintains health care benefits for those currently receiving Medicaid because of their AFDC eligibility and provides $14 billion for child care so parents can go to work without worrying about the health and safety of their children. In addition, this bill preserves the earned income tax credit which has been successful in helping working fami- lies. Mr. Speaker, I voted against the Republican welfare reform bill when it was before this House. That bill represented a drastic depar- ture from the actual intent of welfare\u2014to help the most vulnerable in our society in their time of need. The House bill eliminated the safety net of Medicaid and food stamps for many children. It was mean in spirit and should not have passed. The conference agreement that is before us today, however, is much more reasonable. Children will have the guarantee of health care coverage through Medicaid even as their parents transition to work. Fur- ther, unlike the House bill, States will not be able to opt out of the Federal Food Stamp Program. The conference agreement is a far better bill than the measure passed by the House. It is a bold, yet compassionate step in helping foster independence. I am pleased the President has indicated he will sign this bill into law. I applaud the Presi- dent\u2014who has worked on this issue for years, even before it was politically fashionable\u2014for continuing to insist that the bill be improved before signing it into law. While the President and I agree that this bill is by no means per- fect, it is a good starting point. We can begin the process of moving toward a system that encourages and rewards work for all able-bod- ied citizens. Mr. TORRES. Mr. Speaker, I rise in opposi- tion to this antifamily, antichildren bill. There are so many parts of this bill that should con- cern us. I could stand here all day and de- scribe, in detail, how this bill falls short of our shared goal of welfare reform. For example, consider the effects on our Nation’s most unfortunate children. I say un- fortunate because these children are being sacrificed by election year politics simply be- cause they came from poor families. Their al- ready difficult lives will be made impossible due to food stamp reductions, loss of SSI as- sistance, and no guarantee of Federal assist- ance when time runs out for them and their families. The effect will be to drown an addi- tional 1.1 million children in poverty. Like I said, I could go on and on. But, I won’t waste your time discussing what we all know: that block grants aren’t responsive to a changing economy and inadequate child-care provisions make welfare-to-work a very difficult journey. I will tell you what this so-called reform will mean to California, and how my State is being asked to absorb 40 percent of the proposed cuts. Why? Because California is home to the largest immigrant population in our country and this bill denies legal immigrants Federal assistance. It does not take much to do the math and understand the consequences of de- nying food stamps, supplemental security in- come, or Medicaid to our legal immigrant pop- ulation. There are no exceptions for children or the elderly, regardless of the situation. The needs of these taxpaying, legal resi- dents will not vanish because the Federal Government looks the other way. The children will still be hungry, the elderly will still get sick, and the disabled will still have special needs. Someone will have to provide these services, and it will be our cities and counties who are forced to pick up the tab. And for California, the bill will be approximately $9 billion over 7 years. My district of Los Angeles County is home to some 3 million foreign-born residents. County officials estimate that denying SSI to legal immigrants could cost the county as much as $236 million per year in general relief assistance. More importantly, this translates into no Federal assistance for the elderly or disabled children. These costs would continue to rise with the loss of Medicaid coverage for legal immi- grants. More than 830,000 legal immigrants in California would lose Medicaid coverage, in- cluding 286,000 children. Overall, the total number of uninsured persons in California would rise from 6.6 million to 7.4 million. Under this bill, these people would turn to county hospitals for care. And the costs of that care will be shifted to local governments al- ready operating on shoe string budgets. In Los Angeles County, this could mean as much as $240 million per year. To say this is unfair is an understatement. Legal residents, who play by the rules and contribute over $90 billion a year in taxes, do not deserve this. They deserve what they earn; to be treated with the same care and provided with the same services enjoyed by the rest of the tax-paying community. I encourage my colleagues to oppose these short-sighted cuts and unfair rule changes: Say no to a bad deal and vote against this re- port. Mr. ORTON. Mr. Speaker, I am pleased to rise in support of this welfare reform bill. I commend this Congress for creating a flexible reform bill that will allow Utah and other inno- vative States to continue their successful wel- fare reform efforts. My greatest concerns during the course of the welfare reform debate have been to trans- form the system to a work-based system, to ensure that States like Utah have the flexibility to continue their successful reform efforts, and to protect innocent children. I have worked dili- gently with colleagues on both sides of the aisle to craft a bill that accomplishes these goals, and I am pleased to say that Congress has finally passed a bill that achieves them. I am extremely pleased that this bill contains a provision that allows Utah to continue its successful welfare reform efforts. Under the bill that passed the House 2 weeks ago, Utah would have had to change its program to meet the restrictive Federal requirements contained in the bill. Moreover, CBO estimated that the earlier bill imposed $13 billion in unfunded costs on States unless they restricted eligibility or decreased assistance to those in need. CONGRESSIONAL RECORD \u2014 HOUSEH9418 July 31, 1996 Both the National Governors’ Association and the State of Utah expressed concerns about these unfunded costs. I worked with members of the conference committee to address these concerns, and now we have a bill that really is flexible. The bill that passed the House today con- tained several of the provisions proposed by myself and others who have worked over re- cent months to find bipartisan common ground on welfare reform. For instance, this con- ference report is much more flexible than the earlier House bill because it allows States with waivers to use their own participation definition in meeting Federal work participation require- ments. It also reduces the unfunded costs in the bill substantially. Unlike the House version, the conference report maintains current pro- tections against child abuse, guarantees that children do not lose their Medicaid health care coverage as a result of the bill, and provides States with the option to provide noncash as- sistance to children whose parents have reached the time limit. Finally, it improves upon maintenance of effort provisions and en- forcement of work participation rates. It wasn’t long ago that we were debating H.R. 4, an extreme proposal that would have eliminated 23 child protection programs like foster care and child abuse protection and re- placed them with a block grant that contained $2.7 billion less funding than provided under current law. H.R. 4 would have eliminated nu- trition programs like school lunch, school breakfast, the Summer Food and Adult Care Food Program, the Women, Infants and Chil- dren Program, and the Homeless Children Nu- trition Program, and replaced them with two block grants that provided $6.6 billion less funding for nutrition than provided under cur- rent law. Although claims were made that there were no cuts to certain popular pro- grams like school lunch, the truth was a State would have to eliminate or severely reduce all other programs in order to fully fund these high profile programs. Even in the House version of welfare reform passed 2 weeks ago, children could have lost their Medicaid coverage as the result of the bill; current child abuse protections were elimi- nated and States were prohibited from provid- ing noncash assistance to children whose par- ents have reached the time limit. I am pleased that the conference report has corrected these provisions and protected children. Previous bills, which I opposed, treated 4- year-old children like 40-year-old deadbeats. This bill is far better for children and far more flexible for States than any of the other wel- fare reform proposals that have been passed by this Congress. We finally have a bill that should be signed into law. Mr. TANNER. Mr. Speaker, there is virtually universal agreement that our current welfare system is broken and must be dramatically overhauled. Americans are a compassionate people, eager to lend a helping hand to hard workers experiencing temporary difficulties and especially to children who are victims of circumstances beyond their control. But Ameri- cans also are a just people, expecting every- one to contribute as they are able and to take responsibility for themselves and their families. It is the balancing of these two concerns that makes correcting our welfare system a chal- lenge, but a challenge which must be met. This welfare reform conference report is far from perfect, but it clearly is preferable to con- tinuing the current system and preferable to welfare legislation considered earlier this Con- gress. For these reasons, we support the wel- fare reform conference report and have en- couraged the President to sign it. We have opposed previous welfare reform proposals because we believed that they of- fered empty, unsustainable promises of mov- ing welfare recipients to work. Additionally, earlier bills were seriously deficient in their protections for children and other truly vulner- able populations. We have decided to support this final conference report because it is con- siderably better than the welfare reform bill (H.R. 4) appropriately vetoed by the President last year and it also makes significant im- provements to the bill passed by the House last week. The conference committee agreed with our proposals giving States additional flexibility in moving welfare recipients to work, allowing States to use block grant funds to provide vouchers, and providing other protec- tions for children. This conference report incorporates several improvements proposed by the National Gov- ernors’ Association to H.R. 4 in its final form. it provides $4 billion more funding for child care that will assist parents transitioning to work. It doubles the contingency fund for States facing larger welfare rolls caused by economic downturns. The latest bill returns to a guaranteed status children eligible for school lunch and child abuse prevention programs. The reductions in benefits for disabled children contained in last year’s H.R. 4 are eliminated, and greater allowances are made for hardship cases, increasing the hardship exemption from the benefit time limits to 20 percent of a State’s caseload. Several changes proposed in the Castle- Tanner alternative were subsequently made to the bill passed by the House in July. The amount States must spend on child care was increased. Additionally, States will be required to assess the needs of welfare applicants and prepare an individual responsibility contract outlining a plan to move to work. Also, an in- crease in the State maintenance of effort for States that fail to meet the participation rates was added to the bill. All of these changes strengthen the effort of moving welfare recipi- ents to work. The conference report further improved the bill. The conferees adopted our suggestions providing additional State flexibility in develop- ing work programs and adding additional pro- tections for children. We were disappointed that the conference did not incorporate con- structive suggestions that were made regard- ing penalties for failure to meet work require- ments and, unfortunately, an authorization for additional work funds was eliminated because of parliamentary ”Byrd rule” considerations in the Senate. On balance, however, the con- ference report produced a bill that is signifi- cantly better than the bill passed by the House. President Clinton already has approved waivers allowing 41 States to implement inno- vative programs to move welfare recipients to work. The House’s Welfare Reform bill would have restricted those State reform initiatives by imposing work mandates that are less flexi- ble than States are implementing. Over 20 States would have been required to change their work programs to meet the mandates in that earlier House bill or face substantial pen- alties from the Federal Government. The conference report now allows States that are implementing welfare waivers to go forward with those efforts. Specifically, the conference report allows those States to count individuals who are participating in State-authorized work programs in meeting the work participation rates in the bill, even work programs which otherwise do not meet the Federal mandates in the bill. States such as Tennessee and Texas that have just received waivers will be permitted to begin implementing these reforms and States like Utah and Michigan which have a track record in moving welfare recipients into self- sufficiency will be able to continue their pro- grams. We will work to ensure that States will continue to have this flexibility when their waivers expire if the State plan is successful. Another key goal we have maintained throughout the debate is protecting innocent children. The earlier House bill would have treated a 4-year-old child the same as a 24- year-old deadbeat by prohibiting States from using block grant funds to provide vouchers after the time limit for benefits to the parents had expired. The conference report reverses this extreme position. In addition, the con- ference report moderates the impact of the food stamp cuts on children by maintaing a guaranteed status for children and by increas- ing the housing deduction to $300 a month for families with children. Third, we have been concerned about the impact of health coverage to individuals and payments to health providers as a result of welfare reform. The House bill effectively would have denied Medicaid to thousands of individuals, removing $9 billion of Medicaid as- sistance from the health care system and re- sulting in a cost shift to health care providers that would affect the cost, availability, and quality of care of to everyone. While the cor- rection is less than we had hoped, the con- ference report effectively reduces this cost shift to health care providers by more than half. The conference report also contains lan- guage very similar to the Castle-Tanner bill continuing current Medicaid eligibility rules for AFDC-related populations, ensuring that no one loses health care coverage as a result of welfare reform. As we began by saying, this conference re- port is far from perfect and we continue to have concerns about the impact of several provisions. Although the report provides States with additional flexibility in implementing work programs, the work provisions in the bill still may impose unfunded mandates on States that will make it more difficult to move welfare recipients to work. Given the unfunded man- dates in the bill, the provisions penalizing States for failing to meet participation rates by reducing funding to the State are counter- productive. The contingency fund in the con- ference report, while much stronger than the contingency fund in H.R. 4, will not be suffi- cient to respond to a severe national or re- gional recession. The conference report contains a require- ment that Congress review the impact of the bill 3 years. This review process will allow Congress to make a number of changes that we feel certain will be necessary to fulfill suc- cessful welfare reform. Despite these reservations, we believe that it is critical that welfare reform be enacted this year. Failure to do so will signal yet another wasted opportunity to make critically needed CONGRESSIONAL RECORD \u2014 HOUSE H9419July 31, 1996 reforms. We should enact this conference re- port and fix the current system now, moving toward a system that better promotes work and individual responsibility. Mr. ROYCE. Mr. Speaker, as I was reading the papers this morning I noticed some stories that claimed that this welfare reform proposal is not such a big change\u2014that its significance has been overrated. That all sides are coming to a consensus and it’s not such a big deal after all. In the short term, that’s how it may look. But in the long term, we are making a fundamental change to the status quo\u2014we’ve gone beyond questioning the failed policies of the past\u2014we are implementing a whole new approach. We are beginning to replace the welfare state with an opportunity society. Ideas have consequences and bad ideas have bad consequences. The Great Society approach may have been well-intentioned, but the impact was tragic. We have done a dis- service to those who have fallen into the wel- fare trap. The incentives have been all wrong and the logic backward. We need a welfare system that saves fami- lies, rather than breaking them. And that’s what this bill does. Our welfare system has deprived people of hope, diminished opportunity and destroyed lives. Go into our inner cities and you will find a generation fed on food stamps but starved of nurturing and hope. You’ll meet young teens in their third pregnancy. You’ll meet fa- therless children. You’ll talk to sixth graders who don’t know how many inches are in a foot. And you’ll talk to first-graders who don’t know their ABC’s. It’s time for Washington to learn from its past mistakes. It’s time to reform our welfare system, to encourage families to stay together and to put recipients back to work. That’s what our plan does. Four years ago, President Clinton promised to end welfare as we know it, and I am pleased that he has committed to sign our bill into law. Our plan calls for sweeping child support enforcement. We end welfare for those who won’t cooperate on child support. We strength- en provisions to establish paternity. We force young men to realize they will be required to provide financial support for their children by requiring States to establish an automated State registry to track child support informa- tion. One of the key elements of our welfare re- form bill is ending fraudulent welfare payments to prisoners and illegal immigrants\u2014saving $22 billion. Each year, millions of taxpayer dollars are il- legally sent to prisoners in State and local jails through the Supplemental Security Income Program. In fact, in one case, infamous ”Free- way Killer” William Bonin illegally collected SSI benefits for 14 years while on San Quen- tin’s death row. This bill removes the Washington-based intermeddling and bureaucratic micromanage- ment that has resulted in welfare programs that build a welfare population but do not re- lieve the suffering of those who are poor. We do not want to maintain the poor, we want to transform them. That’s exactly what this bill would do. Mr. SABO. Mr. Speaker, today we will de- bate legislation to radically change our welfare system. We will hear a lot about the fun- damental principles that should govern the way we help those truly in need. And while I agree with those who say our welfare system must work better for the American people, we need to remember that something much more profound than rhetoric is at stake. There is no denying that we should encour- age work and parental responsibility. And I have long argued that States and localities can deliver some services better than we can at the Federal level. But, there are also other principles that we need to remember when we discuss welfare. We need to remember that the safety net for vulnerable people is fundamentally impor- tant to our society. There has long been wide- spread support among Americans of all politi- cal views that the Government should help people who are too sick, too old or too young to help themselves\u2014particularly when they don’t have families who can take care of them. This is why the safety net was developed in the first place and has had the continued sup- port of Republicans such as Richard Nixon and Ronald Reagan as well as Democrats. I congratulate the Republican majority for its attempts to reform welfare, but I believe this legislation fails in many ways. Simply labeling this bill welfare reform cannot disguise the fact that it shreds the national safety net for mil- lions of vulnerable people. The Urban Institute has estimated that 1.1 million children will be pushed into poverty be- cause of this legislation. More than a fifth of American families with children will be hurt by it. They also note that almost half of the fami- lies affected by this bill are already employed. The provision to cut off food stamps after 3 months for unemployed people without de- pendents is unprecedented and unnecessarily harsh. These are some of the most vulnerable people in our country. Under this measure, even if they are trying to find work, if they don’t succeed they will go hungry. And, personally, I find the treatment of legal immigrants mystifying. My parents were immi- grants. They, like many others, came to this country, worked hard, and contributed to their community. Today’s immigrants are no dif- ferent. They come to this country, they work hard, and they pay taxes. If they should fall upon hard times, why shouldn’t we help them just like we help each other? Under the terms of this bill we aren’t allowed to help them. They lose food stamps and SSI even if they have been paying taxes and living legally in this country for years. And new immigrants will be denied Medicaid. Equally as disturbing as this bill’s reduction in its Federal commitment to a national safety net is the pressure it puts on States to reduce their commitments to help vulnerable people. The reduction in State match set by the bill and the flexibility to shift 30 percent of basic block grant moneys to other uses will exacer- bate pressures within State governments to pull their own resources out of these pro- grams. That combined with the cuts in Federal dollars will lead to a sharp reduction in re- sources available for needed services and benefits. The logical end result of all these inter- actions is significant cost-shifting to local gov- ernments. Because of the deep cut in Federal resources and potential reductions in State support, localities will need to spend more of their own funds to help move people from wel- fare to work and to provide needed services while that process is occurring. Many local of- ficials including the Republican mayor of New York, Rudolph Giuliani, have expressed alarm at the hundreds of millions of dollars in addi- tional costs their cities and residents will have to bear. Clearly, this will mean higher property taxes for working families all over the country. We should reform our welfare system. But we must do it in a way that does not simply shift costs and that does not abandon the safety net for people who are truly in need. Unfortunately, Mr. Speaker, this bill badly fails that test and America will be the worse for it. We can and should do better. Mr. CLAY. Mr. Speaker, I condemn both the process and the substance of the Republican conference agreement on welfare. As the 104th Congress draws to a close, the Repub- lican majority has not wavered from its auto- cratic role of this institution nor from its vicious indifference to our Nation’s poor and infirm. Like my other Democratic colleagues, I was systematically denied any meaningful role on that conference. The time and location of con- ference negotiations have been a closely-held secret among Republicans. This most anti- democratic process is an affront to the people of the 1st Congressional District of Missouri who send me here to represent their concerns on all matters of political discourse. Time and time again, this new Republican majority has interfered with my ability to fully represent the interests of my constituents. As a matter of policy and substance, this conference report is an evil charade. From the outset, I had little expectation that the final product of the conference would mean reason- able, viable, and compassionate welfare re- form. After all, both the House and Senate bill contained unrealistic work requirements, woe- ful funding for meaningful workfare, and the very real risk of throwing millions of children into poverty. The Republican majority has no real interest in truly reforming welfare. Then real objective is to steal $60 billion from antipoverty and antihunger programs in order to help finance their tax cuts and other gifts to the wealthy\u2014 Robin Hood in reverse. I can think of no more desperate, shameful act than to use the poor, especially children and the elderly, in a game of political chicken. Mr. Speaker, I cannot in good conscience support a welfare reform bill that will punish those who, through no fault of their own, must turn to their Government for help in times of need. Mr. CUNNINGHAM. Mr. Speaker, I proudly rise to support the conference report for H.R. 3734, the Personal Responsibility and Work Opportunity Act. As chairman of the House Subcommittee on Early Childhood, Youth and Families, as a former teacher and coach, and as a dad, I un- derstand the need to take into account the needs and interests of children. I cannot imag- ine a policy that is crueler to children than the current welfare system. Certainly it was born of the good intention to help the poor. But in the name of compassion, we have unleashed an unmitigated disaster upon America. To- day’s welfare system rewards and encourages the destruction of families, and childbirth out of wedlock. It penalizes work and learning. It poi- sons our communities and our country with generation after generation of welfare depend- ency. It robs human beings of hope and life and any opportunities at the American Dream. In the name of compassion, and with good intentions, the welfare status quo is mean and CONGRESSIONAL RECORD \u2014 HOUSEH9420 July 31, 1996 extreme to children. It is mean and extreme to families. It is mean and extreme to the hard- working Americans who foot the bill. Thus, without a doubt, we must replace this mean, extreme, and failed system of welfare dependency with work, hope, and opportunity. We can and must do better as Americans. And we will, by adopting this compassionate, historic legislation. Our measure makes welfare a way up, not a way of life. It replaces Washington-knows- best with local control and responsibility. It re- places a system that rewards illegitimacy and destroys families, with a family-friendly fighting chance at the American Dream. Now, President Clinton promised in his 1992 campaign to end welfare as we know it. He also made several other promises, including starting his administration with middle class tax relief. Unfortunately, the President has not kept his promises. He raised taxes. And twice, he has vetoed legislation to fulfill his own promise to end welfare. The President who pledged to end welfare as we know it has twice vetoed legislation to end welfare for ille- gal aliens. Let me speak for a moment about illegal aliens. Illegal immigration is breaking our treasury, burdening California, and trying America’s patience. It is wrong for our welfare system to provide lavish benefits for persons in America in violation of our laws. I am proud that the Personal Responsibility and Work Opportunity Act ends welfare for il- legal aliens. It ends eligibility for Government programs for illegal aliens. It ends the tax- payer-funded red carpet for illegal aliens. Our plan is to send a clear message to those who jump our borders, violate our laws, and reside in America illegally: Go home. Stop freeload- ing off of hard-working American taxpayers. Let me address the matter of legal immi- grants. America is a beacon of hope and op- portunity for the world. That is why we con- tinue to have the most generous system of legal immigration that history has ever known. It is in America’s interest to invite those who want to work for a better life, and have a fight- ing chance at the American Dream. But we will not support those who come to America to be dependent upon our social safety net. Thus, our legislation places priority on helping American citizens first, and represents the val- ues held by Americans. For we are determined to liberate families from welfare dependency and get them work and a chance at the American Dream. We un- derstand that for many single parents, child care can make the difference between being able to work or not. That’s why or bill provides more and better child care, with less bureauc- racy and redtape, and more choices and re- sources for parents striving for a better life. Here are the facts: This conference report provides $22 billion for child care over 7 years. That amounts to $4.5 billion over cur- rent law, and $1.7 billion more than President Clinton’s plan recommends. And we dramati- cally increase resources for child care quality improvement. By investing in quality child care, we provide more families the opportunity to be free from welfare dependency and to strive for the American Dream. In the end, this bill is what is about the best of America. We are a compassionate people, united by common ideals of freedom and op- portunity. The great glory of this land of oppor- tunity is the American Dream. Families trapped by welfare, and especially their chil- dren, have had this dream deferred. We can do better. And we do, through this legislation, because this is America. I urge the adoption of the conference report on H.R. 3734. Mr. BILIRAKIS. Mr. Speaker, I would like to join in supporting the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. As representatives of the people, we do not get as many opportunities as we would like to do something that will truly help im- prove the lives of the people we serve. This bill presents us with just such an op- portunity. The landmark welfare reform plan before us today will bring education, training, and jobs to low-income Americans. It will replace welfare dependence with economic self-reliance. And it will create more hopeful futures for the chil- dren of participants. This conference report is more than just a prescription for much-needed welfare reform. It is what I hope will be the first step in our bi- partisan efforts to improve the public assist- ance programs on which disadvantaged fami- lies depend. Last February, the Nation’s Republican and Democrat Governors unanimously endorsed welfare and Medicaid reform plans. And al- though the conference report before us today will give States the tools they need to improve their public assistance programs, our work is not done. After all, welfare as we know it means more than AFDC. It includes food stamps, housing assistance, and energy assistance. And it in- cludes medical assistance. That’s right\u2014for millions of Americans, Med- icaid is welfare. That is because income as- sistance alone is not sufficient to meet the pressing needs of disadvantaged families. For States, too, Medicaid is welfare. In fact, it makes up the largest share of State public assistance funding. As a share of State budg- ets, Medicaid is four times larger than AFDC. If President Clinton does the right thing and signs this welfare reform bill into law, Medicaid will still be caught up in the choking bureau- cratic redtape of Federal control. That is why the Medicaid program must be restructured if States are to fully succeed in making public assistance programs more responsive and ef- fective. I commend my colleagues on both sides of the aisle for their commitment to true welfare reform. And I look forward to continuing our efforts to making all sources of public assist- ance work better for those who need a helping hand up. Thank you. Mr. REED. Mr. Speaker, today’s vote is about change. Today we begin the move from a status quo that no one approves of to a re- formed and improved welfare system. Our cur- rent welfare system traps too many families in a cycle of dependency and does little to en- courage or help such individuals find employ- ment. Both welfare recipients and taxpayers lose if the status quo is maintained. I have repeatedly stated that meaningful welfare reform should move recipients to work and protect children. Just 2 weeks ago, I sup- ported a bipartisan welfare plan, authored by Republican Representative Michael Castle and Democratic Representative John Tanner, which I believe met these goals. The conference agreement on H.R. 3734 is not perfect, but it is a good first step into an era of necessary welfare reform. This legisla- tion contains many useful and necessary im- provements over the previous welfare propos- als put forth by the Republican majority. In fact, this legislation has moved several steps closer to the Castle-Tanner bill. The agreement ensures that low-income mothers and children retain their Medicaid eli- gibility; provides increased child care funding; removes the optional food stamp block grant; removes the adoption and foster care block grant; and allows States to use a portion of their Federal funding to provide assistance to children whose families have been cut off wel- fare because of the 5-year time limit. While this legislation attempts to protect children from the shortcomings and failures of their parents, it does not fulfill all of my goals for welfare reform. I am concerned that H.R. 3734 fails to provide adequate Federal re- sources for States to implement work pro- grams, nor does it contain adequate resources for States and individuals in the event of a se- vere recession. In addition, the legislation makes cuts in food stamps for unemployed individuals willing to work and contains legal immigrant provi- sions that will deny access by legal immigrant children to SSI, food stamps, and other bene- fits. These concerns should be rectified by this and subsequent Congresses. I am committed to realizing this goal, and therefore, I am pleased that the President plans to propose legislation to repeal many of these provisions. Furthermore, several States are currently working on plans to reform their welfare re- form systems. We must ensure that these ef- forts are accommodated by this legislation. This is the first Republican proposal which adequately acknowledges the need to protect children, while emphasizing work. Rhode Is- land, through the work of a coalition of State officials, business leaders, and advocacy groups, has crafted a welfare reform plan that also accomplishes these goals. Should H.R. 3734 prove detrimental to Rhode Island or the children of Rhode Island, I will work to make necessary changes to further strengthen the Nation’s welfare reform efforts. Mr. GOODLATTE. Mr. Speaker, I rise in strong support of this conference report. De- spite the slanderous accusations by the advo- cates of the current welfare state, our welfare reform plan is compassionate and humane, two adjectives rarely used to describe the cur- rent welfare program. Our welfare reform plan ends welfare as a way of life and gives back welfare recipients their self-worth. By replacing welfare with work, current recipients will realize that they have talents in which to make a productive and self-reliant life. They are so used to the government providing for them that they never believed they could provide for themselves and their families. We know this transition isn’t going to be easy; nothing worth having is easy. That is why our welfare reform plan continues govern- ment assistance as long as they are making a good-faith effort to be a productive member of society. We separate from bona fide eligible welfare candidates those who have been convicted of a felony or those that refuse to become citi- zens. For too long, those that have been try- ing to make their own way but are suppressed by the big thumb of government have been represented by those welfare recipients that CONGRESSIONAL RECORD \u2014 HOUSE H9421July 31, 1996 make the headlines. By denying convicted fel- ons and noncitizens taxpayer-funded assist- ance we take away the scourge previously as- sociated with all welfare benefits. We create a new benevolent program and therefore a posi- tive and refreshing atmosphere for its recipi- ents. Along with increased sense of self-worth that necessarily comes with a pay check that isn’t a donation comes a greater sense of per- sonal responsibility. Our reform promotes self- responsibility in an attempt to half rising illegit- imacy rates. Once we diminish illegitimacy we can truly end the cycle of dependency created by our current welfare state. As a condition for benefit eligibility, a mother must identify the father. This will ensure that single parents get the support they need and remind fathers that their children is their re- sponsibility, not the State’s. Our welfare reform plan gives power and flexibility back to the States. I think this is the provision that gives the proponents of the cur- rent welfare state the most heartburn. The block grants give the power and flexibility once enjoyed by big government advocates to our Nation’s Governors and State legislatures. Non longer will Washington power brokers be able to dictate who gets and how much they get. Rather, those who know the solutions for their unique challenges won’t have to wait for bureaucratic approval to put their programs in action. Mr. Speaker, not only is this reform plan his- toric, it is futuristic. This plan ends welfare as we know it and helps us see a society which encourages all of its members to be produc- tive and self-reliant. Mr. FRANKS of Connecticut. Mr. Speaker, this welfare reform conference bill brings us one step closer to fixing a welfare system that has been broken and in need of major repairs. We have had a welfare system that has caused generations of American citizens to live in poverty and become consumed by a condition of hopelessness and despair. We have had a welfare system that has created dependency upon a monthly stipend instead of employment as a viable solution to overcome poverty. I strongly believe in the American dream where each individual is given the opportunity to work, provide for their family, and partici- pate in our society. The current welfare sys- tem has taken that dream away from too many Americans. The conference committee bill represents the change that will place the welfare program back into the hands of the States so that States can implement programs that best fit the needs of their welfare constituents. The bill will reinforce the American principle in which parents are responsible for the well-being of their children. Welfare recipients will be re- quired to identify the absent father, and all able-bodied parents will be expected to work to provide for the needs of their children. The bill strengthens child support enforcement so that absent fathers will be located and re- quired to pay child support. The conference committee bill encourages States to implement the debit card for dis- bursement of welfare funds and food stamps. No longer will welfare recipients be able to use welfare funds to purchase illegal drugs. The bill will bring greater accountability in the spending of American taxpayer’s money. This conference committee bill will lead to greater self-sufficiency. The bill will give fami- lies who have had to live in poverty a new chance for a better life and an opportunity to participate in the American dream. I urge support for the conference committee bill. Mrs. COLLINS of Illinois. Mr. Speaker, I have heard of a rush to anger and a rush to judgment. What we have here is a rush to the floor. We’re told an agreement on a con- ference committee report to H.R. 3734 was made near midnight last night. I haven’t seen the conference report and don’t know what’s in the conference agreement. I read what’s in the National Journal’s Congress Daily\/A.M. edition and the Congressional Quarterly’s House Action Reports ”Conference Sum- mary.” The Congressional Quarterly Action Report includes the disclaimer that they haven’t seen the conference agreement report either, but prepared a morning briefing any- way, using information provided by committee staff. Well, excuse me. I don’t consider it appropriate to rely only on some nebulous statement written by someone who hasn’t read the report before casting my vote on behalf of my constituents. I want to have a copy of the legislation available and that’s why we have the rule that we don’t vote on a conference agreement the same day it is reported. In my 23 years in the Congress, I have been accustomed to reading and studying leg- islation before I cast my vote on behalf of the Seventh District of Illinois, a responsibility I take very seriously. The House has rules gov- erning debate, rules designed to keep us from rushing to judgment. Those rules dictate that we don’t vote on conference reports the same day they are filed so that we have time to study the provisions. That’s why there is a two-thirds majority vote requirement to over- turn that rule. So why are we being asked to waive the time requirement and go immediately to a vote on this conference report? We are told we will have 1 hour of debate on the rule that will give us 1 hour of debate to consider a special rule to waive the two-thirds vote requirement. Why? Because once again the Gingrich Re- publicans are trying to force legislation through the process without adhering to the safe- guards established to protect the American people and the legislative process. I object to this rule and urge my colleagues to defeat this rule so that America has a chance to look at what we are being asked to approve as new changes, major revisions real- ly, in the provisions and control of public as- sistance programs that provide a safety net for the needy and vulnerable among us. I owe it to my constituents to study legislation and weigh the measure before casting my vote for them. Let’s get back to reasoned debate, let’s follow the rules, just like we are going to ask the recipients of the benefits provided or de- nied under this bill to follow. Let’s stop chang- ing the rules as it suits the desires of the Gingrich Republicans. I urge my colleagues to defeat this motion to change the rules. I yield back the balance of my time. Mr. BLUMENAUER. Mr. Speaker, there is perhaps no more urgent issue in America today than ending welfare dependency. In place of a welfare program built around welfare checks, we need a program built around helping people get paychecks. We need to move people toward work and inde- pendence. And we need to be tough on work and protective of children. When the work on welfare reform started last year, the Republican proposals were weak on work, tough on kids, and the President was right to veto them. Unfortunately, the bill before us today, while a significant improvement on the earlier ver- sions, still falls short in both regards. On work, the bill is, in fact, too weak, for it underfunds employment assistance by $13 bil- lion. According to the Congressional Budget Office, a $13 billion shortfall is a guarantee that no State can meet the employment re- quirements in this bill. So we have missed an opportunity to make these poor families self- supporting. On children, the bill is, in fact, too weak in its child care provisions; it is too harsh in the manner children are punished for the failures of their parents; and it is far too extreme in its potential to push an additional 1 million chil- dren into poverty. I am also deeply concerned by the fun- damental premise of this legislation. There are many Governors, in many States, who today are sincerely committed to using a welfare block grant to raise the well-being and quality of life of people within their States. And as I listen to them, I hear a haunting echo of a sit- uation which occurred some years ago when many well-intended State legislators, myself included, voted to transition the mentally ill in Oregon into mainstream society. The concept seemed solid, as the welfare block grant seems to many Governors. But when the 1980’s recession hit Oregon, the commitments we made to the mentally ill\u2014similar in so many ways to the commitment the Governors today are making to their welfare recipients\u2014 simply came undone. And today, many years later, the mentally ill of Oregon still live on the streets, and Oregon’s neighborhoods and local governments are struggling under the burden of serving this neglected population. This, Mr. Speaker, is what I fear we face when the next recession rumbles through this land. When times get tough, and resources grow scarce, and the contingency funds are drawn down, who will be hurt the most? Will it be our schools? Our ports? Our highway funds? Our economic competitiveness pro- grams? Or will it be those who are struggling to find a route out of poverty? I fear without adequate planning, safe- guards, standards, and funding, welfare reform will likewise turn into a nightmare not just for the poor, but for the people in our community ill-equipped to deal with the consequences of another experiment that backfires. Mr. POSHARD. Mr. Speaker, I rise in sup- port of this conference agreement on welfare reform. This is truly an important moment in my legislative career and in the history of the House. I trust our judgement today will be proven wise in years to come. I have supported welfare reform with my work and with my votes during this session. I voted for the bill proposed by my colleague from Georgia, Congressman DEAL, and for the bill most recently proposed by a bipartisan co- alition led by Congressmen CASTLE and TAN- NER. By voting for those bills, and opposing the bills which were passed but vetoed by the President, we have been able to move toward a sensible middle ground, a tough yet humane bill which is worthy of our support. I will enter into the RECORD at this point a number of im- provements which helped earn my support for this legislation. CONGRESSIONAL RECORD \u2014 HOUSEH9422 July 31, 1996 Unlike the House bill, the Conference Agreement forces states wanting to transfer funds between block grants to transfer those funds specifically into child care and social services block grants. The Agreement allows states the flexibil- ity to implement pilot welfare programs like the one being put into place in Illinois. [A part of the Castle-Tanner Plan] However, states many use federal funds to provide vouchers and health and food stamp benfits to children through the five year time limi- tation mandated in the bill. After that, states have the option of continuing benefits in the form of a voucher. The Conference Agreement provides addi- tional flexibility in meeting the work re- quirements by allowing states that are im- plementing plans under federal waivers to count individuals who are participating in work programs under the waiver in meeting the work participation rates in the bill, even if the hours of work or the definition of work in the state plan do not meet the mandates in the bill. The Agreement does not include the House provision that would have prohibited states from using block grant funds to make cash payments to families that have an additional child while on welfare. Unlike the House bill, the Conference Agreement does not give states the option to receive food assistance in the form of a block grant, instead of under the regular Food Stamp program. The bill retains the current Food Stamp program. [A major part of the Castle-Tanner Plan] The Conference Agreement decreased the amount cut from the Food Stamp program by $2.3 billion. (The Agreement cuts the Food Stamp program by $23.3 billion over six years.) Tightens SSI eligibility criteria to restrict eligibility to children who meet the medical listings. However, individualized functional assessment and references to maladaptive behavior are repealed. [Criteria contained in Castle-Tanner Plan] All children meeting medical listings will be eligible for SSI bene- fits. The House bill restricted Food Stamps ben- efits for able-bodied, unemployed adults who have no dependent and who are between the ages of 18 and 50\u2014limiting Food Stamp bene- fits for this group to three months over their lifetime up to age 50. The Agreement pro- vides such individuals with Food Stamps for three months out of every three years, with the possibility of another three months with- in that period. [Moved closer to the Castle- Tanner Plan] Under the agreement, all families cur- rently receiving welfare and Medicaid bene- fits will continue to be eligible for the Med- icaid program. In addition, there is a one year transition period for Medicaid for those transitioning into the workforce. The Conference Agreement does not deny Medicaid benefits for legal immigrants retro- actively and applies the ban on benefits for five years instead of until citizenship to legal immigrants. The Agreement retains the current Family Preservation and Support program, which is a preventive program designed to teach im- proved parenting skills before a child must be removed to foster care. The House bill would have replaced the program with a block grant. The Agreement includes $500 million more than the House bill for a fund to reward states that are effective in moving people from welfare to work, preserving two-parent families, and reducing the out-of-wedlock births. I come from a rural area. I know times can be tough. But I also grew up on a farm where we worked for everything we ever had, and where we took care of each other. Most of the people I represent in the 19th district have similar backgrounds. They know that jobs can be lost or families can break apart and that we need to look after our neighbor. But they also want that neighbor to take responsibility for their behavior and for them to look for work if they’re able. This bill helps us respect those old-fash- ioned traditions in a modern world. It helps us move people from welfare to work, helps us save money in the program, and gives the states the flexibility to meet the needs of their people. We should be prepared to revisit this bill if in fact children are left behind as some critics fear. But today, we should embrace this pro- posal with courage and faith, confident that we are changing not only the construct but also the culture of welfare. Mr. DURBIN. Mr. Speaker, I rise in support of reforming the welfare system. As the Amer- ican people know, the current welfare system is in desperate need of reform. For public aid recipients trapped in the system, for those who exploit the welfare system, and for the taxpayers who foot the bills, an overhaul of welfare in America is a high priority. The fundamental problem with our current system is that for many people welfare be- comes more than a helping hand; it becomes a way of life. For some who enroll in the pri- mary welfare program, Aid to Families with Dependent Children [AFDC], welfare becomes a trap they cannot escape. Some are afraid to lose the health benefits they receive through Medicaid. Others are unable to secure child care to enable them to go to work. We must eliminate these barriers and chart a clear path for welfare recipients to go after a paycheck instead of a welfare check. Welfare should be viewed as temporary assistance, not a life- style. I believe welfare benefits should be cut off for recipients who are unwilling to pursue work, education or training. I also believe we must strengthen child support enforcement. Billions of dollars in child support payments go uncollected each year. By establishing pater- nity at birth and pursuing deadbeat parents, we can reduce the number of families impov- erished by the failure of non-custodial parents to fulfill their financial responsibilities. The legislation before the House today makes many of the changes needed to reform the welfare system. It will move people from welfare to work, and it provides child care funding and Medicaid to help people make the move from a welfare check to a paycheck. It maintains nutritional guarantees. And it in- cludes child support provisions to press dead- beat parents to meet their responsibilities so their children do not end up on welfare. This legislation is better than the Gingrich bill which I opposed 2 weeks ago. The Ging- rich bill eliminated the Federal guarantee of nutritional assistance. The Gingrich bill denied Medicaid to legal immigrants. The Gingrich bill denied benefits to children born to parents on welfare. And the Gingrich bill did not allow States to provide vouchers for children when their parents exceeded time limits. The legisla- tion before us today does not include any of these problems. This legislation is also far better than the Gingrich bill I opposed last year. Last year’s Gingrich bill would have block-granted and re- duced funding for the nutrition program for Women, Infants and Children; school lunches and breakfasts; and the Child and Adult Care Food Program. It would have eliminated the critical nutrition, education and health services that are an important part of the WIC pro- gram’s effectiveness in increasing the number of healthy births. It would have eliminated the assurance of food assistance for many chil- dren, leaving many of them without enough food to eat. And it would have eliminated the assurance of sound nutrition standards for these programs. Last year’s Gingrich bill also would have eliminated the guarantee of Medicaid cov- erage for millions of women and children on AFDC. It would have terminated most Federal day care programs and replaced them with a block grant to States. It would have cut overall child care funding and caused many families to be denied day care assistance. Without day care, many parents would be forced to quit their jobs and enter the welfare system. It also would have eliminated many of the health and safety standards that have previously been re- quired of day care providers receiving Federal funds, and put many children’s lives at risk. And it would have cut funding for foster care, adoption assistance, child abuse prevention and treatment and related services, and turned these programs over to the States in a block grant. Today’s bill does not contain these enormous flaws. The legislation before the House today is far from perfect. It has significant problems that must be corrected, and I will work with the President to ensure that these problems are effectively addressed. I support effective re- quirements on the sponsors of legal immi- grants who apply for benefits, but I do not be- lieve that people who live legally in our coun- try should be treated unfairly. The legislation before the House today is unfair to legal immi- grants who play by the rules and contribute to the progress of our country, just as all of our ancestors have done. And the legislation be- fore us today cuts nutritional assistance too deeply, which will be harmful to children and may force some working families to continue to choose between paying the rent and putting food on the table. I will vote for the legislation that is now be- fore the House because it makes many of the changes that must be made to change welfare from a way of life to a helping hand. And I will work with the President to correct the prob- lems in this legislation that have nothing to do with welfare reform. Mr. FAZIO of California. Mr. Speaker, I rise to express my support for the conference agreement before us and to voice my grati- tude to the many members of the Democratic Caucus who have worked long and hard over the last 2 years on this difficult issue. These members, including XAVIER BECERRA, LYNN WOOLSEY, JOHN TANNER, CHARLIE STEN- HOLM, SANDY LEVIN, BOB MATSUI, MARTIN SABO, and many, many others, have worked long and hard to improve the welfare reform bill that we are considering today. They have increased the awareness of their colleagues and have worked for a whole range of im- provements which have moderated some of the bill’s original provisions. I truly appreciate their efforts. While this conference agreement isn’t per- fect, it represents a step in the right direction. This agreement acknowledges the view that CONGRESSIONAL RECORD \u2014 HOUSE H9423July 31, 1996 welfare should be a second chance for those in need, not a way of life. This agreement sets a 5-year time limit on receiving benefits, includes tough welfare-to- work requirements, and allows States to de- cide how best to meet the needs of their citi- zens. I am pleased to see that the conference agreement moved toward the President’s posi- tion on a number of important issues, espe- cially the removal of a provision that would have allowed States to opt out of the food stamp program. This will help keep the nutri- tional safety net intact for our kids. In addition, I am pleased that strong child support enforce- ment provisions have been included in this agreement. The agreement that we’re voting on today is the first step toward a much-needed overhaul of our welfare system. It stresses both fiscal and personal responsibility and it breaks the cycle of dependence. I urge my colleagues to support this con- ference agreement. Mr. STOKES. Mr. Speaker, I rise in opposi- tion to H.R. 3734, the Personal Responsibility and Work Opportunity Act, a bill which would dramatically overhaul our Nation’s welfare sys- tem. On July 18, 1996, I joined with 170 of my colleagues to show my staunch opposition to H.R. 3734. After reviewing the product of the conference committee, my position remains unchanged. During this session of Congress, our Repub- lican colleagues assured us a family friendly Congress. They promised us that our children would be protected from harm. However, this bill is not about helping our families, nor is it about saving our children. The primary pur- pose of this bill is to achieve more than $61 billion in budget cuts. And unfortunately, those who will suffer most from this legislation will be those who need assistance the most, our children, and the poor. Seven months ago, President Clinton was forced to veto a welfare bill which, much like the bill before us today, would place an alarm- ing number of children into poverty. According to the Urban Institute, H.R. 3734 would push 1.5 million children into poverty. I appeal to President Clinton to veto this measure which abandons the Federal commitment and safety net that protects America’s children. H.R. 3734 slashes more than $61 billion over 6 years in welfare programs. This bill guts funding for the Food Stamp Program, cuts into the SSI protections for disabled chil- dren, drastically cuts child nutrition programs, and slashes benefits for legal immigrants. Mr. Speaker, I find these reductions in quality of life programs appalling. Mr. Speaker, I believe most of us agree that our Nation’s welfare system is in the need of reform. But do we reform the system by deny- ing benefits to legal immigrants who, despite working hard and paying taxes, fall upon hard times? How can we demand that welfare re- cipients work 30 hours a week, yet provide in- efficient job training and job services\u2014essen- tial components in contributing to longevity in the workplace? In short, how can we justify punishing children and their families simply because they are poor? If we are truly to talk about the reform of welfare, if we are going to talk about increas- ing opportunities for our low-income residents, we cannot expect productive changes for our community by taking away from those who al- ready have very little. Mr. Speaker, I can understand and support a balanced and thoughtful approach to ad- dressing the reform of our Nation’s welfare system. However, I cannot support this legisla- tion which would shatter the lives of millions of our Nation’s poor. The pledge to end welfare as we know it is not a mandate to act irresponsibly and without compassion. On behalf of America’s children and the poor, I urge my colleagues to vote against H.R. 3734. Mrs. COLLINS of Illinois. Mr. Speaker, I rise in opposition to the conference agreement on H.R. 3734, legislation that revises our current law providing welfare to needy children, indi- viduals, and families in America. This welfare revision does little more than poke holes in the safety net that is called welfare. In my opinion, this legislation is a desperate\u2014and unsuc- cessful\u2014attempt to claim reform when it is an illogical revision. Change merely for change’s sake can lead to chaos, damage, and injury. This bill reportedly contains changes to our welfare system that will ensure insecurity and forecast fear on the part of the many vulner- able, loving parents out there trying their best to provide for their children a safe, secure, and nurturing environment. Some of my constituents in the Seventh District of Illinois are among the poorest of the Nation. For the 231\u20442 years that I have served in this body, I have fought strong and some- times bitter battles for the benefit of the vul- nerable, the disenfranchised, the young, old, disabled, and poor. That is what I hope to be remembered for when I retire from the House at the end of the year. So, I feel I have an obligation to rise today in opposition to the conference agreement de- veloped in the 11th hour by a few secretly se- lected Members of Congress. I continue to be concerned that we are applying Band-Aid pol- icy and control instead of prevention and early intervention. The funds provided in current law attempt to address, and\/or remedy, the symp- toms of poverty: joblessness, hunger, domes- tic violence, child abuse and neglect, illiteracy; but until and unless we set about strategically to address the causes, we go far short of ade- quate to eradicate the problem and then won- der why we are losing the fight. I was contacted this morning by the Day- Care Council of Illinois, located in Chicago, who reminded me that President Franklin Roo- sevelt, under whose leadership the safety net for our most vulnerable children and families was established some 60 years ago once said: ”The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” We do too little when we take away the Federal oversight of funds that are channeled into State and local coffers in the form of block grants; reduce the Food Stamp program in the name of budget deficit; deny benefits to legal immigrants; and make children-having-children continue to live in housing environments that failed them as teenage parents instead of sup- porting communities in their efforts to provide stable, dependable support systems. Whether that support is supplied by the teen parent’s biological or substitute parent, or a publicly funded shelter, should be the decision of that child-parent, not the Federal Government. Block granting welfare benefits is likely to block grant suffering. I can only hope that if this legislation passes, sufficient Federal cri- teria and oversight can make them work. The States have asked for block grants and will be called upon to demonstrate that they can act responsibly to all vulnerable populations in a non-discriminatory manner. My fear and recol- lection of contemporary history is that many of them will not. On the issue of Medicaid eligibility, until and unless Congress can achieve meaningful health care reform to provide for universal ac- cess to health care financing, there must be Medicaid eligibility for the unemployed, unin- sured families who receive public assistance. The well-being of our children is what public welfare should be all about; and we should focus on how best we can prevent and protect the vulnerable children of our Nation from ex- periencing poverty and despair, against hun- ger and sickness, and against fear and help- lessness. I urge my colleagues to reject this rush to agreement. I yield back the balance of my time. Ms. VELA\u0301ZQUEZ. Mr. Speaker, I rise today in opposition to the welfare conference agree- ment. This bill is an outrage. It constitutes the latest chapter in the right wing majority’s all- out attack on children and the poor. Let’s get real. Less than 2 percent of Fed- eral dollars are spent on assisting poor women and children. Yet radicals are ramming a bill down our throats that does nothing more than single out and punish children in the name of deficit reduction. Many on the other side of the aisle are under the false assumption that all we need to do to eliminate poverty is take food and money away from poor people. But I have news for you\u2014this sink or swim approach will not work. According to the Urban Institute this bill would push 1.1 million children into poverty and eliminate their ability to count on basic in- come support. The worse tragedy of all is that this cruel bill comes up short on jobs. Cutting financial as- sistance to poor families without money for job creation, job training and day care will not force recipients to swim but cause millions of poor children to drown. The real problem is that in poor areas like the one I represent, there simply are not enough jobs for people. In fact in some areas in NYC there are 14 applicants for every one fast-food job. Let’s end this charade. I implore my col- leagues, on both sides of the aisle, to support fairness and basic decency and reject this heartless legislation. The SPEAKER pro tempore. Without objection, the previous question is or- dered on the conference report. There was no objection. The SPEAKER pro tempore. The question is on the conference report. Pursuant to House Resolution 495, the yeas and nays are ordered. The vote was taken by electronic de- vice, and there were\u2014yeas 328, nays 101, not voting 5, as follows: [Roll No. 383] YEAS\u2014328 Ackerman Allard Andrews Archer Armey Bachus Baesler Baker (CA) Baker (LA) Baldacci Ballenger Barcia Barr Barrett (NE) Bartlett Barton Bass Bateman CONGRESSIONAL RECORD \u2014 HOUSEH9424 July 31, 1996 Bentsen Bereuter Bevill Bilbray Bilirakis Bishop Bliley Blute Boehlert Boehner Bonilla Bono Borski Boucher Brewster Browder Brownback Bryant (TN) Bryant (TX) Bunn Bunning Burr Burton Buyer Callahan Calvert Camp Campbell Canady Cardin Castle Chabot Chambliss Chapman Chenoweth Christensen Chrysler Clement Clinger Coble Coburn Collins (GA) Combest Condit Cooley Costello Cox Cramer Crane Crapo Cremeans Cubin Cunningham Danner Davis de la Garza Deal DeFazio DeLay Deutsch Dickey Dicks Dingell Doggett Dooley Doolittle Dornan Doyle Dreier Duncan Dunn Durbin Edwards Ehlers Ehrlich English Ensign Everett Ewing Fawell Fazio Fields (TX) Flanagan Foley Forbes Fowler Fox Franks (CT) Franks (NJ) Frelinghuysen Frisa Frost Funderburk Furse Gallegly Ganske Gejdenson Gekas Geren Gilchrest Gillmor Gilman Gingrich Goodlatte Goodling Gordon Goss Graham Greene (UT) Greenwood Gutknecht Hall (TX) Hamilton Hancock Hansen Harman Hastert Hastings (WA) Hayes Hayworth Hefley Hefner Heineman Herger Hilleary Hobson Hoekstra Hoke Holden Horn Hostettler Houghton Hoyer Hunter Hutchinson Hyde Inglis Istook Johnson (CT) Johnson (SD) Johnson, Sam Jones Kanjorski Kaptur Kasich Kelly Kennelly Kildee Kim King Kingston Kleczka Klink Klug Knollenberg Kolbe LaHood Largent Latham LaTourette Laughlin Lazio Leach Levin Lewis (CA) Lewis (KY) Lightfoot Lincoln Linder Lipinski Livingston LoBiondo Longley Lowey Lucas Luther Manton Manzullo Martini Mascara McCarthy McCollum McCrery McHale McHugh McInnis McIntosh McKeon Meehan Metcalf Meyers Mica Miller (FL) Minge Molinari Montgomery Moorhead Moran Morella Murtha Myers Myrick Neal Nethercutt Neumann Ney Norwood Nussle Obey Orton Oxley Packard Pallone Parker Paxon Payne (VA) Peterson (FL) Peterson (MN) Petri Pickett Pombo Pomeroy Porter Portman Poshard Pryce Quillen Quinn Radanovich Ramstad Reed Regula Richardson Riggs Rivers Roberts Roemer Rogers Rohrabacher Rose Roth Roukema Royce Salmon Sanford Sawyer Saxton Scarborough Schaefer Schiff Seastrand Sensenbrenner Shadegg Shaw Shays Shuster Sisisky Skaggs Skeen Skelton Smith (MI) Smith (NJ) Smith (TX) Smith (WA) Solomon Souder Spence Spratt Stearns Stenholm Stockman Stump Stupak Talent Tanner Tate Tauzin Taylor (MS) Taylor (NC) Thomas Thornberry Thornton Thurman Tiahrt Torkildsen Torricelli Traficant Upton Vento Visclosky Volkmer Vucanovich Walker Walsh Wamp Ward Watts (OK) Weldon (FL) Weldon (PA) Weller White Whitfield Wicker Wilson Wise Wolf Wynn Young (AK) Zeliff Zimmer NAYS\u2014101 Abercrombie Barrett (WI) Becerra Beilenson Berman Blumenauer Bonior Brown (CA) Brown (FL) Brown (OH) Clay Clayton Clyburn Coleman Collins (IL) Collins (MI) Conyers Coyne Cummings DeLauro Dellums Diaz-Balart Dixon Engel Eshoo Evans Farr Fattah Fields (LA) Filner Foglietta Frank (MA) Gephardt Gibbons Gonzalez Green (TX) Gutierrez Hall (OH) Hastings (FL) Hilliard Hinchey Jackson (IL) Jackson-Lee (TX) Jacobs Jefferson Johnson, E. B. Johnston Kennedy (MA) Kennedy (RI) LaFalce Lantos Lewis (GA) Lofgren Maloney Markey Martinez Matsui McDermott McKinney McNulty Meek Menendez Millender- McDonald Miller (CA) Mink Moakley Mollohan Nadler Oberstar Olver Ortiz Owens Pastor Payne (NJ) Pelosi Rahall Rangel Ros-Lehtinen Roybal-Allard Rush Sabo Sanders Schroeder Schumer Scott Serrano Slaughter Stark Stokes Studds Tejeda Thompson Torres Towns Velazquez Waters Watt (NC) Waxman Williams Woolsey Yates NOT VOTING\u20145 Flake Ford Gunderson McDade Young (FL) b 1710 Mr. SCHUMER changed his vote from ”yea” to ”nay.” So the conference report was agreed to. The result of the vote was announced as above recorded. A motion to reconsider was laid on the table. f GENERAL LEAVE Mr. SHAW. Mr. Speaker, I ask unani- mous consent that all Members may have 5 legislative days within which to revise and extend their remarks and in- clude extraneous matter on the con- ference report on H.R. 3734. The SPEAKER pro tempore (Mr. ARMEY). Is there objection to the re- quest of the gentleman from Florida? There was no objection. f REPORT ON RESOLUTION WAIVING POINTS OF ORDER AGAINST CON- FERENCE REPORT ON H.R. 3603, AGRICULTURE, RURAL DEVELOP- MENT, FOOD AND DRUG ADMIN- ISTRATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 1997 Mr. GOSS, from the Committee on Rules, submitted a privileged report (Rept. No. 104 730) on the resolution (H. Res. 496) waiving points of order against the conference report to ac- company the bill (H.R. 3603) making appropriations for Agriculture, Rural Development, Food and Drug Adminis- tration, and Related Agencies pro- grams for the fiscal year ending Sep- tember 30, 1997, and for other purposes, which was referred to the House Cal- endar and ordered to be printed. f REPORT ON RESOLUTION WAIVING POINTS OF ORDER AGAINST CON- FERENCE REPORT ON H.R. 3517, MILITARY CONSTRUCTION AP- PROPRIATIONS ACT, 1997 Mr. GOSS, from the Committee on Rules, submitted a privileged report (Rept. No. 104 731) on the resolution (H. Res. 497) waiving points of order against the conference report to ac- company the bill (H.R. 3517) making appropriations for military construc- tion, family housing, and base realign- ment and closure for the Department of Defense for the fiscal year ending September 30, 1997, and for other pur- poses, which was referred to the House Calendar and ordered to be printed. f REPORT ON RESOLUTION WAIVING POINTS OF ORDER AGAINST CON- FERENCE REPORT ON H.R. 3230, NATIONAL DEFENSE AUTHORIZA- TION ACT FOR FISCAL YEAR 1997 Mr. GOSS, from the Committee on Rules, submitted a privileged report (Rept. No. 104 732) on the resolution (H. Res. 498) waiving points of order against the conference report to ac- company the bill (H.R. 3230) to author- ize appropriations for fiscal year 1997 for military activities of the Depart- ment of Defense, to prescribe military personnel strengths for fiscal year 1997, and for other purposes, which was re- ferred to the House Calendar and or- dered to be printed. f b 1715 INTERNATIONAL DOLPHIN CONSERVATION PROGRAM ACT Mr. GOSS. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 489 and ask for its immediate consideration. The Clerk read the resolution, as fol- lows: H. RES. 489 Resolved, That at any time after the adop- tion of this resolution the Speaker may, pur- suant to clause 1(b) of rule XXIII, declare the House resolved into the Committee of the Whole House on the state of the Union for consideration of the bill (H.R. 2823) to amend the Marine Mammal Protection Act of 1972 to support the International Dolphin Con- servation Program in the eastern tropical Pacific Ocean, and for other purposes. The first reading of the bill shall be dispensed with. General debate shall be confined to the bill and shall not exceed one hour equally di- vided and controlled by the chairman and ranking minority member of the Committee on Resources. After general debate the bill shall be considered for amendment under the five-minute rule. In lieu of the amendment recommended by the Committee on Re- sources now printed in the bill, it shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule the amendment in the nature of a sub- stitute printed in the Congressional Record CONGRESSIONAL RECORD \u2014 HOUSE H9425July 31, 1996 and numbered 1 pursuant to clause 6 of rule XXIII. That amendment shall be considered as read. No other amendment shall be in order except a further amendment printed in the report of the Committee on Rules to ac- company this resolution, which may be of- fered only by Representative Miller of Cali- fornia or his designee, shall be considered as read, shall be debatable for one hour equally divided and controlled by the proponent and an opponent, and shall not be subject to amendment. At the conclusion of consider- ation of the bill for amendment the Commit- tee shall rise and report the bill to the House with such amendments as may have been adopted. Any Member may demand a sepa- rate vote in the House on any amendment adopted in the Committee of the Whole to the bill or to the amendment in the nature of a substitute made in order as original text. The previous question shall be considered as ordered on the bill and amendments thereto to final passage without intervening motion except one motion to recommit with or with- out instructions. The SPEAKER pro tempore (Mr. EWING) The gentleman from Florida [Mr. GOSS] is recognized for 1 hour. Mr. GOSS. Mr. Speaker, for the pur- poses of debate only, I yield the cus- tomary 30 minutes to the gentleman from California [Mr. BEILENSON], pend- ing which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purposes of debate only. (Mr. GOSS asked and was given per- mission to revise and extend his re- marks and include extraneous mate- rial.) Mr. GOSS. Mr. Speaker, the Rules Committee last week found itself in an unusual situation: A request for modi- fied closed rule on a bill reported from the Resources Committee\u2014although the Ways and Means Committee also had jurisdiction over a portion. As you know, bills reported from the Re- sources Committee are traditionally considered under open rules. So what’s different about H.R. 2823, the Inter- national Dolphin Conservation Pro- gram Act? Most importantly, this bill would essentially codify an inter- national agreement between 12 nations known as the Declaration of Panama. Any significant changes to the lan- guage of H.R. 2823 and that agreement is lost. It is worth mentioning that the negotiations that produced this agree- ment could serve as a model for envi- ronmental policymaking because just about every viewpoint in the tuna\/dol- phin debate was represented at the table. These negotiations not only in- volved the governments of 12 nations, but they also included representatives from the environmental community and the fishing industry. The result is a package that enjoys unusually broad support: From the administration and Vice President AL GORE to the Re- sources Committee Chairman DON YOUNG. From Greenpeace to the tuna fishermen. In recognition of the fragile nature of this agreement, the Rules Committee has reported a modified closed rule that allows for a vote on the bill, pre- ceded by an amendment to be offered by the gentleman from California [Mr. MILLER] or his designee, and one mo- tion to recommit, with or without in- structions. It had originally been the intention of the Rules Committee to allow a vote on a full substitute, but the minority specifically requested that the Miller amendment be made in order instead. The rule was agreed to in committee with voice vote without dissent. Mr. Speaker, if you cherish the dol- phin populations of the eastern Pacific, as I do, then you will agree it is vital that we move forward with this legisla- tion. During the coming debate, you will hear differing viewpoints on how this legislation may impact dolphins\u2014 the administration’s experts, the Re- sources Committee, and the Center for Marine Conservation all happen to be- lieve that this bill will save dolphins’ lives, and do so more effectively than current law\u2014I think that’s pretty good credentials. H.R. 2823 backs up that claim by mandating that every tuna boat operating in the eastern Pacific carry an observer to certify that not a single dolphin was killed when the tuna nets were hauled up. Even one dolphin death would prevent the entire catch from being sold in the United States as Dolphin safe. Under today’s standards American consumers do not have this kind of guarantee. However, this proposal is not just about saving dolphins; it’s about preserving endan- gered marine species like the sea tur- tles, as well as billfish and juvenile tunas. In Florida, we certainly treasure our dolphins\u2014but we also take special care to protect other marine popu- lations, and I am pleased that H.R. 2823 will address the eastern Pacific eco- system as a whole, not just one aspect of it. You will hear the argument that one of the techniques allowed under this agreement, encirclement\u2014with divers that release any dolphins before they are caught in the net, is harmful. But those who put forth this argument might not mention the enormous dam- age done by so-called safe fishing methods such as log sets and school sets. As the Resources Committee’s re- port says: The bycatch of other marine species asso- ciated with these two fishing techniques is significantly higher than the bycatch associ- ated with the encirclement technique. School sets generate approximately 10 times the amount of bycatch and log sets generate approximately 100 times the bycatch of juve- nile tunas and other marine species. So the message should be clear: If you want to protect dolphins, turtles, and other marine life, you should sup- port this rule and vote for the Inter- national Dolphin Conservation Pro- gram Act. Mr. Speaker, I reserve the balance of my time. Mr. BEILENSON. Mr. Speaker, I thank the gentleman from Florida [Mr. GOSS] for yielding the customary half hour debate time to me; and I yield myself such time as I may consume. Mr. Speaker, as the gentleman from Florida has explained, this is a modi- fied closed rule for the consideration of H.R. 2823, the International Dolphin Conservation Program Act. Even though we do not prefer rules that are this restrictive, and of course our colleagues who are now in the ma- jority always railed bitterly against them when we were in the majority, it appears that the nature of this debate probably does not require a completely open rule. On the other hand, it is also proper to point out that with a bill so narrow in scope as this one, it is difficult to un- derstand why we need a rule with such strict limits. In any case, we should support this rule. It should provide for adequate dis- cussion of the principal controversy at issue here. Mr. Speaker, the dolphin protection bill has created a great deal of con- troversy within the environmental community which was, after all, re- sponsible for calling our attention to the serious problem of the slaughter of dolphins by the tuna fishing industry in the first place. If it had not been for several environmental organizations, the public would not have known about the way the dolphins were routinely trapped and killed by the giant nets used by tuna fleets. But thanks to many organizations that are deeply concerned about the fate of our entire marine ecosystem, Congress passed legislation embargoing all tuna caught by that method, known as encirclement. Because of that embargo, other big tuna-fishing countries felt the eco- nomic pressure, and after meeting with U.S. officials to develop a voluntary international agreement, pledged to adopt safer fishing methods. These new techniques have been dramatically suc- cessful. The result is that dolphin mor- tality has declined from over 100,000 in 1991 to a little bit more than 3,000 in 1995. Because of that success, the United States, several environmental groups and 11 other nations met in Panama last year to develop a binding inter- national agreement, the terms of which are reflected in H.R. 2823, that rewards these efforts by lifting the United States embargo. The agreement and the bill would also reward any batch of tuna caught without a single dolphin death, to be verified by on-board ob- servers, with the dolphin-safe label that is so important commercially. Mr. Speaker, H.R. 2823 has bipartisan support in the Congress. It has been en- dorsed by the Clinton administration, which helped negotiate the binding international agreement to lock in the dramatic reductions in dolphin deaths that have been achieved and to protect other marine species that are unfortu- nately threatened by alternative tuna fishing practices. That so-called Declaration of Pan- ama was signed by 12 nations in Octo- ber 1995. Environmentalists believe, some environmentalists, not all, that this enforceable international agree- ment is the only way to protect marine CONGRESSIONAL RECORD \u2014 HOUSEH9426 July 31, 1996 resources for the long term. We cannot, they believe, continue to act alone. It would be impossible to protect dolphins and other species if we did. Again, Mr. Speaker, this is a modi- fied closed rule and one that might bet- ter have been somewhat less restrictive or limited. But we hope the terms of the rule will not prevent us from hear- ing all of the arguments about this leg- islation. We are supportive of the rule. We think it is a fair rule. Mr. Speaker, I reserve the balance of my time. Mr. GOSS. Mr. Speaker, I yield 3 minutes to the gentleman from greater San Dimas, CA [Mr. DREIER], the dis- tinguished vice chairman of the Com- mittee on Rules. Mr. DREIER. I thank my friend from Sanibel, FL, the distinguished chair- man of the Subcommittee on Legisla- tive and Budget Process, for yielding me this time, and I rise in strong sup- port of this rule. Mr. Speaker, I am one who enjoys consuming seafood but I am not par- ticularly fond of tuna. But I am very supportive of this measure because it has been a long time in coming. We have just had a great deal of ex- citement around here over the last sev- eral hours as we have brought about with, I think, 328 votes a bipartisan agreement on welfare reform, but the bipartisanship that exists on that, as the gentleman from Florida [Mr. GOSS] implied, pales in comparison when we look at the parties who are involved in this very important agreement who have disagreed on many, many issues in the past. The fact of the matter is while my friend, the gentleman from California [Mr. BEILENSON], said that we in the past would rail about rules that are like this, this rule is very clear in that we are dealing with 12 nations who were part of this negotiating process and as he knows under fast track nego- tiating authority, which this Congress has had in the past but does not have now, we have seen agreement struck where there would be simply an up-or- down vote on measures, and that is the direction in which we are headed with this rule, because we do have, I think, an important environmental concern that is being addressed here and also for other friends of ours in Latin Amer- ica. I was talking with some people at the Mexican Embassy and they have been very anxious about this because they want to see us move ahead and proceed with what is a very important agree- ment not only for the consumers in the United States and Mexico but also for those in the tuna industry and those who are concerned, as we all are, about the safety of dolphins. So when we look at the World Wildlife Federation, at DON YOUNG, I know they do not al- ways come together on issues, I believe that this is a great day as we continue the bipartisan spirit that was in evi- dence just a few minutes ago. About 6 hours ago the bipartisan spirit was not as in evidence here in the House of Representatives, but I am convinced that when we move to final passage on this rule and the measure that that great bipartisan spirit will be alive and well. Mr. BEILENSON. Mr. Speaker, I yield 8 minutes to the gentleman from California [Mr. MILLER], the distin- guished ranking member of the Com- mittee on Resources. (Mr. MILLER of California asked and was given permission to revise and ex- tend his remarks.) Mr. MILLER of California. Mr. Speaker, this legislation that we have begun debating here today, H.R. 2823, the International Dolphin Conserva- tion Program Act, I believe, is a dec- laration of surrender by this Congress to those who insist that American en- vironmental and labor standards must be destroyed on the altar of free trade. b 1730 H.R. 2823 is a complete capitulation to those who believe that U.S. consum- ers have no rights and our trade com- petitors must have all the rights when it comes to product disclosure. This is a bad bill: bad environmental policy, bad trade policy, and bad for- eign policy. It does precisely what we were told NAFTA and GATT would not do. It demands that our own laws gov- erning the environment, worker safety, species protection, and a consumer’s right to know be sacrificed. Less than a decade ago, millions of American consumers, led by school- children of this Nation, demanded the creation of dolphin protection pro- grams because of the needless slaugh- ter of hundreds of thousands of marine mammals by tuna fishermen. We passed the Dolphin Protection Act. We required that tuna sold in the United States be dolphin safe. The U.S. tuna industry, at enormous expense, complied with those require- ments, relocated their ships and proc- essing plants, and produced dolphin safe tuna. Those efforts have had a dra- matic success. Dolphin deaths last year were a little less than 3,600, compared to 100,000 or more a few years ago. The dolphin protection law has worked, but the bill before us today would renounce the very program that has achieved the goals we sought when the dolphin protection law was en- acted. Why on Earth would we so grievously weaken the very law that has worked so well? Not on behalf of American con- sumers, not on behalf of dolphin pro- tection, not on behalf of those inter- ests, but rather on behalf of Mexico, Venezuela, Colombia, and other na- tions who are trying a little environ- mental blackmail, and to date it seems to be working. Those very countries that have con- tinued to fish in violation of the dol- phin safe law now demand of this Na- tion that we weaken our laws so they can sell dolphin unsafe tuna in U.S. su- permarkets under a label that the consumer has come to understand as meaning dolphin safe, a label that was enacted by this Congress. This Con- gress should not now become a party to this deception of that label, and a de- ception that this act would bring about with respect to the American consumer. H.R. 2823 implements an inter- national agreement, the Panama Agreement, which was negotiated be- hind closed doors by five Washington- based environmental organizations and the government of Mexico. This agree- ment makes major changes to long- standing laws protecting dolphins and informing our consumers. But let us remember it was nego- tiated without the knowledge of any elected Member of Congress or other interested parties with a decades-long history on this issue. It was negotiated without consider- ation of the American tuna canning companies who in 1990 responded to the demands from our schoolchildren, their parents, and consumers nationwide, and some of the same environmental groups who secretly negotiated this deal. They did it by voluntarily an- nouncing that they would no longer purchase and sell tuna caught by harm- ing dolphins. It was negotiated without the par- ticipation and approval of dozens of en- vironmental organizations with mil- lions of members nationwide who vig- orously disagree that this is the best way to protect dolphins, and who strongly support the Studds amend- ment that will be offered later to re- tain the current dolphin safe label. The legislation was drafted with the help of lobbyists hired by the Mexican Government, and presented to the Committee on Resources with the ca- veat that no amendments could be ac- cepted if they were unacceptable to Mexico. Since when did we start nego- tiating in this fashion? Since when did we start negotiating in a fashion where privately negotiated agreements are now brought to the Congress and we are told that somehow they are the same as a treaty or an agreement be- tween this Nation and other nations, but this Congress cannot be engaged in the process of amendment? There are some very serious problems with this legislation. The most impor- tant is that it would do exactly what proponents of the trade agreement pledged these pacts would not do: drive down American environmental stand- ards through pressure from countries that do not want to meet those same standards. That is the goal, pure and simple. Let us be clear. The driving force be- hind this legislation is Mexico, which does not want to meet the standards of the dolphin safe label that is on every can of tuna sold in this country. Mex- ico wants to open the floodgates to nonsafe tuna and to desecrate the in- tegrity of the label that has led through consumer preferences. If we do not accede to this undermin- ing effort, Mexico and other nations CONGRESSIONAL RECORD \u2014 HOUSE H9427July 31, 1996 tell us that they will abandon their commitment to this agreement, to fishing dolphin safe, and deliberately resume the slaughter of dolphins. These nations, and many other trading partners, are waiting to see how the U.S. Congress responds to this threat. This legislation responds by capitula- tion. We are going to hear a lot of as- sertions about this legislation, how sensitive it is to dolphins, how it would not allow damage to be done to dol- phins. Before Members vote I urge them to consider the following: This legislation, as currently writ- ten, the supporters will tell us that this bill does not allow more dolphins to be killed; that it reduces the number of dolphin deaths. But the fact is, H.R. 2823 allows the number of dolphin deaths to rise by almost 30 percent. There is nothing in this bill about keeping dolphin deaths at today’s his- toric low level. This bill is about allow- ing more dolphin deaths. They say that their bill does not allow dolphins to be hurt. Under H.R. 2823, dolphins may be regularly encir- cled, harassed, and injured. The bill im- poses no limit on the amount of injury that could be imposed on dolphins, as long as the dolphins do not actually die in the nets. We will hear the proponents say that the environmentalists support this leg- islation. The fact of the matter is that over 80 grassroots environmental orga- nizations vigorously oppose this bill and support the Studds amendment. By contrast, what we have are five Wash- ington-based environmental groups that secretly negotiated this agree- ment with Mexico who are now sup- porting it. Since when is this Congress obligated to accept, unamended, the products of negotiation by environmental organi- zations and foreign governments? Lastly, the supporters of this legisla- tion argue that we cannot change the bill because to do so would be to re- nounce international agreements and damage American credibility. The fact is, there is no international agreement. There is no treaty. This is about going to the negotiations on a possible trea- ty. This bill requires that we change U.S. law as a condition of going to those negotiations. It is worth noting that the United States is the only country that is re- quired to make these kinds of changes, to change domestic consumer protec- tion laws to conform with this agree- ment. I would hope that the Members of this Congress would see through this effort by Mexico to essentially abolish the dolphin safe protection that we currently have on the books, and would support the Studds amendment that will allow for the protection of the label, the protection of consumer knowledge, and provide for the protec- tion of the dolphins. Mr. GOSS. Mr. Speaker, I yield 2 minutes to the distinguished gen- tleman from New Jersey [Mr. SAXTON], chairman of the Subcommittee on Fisheries, Wildlife and Oceans. Mr. SAXTON. Mr. Speaker, first let me thank and commend the Committee on Rules, led by the gentleman from New York [Mr. SOLOMON] and the gen- tleman from Florida [Mr. GOSS], for bringing this rule to the floor. Let me also commend my friend from Mary- land, Mr. GILCHREST, who was the au- thor of this bill, who I think did a very fine job. Mr. Speaker, when I was sitting in my office of the first day of this ses- sion, press reporters called and said, ”How do you think it is going to be serving with a Democrat President, be- cause in your term of being here you have always been able to communicate with and serve with Republican Presi- dents?” I said, ”It will be my goal to find places and issues upon which the President the Democrat President, and I can agree.” This is one of those issues. This is President Clinton’s initiative. And as chairman, of the Subcommittee on Fisheries, Wildlife and Oceans, I am pleased to have been able to support a Clinton administration initiative. I would also just like to point out to the gentleman from California [Mr. MILLER], who used some fairly harsh phrases, phrases like capitulation, and phrases like weakening the law, envi- ronmental blackmail, dolphin unsafe tuna, deception, secret negotiations, lobbyists hired by Mexico, I would just say to my friend from California those characterizations of this bill are mis- leading, untrue, and patently false. There is not any truth to any of those assertions and that is why I rise in support of this rule and its granting of a modified closed rule to govern de- bate on H.R. 2823. I realize the Commit- tee on Resources has traditionally re- quested open rules, but in this case it provides for a total, including the rule, of 4 hours of debate. I believe it is cer- tainly a rule which merits our support. Let me just in closing say, Mr. Speaker, that this bill is supported by the following organizations. Listen to this. Greenpeace, the Center for Marine Conservation, the Environmental De- fense Fund, the World Wildlife Fund, the National Wildlife Federation, and the American Sports Fishing Associa- tion, to say nothing of the Clinton ad- ministration, and the AFL CIO. This is a good rule, it is a good bill, and I urge passage of the rule. Mr. BEILENSON. Mr. Speaker, I re- serve the balance of my time. Mr. GOSS. Mr. Speaker, I yield my- self such time as I may consume to say that I have two remaining speakers, which I will call on. I have admonished them that this is the rule and they are going to focus on the rule and the mer- its of the rule and how it might affect the substance. Once we get through that, I hope we can get to a quick oral vote. Mr. Speaker, I yield 5 minutes to the distinguished gentleman from Mary- land [Mr. GILCHREST], the author of this bill. Mr. GILCHRIST. Mr. Speaker, I thank the gentleman for yielding me this time. Mr. Speaker, I would like to say very quickly that I appreciate the Commit- tee on Rules understanding the nature of this international agreement to bring forth this type of rule that does allow for one opposing view, but the importance of the agreement under- scores the fact that we, as the basic au- thor of the agreement, the United States is the basic author of the agree- ment, we have not given up any sov- ereignty whatsoever. We have encour- aged other nations, other international nations to better manage the marine ecosystem. In response to the gentleman from California, I want to make three quick points. As far as his statement in ref- erence to this bill being, this legisla- tion being debated and formulated be- hind closed doors by people who are fa- natics about open trade, well, first, labor groups that are supporting this legislation, environmental groups that are supporting this legislation opposed NAFTA and GATT. This legislation was created in the full light of day at public hearings in this U.S. Congress. Legislation that was adopted that we are now dealing with was not created by extreme envi- ronmental groups without any back- ground in the marine biological sciences. We tapped the best scientists in this country to come up with the best management scheme so that we could not only, as an individual coun- try, the United States, manage our ma- rine ecosystem, but so that we pre- served it for generations to come and, by the way, ensure that dolphin deaths were down, hopefully, in a few years, to zero. We tapped marine biologists with some of the best background that this country has ever seen, and they are the ones that have come to this unanimous consensus that if we are going to deal on this tiny little planet, that by the year 2096 is going to have a population of 17 billion people, and we have 5.5 bil- lion people right now, we had better begin to learn how to get along with our neighbors. If we are going to deal with a much more complicated regime as global cli- mate change, and we have to deal with our neighbors and create international agreements, we had better understand that the best way to do that is not demagoging an issue but dealing with the matters that people are concerned about, such as dolphin safe tuna. We know that. We are going to ensure that those dolphin safe labels on every one of those tuna cans reflect that no dol- phins were killed or hurt. We are going to ensure that we as a Nation can work with other countries about environ- mental issues. b 1745 So I know that the gentleman from Florida [Mr. GOSS] says that this is a CONGRESSIONAL RECORD \u2014 HOUSEH9428 July 31, 1996 debate about the rule, and I support the rule 1,000 percent, and I would urge the entire Congress to support this rule. Mr. GOSS. Mr. Speaker, I yield 4 minutes to the distinguished gen- tleman from California [Mr. CUNNINGHAM], who is an author of this bill in its original version and was also, interestingly enough, the most fierce representative for his tuna fishermen of anyone I have ever met. Out of that has come this good legislation, and I congratulate him for that. Mr. CUMMINGHAM. Mr. Speaker, it was characterized that some fly-by- night groups got together and put this thing together. At the Inter-American Tropical Tuna Commission, the IATTC, a La Jolla, CA-based organization, 35 scientists got together and developed the most effective bycatch reduction program ever implemented. It saved dolphin and brought down the num- bers. The ”dolphin safe” label now used in U.S. markets takes a much higher ecological toll on marine life. Those who read their Congressional Monitor read that tuna fisherman can- not label their tuna ”dolphin safe.” That is not the case. Many American consumers still mistakenly believe that the Nation’s ”dolphin safe” poli- cies and product labels worked. U.S. fishermen have to have observers on board. None of these other Nations do. If the Studds-Miller agreement goes back, all of the other Nations that have signed aboard this agreement will no longer be required to have observ- ers. They are going to go on and kill dolphin. Why not? They can sell it abroad. This ties other Nations that the United States has no control over to a ”dolphin safe” policy. This is going to save dolphin. And why? Fish from sets of nets where 100 percent of encircled dolphins are re- leased unharmed will qualify as ”dol- phin safe.” No tuna will be labeled safe unless absolutely no dolphins are killed. It has to have 100 percent ver- ification on site as the fish are caught. Trying to comply with current law, the no-encirclement policy, some skip- pers have to fish immature tuna. That is killing our future. And that is why we have such broad support in this. It actually enhances the tuna and the crop for later years. The amendment being offered by the gentleman from Massachusetts [Mr. STUDDS] and the gentleman from Cali- fornia [Mr. MILLER] will destroy the most effective dolphin bycatch resolu- tion. That is why I support this rule, Vice President GORE, and who are the other people who have supported this? The AFL CIO. The gentleman from California [Mr. MILLER] said it is destroying our legal policy. If we look at President Clinton, Vice President GORE, five of the admin- istration groups and all five major en- vironmental groups support this be- cause it is going to help save dolphin; and we support that. And when we can come together as a body and throw out the extremes on both sides and arrive somewhere in the middle, work with industry, work with environmental groups, that is good. Why is the Panama agreement im- portant? Because it does tie those 12 nations to the same observation, the same requirements that the United States has to go through today. This Congress must support dolphin conservation, the fishermen who per- fected their fishing techniques, and the scientists who worked with them to achieve these many accomplishments. Mr. Speaker, I thank the gentleman from Maryland [Mr. GILCHREST] and the gentleman from Illinois [Mr. POR- TER] for their hard work in the face of a lot of lobbying from groups with mis- information. And I would like to thank them for sticking to principle and be- lieving in what they are trying to do. Mr. Speaker, I have a letter from the President of the United States support- ing this legislation, and I would like to submit it for the RECORD. Mr. BEILENSON. Mr. Speaker, I yield such time as he may consume to the gentleman from American Samoa [Mr. FALEOMAVAEGA]. (Mr. FALEOMAVAEGA asked and was given permission to revise and ex- tend his remarks.) Mr. FALEOMAVAEGA. Mr. Speaker, American Samoa is in the middle of the South Pacific Ocean, and fishing has been the life blood of Samoans for thousands of years. While today’s com- mercial canning operations bear little resemblance to my father’s subsistence fishing, we continue to use the same resource, the Pacific Ocean. The Samoans are also known as the voyagers, and countless generations ago, my forefathers, using Samoa and Tonga as a base, expanded the known world to include the island groups now known as French Polynesia, which in- cludes the Island of Tahiti, the Cook is- lands, the Hawaiian Islands, and many of the smaller islands in between. We learned well the ways of the ocean, in- cluding who our friends are. In my lifetime, I have had the oppor- tunity over the years to share the ex- periences of my ancestors. As a youth I traveled extensively on the waters of the Pacific in vessels voyaging between Tokelau and the Manu’s islands. I have even traveled on a purse seiner for 400 miles from Samoa to the southern Tongan Islands. I was also invited to sail on the famous Hokule’a, a histori- cal Polynesian sailing canoe built by native Hawaiians and constructed so as to be the same in size and configura- tion as the ancient sailing canoes. With Nainoa Thompson as our first Polyne- sian navigator in 200 years, we voyaged on the Hokule’a from the Island of Rangiroa in French Polynesia to Ha- waii, utilizing noninstrument naviga- tional methods, sailing by the move- ment of the stars, the ocean waves, and the flight of birds. During this voyage, I had the oppor- tunity to experience firsthand the interaction among those who live in the sea and those who live on and above it. I developed a greater appre- ciation for all living things, and con- firmed the gentle, helpful nature of dolphins. In fact, the experience I got from being at sea for weeks at a time is that the dolphins were always there, and I can share with my colleagues that the dolphins are just like humans. Dol- phins have been sacred to the Polyne- sians as far back as our legends re- count our history. Ancient Polynesians would rather starve than kill a dol- phin. When people are at sea under sail for weeks, dolphins are of tremendous psy- chological benefit. I have experienced lack of movement in the doldrums and the intense heat of the tropics, and I can understand how the dolphins would have given early Polynesian travelers a sense of hope. My voyage on the Hokule’a gave me an opportunity to contemplate that perhaps the reason God created dolphins was to provide psychological support for sailors at sea. Samoan legend and modern news re- porting all confirm today’s common knowledge about dolphins: They are of no threat to mankind, and have on oc- casions saved the lives of their fellow mammals. In return mankind has hunted them down, killing over 100,000 per year, not for sustenance, but be- cause tuna swim under them. When this was brought to the atten- tion of the U.S. public, we rose in out- rage and put enough economic pressure on the tuna industry to change its methods of fishing. And you have al- ready heard, dolphin deaths have dropped from over 100,000 per year to 3,300 in 1995. This is a significant achievement, and we consumers are to be commended. Congress did its part as well, placing an embargo on tuna that is caught by methods which harm dolphins, and by enacting legislation which permits the use of the all-familiar ”dolphin safe” label. Part of the underlying problem is that tuna in the eastern tropical Pa- cific Ocean swim under schools of dol- phin, and one easy, quick way to catch tuna in the eastern Pacific is to chase dolphins until they are too exhausted to swim any further. Then the dol- phins, and the tuna under them, are en- circled in a net. It is this chasing and netting procedure that causes the harm to the dolphins. In the western Pacific Ocean, the tuna do not always swim under schools of dolphin, and tuna are found through the use of modern techniques, includ- ing helicopters and sonar. By netting schools of tuna which are not swim- ming under dolphins, the problem is solved: Consumers get their canned tuna, and no dolphins are killed in the process. Now, under pressure from foreign governments, it is being proposed that the current statutory and regulatory system be changed. My colleagues will CONGRESSIONAL RECORD \u2014 HOUSE H9429July 31, 1996 recall that when we debated the imple- menting legislation for GATT and the proposed World Trade Organization, many of us pointed out the economic and policy difficulties which passage of the legislation would create. This is an example of the kind of problems we knew we would encounter under regu- lations of the World Trade Organiza- tion, or the WTO. Today we are being told that our dol- phin safe embargo is in violation of the WTO rules, and that if we do not re- move our embargo, the United States will be forced to pay significant fines. today we are being asked to forget a sound fisheries management policy that has reduced dolphin kills by 96 percent; we are being asked to forget the sound policy of using the attrac- tion of the consumer market in the United States to alter the behavior of nations less concerned with the preser- vation of life; and instead we are being asked to give in to the foreign inter- ests. H.R. 2823 is a bad idea because it re- wards those who have the worst record in the killing of dolphins. This bill is nothing more than giving in to black- mail. What the foreign governments are saying is that unless we lift the embargo on canned tuna, they will allow the slaughter of hundreds of thousands of dolphins to resume. If this isn’t blackmail\u2014I don’t know what is! Lifting the embargo constitutes only part of the bill. This will also per- petrate a fraud on the American consumer. H.R. 2823 changes the defini- tion of dolphin safe to allow chasing, injury, harassment, encirclement, and capture of dolphins as long as no dol- phins are observed dead in the nets. This definition allows tuna which have been caught by encirclement to be sold as dolphin safe in the U.S. market. This, Mr. Speaker, constitutes consumer fraud. This canneries in American Samoa were the first to announce they would no longer purchase tuna caught in as- sociation with dolphin. In large meas- ure, this decision resulted in a marked decrease in the killing of dolphins worldwide\u2014from a high of 115,000 in 1986 to less than 4,000 in 1995. Lifting the tuna embargo on Mexico and changing the definition of dolphin safe will confuse American consumers and undermine the integrity of an Amer- ican industry which is currently strug- gling to survive. Lifting the embargo will also encour- age what is left of the U.S. tuna indus- try to move to foreign countries in which businesses do not have to com- ply with any of the regulations that apply to U.S. companies located in our States and territories. U.S.-flagged purse seiners and tuna canning facili- ties in the United States must comply with the higher U.S. standards placed on U.S. companies by Federal law. Most foreign countries do not require the same high environmental and labor standards as the United States, and this works to the disadvantage of U.S. citizens and businesses because it puts pressure on U.S. companies to move overseas to be more competitive. There is proof that this movement to over- seas locations is occurring. As a matter of policy, we should be encouraging businesses to locate and expand in the United States, not move to foreign soil. In 1983, 28.3 million pounds of foreign canned tuna entered the U.S. market above the quota. By 1991, this amount had increased to 237.2 million pounds\u2014 a more than eight-fold increase. In 1991, canned tuna from U.S. plants ac- counted for approximately 50 percent of the U.S. market. By 1993, our mar- ket share had been reduced to approxi- mately 39 percent. Mr. Speaker, lifting the embargo on tuna caught by foreign nations will drive the last nail into the coffin of what remains of the U.S. tuna indus- try. Thailand, the Philippines, Indo- nesia, Taiwan, Sri Lanka, and other countries are already able to export their canned tuna to the United States without having to comply with any of the safety, health, or environmental regulations that apply to U.S. compa- nies. Adding additional countries to this list will have a devastating effect on the largest industry in American Samoa. It is believed that approxi- mately 80 percent of our private-sector employment is associated with the catching, cleaning, canning, and ship- ping of tuna. Needless to say, closure of these plants would devastate the econ- omy of American Samoa. Mr. Speaker, now is not the time to turn back the clock. Dolphin deaths worldwide have been reduced by 96 per- cent because of tough dolphin safe laws in the United States and Europe. The foreign businesses which are behind this harmful bill insist the U.S. change its law to unload their hard-to-market dolphin unsafe tuna in the lucrative U.S. dolphin safe market. This makes a mockery of the term dolphin safe. Unfortunately, the dolphins cannot be here to make a case for themselves. A few of us are here in the Chamber today to speak on their behalf, and I want to say on behalf of the millions of dolphins at risk, the day will come when mankind will be held accountable for its actions. This should be an easy vote. By vot- ing against this bill, you will be voting for the dolphins, for U.S. fishermen, for the U.S. boat owners, for the U.S. tuna canners, and against foreign interests. Let us not be governed by foreign in- terests. Save the dolphins and kill the Gilchrest legislation. Mr. Speaker, I submit the following for the RECORD: BOGUS CLAIMS ABOUT TUNA-DOLPHIN BILL DEAR COLLEAGUE: As the House prepares to debate H.R. 2823, the International Dolphin Act, you should know the truth behind sev- eral misimpressions frequently conveyed by supporters of the legislation. A careful ex- amination of the facts provides overwhelm- ing justification for the Studds ”Truth in Dolphin-Safe Labelling Amendment.” H.R. 2823 supporters say: ”This bill doesn’t allow more dolphins to be killed. It will re- duce the number of dolphin deaths.” But the fact is: H.R. 2823 allows the num- ber of dolphin deaths to rise by over 30 per- cent! H.R. 2823 supporters say: ”Our bill doesn’t allow dolphins to be hurt.” But the fact is: dolphins may be regularly encircled, harassed and injured under the provisions of the bill! H.R. 2823 supporters say: ”Environmental- ists support this bill.” The fact is: over 80 grassroots environ- mental organizations vigorously oppose this bill and support the Studds amendment. By contrast, only the five environmental groups that secretly negotiated this agreement with Mexico support the bill. H.R. 2823 supporters say: ”We must support this bill, and we can’t change this bill, be- cause we would renounce an international treaty and damage American credibility.” The fact is: no treaty has yet been nego- tiated, just an agreement to negotiate a treaty! This bill requires that we change U.S. law as a condition of negotiating the international agreement. The U.S. is the only country required to change its domestic consumer protection laws to conform to the pre-treaty agreement. Congress must not perpetuate a fraud on American consumers. ”Dolphin Safe” must mean that dolphins are not injured or killed in the hunt for tuna, which is what our con- stituents believe it means. H.R. 2823 allows an increase in dolphin deaths and the unlim- ited injuring and harassment of dolphins. That is not ”Dolphin Safe.” Support the Studds amendment to keep the ”Dolphin Safe” label honest for Amer- ican consumers. b 1800 Mr. GOSS. Mr. Speaker, I yield 1 minute to the gentleman from Mary- land [Mr. GILCHREST]. Mr. GILCHREST. Mr. Speaker, I would like to submit for the RECORD a letter supporting this legislation from the Maritime Trades Department of the AFL CIO, the Vice President of the United States that supports this legis- lation, and a list of scientists that had concern about the tuna-dolphin issue. I would like to submit these for the RECORD. Very quickly, the gentleman from American Samoa said we were pres- sured into this legislation by foreign powers. I want to say that we were pressured into this legislation by the marine ecosystem that needs our help in managing those scarce resources. The ancient Polynesians had values that we should reflect today. The world is much different today than it was during the ancient Polynesians’ coura- geous efforts across the high seas. We want to retain the values of the an- cient Polynesians. That is why we are trying to manage the ecosystem on an international basis. The last point, 10,000 to 40,000 dol- phins are killed now in the western tropical Pacific. We are trying to eliminate that down to zero with our legislation. Mr. Speaker, I include for the RECORD the correspondence to which I referred: CONGRESSIONAL RECORD \u2014 HOUSEH9430 July 31, 1996 [From the Maritime Trades Department, AFL CIO] H.R. 2823 WOULD GIVE U.S. TUNA INDUSTRY A LEVEL PLAYING FIELD Shortly the House of Representatives will take up H.R. 2823, the International Dolphin Conservation Program Act of 1996, legisla- tion designed to provide a level playing field for the American tuna fishing industry. The Maritime Trades Department, AFL CIO (MTD), representing affiliates that include fishermen and tuna cannery workers among their ranks, urges Congress to adopt this measure without amendment. American tuna fishermen have been dis- advantaged by amendments to the Marine Mammal Protection Act and Dolphin Protec- tion Consumer Information Act. Since 1992, they have been singularly barred from encir- cling dolphins during tuna harvesting. This restriction has had the paradoxical effect of forcing off the high seas American boats and crews, who were responsible for developing dolphin saving techniques in the harvesting process. As a result, many American-flag tuna vessels have been sold and placed under convenience registries with less experienced foreign crews that don’t share similar envi- ronmental concerns. Domestic tuna can- neries have been denied sufficient product to operate economically and have experienced periodic shutdowns. Enactment of H.R. 2823 would help gen- erate conditions conducive to increased par- ticipation of American tuna vessels in the Eastern Tropical Pacific. It also provides adequate supplies of quality tuna to enable domestic tuna canneries in California and Puerto Rico to operate full-time. In the proc- ess, hundreds of American fishing and relat- ed canning jobs will be restored and main- tained. The bill, introduced by Congressman Wayne Gilchrest, also provides strong envi- ronmental benefits that underscore longtime congressional interest in eliminating dolphin mortality resulting from tuna harvesting. H.R. 2823 accomplishes this goal through an international regime for protecting dolphins, including observers and other monitoring, verification and tracking of catch, research and enforcement. Moreover, the bill requires reductions in the allowable dolphin mortal- ity rate to a level that guarantees recovery of dolphin stocks. The act also calls for ship- board observers to be responsible for mon- itoring bycatch of all species, with the goal of reducing total bycatch. On balance, H.R. 2823 creates an environ- ment that will enhance opportunities for American tuna industry workers, while en- hancing international efforts to make tuna harvesting safe for dolphin and other fish species. The MTD urges your support for this legislation. THE VICE PRESIDENT, Washington, DC, June 3, 1996. Hon. WAYNE T. GILCHREST, House of Representatives, Washington, DC. DEAR REPRESENTATIVE GILCHREST: I am writing to thank you for your leadership on the International Dolphin Conservation Pro- gram Act, H.R. 2823. As you know, the Ad- ministration strongly supports this legisla- tion, which is essential to the protection of dolphins and other marine life in the Eastern Tropical Pacific. In recent years, we have reduced dolphin mortality in the Eastern Tropical Pacific tuna fishery far below historic levels. Your legislation will codify an international agreement to lock these gains in place, fur- ther reduce dolphin mortality, and protect other marine life in the region. This agree- ment was signed last year by the United States and 11 other nations, but will not take effect unless your legislation is enacted into law. As you know, H.R. 2823 is supported by major environmental groups, including Greenpeace, the World Wildlife Fund, the National Wildlife Federation, the Center for Marine Conservation, and the Environmental Defense Fund. The legislation is also sup- ported by the U.S. fishing industry, which has been barred from the Eastern Tropical Pacific tuna fishery. Opponents of this legislation promote al- ternative fishing methods, such as ”log fish- ing” and ”school fishing,” but these are en- vironmentally unsound. These fishing meth- ods involve unacceptably high by-catch of juvenile tunas, billfish, sharks, endangered sea turtles and other species, and pose long- term threats to the marine ecosystem. I urge your colleagues to support this leg- islation. Passage of this legislation this ses- sion is integral to ensure implementation of an important international agreement that protects dolphins and other marine life in the Eastern Tropical Pacific. Sincerely, AL GORE. LETTER FROM CONCERNED SCIENTISTS ON THE TUNA\/DOLPHIN PROBLEM We the undersigned scientists recognize the achievements made over the last twenty years to reduce dolphin mortality in the Eastern Tropical Pacific purse seine fishery for yellowfin tuna as well as efforts by U.S. and international scientists to improve the data and estimates of abundance and recruit- ment for dolphin stocks incidentally taken in this fishery. Specifically, dolphin mortal- ity in this fishery has declined dramatically from 423,678 in 1972 to 4,095 in 1994. We support efforts domestically and inter- nationally to continue progress to reduce and eliminate dolphin mortality in this fish- ery. Further, we strongly believe that sound resource management and conservation de- pend upon reliable science and take into con- sideration the conservation and management of the ecosystem as a whole. The Declaration of Panama signed, on October 4, by the Unit- ed States and eleven other nations takes sig- nificant steps in this regard. The scientific merits of the Panama Declaration are nota- ble. First, the Panama Declaration establishes conservative species\/stock specific annual dolphin mortality limits at 0.2% to 0.1% of the minimum population estimate (Nmin) up to 2001 and less than 0.1% of Nmin thereafter. One way to approach the question of how much mortality dolphin populations can sus- tain and remain stable or increase is to ex- press harvest as a proportion of net recruit- ment (i.e. as a proportion of the number of animals added to the population each year minus those that died). Recent estimates of recruitment are 2 6% per year. The Panama Declaration’s annual species\/stock specific mortality limits are set such a low level as to probably result in substantial increases in dolphin populations in the Eastern Pacific Ocean. Second, the Panama Declaration estab- lishes for the first time measures aimed at protecting other marine life caught inciden- tally in the eastern pacific tuna fishery, and represents an important first step towards efforts to reduce bycatch in commercial fish- eries and sound ecosystem management. Third, the Panama Declaration places greater emphasis on science-based manage- ment and conservation of tuna, dolphin, and other marine life in the Eastern Tropical Pa- cific through provisions that strengthen the existing scientific review process; promotes greater interaction between the scientific communities of the nations participating in the eastern Pacific tuna fishery; and places greater reliance on scientific data to inform the conservation and management of the fishery and the incidental take of dolphins and marine life in the fishery. As scientists, we fully support these sci- entific principles which provide the basis for the Panama Declaration, and believe that they represent a scientifically sound ap- proach to the management of the tuna fish- ery and conservation of dolphins. Sincerely, Ken Norris, Ph.D., Professor Emeritus, University of California Santa Cruz. John H. Prescott, Director Emeritus, New England Aquarium, former Chair, Commit- tee of Scientific Advisors, U.S. Marine Mam- mal Commission. Lloyd F. Lowry, Ph.D., Marine Mammal Scientist, Alaska Department of Fish and Game. William E. Evans, Ph.D., President of the Texas Institute of Oceanography, Professor of Wildlife and Fishery of Sciences, Texas A & M University. David Challinor, Ph.D., Science Advisor National Zoo, Smithsonian Institution. J. Lawrence Dunn, VMD, Staff Veterinar- ian, Mystic Marinelife Aquarium. Daniel P. Costa, Ph.D., Professor of Biol- ogy, University of California, Santa Cruz. Dayton L. Alverson, Ph.D., Natural Re- source Consultants. Terry Samansky, Director of Marine Mam- mals, Marine World Africa USA. Edwin S. Skoch, Professor of Biology, John Carroll University, Ecotoxicology & Marine Animal Research Lab. Brad Fenwick, Professor, Kansas State University, College of Veterinary Medicine. Wendy Blanshard, Veterinarian, Sea World Enterprises, Surfer’s Paradise, Australia. Sarah Lister, DVM, Johns Hopkins Univer- sity. Kathryn J. Frost, Ph.D., Marine Mammal Scientist, Alaska Department of Fish and Game. Graham Worthy, Ph.D., Professor of Ma- rine Biology, Texas A & M University. George Woodwell, Ph.D., Past President, Ecological Society of America, Woods Hole Research Center. David St. Aubin, Ph.D., Researcher, Mystic Marinelife Aquarium. Jeff Boehm, Vice President Research and Veterinarian Services, Shedd Aquarium. William Y. Brown, Ph.D., Researcher, Hagler Bailly. Sarah Paynter, Ph.D., Lecturer, Johns Hopkins University and National Aquarium in Baltimore. Gwen Griffith, DVM, President, Alliance of Veterinarians for the Environment. Cecile Gaspar, DVM, Dolphin Quest, Moorea-French Polynesia. Scott Nachbar, DVM, Aquarium of Niagra Falls. Mr. BEILENSON. Mr. Speaker, I yield 2 minutes to the gentleman from American Samoa [Mr. FALEOMAVAEGA]. Mr. FALEOMAVAEGA. Mr. Speaker, I appreciate the sentiments expressed by my good friend from Maryland con- cerning the legislation. But I think as a point of observation that I would like to share with the gentleman about the movement of tuna, not only as a mi- gratory fish, but the fact that the way tuna is being caught in the eastern Pa- cific is quite different than the prob- lems that we face in the western Pa- cific, the problems we have along the coastlines, the Latin American coun- tries where the tuna tend to come up closer to the dolphins. CONGRESSIONAL RECORD \u2014 HOUSE H9431July 31, 1996 I do not know if it is because of the current or the warmth of the water, whatever it is, that causes this dif- ference in how the tuna survives when it moves, quite different than from the way that we catch tuna in the western Pacific. The fact is that the tuna tends to go lower in depth and so that when we do the purse seining, the dolphins are not as much affected as opposed to the problems we face in the eastern Pa- cific. This is the predicament that we find ourselves under. The fact that because of the differences in temperature, whatever it is, that causes the tuna, the eastern Pacific tuna to go up a lit- tle closer to the dolphins so we obvi- ously end up with a very difficult prob- lem there, where our friends from Mex- ico and other countries that have the tendency, when they do catch the tuna under the dolphins, the dolphins defi- nitely are more affected by it as com- pared to the problems that we have in the western Pacific. I say to my good friend while I can appreciate his observations of how my forefathers have given a real sense of appreciation not only for the ocean en- vironment, but the fact that here one of the most beautiful mammals in the world that we see and putting them on a sacrificial altar for the name of expe- diency and saying that tuna is more important than dolphins, I submit to the gentleman from Maryland, I could not disagree with him more on this issue. Mr. GILCHREST. Mr. Speaker, will the gentleman yield? Mr. FALEOMAVAEGA. I yield to the gentleman from Maryland. Mr. GILCHREST. Mr. Speaker, I un- derstand the nature of the difference between the way in which tuna and dolphins act in the eastern tropical Pa- cific. We have reduced the dolphin kill in the eastern tropical Pacific to a lit- tle over 3000. We have not reduced the kill of dolphins in the western tropical Pacific where we have no management ability. Mr. GOSS. Mr. Speaker, I have no further requests for time, and I reserve the balance of my time. Mr. BEILENSON. Mr. Speaker, I yield 4 minutes to the gentleman from New Mexico [Mr. RICHARDSON]. (Mr. RICHARDSON asked and was given permission to revise and extend his remarks.) Mr. RICHARDSON. Mr. speaker, the Gilchrest approach offers the dolphin a better chance than the alternatives. Let me say that the Studds approach is also in my judgment a good alter- native, but this one is much better be- cause we would not be going it alone. Internationally we would be supported by many countries using the approach of WAYNE GILCHREST. Mr. Speaker, the argument is very simple. If fleets do not receive some re- ward for their changed behavior soon, they will revert to their old and easier ways of fishing. Dolphin casualties are going to rise. Under this proposal, we are going to keep international mon- itoring programs all in effect. This leg- islation is critical for both the environ- mental and international communities. I hope my colleagues will support this bill that is fair, is necessary. It is mod- erate and has broad support. Mr. Speaker, who can be greener than AL GORE, the Vice President of the United States who supports this bill? This bill is the next step in the proc- ess of minimizing the impact of tuna fishing on dolphin populations in the marine ecosystem. In 1972, over 400,000 dolphins died in tuna nets. Last year that number was just over 3,000. The Saxton-Gilchrest bill, of which I am a cosponsor, locks into a place a 99 per- cent improvement in environmental protection. Dolphin protection in international waters cannot be carried out by the United States alone. If we go the alter- native route, everyone will say, there goes the United States, on its own again. We have to rely upon commit- ments of several fishing nations to co- operate with us to protect dolphins. With Mexico we have worked very well on this issue. There is a lot of progress. We cannot risk losing this important international coalition. If we do, the United States runs the risk of never being a leader in dolphin protection. then what would happen would be anar- chy and more whaling deaths and there would be a whole upsurge of commer- cialism rather than environmentalism dictating what we should do. The changes promoted by this bill will give incentives to make tuna fish- ing less wasteful of nontarget fish and as safe as ever for dolphins. This bill guarantees through the best observer program in the world that every time a net is deployed only tuna that is truly dolphin safe will receive this label. This dolphin-safe certification would be given to any haul of tuna in which no dolphins were killed or seriously in- jured. Although there are reasonable con- cerns from my colleagues that dolphins will be stressed by this fishing tech- nique, this bill that we are supporting, the Saxton-Gilchrest bill, calls for a study on dolphin stress so that we can finally make some solid conclusions about this issue. The United States must continue to hold the firm line on compliance with sound fishing. This is why this bill will use the same tough trade measures that push countries to improve their fishing methods in the first place. It is important that we implement the Panama Declaration to reward the efforts taken by our trading partners. if we fail to implement this agreement, there is reason to fear that our trading partners will return to their old ways of fishing. If this happens, dolphin mor- tality levels will rise. This bill again is supported by the Clinton administration, National Wild- life Federation, Environmental Defense Fund, World Wildlife Fund, Greenpeace, and 12 nations have agreed to an unprecedented level of marine life protection. I think this is a good bill. It is a good, appropriate step in the interest of sustainable fishing, dol- phin protection and the marine eco- system. I think it has already been stressed that the maritime trade unions of the AFL CIO support this bill. They have issued a statement. Mr. Speaker, let us support this bill, but let us say that the approach that the gentleman from Massachusetts [Mr. STUDDS] has proposed I think is a good approach, but not hardly as good as this one that we are pursuing today. Let us give bipartisanism and environ- mental protection a very strong vote. Mr. BEILENSON. Mr. Speaker, I yield back the balance of my time. Mr. GOSS. Mr. Speaker, I yield my- self such time as I may consume. I would like to point out that this has been an almost full hour debate on the rule. I think we have come to the conclusion that this is a very good rule and it is going to lead to some very fine debate, when we get to the debate on this subject, which we are all look- ing forward to. I am personally pleased that we have made such great progress in dolphin protection. Six years ago, when there was a merchant marine and fisheries committee, there was some disagree- ment that led to a better solution. Fur- ther disagreements have led to better solutions. This shows that democracy works, this Congress works, and I am proud to be part of it. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution. The previous question was ordered. The resolution was agreed to. A motion to reconsider was laid on the table. The SPEAKER pro tempore (Mr. EWING). Pursuant to House Resolution 489 and rule XXIII, the Chair declares the House in the Committee of the Whole House on the State of the Union for consideration of the bill, H.R. 2823. b 1811 IN THE COMMITTEE OF THE WHOLE Accordingly the House resolved itself into the Committee of the Whole House on the State of the Union for the con- sideration of the bill (H.R. 2823) to amend the Marine Mammal Protection Act of 1972 to support the International Dolphin Conservation Program in the eastern tropical Pacific Ocean, and for other purposes, with Mr. COLLINS of Georgia in the chair. The Clerk read the title of the bill. The CHAIRMAN. Pursuant to the rule, the bill is considered as having been read the first time. Under the rule, the gentleman from New Jersey [Mr. SAXTON] and the gen- tleman from Massachusetts [Mr. STUDDS] each will control 30 minutes. The Chair recognizes the gentleman from New Jersey [Mr. SAXTON]. Mr. SAXTON. Mr. Chairman, I yield myself such time as I may consume. CONGRESSIONAL RECORD \u2014 HOUSEH9432 July 31, 1996 Mr. Chairman, I thank the Chair for making in order the consideration of this bill, H.R. 2823, which would codify the Panama Declaration. This bill has been the subject of scrutiny by several committees: The Committee on Re- sources and, of course, our Subcommit- tee on Fisheries, Wildlife and Oceans, the Committee on Ways and Means, as well as the Committee on Commerce. Our distinguished chairman, the gen- tleman from Alaska, DON YOUNG, and the gentleman from Massachusetts, GERRY STUDDS, have both expressed their reluctance to reopen the dolphin- safe tuna issue. They remember the rhetorical battle of the merchant ma- rine and fisheries committee on which we all served, and I remember that bat- tle as well. The Gilchrest bill will lead 12 nations that currently fish in the eastern tropi- cal Pacific or the ETC to a binding agreement to conserve and protect the entire ecosystem, including dolphins. The alternative is an increase in school and log sets which result in kill- ing sharks, endangered sea turtles, bill- fish, and baby tunas. These pictures exemplify what it is that we are trying to protect. We have endangered Olive Ridley turtles. We have sharks. We have wahoo and bill- fish and, of course, juvenile or baby tuna. These are all species that we are trying to protect pursuant to this act. Opponents of the Gilchrest bill will make several arguments. First, they will argue that the change in the sta- tus quo will lead to the wholesale slaughter of dolphins in the eastern tropical Pacific. We will show that that is not true. b 1815 Second, Mr. Chairman, opponents of the Gilchrest bill will also argue that the status quo will serve the purpose of saving the dolphins. We believe that is not true. Opponents will also claim that this bill will somehow undermine NAFTA, which we also believe is un- true. So let me just start with the first issue. The first issue with regard to the Gilchrest bill will be that it is a change in the status quo and it will lead to the wholesale slaughter of dolphins. To me this is a disingenuous argument. In fact, other nations are currently setting on dolphins; in other words, fishing for tuna under dolphins, in the eastern tropical Pacific, as the regular tuna harvesting method. That is going on today, and there is a large-scale slaughter of dolphins today by other countries. These fishermen have refined their harvesting techniques so that a sizable reduction, however, in dolphin mortal- ity has resulted from hundreds of thou- sands of dolphin deaths annually to just about 4,500 dolphin deaths today. Scientists say that this is about 4,500 out of a total of more than 9 million dolphin deaths. These 11 nations, Belize, Columbia, Costa Rica, Ecuador, France, Hon- duras, Mexico, Panama, Spain, Vanuatu, and Venezuela have all nego- tiated with the Clinton administration in good faith to set up the framework for a binding agreement to cap dolphin mortality in the eastern tropical Pa- cific. Mr. Chairman, the result of these ne- gotiations is the Panama Declaration, and the enactment of this bill is the enactment of our promises under that declaration. The linchpin to the Pan- ama Declaration, on which neither our State Department nor other nations will compromise, is the change in the dolphin safe definition. Without this change, the Panama Declaration, the international treaty, falls apart and so does our chance for a binding inter- national marine conservation agree- ment to protect dolphins and other ma- rine life. The opponents also will argue that the Gilchrest bill, that the status quo will better serve the same purpose. Ac- tually that is false. The status quo will no longer exist if the Panama Declara- tion is scuttled, and other countries will revert to their old practices. The current agreement under which these nations, known as the LaJolla Agreement, is 100 percent voluntary on the part of all nations. These nations have shown that they will walk away from the voluntary conservation meas- ures outlined in LaJolla without this agreement. As a matter of fact, in fairness to the opponents, I delayed the subcommittee markup to ensure that all members had an opportunity to express their concerns and have them addressed. The international community expressed its determined disagreement, and I had to personally spend hours meeting with representatives of Latin American countries who threatened to walk away from this process. The gentleman from Massachusetts [Mr. STUDDS] has an amendment that he will offer at the appropriate time. When we begin debate on the Studds amendment, I will discuss in detail why it will cause the demise of many more dolphins in the eastern tropical Pacific, also known as the ETP, than currently occurs. Third, as I pointed out, the oppo- nents will also suggest that this some- how is related to NAFTA. They will further claim that if this bill is ap- proved, the United States is telling the world that we will weaken our own en- vironmental laws to avoid violating NAFTA. I voted against NAFTA, and I can assure my colleagues that this bill is not related to NAFTA at all. That assertion is way off the mark. We are changing the law, yes; but we are not, we are not in any way, weakening it. We are strengthening it by enticing other countries already setting on dol- phins or fishing on dolphins to partici- pate in this binding international agreement that will reduce dolphin mortality even further. Let me just repeat. A binding agree- ment will reduce dolphin mortality even further. Remember the current agreement is voluntary, not binding, and these countries can walk away from it at any time. The NAFTA agree- ment does not wash, the NAFTA argu- ment does not wash, and neither does the assertion that we are weakening our environmental laws. I cannot fath- om how a binding agreement to reduce dolphin mortalities in the ETP can be portrayed as anything, anything but a stunning environmental accomplish- ment. At the close of general debate I will be offering a managers amendment that, like the Gilchrest bill, is whole- heartedly supported by the Clinton ad- ministration. It is also supported by Green Peace, the American Tuna Own- ers Association, the Center for Marine Conservation, the Environmental De- fense Fund, the World Wildlife Fund, the National Wildlife Federation, the Seafarers International Union, and the American Sportfishing Association. I will explain the substitute further at that time and urge all Members to do the right thing for all marine crea- tures in the eastern tropical Pacific and to vote yes. Mr. Chairman, I reserve the balance of my time. Mr. MILLER of California. Mr. Chair- man, I yield 3 minutes to the gen- tleman from New Jersey [Mr. PALLONE]. Mr. PALLONE. Mr. Chairman, in an effort to make concessions to foreign fishing interests, the Clinton adminis- tration and other proponents of H.R. 2823 are tampering with the standards set under the authority of one of our most fundamental and successful envi- ronmental laws, the Marine Mammal Protection Act of 1972. This bill per- mits the number of dolphin deaths to actually increase up to 5,000 annually and has no provisions, in my opinion, to enforce this limit or specify how this number should decrease over time. I believe it leaves a gaping loophole, with no limitations on injuring or harassing dolphins so long as there are no observed mortalities. I think also the American people have the right to know that this bill, in my opinion, has not been subject to proper debate and consideration. I know that my colleague from New Jer- sey talked about the action that took place in the Committee on Resources, but the bill was not referred to the Committee on Commerce which has in the past considered numerous bills re- lating to the labeling of tuna. Also, I am skeptical that adequate observer coverage can occur on a set by set basis as proposed by this bill, much less that a single observer could monitor nets that are up to a mile long and a hun- dred feet deep for potential dolphin fa- talities. Proponents are suggesting that bycatch is an important consideration, and I strongly support the need to ad- dress bycatch issues for tuna fishing, but by means other than a shifting of fishing effort to practices which place CONGRESSIONAL RECORD \u2014 HOUSE H9433July 31, 1996 dolphins at risk. This bill provides no alternative to dolphin sets with a fail- ure to ensure that bycatch mitigation research is done. Setting on logs and debris under which tuna aggregate will continue as two other major commer- cial tuna species, the skipjack and big- eye tunas are traditionally caught under logs and debris and are not typi- cally found with dolphins. Setting on dolphins is not a real solution to the bycatch issue, and H.R. 2823 does ad- dress this. This bill is yet another rollback of environmentalist legislation, and the threat this bill poses to dolphins is very real in my opinion. Mr. SAXTON. Mr. Chairman, I yield such time as he may consume to the gentleman from Maryland [Mr. GILCHREST], the author of the bill. Mr. GILCHREST. Mr. Chairman, I thank the gentleman for yielding this time to me. What I would like to explain to the Members that will be voting here in the next hour or so is that we have a piece of legislation that has been put together in the light of day by numer- ous interested parties, by the fisher- men who want to catch their fair share of fish, by scientists who understand the complexity of the nature of the ma- rine ecosystem, by elected officials in the United States that want to ensure jobs and ensure environmental quality and ensure the sovereignty of the Unit- ed States. This bill has absolutely nothing to do with reneging on our en- vironmental policies, this bill has nothing to do with violating the label so consumers understand that they are eating dolphin safe tuna. Mr. Chairman, this is a bill that puts the best of American together, to join us with 11 other nations to understand the nature of limited resources and a bulging population. This bill under- stands the nature of trying to get international agreement on sensitive environmental issues. This bill is a first step to understand the nature of complex environmental issues such as global warming that we will have to sit down at the table and find agreements on. Now the issue here is encirclement, the issue here is encirclement that deals with purse seine nets, and yes, those purse seine nets since the 1950’s have killed hundreds and thousands of dolphins in the eastern tropical Pa- cific, and yes, the United States placed an embargo on that type of encircle- ment, the United States placed a gear restriction so that we would not im- port tuna where dolphins were killed. But there are still not only dolphins being killed in the pursuit of tuna, there are tens of thousands of sharks as bycatch. There are immature tuna being caught in other methods that will never stand the chance to spawn, and so the tuna population will con- tinue to diminish. So we have gotten together in the light of day in LaJolla, CA some years ago to try to figure out, we, as intel- ligent human beings, trying to figure out how we can manage our resources, feed the world and sustain the environ- mental marine ecosystem for genera- tions to come. Now a speaker earlier talked about the Polynesians and their values for life, both human and animal, fish spe- cies, mammals and so on. Those same values of respecting life on planet Earth are an inherent part of this piece of legislation, and so encircling dol- phins the way it used to be, encircling tuna the way it used to be, killed tens of thousands of dolphins. In this new method, which is not an end-all to this scheme of things, we are not going to adopt this legislation and have this agreement with 12 other countries and not continue to pursue to understand the nature of how to catch tuna without killing one dolphin. We are continuing to study this issue. We encircle the dolphins. I say to my colleagues, Now imagine a boat with a circle around the back of that boat, and you have encircled the tuna fish that are swimming under- neath these dolphins. The boat stops with a licensed observer on board, and then the back of the net drops down. Into that circle, into that net, go mem- bers of that tuna boat to chase the dol- phins and the other marine mammals out of that net, and the net drops down below the surface of the water. And until all the dolphins are out of the net, that net does not get pulled and the tuna do not get processed on board ship. This is not a perfect solution. There is no utopia on planet Earth. We must manage our limited resources with the technology that is available to us at this moment, and in my judgment the technology to reduce dolphin deaths, the technology to ensure the honesty of labeling dolphin safe tuna is this leg- islation. So I will encourage my colleagues, as painful as it is to the gentleman from Massachusetts and the gentleman from California, and I very rarely vote against these two gentlemen when it comes to environmental issues, but I would encourage my colleagues to vote against the Miller-Studds amendment and vote for this legislation. Mr. MILLER of California. Mr. Chair- man, I yield 3 minutes to the gen- tleman from American Samoa [Mr. FALEOMAVAEGA]. Mr. FALEOMAVAEGA. Mr. Chair- man, at some point in time in this de- bate the gentleman from Massachu- setts, I know, will be offering an amendment to the pending legislation, and for that reason I rise in support of the amendment of the gentleman from Massachusetts [Mr. STUDDS] which will continue the meaningful standard of current Federal law on the use of the dolphin safe label. Mr. Chairman, it was through a pub- lic outcry beginning over a decade ago that Congress responded in 1990 with the dolphin safe label we see on all tuna sold in the United States. Amer- ican consumers wanted to purchase canned tuna, but they were not willing to do so if it meant killing over 100,000 dolphins per year. It was through a grass roots belief that dolphins should be protected that the dolphin safe label was born. b 1830 Throughout this period, Mr. Chair- man, Mexican fishermen have wanted to catch tuna by encircling dolphins and selling it to consumers in the Unit- ed States. The Gilchrest bill would give foreign interests greater access to our markets and remove the incentives to the tuna industry to stay in the United States. That is not good policy for any- one but the foreign fishing fleets and foreign canners. Mr. Chairman, today, in a misplaced effort to comply with the foreign trade agreement, supporters of this bill pro- pose changing the definition of dol- phin-safe so dolphins can be chased and encircled in the catching of tuna, and the tuna can still be sold in the United States under the dolphin-safe label. Mr. Chairman, I am opposed to this legislation and, quite frankly, even with the Studds amendment, but I do not believe that the bill adequately protects the dolphin stocks. Without the Studds amendment, Mr. Chairman, the consumers will not have that choice because they will not be able to tell dolphin-safe tuna from dolphin-un- safe tuna. H.R. 2823 is not the solution, Mr. Chairman, to the dolphin issue I would choose, but the Studds amendment is the tolerable option. I urge my col- leagues to vote for the Studds amend- ment when it is brought before the floor for consideration. Mr. SAXTON. Mr. Chairman, I yield 3 minutes to the gentleman from New York [Mr. BOEHLERT]. (Mr. BOEHLERT asked and was given permission to revise and extend his re- marks.) Mr. BOEHLERT. Mr. Chairman, I rise in strong support of this bill. I wish to congratulate the gentleman from Maryland [Mr. GILCHREST] for all his hard work on it, for the thoroughness with which he took this challenging as- signment on, for the openness of the process, for the methodical manner in which this final product was developed. WAYNE GILCHREST is a class act. The choice we face in this debate is between ideological purity and prac- tical impact. The purists want to push an approach to fishing in which no dol- phins will ever become entangled in tuna nets. That sounds good, and we would all feel good voting for it, having demonstrated our purity. There is only one problem: that is, the practical im- pact that vote would have. If we vote down this bill or amend it, we walk away from an international agreement that has been enormously successful in saving dolphins. Dolphin deaths have dropped from over 400,000 in the 1970’s to less than 4,000 last year. The agreement will continue to move CONGRESSIONAL RECORD \u2014 HOUSEH9434 July 31, 1996 us toward reducing mortality to zero. The agreement would fall apart. Other countries would go back to their old means of fishing, and dolphin mortal- ity would increase again if we voted other than for the Gilchrest bill. Not only that, bycatch of other spe- cies such as sea turtles would increase. So our choice is to vote for this bill and accept a small and declining level of dolphin mortality, or to pretend to purity and cause the death of dolphins and other sea creatures. The gentleman from Maryland [Mr. GILCHREST], as one would expect, has taken the moderate approach. It has won the support of even such immod- erate groups as Greenpeace. Some of my friends are for this bill. People ask me, what about your friends? I point out some of my friends are for this bill, and some of my friends are not so enthusiastic. But let me tell the Members about my friends that are for this bill: The National Wildlife Fed- eration, the Environmental Defense Fund, Greenpeace, World Wildlife Fund, Center for Marine Conservation, our good friends in the maritime trades department of the AFL CIO, the Amer- ican Sport Fishing Association, the American Tuna Boat Owners. The Washington Post twice has editorial- ized in support of this Gilchrest bill, and so has the New York Times and the Houston Chronicle. Seasoned observers who care deeply about this process have all examined very carefully the Gilchrest proposal, and they have urged us, the Represent- atives of the American people, to vote for it. I proudly identify with my col- league, the gentleman from Maryland [Mr. GILCHREST], and I enthusiastically support this bill and urge my col- leagues to do likewise. Mr. MILLER of California. Mr. Chair- man, I yield myself such time as I may consume. Mr. Chairman, I would like to re- spond to a couple of things that have been said here. The suggestion is that somehow, if we engage the legislation as it is currently written, that some- how that will lead to a reduction in the dolphin death rate from what we have today. The fact of the matter is the legislation allows for almost a 30 per- cent increase in dolphin deaths under this bill. It also does not address and in fact would allow for the first time, under the guise of being dolphin-safe, the har- assment, the hunting, capture, and killing, the attempt to harass, hunt, capture, or kill, marine mammals. We would not allow this, and this is not al- lowed for any other mammal, any other kind of fisheries under the law. But the fact of the matter is that is what happens. What we do know, and one of the rea- sons that we have this legislation, is because the encirclement, the harassing, and the stress on the dol- phins has taken a toll on them. Yet somehow we condone that, and we sug- gest that that is in fact dolphin-safe, when in fact all the scientists agreed when we wrote this law that that was not dolphin-safe. In fact, Greenpeace, which is supporting the Gilchrest ap- proach here, I believe has never changed their position, that there should be an end to the encirclement of dolphins. But in fact, that is sanc- tioned under this legislation. My colleagues keep referring to their friends who are supporting this legisla- tion. I would like to point out that the Sierra Club, the American Society for the Prevention of Cruelty to Animals, the Earth Island Institute, the Humane Society of the United States, Friends of the Earth, the International Broth- erhood of Teamsters, the American Hu- mane Association, those organizations that have dedicated their entire exist- ence to the humane treatment of ani- mals, to ending the slaughter of ani- mals, mammals and wildlife, oppose this legislation. Again, by denigrating the label, by suggesting that these activities will be allowed, that the increased killing of dolphins will be allowed, and somehow trying to present to the same Amer- ican consumer that has now been mak- ing a decision for many, many years that when they buy a can of tuna that is sold in the United States, that in fact the label of dolphin-safe means dolphin-safe, now we are going to pull a trick on them. We are going to pull a trick. We are going to tell them that dolphin-safe means dolphin-safe, but it does not. It means we can encircle, and we can harass, and we can maim, and we can injure, and we can in fact in- crease the number of dolphins that are killed. The current system, with all of these bandits out there fishing the way they want, the current system has dramati- cally reduced the measured kill in dol- phins some 95, 97 percent. Yet we are told now under the new regime what we have to do is allow these people to kill more dolphins. Then we are going to kid the school- children that led the crusade in this country for dolphin-safe tuna, for the consumers, for the packaging compa- nies that complied with this and made a decision, made an investment, we are going to con all of them that now somehow this legislation is really dol- phin-safe and better for the dolphins, in spite of the language in the legisla- tion that allows the dolphins to be put under much more stress, to be injured, and to be maimed, in direct contradic- tion of the Marine Mammal Protection Act. These are exactly the acts that are prohibited and for which these mam- mals are protected, but in the case of the dolphin, they will no longer have that protection. I am sure my col- leagues on the other side, the col- leagues supporting this legislation, would not suggest that we do away with that protection for marine mam- mals. But somehow, because of the in- sistence of Mexico that they need to do this, and I do not see Mexico volunteer- ing not to take juvenile tuna in their coastal waters. They did not put that in this agreement. The only thing we put in this agreement is changing how American consumers are going to be able to depend upon a label and what this label means. My colleagues say we have to change the method in which we fish for dol- phins because it has an impact on juve- nile tuna. But most of the juvenile tuna is taken within the coastal waters of Mexico, and it is exempt from this agreement. Our trade negotiators, our State De- partment, constantly continue to sell the American market cheap. In one agreement after another, we con- stantly give away the integrity of the market, and, in this case, the integrity of our consumer protection, the integ- rity of our environmental laws, the in- tegrity of our workplace, the integrity of the jobs for our workers. Somehow we do not appreciate the real value of this market. The reason they are banging on the door for this agreement, and this is not a treaty, as people on the other side have sug- gested. This is about an agreement to go forward to negotiations for an agreement. But what we have is Amer- ica unilaterally agreeing to change its basic consumer protection laws. Mexico, however, is free to continue to take all the juvenile tuna they want, probably far in excess of any- thing that will be dealt with by the current system. So I would just hope that our colleagues would understand that there are a lot of suggestions about what this bill will do, but the language of the bill itself simply is contradictory to those representations. Mr. Chairman, I reserve the balance of my time. Mr. SAXTON. Mr. Chairman, I yield 2 minutes to the gentleman from Florida [Mr. GIBBONS]. Mr. GIBBONS. Mr. Chairman, I love the dolphin. I am privileged to, when I go home in Florida, wake up every morning and watch the dolphin frolic in my front yard. Fortunately, com- mercial fishing in my area of the world does not include the capture or the harassment of dolphin, so maybe I should stay out of this fight. But I do love the species, and I think it is important that we begin to get an international agreement on the preser- vation of that species. I wish there were a perfect way to solve this prob- lem, but there is not. I think the Gilchrest bill is a realistic bill and does the proper type of conservation of this particular species. There is, as I say, with the tech- nology that we have now and the knowledge that we have now, and the fact that we do not have an inter- national agreement on the preserva- tion of the dolphin, it leads me to be- lieve that the Gilchrest bill goes in the right direction. Quite often we strike out in our attempts to do good by tak- ing unilateral action. I believe we can do even better if we take international CONGRESSIONAL RECORD \u2014 HOUSE H9435July 31, 1996 action, because these are international waters we are dealing with. This is a migratory species that moves about quite rapidly. I think, attacking this conservation matter, and the fact that such people as Greenpeace, whose credentials are beyond dispute as far as the species is concerned, are endorsing it, I think it is the wisest action to take. I say that, having great respect for the gentleman from Massachusetts [Mr. STUDDS] and the gentleman from California [Mr. MILLER] and their position. But I find that it is best in my judgment to go for the Gilchrest proposal. Mr. SAXTON. Mr. Chairman, I yield 4 minutes to the gentleman from Califor- nia [Mr. CUNNINGHAM]. Mr. CUNNINGHAM. Mr. Chairman, why support this bill? First of all, the United States has fallen under an en- cumbrance of having to have observers on a boat. This is in light of they have actually reduced the number of thou- sands of dolphins killed down to 4,000. My colleague, the gentleman from California, says first of all the number increased 20 percent. Then just a minute ago he said it increased 30 per- cent, which we need to know what it is. I can tell the Members what it is. It goes from 4,000 to 5,000. Let me tell the Members why. Currently, currently the other na- tions that are involved or have the re- strictions on them can go out and kill thousands of dolphin at will. But be- cause of this agreement, the Panama Agreement, they fall under the same umbrella that we do. Fishermen have gone down to 4,000. Dolphin-safe does not have to be dolphin-safe under this current law. Under this bill, we will know that 100 percent of the tuna under as dolphin- safe label will be dolphin-safe, because every single boat will have an observer, not just U.S. boats, but all 12 of the other nations. Why would my friends oppose that? The gentleman from New York, Mr. SHERRY BOEHLERT, called it ”ideological purity.” We have some of those on our side. I recognize that. I think both groups need to moderate their positions. b 1845 I think that has been done by the gentleman from Maryland [Mr. GILCHREST], the gentleman from New Jersey [Mr. SAXTON], the gentleman from New York [Mr. BOEHLERT], people that are known for their environ- mental record, and on your side as well, I would say to the gentleman from California [Mr. MILLER]. I do not apply any motive to this. I think the gentleman has a purely in- tensive feeling about his support of his own amendment. Let us take a look at the groups that support this. Earth Island. They have made millions of dollars managing the dolphin-safe label, managing the dol- phin-safe label from Starkist. Fact. Earth Island, who makes mil- lions of dollars from this, is generating fundraising dollars for their efforts. It is an economical issue for them. But yet on the other side we have the Vice President of the United States; AL GORE, who is your champion for the en- vironment. If we have any radical group on our side, it is the AFL CIO. They endorse this. But on the other side we have the gentleman from New York [Mr. BOEHLERT], the gentleman from Maryland [Mr. GILCHREST], the gentleman from New Jersey [Mr. SAXTON], and many others who nor- mally vote with a green vote. Because they feel that this is an honest effort to protect a resource that under the current conditions, you catch turtles because you fish for immature tuna, and you catch swordfish and the rest of it, and all that bycatch is wasted; killed. This method prevents that. It also saves the resource for future gen- erations. That is why the President and AL GORE and many Members on your side of the aisle support this bill, as well as on our side. I would ask the gentleman in good faith, and I think he knows I am sin- cere in this. I truly believe that this will save dolphins. I think it will help our fishermen. I think it will move Mexico in not just this but in other ways. Already Mexico has worked very closely with us on our sports fisher- men’s rights and moved in that genera- tion. Unless we adopt international agreements and enforce them, and I will work with the gentleman to make sure that these are enforced, then I think that we have slipped backwards. Mr. MILLER of California. Mr. Chair- man, I yield myself 1 minute, just to say that the AFL CIO does not support this legislation. We just spoke to them. We have member unions of the AFL CIO that support this legislation and we in fact have members of the AFL CIO that support our version, the Studds amendment, of that same legis- lation. We just got off the phone to their representative. We both have con- stituents, just as you have environ- mental organizations on both sides. The point is that these same nations that are now making this threat in fact today are not going out and killing tens of thousands, hundreds of thou- sands of dolphins, but they are threat- ening to. They are threatening to go out and act in a completely irrespon- sible fashion unless the U.S. Congress goes along with this attempt to get us to dupe the American consumers about the nature of the dolphin-safe label and the tuna which they buy. Mr. Chairman, I reserve the balance of my time. Mr. SAXTON. Mr. Chairman, I yield 2 minutes to the gentleman from Colo- rado [Mr. SKAGGS]. Mr. SKAGGS. Mr. Chairman, I sup- port this bill. I believe its enactment is necessary if we are going to continue to make progress in reducing dolphin mortality associated with fishing for tuna. I, like many of my colleagues, always have cause to pause for a moment be- fore challenging the position of my friends and colleagues from Massachu- setts and California on an issue like this. Certainly it is disconcerting to have words like ”conned” and ”duped” thrown into the debate. I think every- body here is in agreement about our basic objective, which is reducing dol- phin mortality. It is evident that opin- ions are divided about how to pursue that objective, and so there is a divi- sion of opinion about this bill. I respect those that question the bill’s approach, because I know that what they are primarily seeking here is what I am seeking, and that is reduc- ing to the minimum, as efficiently as we can, the deaths of dolphins. We all remember the horrifying pictures of dolphins dying in fishermen’s nets. That brought the public clamor that got us the very major progress that we have made to date in this issue. The improvement that has been made is largely the result of the La Jolla Agreement. That agreement has brought much reduction in dolphin mortality. But last year, as has been discussed, a dozen tuna fishing nations, including the United States, met to try to build on that agreement and put to- gether a binding international agree- ment to replace the strictly voluntary La Jolla Agreement. The result of those talks was the framework agreement known as the Panama Declaration. It is the purpose of this bill to implement that agree- ment in order to strengthen inter- national conservation programs and set the stage for a further reduction in dolphin mortality. We need to support this legislation in order to be able to keep that international cohesion to- gether in support of a goal that I think all Members share. Mr. Chairman, I support this bill. I believe that its enactment is necessary if we are to continue to make progress in reducing dolphin mortality associated with fishing for tuna. I think everyone here agrees that further re- ducing dolphin mortality should be the goal. But it’s evident that opinions are divided about how we should pursue that objective\u2014and as a result there are divisions of opinion about this bill. I respect those who have questions about this bill’s approach, because I think that what’s primarily involved here is an honest dif- ference of opinion over the specific legislation, not a fundamental difference over its objec- tives. We all remember the horrifying images of dolphins dying in fishermen’s nets. Those scenes rightly brought a public clamor for ur- gent action. And, since then we’ve made real progress. In fact, dolphin mortality in the east- ern tropical Pacific has been cut by better than 90 percent. This improvement is to a large extent the re- sult of an informal, voluntary agreement\u2014 known as the La Jolla Agreement\u2014among countries whose nationals fish in the eastern Pacific. However, while this agreement has brought much improvement, more attention has gone to the U.S. law setting criteria for labeling tuna as ”dolphin safe”\u2014criteria based on fishing practices rather than on dolphin mortality. CONGRESSIONAL RECORD \u2014 HOUSEH9436 July 31, 1996 Last year, a dozen tuna-fishing nations\u2014in- cluding the United States\u2014met in Panama to develop a binding international agreement to replace the strictly voluntary La Jolla Agree- ment. The result of those talks is a new frame- work agreement, known as the Panama Dec- laration. The purpose of this bill is to imple- ment that declaration, in order to strengthen international conservation programs and to set the stage for further reducing dolphin mortality. As we consider this legislation, we should keep in mind what the Panama Declaration provides, because it goes beyond previous agreements in several important ways. Under the Panama Declaration, there would for the first time be a firm, binding international commitment to the goal of completely eliminat- ing dolphin loss resulting from tuna fishing in the eastern Pacific Ocean. In addition, the declaration would provide new, effective pro- tection for individual dolphin species\u2014bio- logically-based mortality caps that will provide important new safeguards for the most de- pleted dolphin populations. And the Panama declaration provides for the world’s strongest dolphin monitoring program, with independent observers on every fishing boat. Implementation of the Panama Declaration depends upon the changes in U.S. law that would be made by this bill. Among other things, these changes will lift restrictions on access to our markets for tuna caught in com- pliance with the new agreement, including re- vision of the standard for use of the ”dolphin safe” label. That change in the ”dolphin safe” label seems to be the most controversial part of the bill, but it is an essential part and should be approved. Remember, under the current law that a ”dolphin safe” label on a can of tuna doesn’t necessarily mean that no dolphins died in con- nection with the catch of the fish. Instead, it simply means that the fishermen did not use a school of dolphins as their guide for setting their nets. If that condition is met, the ”dolphin safe” label can be applied even if dolphin mor- tality in fact has occurred. By contrast, under the Panama Declaration\u2014as implemented by H.R. 2823\u2014the term ”dolphin safe” may not be used for any tuna caught in the eastern Pacific Ocean by a purse seine vessel in a set in which a dolphin mortality occurred\u2014as doc- umented by impartial, independent observers. In other words, it’s not true that this bill would destroy the meaning of the ”dolphin safe” label\u2014it would make its meaning more specific and more accurate, by imposing a no- mortality standard, while providing for further study of the effects of dolphin-encirclement and a mechanism to again stop that fishing technique if it’s determined to have an ad- verse impact on dolphins. I think this is a de- sirable change in the law. Furthermore, fishing can’t be truly ”dolphin safe” unless it’s safe for the ecosystem. Be- cause it focuses on fishing methods, not dol- phin mortality, the current labeling law has had serious unintended consequences. Some of the ”dolphin safe” methods tend to result in a catch of primarily juvenile tuna\u2014harmful to the viability of the fishery\u2014or result in numerous catches of other species such as endangered sea turtles or billfish. In fact, it well may be better for the ocean ecosystem for tuna fishermen to set their nets on dolphins and then to release the dolphins safely when the tuna are harvested\u2014some- thing that is strongly discouraged by the cur- rent labelling standard. So, Mr. Chairman, this is a good bill, one that represents a win-win situation for all. It’s supported by the administration and the U.S. fishing industry as well as by environmental and conservation groups, including the Na- tional Wildlife Federation, the World Wildlife Fund, the Environmental Defense Fund, the Center for Marine Conservation, and Greenpeace. It deserves the support of the House. Mr. TORKILDSEN. Mr. Chairman, I rise in strong support of H.R. 2823, the International Dolphin Conservation Program Act, sponsored by Mr. GILCHREST. This bill is vital to the pro- tection of dolphins, sharks, endangered sea turtles, and other creatures of our marine eco- system. This bill is supported by such well-known environmental advocates as Greenpeace, World Wildlife Fund, the Center for Marine Conservation, and the Environmental Defense Fund. H.R. 2823 is better for dolphins because it locks into place binding international legal pro- tections for dolphins in the eastern tropical Pa- cific [ETP]. Currently, dolphin protection in the ETP is voluntary. Many nations seek to protect dolphins in order to sell tuna in the U.S. mar- ket. The nations that fish for tuna in the eastern tropical Pacific have developed new fishing methods to reduce dolphin mortality. As a re- sult of these efforts, dolphin mortality has dropped from 125,000 in 1991 to 3,300 last year, just 0.2 percent of the population. This is a level more than four times lower than that recommended by the National Research Council to allow recovery of dolphins. This bill sets aggressive mortality limits, with the goal of reducing dolphin mortality to zero. Under the Gilchrest bill the ”dolphin safe” definition is based on actual dolphin mortality. If a dolphin dies as a result of harvesting tuna, then that tuna will not be permitted into the United States and onto our shelves. Currently, despite the label on cans of tuna that it is dol- phin safe, there has been shown to be some dolphin mortality in even log and school sets of tuna harvests. H.R. 2823 assures consum- ers that no dolphins died in the catch of la- beled tuna. Despite the current embargo, existing law has been ineffective in changing fishing prac- tices of foreign fleets in the ETP; in fact, ap- proximately 50 percent of sets by the foreign fleet are on dolphin schools despite the em- bargo. H.R. 2823 implements the Panama Declara- tion, and international agreement to reduce dolphin mortality in the eastern tropical Pacific Ocean and to be bound by the conservation and management measures enacted by the Inter-American Tropical Tuna Commission [IATTC]. Without the Gilchrest bill the signers to the Panama Declaration will walk away from the agreement and we will risk all protec- tions of dolphin throughout the region. A vote for this bill is a vote for the marine environment. The Gilchrest bill contains tough provisions that require tuna fishermen to pro- tect dolphins, sea turtles, sharks, and bill fish. Under current methods of fishing, hundreds of endangered sea turtles and thousands of sharks die every year. The Gilchrest bill pro- vides for protections of these species while si- multaneously strengthening international dol- phin protections. This bill is supported by the administration, Greenpeace, World Wildlife Fund, the Center for Marine Conservation, and the Environ- mental Defense Fund. While important envi- ronmental advocates like the Sierra Club and the Humane Society oppose this legislation, I feel this bill is a good compromise in protect- ing dolphins, sea turtles, and sharks through- out the eastern tropical Pacific Ocean. I urge my colleagues to support H.R. 2823 and vote to protect dolphins in the ETP. I yield back the balance of my time. Mr. MCDERMOTT. Mr. Chairman, last year the United Nations adopted a new treaty to assure the conservation of fish caught in inter- national waters, known as the Agreement on the Conservation and Management of Strad- dling Fish Stocks and Highly Migratory Fish Stocks. This new treaty, which was recently ratified by Congress with bipartisan support, seeks to reverse the depletion of fish and other marine life that has resulted from unsustainable fish- ing practices and the lack of effective inter- national management. The need for this new treaty is painfully ob- vious. Many of our most important fisheries have been depleted, undermining the eco- nomic well-being of coastal communities worldwide. Similarly, the wasteful bycatch of marine life in many fisheries poses a major threat to biodiversity. The legislation we are debating today, H.R. 2823, the International Dolphin Conservation Program Act, and the Panama Agreement upon which it is premised, represents the most far-reaching attempt to date to implement the conservation mandates of the new treaty. If enacted by Congress, it will create a model for the management of high seas fisheries around the world. H.R. 2823 advances several of the new, im- portant conservation objectives of the U.N. treaty. For example, like the U.N. treaty, it pre- vents overfishing by requiring the establish- ment of catch limits based on a precautionary approach. Like the U.N. treaty, it also requires steps to minimize the wasteful by catch of all forms of marine wildlife. Like the U.N. treaty, it assures transparency in the management of fisheries in the eastern Pacific, so that all in- terested stakeholders can effectively partici- pate in the management process; and like the U.N. treaty, it secures international coopera- tion in the conservation of marine resources. H.R. 2823 recognizes that unilateral meas- ures alone cannot succeed in conserving fish- eries that are prosecuted in international wa- ters. It builds upon the recent, important work by the United Nations aimed at the sustain- able management of world fisheries. H.R. 2823 is our best hope of assuring healthy fisheries as well as dolphin protection in the eastern Pacific Ocean. I urge my col- leagues to support this legislation. Mr. CRANE. Mr. Chairman, I am pleased to rise today in support of H.R. 2823. This is a unique opportunity to approve legislation that would put us in compliance with our inter- national obligations, use multilateral standards for the imposition of sanctions instead of uni- lateral standards that violate the GATT, and meet our environmental concerns over dolphin mortality. This bill was referred to the Ways and Means Committee to address its trade as- pects. We reported it out as approved by the Resources Committee, without further amend- ment. I support the bill because it would replace the current use of United States unilateral CONGRESSIONAL RECORD \u2014 HOUSE H9437July 31, 1996 standards as a trigger for an import ban of tuna caught with purse seine nets with multi- lateral standards agreed to as part of the Pan- ama Declaration. If countries are in compli- ance with the multilateral standard for the fish- ing of yellowfin tuna, then the import ban would not apply. Any use of unilateral standards for the impo- sition of sanctions is troubling. In fact, a GATT panel has found our current law to violate our international obligations. Instead, enforcement actions are most effective when they are based on international consensus, as this bill would establish. Such consensus is more con- structive to effective management of the ETP tuna fishery by all countries concerned. I be- lieve that these standards will serve as a posi- tive incentive to reduce dolphin mortality, while, at the same time, putting the United States in compliance with international agree- ments. The Studds amendment, however, would put the Panama Declaration at risk and would threaten all we have achieved. Adoption of this language would invite a serious challenge under the WTO and would discourage our trading partners from adopting more environ- mentally sound fishing methods. Far from achieving increased protection for dolphins, the amendment would undo the progress we have already made. Proof of the benefits of H.R. 2823, without the Studds amendment, is the fact that this legislation is supported by the administration and key environmental groups such as the National Wildlife Federation, the Center for Marine Conservation, the Environmental De- fense Fund, Greenpeace, and the World Wild- life Fund. In addition, our tuna fishing industry supports the bill, and our trading partners have indicated that they believe implementa- tion of the bill would put us in compliance with our international obligations. With such a strong and diverse coalition behind this bill, we should strongly support this bill. Mr. OXLEY. Mr. Chairman, I rise today in strong support of H.R. 2823, the International Dolphin Conservation Program Act. Among other things, this legislation implements the Declaration of Panama, agreed to by a dozen different nations, including the United States. As a strong proponent of free and fair trade, I think this represents a good example of how we can work together with out trading partners to achieve our shared goal of preserving the Earth’s precious resources. H.R. 2823 includes several provisions within the jurisdiction of the Committee on Com- merce. H.R. 2823 provides for implementation of the declaration in an effort to increase inter- national participation in activities to reduce the number of dolphins and other marine mam- mals that die each year as a result of tuna fishing techniques. This bill would also modify the definition of ”dolphin safe” for the purpose of labeling tuna products sold in the United States, and alter current regulations on the im- portation of tuna products. Also, the bill would make misuse of the ”dolphin safe” label an unfair and deceptive trade practice under sec- tion 5 of the Federal Trade Commission Act. In short, this legislation will help the United States achieve its environmental goals by im- plementing a reasonable agreement reached by the United States and its trading partners. It is supported by Republicans and Democrats alike, some environmental groups, and the Clinton administration. I would also like to take this opportunity to thank the gentleman from Alaska [Mr. YOUNG] for his support and willing- ness to work with the Commerce Committee to expedite consideration of this legislation. I urge all of my colleagues to support this legis- lation. Mr. BILBRAY. Mr. Chairman, we are here today to make a decision on an issue of great importance first and foremost to our marine environment, but also to the process by which we will craft the environmental and public health policies of the future. We have a choice between the status quo, which would focus solely on one issue at the expense of others which are equally important, and a com- prehensive, forward-looking agreement which will carry strong dolphin and marine protection policies well into the next century. If we are truly interested in progressive, outcome-based environmental policy, then H.R. 2823 must serve as a cornerstone of that policy founda- tion. Over the last decade, great strides have been made in reducing dolphin mortality rates in the eastern tropical Pacific [ETP], as a re- sult of improved and innovative tuna fishing methods pioneered by the U.S. tuna fleet, and stepped-up levels of on-vessel observer mon- itoring. These improvements were reflected in the landmark La Jolla Agreement of 1992, a voluntary resolution entered into by a number of tuna fishing nations, including the United States, Mexico, and several Latin American countries. This agreement established strict and declining levels of annual dolphin mortality rates, requiring that an annual overall rate of less than 5,000 be achieved by 1999, which is less than 0.1 percent of the estimated total dolphin population. This program has been so effective that it has already achieved a rate of below 4,000 annually, which is considered by scientists to be below levels of biological sig- nificance. I have an article that elaborates fur- ther on this point, Mr. Chairman, which I would ask to be entered into the RECORD along with my statement, but I would like to read one passage from it at this point. These remarks come from Dr. James Joseph, who is the di- rector of the Inter-American Tropical Tuna Commission [IATTC]: Joseph said the dolphin mortality rate is now so low that it cannot affect the survival of any of the dolphin species ”The dolphins increase at a rate of from 2.5% to 3.5% per year. The mortality for every (dolphin) stock is less than one-tenth of 1 percent,” he said. In other words, a great many more young dolphins are born and survive each year than die in tuna nets. There are about 9.5 million dolphins in Eastern Pacific populations in all, and none of their several species\u2014includ- ing common, spinner, and spotted\u2014is endan- gered. ”We continue to take the approach that we can bring it (dolphin mortality) lower, and we continue to work in that direc- tion. It is essential that we keep all of the countries involved in the fishery cooperating in our program,” Joseph said. The La Jolla Agreement also required that observers be posted on each licensed vessel, which were each assigned strict dolphin mor- tality limits [DML]. To date, the signatories have continued to operate in good faith to pro- tect dolphin in the course of harvesting tuna under this nonbinding agreement; however, some nations had openly considered dropping out of the La Jolla Agreement and the Inter- American Tropical Tuna Commission, its um- brella organization, because despite the ad- vances made in reducing dolphin mortality rates, U.S. law had not been changed to lift the existing embargoes on tuna imported into the United States. However, H.R. 2823, if en- acted, would provide the incentives for these other fishing nations to want to remain in- volved in the IATTC and continue to fish for tuna in a dolphin-sensitive fashion, rather than ”leaving the table” and reverting to older and more dolphin-unsafe fishing methods. In addition to this threat of retreat from vast- ly improved dolphin protection practices, bio- logical problems of significant dimensions have arisen as a result of alternative ”nondol- phin” fishing methods now in use due to the existing restrictions to setting tuna nets ”on dolphin”. Such methods include setting nets around tuna attracted to floating objects\u2014log fishing\u2014or around free-swimming schools of fish\u2014school fishing. While these methods do reduce direct contact with dolphin, they create other problems. Studies indicate that up to 25 percent of volume of these harvest methods is ”bycatch” of other species, including high vol- umes of sharks, billfish, and other pelagics, endangered sea turtles, and immature tuna. These young tuna are not market-ready, and are largely dead by the time they are returned to the sea. This wasteful depletion of juvenile tuna poses a serious threat to maintaining healthy, long-term populations of yellowfin tuna, in addition to stressing the populations of these other sensitive species. Conversely, setting tuna nets ”on dolphin” creates little bycatch other than the dolphin themselves. While this was problematic\u2014and lethal\u2014for dolphin in past years, recent im- provements in tuna harvest methods, such as the ”backing down” procedure, in which the edge of the nets are allowed to swim below the surface, affording dolphins the opportunity to leave the net, have served to greatly mini- mize the threat to dolphin. In addition, small boats and a number of divers are often de- ployed within the net to assist dolphin out of danger. However, the problem of bycatch under- scores a policy dilemma, as to how best to manage our marine resources on an ”eco- system” basis, rather than channeling all our energy and resources into ”single population” strategies. While it is clearly essential that we continue to work to reduce dolphin mortality rates toward zero, this cannot and should not occur at the expense of other parts of our ocean biosystem, Fortunately, in H.R. 2823, we have a long-term solution before us today which will resolve the challenges, both envi- ronmental and economic, which we now face. In October 1995, 12 nations, including the United States, met in Panama to craft a bind- ing international agreement to protect dolphin and other species in the eastern tropical Pa- cific. Five major environmental organizations were instrumental in developing this agree- ment, which been dubbed the Panama Dec- laration. The declaration will establish a per- manent mortality limit, with the goal of zero dolphin mortality in that fishery. It will set mor- tality caps for individual species of dolphin, and provide for individual vessel accountability by establishing strict per vessel mortality caps. Just as important, the Panama Declaration provides greater study of and protection for other now at risk from ”bycatch”, and increase internationally enforceable monitoring systems to ensure compliance by participating nations who wish to fish in the ETP. CONGRESSIONAL RECORD \u2014 HOUSEH9438 July 31, 1996 The Panama Declaration, which will be codi- fied into law by enactment of H.R. 2823, cre- ates a binding and enforceable process to en- sure continued declining rates of dolphin mor- tality, while for the first time adopting an ”eco- system-based” approach to ocean resource management. While there is absolutely no question that dolphin populations must and will continue to be protected and strengthened under the progressive strategies of this legisla- tion, we can no longer ignore the potentially harmful problems which have been inadvert- ently created by our existing ”dolphin-safe” policies. The Panama Declaration, in the form of H.R. 2823, should be codified into law, in order to ensure that we manage our marine resources to protect all species, in a sound and science-based manner. We must reject efforts, however well-intended, to reinforce the status quo, and move swiftly to enact the pro- visions of this legislation. H.R. 2823, which I have cosponsored along with a great number of my colleagues from both sides of the aisle, is the vehicle to achieve this, and I would urge all my colleagues to lend their support to this progressive measure. This is more than sound ocean resources management. It is a blueprint for how we should proceed on future environmental strat- egy matters. This is an opportunity for us to move beyond the outdated ”single species” approach of years past, and embrace more comprehensive, inclusive, and effective multi- species conservation management style. We have to be able to see the whole picture, and assemble our strategies accordingly. The in- creased loss of other marine life and sensitive species to ”bycatch” under existing law has to date been largely overlooked, and is a loom- ing biological threat which certainly merits the same levels of concern and proper scientific attention as has our dolphin population. These unintended consequences are indeed troubling, and will be comprehensively ad- dressed by the Panama Declaration and H.R. 2823. We have created the technology and the incentives to keep dolphin mortality at in- significant and declining levels, which will be reinforced and locked in by H.R. 2823. How- ever, protection for the dolphin is not the ”end of the story” for conserving our ocean environ- ment. It is also not the end of our responsibil- ities. As we have done with other strategies, we must take a comprehensive approach to marine conservation as well, in order to iden- tify and understand these threats, and take ac- tion on them before they reach a crisis point. If we are truly interested in progressive, out- come-based environmental policy, guided by science, then we should embrace this biparti- san proposal, which is supported by the U.S. tuna fleet, the Clinton administration, and a number of major environmental groups. As we move into the next century, we should lead with an environmental strategy which reflects the level of scientific knowledge we have now, not what we knew 15 or 20 years ago. This bill keeps dolphins safe, and will help us avoid future problems with marine conservation. I urge all my colleagues to support H.R. 2823, the International Dolphin Conservation Act of 1996. [From the San Diego Union Tribune, June 7, 1996] SCIENTIST HAILED FOR SAVING DOLPHINS (By Steve La Rue) Dolphin deaths in tuna fishing nets have declined by about 98 percent since 1986 in the Eastern Pacific Ocean, and a San Diego ma- rine scientist will get a large share of the credit tonight when he receives San Diego Oceans Foundation’s highest award. The annual Roger Revelle Perpetual Award will be presented to James Joseph, director of the La Jolla-based Inter-American Tropi- cal Tuna Commission since 1969. With Joseph at the helm, the eight-nation commission has mounted a sustained effort to reduce drowning deaths of dolphins in tuna fishing nets. Its success could help unlock a decades-old environmental dispute and end a U.S. embargo on tuna caught by boats from Mexico and other countries that look for the popular fish under dolphin schools. Large tuna often swim under schools of dolphins in the Eastern Pacific Ocean for reasons that are not entirely understood. Fishing boats historically have encircled these surface-swimming schools with their nets, cinched the nets shut at the bottom, then reeled in their catch. Air-breathing dolphins drowned in vast numbers, because they were snared in the nets and dragged under water. An estimated 133,174 dolphins died this way in 1986, but the total fell to an estimated 3,274 last year, ac- cording to the commission. The decline has come through a variety of measures, including placement of observers on every tuna boat in the Eastern Pacific, newer equipment for some boats, better training of tuna crews and captains, special attention to individual boats with high-dol- phin kills and other measures. Joseph said the dolphin mortality level is now so low that it cannot affect the survival of any of the dolphin species. The dolphins increase at a rate of from 2.5 to 3.5 percent per year. The mortality for every (dolphin) stock as a percentage of every stock is less than one-tenth of 1 per- cent,” he said. In other words, a great deal more young dolphins are born and survive each year than die in tuna nets. There are about 9.5 million dolphins in Eastern Pacific populations in all, and none of their several species\u2014includ- ing common, spinner and spotted dolphins\u2014 is endangered. ”We continue to take the approach that we can bring it lower, and we continue to work in that direction. It is essential that we keep all of the countries involved in this fishery cooperating in our program,” Joseph said. Commission members include Costa Rica, France, Nicaragua, Panama, the United States; the Pacific island-nation of Vanuatu and Venezuela. Frank Powell, executive director of Hubbs- Sea World Research Institute and last year’s award winner, praised Joseph in a prepared statement as ”A first-class biologist who has devoted his entire career to the ocean. He has been instrumental in reducing the num- ber of dolphin fatalities related to tuna fish- ing.” The award\u2014a wood sculpture of a garibaldi fish that remains in Scripps Bank’s La Jolla office\u2014will be present tonight at the San Diego Oceans Foundation benefit dinner. The foundation is a volunteer organization committed to preserving San Diego’s bays and ocean waters. The Roger Revelle Perpet- ual Award is named for the late scientist who was founder of UCSD and director of the Scripps Institution of Oceanography. Lowering the dolphin kill also was a prel- ude to the introduction of proposed federal legislation to allow tuna caught by setting nets around dolphin schools to be sold in the United States as ”dolphin-safe”\u2014but only if the commission’s on-board observers certify that no dolphins were killed. Under current law, no tuna can be sold as ”dolphin-safe” is this country if they are caught by setting nets around dolphin schools. The issue also has split environmental groups. Greenpeace, the Center for Marine Conservation, the Environmental Defense Fund, and the National Wildlife Federation support the proposed law. The Earth Island Institute, the Sierra Club, the Human Soci- ety of the United States, and the American Society for the Prevention of Cruelty to Ani- mals oppose it. Because of the current law and other fac- tors, the U.S. tuna fishing fleet, which once numbered 110 vessels and was prominent in San Diego, has shrunk to 40 vessels operat- ing in the Western Pacific and 10 in the East- ern Pacific. The Earth Island Institute said in a state- ment that the legislation would allow ”For- eign tuna stained by the blood of dolphins to be sold on U.S. supermarket shelves” and allow ”chasing, harassing, injuring, and en- circling dolphins as long as no dolphins were ‘observed’ being killed outright.” Mr. MILLER of California. Mr. Chair- man, I have no further requests for time, and I yield back the balance of my time. Mr. SAXTON. Mr. Chairman, I have no further requests for time, and I yield back the balance of my time. The CHAIRMAN. All time for general debate has expired. Pursuant to the rule, the amendment in the nature of a substitute printed in the CONGRESSIONAL RECORD as No. 1 is considered as an original bill for the purpose of amendment and is consid- ered read. The text of the amendment in the na- ture of a substitute is as follows: H.R. 2823 Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; REFERENCES. (a) SHORT TITLE.\u2014This Act may be cited as the ”International Dolphin Conservation Program Act”. (b) REFERENCES TO MARINE MAMMAL PRO- TECTION ACT.\u2014Except as otherwise expressly provided, whenever in this Act an amend- ment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be con- sidered to be made to a section or other pro- vision of the Marine Mammal Protection Act of 1972 (16 U.S.C. 1361 et seq.). SEC. 2. PURPOSE AND FINDINGS. (a) PURPOSE.\u2014The purposes of this Act are\u2014 (1) to give effect to the Declaration of Pan- ama, signed October 4, 1995, by the Govern- ments of Belize, Colombia, Costa Rica, Ecua- dor, France, Honduras, Mexico, Panama, Spain, the United States of America, Vanuatu, and Venezuela, including the es- tablishment of the International Dolphin Conservation Program, relating to the pro- tection of dolphins and other species, and the conservation and management of tuna in the eastern tropical Pacific Ocean; (2) to recognize that nations fishing for tuna in the eastern tropical Pacific Ocean have achieved significant reductions in dol- phin mortality associated with that fishery; and (3) to eliminate the ban on imports of tuna from those nations that are in compliance with the International Dolphin Conservation Program. (b) FINDINGS.\u2014The Congress finds the fol- lowing: (1) The nations that fish for tuna in the eastern tropical Pacific Ocean have achieved CONGRESSIONAL RECORD \u2014 HOUSE H9439July 31, 1996 significant reductions in dolphin mortalities associated with the purse seine fishery from hundreds of thousands annually to fewer than 5,000 annually. (2) The provisions of the Marine Mammal Protection Act of 1972 that impose a ban on imports from nations that fish for tuna in the eastern tropical Pacific Ocean have served as an incentive to reduce dolphin mortalities. (3) Tuna canners and processors of the United States have led the canning and proc- essing industry in promoting a dolphin-safe tuna market. (4) 12 signatory nations to the Declaration of Panama, including the United States, agreed under that Declaration to require that the total annual dolphin mortality in the purse seine fishery for yellowfin tuna in the eastern tropical Pacific Ocean not exceed 5,000, with a commitment and objective to progressively reduce dolphin mortality to a level approaching zero through the setting of annual limits. SEC. 3. DEFINITIONS. Section 3 (16 U.S.C. 1362) is amended by adding at the end the following new para- graphs: ”(28) The term ‘International Dolphin Con- servation Program’ means the international program established by the agreement signed in La Jolla, California, in June 1992, as for- malized, modified, and enhanced in accord- ance with the Declaration of Panama, that requires\u2014 ”(A) that the total annual dolphin mortal- ity in the purse seine fishery for yellowfin tuna in the eastern tropical Pacific Ocean not exceed 5,000, with the commitment and objective to progressively reduce dolphin mortality to levels approaching zero through the setting of annual limits; ”(B) the establishment of a per-stock per- year mortality limit for dolphins, for each year through the year 2000, of between 0.2 percent and 0.1 percent of the minimum pop- ulation estimate; ”(C) beginning with the year 2001, that the per-stock per-year mortality of dolphin not exceed 0.1 percent of the minimum popu- lation estimate; ”(D) that if the mortality limit set forth in subparagraph (A) is exceeded, all sets on dol- phins shall cease for the fishing year con- cerned; ”(E) that if the mortality limit set forth in subparagraph (B) or (C) is exceeded sets on such stock and any mixed schools containing members of such stock shall cease for that fishing year; ”(F) in the case of subparagraph (B), to conduct a scientific review and assessment in 1998 of progress toward the year 2000 ob- jective and consider recommendations as ap- propriate; and ”(G) in the case of subparagraph (C), to conduct a scientific review and assessment regarding that stock or those stocks and consider further recommendations; ”(H) the establishment of a per-vessel max- imum annual dolphin mortality limit con- sistent with the established per-year mortal- ity caps; and ”(I) the provision of a system of incentives to vessel captains to continue to reduce dol- phin mortality, with the goal of eliminating dolphin mortality. ”(29) The term ‘Declaration of Panama’ means the declaration signed in Panama City, Republic of Panama, on October 4, 1995.”. SEC. 4. AMENDMENTS TO TITLE I. (a) AUTHORIZATION FOR INCIDENTAL TAK- ING.\u2014Section 101(a)(2) (16 U.S.C. 1371(a)(2)) is amended as follows: (1) By inserting after the first sentence ”Such authorizations may also be granted under title III with respect to the yellowfin tuna fishery of the eastern tropical Pacific Ocean, subject to regulations prescribed under that title by the Secretary without re- gard to section 103.”. (2) By striking the semicolon in the second sentence and all that follows through ”prac- ticable”. (b) DOCUMENTARY EVIDENCE.\u2014Section 101(a) (16 U.S.C. 1371(a)) is amended by strik- ing so much of paragraph (2) as follows sub- paragraph (A) and as precedes subparagraph (C) and inserting: ”(B) in the case of yellowfin tuna har- vested with purse seine nets in the eastern tropical Pacific Ocean, and products there- from, to be exported to the United States, shall require that the government of the ex- porting nation provide documentary evi- dence that\u2014 ”(i) the tuna or products therefrom were not banned from importation under this paragraph before the effective date of the International Dolphin Conservation Program Act; ”(ii) the tuna or products therefrom were harvested after the effective date of the International Dolphin Conservation Program Act by vessels of a nation which participates in the International Dolphin Conservation Program, such harvesting nation is either a member of the Inter-American Tropical Tuna Commission or has initiated (and with- in 6 months thereafter completed) all steps (in accordance with article V, paragraph 3 of the Convention establishing the Inter-Amer- ican Tropical Tuna Commission) necessary to become a member of that organization; ”(iii) such nation is meeting the obliga- tions of the International Dolphin Conserva- tion Program and the obligations of member- ship in the Inter-American Tropical Tuna Commission, including all financial obliga- tions; ”(iv) the total dolphin mortality permitted under the International Dolphin Conserva- tion Program will not exceed 5,000 in 1996, or in any year thereafter, consistent with the commitment and objective of progressively reducing dolphin mortality to levels ap- proaching zero through the setting of annual limits and the goal of eliminating dolphin mortality; and ”(v) the tuna or products therefrom were harvested after the effective date of the International Dolphin Conservation Program Act by vessels of a nation which participates in the International Dolphin Conservation Program, and such harvesting nation has not vetoed the participation by any other nation in such Program.”. (c) ACCEPTANCE OF EVIDENCE COVERAGE.\u2014 Section 101 (16 U.S.C. 1371) is amended by adding at the end the following new sub- sections: ”(d) ACCEPTANCE OF DOCUMENTARY EVI- DENCE.\u2014The Secretary shall not accept docu- mentary evidence referred to in section 101(a)(2)(B) as satisfactory proof for purposes of section 101(a)(2) if\u2014 ”(1) the government of the harvesting na- tion does not provide directly or authorize the Inter-American Tropical Tuna Commis- sion to release complete and accurate infor- mation to the Secretary to allow a deter- mination of compliance with the Inter- national Dolphin Conservation Program; ”(2) the government of the harvesting na- tion does not provide directly or authorize the Inter-American Tropical Tuna Commis- sion to release complete and accurate infor- mation to the Secretary in a timely manner for the purposes of tracking and verifying compliance with the minimum requirements established by the Secretary in regulations promulgated under subsection (f) of the Dol- phin Protection Consumer Information Act (16 U.S.C. 1385(f)); or ”(3) after taking into consideration this in- formation, findings of the Inter-American Tropical Tuna Commission, and any other relevant information, including information that a nation is consistently failing to take enforcement actions on violations which di- minish the effectiveness of the International Dolphin Conservation Program, the Sec- retary, in consultation with the Secretary of State, finds that the harvesting nation is not in compliance with the International Dol- phin Conservation Program. ”(e) EXEMPTION.\u2014The provisions of this Act shall not apply to a citizen of the United States who incidentally takes any marine mammal during fishing operations outside the United States exclusive economic zone (as defined in section 3(6) of the Magnuson Fishery Conservation and Management Act (16 U.S.C. 1802(6))) when employed on a for- eign fishing vessel of a harvesting nation which is in compliance with the Inter- national Dolphin Conservation Program.”. (d) ANNUAL PERMITS.\u2014Section 104(h) is amended to read as follows: ”(h) ANNUAL PERMITS.\u2014(1) Consistent with the regulations prescribed pursuant to sec- tion 103 and the requirements of section 101, the Secretary may issue an annual permit to a United States vessel for the taking of such marine mammals, and shall issue regula- tions to cover the use of any such annual permits. ”(2) Annual permits described in paragraph (1) for the incidental taking of marine mam- mals in the course of commercial purse seine fishing for yellowfin tuna in the eastern tropical Pacific Ocean shall be governed by section 304, subject to the regulations issued pursuant to section 302.”. (e) REVISIONS AND FUNDING SOURCES.\u2014Sec- tion 108(a)(2) (16 U.S.C. 1378(a)(2)) is amended as follows: (1) By striking ”and” at the end of sub- paragraph (A). (2) By adding at the end the following: ”(C) discussions to expeditiously negotiate revisions to the Convention for the Estab- lishment of an Inter-American Tropical Tuna Commission (1 UST 230, TIAS 2044) which will incorporate conservation and management provisions agreed to by the na- tions which have signed the Declaration of Panama; ”(D) a revised schedule of annual contribu- tions to the expenses of the Inter-American Tropical Tuna Commission that is equitable to participating nations; and ”(E) discussions with those countries par- ticipating or likely to participate in the International Dolphin Conservation Pro- gram, to identify alternative sources of funds to ensure that needed research and other measures benefiting effective protec- tion of dolphins, other marine species, and the marine ecosystem;”. (f) REPEAL OF NAS REVIEW.\u2014Section 110 (16 U.S.C. 1380) is amended as follows: (1) By redesignating subsection (a)(1) as subsection (a). (2) By striking subsection (a)(2). (g) LABELING OF TUNA PRODUCTS.\u2014Para- graph (1) of section 901(d) of the Dolphin Pro- tection Consumer Information Act (16 U.S.C. 1385(d)(1)) is amended to read as follows: ”(1) It is a violation of section 5 of the Fed- eral Trade Commission Act for any producer, importer, exporter, distributor, or seller of any tuna product that is exported from or of- fered for sale in the United States to include on the label of that product the term ‘Dol- phin Safe’ or any other term or symbol that falsely claims or suggests that the tuna con- tained in the product was harvested using a method of fishing that is not harmful to dol- phins if the product contains any of the fol- lowing: ”(A) Tuna harvested on the high seas by a vessel engaged in driftnet fishing. CONGRESSIONAL RECORD \u2014 HOUSEH9440 July 31, 1996 ”(B) Tuna harvested in the eastern tropical Pacific Ocean by a vessel using purse seine nets unless the tuna is considered dolphin safe under paragraph (2). ”(C) Tuna harvested outside the eastern tropical Pacific Ocean by a vessel using purse seine nets unless the tuna is consid- ered dolphin safe under paragraph (3). ”(D) Tuna harvested by a vessel engaged in any fishery identified by the Secretary pur- suant to paragraph (4) as having a regular and significant incidental mortality of ma- rine mammals.”. (h) DOLPHIN SAFE TUNA.\u2014(1) Paragraph (2) of section 901(d) of the Dolphin Protection Consumer Information Act (16 U.S.C. 1385(d)(2)) is amended to read as follows: ”(2)(A) For purposes of paragraph (1)(B), a tuna product that contains tuna harvested in the eastern tropical Pacific Ocean by a ves- sel using purse seine nets is dolphin safe if the vessel is of a type and size that the Sec- retary has determined, consistent with the International Dolphin Conservation Pro- gram, is not capable of deploying its purse seine nets on or to encircle dolphins, or if the product meets the requirements of sub- paragraph (B). ”(B) For purposes of paragraph (1)(B), a tuna product that contains tuna harvested in the eastern tropical Pacific Ocean by a ves- sel using purse seine nets is dolphin safe if the product is accompanied by a written statement executed by the captain of the vessel which harvested the tuna certifying that no dolphins were killed during the sets in which the tuna were caught and the prod- uct is accompanied by a written statement executed by\u2014 ”(i) the Secretary or the Secretary’s des- ignee; ”(ii) a representative of the Inter-Amer- ican Tropical Tuna Commission; or ”(iii) an authorized representative of a par- ticipating nation whose national program meets the requirements of the International Dolphin Conservation Program, which states that there was an observer ap- proved by the International Dolphin Con- servation Program on board the vessel dur- ing the entire trip and documents that no dolphins were killed during the sets in which the tuna concerned were caught. ”(C) The statements referred to in clauses (i), (ii), and (iii) of subparagraph (B) shall be valid only if they are endorsed in writing by each exporter, importer, and processor of the product, and if such statements and endorse- ments comply with regulations promulgated by the Secretary which would provide for the verification of tuna products as dolphin safe.”. (2) Subsection (d) of section 901 of the Dol- phin Protection Consumer Information Act (16 U.S.C. 1385(d)) is amended by adding the following new paragraphs at the end thereof: ”(3) For purposes of paragraph (1)(C), tuna or a tuna product that contains tuna har- vested outside the eastern tropical Pacific Ocean by a vessel using purse seine nets is dolphin safe if\u2014 ”(A) it is accompanied by a written state- ment executed by the captain of the vessel certifying that no purse seine net was inten- tionally deployed on or to encircle dolphins during the particular voyage on which the tuna was harvested; or ”(B) in any fishery in which the Secretary has determined that a regular and signifi- cant association occurs between marine mammals and tuna, it is accompanied by a written statement executed by the captain of the vessel and an observer, certifying that no purse seine net was intentionally deployed on or to encircle marine mammals during the particular voyage on which the tuna was harvested. ”(4) For purposes of paragraph (1)(D), tuna or a tuna product that contains tuna har- vested in a fishery identified by the Sec- retary as having a regular and significant in- cidental mortality or serious injury of ma- rine mammals is dolphin safe if it is accom- panied by a written statement executed by the captain of the vessel and, where deter- mined to be practicable by the Secretary, an observer participating in a national or inter- national program acceptable to the Sec- retary certifying that no marine mammals were killed in the course of the fishing oper- ation or operations in which the tuna were caught. ”(5) No tuna product may be labeled with any reference to dolphins, porpoises, or ma- rine mammals, unless such product is la- beled as dolphin safe in accordance with this subsection.”. (i) TRACKING AND VERIFICATION.\u2014Sub- section (f) of section 901 of the Dolphin Pro- tection Consumer Information Act (16 U.S.C. 1385(f)) is amended to read as follows: ”(f) TRACKING AND VERIFICATION.\u2014The Sec- retary, in consultation with the Secretary of the Treasury, shall issue regulations to im- plement subsection (d) not later than 3 months after the date of enactment of the International Dolphin Conservation Program Act. In the development of these regulations, the Secretary shall establish appropriate procedures for ensuring the confidentiality of proprietary information the submission of which is voluntary or mandatory. Such regu- lations shall, consistent with international efforts and in coordination with the Inter- American Tropical Tuna Commission, estab- lish a domestic and international tracking and verification program that provides for the effective tracking of tuna labeled under subsection (d), including but not limited to each of the following: ”(1) Specific regulations and provisions ad- dressing the use of weight calculation for purposes of tracking tuna caught, landed, processed, and exported. ”(2) Additional measures to enhance ob- server coverage if necessary. ”(3) Well location and procedures for mon- itoring, certifying, and sealing holds above and below deck or other equally effective methods of tracking and verifying tuna la- beled under subsection (d). ”(4) Reporting receipt of and database stor- age of radio and facsimile transmittals from fishing vessels containing information relat- ed to the tracking and verification of tuna, and the definition of sets. ”(5) Shore-based verification and tracking throughout the transshipment and canning process by means of Inter-American Tropical Tuna Commission trip records or otherwise. ”(6) Provisions for annual audits and spot checks for caught, landed, and processed tuna products labeled in accordance with subsection (d). ”(7) The provision of timely access to data required under this subsection by the Sec- retary from harvesting nations to undertake the actions required in paragraph (6) of this subsection. The Secretary may make such adjustments as may be appropriate to the regulations promulgated under this subsection to imple- ment an international tracking and verifica- tion program that meets or exceeds the min- imum requirements established by the Sec- retary under this subsection.”. SEC. 5. AMENDMENTS TO TITLE III. (a) HEADING.\u2014The heading of title III is amended to read as follows: ”TITLE III\u2014INTERNATIONAL DOLPHIN CONSERVATION PROGRAM”. (b) FINDINGS.\u2014Section 301 (16 U.S.C. 1411) is amended as follows: (1) In subsection (a), by amending para- graph (4) to read as follows: ”(4) Nations harvesting yellowfin tuna in the eastern tropical Pacific Ocean have dem- onstrated their willingness to participate in appropriate multilateral agreements to re- duce, with the goal of eliminating, dolphin mortality in that fishery. Recognition of the International Dolphin Conservation Program will assure that the existing trend of reduced dolphin mortality continues; that individual stocks of dolphins are adequately protected; and that the goal of eliminating all dolphin mortality continues to be a priority.”. (2) In subsection (b), by amending para- graphs (2) and (3) to read as follows: ”(2) support the International Dolphin Conservation Program and efforts within the Program to reduce, with the goal of elimi- nating, the mortality referred to in para- graph (1); ”(3) ensure that the market of the United States does not act as an incentive to the harvest of tuna caught with driftnets or caught by purse seine vessels in the eastern tropical Pacific Ocean that are not operating in compliance with the International Dol- phin Conservation Program;”. (c) INTERNATIONAL DOLPHIN CONSERVATION PROGRAM.\u2014Section 302 (16 U.S.C. 1412) is amended to read as follows: ”SEC. 302. AUTHORITY OF THE SECRETARY. ”(a) REGULATIONS TO IMPLEMENT PROGRAM REGULATIONS.\u2014(1) The Secretary shall issue regulations to implement the International Dolphin Conservation Program. ”(2)(A) Not later than 3 months after the date of enactment of this section, the Sec- retary shall issue regulations to authorize and govern the incidental taking of marine mammals in the eastern tropical Pacific Ocean, including any species of marine mam- mal designated as depleted under this Act but not listed as endangered or threatened under the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.), by vessels of the United States participating in the International Dolphin Conservation Program. ”(B) Regulations issued under this section shall include provisions\u2014 ”(i) requiring observers on each vessel; ”(ii) requiring use of the backdown proce- dure or other procedures equally or more ef- fective in avoiding mortality of marine mammals in fishing operations; ”(iii) prohibiting intentional deployment of nets on, or encirclement of, dolphins in violation of the International Dolphin Con- servation Program; ”(iv) requiring the use of special equip- ment, including dolphin safety panels in nets, monitoring devices as identified by the International Dolphin Conservation Pro- gram, as practicable, to detect unsafe fishing conditions before nets are deployed by a tuna vessel, operable rafts, speedboats with tow- ing bridles, floodlights in operable condition, and diving masks and snorkels; ”(v) ensuring that the backdown procedure during the deployment of nets on, or encir- clement of, dolphins is completed and rolling of the net to sack up has begun no later than 30 minutes after sundown; ”(vi) banning the use of explosive devices in all purse seine operations; ”(vii) establishing per vessel maximum an- nual dolphin mortality limits, total dolphin mortality limits and per-stock per-year mor- tality limits, in accordance with the Inter- national Dolphin Conservation Program; ”(viii) preventing the intentional deploy- ment of nets on, or encirclement of, dolphins after reaching either the vessel maximum annual dolphin mortality limits, total dol- phin mortality limits, or per-stock per-year mortality limits; ”(ix) preventing the fishing on dolphins by a vessel without an assigned vessel dolphin mortality limit; CONGRESSIONAL RECORD \u2014 HOUSE H9441July 31, 1996 ”(x) allowing for the authorization and conduct of experimental fishing operations, under such terms and conditions as the Sec- retary may prescribe, for the purpose of test- ing proposed improvements in fishing tech- niques and equipment (including new tech- nology for detecting unsafe fishing condi- tions before nets are deployed by a tuna ves- sel) that may reduce or eliminate dolphin mortality or do not require the encirclement of dolphins in the course of commercial yel- lowfin tuna fishing; ”(xi) authorizing fishing within the area covered by the International Dolphin Con- servation Program by vessels of the United States without the use of special equipment or nets if the vessel takes an observer and does not intentionally deploy nets on, or en- circle, dolphins, under such terms and condi- tions as the Secretary may prescribe; and ”(xii) containing such other restrictions and requirements as the Secretary deter- mines are necessary to implement the Inter- national Dolphin Conservation Program with respect to vessels of the United States. ”(C) The Secretary may make such adjust- ments as may be appropriate to the require- ments of subparagraph (B) that pertain to fishing gear, vessel equipment, and fishing practices to the extent the adjustments are consistent with the International Dolphin Conservation Program. ”(b) CONSULTATION.\u2014In developing regula- tions under this section, the Secretary shall consult with the Secretary of State, the Ma- rine Mammal Commission and the United States Commissioners to the Inter-American Tropical Tuna Commission appointed under section 3 of the Tuna Conventions Act of 1950 (16 U.S.C. 952). ”(c) EMERGENCY REGULATIONS.\u2014(1) If the Secretary determines, on the basis of the best scientific information available (includ- ing that obtained under the International Dolphin Conservation Program) that the in- cidental mortality and serious injury of ma- rine mammals authorized under this title is having, or is likely to have, a significant ad- verse effect on a marine mammal stock or species, the Secretary shall take actions as follows\u2014 ”(A) notify the Inter-American Tropical Tuna Commission of the Secretary’s find- ings, along with recommendations to the Commission as to actions necessary to re- duce incidental mortality and serious injury and mitigate such adverse impact; and ”(B) prescribe emergency regulations to reduce incidental mortality and serious in- jury and mitigate such adverse impact. ”(2) Prior to taking action under para- graph (1) (A) or (B), the Secretary shall con- sult with the Secretary of State, the Marine Mammal Commission, and the United States Commissioners to the Inter-American Tropi- cal Tuna Commission. ”(3) Emergency regulations prescribed under this subsection\u2014 ”(A) shall be published in the Federal Reg- ister, together with an explanation thereof; and ”(B) shall remain in effect for the duration of the applicable fishing year; and The Secretary may terminate such emer- gency regulations at a date earlier than that required by subparagraph (B) by publication in the Federal Register of a notice of termi- nation, if the Secretary determines that the reasons for the emergency action no longer exist. ”(4) If the Secretary finds that the inciden- tal mortality and serious injury of marine mammals in the yellowfin tuna fishery in the eastern tropical Pacific Ocean is con- tinuing to have a significant adverse impact on a stock or species, the Secretary may ex- tend the emergency regulations for such ad- ditional periods as may be necessary. ”(d) RESEARCH.\u2014The Secretary shall, in cooperation with the nations participating in the International Dolphin Conservation Program and with the Inter-American Tropi- cal Tuna Commission, undertake or support appropriate scientific research to further the goals of the International Dolphin Conserva- tion Program. Such research may include but shall not be limited to any of the follow- ing: ”(1) Devising cost-effective fishing meth- ods and gear so as to reduce, with the goal of eliminating, the incidental mortality and se- rious injury of marine mammals in connec- tion with commercial purse seine fishing in the eastern tropical Pacific Ocean. ”(2) Developing cost-effective methods of fishing for mature yellowfin tuna without deployment of nets on, or encirclement of, dolphins or other marine mammals. ”(3) Carrying out stock assessments for those marine mammal species and marine mammal stocks taken in the purse seine fishery for yellowfin tuna in the eastern tropical Pacific Ocean, including species or stocks not within waters under the jurisdic- tion of the United States. ”(4) Studying the effects of chase and en- circlement on the health and biology of dol- phin and individual dolphin populations inci- dentally taken in the course of purse seine fishing for yellowfin tuna in the eastern tropical Pacific Ocean. There are authorized to be appropriated to the Department of Commerce $1,000,000 to be used by the Sec- retary, acting through the National Marine Fisheries Service, to carry out this para- graph. Upon completion of the study, the Secretary shall submit a report containing the results of the study, together with rec- ommendations, to the Congress and to the Inter-American Tropical Tuna Commission. ”(5) Determining the extent to which the incidental take of nontarget species, includ- ing juvenile tuna, occurs in the course of purse seine fishing for yellowfin tuna in the eastern tropical Pacific Ocean, the geo- graphic location of the incidental take, and the impact of that incidental take on tuna stocks, and nontarget species. The Secretary shall include a description of the annual results of research carried out under this subsection in the report required under section 303.”. (d) REPORTS.\u2014Section 303 (16 U.S.C. 1414) is amended to read as follows: ”SEC. 303. REPORTS BY THE SECRETARY. ”Notwithstanding section 103(f), the Sec- retary shall submit an annual report to the Congress which includes each of the follow- ing: ”(1) The results of research conducted pur- suant to section 302. ”(2) A description of the status and trends of stocks of tuna. ”(3) A description of the efforts to assess, avoid, reduce, and minimize the bycatch of juvenile yellowfin tuna and other nontarget species. ”(4) A description of the activities of the International Dolphin Conservation Program and of the efforts of the United States in support of the Program’s goals and objec- tives, including the protection of dolphin populations in the eastern tropical Pacific Ocean, and an assessment of the effective- ness of the Program. ”(5) Actions taken by the Secretary under subsections (a)(2)(B) and (d) of section 101. ”(6) Copies of any relevant resolutions and decisions of the Inter-American Tropical Tuna Commission, and any regulations pro- mulgated by the Secretary under this title. ”(7) Any other information deemed rel- evant by the Secretary.”. (e) PERMITS.\u2014Section 304 (16 U.S.C. 1416) is amended to read as follows: ”SEC. 304. PERMITS. ”(a) IN GENERAL.\u2014(1) Consistent with sec- tion 302, the Secretary is authorized to issue a permit to a vessel of the United States au- thorizing participation in the International Dolphin Conservation Program and may re- quire a permit for the person actually in charge of and controlling the fishing oper- ation of the vessel. The Secretary shall pre- scribe such procedures as are necessary to carry out this subsection, including, but not limited to, requiring the submission of\u2014 ”(A) the name and official number or other identification of each fishing vessel for which a permit is sought, together with the name and address of the owner thereof; and ”(B) the tonnage, hold capacity, speed, processing equipment, and type and quantity of gear, including an inventory of special equipment required under section 302, with respect to each vessel. ”(2) The Secretary is authorized to charge a fee for issuing a permit under this section. The level of fees charged under this para- graph may not exceed the administrative cost incurred in granting an authorization and issuing a permit. Fees collected under this paragraph shall be available, subject to appropriations, to the Under Secretary of Commerce for Oceans and Atmosphere for expenses incurred in issuing permits under this section. ”(3) After the effective date of the Inter- national Dolphin Conservation Program Act, no vessel of the United States shall operate in the yellowfin tuna fishery in the eastern tropical Pacific Ocean without a valid per- mit issued under this section. ”(b) PERMIT SANCTIONS.\u2014(1) In any case in which\u2014 ”(A) a vessel for which a permit has been issued under this section has been used in the commission of an act prohibited under section 305; ”(B) the owner or operator of any such ves- sel or any other person who has applied for or been issued a permit under this section has acted in violation of section 305; or ”(C) any civil penalty or criminal fine im- posed on a vessel, owner or operator of a ves- sel, or other person who has applied for or been issued a permit under this section has not been paid or is overdue, the Secretary may\u2014 ”(i) revoke any permit with respect to such vessel, with or without prejudice to the issu- ance of subsequent permits; ”(ii) suspend such permit for a period of time considered by the Secretary to be ap- propriate; ”(iii) deny such permit; or ”(iv) impose additional conditions or re- strictions on any permit issued to, or applied for by, any such vessel or person under this section. ”(2) In imposing a sanction under this sub- section, the Secretary shall take into ac- count\u2014 ”(A) the nature, circumstances, extent, and gravity of the prohibited acts for which the sanction is imposed; and ”(B) with respect to the violator, the de- gree of culpability, any history of prior of- fenses, and other such matters as justice re- quires. ”(3) Transfer of ownership of a vessel, by sale or otherwise, shall not extinguish any permit sanction that is in effect or is pend- ing at the time of transfer of ownership. Be- fore executing the transfer of ownership of a vessel, by sale or otherwise, the owner shall disclose in writing to the prospective trans- feree the existence of any permit sanction that will be in effect or pending with respect to the vessel at the time of transfer. ”(4) In the case of any permit that is sus- pended for the failure to pay a civil penalty CONGRESSIONAL RECORD \u2014 HOUSEH9442 July 31, 1996 or criminal fine, the Secretary shall rein- state the permit upon payment of the pen- alty or fine and interest thereon at the pre- vailing rate. ”(5) No sanctions shall be imposed under this section unless there has been a prior op- portunity for a hearing on the facts underly- ing the violation for which the sanction is imposed, either in conjunction with a civil penalty proceeding under this title or other- wise.”. (f) PROHIBITIONS.\u2014Section 305 is repealed and section 307 (16 U.S.C. 1417) is redesig- nated as section 305, and amended as follows: (1) In subsection (a): (A) By amending paragraph (1) to read as follows: ”(1) for any person to sell, purchase, offer for sale, transport, or ship, in the United States, any tuna or tuna product unless the tuna or tuna product is either dolphin safe or has been harvested in compliance with the International Dolphin Conservation Program by a country that is a member of the Inter- American Tropical Tuna Commission or has initiated steps, in accordance with Article V, paragraph 3 of the Convention establishing the Inter-American Tropical Tuna Commis- sion, to become a member of that organiza- tion;”. (B) By amending paragraph (2) to read as follows: ”(2) except in accordance with this title and regulations issued pursuant to this title as provided for in subsection 101(e), for any person or vessel subject to the jurisdiction of the United States intentionally to set a purse seine net on or to encircle any marine mammal in the course of tuna fishing oper- ations in the eastern tropical Pacific Ocean; or”. (C) By amending paragraph (3) to read as follows: ”(3) for any person to import any yellowfin tuna or yellowfin tuna product or any other fish or fish product in violation of a ban on importation imposed under section 101(a)(2);”. (2) In subsection (b)(2), by inserting ”(a)(5) and” before ”(a)(6)”. (3) By striking subsection (d). (g) REPEAL.\u2014Section 306 is repealed and section 308 (16 U.S.C. 1418) is redesignated as section 306, and amended by striking ”303” and inserting in lieu thereof ”302(d)”. (h) CLERICAL AMENDMENTS.\u2014The table of contents in the first section of the Marine Mammal Protection Act of 1972 is amended by striking the items relating to title III and inserting in lieu thereof the following: ”TITLE III\u2014INTERNATIONAL DOLPHIN CONSERVATION PROGRAM ”Sec. 301. Findings and policy. ”Sec. 302. Authority of the Secretary. ”Sec. 303. Reports by the Secretary. ”Sec. 304. Permits. ”Sec. 305. Prohibitions. ”Sec. 306. Authorization of appropriations.”. SEC. 6. AMENDMENTS TO THE TUNA CONVEN- TIONS ACT. (a) MEMBERSHIP.\u2014Section 3(c) of the Tuna Conventions Act of 1950 (16 U.S.C. 952(c)) is amended to read as follows: ”(c) at least one shall be either the Direc- tor, or an appropriate regional director, of the National Marine Fisheries Service; and”. (b) ADVISORY COMMITTEE AND SCIENTIFIC ADVISORY SUBCOMMITTEE.\u2014Section 4 of the Tuna Conventions Act of 1950 (16 U.S.C. 953) is amended to read as follows: ”SEC. 4. GENERAL ADVISORY COMMITTEE AND SCIENTIFIC ADVISORY SUBCOMMIT- TEE. ”The Secretary, in consultation with the United States Commissioners, shall: ”(1) Appoint a General Advisory Commit- tee which shall be composed of not less than 5 nor more than 15 persons with balanced representation from the various groups par- ticipating in the fisheries included under the conventions, and from nongovernmental con- servation organizations. The General Advi- sory Committee shall be invited to have rep- resentatives attend all nonexecutive meet- ings of the United States sections and shall be given full opportunity to examine and to be heard on all proposed programs of inves- tigations, reports, recommendations, and regulations of the commission. The General Advisory Committee may attend all meet- ings of the international commissions to which they are invited by such commissions. ”(2) Appoint a Scientific Advisory Sub- committee which shall be composed of not less than 5 nor more than 15 qualified sci- entists with balanced representation from the public and private sectors, including nongovernmental conservation organiza- tions. The Scientific Advisory Subcommittee shall advise the General Advisory Commit- tee and the Commissioners on matters in- cluding the conservation of ecosystems; the sustainable uses of living marine resources related to the tuna fishery in the eastern Pa- cific Ocean; and the long-term conservation and management of stocks of living marine resources in the eastern tropical Pacific Ocean. In addition, the Scientific Advisory Subcommittee shall, as requested by the General Advisory Committee, the United States Commissioners or the Secretary, per- form functions and provide assistance re- quired by formal agreements entered into by the United States for this fishery, including the International Dolphin Conservation Pro- gram. These functions may include each of the following: ”(A) The review of data from the Program, including data received from the Inter-Amer- ican Tropical Tuna Commission. ”(B) Recommendations on research needs, including ecosystems, fishing practices, and gear technology research, including the de- velopment and use of selective, environ- mentally safe and cost-effective fishing gear, and on the coordination and facilitation of such research. ”(C) Recommendations concerning sci- entific reviews and assessments required under the Program and engaging, as appro- priate, in such reviews and assessments. ”(D) Consulting with other experts as needed. ”(E) Recommending measures to assure the regular and timely full exchange of data among the parties to the Program and each nation’s National Scientific Advisory Com- mittee (or equivalent). ”(3) Establish procedures to provide for ap- propriate public participation and public meetings and to provide for the confidential- ity of confidential business data. The Sci- entific Advisory Subcommittee shall be in- vited to have representatives attend all non- executive meetings of the United States sec- tions and the General Advisory Subcommit- tee and shall be given full opportunity to ex- amine and to be heard on all proposed pro- grams of scientific investigation, scientific reports, and scientific recommendations of the commission. Representatives of the Sci- entific Advisory Subcommittee may attend meetings of the Inter-American Tropical Tuna Commission in accordance with the rules of such Commission. ”(4) Fix the terms of office of the members of the General Advisory Committee and Sci- entific Advisory Subcommittee, who shall receive no compensation for their services as such members.”. SEC. 7. EQUITABLE FINANCIAL CONTRIBUTIONS. It is the sense of the Congress that each nation participating in the International Dolphin Conservation Program should con- tribute an equitable amount to the expenses of the Inter-American Tropical Tuna Com- mission. Such contributions shall take into account the number of vessels from that na- tion fishing for tuna in the eastern tropical Pacific Ocean, the consumption of tuna and tuna products from the eastern tropical Pa- cific Ocean and other relevant factors as de- termined by the Secretary. SEC. 8. EFFECTIVE DATE. This Act and the amendments made by this Act shall take effect upon certification by the Secretary of State to the Congress that a binding resolution of the Inter-Amer- ican Tropical Tuna Commission, or another legally binding instrument, establishing the International Dolphin Conservation Program has been adopted and is in effect. The CHAIRMAN. No other amend- ment shall be in order except a further amendment printed in House Report 104 708, which may be offered only by the gentleman from California [Mr. MILLER] or his designee, shall be con- sidered read, shall be debatable for 1 hour, equally divided and controlled by the proponent and an opponent, and shall not be subject to amendment. AMENDMENT OFFERED BY MR. STUDDS Mr. STUDDS. Mr. Chairman, I offer an amendment made in order under the rule. The CHAIRMAN. The Clerk will des- ignate the amendment. The text of the amendment is as fol- lows: Amendment offered by Mr. STUDDS: In sec- tion 901(d)(2)(B) of the Dolphin Protection Consumer Information Act (as proposed to be amended by section 4(h)(1) of the amendment in the nature of a substitute made in order as original text), insert ”, chased, harassed, injured, or encircled with nets” after ”killed” in each of the places it appears. The CHAIRMAN. Pursuant to House Resolution 489, the gentleman from Massachusetts [Mr. STUDDS] and a Member opposed each will control 30 minutes. The Chair recognizes the gentleman from Massachusetts [Mr. STUDDS]. Mr. STUDDS. Mr. Chairman, I yield myself such time as I may consume. (Mr. STUDDS asked and was given permission to revise and extend his re- marks.) Mr. STUDDS. Mr. Chairman, let me begin by stating most emphatically that I would very much prefer not to be standing here debating this issue or of- fering this amendment. I have very lit- tle doubt that by now every Member in this Chamber, and there must be at least six of them, and those who are watching, are thoroughly confused about how best to save dolphins. Ap- parently, so are the environmental groups, and, quite frankly, so am I. Nonetheless, I offer this amendment because the one portion of this debate that should not be confusing is the def- inition of the word ”safe,” notwith- standing the fact that people in this city have been always able to take short English words and euphemize the meaning out of them. When I grew up, safe meant secure from danger, harm or evil. That is what the dictionary says it means. Under this bill, safe would permit doing all kinds of things to dolphins, CONGRESSIONAL RECORD \u2014 HOUSE H9443July 31, 1996 including seriously injuring them, and as long as no one actually noticed it happening, they might even be able to kill them. This legislation would define as safe a process that stops dolphins from feeding, separates mothers from their calves, injures animals, and al- lows them to be chased for hours until they are unable to swim any longer. We can only hope that the Committee on the Judiciary does not get a hold of this reasoning the next time it takes up reform of the criminal code. For three of the four debates during which we have had strong bipartisan support for legislation protecting dol- phins from the extraordinary slaughter that occurred in this fishery, I had the honor of chairing the subcommittee of jurisdiction. We passed the law requir- ing truth in tuna labeling because American consumers, American voters, and American schoolchildren de- manded it. They made it clear that they did not want to endorse the sell- ing of a product whose harvesting caused any harm to dolphins. Since its enactment in 1972, the Marine Mammal Protection Act has prohibited any, quote, attempt to harass, hunt, capture or kill any marine mammal, unquote. Again, it is illegal under current law to harass, hunt, capture or kill any marine mammal. That language is in the law because we know that these ac- tivities are not safe from marine mam- mals. Those who support the labeling change in this bill, I am sure, would not allow whale-watching vessels in my district to harass whales and separate mothers from nursing calves and then market those cruises as safe for whales. I suspect they would not allow Mr. YOUNG’s oil companies to conduct exploratory drilling that disrupts the feeding behavior of whales and then call the oil whale-safe. Two years ago, some of the environ- mental groups that are supporting this bill blocked regulations allowing dol- phin-feeding cruises in Florida and in Texas because they were convinced that the harassment of dolphins was not safe. The double standard in this bill, put there for Mexico’s sake, violates in my judgment the integrity of everything we on both sides of this aisle have worked to achieve over the last 20 years. The amendment is simple. It did not get read but it would have taken less time to read it than to designate it. It simply adds after the word ”killed,” and I quote, ”chased, harassed, injured or encircled with nets.” You cannot do any of those things under our amend- ment and call it dolphin safe. The amendment leaves intact the provisions of the bill that lift the em- bargoes on tuna. It leaves intact the remainder of the international agree- ment. But it retains honest informa- tion for American consumers, and that is all it does. Not long ago we held a debate on this floor about truth in nutrition labeling. Right now there is a bipartisan effort under way in both Chambers to estab- lish simple labels on clothing and sporting goods that would inform con- sumers if those products were made by child labor. Labeling means something to consumers. It means trust. The American people know what the word ”safe” means. If we cannot be honest about the meaning, then we should probably get rid of the label. Perhaps we could call it ”good for Mex- ico,” or ”NAFTA-consistent,” or ”caught under international guide- lines,” but we should not call it safe for dolphins, because by any standard, semantic or otherwise, it is not. Let me once again remind my col- leagues that the amendment does not address the international agreement. it does not address the embargo. It sim- ply says that we retain the sanctity and the meaning of the label ”dolphin- safe” which has been so successful as it is now in current law, which says that if they want to use that label on im- ported tuna, they not only have to demonstrate that that tuna was caught in a way that did not kill dolphins but did not involve chasing, harassing, in- juring, or encircling with nets the aforementioned dolphins. Like the gentleman from Florida [Mr. GIBBONS], I too have communed with my own dolphins on this matter and, as I have in the past, I can assure my colleagues that in unequivocally dolphin ways they have made it very clear to me that they support this amendment. That is pretty tough. I know the gentleman from Alaska is going to suggest that these may be a regional dialect in question here, and that dolphins in other parts of the country may be saying something dif- ferent, but I rather doubt that. I am also prepared to stipulate, as suggested by the gentleman from New York, that the gentleman from Mary- land is a class act. I think I made that observation myself even before the gentleman from New York [Mr. BOEH- LERT] did. I have no doubt whatsoever about that. I wish there were more like him in this Chamber. b 1900 Mr. Chairman, I reserve the balance of my time. Mr. SAXTON. Mr. Chairman, I rise in opposition to the amendment. The CHAIRMAN. The gentleman from New Jersey [Mr. SAXTON] will control 30 minutes. The Chair recognizes the gentleman from New Jersey [Mr. SAXTON]. Mr. SAXTON. Mr. Chairman, I yield such time as he may consume to the gentleman from Alaska [Mr. YOUNG]. Mr. YOUNG of Alaska. Mr. Chair- man, I thank the gentleman for yield- ing me this time. Mr. Chairman, I usually agree with my esteemed colleague from Massachu- setts on fishery issues. He and I have worked together for 24 years and rarely do we disagree on the issues of fish- eries. I must oppose his amendment, though, because the Gilchrest bill im- plements the Panama Declaration, as discussed in general debate, which locks into place binding conservation management measures for dolphin and other marine life. This bill is supported, as has been said before, by five environmental or- ganizations, the American Tunaboat Owners, the National Fisheries Insti- tute, the Seafarers’ International Union, the California Federation of Labor, the United Industrial Workers, the American Sportfishing Association, and the Clinton administration, al- though that gives me some reservation. Mr. Chairman, H.R. 2823 recognizes the international voluntary compli- ance with the Inter-American Tropical Tuna Commission’s dolphin conserva- tion program, which has been in place for the past 4 years. This bill incor- porates provisions into U.S. law to con- tinue the international cooperation and compliance. Over the last couple of months, Mr. GILCHREST has worked to address the concerns of the opponents to H.R. 2823. However, the definition of dolphin-safe has kept the two sides from reaching an agreement. The amendment being offered by Mr. STUDDS was offered at subcommittee markup by Congressman FARR and was defeated. The Studds-Miller amend- ment will keep the current dolphin- safe definition which will continue to outlaw the use of fishing practices with the lowest bycatch, despite techno- logical breakthroughs which have re- duced dolphin mortality by 97 percent. The proponents of this amendment will tell you that by keeping the cur- rent dolphin-safe definition, it will pro- tect dolphins. However, the Studds- Miller amendment will not end the en- circlement of dolphins by foreign fish- ermen in the eastern tropical Pacific Ocean. Since the adoption of the em- bargo in 1992, the number of dolphin sets has not decreased. Approximately 50 percent of sets by foreign fleets are on dolphin schools despite the embar- go. The Studds-Miller amendment also promotes fishing practices which have a high bycatch of juvenile tuna, bill- fish, sea turtles and sharks. Mr. Chairman, H.R. 2823 promotes conservation and management meas- ures based on science. It does not pro- mote the protection of one species over the needs of other marine species. This legislation protects dolphins and other marine life. The Studds-Miller amendment, on the other hand, will jeopardize the progress made in reducing dolphin mor- talities in the eastern tropical Pacific Ocean and do nothing to protect other marine life. Finally, the amendment will negate all of the international co- operation and compliance envisioned in the Panama Declaration. Therefore, I ask my colleagues to vote against the Studds-Miller amend- ment. I think it will actually cut this bill. Mr. STUDDS. Mr. Chairman, I find it difficult to believe the gentleman from CONGRESSIONAL RECORD \u2014 HOUSEH9444 July 31, 1996 Alaska has been here for 24 years given his appearance, but we will have to take his word for it. Mr. Chairman, I yield 2 minutes to the distinguished gentlewoman from Oregon [Ms. FURSE]. Ms. FURSE. Mr. Chairman, I rise in strong support of the Studds amend- ment. This amendment does one thing, it protects the integrity of the ”dol- phin safe” label. Now, it is really very simple. The rest of the world would like to get into our market, they would like to sell their product under the label ”dolphin safe,” but without this amendment and under this bill, tuna fisheries could chase, harass, injure dolphins and still get the benefit of the ”dolphin safe” label. Now, maybe in this bill we should have a ”dolphin less-safe” label or a ”dolphin almost-safe” label, but if we want the consumers to rely on the ”dolphin safe” label, we must pass the Studds amendment because we simply do not know what the effects are of chasing and harassing these mammals. However, marine mammal biologists believe that the trauma that dolphins endure under this type of encirclement does lead to the diminishment of the dolphin populations. I would remind my colleagues that our first obligation is to the U.S. consumer, not, not to the Mexican Government. We cannot allow our do- mestic consumer protection laws and environmental laws to be held hostage. Please join me and the millions of Americans who want the opportunity to choose the type of tuna they are buying. They want to know that ”dol- phin safe” means ”dolphin safe.” Sup- port the Studds amendment. Make this bill significantly better. Mr. SAXTON. Mr. Chairman, I yield 2 minutes to the gentleman from Mary- land [Mr. CARDIN]. Mr. CARDIN. Mr. Chairman, first let me thank my colleague from New Jer- sey for yielding me this time and thank him for his leadership on this issue. Mr. Chairman, I rise in support of H.R. 2823 and against the Miller-Studds amendment. I first want to compliment my colleague from Maryland, Mr. GILCHREST, for his leadership on this legislation. He has done a great job in bringing this issue forward, which would implement the Panama Declara- tion by opening up the U.S. market to tuna caught in compliance with the Tuna Commission Program, which would reduce dolphin mortality, lessen the bycatch of other forms of marine life and sustain dolphin and fish popu- lations for the future. Mr. Chairman, people are most con- cerned with the practice of dolphin en- circlement by fishing vessels. The rate of dolphin mortality under the Panama Declaration has dramatically declined because of the declaration’s goals to strictly limit any deaths, provide tuna- boat crew training, and require inter- nationally trained observers on all tuna vessels. This bill requires that the annual mortality rate be further re- duced to less than a fraction of 1 per- cent of the dolphin population, leading to the elimination of dolphin mortali- ties altogether. The ”dolphin-safe” label is preserved because certified in- spectors aboard ship guarantee that no dolphins were killed. We should not forget that other methods of catching tuna kill other sea life. Tuna have been known to swim near logs and debris close to shorelines. Fishermen who cast their nets to catch these tuna don’t kill dolphins, but they do kill a huge bycatch of sharks, en- dangered sea turtles, and juvenile tuna whose survival is crucial to tuna pros- perity years from now. Because of the progress made through an international effort led by the United States, we have negotiated an agreement among all the countries that have fishing vessels in the eastern Pacific. Dolphin conservation gains have come as a result of more careful fishing and international cooperation, and we must continue with this progress by passing H.R. 2823. Mr. Chairman, I urge my colleagues to defeat this amendment that would compromise this bill. Let us pass H.R. 2823. It is in the interest of the environ- ment, and I urge my colleagues to sup- port the legislation. Mr. STUDDS. Mr. Chairman, I yield 2 minutes to the gentleman from Califor- nia [Mr. FARR]. Mr. FARR of California. Mr. Chair- man, I thank the gentleman from Mas- sachusetts for yielding me this time. Mr. Chairman, I rise in support of the Studds amendment and let me tell my colleagues why. There is a problem that I think the author, the gentleman from Maryland [Mr. GILCHREST], is try- ing to address. We all want to address that problem, and that is the problem of bycatch. But the bill, as written, really does not do that without harm- ing dolphins, and that is why the Studds amendment makes the bill a better bill. It is very simple. In America we have what we call truth in labeling. For 6 years U.S. consumers have been buying tuna in the stores that say that it is dolphin safe. We all know what the word ”safe” means, our constituents know what it means, school kids know what it means. They are confident that tuna labeled as ”dolphin safe” has not been caught in a way that harms dol- phins. The amendment that the gentleman from Massachusetts [Mr. STUDDS] is of- fering only puts 6 words into law. If the bill goes through right now, however, dolphins that are chased and die can be labeled ”dolphin safe.” Dolphins that are harassed and die can be labeled ”dolphin safe.” Dolphins that are in- jured or encircled with nets and die can be labeled as ”dolphin safe.” That is not truth in labeling, and that is the problem here. We need to have truth in labeling. I urge my colleagues, add these 6 words to this bill to make it a good bill, to make it a better bill, to make it a bill we can all vote for and support, because that is what the American peo- ple want. They do not want us in Con- gress to play tricks with labels on cans in order to enhance an industry that fishes way offshore from here. Changing the definition of ”dolphin safe” now without a sound scientific basis for that decision not only risks undercutting the progress we have made in the last decade to protect dol- phins, but it also misleads the Amercan consumers. Vote ”yes” on this simple amend- ment. Restore order to this bill. Mr. SAXTON. Mr. Chairman, I yield 8 minutes to the gentleman from Mary- land [Mr. GILCHREST] who was the first to point out to me that this bill not only protects dolphins, but it also pro- tects sea turtles, sharks, and billfish. Mr. GILCHREST. Mr. Chairman, I thank the gentleman from New Jersey for yielding me this time, and I thank the gentleman from Massachusetts for his applause. Mr. Chairman, if we could just look at this photograph over here for a sec- ond, what I want to try to display to my colleagues is the present condition of the marine ecosystem under the present law. When we talk about bycatch, that means discarded fish, that means dis- carded marine mammals, that means discarded reptiles, that means dis- carded turtles, sea turtles, many of which are endangered. If we look at this picture, up in the right-hand corner we will see sharks that are discarded in the present proc- ess of fishing techniques. If we look at this photograph here, we will see in this trough immature tuna that will not be able to spawn, that will not sustain the population. The basic point I want to get across here is that we need to find new meth- ods of fishing, new techniques. Unless we change what we are doing at the present time, and unless we have an agreement with other countries to try to preserve and sustain the resources of our coastal oceans, we cannot do it alone. Mr. SAXTON. Mr. Chairman, will the gentleman yield? Mr. GILCHREST. I yield to the gen- tleman from New Jersey. Mr. SAXTON. Mr. Chairman, I just want the gentleman to explain perhaps to Members who are not on the com- mittee why it is that fishing on log sets and why it is that fishing on schools of tuna produces a larger bycatch than the proposed method of fishing on dolphins. Mr. GILCHREST. Mr. Chairman, re- claiming my time, I will try to in 60 seconds educate people on encircle- ment, log sets, and tuna sets, if I can. Basically, encirclement the way we did it in the past was bad. We had an embargo, we ended it, we reduced the dolphin kills from 100,000 a year down to under 4,000 a year. That is what we are trying to do here. CONGRESSIONAL RECORD \u2014 HOUSE H9445July 31, 1996 Log sets. Tuna, for some strange rea- son, will swim under something. If they do not swim under dolphins like ma- ture tuna fish do, they will swim under logs. Now, we have a lot of immature tuna that swim under logs. We do not have any dolphins there, but when they encircle the tuna and catch them in these big nets, not only do they catch tuna fish, but what we see in these pic- tures here is they catch many more marine species. These species are under stress be- cause they are being discarded. They are not being used. Mr. SAXTON. Mr. Chairman, if the gentleman would continue to yield. This is an important point. If we prohibit fishing on dolphins, which we now believe we can do much safer than we used to, then we not only permit fishing on log sets and permit fishing on schools, but we encourage those fishermen who would normally be fishing in a safer way on dolphins to go fish on log sets and on schools where we get this higher bycatch. Mr. GILCHREST. The whole reason for this particular legislation is three- fold: to reduce the number of dolphins killed, to reduce the number of marine species that are killed in the process of catching tuna, and to set up an agree- ment that we are sponsoring to ensure the sustainability of the marine eco- system. We can then open the door to a number of other environmental agreements, including global warming. What I want to do is to talk briefly on some of the charges that the other side has made. Last year there were 3,300 dolphins killed in the eastern tropical Pacific. That is down 99 percent from what it was. That is using this particular tech- nique. Why do we have in our bill a maxi- mum, maximum, of 5,000 dolphins killed? That is because there will be more fishers in the fishery, so we need to have some reasonable number. Five thousand dolphins killed is biologically insignificant as assessed by some of the best scientists in the world. One of them is from the National Oceanic and Atmospheric Administration, a woman named Elizabeth Edwards, who says that is biologically insignificant. We understand that. We do not ac- cept the 5,000 number. We will continue to work toward zero. Here is what Dr. Edwards says about the study, that the process that we are trying to get into law stresses dolphins to the degree that it harms them. She says, ”In particular the 5 reviewers were unanimous in their opinion that the study failed to confirm the stated conclusion that dolphins were experi- encing acute continuous stress.” b 1915 So I wanted to dismiss that accusa- tion that the encirclement, where you allow the dolphins to get out, which is what we are doing, causes stress that harms the dolphin. There is no evi- dence to that effect. The Center for Marine Conservation, one of our more sophisticated, respected environmental groups around the country, says argu- ably stress is not found to lead to spe- cies decline, the stress that they expe- rience in this encirclement. And under- stand, we do not want to encircle dol- phins. This is not the last step in this process. This international agreement does not end the way we catch tuna fish. This international agreement by the United States, by the environmental groups such as Greenpeace, Center for Marine Conservation, we want to con- tinue to use the expertise of the United States to find ways to ensure the sus- tainability of the marine ecosystem and reduce dolphin kills to zero and some day hopefully end encirclement entirely. But we cannot do it alone. We need this international agreement. I want to point out one other thing. IATTC is showing an increase in dol- phin population. Now, the comment that we are im- porting tuna fish for the purpose of doing something for the benefit of Mex- ico or Mexican fishermen, and we are not concerned about the death of dol- phins. Well, I want to say something. In our bill, on every single boat there will be, there must be, observers in order to sell that tuna fish into the United States. So we will know, how- ever unfortunate it might be, every single dolphin death. And we will know that because we have observers on board those boats. Since we have ob- servers on those boats, we recognize in the past year there has been 3,300 dol- phin deaths, but we know that, and we are trying to reduce that. Now, the present regime, before this legislation goes into effect, we are get- ting much of our tuna fish, if not most of our tuna fish, from the western trop- ical Pacific, where there are no observ- ers on those boats, and it is fundamen- tally understood. It is fundamentally understood that from 10,000 to 40,000 dolphins are killed a year. We have no control over that. Do we want to have dolphin kills without anybody to ob- serve those dolphin deaths and then quite likely import that tuna, can it in the United States, and then label it dolphin safe? I would much rather have an understanding as to the number of dolphin deaths and a continuous effort to reduce those dolphin deaths. Mr. Chairman, I urge my colleagues to oppose the Miller-Studds amend- ment and to support the legislation. It is an international agreement of very positive proportions so that we can continue down the road as a planet, as a world population that is continuing to increase to have some sense of un- derstanding together as a global com- munity to sustain the limited re- sources that are essential for the food of this planet. Mr. STUDDS. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I want to correct one thing. The gentleman from Maryland may be right or he may be wrong, but he is simply asserting something with- out documentation. There has only been one study to date that we know on the effect of encirclement of dol- phins, and I am holding it in my hand. It is from the Journal of Pathophysiology, and it has the impos- ing title of ”Adrenocortical Color Darkness and Correlates as Indicators of Continuous Acute Premortem Stress in Chased and Purse-seine Captured Male Dolphins.” So there. I want the record to reflect that, done by the Na- tional Marine Fisheries Service, the only study we have suggests, does not assert, suggests to the contrary. Now, the dolphins as usual speak for themselves. There are two species that have been consistently, over time, chased and netted in this fishery: The eastern spinner dolphin and the north- ern offshore spotted dolphin. I do not know which one the gentleman is com- muning with. According to the Na- tional Marine Fisheries Service, these two populations are at less than 20 per- cent of their original size. This is an indisputable fact due to the 8 million deaths that have taken place over the last 20 years. Now, we have been enormously suc- cessful in reducing those deaths, as most people have mentioned speaking on both sides of this issue, but, and this is a large ”but,” in spite of the much observed lower level of dolphin deaths these two dolphin populations are now growing. The fact is worth repeating. Although dolphin deaths have dropped from approximately 100,000 annually to about 3,600, we see no increase in these populations. Many biologists believe that the con- stant injury and harassment of these animals is preventing the recovery of the populations. I do not pretend to as- sert that as fact. I have been quite open from the beginning that I do not know. But I suggest that no one else here knows either. Insofar as we have any study to suggest that the contrary may be true, to assert something on the floor of this hallowed institution does not make it so, and in this case it might be that a little bit of humility and caution might be in order. Mr. Chairman, I yield 2 minutes to the gentleman from New Jersey [Mr. PALLONE]. Mr. PALLONE. Mr. Chairman, I urge my colleagues to support the amend- ment offered by the gentleman from Massachusetts [Mr. STUDDS]. Consum- ers have a right to know that ”dolphin safe” means that dolphins were not harassed or killed. That is what the label has meant for the last 6 years. Under the Studds amendment, tuna can be sold in the United States re- gardless of whether it was caught using safe techniques, but it could not be la- beled ”dolphin safe” unless it meets the standard that every American consumer has relied upon and should be able to continue to rely upon. It is hard to believe that chasing dol- phins by speedboats and helicopters until they are too exhausted to escape CONGRESSIONAL RECORD \u2014 HOUSEH9446 July 31, 1996 and then encircled in a purse-seine net can be considered safe. At worst, the netted dolphins face the risk of crushed bones, loss of fins, or suffocation in the nylon nets. At the very least, mortal injuries may ensue from separation of mothers from their calves or the severe stress caused by this harassment which may have detrimental effects. One study suggests that there may be immediate effects of stress on these animals or long-term effects on the population as a whole, as indicated by the reduced pregnancy rates from heav- ily fished areas. There are signs that netting dolphins may have adverse ef- fects, with the stress being one possible cause. All of which may not necessarily go observed as the dolphins also sink or survive the experience only to die later. Meaning that the change to the ”dolphin safe” label would render it worthless as now observed, and I quote, ”observed,” mortalities occurred dur- ing the netting. The bottom line is that the only true safe method to fish for tuna is to re- move dolphins from the equation. The public knows this and so do over 80 en- vironmental groups that support this amendment. That is why I voted for the current definition of dolphin safe in 1990 under the Dolphin Protection Consumer Information Act. At Mexico’s request in 1991, a GATT panel found that trade embargoes on tuna imports under the authority of the Marine Mammal Protection Act did not meet with trade obligations. But the dolphin-safe label was not an issue before the GATT dispute panel; only the embargo itself. There is no le- gitimate trade conflict with the dol- phin-safe label. The Studds amendment will continue to preserve the dolphin- safe label, which is an integral part of dolphin protection. Mr. Chairman, I include the following ”Dear Colleague” letter for the RECORD. SAVE THE ”DOLPHIN SAFE” LABEL DEAR COLLEAGUE: H.R. 2823, ”The Inter- national Dolphin Conservation Program Act” will change U.S. law and allow tuna caught by methods that injure and terrorize dolphins to be labeled ”Dolphin Safe.” The bill’s proponents admit that under H.R. 2823, the number of dolphins that will be killed could rise. In fact, H.R. 2823 specifically per- mits a 25% increase in the number of dead dolphins. This legislation would perpetuate a fraud on American consumers. Consumers have a right to know that ”Dol- phin Safe” means that dolphins were not harassed or killed. That is what the label has meant for the past 6 years. Under the Studds amendment, tuna can be sold in the United States regardless of whether it was caught using safe techniques. But it could not be labelled ”Dolphin Safe” unless it meets the standard that every American consumer has relied upon and should be able to continue to rely on. WHAT THE ”DOLPHIN SAFE” LABEL MEANS H.R. 2823 (Gilchrest) Studds Amendment Dolphins can be encircled, harassed, injured and tuna can still be called Dolphin Safe); 25% in- crease in dolphin mortality al- lowed. Current law: no harassing tech- niques, no dolphin injuries, no dolphin deaths; non-safe tuna may be sold without the label. If we can’t save dolphins, at least we can save the label. Support the ”Dolphin Safe” Label: Support the Studds Truth in Labelling Amendment. Sincerely, SAM FARR. FRANK PALLONE, Jr. Mr. SAXTON. Mr. Chairman, I yield 1 minute to the gentleman from Mary- land [Mr. GILCHREST] for purposes of responding to the author of the amend- ment. Mr. GILCHREST. Mr. Chairman, in response to the assertion of the gen- tleman from Massachusetts, let me re- spond to the study that was done on stress by Dr. Elizabeth Edwards of the National Oceanic and Atmospheric Ad- ministration. This is what she said about the study concerning stress in dolphins: ”While all five reviewers felt that post-mortem examination of one or more physiological or histological sam- ples taken from dolphins killed during purse-seining might well provide some indication of types and amounts of stress the animals may have experi- enced prior to death, none of the re- viewers,” talking about the study that was done, ”none of the reviewers felt that the body of work described in this paper presented any convincing evi- dence. In particular, the reviewers” of the study ”were unanimous in their opinion that the study failed to con- firm the stated conclusion * * *” Mr. SAXTON. Mr. Chairman, I yield 2 minutes to the gentleman from San Diego, CA [Mr. BILBRAY]. Mr. BILBRAY. Mr. Chairman, I re- gretfully have to oppose the Studds amendment, and I would like to clarify that. I oppose the amendment because it locks us into the old concepts of spe- cies management that might have served us well in the seventies and the eighties, but is totally deficient for the latter part of the nineties and going into the next century. Mr. Chairman, one of the great ac- complishments that we are seeing this decade is the movement from single- species management to multispecies management when it comes to environ- mental protection. This amendment would lead us back into single-species management. Mr. Chairman, I do not think anyone who originally supported this legisla- tion meant to endanger sensitive ma- rine species or to encourage, if not mandate, fishing practices that would directly and negatively impact dif- ferent species, including endangered species. The loss of endangered sea tur- tles as a result of the present alter- native to this legislation, H.R. 2823, the main bill, was, I think, totally unfore- seen back in the 1970’s and the 1980’s, and new science says that we need to address this. Now, Mr. Chairman, I do not want to make this a battle between Flipper and the Ninja Turtles; that we are going to have to choose between porpoises and billfish, or dolphins and endangered turtles. I think there is a proper way to do this, and one of the ways is to direct our fishing practices in a manner that would facilitate protection of multiple species, as H.R. 2823 would do. This amendment would strike that concept and move us back to the era of the 1970’s and 1980’s; the old concept that we will only look at one species rather than the entire environment. Mr. Chairman, I ask that my col- leagues consider the fact that both Vice President GORE and Greenpeace, among others, recognize that it is time to move forward and be more progres- sive and more global in our approach to ocean species management. America must lead, but we cannot do this alone, and species management cannot be done appropriately when focused only on one species or subspecies. This amendment would move us back to that position, that would hamstring us in addressing these protection issues in a comprehensive manner. So I would ask the supporters of the motion to recognize its unintentional but negative impact to endangered ma- rine species, and to reflect on the facts which are that this Studds amendment does not address the concerns that we need to address to definitely protect dolphins and other ocean animals. Mr. SAXTON. Mr. Chairman, I yield 3 minutes to the gentleman from Ari- zona [Mr. KOLBE]. Mr. KOLBE. Mr. Chairman, I thank the gentleman for yielding. Mr. Chairman, I rise in support of this bill H.R. 2823, the International Dolphin Conservation Program Act and in opposition to the amendment offered by the gentleman from California [Mr. MILLER] and the gentleman from Mas- sachusetts [Mr. STUDDS]. I think this is an exceptional bill pro- viding an international solution to an international problem, and that is the regulation of tuna fishing in the open seas. It is a good bill and reflects a good compromise among a lot of com- peting interests. But, I think we need to start by putting it in historical per- spective. In the mid-1970’s, dolphin mortality rates were clearly at unacceptable lev- els. Over 500,000 dolphins were being killed each year in pursuit of tuna stocks. So in response to this unaccept- able loss of life among the dolphin pop- ulation, 5 years ago the United States placed an embargo on the importation of tuna caught using primitive encir- clement measures. But as has been pointed out in this debate, in recent years tuna fishermen have developed new and innovative methods which enable them to capture tuna without ensnaring dolphins at the same time. We have tough new mon- itoring procedures that have been in- stituted and international oversight re- sponsibility has been strengthened. CONGRESSIONAL RECORD \u2014 HOUSE H9447July 31, 1996 Over time, these procedures have be- come increasingly internationalized, first through voluntary compliance with the La Jolla Agreement, then through permanent binding procedures set forth in the Panama Declaration. By implementing the Panama Dec- laration, H.R. 2823 brings us along in the next step as the gentleman from Maryland has suggested, the next step in this evolutionary process. It locks in the reforms of the Panama Declaration and strengthens compliance proce- dures. The bill also provides incentives needed for other nations to remain in compliance by providing those nations who abide by the agreement with ac- cess to their most important tuna mar- ket, the United States. It was this issue with Mexico and my work with the United States-Mexico Interparliamentary Conference that brought me first to this issue. b 1930 Make no mistake about it, these market incentives are absolutely criti- cal to the continued success of the pro- gram. The procedures required under the Panama Declaration are costly: on- board observers on all tuna boats, indi- vidual boat licensing, and use of nets and divers to ensure the safety of the dolphin population. But let us be blunt. Without the U.S. market as an incentive, these nations are certain to revert to destructive fishing practices of the past and just export to the markets that they can, and we will end up with dolphin kill ra- tios as high as we had in the 1970’s and 1980’s. If we do not act today and enact this legislation without amendment, what we have left is a dolphin-safe label but no dolphins. As has been pointed out, this bill does more than protect dolphins. It provides an effective method to con- serve total marine ecosystem in the eastern Pacific. The fishing practices encouraged by proposed alternative legislation result in an unreasonably excessive bycatch of a number of dif- ferent species, including endangered sea turtles, sharks, billfish, and large numbers of tuna and other fish species. In fact, the fishing procedures advo- cated by the opponents to this bill are likely to endanger the long-term health of tuna stocks themselves. We need this bill. We can do it. We can have tuna fishing, and we can pro- tect dolphins. We have the technology to preserve the marine ecosystem and protect the dolphin. Let us do it. Let us implement the legislation of the Pan- ama Declaration. Keep the dolphin and the marine ecosystem safe. I urge sup- port for the bill and opposition to the Studds amendment. Mr. STUDDS. Mr. Chairman, now that English is about to become the of- ficial language and we have La Jolla and Saint Diego, I guess I should yield to the gentlewoman from Saint Frank or Saint Francis, whatever that will become once we become English speak- ing. Mr. Chairman, I yield 3 minutes to the distinguished gentlewoman from California [Ms. PELOSI]. Ms. PELOSI. Mr. Chairman, I thank the gentleman for yielding and rise in support of his amendment. It is a wonderful thing in the House of Representatives that we are express- ing all of this concern for the dolphin. Hopefully, this will carry over to the human species as well. Mr. Speaker, as I said, I rise in oppo- sition to the legislation as it is and in the hopes that our colleagues will vote in support of the Studds amendment. As has been said, in 1990, environ- mental, animal and consumer activists won a victory with the advent of the dolphin-safe label for commercially sold tuna. No product can be labeled dolphin-safe if the tuna is caught by chasing, harassing or netting dolphins. The issue before the house tonight is about what can be labeled dolphin-safe. The dolphin-safe label has worked to preserve dolphin populations. After Congress adopted its ban of imported tuna caught using enclosure nets in 1992, the dolphin mortality rate dropped from 100,000 per year to less than 3,000, as has been indicated. The bill before us would change the meaning of dolphin-safe to allow ac- tivities that would include highspeed chases with boats and helicopters, the separation of mothers from their calves, the withholding of food from trapped schools and the deliberate in- jury of dolphins to prevent the school from escape. I call to the attention of my col- leagues this chart which compares what the dolphin-safe label means. Under the bill, it means this. Under the public view, dolphin-safe means this. We have got to keep faith with the public in our truth-in-labeling. In fact almost any fishing activity would be termed dolphin-safe provided that no dolphins were observed to die during the catch. Dolphin populations have been depleted by as much as 80 percent. The dolphin-safe label stopped this trend and has proved one of the most successful consumer initiatives in U.S. history. Americans care about what is left of our natural resources and the threatened creatures who in- habit them. The Studds amendment maintains the integrity of the dolphin-safe stick- er to the definition of the label. Dol- phin-safe must mean that dolphins are safe and not injured or killed in the hunt for tuna. H.R. 2823 allows an increase in the dolphin deaths and unlimited injury and harassment of dolphin. That is by no means dolphin-safe. Mr. Chairman, I urge our colleagues to support the Studds amendment which would enable us to keep the promise made to the American people. The trade agreements would not result in the weakening of U.S. environ- mental laws. At the same time, it would help us live up to those trade ob- ligations and protect dolphins. I urge an ”aye” vote on the Studds amend- ment. Mr. SAXTON. Mr. Chairman, I yield 1 minute to the gentleman from Mary- land [Mr. GILCHREST] who is busy re- erecting some visual aids. Mr. GILCHREST. Mr. Chairman, I thank the gentleman for yielding the time. If I may, the gentleman from Califor- nia asked me to get my own chart so I will not use the chart that the gentle- woman from California [Ms. PELOSI] used just a second ago. What I would like to do, when we looked at the chart from Ms. PELOSI, the fine gentlewoman from California, she showed us a dol- phin sort of beat up and said that that is what is going to happen under our bill, and then a dolphin that looked really healthy and find and not beat up. That is what would happen with their bill and their dolphin-safe bill. What I want to explain though, just another point, existing law, 10,000 40,000 dolphins are killed that are not observed. Many likely are killed in the process of catching tuna fish that are sold in the United States because we do not observe those deaths as dolphin- safe with the label. What we want to do is put an ob- server on every single boat, every sin- gle time they fish for dolphins, every single time they fish for tuna, and they cannot sell that tuna in the United States unless they have a licensed ob- server on board. We want to protect the system, protect the truth in label- ing. Vote against the Studds amend- ment. Mr. STUDDS. Mr. Chairman, I yield 2 minutes to the gentleman from Califor- nia [Mr. MILLER] so that he may po- litely but devastatingly respond to the gentleman from Maryland. Mr. MILLER of California. Mr. Chair- man, the chart is terribly graphic and makes the point. We will have observ- ers on the boat. What observers can ob- serve is dolphins being, for example, encircled, harassed, hunted down, maimed, and injured. Under that bill that is what is allowed. Under current law, that is not al- lowed, that is not allowed. And to be sold on supermarket shelves, the tuna that results cannot be sold as dolphin- safe. What we are saying is, you can have your ocean management tech- niques, you can try your bycatch, you can do all of those things. But when it results in a dolphin being maimed, being harassed and being chased and being stressed and being exhausted, do not try to tell the American consumer that that is dolphin-safe. What the Studds amendment says is let the consumer choose. Let the consumer choose. They can choose the existing can of tuna with the existing label under the Studds amendment that they know is dolphin-safe. Or they can choose some pale imitation that lets you kill an increased number of dolphins, lets you harass, lets you en- circle, lets you stress, lets you harm, lets you maim, all with observers. CONGRESSIONAL RECORD \u2014 HOUSEH9448 July 31, 1996 The American people do not want ob- servers to this activity. They want an end to this activity. That is what the Studds amendment allows to happen. Mr. STUDDS. Mr. Chairman, I yield myself 30 seconds. I observe no further requests for time on this side. If the gentleman has the right to close and intends to use it, I trust he will do it with humane brev- ity. I challenge the gentleman to prove to a certainty that anything that can be said has not already been said. With that in mind and secure in the feeling that what has been said on be- half of the amendment far outweighs in subtlety and in strength and in humor and goodwill that which has been said in opposition to the amendment, I con- fidently, quietly, and quickly yield back the balance of my time. Mr. SAXTON. Mr. Chairman, I yield myself such time as I may consume for purposes of closing debate. Mr. Chairman, I think the gentleman is right. Much of what has been said has been said. It is pretty obvious to me that the weight of the arguments in opposition to the gentleman’s amend- ment are strong and heavy and that we should move to a vote, hopefully di- rectly to final passage. Just let me close by summarizing. A vote in favor of final passage and pre- viously to that, I suppose, against the Studds amendment enables the United States to join with 11 other countries to put in place fishing methods agreed to by those 12 countries that will pro- tect dolphins, protect sea turtles, pro- tect sharks, protect billfish, and pro- tect juvenile tuna. That is what the gentleman from California [Mr. BILBRAY] was referring to when he talked about multispecies manage- ment. It is true, I suspect, that if we were to reject this bill and in so doing enact the Studds amendment, I suppose that unilaterally we could protect dolphins in 1 country out of the 12. My under- standing is that that includes pres- ently something in the neighborhood of six to eight fishing boats on the west coast of the United States. That is what we would be regulating, six to eight boats in one country as opposed to many boats in a dozen countries. In addition to that, Mr. Chairman, I would just like to point out, once again, that it would be unusual for the major environmental groups, including the National Wildlife Federation, the Environmental Defense Fund, Greenpeace, the World Wildlife Fund, the Center for Marine Conservation, and others to join with this chairman of the Subcommittee on Fisheries, Wildlife and Oceans and the Clinton ad- ministration and variety of labor groups in supporting final passage of this bill, if it were subject to all of the charges that have been made by some of the opponents. Obviously, we hope that this bill passes. As one who has been a sup- porter of marine wildlife and aqua wildlife all of my career, along with many other Members, such as Mr. GILCHREST and others from both sides, we believe on a bipartisan basis that this bill deserves to be passed, should be passed, and will implement a very important international agreement. Mr. Chairman, I ask Members on both sides of the aisle for strong bipar- tisan support and encourage a ”no” vote on the Studds amendment and ob- viously a ”yes” vote on final passage. Mr. OLVER. Mr. Chairman, this amendment offers American consumers exactly what we know they want. It took American citizens more than two decades to get the Congress to end the slaughter of dolphins and adopt dol- phin-safe labeling of tuna. The terrible pictures of herds of dead dol- phins in a sea of red are practically gone from memory. It’s been great environmental suc- cess. Without the Studds amendment the underly- ing bill moves us backward. No, it doesn’t mean that we’ll return to the days of mass dol- phin slaughter, but it does mean that dolphins will be chased, harassed, and encircled. Perhaps there is no mammal more symbolic of American’s love and concern for animals\u2014 than the dolphin. As this Congress desperately attempts to recast itself in the wake of its poor environ- mental record\u2014no vote is easier and will please such a broad spectrum of the Amer- ican public than the Studds amendment. Recently, this Congress has voted for consumer-friendly right-to-know provisions in several bills. Yet today, this bill aims to confuse the dol- phin-safe label and deceive the American pub- lic. Americans want to know which tuna has been caught without risks to dolphins. The dolphin-safe label ought to mean what it says. Finally, I believe it’s fair to say that no one in recent memory in this body has done so much to protect so many of one individual species than my colleague from Massachu- setts. We should honor his 20 years of work and expertise by supporting the Studds amend- ment. If Studds does not pass\u2014we could be faced with another tuna boycott until the American public can be sure that dolphin-safe labels are telling the truth. Ms. ESHOO. Mr. Chairman, I rise in support of this important and necessary amendment, and I thank Representatives STUDDS and MIL- LER for all of their efforts to protect our plan- et’s ocean life and our Nation’s consumers. Mr. Chairman, this amendment is simple: It protects dolphins from being chased, har- assed, injured, or encircled with nets by tuna fishermen. It’s necessary because the underlying legis- lation would allow unlimited harassment and injuring of dolphins, so long as no more than 5,000 are actually killed in the eastern tropical Pacific each year. Despite increased deaths and injury to dolphins, tuna caught under the provisions of the underlying legislation could still be labeled in the United States as dolphin- safe. That’s not acceptable. In my view, there should be zero dolphin deaths associated with our dolphin-safe label. Seven years ago, 100,000 dolphins were slaughtered each year. As a result of the U.S. tuna industry’s voluntary policy of refusing to purchase tuna caught while harming or killing dolphins, that number has dropped to approxi- mately 3,200\u2014an impressive 97 percent. The Studds amendment retains the integrity of the dolphin safe label by ensuring that dol- phins are not harassed while fishing for tuna. Although H.R. 2823, even if improved by the Studds\/Miller amendment, would condone more dolphin deaths than are associated with the current U.S. dolphin safe label, it would actually result in fewer dolphin deaths world- wide. This is because only 5,000 deaths total would be permitted, and only those foreign fishermen that fish in compliance with the 5,000 limit would be able to sell their tuna to the U.S. market. Consumers need to know that dolphin safe means what it says. The Studds amendment although imperfect, helps move us in that di- rection. Mr. Chairman, I urge my colleagues to sup- port the Studds amendment, support the wish- es of the American consumer, and support the dolphins. Mr. Chairman, I yield back the bal- ance of my time. The CHAIRMAN. The question is on the amendment offered by the gen- tleman from Massachusetts [Mr. STUDDS]. The question was taken; and the Chairman announced that the noes ap- peared to have it. RECORDED VOTE Mr. STUDDS. Mr. Chairman, I de- mand a recorded vote. A recorded vote was ordered. The vote was taken by electronic de- vice, and there were\u2014ayes 161, noes 260, not voting 12, as follows: [Roll No. 384] AYES\u2014161 Abercrombie Andrews Baldacci Barcia Barrett (WI) Becerra Berman Bilirakis Blumenauer Blute Bonior Borski Brown (CA) Brown (FL) Brown (OH) Bryant (TN) Bunn Campbell Chabot Clay Clayton Clyburn Coleman Collins (IL) Collins (MI) Conyers Costello Coyne Cummings de la Garza DeFazio DeLauro Dellums Deutsch Dixon Doggett Dornan Doyle Durbin Engel Ensign Eshoo Evans Farr Fattah Fazio Fields (LA) Filner Flanagan Foglietta Foley Forbes Frank (MA) Franks (NJ) Frost Furse Gejdenson Gephardt Goodling Gordon Green (TX) Gutierrez Hall (OH) Harman Hastings (FL) Hilliard Hinchey Holden Jackson (IL) Jackson-Lee (TX) Jacobs Jefferson Johnson (SD) Johnson, E. B. Jones Kanjorski Kaptur Kennedy (MA) Kennedy (RI) Kildee Kleczka Klink LaHood Lantos Lewis (GA) Lipinski Lofgren Lowey Maloney Manton Markey Martini Mascara McDermott McHale McKinney McNulty Meehan Meek Menendez Meyers Millender- McDonald Miller (CA) Mink Moakley Mollohan Moran Murtha Nadler Neal Ney Oberstar Obey Olver Owens Pallone Payne (NJ) Pelosi Poshard Rahall Rangel Reed Rivers Rose Roybal-Allard Rush Sabo CONGRESSIONAL RECORD \u2014 HOUSE H9449July 31, 1996 Sanders Sanford Schiff Schroeder Schumer Scott Shays Slaughter Smith (NJ) Spratt Stark Stokes Studds Stupak Taylor (MS) Thornton Torres Torricelli Velazquez Vento Visclosky Volkmer Wamp Ward Waters Watt (NC) Waxman Weller Wilson Wise Woolsey Wynn Yates Zimmer NOES\u2014260 Ackerman Allard Archer Armey Baesler Baker (CA) Baker (LA) Ballenger Barr Barrett (NE) Bartlett Barton Bass Bateman Beilenson Bentsen Bereuter Bevill Bilbray Bishop Bliley Boehlert Boehner Bonilla Bono Boucher Brewster Browder Bryant (TX) Bunning Burr Burton Buyer Callahan Calvert Camp Canady Cardin Castle Chambliss Chapman Chenoweth Christensen Chrysler Clement Clinger Coble Coburn Collins (GA) Combest Condit Cooley Cox Cramer Crane Crapo Cremeans Cubin Cunningham Danner Davis Deal DeLay Diaz-Balart Dickey Dicks Dingell Dooley Doolittle Dreier Duncan Dunn Edwards Ehlers Ehrlich English Everett Ewing Fawell Fields (TX) Fowler Fox Franks (CT) Frelinghuysen Frisa Funderburk Gallegly Ganske Gekas Geren Gibbons Gilchrest Gillmor Gilman Gonzalez Goodlatte Goss Graham Greene (UT) Greenwood Gunderson Gutknecht Hall (TX) Hamilton Hancock Hansen Hastings (WA) Hayes Hayworth Hefley Hefner Heineman Herger Hilleary Hobson Hoekstra Hoke Horn Hostettler Houghton Hoyer Hunter Hutchinson Hyde Inglis Istook Johnson (CT) Johnson, Sam Johnston Kasich Kelly Kennelly Kim King Kingston Klug Knollenberg Kolbe LaFalce Largent Latham LaTourette Laughlin Lazio Leach Levin Lewis (CA) Lewis (KY) Lightfoot Lincoln Linder Livingston LoBiondo Longley Lucas Luther Manzullo Matsui McCarthy McCollum McHugh McInnis McIntosh McKeon Metcalf Mica Miller (FL) Minge Molinari Montgomery Moorhead Morella Myers Myrick Nethercutt Neumann Norwood Nussle Ortiz Orton Oxley Packard Parker Pastor Paxon Payne (VA) Peterson (FL) Peterson (MN) Petri Pickett Pombo Pomeroy Porter Portman Pryce Quillen Quinn Radanovich Ramstad Regula Richardson Riggs Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Roth Roukema Royce Salmon Sawyer Saxton Scarborough Schaefer Seastrand Sensenbrenner Shadegg Shaw Shuster Sisisky Skaggs Skeen Skelton Smith (MI) Smith (TX) Smith (WA) Solomon Souder Spence Stearns Stenholm Stockman Stump Talent Tanner Tate Tauzin Taylor (NC) Tejeda Thompson Thornberry Thurman Tiahrt Torkildsen Traficant Upton Vucanovich Walker Walsh Watts (OK) Weldon (FL) Weldon (PA) White Whitfield Wicker Williams Wolf Young (AK) Zeliff NOT VOTING\u201412 Bachus Brownback Flake Ford Hastert Martinez McCrery McDade Serrano Thomas Towns Young (FL) b 2000 Mr. ARCHER changed his vote from ”aye” to ”no.” Ms. VELA\u0301ZQUEZ, Mr. RAHALL, and Mr. HOLDEN changed their vote from ”no” to ”aye.” So the amendment was rejected. The result of the vote was announced as above recorded. The CHAIRMAN. The question is on the amendment in the nature of a sub- stitute. The amendment in the nature of a substitute was agreed to. The CHAIRMAN. Under the rule, the Committee rises. Accordingly the Committee rose; and the Speaker pro tempore (Mr. FOX of Pennsylvania) having assumed the chair, Mr. COLLINS of Georgia, Chair- man of the Committee of the Whole House on the State of the Union, re- ported that that Committee, have had under consideration the bill (H.R. 2823) to amend the Marine Mammal Protec- tion Act of 1972 to support the Inter- national Dolphin Conservation Pro- gram in the eastern tropical Pacific Ocean, and for other purposes, pursu- ant to House Resolution 489, he re- ported the bill back to the House with the amendment adopted by the Com- mittee of the Whole. The SPEAKER pro tempore. Under the rule, the previous question is or- dered. The question is on the amendment in the nature of a substitute. The amendment in the nature of a substitute was agreed to. The SPEAKER pro tempore. The question is on the engrossment and third reading of the bill. The bill was ordered to be engrossed and read a third time, and was read the third time. The SPEAKER pro tempore. The question is on the passage of the bill. The question was taken; and the Speaker pro tempore announced that the ayes appeared to have it. RECORDED VOTE Mr. SAXTON. Mr. Speaker, I demand a recorded vote. A recorded vote was ordered. The vote was taken by electronic de- vice, and there were\u2014ayes 316, noes 108, not voting 9, as follows: [Roll No. 385] AYES\u2014316 Ackerman Allard Archer Armey Baesler Baker (CA) Baker (LA) Ballenger Barr Barrett (NE) Bartlett Barton Bass Bateman Becerra Beilenson Bentsen Bereuter Berman Bevill Bilbray Bishop Bliley Blumenauer Blute Boehlert Boehner Bonilla Bono Borski Boucher Brewster Browder Brown (FL) Bryant (TN) Bryant (TX) Bunning Burr Burton Buyer Callahan Calvert Camp Canady Cardin Castle Chambliss Chapman Chenoweth Christensen Chrysler Clement Clinger Clyburn Coble Coburn Collins (GA) Combest Condit Cooley Cox Cramer Crane Crapo Cremeans Cubin Cummings Cunningham Danner Davis de la Garza DeLay Deutsch Diaz-Balart Dickey Dicks Dingell Dixon Doggett Dooley Doolittle Dreier Duncan Dunn Edwards Ehlers Ehrlich English Ensign Everett Ewing Fawell Fazio Fields (LA) Fields (TX) Flanagan Foley Forbes Fowler Fox Franks (CT) Frelinghuysen Frisa Frost Funderburk Gallegly Ganske Gekas Geren Gibbons Gilchrest Gillmor Gilman Gonzalez Goodlatte Goodling Gordon Goss Graham Green (TX) Greene (UT) Greenwood Gunderson Gutknecht Hall (OH) Hall (TX) Hamilton Hancock Hansen Harman Hastert Hastings (FL) Hastings (WA) Hayes Hayworth Hefley Hefner Heineman Herger Hilleary Hobson Hoekstra Hoke Holden Horn Hostettler Houghton Hoyer Hunter Hutchinson Hyde Inglis Istook Jackson-Lee (TX) Johnson (CT) Johnson, Sam Johnston Jones Kasich Kelly Kennelly Kim King Kingston Klug Knollenberg Kolbe LaFalce LaHood Largent Latham LaTourette Laughlin Lazio Leach Levin Lewis (CA) Lewis (KY) Lightfoot Lincoln Linder Livingston LoBiondo Longley Lucas Luther Manton Manzullo Martini Mascara Matsui McCarthy McCollum McDermott McHale McHugh McInnis McIntosh McKeon Meek Metcalf Mica Miller (FL) Minge Mink Molinari Mollohan Montgomery Moorhead Moran Morella Myers Myrick Nethercutt Ney Norwood Nussle Ortiz Orton Oxley Packard Parker Pastor Paxon Payne (VA) Peterson (FL) Peterson (MN) Petri Pickett Pombo Pomeroy Porter Portman Pryce Quillen Quinn Radanovich Rahall Ramstad Rangel Reed Regula Richardson Riggs Roberts Roemer Rogers Rohrabacher Ros-Lehtinen Roth Roukema Roybal-Allard Royce Salmon Sawyer Saxton Scarborough Schaefer Schiff Scott Seastrand Sensenbrenner Shadegg Shaw Shays Shuster Sisisky Skaggs Skeen Skelton Slaughter Smith (MI) Smith (TX) Smith (WA) Solomon Souder Spence Stearns Stenholm Stockman Stump Stupak Talent Tanner Tate Tauzin Taylor (NC) Tejeda Thomas Thompson Thornberry Thornton Torkildsen Torres Traficant Upton Visclosky Vucanovich Walker Walsh Wamp Ward Watts (OK) Weldon (FL) Weldon (PA) Weller White Whitfield Wicker Williams Wilson Wise Wolf Yates Young (AK) Zeliff NOES\u2014108 Abercrombie Andrews Baldacci Barcia Barrett (WI) Bilirakis Bonior Brown (CA) Brown (OH) CONGRESSIONAL RECORD \u2014 HOUSEH9450 July 31, 1996 Bunn Campbell Chabot Clay Clayton Coleman Collins (IL) Collins (MI) Conyers Costello Coyne Deal DeFazio DeLauro Dellums Dornan Doyle Durbin Engel Eshoo Evans Farr Fattah Filner Foglietta Frank (MA) Franks (NJ) Furse Gejdenson Gephardt Gutierrez Hilliard Hinchey Jackson (IL) Jacobs Jefferson Johnson (SD) Johnson, E. B. Kanjorski Kaptur Kennedy (MA) Kennedy (RI) Kildee Kleczka Klink Lantos Lewis (GA) Lipinski Lofgren Lowey Maloney Markey McKinney McNulty Meehan Menendez Meyers Millender- McDonald Miller (CA) Moakley Murtha Nadler Neal Neumann Oberstar Obey Olver Owens Pallone Payne (NJ) Pelosi Poshard Rivers Rose Rush Sabo Sanders Sanford Schroeder Schumer Serrano Smith (NJ) Spratt Stark Stokes Studds Taylor (MS) Thurman Tiahrt Torricelli Velazquez Vento Volkmer Waters Watt (NC) Waxman Woolsey Wynn Zimmer NOT VOTING\u20149 Bachus Brownback Flake Ford Martinez McCrery McDade Towns Young (FL) b 2020 So the bill was passed. The result of the vote was announced as above recorded. A motion to reconsider was laid on the table. f GENERAL LEAVE Mr. GILCHREST. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their re- marks and include extraneous material on the bill just passed. The SPEAKER pro tempore (Mr. FOX of Pennsylvania). Is there objection to the request of the gentleman from Maryland? There was no objection. f TEAMWORK FOR EMPLOYEES AND MANAGERS ACT OF 1995\u2014VETO MESSAGE FROM THE PRESIDENT OF THE UNITED STATES The SPEAKER pro tempore. The un- finished business is the further consid- eration of the veto message of the President on the bill (H.R. 743) to amend the National Labor Relations Act to allow labor management cooper- ative efforts that improve economic competitiveness in the United States to continue to thrive, and for other purposes. Mr. GOODLING. Mr. Speaker, I ask unanimous consent that the veto mes- sage of the President, together with the accompanying bill, H.R. 743, be re- ferred to the Committee on Economic and Educational Opportunities. The SPEAKER pro tempore. Is there objection to the request of the gen- tleman from Pennsylvania? There was no objection. REPORT ON RESOLUTION PROVID- ING FOR CONSIDERATION OF H.R. 123, ENGLISH LANGUAGE EMPOWERMENT ACT OF 1996 Mr. GOSS, from the Committee on Rules, submitted a privileged report (Rept. 104 734) on the resolution (H. Res. 499) providing for consideration of the bill (H.R. 123) to amend title 4, United States Code, to declare English as the official language of the Govern- ment of the United States, which was referred to the House Calendar and or- dered to be printed. f CONFERENCE REPORT ON H.R. 3754, LEGISLATIVE BRANCH APPRO- PRIATIONS ACT, 1997 Mr. PACKARD submitted the follow- ing conference report and statement on the bill (H.R. 3754) making appropria- tions for the legislative branch for the fiscal year ending September 30, 1997, and for other purposes: CONFERENCE REPORT (H. REPT. 104 733) The committee of conference on the dis- agreeing votes of the two Houses on the amendments of the Senate to the bill (H.R. 3754) ”making appropriations for the Legisla- tive Branch for the fiscal year ending Sep- tember 30, 1997, and for other purposes,” hav- ing met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows: That the Senate recede from its amend- ments numbered 9, 20, 23, and 24. That the House recede from its disagree- ments to the amendments of the Senate numbered 1, 2, 6, 10, 11, 12, 13, 14, 17, 18, and 19, and agree to the same. Amendment Numbered 3: That the House recede from its disagree- ment to the amendment of the Senate num- bered 3, and agree to the same with an amendment, as follows: In lieu of the sum proposed by said amend- ment, insert: $2,750,000; and the Senate agree to the same. Amendment Numbered 4: That the House recede from its disagree- ment to the amendment of the Senate num- bered 4, and agree to the same with an amendment, as follows: In lieu of the sum proposed by said amend- ment, insert: $69,356,000; and the Senate agree to the same. Amendment Numbered 5: That the House recede from its disagree- ment to the amendment of the Senate num- bered 5, and agree to the same with an amendment, as follows: In lieu of the sum proposed by said amend- ment, insert: $33,437,000; and the Senate agree to the same. Amendment Numbered 7: That the House recede from its disagree- ment to the amendment of the Senate num- bered 7, and agree to the same with an amendment, as follows: In lieu of the sum proposed by said amend- ment, insert: $2,782,000; and the Senate agree to the same. Amendment Numbered 8: That the House recede from its disagree- ment to the amendment of the Senate num- bered 8, and agree to the same with an amendment, as follows: In lieu of the sum proposed by said amend- ment, insert: $24,532,000; and the Senate agree to the same. Amendment Numbered 15: That the House recede from its disagree- ment to the amendment of the Senate num- bered 15, and agree to the same with an amendment, as follows: In lieu of the sum proposed by said amend- ment, insert: $9,753,000; and the Senate agree to the same. Amendment Numbered 16: That the House recede from its disagree- ment to the amendment of the Senate num- bered 16, and agree to the same with an amendment, as follows: In lieu of the sum proposed by said amend- ment, insert: $1,310,000; and the Senate agree to the same. Amendment Numbered 21: That the House recede from its disagree- ment to the amendment of the Senate num- bered 21, and agree to the same with an amendment, as follows: In lieu of the matter proposed by said amendment, insert: SEC. 314. (A) Upon enactment into law of this Act, there shall be established a program for providing the widest possible exchange of infor- mation among legislative branch agencies with the long range goal of improving information technology planning and evaluation. The Com- mittee on House Oversight of the House of Rep- resentatives and the Committee on Rules and Administration of the Senate are requested to determine the structure and operation of this program and to provide appropriate oversight. All of the appropriate offices and agencies of the legislative branch as defined below shall participate in this program for information ex- change, and shall report annually on the extent and nature of their participation in their budget submissions to the Committee on Appropriations of the House of Representatives and the Com- mittee on Appropriations of the Senate. (B) As used in this section\u2014 (1) the term ”offices and agencies of the legis- lative branch” means the office of the Clerk of the House, the office of the Secretary of the Sen- ate, the office of the Architect of the Capitol, the General Accounting Office, the Government Printing Office, the Library of Congress, the Congressional Research Service, the Congres- sional Budget Office, the Chief Administrative Officer of the House of Representatives, and the Sergeant at Arms of the Senate; and (2) the term ”technology” refers to any form of computer hardware and software; computer- based systems, services, and support for the cre- ation, processing, exchange, and delivery of in- formation; and telecommunications systems, and the associated hardware and software, that pro- vide for voice, data, or image communication. And the Senate agree to the same. Amendment Numbered 22: That the House recede from its disagree- ment to the amendment of the Senate num- bered 22, and agree to the same with an amendment, as follows: In lieu of the of the first section number named in said amendment, insert: 315; and the Senate agree to the same. Amendment Numbered 25: That the House recede from its disagree- ment to the amendment of the Senate num- bered 25, and agree to the same with an amendment, as follows: In lieu of the of the first section number named in said amendment, insert: 316 and at the end of the matter proposed by said amendment, insert the following: Sec. 317. For payment to Jo Ann Emerson, widow of Bill Emerson, late a Representative from the State of Missouri, $133,600. And the Senate agree to the same. RON PACKARD, CHARLES H. TAYLOR, DAN MILLER, ROGER F. WICKER, BOB LIVINGSTON, RAY THORNTON, JOSE\u0301 SERRANO, VIC FAZIO, DAVID R. OBEY, Managers on the Part of the House. CONGRESSIONAL RECORD \u2014 HOUSE H9451July 31, 1996 CONNIE MACK, ROBERT F. BENNETT, BEN NIGHTHORSE CAMPBELL, MARK O. HATFIELD, PATTY MURRAY, BARBARA A. MIKULSKI, ROBERT C. BYRD, Managers on the Part of the Senate. JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE The managers on the part of the House and the Senate at the conference on the disagree- ing votes on the two Houses on the amend- ments of the Senate to the bill (H.R. 3754) making appropriations for the Legislative Branch for the fiscal year ending September 30, 1997, and for other purposes, submit the following joint statement to the House and Senate in explanation of the effect of the ac- tion agreed upon by the managers and rec- ommended in the accompanying conference report. TITLE I\u2014CONGRESSIONAL OPERATIONS SENATE Amendment No. 1: Appropriates $441,208,000 for the operations of the Senate, and con- tains several administrative provisions. In- asmuch as the amendment relates solely to the Senate and in accord with long practice under which each body determines its own housekeeping requirements and the other concurs without intervention, the managers on the part of the House, at the request of the managers on the part of the Senate, have receded to the Senate amendment. HOUSE OF REPRESENTATIVES The managers on the part of the House, with the concurrence of the managers on the part of the Senate, support the policy of dis- posing of excess House computer equipment for the use of elementary and secondary schools, comparable to the program estab- lished by the Senate. The House managers note that, under current statute, the Com- mittee on House Oversight has the authority to make such dispositions. JOINT ITEMS JOINT COMMITTEE ON INAUGURAL CEREMONIES OF 1997 Amendment No. 2: Deletes $950,000, and re- lated provisions, appropriated for the Joint Committee on Inaugural Ceremonies of 1997 as proposed by the House and inserts $950,000, together with related provisions, appro- priated for the Joint Committee on Inau- gural Ceremonies of 1997 as proposed by the Senate. These funds are provided in accord- ance with Senate Concurrent Resolutions 47 and 48, 104th Congress, agreed to in the Sen- ate on March 20, 1996. JOINT ECONOMIC COMMITTEE Amendment No. 3: Appropriates $2,750,000 for the Joint Economic Committee instead of $3,000,000 as proposed by the House and $750,000 as proposed by the Senate. The con- ferees agree that the long term need for this committee should be reviewed and expect the funding to be phased down to zero in the future. CAPITOL POLICE BOARD CAPITOL POLICE SALARIES Amendment No. 4: Appropriates $69,356,000 for the salaries and related personnel ex- penses of the Capitol Police instead of $68,392,000 as proposed by the House and $70,132,000 as proposed by the Senate. The conferees believe that the information and systems that support Capitol Police finan- cial management processes are in need of im- provement. To some extent, the transfer of payroll\/personnel recordkeeping to the Na- tional Finance Center will lead to significant improvement in the reliability and accuracy of financial data, but other accounting and management information systems also re- quire attention. Amendment No. 5: Provides $33,437,000 to the Sergeant at Arms of the House of Rep- resentatives, to be disbursed by the Chief Ad- ministrative Officer of the House, for the Capitol Police assigned to the House rolls in- stead of $32,927,000 as proposed by the House and $34,213,000 as proposed by the Senate. Amendment No. 6: Provides $35,919,000 to the Sergeant at Arms and Doorkeeper of the Senate, to be disbursed by the Secretary of the Senate, for the Capitol Police assigned to the Senate rolls as proposed by the Senate instead of $35,465,000 as proposed by the House. GENERAL EXPENSES Amendment No. 7: Appropriates $2,782,000 for general expenses of the Capitol Police in- stead of $2,685,000 as proposed by the House and $2,880,000 as proposed by the Senate. The additional funds provided above the House bill are provided for vehicle replacement. CONGRESSIONAL BUDGET OFFICE SALARIES AND EXPENSES Amendment No. 8: Appropriates $24,532,000 for salaries and expenses, Congressional Budget Office, instead of $24,288,000 as pro- posed by the House and $24,775,000 as pro- posed by the Senate. ARCHITECT OF THE CAPITOL CAPITOL BUILDINGS AND GROUNDS CAPITOL BUILDINGS Amendment No. 9: Appropriates $23,255,000 for Capitol buildings, Architect of the Cap- itol as proposed by the House instead of $23,555,000 as proposed by the Senate. The conferees note that the Capitol Police, due to legislation enacted in the District of Columbia Appropriations Act for Fiscal Year 1996, will inherit the D.C. canine facility lo- cated at Blue Plains at a site adjacent to the Botanic Garden plant nursery. In the mean- time, through a reprogramming of funds made available by the Committees on Appro- priations, the Capitol Police canine oper- ation was relocated, on July 24, 1996, to a site adjacent to the buildings, training grounds, and kennels they will occupy when the D.C. canine operation vacates. This recent Cap- itol Police relocation was accomplished within a few months of learning of extremely hazardous conditions at the former location, and includes new kennels, training grounds, temporary office and classroom buildings, and other facilities necessary to continue this very important security program. The Committees on Appropriations have been ad- vised that the space being developed for the D.C. canine operation will be completed by February 27, 1997. The conferees expect that the Architect of the Capitol and the Capitol Police will make the necessary arrange- ments to move into those quarters imme- diately upon their availability. In the mean- time, the conferees believe that the Archi- tect of the Capitol should survey the need for renovations at the D.C. canine facility. If it is determined that renovations are nec- essary, the Committees on Appropriations will entertain a request to reprogram funds based upon the receipt of adequate engineer- ing estimates, plans, and design documenta- tion. HOUSE OFFICE BUILDINGS The managers on the part of the House, with the concurrence of the managers on the part of the Senate, direct that all employees displaced by the custodial contract at the Ford House Office Building will be absorbed in available vacant positions and expect every effort to be made to place them in po- sitions of equal or comparable pay. SENATE OFFICE BUILDINGS Amendment No. 10: Appropriates $39,640,000, of which $3,200,000 shall remain available until expended, for the operations of the Senate office buildings. Inasmuch as the amendment relates solely to the Senate and in accord with long practice under which each body determines its own housekeeping requirements and the other concurs without intervention, the managers on the part of the House, at the request of the managers on the part of the Senate, have receded to the Senate amendment. TITLE II\u2014OTHER AGENCIES LIBRARY OF CONGRESS SALARIES AND EXPENSES Amendment No. 11: Provides $216,007,000 for salaries and expenses, Library of Congress as proposed by the Senate instead of $215,007,000 as proposed by the House. The conferees agree with the Senate report language re- garding the deputy Librarian of Congress. Amendment No. 12: Earmarks $928,800 for the operation of the American Folklife Cen- ter as proposed by the Senate. ADMINISTRATIVE PROVISIONS Amendment No. 13: Deletes a provision proposed by the House and stricken by the Senate authorizing account-to-account transfers, subject to approval, of funds ap- propriated in the bill to the Library of Con- gress. Amendment No. 14: Provides a two-year authorization for the American Folklife Cen- ter as proposed by the Senate. ARCHITECT OF THE CAPITOL LIBRARY BUILDINGS AND GROUNDS STRUCTURAL AND MECHANICAL CARE Amendment No. 15: Appropriates $9,753,000 for structural and mechanical care, Library buildings and grounds, Architect of the Cap- itol instead of $9,003,000 as proposed by the House and $10,453,000 as proposed by the Sen- ate. These funds include $750,000 above the House bill for an uninterruptible power sup- ply. The conferees note that the additional amounts provided were not included in the budget request transmitted to the Congress. Amendment No. 16: Provides that $1,310,000 shall remain available until expended for structural and mechanical care, Library buildings and grounds instead of $560,000 as proposed by the House and $1,910,000 as pro- posed by the Senate. GENERAL ACCOUNTING OFFICE SALARIES AND EXPENSES The conferees agree that funding included for the General Accounting Office contract audit services is $8,000,000. TITLE III\u2014GENERAL PROVISIONS Amendment No. 17: Deletes a provision proposed by the House and stricken by the Senate regarding dynamic macroeconomic scoring of certain spending and revenue leg- islation. Amendment No. 18: Authorizes law en- forcement personnel of the Capitol Police to elect to receive compensatory time off in lieu of overtime compensation in excess of the maximum for their work period as pro- posed by the Senate. Amendment No. 19: Makes a date change in section 316 of Public Law 101 302 regarding Senate artwork as proposed by the Senate. Amendment No. 20: Deletes a provision proposed by the Senate that the Government Printing Office shall be considered an agency and the Public Printer shall be considered the head of the agency for purposes of sec- tions 801(b)(2)(B) and 801(b)(2)(C), respec- tively, of the National Energy Conservation Policy Act. Amendment No. 21: Changes a section number and amends a provision inserted by CONGRESSIONAL RECORD \u2014 HOUSEH9452 July 31, 1996 the Senate regarding technology planning, evaluation, development, and management in the legislative branch. The conference agreement requests the Senate Committee on Rules and the Committee on House Over- sight to oversee a program for providing the widest possible exchange of information among legislative branch agencies with the long range goal of improving information technology planning and evaluation. The conferees note that the Committee on House Oversight and the Senate Committee on Rules and Administration have begun a process to develop a common information system. The Clerk of the House and the Sec- retary of the Senate have been called upon to coordinate the project with the oversight of those Committees and to ultimately pro- pose the standards for a legislative branch wide information system to the Committees for approval. An open exchange of technology, projects, plans and developments is crucial to the suc- cess of a legislative branch wide information system. The conferees expect, therefore, that the following organizations will be relied upon to participate and assist in this effort: the Clerk of the House, the Chief Adminis- trative Officer of the House, the office of the Secretary of the Senate, the Sergeant at Arms of the Senate, the Library of Congress, the Government Printing Office, House In- formation Resources, the Senate Computer Center, the General Accounting Office, the Congressional Budget Office, and the office of the Architect of the Capitol. Section 209 of the Legislative Branch Ap- propriations Act, 1996, directed the Library of Congress to develop a plan and supporting analyses for this system. In so doing, the Li- brary identified the major programs under development in various parts of the legisla- tive branch as well as a significant amount of duplication. The process begun by the oversight committees will enable the strengths of each program to be recognized and integrated into a system that will bene- fit Congress as a whole. Amendment No. 22: Retains a provision proposed by the Senate, amended to change a section number, that amends section 3303 of Title 5, United States Code, together with technical and conforming amendments, re- garding recommendations made by Senators and Representatives for applicants to the competitive service. Amendment No. 23: Deletes a provision proposed by the Senate regarding an elec- tronic information system. The managers on the part of the House and Senate agree that the Congressional Research Service, upon the request of the Senate Committee on Rules and Administration, and in consulta- tion with the Secretary of the Senate and the heads of the appropriate offices and agencies of the legislative branch, shall co- ordinate the development of an electronic congressional legislative information and document retrieval system to provide for the legislative information needs of the Senate through the exchange and retrieval of infor- mation and documents among legislative branch offices and agencies. The managers on the part of the House and the Senate also agree that the Library of Congress shall as- sist the Congressional Research Service in supporting the Senate in this effort, and shall provide technical staff and resources as may be necessary. Amendment No. 24: Deletes a provision in- serted by the Senate regarding employment limitations under section 207(e) of title 18, United States Code. Amendment No. 25: Retains a provision proposed by the Senate, amended to change a section number, that amends Chapter 1 of title 17, United States Code, to exempt from infringement of copyright the reproduction or distribution of certain publications in spe- cialized formats exclusively for use by blind or other persons with disabilities. In addi- tion, the conferees, at the request of the managers on the part of the House, have in- serted a provision that provides the tradi- tional death gratuity for the widow of Bill Emerson, late a Representative from the State of Missouri. CONFERENCE TOTAL\u2014WITH COMPARISONS The total new budget (obligational) au- thority for the fiscal year 1997 recommended by the Committee of Conference, with com- parisons to the fiscal year 1996 amount, the 1997 budget estimates, and the House and Senate bills for 1997 follow: New budget (obligational) authority, fiscal year 1996 …………………………… $2,187,356,000 Budget estimates of new (obligational) authority, fiscal year 1997 ……………. 2,339,421,000 House bill, fiscal year 1997 1,681,311,000 Senate bill, fiscal year 1997 2,165,081,000 Conference agreement, fis- cal year 1997 ……………….. 2,165,097,600 Conference agreement compared with: New budget (obligational) author- ity, fiscal year 1996 … \u00a522,258,400 Budget estimates of new (obligational) authority, fiscal year 1997 ……………………… \u00a5174,323,400 House bill, fiscal year 1997 ……………………… +483,786,600 Senate bill, fiscal year 1997 ……………………… +16,000 RON PACKARD, CHARLES H. TAYLOR, DAN MILLER, ROGER F. WICKER, BOB LIVINGSTON, RAY THORNTON, JOSE\u0301 SERRANO, VIC FAZIO, DAVID R. OBEY, Managers on the Part of the House. CONNIE MACK, ROBERT F. BENNETT, BEN NIGHTHORSE CAMPBELL, MARK O. HATFIELD, PATTY MURRAY, BARBARA A. MIKULSKI, ROBERT C. BYRD, Managers of the Part of the Senate. f PROVIDING FOR DISPOSAL OF PUBLIC LANDS IN SUPPORT OF MANZANAR HISTORIC SITE Mr. HANSEN. Mr. Speaker, I ask unanimous consent for the immediate consideration in the House of the bill (H.R. 3006) to provide for disposal of public lands in support of the Manzanar Historic Site in the State of California, and for other purposes. The Clerk read the title of the bill. The SPEAKER pro tempore. Is there objection to the request of the gen- tleman from Utah? Mr. MILLER of California. Mr. Speaker, reserving the right to object, I yield to the gentleman from Califor- nia [Mr. LEWIS] to explain the purpose of the bill. (Mr. LEWIS of California asked and was given permission to revise and ex- tend his remarks.) Mr. LEWIS of California. I appreciate the gentleman yielding. Mr. Speaker, responding to the gen- tleman from California, this bill is de- signed to add additional land to the Manzanar Historic Site. I think the House knows that that was a major lo- cation whereby Americans of Japanese descent were interned during World War II, and it is combined with a rath- er fantastic environmental project tak- ing place between the country of Inyo and the Los Angeles Department of Water and Power. Mr. MILLER of California. I thank the gentleman. Mr. Speaker, further reserving the right to object, I yield to the gen- tleman from California [Mr. MATSUI]. (Mr. MATSUI asked and was given permission to revise and extend his re- marks.) Mr. MATSUI. I thank the gentleman from California for yielding. Mr. Speaker, I thank the gentleman from California [Mr. LEWIS] for leading the way on this piece of legislation. We really appreciate all he has done as well as, of course, the gentleman from Utah [Mr. HANSEN], the gentleman from Alaska [Mr. YOUNG], the gen- tleman from California [Mr. MILLER], and the gentleman from New Mexico [Mr. RICHARDSON]. I just want to thank all the gentle- men for all the help on behalf of the Japanese-American community. Mr. LEWIS of California. Mr. Speak- er, if the gentleman will yield further under his reservation, I must say I very much appreciate the cooperation of my colleague from California as well, all of my colleagues from California. This is a very important measure. Mr. MATSUI. Mr. Speaker, I am extremely pleased that we are moving forward tonight with this important legislation, H.R. 3006, the Owens River Valley Environmental Restoration and Manzanar Land Transfer Act of 1996. This bill will allow us to complete the process of creating a National Historic Site on the grounds of the former Manzanar Internment Camp. During World War II, 11,000 Americans of Japanese ancestry were confined at the Manzanar Internment Camp. These individuals were some of the over 120,000 Japanese- Americans interned at 10 sites throughout the United States. The National Park Service determined in the 1980’s that of the 10 former internment camps, Manzanar was best suited to be pre- served and to thus serve as a reminder to Americans of the glaring violation of civil rights that the internment represented. As a result, the 102d Congress passed Public Law 102 248 establishing a national historic site at Manzanar. H.R. 3006 will finish this process by allowing the Federal Government to obtain the CONGRESSIONAL RECORD \u2014 HOUSE H9453July 31, 1996 Manzanar site through a land exchange with the Los Angeles Department of Water and Power [LADWP], which currently owns the property. The parties that would be involved in this land transfer\u2014LADWP, the National Park Service, the Bureau of Land Management, and Inyo County\u2014reached agreement in Feb- ruary on a land exchange that can occur rap- idly once our legislation is passed. All of these parties strongly support this legislation. When completed, the Manzanar National Historic Site will stand as powerful testimony to the tragedy of the internment. Through its ability to educate future generations of Ameri- cans, the site will make an important contribu- tion to our efforts to prevent any group in the United States from ever suffering such a wide- spread abrogation of its constitutional liberties. I want to express my deep gratitude to my colleague, JERRY LEWIS, for his hard work in introducing this legislation and moving it for- ward. In addition, I deeply appreciate the as- sistance of the Resources Committee, particu- larly Chairman DON YOUNG and the ranking minority member GEORGE MILLER, as well as JIM HANSEN and BILL RICHARDSON, chairman and ranking minority member of the National Parks, Forests and Lands Subcommittee re- spectively. I also want to thank Sue Embrey and the other members of the Manzanar National His- toric Site Advisory Commission. Their tireless commitment to the realization of the Manzanar NHS has been the critical force behind this ef- fort. Finally, we could not have reached this stage without the help of Director of the Na- tional Park Service Roger Kennedy, the re- gional staff of the National Park Service and Bureau of Land Management, the Los Angeles Department of Water and Power [LADWP], and Inyo County. I look forward to working with my colleagues in this body and in the Senate to achieve final passage of this important bill. Mr. MILLER of California. Mr. Speaker, H.R. 3006 will facilitate the disposal of certain pub- lic lands for the benefit of the Manzanar Na- tional Historic Site by revoking some outdated public land withdrawals. It is our understand- ing that these lands, which the BLM has iden- tified for disposal, will then be used in an ex- change for lands owned by the city of Los An- geles which are inside the boundary of the Manzanar National Historic Site. In addition, the bill expands the Boundaries of the Manzanar National Historic Site to include an additional 300 acres of land that has been found to have important archaeological ele- ments. This is a good initiative that is supported by the administration, and on a bipartisan basis by Members of the California delegation. We support the bill and have no objection to its consideration today. Mr. Speaker, I withdraw my reserva- tion of objection. The SPEAKER pro tempore. Is there objection to the request of the gen- tleman from Utah? There was no objection. The Clerk read the bill, as follows: H.R. 3006 Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, SECTION 1. TERMINATION OF WITHDRAWALS. (a) UNAVAILABILITY OF CERTAIN LANDS.\u2014 The Congress, by enacting the Act entitled ”An Act to establish the Manzanar National Historic Site in the State of California, and for other purposes”, approved March 3, 1992 (106 Stat. 40; Public Law 102 248), (1) provided for the protection and interpretation of the historical, cultural, and natural resources associated with the relocation of Japanese- Americans during World War II and estab- lished the Manzanar National Historic Site in the State of California, and (2) authorized the Secretary of the Interior to acquire lands or interests therein within the boundary of the Historic Site by donation, purchase with donated or appropriated funds, or by ex- change. The public lands identified for dis- posal in the Bureau of Land Management’s Bishop Resource Area Resource Management Plan that could be made available for ex- change in support of acquiring lands within the boundary of the Historic Site are cur- rently unavailable for this purpose because they are withdrawn by an Act of Congress. (b) TERMINATION OF WITHDRAWAL.\u2014To pro- vide a land base with which to allow land ex- changes in support of acquiring lands within the boundary of the Manzanar National His- toric Site, the withdrawal of the following described lands is terminated and such lands shall not be subject to the Act of March 4, 1931 (chap. 517; 46 Stat. 1530): MOUNT DIABLO MERIDIAN Township 2 North, Range 26 East Section 7: North half south half of lot 1 of southwest quarter, north half south half of lot 2 of southwest quarter, north half south half southeast quarter, Township 4 South, Range 33 East Section 31: Lot 1 of southwest quarter, northwest quarter northeast quarter, southeast quar- ter; Section 32: Southeast quarter northwest quarter, northeast quarter southwest quarter, south- west quarter southeast quarter, Township 5 South, Range 33 East Section 4: West half of lot 1 of northwest quarter, west half of lot 2 of northwest quarter, Section 5: East half of lot 1 of northeast quarter, east half of lot 2 of northeast quarter, Section 9: Northwest quarter southwest quarter northeast quarter, Section 17: Southeast quarter northwest quarter, northwest quarter southeast quarter, Section 22: Lot 1 and 2, Section 27: Lot 2, west half northeast quarter, south- east quarter northwest quarter, northeast quarter southwest quarter, northwest quar- ter southeast quarter, Section 34: Northeast quarter, northwest quarter, southeast quarter, Township 6 South, Range 31 East Section 19: East half northeast quarter southeast quarter. Township 6 South, Range 33 East Section 10: East half southeast quarter; Section 11: Lot 1 and 2, west half northeast quarter, northwest quarter, west half southwest quar- ter, northeast quarter southwest quarter; Section 14: Lots 1 thru 4, west half northeast quarter, southeast quarter northwest quarter, north- east quarter southwest quarter, northwest quarter southeast quarter. Township 7 South, Range 32 East Section 23: South half southwest quarter; Section 25: Lot 2, northeast quarter northwest quar- ter. Township 7 South, Range 33 East Section 30: South half of lot 2 of northwest quarter, lot 1 and 2 of southwest quarter, Section 31: North half of lot 2 of northwest quarter, southeast quarter northeast quarter, north- east quarter southeast quarter. Township 8 South, Range 33 East Section 5: Northwest quarter southwest quarter. Township 13 South, Range 34 East Section 1: Lots 43, 46, and 49 thru 51. Section 2: North half northwest quarter southeast quarter southeast quarter. Township 11 South, Range 35 East Section 30: Lots 1 and 2, east half northwest quarter, east half southwest quarter, and west half southwest quarter southeast quarter. Section 31: Lot 8, west half west half northeast quar- ter, east half northwest quarter, and west half southeast quarter. Township 13, South, Range 35 East Section 18: South half of lot 2 of northwest quarter, lot 1 and 2 of southwest quarter, southwest quarter northeast quarter, northwest quarter southeast quarter; Section 29: Southeast quarter northeast quarter, northeast quarter southeast quarter. Township 13 South, Range 36 East Section 17: Southwest quarter northwest quarter, southwest quarter; Section 18: South half of lot 1 of northwest quarter, lot 1 of southwest quarter, northeast quar- ter, southeast quarter; Section 19: North half of lot 1 of northwest quarter, east half northeast quarter, northwest quar- ter northeast quarter; Section 20: Southwest quarter northeast quarter, northwest quarter, northeast quarter south- west quarter, southeast quarter; Section 28: Southwest quarter southwest quarter; Section 29: East half northeast quarter; Section 33: Northwest quarter northwest quarter, southeast quarter northwest quarter. Township 14 South, Range 36 East Section 31: Lot 1 and 2 of southwest quarter, south- west quarter southeast quarter. aggregating 5,630 acres, more or less. (c) AVAILABILITY OF LANDS.\u2014Upon enact- ment of this Act, the lands specified in sub- section (b) shall be open to operation of the public land laws, including the mining and mineral leasing laws, only after the Sec- retary of the Interior has published a notice in the Federal Register opening such lands. COMMITTEE AMENDMENT The SPEAKER pro tempore. The Clerk will report the committee amendment. The Clerk read as follows: Committee amendment: Page 8, after line 4, insert the following: CONGRESSIONAL RECORD \u2014 HOUSEH9454 July 31, 1996 SEC. 2. ADDITIONAL AREA. Section 101 of Public Law 102 248 is amend- ed by inserting in subsection (b) after the second sentence ”The site shall also include an additional area of approximately 300 acres as demarcated as the new proposed bound- aries in the map dated March 8, 1996, entitled ‘Manzanar National Historic Site Archae- ological Base Map’.” The committee amendment was agreed to. The bill was ordered to be engrossed and read a third time, was read the third time, and passed. The title of the bill was amended so as to read: ”A bill to provide for dis- posal of public lands in support of the Manzanar National Historic Site in the State of California, and for other pur- poses.” A motion to reconsider was laid on the table. f TRANSFERRING JURISDICTION OF FEDERAL PROPERTY LOCATED IN THE DISTRICT OF COLUMBIA Mr. HANSEN. Mr. Speaker, I ask unanimous consent for the immediate consideration in the House of the bill (H.R. 2636) to transfer jurisdiction over certain parcels of Federal real property located in the District of Columbia, and for other purposes. The Clerk read the title of the bill. The SPEAKER pro tempore. Is there objection to the request of the gen- tleman from Utah? Mr. MILLER of California. Mr. Speaker, reserving the right to object, and I shall not object, I yield to the gentleman from Utah [Mr. HANSEN]. (Mr. HANSEN asked and was given permission to revise and extend his re- marks.) Mr. HANSEN. Mr. Speaker, I rise in support of this piece of legislation. Mr. MILLER of California. Mr. Speaker, further reserving the right to object, I just want to mention that this legislation was introduced by our col- league the gentleman from Minnesota [Mr. OBERSTAR]. I want to thank the gentleman from Utah for his coopera- tion. Mr. Speaker, H.R. 2636, introduced by our colleague, Mr. OBERSTAR, authorizes a three- way transfer of jurisdiction over several par- cels of land among the Architect of the Cap- itol, the Secretary of the Interior, and the Dis- trict of Columbia. In addition to facilitating management of these parcels, this transfer is being done for the purpose of setting aside a parcel of land adjacent to the Capitol Grounds for the proposed Japanese-American Patriot- ism Memorial. The memorial will honor the pa- triotic efforts of Japanese-Americans in World War II. It is our understanding that the parties in- volved support this transfer and we have no objection to the passage of the bill. Mr. MATSUI. Mr. Speaker, I rise to express my strong support for this important legislation and my great pleasure that it is before us this evening. H.R. 2636 is needed to facilitate the construction of a Memorial honoring the patri- otism of Japanese Americans during World War II here in our nation’s Capital. In 1992, Congress passed Public Law 102 502, authorizing the construction of this Me- morial on federal property. Under the terms of the legislation, the Memorial will involve vir- tually no Federal costs. All construction and major maintenance costs will be paid by pri- vate funds. The National Japanese American Memorial Foundation, formerly the Go For Broke National Veterans Association, has al- ready begun this fundraising effort. Land currently owned by the Architect of the Capitol has been selected as a site for the Memorial. However, in order for the construc- tion of the Memorial to proceed, the land must be transferred to the National Park Service. H.R. 2636 would direct such a transfer to occur. In exchange, the Architect of the Cap- itol would obtain a parcel of land adjacent to the Hart Senate Office Building that is more integral to the Capitol grounds. It is critically important for the land ex- change to occur this year. The 1992 authoriz- ing legislation and other applicable law require that construction on the Memorial begin by 1999. Until the land is transferred, the ap- proval process for the Memorial’s design can not begin. Because of the many agencies in- volved, this approval process will almost defi- nitely consume the next three years. 33,000 Americans of Japanese Ancestry served in the military during World War II. The all Japanese American 100th Infantry Battal- ion\/442nd Regimental Combat Team was the most decorated unit in military history for its size and length of service\u2014700 members of the unit gave their lives. When completed, this Memorial will pay tribute to the immeasurable sacrifice made by these individuals as well as the many other contributions that Japanese- Americans made to the war effort. This effort would not have reached this stage without the hard work and assistance of several individuals. The leadership of my friend and former colleague Norm Mineta in achieving the passage of the original 1992 legislation as well as his important role in de- veloping this legislation was absolutely essen- tial. In addition, I am extremely grateful to the sponsor of H.R. 2636, JIM OBERSTAR and also to Chairman of the Transportation and Infra- structure Committee, BUD SHUSTER. I also deeply appreciate the assistance of the Re- sources Committee, particularly Chairman DON YOUNG and the Ranking Minority Member GEORGE MILLER, as well as JIM HANSEN and BILL RICHARDSON, chairman and ranking mi- nority member of the National Parks, Forests and Lands Subcommittee respectively. The Board and staff of the National Japa- nese American Memorial Foundation has also been critical to this effort. I would note particu- larly the Foundation’s Chairman Emeritus Wil- liam Marutani, its Chairman Mo Marumoto, Honorary Co-Chair Etsu Mineta Masaoka and Executive Director George Wakiji. I look forward to working with my colleagues in this body and in the Senate to achieve final passage of this important bill. Mr. MILLER of California. Mr. Speaker, I withdraw my reservation of objection. The SPEAKER pro tempore. Is there objection to the request of the gen- tleman from Utah? There was no objection. The Clerk read the bill, as follows: H.R. 2636 Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, SECTION 1. PURPOSE. It is the purpose of this Act\u2014 (1) to assist in the effort to timely estab- lish within the District of Columbia a na- tional memorial to Japanese American pa- triotism in World War II; and (2) to improve management of certain par- cels of Federal real property located within the District of Columbia, by transferring ju- risdiction over such parcels to the Architect of the Capitol, the Secretary of the Interior, and the Government of the District of Co- lumbia. SAC. 2. TRANSFERS OF JURISDICTION. (a) IN GENERAL.\u2014Effective on the date of the enactment of this Act and notwithstand- ing any other provision of law, jurisdiction over the parcels of Federal real property de- scribed in subsection (b) is transferred with- out additional consideration as provided by subsection (b). (b) SPECIFIC TRANSFERS.\u2014 (1) TRANSFERS TO SECRETARY OF THE INTE- RIOR.\u2014 (A) IN GENERAL.\u2014Jurisdication over the following parcels is transferred to the Sec- retary of the Interior: (i) That triangle of Federal land, including any contiguous sidewalks and tree space, that is part of the United States Capitol Grounds under the jurisdiction of the Archi- tect of the Capitol bound by D Street, N.W., New Jersey Avenue, N.W., and Louisiana Av- enue, N.W., in Square W632 in the District of Columbia, as shown on the Map Showing Properties Under Jurisdiction of the Archi- tect of the Capitol, dated November 8, 1994. (ii) That triangle of Federal land, includ- ing any contiguous sidewalks and tree space, that is part of the United States Capitol Grounds under the jurisdiction of the Archi- tect of the Capitol bound by C Street, N.W., First Street, N.W., and Louisiana Avenue, N.W., in the District of Columbia, as shown on the Map Showing Properties Under Juris- diction of the Architect of the Capitol, dated November 8, 1994. (B) LIMITATION.\u2014The parcels transferred by subparagraph (A) shall not include those contiguous sidewalks abutting Louisiana Av- enue, N.W., which shall remain part of the United States Capitol Grounds under the ju- risdiction of the Architect of the Capitol. (C) CONSIDERATION AS MEMORIAL SITE.\u2014The parcels transferred by clause (i) of subpara- graph (A) may be considered as a site for a S6201 national memorial to Japanese Amer- ican patriotism in World War II. (2) TRANSFERS TO ARCHITECT OF THE CAP- ITOL.\u2014Jurisdiction over the following par- cels is transferred to the Architect of the Capitol: (A) That portion of the triangle of Federal land in Reservation No. 204 in the District of Columbia under the jurisdiction of the Sec- retary of the Interior, including any contig- uous sidewalks, bound by Constitution Ave- nue, N.E., on the north, the branch of Mary- land Avenue, N.E. running in a northeast di- rection on the west, the major portion of Maryland avenue, N.E., on the south, and 2nd Street, N.E., on the east, including the con- tiguous sidewalks. (B) That irregular area of Federal land in Reservation No. 204 in the District of Colum- bia under the jurisdiction of the Secretary of the Interior, including any contiguous side- walks, northeast of the real property de- scribed in subparagraph (A) bound by Con- stitution Avenue, N.E., on the north, the branch of Maryland Avenue, N.E., running to the northeast on the south, and the private property on the west known as lot 7 in square 726. (C) The two irregularly shaped medians lying north and east of the property de- scribed in subparagraph (A), located between CONGRESSIONAL RECORD \u2014 HOUSE H9455July 31, 1996 the north and south curbs of Constitution Avenue, N.E., west of its intersection with Second Street, N.E., all as shown in Land Record No. 268, dated November 22, 1957, in the Office of the Surveyor, District of Co- lumbia, in Book 138, Page 58. (D) All sidewalks under the jurisdiction of the District of Columbia abutting on and contiguous to the land described in subpara- graphs (A), (B), and (C). (3) TRANSFERS TO DISTRICT OF COLUMBIA.\u2014 Jurisdiction over the following parcels is transferred to the Government of the Dis- trict of Columbia: (A) That portion of New Jersey Avenue, N.W., between the northernmost point of the intersection of New Jersey Avenue, N.W., and D Street, N.W., and the northernmost point of the intersection of New Jersey Ave- nue, N.W., and Louisiana Avenue, N.W., be- tween squares 631 and W632, which remains Federal property. (B) That portion of D Street, N.W., be- tween its intersection with New Jersey Ave- nue, N.W., and its intersection with Louisi- ana Avenue, N.W., between Squares 630 and W632, which remains Federal property. SEC. 3. MISCELLANEOUS. (A) COMPLIANCE WITH OTHER LAWS.\u2014Com- pliance with this Act shall be deemed to sat- isfy the requirements of all laws otherwise applicable to transfers of jurisdiction over parcels of Federal real property. (b) LAW ENFORCEMENT RESPONSIBILITY.\u2014 Law enforcement responsibility for the par- cels of Federal real property for which juris- diction is transferred by section 2 shall be assumed by the person acquiring such juris- diction. (c) UNITED STATES CAPITOL GROUNDS.\u2014 (1) DEFINITION.\u2014The first section of the Act entitled ”An Act to define the United States Capitol Grounds, to regulate the use thereof, and for other purposes”, approved July 31, 1946 (40 U.S.C. 193a), is amended to include within the definition of the United States Capitol Grounds the parcels of Fed- eral real property described in section 2(b)(2). (2) JURISDICTION OF CAPITOL POLICE.\u2014The United States Capitol Police shall have ju- risdiction over the parcels of Federal real property described in section 2(b)(2) in ac- cordance with section 9 of such Act of July 31, 1946 (40 U.S.C. 212a). (e) EFFECT OF TRANSFERS.\u2014A person relin- quishing jurisdiction over a parcel of Federal real property transferred by section 2 shall not retain any interest in the parcel except as specifically provided by this Act. COMMITTEE AMENDMENT The SPEAKER pro tempore. The Clerk will report the committee amendment. The Clerk read as follows: Committee amendment: Page 4, line 12, strike ”S6201”. The committee amendment was agreed to. The bill was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to reconsider was laid on the table. f GENERAL LEAVE Mr. HANSEN. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their re- marks on H.R. 3006 and H.R. 2636, the bills just passed. The SPEAKER pro tempore. Is there objection to the request of the gen- tleman from Utah? There was no objection. f b 2030 SPECIAL ORDERS The SPEAKER pro tempore (Mr. FOX of Pennsylvania). Under the Speaker’s announced policy of May 12, 1995, and under a previous order of the House, the following Members will be recog- nized for 5 minutes each. f The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from New Jersey [Mr. SAXTON] is recognized for 5 minutes. [Mr. SAXTON addressed the House. His remarks will appear hereafter in the Extensions of Remarks.] f The SPEAKER pro tempore. Under a previous order of the House, the gentle- woman from Illinois [Mrs. COLLINS] is recognized for 5 minutes. [Mrs. COLLINS of Illinois addressed the House. Her remarks will appear hereafter in the Extensions of Re- marks.] f The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from Indiana [Mr. BURTON] is recognized for 5 minutes. [Mr. BURTON of Indiana addressed the House. His remarks will appear hereafter in the Extensions of Re- marks.] f SPECIAL CEREMONY FOR STEPHEN D. BAKRAN The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from Michigan [Mr. STUPAK] is recognized for 5 minutes. Mr. STUPAK. Mr. Speaker, I would like to call to your attention and that of the U.S. House of Representatives a special ceremony that will be held this Friday, August 2, in Wells, MI, in my congressional district. On Friday, the family of Navy avia- tion Radioman Second Class Stephen D. Bakran will gather at the gardens of Rest Memorial Park in Wells, MI, as his remains are laid to rest. It is the tradition of our Nation to honor our war dead. What makes the ceremony for Airman Bakran so special is the fact that this important closure for the family comes more than five decades after this young man was killed in action. From Navy officials and other sources, we know that Stephen Bakran was part of a special bombing squadron on a unique mission assigned to the U.S.S. Ranger, CV 4, the first ship built from the keel up as an aircraft carrier. Stephen Bakran came to be aboard the Ranger after enlisting in the Navy on June 27, 1941, only weeks after his graduation from high school. The eldest son in a Catholic family of 11 children, Stephen is remembered by family, friends, teachers, and others as an honest, hard working, caring indi- vidual. The son of Croatian immigrants, Ste- phen is recalled in his role as a money earner for the family on his paper route, a dutiful son working in the family garden or tending the farm ani- mals, and a responsible sibling chang- ing and washing diapers of his younger brothers and sisters. Airman Bakran is part of the first U.S. carrier based mission launch against Nazi-held Norway. Code named Operation Leader, the planes of the mission sank Nazi shipping and caused other damage at the cost of two SBD 5 Dauntless scout bombers. One of these bombers that were downed claimed the lives of Stephen Bakran and his pilot, Lieutenant Clyde A. Tucker, Jr. of Alexandria, LA. Reports say that Stephen Bakran was still firing his machine gun as his plane went down on October 4, 1943. Although the Navy listed Stephen Bakran and Clyde Tucker as killed in action, it was not until 1990 that a Nor- wegian diving club and a Norwegian historical research vessel found the wreckage of the aircraft off the coast of Bodo, Norway, in 150 feet of water. It was not until July of 1993 that div- ers were able to locate and recover the two aviators. The remains of Clyde Tucker were identified in 1994 and are buried in Arlington National Cemetery. However, DNA tests did not conclu- sively identify the remains of Stephen Bakran until this year. I am pleased that I was able to assist the family by working with our mili- tary officials during the identification process, and now I am extremely grate- ful to everyone, including those who helped to find, identify and transport Steve Bakran back to his family where they will be able to find a final resting place for this fallen warrior. Today as we watch other families struggle with the tragedies of the dis- appearance of loved ones in a dark wa- tery grave, we find comfort in witness- ing that the search for our military missing in action never ends and the door of hope, hope that they may be found, never closes. Mr. Speaker, let us remember the Bakran family in our thoughts and prayers on Friday. I regret that I will not be able to attend the funeral, as I will be here attending to legislative business. The Bakran family, the Wells and Escanaba community will be at Steve’s funeral, but my family will join the Bakran family in a final salute to our World War II Navy veteran who is laid to rest. f The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from California [Mr. RIGGS] is recognized for 5 minutes. [Mr. RIGGS addressed the House. His remarks will appear hereafter in the Extensions of Remarks.] CONGRESSIONAL RECORD \u2014 HOUSEH9456 July 31, 1996 The SPEAKER pro tempore. Under a previous order of the House, the gentle- woman from California [Ms. MILLENDER-MCDONALD] is recognized for 5 minutes. [Ms. MILLENDER-MCDONALD ad- dressed the House. Her remarks will appear hereafter in the Extensions of Remarks.] f The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from Washington [Mr. METCALF] is recognized for 5 minutes. [Mr. METCALF addressed the House. His remarks will appear hereafter in the Extensions of Remarks.] f TRIBUTE TO JACK HENNING The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from California [Mr. BROWN] is recognized for 5 minutes. Mr. BROWN of California. Mr. Speak- er, I rise today to pay tribute to the life and career of John F. ”Jack” Henning. On Tuesday, July 30, 1996, yesterday, the California labor movement bid a fond farewell to their top leader for the past 26 years. Mr. Henning, at the age of 80 years, retired as executive sec- retary-treasurer of the California Labor Federation, AFL CIO. Born in San Francisco, where he was raised in a blue collar family, Jack earned a college degree in English lit- erature at St. Mary’s College. Mr. Henning’s rise in labor unions began in the 1940’s, when he held jobs in a pipe and steel plant; and in 1949, he began working at the California Labor Fed- eration, initially as a senior staffer. Mr. Henning has also served as Direc- tor of the California Department of In- dustrial Relations in the early 1960’s, where I worked closely with him in my role as a member of the State Assem- bly Committee on Industrial Relations. He also worked as Under Secretary of Labor in both the Kennedy and John- son administrations, where again I worked closely with him as a Member of Congress and a member of the Com- mittee on Education and Labor. In ad- dition to his already distinguished ca- reer, Mr. Henning was also the Ambas- sador to New Zealand from 1967 to 1969, where again I visited with him on my first trip to Anarctica, and a Regent of the University of California from 1977 to 1989. After Mr. Henning returned home from New Zealand, he took the helm of the California Labor Federation, and for the past 26 years never faced an op- ponent for the post. Throughout his career in the labor union movement, which he began as a young man in 1938, he was heralded as a master orator, ”thundering from the political left against what he regards as the scourge of unbridled capital- ism.” Mr. Henning has been a cham- pion of the working poor and underclass, fighting to increase their standard of living. Mr. Henning was in- strumental in the passage of the Cali- fornia Agricultural Labor Relations Act of 1975, which gave farm workers the right to organize and bargain col- lectively, as he was in sponsoring an initiative in 1988 which regulated work- place health and safety for the state’s workers. During his farewell address, he called upon those to his political right to visit any major U.S. city and ”see what capital has done to the poor, see the centers of wealth and the mansions and the corporate wealth, and then see the impoverished . . . homeless, beggers at the table of wealth.” One of his many accomplishments has been preventing restaurant owners from counting tips as part of the minimum wage. Jack Henning has left behind a ca- reer in the labor union movement in which his contributions will not be for- gotten. His tough negotiating skills along with his ability to sway people with his orations, have provided labor employees with better working condi- tions. He has truly been an inspiration to me and to others who are fighting to protect the jobs and lives of the citi- zens of California. Mr. Speaker, I ask my colleagues to join me in commending Jack Henning on his dedicated service to the Califor- nia Labor Federation and to the work- ers of the State of California. f The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from Florida [Mr. FOLEY] is recognized for 5 minutes. [Mr. FOLEY addressed the House. His remarks will appear hereafter in the Extensions of Remarks.] f The SPEAKER pro tempore. Under a previous order of the House, the gentle- woman from Texas [Ms. JACKSON-LEE] is recognized for 5 minutes. [Ms. JACKSON-LEE of Texas ad- dressed the House. Her remarks will appear hereafter in the Extensions of Remarks.] f The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from California [Mr. MILLER] is recognized for 5 minutes. [Mr. MILLER of California addressed the House. His remarks will appear hereafter in the Extensions of Re- marks.] f ECONOMIC GROWTH UNDER CLIN- TON ADMINISTRATION HAS BEEN ANEMIC The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from California [Mr. DREIER] is recognized for 5 minutes. Mr. DREIER. Mr. Speaker, I rise this evening to comment on a statement that was made throughout the debate on this historic welfare reform measure that was passed. I am pleased to see that we did it in a bipartisan way, but both sides of the aisle, very appro- priately, accurately stated that as we look at reducing welfare we are going to be faced with an economy that will not have enough jobs for those people out there who are going to be moving off of welfare. That is a very legitimate concern be- cause economic growth under this ad- ministration has been anemic. In fact, it has been lower than 21 of the last 30 years. Now, I believe, Mr. Speaker, that it is very important for us to follow up the very historic welfare reform legislation which we passed today with an eco- nomic growth plan that increases sav- ings and investment, which will lead to higher rates of productivity, increase worker wages and the creation of more private sector jobs. The reason for the anemic growth that we have seen is that productivity growth is too low. Productivity is too low because we are not investing enough in both physical capital and human capital. Unfortunately, this ad- ministration is responsible for low pro- ductivity growth because the tax and regulatory burden has been way too great. Every year since Bill Clinton took of- fice, taxes have been higher and family income has been lower than when he got elected. In fact, as we all have come to find out, the average family has a tax burden which is in excess of 38 percent. Under the Clinton administration the cost of complying with Federal regula- tions has also been very high. It aver- ages $1,000 per household. Obviously, we all know that regulation increases the cost of employing workers, and thus acts as a tax on job creation and employment. Now, this administration is respon- sible for low productivity growth be- cause the President has fought our ef- forts to reform the education system that we have. Unfortunately, this ad- ministration, due to it, government spending on education, as we all know, has gone way up, while the perform- ance, the school performance and stu- dent achievement have remained static and are leaving young Americans ill equipped to function in today’s increas- ingly competitive global economy. What Congress can do to increase productivity and long-term capital eco- nomic growth is very, very key, and there are more than a few items that we can do to address them. Obviously, the first that comes to mind for vir- tually everyone is balance the budget. We have been very committed to a balance budget, and we know what that will create. It obviously increases do- mestic savings, it lowers interest rates, and increases overall investment, and we know that that would be a very, very key and beneficial item as we look towards addressing this concern of anemic economic growth and slow pro- ductivity. Another one that is very key is to de- crease the tax burden on investment. CONGRESSIONAL RECORD \u2014 HOUSE H9457July 31, 1996 Now, so often these things are mis- labeled as a tax cut on the rich, but every shred of empirical evidence, Mr. Speaker, has demonstrated that it will in fact be beneficial in job creation and economic growth. A capital gains tax cut will make more venture capital available for emerging technologies as we charge to- ward the millennium. We know how important that is. We know that job creation is emanating from the private sector and the small business sector of our economy. b 2045 We also need, in looking at the tech- nological changes that are made, we need to make the research and develop- ment tax credit permanent so that this incentive that we need for encouraging innovation in new technologies is there. We also need to do what we can to in- crease the skills of the workforce in this country, improving basic edu- cation through school choice, increas- ing local control and reducing the bu- reaucracy; creating tax deferred or tax- free education savings account similar to individual retirement accounts, something that this administration ad- mittedly has talked about, but has not acted upon. And we have tried respon- sibly to move ahead with that and have not gotten much support from the ad- ministration. We have not cut spending on education, nor should we continue to throw money at what is a wasteful, broken system. We need also to enact significant reg- ulatory reform. The explosion of new regulation we have seen since 1988 has raised the cost of labor and capital, created barriers to the formation of new companies and jobs, and raised the cost of employing Americans. The higher cost of employment, in turn, means that in a competitive economy the return to labor in the form of wages is greatly reduced. The regulatory burden needs to be rolled back, not only to allow wages to rise, but also to decrease the cost of hiring workers. And remember, again we are trying to address the concern that many have raised that will follow on with reforming the welfare structure. We also need to have a modest in- crease in the long-term growth rate, which can have a dramatic impact on the standard of living here in the Unit- ed States. A 1 percent increase in long- term economic growth would mean 6 million new jobs created over an 8- year-period, $700 billion more in tax revenue, enough to balance the budget by the year 2002 without any spending cuts, and also Social Security would remain solvent for 30 more years if we were to have just a 1 percent increase in long-term economic growth. Also, 200,000 new small businesses would be created over a 4-year period. With that, I am convinced, Mr. Speaker, that we could go a long way towards addressing the concerns that have been raised by Members on both sides of the aisle that will following the wake of reforming the welfare sys- tem, but it must be done, it must be done as expeditiously as possible. Unleash this economy and let us do it now. f PENSIONS MUST BE PROTECTED The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from Massachusetts [Mr. TORKILDSEN] is recognized for 5 min- utes. Mr. TORKILDSEN. Mr. Speaker, I rise this evening to discuss an issue im- portant to every American: protecting pensions. Pensions represent security and inde- pendence for all working Americans. As Americans have come to rely on So- cial Security, they also have every right to expect their pensions will be there when they retire. This Congress has made great strides in enacting a balanced budget. Finally, Republicans and most Democrats agree that the budget must be balanced in the next 6 years. How we actually get to a balanced budget is still being de- bated, but at least there is bipartisan agreement to balance the budget. The issue of pensions became a part of last year’s budget battle. While I supported the balanced budget, I voted for the motion to instruct conferees that would have ensured workers’ pen- sions throughout America. The reason we needed to instruct conferees was that the act proposed allowing some businesses to tap into so-called excess pension funds. While under this pro- posal, these funds would need to be used in other employee benefit ac- counts, cutting pension accounts for any reason could place workers’ retire- ments at risk. The investment market is simply too volatile. In many cases these were not ”ex- cess” pension funds at all, but were simply the value that inflation had added to the pension funds. If any- thing, these excess funds should only be used for cost-of-living adjustments for retirees. That is why I voted to in- struct conferees to protect workers’ pensions. A study done by the Pension Guar- anty Corporation reported that plans with excess funding could become un- derfunded with an economic downturn, such as a drop in interest rates or mar- ket shifts. While businesses must make up any shortfalls, this weakens their overall financial health. This just is not worth the risk. It is critical that Congress protect these pensions for workers as it did when the Tax Reform Act of 1986 was passed. Congress recognized that em- ployers have an obligation to ensure their employees’ pensions. This obliga- tion is critical in the 1990’s. When the budget was signed into law by President Clinton, it contained no changes that would allow any cor- porate raid on pensions. I will continue my work to protect workers’ pensions. These funds were earned by retirees and they must be there when they need them. f AMERICA IS IN NEED OF PRAYER The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from California [Mr. DORNAN] is recognized for 5 minutes. Mr. DORNAN. Mr. Speaker, I had the opportunity to put in that section of the RECORD we call the Extension of Remarks a beautiful, thoughtful, short exposition by the Reverend Joseph Wright. He is not from my State. It was given to me by one of the outside institutions around this place, the lovely Rita Warren of Massachusetts, who goes through all the hoops around here to get permission to have a Pas- sion Play on the East Steps of our beautiful U.S. Capitol every Easter week; and I noticed she is starting to worry about what is happening to our country, vis-a-vis what Reverend Billy Graham or the Holy Father in Rome has said. So I notice that she has her Passion Play out on the steps with a figure of Jesus and all of his beautiful sayings as the Prince of Peace that can save our world. But she asked me, since she had given me this recitation by Reverend Wright if I could not read it on the floor of the House, as well as put it in. So for Rita Warren, I will do that, Mr. Speaker. The following is ex- cerpted from a prayer in the Kansas house. This was delivered on the floor of the Kansas legislature, courageous Bob Dole’s home State, on January 23 by Joe Wright of Central Christian Church, Wichita. We have ridiculed the absolute truth of God’s word and called it pluralism. We have worshiped false gods and called it multiculturalism. We have endorsed perversion and called it alternative lifestyle or diver- sity. We have exploited the poor and called it the lottery. We have neglected the needy and called it self-preservation. We have rewarded laziness and called it welfare. We have killed the pre-born and called it choice. We have neglected to discipline our children and have called it building self-esteem. We have abused power and called it political savvy. We have coveted our neighbor’s pos- sessions and called it ambition. We have polluted the airwaves with profanity and pornography and called it freedom of expression. We have ridiculed the time-honored values of our forefathers and called it enlightenment. We have indoctrinated our children and called it education. We have censored God from our pub- lic life and called it religious freedom. We have prevented our citizens from defending themselves and called it gun control. CONGRESSIONAL RECORD \u2014 HOUSEH9458 July 31, 1996 We have allowed violent criminals to be released to prey on society and called it compassion or rehabilitation. We have imprisoned the innocent and let the guilty go free and called it jus- tice. Indeed America is in much need of prayer. And in my concluding minute, let me point out, Mr. Speaker, that the RU 486 pill, about to emerge on the Amer- ican market, has been called by Thom- as Grenchik, director of the arch- diocesan Pro-Life Office as a child-pes- ticide. He says Clinton has another an- ticipated victory in his campaign to kill the pre-born. ”At the President’s direction,” Mr. Grenchik says, ”the Food and Drug Ad- ministration has strong-armed the use of RU 486 from its European owner and, as promised, will ramrod the approval of this child-pesticide at all costs.” It goes on to describe this panel of experts on July 19, way out of town in Gaithersburg with a 6 0 vote, two ab- staining, on unleashing this child-pes- ticide. RU 486, also known by its generic name mifepristone, is taken first and causes the uterine lining to break down and slough off. Then misoprostol, a prostaglandin that stimulates uterine contractions, is taken 2 days later, a complicated procedure requiring sev- eral medical visits, precise drug doses, and monitoring. In an editorial in ”L’Osservatore Ro- mano,” the Vatican newspaper, it was condemned as an abortion pill, ”the pill of Cain, the monster that cynically kills one’s brother”; and in this edi- torial, a moral theologian writes that the pill’s anticipated approval in the United States is an important victory for what it termed, and this is in Rome, the ”abortion party” led by the Population Council and the Inter- national Planned Parenthood Federa- tion. So the battle goes on, Mr. Speaker, and let us hope that people go into this with their eyes open and that we do not have a delayed time bomb of the tha- lidomide problem here. Yes, as Rev- erend Joe Wright says, America is cer- tainly a Nation in need of prayer. As Billy Graham said in our beautiful Rotunda when he received, unani- mously from both the Senate and the House, the Congressional Gold Medal, America is a Nation on the brink of self-destruction. ACTIONS TO MARKET ABORTION PILL ARE DENOUNCED The archdiocesan pro-life director de- nounced this week’s government actions that would soon put the abortion-inducing pill RU 486 on the American market. Thomas Grenchik, director of the arch- diocesan Pro-Life Office, said that President Clinton ”has another anticipated victory in his campaign to kill” the unborn. ”At the president’s direction, the Food and Drug Ad- ministration has strong-armed the use of RU 486 from its European owner and, as promised, will ramrod the approval of this child-pesticide at all costs.” A panel of scientific experts recommended July 19 that the FDA here in Washington allow the controversial abortion-inducing pill to be marketed in the United States. Following a public hearing in Gaithersburg, the FDA’s Reproductive Health Drugs Advisory Committee voted 6 0 that the benefits of the RU 486\/misoprostol regimen for terminating early pregnancies outweigh its risks. Two members of the panel abstained. RU 486, also known by its generic name mifepristone, is taken first and causes the uterine lining to break down and slough off. Misoprostol, a prostaglandin that stimulates uterine contractions, is taken two days later. The procedure requires several medical visits, precise drug dosage and monitoring. An editorial in the July 22 issue of L’Osservatore Romano, the Vatican news- paper, condemned the abortion pill as ”the pill of Cain, the monster that cynically kills one’s brother.” The editorial, signed by Father Gino Concetti, a moral theologian, said the pill’s anticipated approval in the United States was an important victory for what it termed the ”abortion party” led by the Population Council and the International Planned Par- enthood Federation. At the hearing, the Population Council, a New-York based research organization that holds the U.S. patent rights to RU 486, pre- sented clinical data from two French trials involving 2,480 women and preliminary safe- ty data from U.S. trials involving 2,100 women. More than 30 individuals also testified dur- ing the open portion of the meeting. The French data showed the medical abor- tion procedure to be 95 percent effective. However, panelists also heard that women participating in the clinical trials experi- enced painful contractions of the uterus as well as nausea, vomiting, diarrhea, pelvic pain and spasm, and headache. In some cases where the chemical com- bination failed to produce an abortion, women then had surgical abortions; others completed their pregnancies and delivered babies with deformities. According to an FDA statement after the panel decision, ”a very small percentage of patients in the clinical trials required hos- pitalizations, surgical treatment or trans- fusions.” Dr. Mark Louviere, a Waterloo, Iowa, emergency room physician who said he is a supporter of legalized abortion, told FDA panelists that he treated a participant in the Planned Parenthood of Iowa trial who lost more than half of her blood volume and near- ly died. ”I am concerned that all of the true com- plications of RU 486 are not being reported to both the media and to the FDA,” he said, adding that he also fears the use of RU 486 ”by physicians without appropriate follow- up.” ”The FDA approval process is moving at an unheard-of-pace to approve this deadly drug combination, leaving many concerns about safety unresolved,” said Wanda Franz, a developmental psychologist at West Vir- ginia University and president of the Na- tional Right to Life Committee, in a state- ment from the group’s Washington office. ”Respect for human life and women’s health, not developing human ‘pesticides,’ should be at the center of the FDA’s concern when advancing new drugs,’ said Judie Brown, president of the American Life League, in a statement from the organiza- tion’s headquarters in Stafford, VA. RU 486 was developed by the French com- pany Roussel Uclaf, and has been taken by more than 200,000 European women since 1989. In 1994, Roussel Uclaf signed over U.S. rights to the Population Council, which filed the FDA application in March. In deciding on drug applications, the fed- eral agency usually has followed the rec- ommendations of its advisory committees. If RU 486 is approved by the FDA, the drug would be sold by Advances in Health Tech- nology, a company set up for that purpose last year, and could be available in the Unit- ed States next year. f REPORT ON RESOLUTION WAIVING REQUIREMENT OF CLAUSE 4(b) OF RULE XI WITH RESPECT TO SAME DAY CONSIDERATION OF RESOLUTION REPORTED BY COM- MITTEE ON RULES Mr. GOSS (during the special order of the gentleman from Georgia [Mr. KINGSTON] from the Committee on Rules, submitted a privileged report (Rept. No. 104 735) on the resolution (H. Res. 500) waiving a requirement of clause 4(b) of rule XI with respect to consideration of a certain resolution reported from the Committee on Rules, which was referred to the House Cal- endar and ordered to be printed. f A DIFFERENT VISION OF AMERICA The SPEAKER pro tempore. Under the Speaker’s announced policy of May 12, 1995, the gentleman from Georgia [Mr. KINGSTON] is recognized for 60 minutes as the designee of the major- ity leader. Mr. KINGSTON. Mr. Speaker, I want- ed to talk tonight about a different vi- sion of America, a vision that we are not really seeing from the Washington bureaucracy, but one that this Con- gress is trying to form and trying to achieve and move our Nation towards. We have asked ourselves some fun- damental questions: What kind of America do we want? Do we want an America where illegal drug use is up? Do we want an America where taxes are up and wages are down? Do we want an America where welfare traps fami- lies and despairs generation after gen- eration? And do we want an America where illegal immigration is up? And do we want one where a White House has more scandals than Hollywood has disaster films? Look at that vision of America. That is somehow what many of the Washing- ton bureaucrats see and administer today. Think about another kind of Amer- ica. Would we like one that has strong- er and safer families through a real fight against crime and illegal drugs? Do we want an America where there are more opportunities through lower taxes, higher wages, better jobs and more free time? Do we want an Amer- ican where illegal immigration is down and English is truly our common and unifying language? Do we want an America where welfare is replaced by work? And do we want an America where the White House is the moral leader of the country, not just the po- litical issues. These are the things that we are going to talk about tonight, and I have CONGRESSIONAL RECORD \u2014 HOUSE H9459July 31, 1996 with me our esteemed colleague from Pennsylvania, Mr. CURT WELDON. Mr. WELDON, if you have any com- ments, let me yield to you. Mr. WELDON of Pennsylvania. Mr. Speaker, I thank the gentleman for yielding, and I am pleased to join with him this evening in a portion of his special order. As he knows, I will be taking a special order following this to discuss our defense bill that will be on the floor this week. But I thought it very important to highlight the key areas the gentleman has raised that are really, I think, going to frame the debate as we move into the final 3 months of the election cycle into Sep- tember and October and talk about what is the status of this country today in five key areas and what is the vision for the future and which party and which candidate can offer the best vision for America. I start out by saying to the gen- tleman and my friend, I ran for office and got involved in public life because of drug use in my hometown and my county. I come from a town that was one of our most distressed commu- nities in Pennsylvania. I was born and raised, the youngest of nine children, there, was active in the community a number of ways, including the volun- teer fire company and the Red Cross and the Boy Scout troop, and was upset because our town had become the na- tional headquarters of one of the five largest motorcycle gangs in America. That gang controlled all the drug trafficking along the east coast of this country. They had 65 members living there, and the national president lives there and because we were just a small town, we had no resources of coping with the problem of drug abuse. We have continuously seen since that point in time, approximately 20 years ago, a declining use of drugs in Amer- ica. During the era of Ronald Reagan and George Bush, we saw a marked de- crease in the use of drugs in this coun- try. The gentleman has some factual in- formation that he might want to insert in the RECORD. My understanding is that in the past 3 years the use of drugs in this country has in fact reversed, and we are now seeing an increase in the amount of drug use by 14-year- old’s. Is that correct? Mr. KINGSTON. You have made a very good point. For 11 straight years, until 1992, illegal drug use fell in all categories of drugs except, for some reason, heroin, but everything else had fallen. b 2100 Now, since 1992, when a lot of these drug education programs and a lot of the interdiction programs and enforce- ment programs were cut, under the Clinton administration drug use has gone back up to the extent now that, just to give some numbers, marijuana use among teenagers has dropped, ex- cuse me, has since 1992 increased 137 percent amongst 12- and 13-year-olds. Now, for 14- to 15-year-olds there has been a 200 percent increase. Of the graduating class of 1995, sta- tistically half of the will have experi- enced some sort of illegal drug, and a drug like LSD which we really had not been talking about at all in recent years is now back strong on the streets and LSD use has increased 62 percent since 1992. One of the things that we have been fighting is the fact that the President had slashed the funding for the Office of National Drug Control Policy by 80 percent. I am on the Treasury-Post Of- fice Committee. We are doing every- thing we can to work with General McCaffrey, the new drug czar, to re- store much of this funding and do ev- erything we can, but along with gov- ernment funding there are some other things that we can do to fight drugs. And I do believe in these interdiction programs. I do believe in local policing in States like Georgia where, for exam- ple, the police opened up a satellite station in the middle of one of the big- gest housing projects, where they had the high drug use and they had crime and teenage dropout and teenage preg- nancy problems. As a result of them doing that, the children got to know the police officers. The families came out of the house and the streets got to be safe. And in Statesboro, GA, in that high crime area, drug use has dropped. That is the sort of thing that we are trying to encourage with our budget is local policies to fight drugs. Mr. WELDON of Pennsylvania. The gentleman makes an excellent point. Two key considerations here. First of all, while the administration puts out the rhetoric of being concerned about drug use and supposedly doing some- thing about it, the facts and this is typically the case throughout this ad- ministration, just do not bear out the rhetoric. As the gentleman and my friend pointed out, the office of Drug Enforce- ment Administration reporting to the White House has in fact been cut by, I think the figure used was 84 percent. In fact, it has been decimated. But this President, knowing that he can use perception as opposed to substance, in his last State of the Union Speech ap- pointed one of this Nation’s heroes, General Barry McCaffrey, to head up the drug effort because he wanted to give the people the perception that he in fact is really doing something sub- stantive. So he appoints a genuine hero in this country, whom all of us have the highest respect for and whom all of us want to help, while at the same time he is decimating the funding to allow the programs under the control of that individual and that agency in fact to go forward. Furthermore, perceptually, this ad- ministration has created a casual at- mosphere about drug use. That casual atmosphere then gets translated to our teenagers across the country, and they then think maybe it is okay to do some drugs or limited use and we see the numbers start to go up, as our col- league has pointed out. We saw de- scending use of drugs in this country for the previous 12 years, and in the last 3 years we have seen an increase in drug use by the use of this country. While we cannot blame any one per- son for that, we can look at the factors that may in fact be causing that in- crease and the fact that we have to be doing more substantively to deal with that increase. As the gentleman points out, that is one of the issues that we have been fighting to have as a top pri- ority for the past 2 years since the Re- publican Party has controlled this in- stitution. Mr. KINGSTON. I want to conclude this section of our five-part discussion with this comment. Two other things we want to do with drugs is to have se- vere penalties, pressure; if you are pushing drugs to school kids on basket- ball courts or playgrounds, you go to jail. You stay in jail. We need to have that. Then finally for the addicts, why not have a 24-hour a day hotline that says if a drug addict says I am ready to kill myself, I have hit bottom, I want to bounce back up, give a 24-hour hotline that we will get you help the next day, we will get you help on the spot, be- cause once an individual has made up his or her mind to kick the habit, then they are the easiest to cure. We are going to talk again about in a second on illegal immigration, but in the meantime let me yield to the dis- tinguished chairman of the Committee on Rules, Mr. SOLOMON. Mr. SOLOMON. Mr. Speaker, I thank the gentleman for yielding. Mr. Speaker, I just came from a Com- mittee on Rules meeting and heard what my colleagues were doing on this proliferation of drug use in America. It is such a sad, sad thing. The gentleman over here from Pennsylvania [Mr. WELDON] mentioned casual attitude. Let me tell how bad that casual atti- tude is coming out of the White House and what is happening to our children and our grandchildren. Seventy-five percent of all violent crime in America today that is com- mitted against women and children, 75 percent that is committed against women and children are drug-related. What has this casual attitude done? It is the most pathetic thing. Today among 12- and 13-year olds, marijuana use is up 137 percent. And in the 14- and 15-year-old range, it is up 200 percent. Among young adults, it has doubled just in the last four years. The worst part of it is these kinds of drugs today, because of this casual attitude coming out of the White House and other places, means that drugs now are being used as weapons against women and children. A drug like Rohypnol, for in- stance, is used as a weapon where, after young women have been plied with marijuana or with alcohol, they have had a Rohypnol tablet slipped into their drink. It renders them uncon- scious, but awake, so that they cannot CONGRESSIONAL RECORD \u2014 HOUSEH9460 July 31, 1996 defend themselves but they can see what is going on when the rape is tak- ing place. This is a whole new genera- tion that is now exposed to this. When we compare this to Nancy Rea- gan’s ”Just Say No” and Ronald Reagan when he sponsored, when he ap- proved my legislation which had ran- dom drug testing for our military, we had use of drugs in our military that was running at 25 percent back in the early 1980s, and once we implemented that random drug testing system, it dropped to 4.5 percent. Drug use all over America began to drop. Now look what has happened. It has turned around and it is just ruining these kids. Is a terrible thing. I thank the gentleman for bringing this to our attention and we need to focus on this all the way. There better be a change at the White House in this casual attitude. Mr. KINGSTON. Mr. Speaker, I want- ed to go on to the next topic that Mr. WELDON and I wanted to bring up, the subject of illegal immigration. First, let me recognize Mr. BOB EHR- LICH of Maryland, who is here with us tonight. Before I yield to the gen- tleman, let me throw out some statis- tics on how bad the illegal immigra- tion problem is, because most Ameri- cans know that we have a lot of illegal aliens in America but they do not know how extensive the problem is. There are an estimated 4.5 million il- legal aliens in America now, that is about the size of the State of Indiana; 300,000 new illegal aliens come each year and so the problem is getting big- ger and bigger. In many cases, they are using false documents to get American welfare benefits, American jobs and so forth, and it is displacing people and putting a further tax drain on us. One of the huge tax drains is in the Federal penal system where right now approximately 22 percent of the pris- oners in the Federal penitentiaries are illegal aliens, and about 80 percent of them are violent offenders which are the most expensive to incarcerate. We have a lot of direct and indirect costs because of the strain of illegal aliens, but one of them is now that school systems must offer not just bi- lingual education but multi-lingual education. In Seattle, for example, there are 75 different languages spoken in the school system; in Los Angeles, 80; 100 in Chicago. Now, we are all sons and daughters of immigrants, most of us sons and daughters of legal immigrants. But what they did when they came to America is they learned American cul- ture and they learned English as our common language. They did not turn their back on the home country great traditions. Savannah, GA, where I live, has ethnic celebrations all through the year, because we have a strong ethnic heritage. We want to keep that in mind and celebrate it. I know where I was raised, not in Sa- vannah but in Athens, GA, a lot of Cuban families came after Castro took over and in most of their homes they spoke Spanish. But their children were raised in the school systems where they learned English. Now those chil- dren are in very good jobs because they were not trained to be special. They were trained\u2014well, I take that back. They were trained to be special because all Americans are special. But now our school systems have all these ridicu- lous requirements. I have heard that the voting ballot in California is in seven different languages. Can you imagine voting but not knowing Eng- lish? I yield to the gentleman from Mary- land [Mr. EHRLICH]. Mr. EHRLICH. Mr. Speaker, the gen- tleman said an awful lot of truth here. It really speaks to the fact that we are a multi-ethnic culture and we revel in that fact. The gentleman just recited that fact, but we are one culture. And that one culture has a common language, which is English. Of course, the English bill will certainly dominate the debate on this floor over the next couple days. But I know the gentleman has put it very well. What better means to you achieve economic mobility in this country other than by a common lan- guage? Does it make any sense that any other options\u2014look what is hap- pening in Quebec right to the north? Multi-ethnic but one single culture, that is the way to the American dream. That is the way to economic prosper- ity. That is certainly the message that should go out from this Congress. Mr. KINGSTON. If you will remem- ber the biblical story about the tower of Babel, the story is that the villagers decided to build a tower to heaven. And the Lord did not want that done and, as a preemptive measure, gave them all different languages. And then they could not work together, and they broke up and they started all the other nations. I am not saying that we cannot work with each other when we speak dif- ferent languages, but the fact is, it is interesting that thousands and thou- sands of years ago, in a Bible story we all learned as children, the way to break up a nation was to have different languages. I believe, to say it in a posi- tive light, the way to unify America further is having one common lan- guage. Today there are 320 languages spoken in the United States of Amer- ica. Mr. WELDON of Pennsylvania. Mr. Speaker, on the issue of immigration, again, this administration wants to create the perception among the Amer- ican people that Republicans do not care, that we are not sensitive, that we are not compassionate. And we have to rise up and we have to shout as loud as we can the facts, because that is not the case. What we are trying to do is to stop the abuse. I think the best case that I can point to of what is going haywire in this country was brought to my at- tention by a good friend and colleague from California, ELTON GALLEGLY, who has been the leader in this Congress in terms of immigration. ELTON GALLEGLY showed me a brochure, I think it was the last session of Con- gress, printed in Spanish, paid for by the U.S. taxpayers. This four-page brochure was being handed out in southern California to anyone who was Spanish speaking that needed health care. And what it said was that if you are pregnant, you can go to any hospital within the jurisdic- tion of the brochure being given out, I think it was Orange County, and you can get prenatal care, postnatal care, and have the cost of delivering your child borne by the taxpayers of this country. If you are a young Mexican mother and you know in a brochure printed in your native language that you can come across the border to America, where health care is the best in the world, and you can go to any hospital and have your prenatal care provided, your baby delivered and your postnatal care provided, what are you going to do? You are going to do everything you can to come across that border. Here is the real rub. The person also knows, the mother also knows when that child is born in America, guess what, that child is an American citi- zen. Even though that child is born to an illegal immigrant in this country, that child becomes a full U.S. citizen with the same rights as any other child born here. But what really bothered me about this brochure, which should bother every Member of this institution, was a paragraph in the bottom of the third page that said, you cannot be turned into the immigration service even if you are here illegally. b 2115 Now we wonder why we have an im- migration problem. Here is a brochure printed by the taxpayers of this coun- try in Spanish given to people all over the southern part of California and in Mexico, and we wonder why they are all coming across the border. We just cannot continue to be the health care resource center for the world. That is what we are talking about, immigra- tion reform that stops that. Mr. KINGSTON. Well, let me give some numbers on that: 1996 taxpayers will spend $26 billion to provide welfare benefits to nonciti- zens which includes 11 billion in Medic- aid benefits, which is basically free in- surance, health care, free health care; 4.4 billion in Supplemental Security In- come, which is up, incidentally, 825 percent. Now remember we are just talking about noncitizens. There is 2.9 billion in food stamps; 2.3 billion in Aid to Families with Depend- ent Children; 3.89 billion in housing cash assistance and other subsidies. And that is from a Harvard University study; that is not exactly, you know, a conservative group up there. But this CONGRESSIONAL RECORD \u2014 HOUSE H9461July 31, 1996 is putting an additional tax strain on American middle class taxpayers. I believe we need to strengthen our border patrols. We need to crack down on deportation of criminals aliens. We need to have sponsorship, legally bind- ing; so if you want to bring your family member or whoever in, fine, but you need to be responsible for that person to make sure he or she is independent of government benefits. We also need to protect American jobs. There are a lot of American jobs that have been displaced. Then finally tomorrow this House will vote on English-first as a lan- guage. I believe we have enough votes to pass it. I think the President is probably going to veto it, but I am not discouraged because the liberal Gov- ernor of Georgia vetoed it two or three times himself. Finally this year, be- cause of election year pressures, he signed it. As we saw today with wel- fare, our President is very sensitive to election year pressures, and maybe we can get his attention on it. Mr. EHRLICH. If the gentleman will yield, I think the message is well taken. I hear this term sensitivity used in this House so much. But I never hear that term used in the context of the American taxpayer. The gentleman cited an interesting statistic early on; I think it bears re- peating. The gentleman, I believe, said that 22 percent of the population in the Federal penal system in this country, is illegal aliens; is that correct? Mr. KINGSTON. That is absolutely correct. Mr. EHRLICH. This free ride on the American taxpayer has to end. That is the bottom line to illegal drugs. That is the bottom line to illegal immigra- tion. That is the bottom line to reform- ing our legal immigration system. That is the bottom line to welfare re- form as we have discussed. It is the bottom line to almost every issue in this town because, as the gentleman just said, working Americans are just tired of it. They are tired of the free ride. We have a very hospitable people in this country. We are a Nation of immi- grants, as the gentleman has said. We are sensitive to the concerns and the plights of people. But at some point this Congress has to say: You know what, folks? You know what, world? There is a limit to what we can do, and we expect you to abide by our laws. Mr. KINGSTON. Our compassion does not rule out common sense, and we have to just put a little bit more com- mon sense in it. Just as we have said, we are going to address this illegal im- migration, this English-first issue. This Congress is going to move in that direction. The other thing that we all mention is $26 billion is the direct cost of illegal immigration. There are other indirect costs, but that tax strain is further adding to the third issue that we want- ed to discuss. That is the fact that this Congress, this Republican agenda, wants to have for our middle class citi- zens lower taxes, higher wages and more free time. I am going to show you some of the statistics on taxes, but right now we know that the average middle class family is paying 38 percent of the total household income in taxes, which basi- cally means the second income earner is working for the government. That is just, you know, what is happening. Right now we all work until May 7 to have the tax-free independence. So from January 1 to May 7 every year, people are working just to pay the IRS and State and local taxes. Now, if you add on the cost of gov- ernment regulations and other taxes, you are going until July 3d for Inde- pendence Day. Now people will say, well, what are you talking about? Let me show you this chart. This is a gas pump. On $1.20 for a gal- lon of gas\u2014fortunately I am paying a little bit less in Georgia, but I know the folks in Maryland, they all are pay- ing more than $1.20. But on a $1.20 gal- lon of gas, 56 cents goes to taxes, and that includes\u2014I am just going to read: FICA tax, corporate income tax, indi- vidual tax, capital gains tax, customs, ad valorem taxes, State taxes, cor- porate income, unemployment taxes, motor fuel taxes, excise taxes, used oil disposal taxes, business property taxes, pipeline throughput taxes. It is ridicu- lous. When people buy 10 gallons worth of gas, they are paying $5.60. They do not even think about taxes on top of what has already been taken out of their paycheck. Now let us talk about a bottle of beer, 43 cents on a dollar bottle\u2014well a little over a dollar, but 43 cents on a bottle of beer goes to taxes, basically the same kind of thing. On a loaf of bread there are 118 dif- ferent taxes that you and I and our families pay when we go to the grocery store to buy a loaf of bread. Hidden in the cost of that bread are 118 different taxes. That is why the middle class families are working their tails off. The harder they work, the less time they have because the more taxes they have to pay, and we do not have that family fellowship that we so des- perately need to impart values to our next generation. Mr. EHRLICH. That is why the mid- dle class in this country is nervous. When working folks get nervous, this place feels it. The gentleman has raised a very interesting point. The gen- tleman talked about, what was it, 120 different taxes on a loaf of bread? Mr. KINGSTON. One hundred eight- een. Mr. EHRLICH. One hundred eighteen. But when we go to the grocery store, what do we see? One price, one price. We never think about it. And I love this term ”takehome pay.” What does takehome pay mean to you, to the average person? Well, after you work until what, July 3d this year, you get your takehome pay. You work the rest of the year for yourself; right? Mr. KINGSTON. Well now, actually your direct tax burden\u2014you work from January 1 to May 7, and then the indi- rect tax in regulatory burden, you go on to July 3d. Mr. EHRLICH. But the rest of the year you are really not taking home the rest of your paycheck because, de- spite your takehome pay, you take your takehome pay, your cash, and you go out and you buy things which are taxes. So I think we really need to under- stand the dramatic way in which taxes impact the average working person in this country. Mr. KINGSTON. Now to give my col- leagues an idea of the Federal Govern- ment Washington command control bu- reaucracy view on taxes versus drugs, when we talked about earlier 13- and 14-year-olds using marijuana higher than ever before, I think, in history, but it is up anywhere from 137 to 200 percent depending on what age group in that 12-to-14 range, here is what we have fighting drugs. Now this chart, I hope you can see it. The DEA has 6,700 employees, and that is to fight drugs. The Border Pa- trol, immigration folks, 5,800 employ- ees. So that is what we have got. You know, we will just round this up and say about 13,000 employees for fighting drugs and illegal immigration. For the IRS we have 111,000 employ- ees. Now, of those 111,000 employees, for every 3,000 citizens of America there is one criminal investigator. So what we are saying is, no, we can- not fight drugs, we cannot fight illegal immigration, but we can audit you, and we can make sure that you are paying your taxes, and people should pay their taxes, and IRS should be able to collect it. But it shows a disproportionate value rendered when you have 110,000 IRS employees versus 13,000 Border Patrol and drug enforcement. Mr. EHRLICH. If the gentleman will yield, it reflects the values that have held sway in this town for at least 30 to 40 years. That is exactly what it re- flects. I know the gentleman is very anxious to talk about the topic of the day, the issue of the day, welfare reform. Mr. KINGSTON. I am. But before we leave that, I do want to get one other thing on taxes. There was a big discussion about the Clinton tax increase went to balancing the budget 1993, when Clinton passed the largest tax increase in the history of America, $245 billion. That money did not go into deficit reduction. That money went into more Federal Govern- ment. Now, you know, the thinking that Americans do not deserve tax relief right after the President just passed such a huge tax credit\u2014what the Re- publican Party was trying to do was CONGRESSIONAL RECORD \u2014 HOUSEH9462 July 31, 1996 basically say we want to give you back some of the money that the President took from you in 1993, and one of those was a $500 per child tax credit. So, working person, and I love to tell the story about John Johnson who works for UPS, U P S, in my district, and he said to me: You know, I make pretty good money. I do a lot of overtime. I worked hard. My wife is a school teacher, and between the two of us we do OK. But we have got three kids. And at the end of the month we are not able to go down to Florida or go up to Atlanta and see a Braves game or do some of the nice things because we have got to buy a new set of tires, a new dryer. We have got to spend money on groceries, and so forth, and we cannot get ahead. And this is a real story. Now, with the $500 per child tax cred- it, he and his wife could have had $1,500 in their pocket that they could have spent any way they wanted to. And I think they know how to do it a heck of a lot better than Washington bureau- crats. Mr. EHRLICH. If the gentleman will yield, what is so dangerous, what is so radical, and my favorite term in this Congress, what is so extreme about working people in this country taking home just a little bit more money? And I think I have the answer to that ques- tion: Class warfare works in elections. How much class warfare do we see on this floor every day? How many times do we hear this phrase, the rich, the rich? And you know what? Those folks you just mentioned in your district, they are rich. They do not know it. Mr. KINGSTON. Yes, they are, be- cause under the liberal Washington def- inition of rich, that means you hold a job and you pay taxes. You know another thing: marriage tax penalty. Two people living together doing everything that a married couple does pay less taxes than if they go down to the chapel and get a ring around their finger. That is absurd. Marriage is the key foundation block of the family in America, and here the first thing we do right off the bat is tell a couple: Hey, it is cheaper to live together than it is to get married. Mr. EHRLICH. If the gentleman will yield, what is the basic fabric of the free enterprise system in America? Small business people, small business- men, and particularly small business women. Yet, we make it extremely dif- ficult for these small business folks, who create 80 to 85 percent of the jobs in this country, to transfer their small businesses to the next generation. We punish success. Of course, that is what class warfare is all about, punishing success. And I rally think it is incumbent upon this Congress\u2014and now we have been joined by the President of the freshman class, the gentleman from California [Mr. RADANOVICH], and I know he has very strong views on this issue, being a busi- ness man himself. We make it for some reason part of the political atmosphere in this coun- try to practice this class warfare, gen- eration warfare to make that person who is making $25,000 a year jealous of that person making $38,000 a year, which is not the way it is supposed to be. Yet every day in this House we hear from across the aisle: Class warfare. Tired of it. Mr. KINGSTON. I have a friend of mine named Ted Fox, and Ted says this is what Congress’ basic mentality is, that it is the three of us right here. We are walking down the street together, and one had more money than the other two. The other two could vote to take your money, and it would be mor- ally fine and justified. b 2130 That is exactly, that is the whole left-wing premise: It is okay to steal, as long as you vote it as law in Con- gress. That is their whole mentality. I want to yield to the gentleman from California [Mr. RADANOVICH] be- cause he has been involved in so many of these good changes we have done. First, I want to say this, the idea be- hind class warfare is a loser. You are just bashing people. The other day we had a leading Dem- ocrat say in the CONGRESSIONAL RECORD, and I will give you both and anybody else interested a copy of this, that the employer-employee relation- ship is similar to the jailer and pris- oner relationship or the slave and the master relationship. That was from a leading Democrat, in one of the pro- family debates we were having. Mr. Speaker, I yield to the gentleman from California [Mr. RADANOVICH]. Mr. RADANOVICH. My thanks to the gentleman from Georgia, Mr. Speaker, I was interested in the debate and wanted to come down and share the gentleman’s comments and concerns. In my perception, I think, of what we have seen in the brief year and a half and a little bit more that we have been in Washington as freshmen, it has been one of continual amazement in our dia- log with the American people and how we think our Government relates to so- ciety in general, and how we are com- ing up against some pretty old ideas that have been around town for the last 40 years about government and its rela- tionship with the people, as if that is the only relationship that is in Amer- ica today. It kind of epitomizes the Great Soci- ety and some of the ways of thinking of the last 40 years, in that the only rela- tionship in America is Americans, with their government, and that there is only a two-way street there. In coming to Washington and having to develop ideas on how to solve com- plex problems, like the deficit that we have, the up to $200 billion deficit and $5 trillion worth of debt, we have to begin to think in terms of other rela- tionships that comprise America; that there are other institutions out there that are perhaps fundamentally more suited to the solving of some of our so- ciety’s problems. So when we get people coming on the House floor debating class warfare and this idea that there is a pot with only so much in it and you have to divvy it up among the people in the United States, and the only relationship that Americans have is with their Govern- ment, they are some of the ideas we have to begin to defuse. In so doing, we have to remind the American people that there are other institutions out there that are perhaps more suited to taking up the responsibilities that we have seen fit over the last 40 years to assume. There are family units, there is busi- ness, legitimate business, and there are religious and civic institutions. Some of those jobs that government is doing right now are far more suited to these other institutions. Rather than get into this dialog about there being fi- nite resources and we have to promote class warfare to get our piece of the pie, and that government should be in- volved in doing all these things and that is the only way we are going to solve our problem, I think what we need to do is to speak in terms of what other institutions in this country are better suited to solving these problems. If we were thinking in those terms we would probably not be $5 trillion in debt right now. Mr. KINGSTON. I will say one thing, Mr. Speaker, that we all who are par- ents know the joy of holding our own child for the first time. You can hold your nephew or niece, you can hold a friend’s baby, and you can love that baby and go to bat for him time and time again and care for him very deep- ly, but when you hold your own baby it is a whole new ball game. The difference is we have Washington bureaucrats, and as well-minded as they may be about the children in Cali- fornia, in Maryland, in Georgia, and I am sure they love them to death, and I am sure they would never use children as political pawns, but the fact is the folks in Georgia, California, and Mary- land love our kids a heck of a lot better than Washington bureaucrats, regard- less of how great they may be up here. WELFARE Mr. Speaker, we want to move to our next topic, which ties into the family. It ties into the tax burden. That is that of welfare. The gentleman from Mary- land [Mr. EHRLICH] had mentioned that earlier. I could tell he was chomping at the bit. I need to congratulate the two gentlemen for their leadership on this issue, because it is truly because their freshman class has been so persistent when the President has twice vetoed welfare reform, and you two have fought hard to bring it back to the floor time and time again. Mr. Speaker, I am disappointed the President vetoed welfare twice, but that is part of the process. The fact is in our American system, hey, it is 3 months away from election, and he is CONGRESSIONAL RECORD \u2014 HOUSE H9463July 31, 1996 going to sign it. He is going to sign it for that reason. I understand that, and I will not complain about it if we get a bill and we help get children out of the poverty trap, so they can enjoy the so- cial and economic mainstream. Mr. EHRLICH. If the gentleman will continue to yield, once we think about getting some other bills on which we have had vetoes in the past, maybe a clean products liability bill, maybe we can get that signed. The president of the class is here and I know he would love that. Before I begin my remarks on wel- fare, I have to be maybe the first in the entire House to congratulate my friend on his engagement, the gentleman from California [Mr. RADANOVICH]. I am very proud of the gentleman, and so is my wife. Welfare reform. It is a great day, a great day for America. Substance tri- umphs over politics: Real work require- ments, real reform of our legal immi- gration system, real time limits. It really leads into what the gentleman from California [Mr. RADANOVICH] was talking about just 2 minutes ago: what institutions do when we realize finally that government cannot do everything; that $5 trillion to $6 trillion in debt has made us at this point a permanent debtor nation, and we all know no su- perpower can live on for very long being a permanent debtor nation. What institutions will take over for government? One is the private sector: jobs, real work, a quid pro quo for the Federal taxpayer. You want hard- earned tax money to live? Fine. It is a legitimate thing for government to do, to provide temporary assistance to folks. No one argues that. It should not be generational, it should not be multigenerational. Look what it has done to the society. What is part of the answer? Work. The very foundation, the philosophical foundation of our welfare bill, which is quite similar to what the President ve- toed last year, is work. Mr. RADANOVICH. Mr. Speaker, if the gentleman will continue to yield, it also is fair in saying too that when we are dealing with generations of people who are used to being on the welfare rolls, we have to be concerned a little more about conscience-building among those ranks to get them off. Work is a moral responsibility. It really is not something that government should be teaching right now. Every citizen in this country has the obligation of work, but it is very hard to instill those values, being a govern- ment institution. That is why block granting and getting these ideas away from government and starting to think about religious and civic institutions instilling those morals, and in the busi- ness institutions learning to work, so people go out and get the job and get the satisfaction of a day’s pay for a day’s work. It will be a wonderful thing. Government cannot teach those things. Mr. KINGSTON. One of the things that is dear to the heart of every American citizen, Mr. Speaker, and particularly Virginia legislators, be- cause it has the first House of Bur- gesses, which was the first legislative body in America, Jamestown, as the gentleman recalls from our history, the Jamestown Colony, many of the people who came over had their job classifica- tion as gentlemen. They thought they were coming to America, to the streets of gold, and so forth, the land of oppor- tunity. They did not realize it had a work requirement to it. As a result, I think half of the crew perished that first and very harsh winter. Then Cap- tain John Smith said, all right, there is going to be a new game. Everybody is going to work. When they did, the col- ony survived. What we are saying is that if you are able to work, you are going to be re- quired to work, and you are going to be better for it because you can join the socioeconomic mainstream. President Clinton loves to tell the story about the little boy who says, ”The best thing about my Mama being off welfare is because when people ask me what she does, I can say she has a job,” so we are very much in line, here. Mr. Speaker, I wanted to recognize the gentleman from Arizona [Mr. SHADEGG], who is here to join us, and I will yield to the gentleman. Mr. EHRLICH. Mr. Speaker, we have our classmate outnumbered, 3 to 1. The gentleman from Arizona [Mr. SHADEGG] is a good friend of all of us and a great leader in our class. Before he speaks, I just want to say one thing. All of us go back to our districts every weekend and talk to our con- stituents. That is part of the job. The modern House has evolved into that. It is such an important part of our jobs. Housing policy is a major issue in my district, particularly a settlement in Baltimore, which I know my friends in the class know about too well; welfare reform, personal responsibility as a concept. What I see as the common denomina- tor to all these issues is just a working class interest in having people work. It is a working class resentment toward those who will not, not cannot, but will not. I see it time and time again in comments from people I represent who stop me in shopping malls, gas sta- tions, the hardware store, wherever, and they say, ”We work very hard to send our kids to school, to pay our mortgage, to buy our car. We do every- thing, EHRLICH, you want us to do. Yet we see in the newspaper every day peo- ple who will not who are rewarded for it.” Mr. KINGSTON. Mr. Speaker let me apologize to the gentleman who I said earlier was from Nevada. We have so many good-looking freshmen faces that sometimes I just assume they are from all out West somewhere, and throw all those categories out there. I apologize, and I yield to the gentleman from Ari- zona. Mr. SHADEGG. No apology nec- essary, Mr. Speaker. I am just pleased to join you all in celebrating what I think is a great victory for America today. Today really is not a day for par- tisanship, it is a day for celebration. The truth is all across America, Ameri- cans understand that the welfare sys- tem we have, though well-intended, simply is not working. It is not work- ing for the Americans that are at work and paying taxes, now paying taxes of close to half of their income, support- ing those people. It is not working for them. But even more importantly, the wel- fare system that we have created in this Nation, out of a desire to help our fellow man and our fellow women and the poor children in this country, sim- ply is not benefiting them. I think the beauty of it, and it is well put in the gentleman’s quote about the young boy who says, ”Now I can say that my mother has a job, or is not on welfare any longer,” is the benefit for those people who are right now trapped in the system. In a way, God created us to respond to incentives. The incentives in the current system are very bad. The in- centives encourage people not to go back to work. They encourage people to have multiple illegitimate births. They encourage people to engage in lifestyles which are self-destructive. All Americans recognize that there ought to be a safety net there to help those in need, but the safety net we have built has become not only a safe- ty net but a trap. People try to climb out of that net and are caught up in it. Indeed, they spend way too long in it. It destroys them, it destroys their self- respect, and it destroys their families. What we have done with this welfare bill, and I commend the President. I do not really care what his reasons are. He opposed it twice before. Now he has joined us. The bottom line point is we are going to make America better. We are fulfilling his promise to end welfare as we know it, because way back 3 years ago when he made that promise Americans understood welfare as we know it was a failure. Now we are embarked on a program which will redesign welfare in America to help those that need help, but not just help them at their down point in their lives, help them get back into the job market, help them make them- selves productive citizens again, help them attain back that point in their lives when they can respect what they do and when they can feel good about it, and when they can hold their head high and become participants in this economy and in the great experiment which is America, which is that we are going to reward initiative, that we are going to reward hard work. That is what this Nation was built on. We have been cutting a whole block of Americans out from under that dream, saying to them, ”No, you really cannot work. We know you are not able to work, so we are going to take care of you.” That is not an answer, and that CONGRESSIONAL RECORD \u2014 HOUSEH9464 July 31, 1996 is not giving them hope, it is not giv- ing them a future. I just think it is a tremendous day to celebrate the fact that we are in fact revising a failed system and making the Nation better, not only for the peo- ple trapped in the system but for those of us who are picking up the tab, as well. Mr. KINGSTON. Mr. Speaker, we now have with us another freshman, the gentleman from Washington, Mr. RANDY TATE, and I will attribute him to the State of Washington, rightly or wrongly. I know it is west of the Mis- sissippi. Mr. TATE. I would like to thank the gentleman from Georgia, Mr. Speaker. To folks out in the real Washington, this is an exciting day. To me welfare reform is not about balancing the budget. It has nothing to do with that, from my perspective. It is about help- ing people that are trapped in a system that has destroyed their self-esteem, that is taking their initiative away, that has trapped families and hurt chil- dren. We have spent, I have heard that number many times, $5 trillion since the 1960s. If we put that in real dollars, that is more than we spent fighting the Japanese and Germans during World War II, and we won that battle. Everyone agrees welfare has failed. President Clinton said just right here during his State of the Union that this is the year to end welfare as we know it. Today, in the House of Representa- tives, we began to end welfare as we know it, not for the sake of balancing the budget, not sitting there and counting beans. It is about helping peo- ple. That is what this whole debate is about, breaking down the system to make it work for people again, to help families, to help moms, to help dads, to help kids have a better future. b 2145 Mr. EHRLICH. The gentleman has really brought up the fifth topic of the evening, which is words and actions. Mr. KINGSTON. Before going to the fifth topic, I want to make it very abundantly clear for the record that we would not be in a position of having a welfare bill today if not for the action of the freshman class and the leader- ship of the 4 of you and many of your colleagues, because I can say this hav- ing come the previous term. We all talked about welfare, we never could get a bill on the floor of the House. You have been persistent. I would like to say also, I do not think there is anything extreme about saying able-bodied people who can work would be required to work, and I do not think there is anything extreme about getting people out of the poverty trap, and I do not think there is any- thing extreme about saying to nonciti- zens, you cannot have our welfare ben- efits if that is the reason you have come into the country. I know your class has caught lots of criticism, but this victory today be- longs to your class. I think that is very important. Mr. RADANOVICH. If the gentleman would yield, I would like to add to that comment and appreciate the senti- ment. Before saying what I am going to say, there are two things that need to be said. One is that it does not matter who gets credit for this, it passed and it was good for America. So it does not make any difference if the President gets credit or Congress gets credit. However, having said that, I would say one thing, and that is during the dark times of late December, early January, when we were struck in the middle of a Government shutdown, when the freshmen were getting a lot of flak for standing on resolve and keeping certain people to their word, this is the fruit of that. I think that I am not at all out of line to say that had we not gone through a Government shutdown, we would not have had the President of the United States in the Chamber say- ing that the era of big Government is over and we would not have a President in here signing welfare reform that changes welfare as we know it simply because he knew that there were people in the House of Representatives that were going to keep him to his word, come heck or high water. I think that that needs to be said. We are seeing the fruits of that shutdown. I know it is a tough subject, I know it is not what people want to go back to and talk about, but the American peo- ple know that that was absolutely nec- essary in order to get the changes that we are beginning to see the fruit of now. Mr. EHRLICH. The President of the class just used the word ”fortitude,” and the word ”integrity” gets brought up, and the word ”consistency.” Now you are joined by 4 freshman, the gen- tleman from Georgia is really sur- rounded; five actually with the gen- tleman from California [Mr. BILBRAY]. There is a quote right next to the gen- tleman. One of the President’s closest advisers made that quote recently, I believe on Larry King Live, in Feb- ruary 1996. It is really interesting for the freshmen and certainly for the non- freshmen in this Congress to look at quotes like this and wonder what is meant. I know when I go back home on weekends, people come up to me, and I get a lot of credit for doing the easiest thing in the world, what no politician should get credit for in any legislative body anywhere, which is keeping his or her word. We should not get credit for it, yet we all get credit for it every weekend, every day, and in talking to my colleagues, I know we do. It is somewhat of a symbol of how far we have fallen, and this institution has fallen, our profession. We hate to admit it now, but we are full-time politicians, Members of Congress. ”For this President, words are ac- tions.” Mr. Stephanopoulos, words are not actions. Words are cheap, words are meaningless. Words, whether it is the State of the Union, these words we are speaking tonight, if they are not backed up with real actions, are with- out meaning. I know the gentleman from Arizona is chomping at the bit over there. Mr. SHADEGG. If the gentleman will yield, let me just make this point. If Mr. Stephanopoulos said this, ”For this President, words are actions,” it pretty well defines the situation. I guess then saying that we should end welfare as we know it means that you have ended it. And yet in the first 3 years of this administration, nothing changed for America, not until the rub- ber hit the road, not until the votes were cast on the floor of this House to actually change the welfare system as written in the law did anything mean- ingful ever happen. I would like to add one point to that. The victory, while it may been driven in part by the freshman class, as our colleague from Georgia has just point- ed out, it was really driven by Main Street, America. This today was and is, and I guess we can claim victory today because the President has come for- ward and to his credit he has said he will sign this bill, that is victory for Main Street, America, because the val- ues that freshmen have been advocat- ing, the ideas of changing welfare to make it work for all Americans, those in the system and those paying for the system, those ideas came not from freshmen, they came from Main Street, America. They came from the people that we went to and asked what they wanted to see happen in this country and they want change. That is the point. Mr. BILBRAY. If the gentleman will yield, I think the word was used quite appropriately, ”integrity.” There are those that have been in this town for a long time who think that the freshmen and the new majority is somehow radi- cal because we have brought with us from mainstream America the concept of integrity, that words without com- mitment, words without action, words that are said without the intent to per- form lack integrity. And yet there are those in Washington who are terrified of the 73 freshmen who came here and said, I will not sacrifice either my in- tegrity personally or the integrity of the commitment to the people of the United States. Frankly, I have to sort of chuckle at the fact that Washington is so terrified of a group that is finally bringing some integrity to the House floor. I want to say this about the welfare reform. I served as the chairman of San Diego County, which has a welfare sys- tem larger than 32 States in the Union. We in 1978 proposed a concept that at that time they called cruel and mean- spirited. That concept in 1978 was workfare. Every bureaucrat and every obstructionist tried to stop us from executing a concept that would bring dignity back into the public assistance programs. When we were fighting on things like welfare fraud, as an admin- istrator I looked at it, at the cards and CONGRESSIONAL RECORD \u2014 HOUSE H9465July 31, 1996 said ”There is not even a picture on the ID. Let’s put a picture on the ID.” Common sense. Washington said no, be- cause they said it would violate the privacy of the welfare recipient. These are just a few of many stories where every time you try to do some- thing right with welfare, Washington stood in the way. Tonight we finally brought the integrity of the system be- fore the American people and said if you want to promise that we are going to change welfare as we know it, then you have got to have the guts to change it. Mr. KINGSTON. Let me reclaim the time just to remind everybody we have about 4 minutes left. So if each of you want to have a closing statement of 1 minute each. Mr. EHRLICH. Just to back up what the gentleman from California had to say, I know the gentleman has another quote right next to him: ”The Presi- dent has kept all the promises he meant to keep.” What does that mean? The American people deserve to know what that means. They deserve to know when the President makes a promise which promise he means and which promise he does not mean. I do not care if you are liberal, conservative, Republican, Democrat. Your words should have meaning. Your words should have, as the gentleman said, integrity behind them if you sit in any legislative body, particularly the Congress of the United States. Mr. TATE. I could not agree more. What does that mean? Are there prom- ises you did not mean to keep, Mr. President? That is the question that I think is quite clear. The President did not mean to keep his tax cut for the middle class because he never provided a plan to do that. He never meant to balance the budget. We had to bring him kicking and screaming all the way to the dance, so to speak, all the way to actually pro- vide a plan finally, 3 years into his term, and, lastly, welfare reform today. It was not until the last moment, after he had already vetoed it twice, did he finally agree to sign welfare reform. So I think I know exactly what it meant. Say one thing when you run, do another thing when you get elected. That is not what this Republican Con- gress is all about. Mr. BILBRAY. I think the sad part about it is America and this Congress knows that if it was not election year, we would not have gotten three-quar- ters of Congress supporting what the American people are demanding. We operate a welfare system in this soci- ety that we would not do to our own children. But we justify it under the guise of being merciful. It would be il- legal for us to do to our own children what we do on welfare. We pay under- age children to live alone and send them a check. If you and I did that to our own children, it would not only be child abandonment, it would be child abuse. But there are those here who claim they care about the children and hide behind the words they care about the children when in fact what they are doing is government-subsidized child abuse. Tonight we had a great victory, and the American people had the great vic- tory of making politics work for the American people, changing the system. I worry that without the American people keeping a clear message in the next election, that there are those who will try to go back to the old, worn- out, corrupt systems of the old Wash- ington rather than moving forward with the integrity of the new majority. Mr. Kingston. Let me reclaim the time just to yield to the president of the freshman class that has made all these changes possible. We are closing our discussion of illegal immigration, drug use, higher wages, lower taxes and, of course, welfare reform. I yield to the gentleman from California [Mr. RADANOVICH]. Mr. RADANOVICH. I thank the gen- tleman. My final words are promises made, promises kept; the promise to the American people that until we start keeping word and following through in Washington, it will be a long time even then before they begin to feel the results on Main Street, America. This is really truly where is happens. That is the commitment that we intend to keep to the American peo- ple. Mr. KINGSTON. Mr. Speaker, I thank the gentleman from Arizona [Mr. SHADEGG], the gentleman from Washington [Mr. TATE], the gentleman from California [Mr. BILBRAY], the gen- tleman from California [Mr. RADANOVICH], the gentleman from Pennsylvania [Mr. WELDON], and the Gentleman from Maryland [Mr. EHR- LICH] for participating in this special order. f IN SUPPORT OF CONFERENCE RE- PORT ON H.R. 3230, NATIONAL DEFENSE AUTHORIZATION ACT The SPEAKER pro tempore (Mr. TAYLOR of North Carolina). Under the Speaker’s announced policy of May 12, 1995, the gentleman from Pennsylvania [Mr. WELDON] is recognized for 60 min- utes. Mr. WELDON of Pennsylvania. Mr. Speaker, I will attempt to not take the entire hour, but I did want to rise this evening first of all to commend my col- leagues for the excellent work they did in discussing the message of the Repub- lican Party, and not just the Repub- lican Party but, as evidenced by the vote on the welfare reform bill today, the overwhelming majority of Members of this institution. In fact, on the final vote there were 98 Democrats who voted for the bill and 98 who opposed it. So it truly was a bipartisan effort. While there is much perceptual criti- cism of the Republicans in the Con- gress this year, the fact is that most of our initiatives have passed with bipar- tisan support and our colleagues on the other side have joined us. That leads me to my point of discus- sion tonight, which is also bipartisan and which I expect to hit the House floor tomorrow, and that is the final conference report on the defense au- thorization bill for 1997. Mr. Speaker, I rise as the chairman of the Subcommittee on Research and Development for the House Committee on National Security and one of the conferees who chaired two of the panels with the Senate in deliberating the final conference report that will come before us tomorrow. Let me start out by saying, Mr. Speaker, that I think it is a good bill. It is not everything that I had wanted. I will talk about some of the weak- nesses that I think we did not get in this bill, but all in all it is a good piece of legislation that deserves the support from a bipartisan standpoint of the ma- jority of the Members of this institu- tion. But I want to start off by clearing up some misconceptions. The President and certain members of his administra- tion and some on the other side in the more liberal wing of the Democratic Party have gone around the country talking about the Republicans wanting to have massive plus-ups in defense spending and that in fact the Repub- licans are giving the Pentagon pro- grams that they really do not want, that we are just about buying more weapons systems and that we really are not concerned about the human problems that people in this country face. Let me start out by saying, Mr. Speaker, that I come to this body as a public school teacher. I taught for 7 years in the public schools of Penn- sylvania. I ran a chapter 1 program for 3 years in one of my depressed commu- nities like West Philadelphia, then worked for a corporation running their training department and ran for office as the mayor of my hometown. All of those things I did to try to help people and to try to make a difference. In my 10 years in Washington, I have tried to exercise in every possible way through my votes and my actions sup- port and compassion for those needs that ordinary people have. In fact, I take great pride this year in the fact that, working with my colleague the gentleman from New York, RICK LAZIO, after Speaker GINGRICH had asked RICK and I to cochair an effort dealing with anti-poverty initiatives, that we were able to plus-up the funding for the community services block grant pro- gram in the appropriate appropriations bill on the House floor by $100 million. This money goes directly to a net- work of 1100 community action agen- cies nationwide that basically is to- tally consistent with the Republican philosophy of empowering people lo- cally to solve the problems of the poor. This plus-up in funding did not get much play in the national media. It was the single largest plus-up in the CONGRESSIONAL RECORD \u2014 HOUSEH9466 July 31, 1996 community services block grant pro- gram in the history of that program, which dates back to prior to the 1980’s. b 2200 In fact, these CAA’s nationwide le- verage, on average, $2 to $3 of private money for every $1 of public money we put in. So it is a tremendous invest- ment in helping local folks through the nonprofit CAA’s nationwide solve the problems of poverty and ways that we can work to empower people who have the greatest needs. That is just one example of the kinds of things that this Congress has done that have largely been ignored by the American media in its rush to embrace the liberal wing of the Democrat Party and this President, who talk a good game but do not seem to follow through with the deeds that match their rhetoric. I say that, Mr. Speaker, because we have also heard the rhetoric coming out of both the White House and the liberal wing of the Democratic Party that somehow we have dramatically in- creased defense spending. I want to get to that point because that is the topic of my special order tonight. Again, the facts do not bear that out. The analysis that I use, Mr. Speaker, is to take defense spending and com- pare it today versus what we were spending back in the 1960’s. I pick the time period of the 1960’s because we were at relative peace in the world. It was after Korea and it was before Viet- nam. John Kennedy, a Democrat, was our President. He believed in a strong defense for our country and worked hard to maintain our national security interests. During John Kennedy’s tenure, Mr. Speaker, we were spending about 9 per- cent of our country’s gross national product on the military. We were spending about 55 cents of every Fed- eral dollar that we take in in terms of taxes on the defense of this country\u201455 cents of every Federal dollar and 9 per- cent of our total gross national prod- uct. This year’s defense budget that will be finally approved tomorrow, in the final conference report that we will vote on, will see us spend less than 3 percent of our gross national product on the military and about 16 cents of the total Federal dollar that we take in this year. Now, those are glaring differences, Mr. Speaker; 9 percent of our GNP in the 1960’s versus 3 percent of our GNP today; 55 cents of every Federal dollar in the 1960s versus 16 cents of the Fed- eral dollar that we take in today. In addition to those numbers, Mr. Speaker, we have to let the American people know that there are some dif- ferences in today’s environment. First of all, we have an all-volunteer mili- tary. We no longer have the draft. We pay those people who join the services a much higher salary and, in fact, a much larger percentage of our military personnel today are married and they have kids. So we have added housing costs, we have cost-of-living increases, we have a much larger health care sys- tem. The quality of life for our service per- sonnel today is dramatically improved over what it was back in the 1960’s and, in fact, a much larger percentage of that lesser amount of Federal money is going for the quality of life for those men and women who serve in the var- ious branches of our Armed Services. So, in fact, while we have decreased the percentage of Federal spending on our national defense, we in fact, Mr. Speaker, are spending more of today’s defense dollar on the quality-of-life is- sues for our men and women who serve in the military. We have over the past 8 and 9 years made dramatic cuts in defense spend- ing. Now, these were not all done at the suggestion of President Clinton. I am not here to say that tonight. In fact, some of these cuts were proposed under the Bush administration because the world was changing. And, in fact, many of those cuts I supported, but no- where near the draconian cuts that are taking place today. Those cuts, Mr. Speaker, that were proposed during the Bush administra- tion were based on threat assessments that we were given from the situations that existed around the world that threatened American Security Inter- ests and our allies’ security interests. Today’s dollars that we spend on the military are largely not spent based on threat assessments, they are largely determined by numbers pulled out of the air. The Clinton administration, in fact, just pulled a number out of the air and said this is what we are going to spend on defense, in spite of the fact that when Les Aspin served as Secretary of Defense and completed his bottom-up review, he said we would need enough money to be able to fund the support for two simultaneous conflicts. The General Accounting Office has said on the record that there is no way, given the Clinton administration num- bers, that we could ever come close to funding up two simultaneous oper- ations. So, in fact, Mr. Speaker, the numbers that we are basing our defense budget on today are not based on reality, they are not even based on the philosophy that this administration established for our military leaders, and that was established in the bottom-up review headed up by then-Secretary of Defense Les Aspin. What is more ironic, Mr. Speaker, with where we are today is that in dra- matically cutting defense spending over the past 3 years, by the most sig- nificant cuts in the last 50 years in this country in terms of our military, we have seen 1 million men and women lose their jobs. Now, Mr. Speaker, the defense budget is not a jobs bill. It is not like public works projects and it is not designed to ultimately just employ people, but we have to understand the irony of what is occurring in the country today, Mr. Speaker, and I want to point it out. We have the Clinton administration over the past 3 years cutting defense spending by draconian amounts, result- ing in the forced layoffs and cutbacks in defense industries and subcontrac- tors that have caused 1 million men and women to lose their jobs in Amer- ica. Now, Mr. Speaker, the irony here is that most of those 1 million men and women were union employees. They were members of the United Auto Workers, the International Association of Machinists, the IUE, the electrical workers. They were involved in the building trades who worked in our bases and in our facilities. So the bulk of the 1 million men and women who lost their jobs over the past 3 years, caused by this administra- tion’s actions, were union personnel. Not only did they lose their jobs, and all across this country, Mr. Speaker, we know of hundreds of thousands of our constituents who are out of work today who were employed at defense plants and subcontracting machine shops and subcontracting companies, but the irony is that the national AFL CIO this year is forcing from every union employee in this country a $39 assessment. That $39 assessment is being taken out of the pockets of union personnel who work in defense plants to defeat Republican Members who have supported the dollars to fund their jobs. Now, that has to be the ultimate irony. I look particularly at one plant, McDonnell-Douglas. My understanding is they have 8,000 union employees. Mr. Speaker, if we look at the amount of assessment that the AFL CIO has lev- ied on those defense workers working for McDonnell-Douglas, it amounts to over $300,000, and that money is being targeted not to people who are voting against their jobs, but it is being tar- geted to support the ideals of the Democratic Congressional Campaign Committee, and only to target fresh- men Republican Members, most of whom supported a more robust defense budget which in effect provided the dollars for those very jobs. That is the ultimate irony, Mr. Speaker. And all of this money is being taken from those rank-and-file union workers without their support and without their ability to determine where that money should be spent, in spite of the fact that in the 1994 elec- tions, 40 percent of the rank-and-file union workers in this country voted for Republican candidates. Mr. Speaker, that is outrageous; yet we have not heard one national labor leader in Washington talk about the Clinton elimination of 1 million union jobs in this country. We are now in the process, Mr. Speaker, of taking that message to every plant in this Nation. And why are we going to do that? Because this President will go to every one of those CONGRESSIONAL RECORD \u2014 HOUSE H9467July 31, 1996 plants and stand up on the podium next to the CEO and the union leader and talk about the jobs that are there, and he will talk about what his administra- tion is doing to keep those workers em- ployed. Yet this administration, in concert with the national AFL CIO leadership, is in fact targeting, through forced contributions, funds to eliminate those freshman Members who have largely voted for the defense funding level that we are going to have on this floor to- morrow. To me, Mr. Speaker, that is outrageous. Now, the further hypocrisy of this administration, Mr. Speaker, is that last year the Congress, bipartisan sup- port, plussed up defense spending by about $5.5 billion above the President’s mark. We did not pull that number out of the air, Mr. Speaker, we took it from the recommendations of the Joint Chiefs of Staff. They are not political appointees, they are career servants of the military, whose command respon- sibilities are to protect the lives of our troops. We met with them and, based upon their advice, we funded the Defense De- partment funding levels to the requests that they gave us. Actually they want- ed more money than we could provide. This year, Mr. Speaker, when the President again chose in a draconian way to cut defense spending, we brought in the service chiefs, and the service chiefs were very candid. They said the budget proposed was unaccept- able. In fact, Mr. Speaker, when the House Committee on National Security had the four service chiefs in front of us, it was the late Admiral Boorda, the CNO of the Navy, and a very fine leader of our naval forces who said publicly, when asked if he had the ability to pro- vide a wish list for additional funds, where would he put those dollars, and he replied back to us, Congressmen, there is no wish list. These priorities that I will give you are absolutely es- sential to protect the sailors under my command. We then went to the Commandant of the Marine Corps and when the Com- mandant, General Krulak, had his chance to respond, he likewise said, look Congressmen and Congresswomen, I am not going to make any bones about what we need here. My warriors need additional funding, and the re- quest I give you is going to be real. To every last one of the four service chiefs, they gave us the dollar amounts that they need to support the inter- nationalist escapades of this adminis- tration around the world; to fund the operations in Somalia, to fund the $3 to $4 billion we are currently spending in Bosnia, the $2 to $3 billion we are spending in Haiti, the escapades that the President is committing our men and women all over the world. These four leaders told us the dollar amounts that they felt were absolutely nec- essary to meet the requirements of quality of life and protection of these troops. Mr. Speaker, the bill that we will provide tomorrow will begin to do that. It will not completely provide the sup- port they requested from us, because we cannot get additional dollars in this budget environment where we are com- mitted to balancing the budget over a set period of time. We do not have addi- tional money to put into the military. Therefore, we have to make do with this plus-up that we are providing. Now, here is the outrage again, Mr. Speaker, the outrage that I feel every day I serve in this body. This President criticized this Congress last year for plussing up defense spending over his request. When Secretary Perry came before our committee this year, he had a chart showing the amount of defense spending that the Clinton administra- tion would provide. In that chart, it was a line graph, he showed a flattening out of the cuts in the acquisition programs to buy new equipment and he said that the Clinton administration was taking steps to stop the decline and that decline, in fact, stopped in 1996. I said to the Secretary of Defense, this is an outrage. It is the most out- rageous presentation I have seen from a Secretary of Defense. Why? Because here we had the Secretary of Defense, who last year joined with President Clinton in criticizing us for plussing up defense spending, now this year taking credit for what they criticized us for doing last year. That same thing will happen this year, Mr. Speaker. My prediction is that with all the criticisms from the White House and from the Secretary of Defense, they in fact will accept the final bill that we pass, the funding will be provided, and then this President will go to every one of those plants and every one of those bases, and this President will take credit for those items that we funded through a bipar- tisan action of this Congress that he opposed and criticized us for. It even gets worse than that, Mr. Speaker. The hypocrisy coming from the White House is unbelievable. The B 2 bomber is a perfect case in point. Let me say, Mr. Speaker, that some would say you are just down here as a Republican hawk who supports every defense weapon system and that is why you are mad at President Clinton. b 2045 That is not the case. Let me give the example of the B 2. I have opposed the B 2 bomber for the last 3 years, Mr. Speaker, even though I chair the Na- tional Security Research and Develop- ment Subcommittee. My party leader- ship, as you know, has supported the B 2 bomber; in fact, the majority of my colleagues on the Republican side sup- port the B 2 bomber. I felt it was great technology, but we cannot afford it. Given the budget numbers that we have to work with, we cannot afford to spend money on a pro- gram that we cannot continue. There- fore, over the past 3 years I have con- sistently, in committee and on the House floor, opposed money for the B 2. Now this President, Mr. Speaker, has said that he too opposes the B 2 bomb- er, just like he has criticized us for plussing up defense spending. But after the President signed the defense appro- priation bill last year, which had B 2 funding in it, what did this President do? He went out to southern California and he went to the plant where the B 2 bomber is manufactured and he gave a speech with the head of the union and the head of the company standing on both sides of him and what did he say? He said to those workers, I am here to support building one more B 2 bomber. And then he went on to say, and I have authorized the commission of a study that is going to be done that will deter- mine whether or not we need more deep strike bombing capabilities. Now, there is the President, who sup- posedly was against the B 2, had criti- cized this Congress for funding it, now out at the plant where the program is under way taking credit for it and, fur- thermore, leaving all of these workers in southern California believing that somehow this President is having a change of heart and leaving the option out there that perhaps there will be a change, and after the election is over, somehow will reverse and we will start building more B 2’s. In fact, the President told these workers that that study will be re- leased at end of November. Which oh, by the way, Mr. Speaker, is a couple of weeks after the Presidential election. All of those B 2 workers, Mr. Speak- er, are union employees. Where is the outrage from the national leadership? There is none. The hypocrisy of this administration on defense programs is mind boggling. One final example, Mr. Speaker, this President went before AIPAC, a na- tional association of Jews in America who support Israel as much as I do. He went before AIPAC, they had a thou- sand or so people here in the Capital, and he gave a very commanding speech about our relationship with Israel and especially Israel’s national security. And during that speech, he pledged publicly that he would move forward with a bold new defense program called Nautilus. This new missile defense technology would protect the Israeli people from the threat of a Russian Katyusha rock- et being launched into Israel, like we saw the Scuds launched in there during Desert Storm. That speech was met with thunderous applause as the AIPAC members stood up and ap- plauded President Clinton for his bold words of support for protecting the Is- raeli people. But again, Mr. Speaker, we have to look beyond the rhetoric and the words. In fact, Mr. Speaker, as I said the next day after I read the text of the President’s speech, the Clinton admin- istration for the past 3 years has zeroed out funding for the high energy laser CONGRESSIONAL RECORD \u2014 HOUSEH9468 July 31, 1996 program each year. In fact, this year they put $3 million in their budget re- quest to kill the program totally. That was in January. Mr. Speaker, the high energy laser program is Nautilus. So here we had a President standing before thousands of supporters of Israel’s protection and freedom, getting rave reviews and cheers, not telling these same people that he has tried to kill that program 3 straight years. Only because of the Congress’ action, Democrats and Re- publicans alike, was the high energy laser program kept intact and can we now fully fund that tomorrow in the bill that we will bring before this body. In fact, Mr. Speaker, there was no re- quest by this administration for fund- ing for the Nautilus program at all this year. Now that is outrageous. The President gave a speech; the President said he was for the program. There was never a request given to this body or our committee for funding the Nautilus program. We funded it. Democrats and Repub- licans working together made sure the full funding for Nautilus is in this bill. And tomorrow we vote on it and it will be there. My bill, Mr. Speaker, in fact, is a good bill. It provides for the quality-of- life issues that are important for our service people. It provides for a pay raise. The first year of the Clinton ad- ministration he did not even request a pay raise for our troops. He wanted them to forgo a pay raise; send them to Somalia or Bosnia or Haiti, but do not give them a pay raise. Extend the de- ployments. Have them go 6, 8, 9, 12 months, but do not give them a pay raise. We found the money in the Con- gress to fully fund the pay raise the first couple of years of the Clinton ad- ministration. In this year’s bill, Mr. Speaker, that we will vote on tomorrow, a pay raise for our troops is consistent with other Federal employees. We have also pro- vided funds for a COLA for our retired military employees. We have also, Mr. Speaker, taken ag- gressive steps to deal with those human issues of impact aid to affect those school districts where kids of people who are in the military go to school to make sure we take care of those extra costs associated with the sons and daughters of our enlisted per- sonnel. We have also, Mr. Speaker, gone to great lengths to provide for the qual- ity-of-life support for our men and women in the military. And much of the increase that we provide, over the President’s request that he has criti- cized us for, will go for day care cen- ters, will go for family housing, will go for cost-of-living adjustments for those men and women serving this country around the world. They are justified. They are right, and they are supported by an over- whelmingly bipartisan group of this body and the other body. I am happy to say they are in the bill. Mr. Speaker, our defense bill that we will finally enact tomorrow with the help of our colleagues also does some other things. In my particular area of concern, there are some new initia- tives. For instance, we fully fund our laboratories. The laboratories allow us to maintain state-of-the-art research on new technologies. That, in fact, is a key part of the R&D portion of our conference report tomorrow. We fund our national science and technology initiative to make sure that our uni- versities are continuing to do research in new technologies, in new materials, to make sure that we are always on the cutting edge. The bill that we enact tomorrow, Mr. Speaker, and we will vote on tomor- row, does some other things that are very important. It provides a whole new oceans partnership initiative that Congress and PAT KENNEDY and I offer. This new initiative, Mr. Speaker, again bipartisan, allows the Navy to take the lead in bringing together all of our Federal agencies that do oceanographic research to better coordinate the dol- lars that we spend and provide new partnerships with the private sector with academic institutions like Woods Hole and Scripps and those other facili- ties around the country that are look- ing at the environmental impact of our oceans and what needs to be done to protect coral reefs and our ocean ecosystems. Much of the work that we are seeing off the coast of New York in searching for those remains of TWA flight 800 are being done with the Navy, because of the extensive capabilities the Navy has. And there is a whole new initia- tive in tomorrow’s bill to further en- hance the Navy’s capability in the area of oceanographic work, oceanographic mapping, and ocean partnership activi- ties. Mr. Speaker, we have also taken great steps forward to keep in place a dual-use initiative so that we encour- age the military to use dual use wher- ever possible, so it is not just benefit- ting the military but it is also benefit- ting civilian life so that wherever we can take a technology, use it for the military, but also have civilian benefit, that we provide the dollars to make those kinds of things happen. That is a major part of our bill that we will be voting on tomorrow. But, Mr. Speaker, the real purpose of my special order tonight is to focus on what I think are the two major threats that we face as a Nation, both of which are addressed in this bill and both of which the leadership has come not from 1600 Pennsylvania Avenue, but rather from this body. Democrats and Republicans working together have crafted a bill that has al- lowed us to address the two major threats that we face as a Nation. These threats are critical, they are real, and we see evidence of them as we just look around the world today. The first is terrorism, and we see it every day in every possible aspect of our society and our lives, whether it be in the air, on the ground, or whatever. It is a major problem and a major con- cern. The other is missile proliferation. Those are the two major threats, Mr. Speaker, that we see emerging around the world which this bill directly ad- dresses and they both involve weapons of mass destruction, whether they be the use of chemical, biological, nuclear or conventional arms. How did we address that, Mr. Speak- er? Despite, again, the words and the rhetoric coming out of the White House because of the downing of the TWA and because of the bombing of our troops in Saudi Arabia, it was this Congress, Mr. Speaker, that in the last 2 years plussed up funding under Republican leadership for chemical and biological research and development. My subcommittee and our full com- mittee and the final conference in last year’s bill and this year’s bill plussed up funding in that area so that our military spends more money and more focus on the threat from chemical, bio- logical, nuclear and conventional weapons of mass destruction. It is money that has been in the bill since we started this process last January; not money that we put in because of the TWA incident or because of the Saudi Arabia bombing. Money that we put in because the hearings that we held last fall and this winter showed that the administration was not re- questing enough dollars. Well, we met the shortfall and we put the money in. We put the money in another area where the President was quick to criti- cize our actions. Now though, changing his course, he wants to have a huge meeting at the White House about what can we do about the threat of ter- rorism and chemical and biological weapons. Again, because the media’s focus is there, the President is there. Well, this Congress has been there long before the media was focused on these kinds of incidents. Mr. Speaker, we also provide addi- tional funding for what is being called Nunn-Lugar Two. We did not accept ev- erything that SAM NUNN and RICHARD LUGAR wanted in the other body, but we took their recommendations deal- ing with terrorism and disposal of nu- clear weapons in Russia and other former Soviet States and we modified and changed it and we modified the do- mestic side, so that we have a robust program to assist our towns and cities in dealing with terrorist acts around the country. Now, again, Mr. Speaker, these are not new issues. I introduced a piece of legislation three sessions ago that would have required FEMA to establish a computerize inventory of every pos- sible resource that a city mayor, a fire chief, or an incident command scene coordinator could have at his or her disposal if a mass incident occurred, whether it be the World Trade Center bombing or the Oklahoma City bomb- ing or some other incident. FEMA has still not acted on that request. That is in our bill tomorrow. CONGRESSIONAL RECORD \u2014 HOUSE H9469July 31, 1996 Mr. Speaker, that will be part of the requirement; that FEMA working with the DOD and other Federal agencies has to computerize every resource that this Federal Government provides that could be brought to use in the case of a disaster in our cities, our towns, our rural areas, wherever it might be. And it is about time that took place. That did not come about because the White House said it was important; it came about because this Congress took the action. Mr. Speaker, we also provide a new thrust for local emergency response personnel. Our portion that we forced through the conference process on the House side and agreed to by the other body provides dollars to train local emergency response personnel, fire- fighters, EMT’s, paramedics, police of- ficers, so that when they are called upon to respond to disasters involving terrorist acts and terrorist weapons, they know what they are dealing with and they can respond accordingly. Those plus-ups are in this bill. They are valid and they are worthy of our support tomorrow. Last week in one of our other appro- priation bills we plussed up money, $5 million, for a local emergency re- sponder, so it adds to that effort that we have already approved in this body. Mr. Speaker, we go a long way to ad- dressing the issue of responding to ter- rorist acts and to better equip not just our military, but to better equip those civilian entities around the country that are the first responders in these types of situations. The bill also, Mr. Speaker, addresses the second major threat that we face as a Nation, and that is the threat of mis- sile proliferation. Mr. Speaker, around the world, there is a mad rush by scores of countries to develop new ca- pabilities in terms of missile tech- nology and these new capabilities, Mr. Speaker, present real challenges for the United States and our allies. b 2230 We, to look at Israel and see the con- cern of just those very antiquated Scuds being fired and the damage they caused during the Desert Storm. In fact, Mr. Speaker, the only major loss of life from one single incident in Desert Storm to American troops was caused by an Iraqi Scud missile being fired into one of our barracks. If we would have developed and de- ployed systems that we know we have the capability of putting into place today, perhaps we could have prevented those kinds of incidents from ever oc- curring. The threat of missile proliferation is more real than it has ever been and countries around the world today are developing capabilities that we have never seen before. This Congress, Mr. Speaker, has taken the effort to plus up funding in the area of defending our country against a missile attack. There has been a lot of misinformation, Mr. Speaker. The liberal media and the White House basically rails against missile spending, saying we should not be spending this money. We have not been talking about building new offen- sive weapons. We are not talking about building MX missiles. What we are talking about, Mr. Speaker, is defense, protecting the American people, our troops and our allies against an acci- dental or deliberate launch by one or two missiles. Today, Mr. Speaker, we have no such capability. Our troops are vulnerable and our people are vulnerable. What we want to do in this Congress is, we want to deploy those technologies that we know are available today and will be available over the next several years. It is the single biggest area of dis- agreement with this administration, how fast and how much we should be developing and deploying missile de- fense systems for the troops, for our al- lies and for the people of this country. The Clinton administration would have us believe that the world is rosy. Again, the President has misinformed the American people. Remember what we heard earlier about words. Words seem to be everything in this White House. Actions and facts seem to fall by the wayside. On two occasions, Mr. Speaker, the President of the United States has stood at this podium right behind me in the State of the Union speech and he has said to the American people, as he bit his lip, that the children of America can sleep well tonight because for the first time in 20 or 30 years, there are no Russian offensive missiles pointed at America’s children. During the past year, Mr. Speaker, we have totally refuted what the Presi- dent said, not by Republican experts but by his own personnel working in the military. First of all, Mr. Speaker, during a se- ries of 14 hearings we held in this ses- sion of the Congress, we had the ex- perts from the Air Force, from the in- telligence community come in and tell us on the record there is no way for us to verify whether or not the Russians have retargeted their offensive weap- ons. We have no way of verifying that. The President has no way of verifying it because our intelligence community cannot verify it. But the President made the statement. The second thing is, Mr. Speaker, if we even could verify that, our targeting experts have said on the record that we can retarget an offen- sive missile in less than 30 seconds. Why then would the President say this? Because the President wants to create this impression that somehow all is so well and somehow the American people do not have to worry. Let me make a point here, Mr. Speaker, I am not a reactionary alarm- ist. In fact, I probably do more work with the Russians that any other Mem- ber of the Congress. I will talk about those initiatives again tonight. Since my undergraduate degree in Russian studies and since my days in speaking the Russian language and in my numerous visits to Russia, I have worked in helping them with their en- ergy needs, their environmental needs, and, in fact, I am right now setting up a new initiative that the Speaker has tasked me to do with Mr. Vladimir Lukin, chairman of the International Affairs Committee for the Russian Duma, that will have Members of this Congress and the Russian Duma come together for the first time in a real way on an ongoing basis. It will be an institutional process that will last be- yond Members. Right now I am working with the ambassador of Russia to help develop a new technology transfer center in America for Russian technology. I put money in the defense bill, Mr. Speaker, this year for $20 million of joint Rus- sian-American missile defense tech- nology so that we work with the Rus- sians, so that we do not try to squirrel one up on them. I was the one last year who opposed those in my party who wanted to offer an amendment on the defense bill last year that would have forced the Presi- dent to abrogate the ABM treaty. Mr. Speaker, I am not some rabid conserv- ative who thinks that perhaps the Rus- sian government is still the evil em- pire. I want the same ultimate objective that I think Bill Clinton wants. I want the same ultimate objective that I think Strobe Talbott wants; that is, a free, democratic Russia to succeed with free markets and security and less of a threat to America and the rest of the world. But there is one key difference, Mr. Speaker. I am willing to go to the Rus- sians when there are problems that we have to confront them with and confront them openly. This administra- tion’s pattern has been to ignore re- ality and in effect to try to bury or brush over or create a perception that there are no problems there. We all know that Russia is going through problems of severe internal turmoil. We were all happy that Boris Yeltsin won the presidential election a few short weeks ago. And we are all happy the Duma is committed to work- ing with him. Mr. Speaker, there is one very impor- tant fact we have to keep in mind. The leadership in the Russian military today is the same leadership that was there during the Soviet Communist domination. Perestroika and glasnost has not come with the Russian mili- tary. In fact, Mr. Speaker, I obtained a document earlier this year that was published by one of the leading Russian think tanks, the Institute for Defense Analysis, it was published by a gen- tleman of the name of Anton Surikov. It is called the Surikov document. This document, which was briefed to the former defense minister Pavel Grazhdye and the current chief of com- mand for the Russian military, General Kalesnakov, has some very interesting material in it that every American and CONGRESSIONAL RECORD \u2014 HOUSEH9470 July 31, 1996 every one of our colleagues should read. It says in it that in the end America is always going to be an enemy of Rus- sia. In the end America is always going to be a threat to Russia’s sovereignty. In the the end, the Russian government should look to establish linkages with emerging rogue Islamic nations and it names them. It names Libya. It names Iraq, Syria as those allies of Russia that should be nurtured and where technology should be transferred to benefit a mutual relationship. This is not put out by some American think tank. This is an internal docu- ment published within Russia. Mr. Speaker, I am not here to say that every Russian believes this be- cause they do not. Boris Yeltsin does not believe this, I firmly believe. But there are people in the Russian mili- tary who still believe this, and this President and this administration do not want to call them on that. That is what is so outrageous. Mr. Speaker, we have seen some evi- dence of that. Last year about this time there was a transfer of accelerometers and gyroscopes that went from Russia to Iraq. Why is that so important? Mr. Speaker, gyroscopes and the accelerometers and the gyro- scopes that were retrieved by the Jor- danian intelligence agency and the Is- raeli intelligence agency could only be used for one purpose: They are so so- phisticated that their only purpose is to be used in long range missiles; that is, short range Scuds, long range mis- siles, long range missiles that ulti- mately could pose a threat to the U.S. Now these missiles, these devices, the accelerometers and the gyroscopes were going from Russia to Iraq. The Washington Post, in December, re- ported the story on the front page, that the Jordanians and Israelis had inter- cepted these devices. I asked the administration to give me a briefing on it. I got some remark that it was too early. I was in Moscow in January, and I met with our ambassador at the time, Ambassador Pickering, who is a fine gentleman and I think doing a great job in Moscow. I said to him, Mr. Am- bassador, what is the response of the Russian government to the fact that we have intercepted these devices being transferred to Iraq, because it is a direct violation of the Missile Tech- nology Control Regime. The MTCR, which is very complicated, is basically an arms control agreement that we brought Russia into that says they will not transfer technology involving mis- siles to another rogue Nation. This is a clear violation. When I asked the ambassador what the Russian response was, he said, Con- gressman, we have not asked them yet. I said, What do you mean you have not asked them yet. We have not requested them yet. We have not officially asked the Russians why and how these mate- rials were being transferred from Rus- sia to Iraq. I came back to the U.S. and I asked the question again and again. In fact, I wrote to the President in late Feb- ruary. I did not get a response until April 3. The President’s response to me was, Mr. Congressman, we have asked the Russians for a full explanation and they have promised us they will get it to us. I have asked when and we have no answer. But the important point, Mr. Speak- er, is, that is a violation of an arms control agreement that this adminis- tration maintains is the cornerstone of our relationship with Russia. Now, if we are not going to hold na- tions accountable when they violate arms control agreements that this President feels are the cornerstone of our relationship, how can we expect the Russian people to have any respect for us? We cannot, because they do not. Missile technology is being transferred around the world. I am not saying it is being done open- ly by the Russian government, because I do not think they would do that. But it is happening. The rise of the Mafia in Russia that has stolen nuclear mate- rial, nuclear fissile material, that has transferred technology, that has gained control of certain elements of the arms control system in Russia, is spreading around the world and this administra- tion is not taking aggressive steps to deal with that. This Congress is. This Congress is dealing in reality, Mr. Speaker. And we are not doing it in such a way to tweak the Russians. Everything I have talked about is to do it holding the leadership’s hands in Russia, to show them that we want to work with them. We want Russia to succeed. We are not about getting an edge up on that. We do not want to gain an advan- tage over Russia. But we do want to provide a protection for our people that we do not have that the Russian people have had for the past 15 years. Mr. Speaker, under the ABM treaty, each country is allowed to have one missile defense system. The Russians have one. They have had it for 15 years. They have upgraded it four times. We have none. We have none because the liberals in this city have never wanted the U.S. to be able to achieve its rightful place in providing a defensive system to protect the people of America. Mr. Speaker, that is outrageous. We are not talking about offensive mis- siles. We are not talking about killing people. We are talking about a defen- sive system that Russia already has. Mr. Speaker, I hope this becomes a major issue in this year’s presidential race because this President is totally and completely vulnerable on the issue of arms control and our relations with not just Russia but those nations de- veloping missile technology. This Con- gress is doing something about that. This Congress does not wait until Is- rael gets hit by some Scuds and it goes before AIPAC and makes a big speech and then tries to put money in. This Congress looks at the facts. This Congress has deliberated, Demo- crats and Republicans, and based on the threat as we understand it, has said we are not doing enough to protect the American people and our troops. In fact, Mr. Speaker, it has become somewhat outrageous. Last year the commanding officer for our troops in South Korea wrote to General Shalikashvili, the commander’s name is General Luck. General Luck is charged by the people of this country with the responsibility of protecting the lives of our sons and daughters who are in South Korea today. General Luck wrote to General Shalikashvili and he said, I need to have a theater missile defense system as soon as pos- sible, because I feel that my troops are vulnerable and I need you to give me a deployment as soon as you can give it to me. The system he is talking about, Mr. Speaker, is not national missile de- fense. It is not the new variation of protecting our own country. It is thea- ter missile defense, which this Presi- dent has said publicly he supports. It is called THAAD. The Navy ver- sion is called Navy Upper Tier. Now this President has come out and said he supports theater missile defense. This Congress supports theater missile defense. But in this year’s defense bill, Mr. Speaker, that we are now imple- menting, the 1996 defense bill, we put two specific dates in that bill for de- ploying THAAD and Navy Upper Tier. Never once did this President or the Secretary of Defense or any general come to us and tell us those dates were unattainable. Never once did they say, do not put them in there, we cannot meet them. The dates were 2000 and 2001, the earliest possible dates for hav- ing systems in place to protect our troops. b 2245 This President signed that bill into law in February of this year. Within a week of signing that bill into law, his people came before the Congress and said: We are going to restructure the program, we are not going to be able to meet those dates, we are not going to obey the law. We are going to slip the THAAD program until 2006. We are going to slip the program requested by the general in charge of our troops in South Korea by 6 years, even though it is law and even though this President signed that bill into law, and even though this President never objected to that date, and even though the com- mander in chief of our troops over there says it is vitally important we have them in place. We have no recourse, Mr. Speaker. We are suing the President in Federal court right now to get him to abide like the law like we all have to do. There are major areas of disagree- ment, Mr. Speaker, between this Con- gress and that White House in terms of national missile defense, theater mis- sile defense, and cruise missile defense. Unfortunately, we have an administra- tion that waits until the right media CONGRESSIONAL RECORD \u2014 HOUSE H9471July 31, 1996 opportunity, the APAC speech, the Scud attack, the Saudi attack, the TWA bombing, and then raises its hands, calls a press conference, invites people to stand behind the President, and then all of a sudden there is con- cern that we are going to do something to solve the problem. Yet all along while this Congress is in a very deliberate way providing the dollars to meet those very threats and needs, this President and his people are criticizing this Congress and attempt- ing to make the case to the American people of providing funds to meet threats that do not exist. Mr. Speaker, to me as someone who devotes the bulk of my time to both national security and Russian rela- tions, it is outrageous, and I am not going to stand for it. I am going to use every possible opportunity I have for the next 3 months to expose this ad- ministration for the hypocrisy that oc- curs every day. Whether it is the lack of enforcement of arms control agree- ments, whether it is the lack of calling the Chinese on the transfer of ring magnets to Pakistan, or whether it is the M 11 missile technology transfers, or whether it is the accelerometers and gyroscopes going from Russia to Iraq, we are going to call this administra- tion. But that is not enough, Mr. Speaker, because the world is dangerous. The Russians are hurting for cash right now. In our bill tomorrow we are going to provide some dollars to help them dismantle nuclear weapons, and I will stand up and I will support that on the floor, as I have done repeatedly, but that is not enough. In the rush of the Russians to try to find new markets, they are now offer- ing for market sale their most sophisti- cated offensive strategic weapons. These are long-range weapons. The SS 25 is what they are technically referred to: These missiles have a range of 10,000 kilometers, which means that these missiles can hit any city in the United States from any place in Russia. Now, Mr. Speaker, I am not here to say tonight that I think Russia is going to launch a SS 25 at America, so I do not want my liberal friends to go out saying, ”There goes WELDON, scar- ing the American people.” I am not saying that. There is a possibility of a rogue event occurring. The Russian military has tremendous problems with morale\u2014underpaid, finding proper housing. They have got problems with crime. But I still have some degree of confidence in the Russian military’s control of their systems. We are not talking about that, Mr. Speaker. What we are talking about is taking a SS 25 launcher, and we know the Russians have over 400 of them, they are all mobile, they are on the back of a truck, you can drive them any place. They are on rubber tires. You can drive them through the coun- try, and the CIA has said on the record it would be possible to move one of those launchers out of Russia without our surveillance camera detecting it. Here is the rub, Mr. Speaker, I do not really think that the threat comes from Iraq developing its own long- range missile. I do not think it is going to come from Libya developing its own long-range missile. What I think is going to happen is one of those nations will pay the right price to buy one of those mobile launched SS 25 systems that is currently being marketed for space launch purposes. Now the Russians tell us that they are controlling the launches, that they are all going to occur on their soil, even though they originally wanted to have a launch capacity in both Brazil and South Africa until we objected. But the point is, at some point in time in the future, mark my works, Mr. Speaker, there will be an incident in- volving a transfer of one of those launch systems, and when that occurs, we have no protection. Mr. Speaker, we have no system in this country today to protect the American people. If we are threatened, we have nothing we can do except of- fensively go in and attempt to take that missile launcher out, if we know in advance it is going to occur. That is where the threat is, Mr. Speaker, and that does not even in- clude the threat coming from North Korea and China. The Chinese are now on their latest variation of the CSS 5A. This missile has a range of 13,000 kilo- meters. We know it can hit any city in America. Now the Clinton administration tells us we do not need missile defense be- cause we have the ABM Treaty and therefore, since Russia is part of the ABM Treaty, we do not have to worry about Russia attacking us. China is not and never was a signatory to the ABM Treaty. There is no prohibition in China, and their offensive weapons today have the capacity to hit any city in the United States. North Korea is developing the Tae Po Dong and the Tae Po Dong II. These missiles will eventually have the range, very short- ly, in a matter of years, of hitting Ha- waii and Alaska. Again the outrage, Mr. Speaker. In- stead of this President talking hon- estly to the American people about the threat, what did he have the intel- ligence community do? In a threat as- sessment that was leaked to two Demo- crats last December before it was done, even though General O’Neill was the customer for that threat assessment, this administration said in their intel- ligence report there is no threat to the continental United States that we have to worry about for the next 10 to 15 years. Now the intelligence community is going back now and kind of rethinking what they said there, but here is the important thing. Here is an adminis- tration that would go to this length, in terms of disagreeing between the Con- gress and the White House over missile defense initiatives, to say no threat to the continental United States. In other words, forget about Alaska and Hawaii. Because they are not a part of the con- tinental United States, we are not going to worry about the North Kore- ans having the capability of hitting Hawaii or parts of Alaska. Mr. Speaker, that is outrageous. This administration said that, and this ad- ministration has sold that to Members of Congress and the American people. Thank goodness this Congress has not bought it. Mr. Speaker, our bill tomorrow pro- vides full funding for missile defense in response to what the President’s own ballistic missile defense organization said it could use. We did not go out and put money into programs just because we felt they are important, and I have no programs anywhere near my district in this area at all. We went to General O’Neill, who ran the President’s own operation up until he retired last month, and said where would you put the dollars, and that is where we put the money. But this President, Mr. Speaker, is not providing honest information to the American people about reality today, reality in terms of the threat and reality in terms of what we should be doing to protect the American peo- ple and our troops. Here we are putting our troops around the world, yet not giving them the protection they need through capabilities that we have tech- nically available today. There are two major provisions that were deleted from the final conference bill that I am very disappointed with. The first would have prevented the ad- ministration from making any changes to the ABM Treaty in terms of adding in other nations without the advice and consent of the U.S. Senate. To me that is outrageous. This administration right now is over in Geneva negotiating changes to the ABM Treaty. They want to bring in other former Soviet states. Why is that so significant? Because when we want to modify that treaty, we do not just have to get Russia’s approval, we have got to get Belorussia’s approval, Ukraine’s approval, Kazakhstan’s ap- proval, Tadzhikistan’s approval, none of whom have offensive nuclear weap- ons. When I was over in Geneva as the only Member of Congress to visit the discussions and the negotiations tak- ing place this year, for 21\u20442 hours I sat across from the chief Russian nego- tiator General Kotunov. He is a hard- liner, but a decent person. We had a frank discussion. Sitting next to me was our chief American negotiator, Stanley Riveles. I looked General Kotunov right in the eye and I said: ”General, tell me, why does Russia want to amend the treaty to bring in all of these other countries? They do not have offensive weapons, they do not have offensive missiles.” He said, ”Congressman, you are ask- ing that question of the wrong person. I have not raised the issue of multilateralizing the treaty. You should be asking that of the person sit- ting next to you. CONGRESSIONAL RECORD \u2014 HOUSEH9472 July 31, 1996 Mr. Speaker, I cannot believe that our administration would be so be- holden to an arms control treaty that they would want to involve other coun- tries so it would be more difficult for us to amend that treaty down the road. That is what I feel this administration is doing, and I feel that is wrong. It is also certainly wrong without the ad- vice and consent of the Senate. We had to remove that language from the bill because this President threatened to veto it, and the Senate would not go along with us. The second thing we had to remove from this bill was on further discus- sions in Geneva relative to demarca- tion. Now there are not many people who understand the demarcation issue because, to be honest with you, I can- not understand it fully myself. But I can tell you what is going on. This administration, unlike the pre- vious 12 years of administrations deal- ing with Russia, has interpreted the ABM Treaty in such a way to require us to go in and negotiate systems that we have never before felt came under the terms of the ABM Treaty. This ad- ministration is right now about to give us an agreement, probably in October, that will limit our ability to fully de- velop our Navy upper-tier theater mis- sile defense system. We call it dumbing-down our technology. There is no reason for it, Mr. Speaker. The previous two administrations set a standard that this Congress, Demo- crats and Republicans, agreed to. It is called the demonstrated standard in terms of where the ABM Treaty ap- plies. This administration went over to Geneva and opened up a whole new can of worms, and so we are going to nego- tiate an agreement with the Russians on what is or is not allowed in terms of theater missile defense systems; the bottom line being, we are going to fur- ther limit, self-limit and self-impose, limitations on our own capabilities. It reminds me of what we did with the Patriot system. A lot of us saw the Patriot used during Desert Storm and we thought what a great system. Do you know, Mr. Speaker, that system was dumbed-down? That system was originally designed to take out planes and not missiles. We had a change at the eleventh hour because of the mis- siles coming into Israel. Is that what is going to happen here? Are we going to wait until something happens, and then let the President have a major national press conference and pound the table and talk about his commitment to missile defense for our troops? Are we going to wait until we have a missile land in South Korea and then say that we are working hard on this new initiative? Are we going to wait until we have a Third World na- tion get a capability that threatens our sovereignty and then say we are going to move ahead? That is not what this Congress is doing. This Congress is taking steps to protect our troops and to protect our American people in spite of this admin- istration. I just hope that as this year goes on our colleagues join with us in telling the message of truth about what is happening to our national secu- rity. f THE DEFENSE NEEDS OF OUR NATION The SPEAKER pro tempore. Under a previous order of the House, the gen- tleman from Maine [Mr. LONGLEY] is recognized for 5 minutes. Mr. LONGLEY. Mr. Speaker, I recog- nize that the hour is late and I will only speak but for a few minutes, but I was in my office listening to the gen- tleman from Pennsylvania, and was very struck by his remarks, and felt that it would be appropriate to perhaps follow along with what the gentleman from Pennsylvania has been saying. He is a fellow member of the Committee on National Security, but he is making some very important points. It was a masterful summary of the provisions of the defense conference report that we will be discussing in the House tomor- row, but, more importantly, the focus on the reality of the problems, the threats that confront us as a Nation, and the issues and how they affect our defense and national security could not have been better stated. I want to particularly make ref- erence to his comments in the light of the unfortunate incident of barely 2 weeks ago, the downing of TWA Flight 800. I think that we are all greatly sorry that that aircraft was downed in the manner that it was. But I have to say very honestly that I think we do know what caused the aircraft to come down, and I am very concerned that we seem to be somewhat afraid of actually stating the reason. From all circumstances, and again I have no particular knowledge, but from all the circumstantial evidence it ap- pears very clear that this aircraft was taken down by an act of sabotage. Again, it has not been proven yet, but the suggestion is very strong that it was some form of an altitude deto- nated device that sent 230 innocent men women and children to their deaths in the Atlantic off of Long Is- land. b 2300 To the extent that that is true, I think as a Nation we need to be look- ing at our defense bill, not only in the context of that terrible, tragic acci- dent, but also in the context of the prior bombing of the Dhahran barracks barely another 2 weeks prior to that, where another 19 or 20 young Ameri- cans lost their lives in Saudi Arabia, and then going back to last November in Riyadh and the attack, again, on in- nocent Americans, the five that were killed in that maintenance facility in Saudi Arabia. One of the things that is becoming very clear about the previous two at- tacks is that they were well-planned and very sophisticated and required a high level of training and expertise to be carried out. I am advised, for in- stance, that the bomb that destroyed the facility in Riyadh was timed to detonate at precisely noon, or roughly during the time of noon prayer, when any non-American personnel were like- ly to be at the nearby mosque for noon prayers; or that the bomb that deto- nated the barracks in Dhahran was ac- tually a very sophisticated mix of mili- tary and commercial grade explosives, well over 5,000 to 10,000 pounds of explo- sives, again, that were structured in a highly sophisticated and detailed man- ner designed, in effect, and executed by professionals. Again, we do not know yet the an- swer to TWA Flight 800, but it is very clear that many of the terrorist groups in the Middle East who have taken credit, small or large, for the prior at- tacks are also invoking their name in the context of TWA Flight 800. To that extent, it is a serious, serious issue that I hope this Congress will de- mand very honest and candid answers to; because to the extent that there is a connection between these three inci- dents, to the extent that they docu- ment a very serious threat that is being mounted against this country, then I think that while it is appro- priate that we be engaging in a discus- sion of what security measures are ap- propriate and how we might best pro- tect ourselves as a Nation, as a group of innocent people, concerned with the danger that might be raised against in- nocent men and women and children, then it is also appropriate that we con- sider, to the extent that it is possible to do so, from whence these attacks have arisen; what is the cause, who were the perpetrators, why are inno- cent men and women and children and American servicemen and women being targeted in the manner they are being targeted? I also say this with reference to my service in Desert Storm and as a vet- eran of that conflict. I am very much aware of the fact that 95 percent of our seaborne traffic, our military support that supported American troops in Desert Storm and Saudi Arabia, transited into the Persian Gulf through the Straits of Hormuz, past the three islands that are currently occupied by the country of Iran, islands that have been fortified with chemical weapons, islands that have been fortified with antiship and anti-air missiles, and is- lands the sovereignty over which has been claimed by a country that openly proclaims its intentions of driving the United States from the Middle East, driving the United States from the Per- sian Gulf, and in effect, asserting con- trol over the tremendous oil resources of that region and threatening the eco- nomic lifeblood of the western and free world, including the United States. Mr. Speaker, I have tried to raise several very important questions. I think they are very serious in the con- text of the prior tour de force that was conducted by the gentleman from CONGRESSIONAL RECORD \u2014 HOUSE H9473July 31, 1996 Pennsylvania, Mr. WELDON, relating to our defense needs and the method in which we have attempted to address them in the upcoming conference re- port. f RECESS The SPEAKER pro tempore (Mr. TAYLOR of North Carolina). Pursuant to clause 12 of rule I, the House stands in recess subject to the call of the Chair. Accordingly (at 11 o’clock and 2 min- utes p.m.), the House stood in recess subject to the call of the Chair. f b 2343 AFTER RECESS The recess having expired, the House was called to order by the Speaker pro tempore (Mr. TAYLOR of North Caro- lina) at 11 o’clock and 43 minutes p.m. f REPORT ON H.R. 3103, HEALTH IN- SURANCE PORTABILITY AND AC- COUNTABILITY ACT OF 1996 Mr. HASTERT submitted the follow- ing conference report and statement on the bill (H.R. 3103) to amend the Inter- nal Revenue Code of 1986 to improve portability and continuity of health in- surance coverage in the group and indi- vidual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care serv- ices and coverage, to simplify the ad- ministration of health insurance, and for other purposes. CONFERENCE REPORT (H. REPT. 104 736) The committee of conference on the dis- agreeing votes of the two Houses on the amendment of the Senate to the bill (H.R. 3103), to amend the Internal Revenue Code of 1986 to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long- term care services and coverage, to simplify the administration of health insurance, and for other purposes, having met, after full and free conference, and agreed to recommend and do recommend to their respective Houses as follows: That the House recede from its disagree- ment to the amendment of the Senate and agree to the same with an amendment as fol- lows: In lieu of the matter proposed to be in- serted by the Senate amendment, insert the following: SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE.\u2014This Act may be cited as the ”Health Insurance Portability and Account- ability Act of 1996”. (b) TABLE OF CONTENTS.\u2014The table of con- tents of this Act is as follows: Sec. 1. Short title; table of contents. TITLE I\u2014HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY Subtitle A\u2014Group Market Rules PART 1\u2014PORTABILITY, ACCESS, AND RENEWABILITY REQUIREMENTS Sec. 101. Through the Employee Retirement In- come Security Act of 1974. ”PART 7\u2014GROUP HEALTH PLAN PORTABILITY, ACCESS, AND RENEWABILITY REQUIREMENTS ”Sec. 701. Increased portability through limitation on preexisting condi- tion exclusions. ”Sec. 702. Prohibiting discrimination against individual participants and beneficiaries based on health status. ”Sec. 703. Guaranteed renewability in mul- tiemployer plans and multiple em- ployer welfare arrangements. ”Sec. 704. Preemption; State flexibility; construction. ”Sec. 705. Special rules relating to group health plans. ”Sec. 706. Definitions. ”Sec. 707. Regulations. Sec. 102. Through the Public Health Service Act. ”TITLE XXVII\u2014ASSURING PORTABILITY, AVAILABILITY, AND RENEWABILITY OF HEALTH INSURANCE COVERAGE ”PART A\u2014GROUP MARKET REFORMS ”SUBPART 1\u2014PORTABILITY, ACCESS, AND RENEWABILITY REQUIREMENTS ”Sec. 2701. Increased portability through limitation on preexisting condi- tion exclusions. ”Sec. 2702. Prohibiting discrimination against individual participants and beneficiaries based on health status. ”SUBPART 2\u2014PROVISIONS APPLICABLE ONLY TO HEALTH INSURANCE ISSUERS ”Sec. 2711. Guaranteed availability of cov- erage for employers in the group market. ”Sec. 2712. Guaranteed renewability of cov- erage for employers in the group market. ”Sec. 2713. Disclosure of information. ”SUBPART 3\u2014EXCLUSION OF PLANS; ENFORCEMENT; PREEMPTION ”Sec. 2721. Exclusion of certain plans. ”Sec. 2722. Enforcement. ”Sec. 2723. Preemption; State flexibility; construction. ”PART C\u2014DEFINITIONS; MISCELLANEOUS PROVISIONS ”Sec. 2791. Definitions. ”Sec. 2792. Regulations. Sec. 103. Reference to implementation through the Internal Revenue Code of 1986. Sec. 104. Assuring coordination. Subtitle B\u2014Individual Market Rules Sec. 111. Amendment to Public Health Service Act. ”PART B\u2014INDIVIDUAL MARKET RULES ”Sec. 2741. Guaranteed availability of indi- vidual health insurance coverage to certain individuals with prior group coverage. ”Sec. 2742. Guaranteed renewability of in- dividual health insurance cov- erage. ”Sec. 2743. Certification of coverage. ”Sec. 2744. State flexibility in individual market reforms. ”Sec. 2745. Enforcement. ”Sec. 2746. Preemption. ”Sec. 2747. General exceptions. Subtitle C\u2014General and Miscellaneous Provisions Sec. 191. Health coverage availability studies. Sec. 192. Report on medicare reimbursement of telemedicine. Sec. 193. Allowing Federally-qualified HMOs to offer high deductible plans. Sec. 194. Volunteer services provided by health professionals at free clinics. Sec. 195. Findings; severability. TITLE II\u2014PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION; MEDICAL LIABILITY REFORM Sec. 200. References in title. Subtitle A\u2014Fraud and Abuse Control Program Sec. 201. Fraud and abuse control program. Sec. 202. Medicare integrity program. Sec. 203. Beneficiary incentive programs. Sec. 204. Application of certain health anti- fraud and abuse sanctions to fraud and abuse against Federal health care programs. Sec. 205. Guidance regarding application of health care fraud and abuse sanc- tions. Subtitle B\u2014Revisions to Current Sanctions for Fraud and Abuse Sec. 211. Mandatory exclusion from participa- tion in medicare and State health care programs. Sec. 212. Establishment of minimum period of exclusion for certain individuals and entities subject to permissive exclusion from medicare and State health care programs. Sec. 213. Permissive exclusion of individuals with ownership or control interest in sanctioned entities. Sec. 214. Sanctions against practitioners and persons for failure to comply with statutory obligations. Sec. 215. Intermediate sanctions for medicare health maintenance organiza- tions. Sec. 216. Additional exception to anti-kickback penalties for risk-sharing ar- rangements. Sec. 217. Criminal penalty for fraudulent dis- position of assets in order to ob- tain medicaid benefits. Sec. 218. Effective date. Subtitle C\u2014Data Collection Sec. 221. Establishment of the health care fraud and abuse data collection pro- gram. Subtitle D\u2014Civil Monetary Penalties Sec. 231. Social security act civil monetary pen- alties. Sec. 232. Penalty for false certification for home health services. Subtitle E\u2014Revisions to Criminal Law Sec. 241. Definitions relating to Federal health care offense. Sec. 242. Health care fraud. Sec. 243. Theft or embezzlement. Sec. 244. False Statements. Sec. 245. Obstruction of criminal investigations of health care offenses. Sec. 246. Laundering of monetary instruments. Sec. 247. Injunctive relief relating to health care offenses. Sec. 248. Authorized investigative demand pro- cedures. Sec. 249. Forfeitures for Federal health care of- fenses. Sec. 250. Relation to ERISA authority. Subtitle F\u2014Administrative Simplification Sec. 261. Purpose. Sec. 262. Administrative simplification. ”PART C\u2014ADMINISTRATIVE SIMPLIFICATION ”Sec. 1171. Definitions. ”Sec. 1172. General requirements for adop- tion of standards. ”Sec. 1173. Standards for information trans- actions and data elements. ”Sec. 1174. Timetables for adoption of standards. ”Sec. 1175. requirements. ”Sec. 1176. General penalty for failure to comply with requirements and standards. ”Sec. 1177. Wrongful disclosure of individ- ually identifiable health informa- tion. CONGRESSIONAL RECORD \u2014 HOUSEH9474 July 31, 1996 ”Sec. 1178. Effect on State law. ”Sec. 1179. Processing payment trans- actions. Sec. 263. Changes in membership and duties of National Committee on Vital and Health Statistics. Sec. 264. Recommendations with respect to pri- vacy of certain health informa- tion. Subtitle G\u2014Duplication and Coordination of Medicare-Related Plans Sec. 271. Duplication and coordination of medi- care-related plans. Subtitle H\u2014Patent Extension Sec. 281. Patent extension. TITLE III\u2014TAX-RELATED HEALTH PROVISIONS Sec. 300. Amendment of 1986 Code. Subtitle A\u2014Medical Savings Accounts Sec. 301. Medical savings accounts. Subtitle B\u2014Increase in Deduction for Health Insurance Costs of Self-Employed Individuals Sec. 311. Increase in deduction for health insur- ance costs of self-employed indi- viduals. Subtitle C\u2014Long-Term Care Services and Contracts PART I\u2014GENERAL PROVISIONS Sec. 321. Treatment of long-term care insur- ance. Sec. 322. Qualified long-term care services treat- ed as medical care. Sec. 323. Reporting requirements. PART II\u2014CONSUMER PROTECTION PROVISIONS Sec. 325. Policy requirements. Sec. 326. Requirements for issuers of qualified long-term care insurance con- tracts. Sec. 327. Effective dates. Subtitle D\u2014Treatment of Accelerated Death Benefits Sec. 331. Treatment of accelerated death bene- fits by recipient. Sec. 332. Tax treatment of companies issuing qualified accelerated death bene- fit riders. Subtitle E\u2014State Insurance Pools Sec. 341. Exemption from income tax for State- sponsored organizations providing health coverage for high-risk indi- viduals. Sec. 342. Exemption from income tax for State- sponsored workmen’s compensa- tion reinsurance organizations. Subtitle F\u2014Organizations Subject to Section 833 Sec. 351. Organizations subject to section 833. Subtitle G\u2014IRA Distributions to the Unemployed Sec. 361. Distributions from certain plans may be used without additional tax to pay financially devastating medi- cal expenses. Subtitle H\u2014Organ and Tissue Donation Infor- mation Included With Income Tax Refund Payments Sec. 371. Organ and tissue donation informa- tion included with income tax re- fund payments. TITLE IV\u2014APPLICATION AND ENFORCE- MENT OF GROUP HEALTH PLAN RE- QUIREMENTS Subtitle A\u2014Application and Enforcement of Group Health Plan Requirements Sec. 401. Group health plan portability, access, and renewability requirements. Sec. 402. Penalty on failure to meet certain group health plan requirements. Subtitle B\u2014Clarification of Certain Continuation Coverage Requirements Sec. 421. COBRA clarifications. TITLE V\u2014REVENUE OFFSETS Sec. 500. Amendment of 1986 Code. Subtitle A\u2014Company-Owned Life Insurance Sec. 501. Denial of deduction for interest on loans with respect to company- owned life insurance. Subtitle B\u2014Treatment of Individuals Who Lose United States Citizenship Sec. 511. Revision of income, estate, and gift taxes on individuals who lose United States citizenship. Sec. 512. Information on individuals losing United States citizenship. Sec. 513. Report on tax compliance by United States citizens and residents living abroad. Subtitle C\u2014Repeal of Financial Institution Transition Rule to Interest Allocation Rules Sec. 521. Repeal of financial institution transi- tion rule to interest allocation rules. TITLE I\u2014HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY Subtitle A\u2014Group Market Rules PART 1\u2014PORTABILITY, ACCESS, AND RENEWABILITY REQUIREMENTS SEC. 101. THROUGH THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. (a) IN GENERAL.\u2014Subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the follow- ing new part: ”PART 7\u2014GROUP HEALTH PLAN PORTABILITY, ACCESS, AND RENEWABILITY REQUIREMENTS ”SEC. 701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING CON- DITION EXCLUSIONS. ”(a) LIMITATION ON PREEXISTING CONDITION EXCLUSION PERIOD; CREDITING FOR PERIODS OF PREVIOUS COVERAGE.\u2014Subject to subsection (d), a group health plan, and a health insurance is- suer offering group health insurance coverage, may, with respect to a participant or bene- ficiary, impose a preexisting condition exclusion only if\u2014 ”(1) such exclusion relates to a condition (whether physical or mental), regardless of the cause of the condition, for which medical ad- vice, diagnosis, care, or treatment was rec- ommended or received within the 6-month period ending on the enrollment date; ”(2) such exclusion extends for a period of not more than 12 months (or 18 months in the case of a late enrollee) after the enrollment date; and ”(3) the period of any such preexisting condi- tion exclusion is reduced by the aggregate of the periods of creditable coverage (if any, as defined in subsection (c)(1)) applicable to the partici- pant or beneficiary as of the enrollment date. ”(b) DEFINITIONS.\u2014For purposes of this part\u2014 ”(1) PREEXISTING CONDITION EXCLUSION.\u2014 ”(A) IN GENERAL.\u2014The term ‘preexisting con- dition exclusion’ means, with respect to cov- erage, a limitation or exclusion of benefits relat- ing to a condition based on the fact that the condition was present before the date of enroll- ment for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date. ”(B) TREATMENT OF GENETIC INFORMATION.\u2014 Genetic information shall not be treated as a condition described in subsection (a)(1) in the absence of a diagnosis of the condition related to such information. ”(2) ENROLLMENT DATE.\u2014The term ‘enroll- ment date’ means, with respect to an individual covered under a group health plan or health in- surance coverage, the date of enrollment of the individual in the plan or coverage or, if earlier, the first day of the waiting period for such en- rollment. ”(3) LATE ENROLLEE.\u2014The term ‘late enrollee’ means, with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during\u2014 ”(A) the first period in which the individual is eligible to enroll under the plan, or ”(B) a special enrollment period under sub- section (f). ”(4) WAITING PERIOD.\u2014The term ‘waiting pe- riod’ means, with respect to a group health plan and an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the in- dividual is eligible to be covered for benefits under the terms of the plan. ”(c) RULES RELATING TO CREDITING PREVIOUS COVERAGE.\u2014 ”(1) CREDITABLE COVERAGE DEFINED.\u2014For purposes of this part, the term ‘creditable cov- erage’ means, with respect to an individual, cov- erage of the individual under any of the follow- ing: ”(A) A group health plan. ”(B) Health insurance coverage. ”(C) Part A or part B of title XVIII of the So- cial Security Act. ”(D) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928. ”(E) Chapter 55 of title 10, United States Code. ”(F) A medical care program of the Indian Health Service or of a tribal organization. ”(G) A State health benefits risk pool. ”(H) A health plan offered under chapter 89 of title 5, United States Code. ”(I) A public health plan (as defined in regu- lations). ”(J) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)). Such term does not include coverage consisting solely of coverage of excepted benefits (as de- fined in section 706(c)). ”(2) NOT COUNTING PERIODS BEFORE SIGNIFI- CANT BREAKS IN COVERAGE.\u2014 ”(A) IN GENERAL.\u2014A period of creditable cov- erage shall not be counted, with respect to en- rollment of an individual under a group health plan, if, after such period and before the enroll- ment date, there was a 63-day period during all of which the individual was not covered under any creditable coverage. ”(B) WAITING PERIOD NOT TREATED AS A BREAK IN COVERAGE.\u2014For purposes of subpara- graph (A) and subsection (d)(4), any period that an individual is in a waiting period for any cov- erage under a group health plan (or for group health insurance coverage) or is in an affili- ation period (as defined in subsection (g)(2)) shall not be taken into account in determining the continuous period under subparagraph (A). ”(3) METHOD OF CREDITING COVERAGE.\u2014 ”(A) STANDARD METHOD.\u2014Except as otherwise provided under subparagraph (B), for purposes of applying subsection (a)(3), a group health plan, and a health insurance issuer offering group health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period. ”(B) ELECTION OF ALTERNATIVE METHOD.\u2014A group health plan, or a health insurance issuer offering group health insurance coverage, may elect to apply subsection (a)(3) based on cov- erage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subparagraph (A). Such election shall be made on a uniform basis for all participants and beneficiaries. Under such election a group health plan or is- suer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category. ”(C) PLAN NOTICE.\u2014In the case of an election with respect to a group health plan under sub- paragraph (B) (whether or not health insurance coverage is provided in connection with such plan), the plan shall\u2014 ”(i) prominently state in any disclosure state- ments concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made such election, and CONGRESSIONAL RECORD \u2014 HOUSE H9475July 31, 1996 ”(ii) include in such statements a description of the effect of this election. ”(4) ESTABLISHMENT OF PERIOD.\u2014Periods of creditable coverage with respect to an individual shall be established through presentation of cer- tifications described in subsection (e) or in such other manner as may be specified in regulations. ”(d) EXCEPTIONS.\u2014 ”(1) EXCLUSION NOT APPLICABLE TO CERTAIN NEWBORNS.\u2014Subject to paragraph (4), a group health plan, and a health insurance issuer of- fering group health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the 30-day period beginning with the date of birth, is covered under creditable cov- erage. ”(2) EXCLUSION NOT APPLICABLE TO CERTAIN ADOPTED CHILDREN.\u2014Subject to paragraph (4), a group health plan, and a health insurance is- suer offering group health insurance coverage, may not impose any preexisting condition exclu- sion in the case of a child who is adopted or placed for adoption before attaining 18 years of age and who, as of the last day of the 30-day period beginning on the date of the adoption or placement for adoption, is covered under cred- itable coverage. The previous sentence shall not apply to coverage before the date of such adop- tion or placement for adoption. ”(3) EXCLUSION NOT APPLICABLE TO PREG- NANCY.\u2014A group health plan, and health insur- ance issuer offering group health insurance cov- erage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition. ”(4) LOSS IF BREAK IN COVERAGE.\u2014Para- graphs (1) and (2) shall no longer apply to an individual after the end of the first 63-day pe- riod during all of which the individual was not covered under any creditable coverage. ”(e) CERTIFICATIONS AND DISCLOSURE OF COV- ERAGE.\u2014 ”(1) REQUIREMENT FOR CERTIFICATION OF PE- RIOD OF CREDITABLE COVERAGE.\u2014 ”(A) IN GENERAL.\u2014A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide the certifi- cation described in subparagraph (B)\u2014 ”(i) at the time an individual ceases to be cov- ered under the plan or otherwise becomes cov- ered under a COBRA continuation provision, ”(ii) in the case of an individual becoming covered under such a provision, at the time the individual ceases to be covered under such pro- vision, and ”(iii) on the request on behalf of an individ- ual made not later than 24 months after the date of cessation of the coverage described in clause (i) or (ii), whichever is later. The certification under clause (i) may be pro- vided, to the extent practicable, at a time con- sistent with notices required under any applica- ble COBRA continuation provision. ”(B) CERTIFICATION.\u2014The certification de- scribed in this subparagraph is a written certifi- cation of\u2014 ”(i) the period of creditable coverage of the in- dividual under such plan and the coverage (if any) under such COBRA continuation provi- sion, and ”(ii) the waiting period (if any) (and affili- ation period, if applicable) imposed with respect to the individual for any coverage under such plan. ”(C) ISSUER COMPLIANCE.\u2014To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification re- quirement under this paragraph if the health insurance issuer offering the coverage provides for such certification in accordance with this paragraph. ”(2) DISCLOSURE OF INFORMATION ON PRE- VIOUS BENEFITS.\u2014In the case of an election de- scribed in subsection (c)(3)(B) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certifi- cation of coverage of the individual under para- graph (1)\u2014 ”(A) upon request of such plan or issuer, the entity which issued the certification provided by the individual shall promptly disclose to such requesting plan or issuer information on cov- erage of classes and categories of health benefits available under such entity’s plan or coverage, and ”(B) such entity may charge the requesting plan or issuer for the reasonable cost of disclos- ing such information. ”(3) REGULATIONS.\u2014The Secretary shall es- tablish rules to prevent an entity’s failure to provide information under paragraph (1) or (2) with respect to previous coverage of an individ- ual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage. ”(f) SPECIAL ENROLLMENT PERIODS.\u2014 ”(1) INDIVIDUALS LOSING OTHER COVERAGE.\u2014A group health plan, and a health insurance is- suer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not en- rolled, for coverage under the terms of the plan (or a dependent of such an employee if the de- pendent is eligible, but not enrolled, for cov- erage under such terms) to enroll for coverage under the terms of the plan if each of the fol- lowing conditions is met: ”(A) The employee or dependent was covered under a group health plan or had health insur- ance coverage at the time coverage was pre- viously offered to the employee or dependent. ”(B) The employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan spon- sor or issuer (if applicable) required such a statement at such time and provided the em- ployee with notice of such requirement (and the consequences of such requirement) at such time. ”(C) The employee’s or dependent’s coverage described in subparagraph (A)\u2014 ”(i) was under a COBRA continuation provi- sion and the coverage under such provision was exhausted; or ”(ii) was not under such a provision and ei- ther the coverage was terminated as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce, death, ter- mination of employment, or reduction in the number of hours of employment) or employer contributions towards such coverage were termi- nated. ”(D) Under the terms of the plan, the em- ployee requests such enrollment not later than 30 days after the date of exhaustion of coverage described in subparagraph (C)(i) or termination of coverage or employer contribution described in subparagraph (C)(ii). ”(2) FOR DEPENDENT BENEFICIARIES.\u2014 ”(A) IN GENERAL.\u2014If\u2014 ”(i) a group health plan makes coverage available with respect to a dependent of an indi- vidual, ”(ii) the individual is a participant under the plan (or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period), and ”(iii) a person becomes such a dependent of the individual through marriage, birth, or adop- tion or placement for adoption, the group health plan shall provide for a de- pendent special enrollment period described in subparagraph (B) during which the person (or, if not otherwise enrolled, the individual) may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adop- tion of a child, the spouse of the individual may be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage. ”(B) DEPENDENT SPECIAL ENROLLMENT PE- RIOD.\u2014A dependent special enrollment period under this subparagraph shall be a period of not less than 30 days and shall begin on the later of\u2014 ”(i) the date dependent coverage is made available, or ”(ii) the date of the marriage, birth, or adop- tion or placement for adoption (as the case may be) described in subparagraph (A)(iii). ”(C) NO WAITING PERIOD.\u2014If an individual seeks to enroll a dependent during the first 30 days of such a dependent special enrollment pe- riod, the coverage of the dependent shall become effective\u2014 ”(i) in the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is re- ceived; ”(ii) in the case of a dependent’s birth, as of the date of such birth; or ”(iii) in the case of a dependent’s adoption or placement for adoption, the date of such adop- tion or placement for adoption. ”(g) USE OF AFFILIATION PERIOD BY HMOS AS ALTERNATIVE TO PREEXISTING CONDITION EX- CLUSION.\u2014 ”(1) IN GENERAL.\u2014In the case of a group health plan that offers medical care through health insurance coverage offered by a health maintenance organization, the plan may pro- vide for an affiliation period with respect to cov- erage through the organization only if\u2014 ”(A) no preexisting condition exclusion is im- posed with respect to coverage through the orga- nization, ”(B) the period is applied uniformly without regard to any health status-related factors, and ”(C) such period does not exceed 2 months (or 3 months in the case of a late enrollee). ”(2) AFFILIATION PERIOD.\u2014 ”(A) DEFINED.\u2014For purposes of this part, the term ‘affiliation period’ means a period which, under the terms of the health insurance cov- erage offered by the health maintenance organi- zation, must expire before the health insurance coverage becomes effective. The organization is not required to provide health care services or benefits during such period and no premium shall be charged to the participant or bene- ficiary for any coverage during the period. ”(B) BEGINNING.\u2014Such period shall begin on the enrollment date. ”(C) RUNS CONCURRENTLY WITH WAITING PERI- ODS.\u2014An affiliation period under a plan shall run concurrently with any waiting period under the plan. ”(3) ALTERNATIVE METHODS.\u2014A health main- tenance organization described in paragraph (1) may use alternative methods, from those de- scribed in such paragraph, to address adverse selection as approved by the State insurance commissioner or official or officials designated by the State to enforce the requirements of part A of title XXVII of the Public Health Service Act for the State involved with respect to such issuer. ”SEC. 702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS AND BENEFICIARIES BASED ON HEALTH STATUS. ”(a) IN ELIGIBILITY TO ENROLL.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (2), a group health plan, and a health insurance is- suer offering group health insurance coverage in connection with a group health plan, may not establish rules for eligibility (including con- tinued eligibility) of any individual to enroll under the terms of the plan based on any of the following health status-related factors in rela- tion to the individual or a dependent of the in- dividual: ”(A) Health status. ”(B) Medical condition (including both phys- ical and mental illnesses). ”(C) Claims experience. ”(D) Receipt of health care. ”(E) Medical history. ”(F) Genetic information. ”(G) Evidence of insurability (including con- ditions arising out of acts of domestic violence). CONGRESSIONAL RECORD \u2014 HOUSEH9476 July 31, 1996 ”(H) Disability. ”(2) NO APPLICATION TO BENEFITS OR EXCLU- SIONS.\u2014To the extent consistent with section 701, paragraph (1) shall not be construed\u2014 ”(A) to require a group health plan, or group health insurance coverage, to provide particular benefits other than those provided under the terms of such plan or coverage, or ”(B) to prevent such a plan or coverage from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals en- rolled in the plan or coverage. ”(3) CONSTRUCTION.\u2014For purposes of para- graph (1), rules for eligibility to enroll under a plan include rules defining any applicable wait- ing periods for such enrollment. ”(b) IN PREMIUM CONTRIBUTIONS.\u2014 ”(1) IN GENERAL.\u2014A group health plan, and a health insurance issuer offering health insur- ance coverage in connection with a group health plan, may not require any individual (as a condition of enrollment or continued enroll- ment under the plan) to pay a premium or con- tribution which is greater than such premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health status-related factor in relation to the individ- ual or to an individual enrolled under the plan as a dependent of the individual. ”(2) CONSTRUCTION.\u2014Nothing in paragraph (1) shall be construed\u2014 ”(A) to restrict the amount that an employer may be charged for coverage under a group health plan; or ”(B) to prevent a group health plan, and a health insurance issuer offering group health insurance coverage, from establishing premium discounts or rebates or modifying otherwise ap- plicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention. ”SEC. 703. GUARANTEED RENEWABILITY IN MUL- TIEMPLOYER PLANS AND MULTIPLE EMPLOYER WELFARE ARRANGE- MENTS. ”A group health plan which is a multiem- ployer plan or which is a multiple employer wel- fare arrangement may not deny an employer whose employees are covered under such a plan continued access to the same or different cov- erage under the terms of such a plan, other than\u2014 ”(1) for nonpayment of contributions; ”(2) for fraud or other intentional misrepre- sentation of material fact by the employer; ”(3) for noncompliance with material plan provisions; ”(4) because the plan is ceasing to offer any coverage in a geographic area; ”(5) in the case of a plan that offers benefits through a network plan, there is no longer any individual enrolled through the employer who lives, resides, or works in the service area of the network plan and the plan applies this para- graph uniformly without regard to the claims experience of employers or any health status-re- lated factor in relation to such individuals or their dependents; and ”(6) for failure to meet the terms of an appli- cable collective bargaining agreement, to renew a collective bargaining or other agreement re- quiring or authorizing contributions to the plan, or to employ employees covered by such an agreement. ”SEC. 704. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION. ”(a) CONTINUED APPLICABILITY OF STATE LAW WITH RESPECT TO HEALTH INSURANCE ISSUERS.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (2) and except as provided in subsection (b), this part shall not be construed to supersede any provision of State law which establishes, imple- ments, or continues in effect any standard or re- quirement solely relating to health insurance is- suers in connection with group health insurance coverage except to the extent that such standard or requirement prevents the application of a re- quirement of this part. ”(2) CONTINUED PREEMPTION WITH RESPECT TO GROUP HEALTH PLANS.\u2014Nothing in this part shall be construed to affect or modify the provi- sions of section 514 with respect to group health plans. ”(b) SPECIAL RULES IN CASE OF PORTABILITY REQUIREMENTS.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (2), the provisions of this part relating to health in- surance coverage offered by a health insurance issuer supersede any provision of State law which establishes, implements, or continues in effect a standard or requirement applicable to imposition of a preexisting condition exclusion specifically governed by section 701 which dif- fers from the standards or requirements specified in such section. ”(2) EXCEPTIONS.\u2014Only in relation to health insurance coverage offered by a health insur- ance issuer, the provisions of this part do not supersede any provision of State law to the ex- tent that such provision\u2014 ”(i) substitutes for the reference to ‘6-month period’ in section 701(a)(1) a reference to any shorter period of time; ”(ii) substitutes for the reference to ’12 months’ and ’18 months’ in section 701(a)(2) a reference to any shorter period of time; ”(iii) substitutes for the references to ’63’ days in sections 701(c)(2)(A) and 701(d)(4)(A) a ref- erence to any greater number of days; ”(iv) substitutes for the reference to ’30-day period’ in sections 701(b)(2) and 701(d)(1) a ref- erence to any greater period; ”(v) prohibits the imposition of any preexist- ing condition exclusion in cases not described in section 701(d) or expands the exceptions de- scribed in such section; ”(vi) requires special enrollment periods in ad- dition to those required under section 701(f); or ”(vii) reduces the maximum period permitted in an affiliation period under section 701(g)(1)(B). ”(c) RULES OF CONSTRUCTION.\u2014Nothing in this part shall be construed as requiring a group health plan or health insurance coverage to pro- vide specific benefits under the terms of such plan or coverage. ”(d) DEFINITIONS.\u2014For purposes of this sec- tion\u2014 ”(1) STATE LAW.\u2014The term ‘State law’ in- cludes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State. A law of the United States applicable only to the District of Columbia shall be treated as a State law rather than a law of the United States. ”(2) STATE.\u2014The term ‘State’ includes a State, the Northern Mariana Islands, any politi- cal subdivisions of a State or such Islands, or any agency or instrumentality of either. ”SEC. 705. SPECIAL RULES RELATING TO GROUP HEALTH PLANS. ”(a) GENERAL EXCEPTION FOR CERTAIN SMALL GROUP HEALTH PLANS.\u2014The requirements of this part shall not apply to any group health plan (and group health insurance coverage of- fered in connection with a group health plan) for any plan year if, on the first day of such plan year, such plan has less than 2 partici- pants who are current employees. ”(b) EXCEPTION FOR CERTAIN BENEFITS.\u2014The requirements of this part shall not apply to any group health plan (and group health insurance coverage) in relation to its provision of excepted benefits described in section 706(c)(1). ”(c) EXCEPTION FOR CERTAIN BENEFITS IF CERTAIN CONDITIONS MET.\u2014 ”(1) LIMITED, EXCEPTED BENEFITS.\u2014The re- quirements of this part shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) in relation to its provision of ex- cepted benefits described in section 706(c)(2) if the benefits\u2014 ”(A) are provided under a separate policy, certificate, or contract of insurance; or ”(B) are otherwise not an integral part of the plan. ”(2) NONCOORDINATED, EXCEPTED BENEFITS.\u2014 The requirements of this part shall not apply to any group health plan (and group health insur- ance coverage offered in connection with a group health plan) in relation to its provision of excepted benefits described in section 706(c)(3) if all of the following conditions are met: ”(A) The benefits are provided under a sepa- rate policy, certificate, or contract of insurance. ”(B) There is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan main- tained by the same plan sponsor. ”(C) Such benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor. ”(3) SUPPLEMENTAL EXCEPTED BENEFITS.\u2014The requirements of this part shall not apply to any group health plan (and group health insurance coverage) in relation to its provision of excepted benefits described in section 706(c)(4) if the ben- efits are provided under a separate policy, cer- tificate, or contract of insurance. ”(d) TREATMENT OF PARTNERSHIPS.\u2014For pur- poses of this part\u2014 ”(1) TREATMENT AS A GROUP HEALTH PLAN.\u2014 Any plan, fund, or program which would not be (but for this subsection) an employee welfare benefit plan and which is established or main- tained by a partnership, to the extent that such plan, fund, or program provides medical care (including items and services paid for as medical care) to present or former partners in the part- nership or to their dependents (as defined under the terms of the plan, fund, or program), di- rectly or through insurance, reimbursement, or otherwise, shall be treated (subject to paragraph (2)) as an employee welfare benefit plan which is a group health plan. ”(2) EMPLOYER.\u2014In the case of a group health plan, the term ’employer’ also includes the partnership in relation to any partner. ”(3) PARTICIPANTS OF GROUP HEALTH PLANS.\u2014 In the case of a group health plan, the term ‘participant’ also includes\u2014 ”(A) in connection with a group health plan maintained by a partnership, an individual who is a partner in relation to the partnership, or ”(B) in connection with a group health plan maintained by a self-employed individual (under which one or more employees are partici- pants), the self-employed individual, if such individual is, or may become, eligible to receive a benefit under the plan or such individ- ual’s beneficiaries may be eligible to receive any such benefit. ”SEC. 706. DEFINITIONS. ”(a) GROUP HEALTH PLAN.\u2014For purposes of this part\u2014 ”(1) IN GENERAL.\u2014The term ‘group health plan’ means an employee welfare benefit plan 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 employ- ees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise. ”(2) MEDICAL CARE.\u2014The term ‘medical care’ means amounts paid for\u2014 ”(A) the diagnosis, cure, mitigation, treat- ment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body, ”(B) amounts paid for transportation pri- marily for and essential to medical care referred to in subparagraph (A), and ”(C) amounts paid for insurance covering medical care referred to in subparagraphs (A) and (B). ”(b) DEFINITIONS RELATING TO HEALTH INSUR- ANCE.\u2014For purposes of this part\u2014 ”(1) HEALTH INSURANCE COVERAGE.\u2014The term ‘health insurance coverage’ means benefits con- sisting of medical care (provided directly, through insurance or reimbursement, or other- wise and including items and services paid for CONGRESSIONAL RECORD \u2014 HOUSE H9477July 31, 1996 as medical care) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance or- ganization contract offered by a health insur- ance issuer. ”(2) HEALTH INSURANCE ISSUER.\u2014The term ‘health insurance issuer’ means an insurance company, insurance service, or insurance orga- nization (including a health maintenance orga- nization, as defined in paragraph (3)) 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)). Such term does not include a group health plan. ”(3) HEALTH MAINTENANCE ORGANIZATION.\u2014 The term ‘health maintenance organization’ means\u2014 ”(A) a Federally qualified health mainte- nance organization (as defined in section 1301(a) of the Public Health Service Act (42 U.S.C. 300e(a))), ”(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. ”(4) GROUP HEALTH INSURANCE COVERAGE.\u2014 The term ‘group health insurance coverage’ means, in connection with a group health plan, health insurance coverage offered in connection with such plan. ”(c) EXCEPTED BENEFITS.\u2014For purposes of this part, the term ‘excepted benefits’ means benefits under one or more (or any combination thereof) of the following: ”(1) BENEFITS NOT SUBJECT TO REQUIRE- MENTS.\u2014 ”(A) Coverage only for accident, or disability income insurance, or any combination thereof. ”(B) Coverage issued as a supplement to li- ability insurance. ”(C) Liability insurance, including general li- ability insurance and automobile liability insur- ance. ”(D) Workers’ compensation or similar insur- ance. ”(E) Automobile medical payment insurance. ”(F) Credit-only insurance. ”(G) Coverage for on-site medical clinics. ”(H) Other similar insurance coverage, speci- fied in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits. ”(2) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED SEPARATELY.\u2014 ”(A) Limited scope dental or vision benefits. ”(B) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof. ”(C) Such other similar, limited benefits as are specified in regulations. ”(3) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED AS INDEPENDENT, NONCOORDINATED BENEFITS.\u2014 ”(A) Coverage only for a specified disease or illness. ”(B) Hospital indemnity or other fixed indem- nity insurance. ”(4) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED AS SEPARATE INSURANCE POLICY.\u2014 Medicare supplemental health insurance (as de- fined under section 1882(g)(1) of the Social Secu- rity Act), coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code, and similar supplemental coverage provided to coverage under a group health plan. ”(d) OTHER DEFINITIONS.\u2014For purposes of this part\u2014 ”(1) COBRA CONTINUATION PROVISION.\u2014The term ‘COBRA continuation provision’ means any of the following: ”(A) Part 6 of this subtitle. ”(B) Section 4980B of the Internal Revenue Code of 1986, other than subsection (f)(1) of such section insofar as it relates to pediatric vaccines. ”(C) Title XXII of the Public Health Service Act. ”(2) HEALTH STATUS-RELATED FACTOR.\u2014The term ‘health status-related factor’ means any of the factors described in section 702(a)(1). ”(3) NETWORK PLAN.\u2014The term ‘network plan’ means health insurance coverage offered by a health insurance issuer under which the fi- nancing and delivery of medical care (including items and services paid for as medical care) are provided, in whole or in part, through a defined set of providers under contract with the issuer. ”(4) PLACED FOR ADOPTION.\u2014The term ‘place- ment’, or being ‘placed’, for adoption, has the meaning given such term in section 609(c)(3)(B). ”SEC. 707. REGULATIONS. ”The Secretary, consistent with section 104 of the Health Care Portability and Accountability Act of 1996, may promulgate such regulations as may be necessary or appropriate to carry out the provisions of this part. The Secretary may promulgate any interim final rules as the Sec- retary determines are appropriate to carry out this part.”. (b) ENFORCEMENT WITH RESPECT TO HEALTH INSURANCE ISSUERS.\u2014Section 502(b) of such Act (29 U.S.C. 1132(b)) is amended by adding at the end the following new paragraph: ”(3) The Secretary is not authorized to en- force under this part any requirement of part 7 against a health insurance issuer offering health insurance coverage in connection with a group health plan (as defined in section 706(a)(1)). Nothing in this paragraph shall af- fect the authority of the Secretary to issue regu- lations to carry out such part.”. (c) DISCLOSURE OF INFORMATION TO PARTICI- PANTS AND BENEFICIARIES.\u2014 (1) IN GENERAL.\u2014Section 104(b)(1) of such Act (29 U.S.C. 1024(b)(1)) is amended in the matter following subparagraph (B)\u2014 (A) by striking ”102(a)(1),” and inserting ”102(a)(1) (other than a material reduction in covered services or benefits provided in the case of a group health plan (as defined in section 706(a)(1))),”; and (B) by adding at the end the following new sentences: ”If there is a modification or change described in section 102(a)(1) that is a material reduction in covered services or benefits pro- vided under a group health plan (as defined in section 706(a)(1)), a summary description of such modification or change shall be furnished to participants and beneficiaries not later than 60 days after the date of the adoption of the modification or change. In the alternative, the plan sponsors may provide such description at regular intervals of not more than 90 days. The Secretary shall issue regulations within 180 days after the date of enactment of the Health Insur- ance Portability and Accountability Act of 1996, providing alternative mechanisms to delivery by mail through which group health plans (as so defined) may notify participants and bene- ficiaries of material reductions in covered serv- ices or benefits.”. (2) PLAN DESCRIPTION AND SUMMARY.\u2014Section 102(b) of such Act (29 U.S.C. 1022(b)) is amend- ed\u2014 (A) by inserting ”in the case of a group health plan (as defined in section 706(a)(1)), whether a health insurance issuer (as defined in section 706(b)(2)) is responsible for the financing or ad- ministration (including payment of claims) of the plan and (if so) the name and address of such issuer;” after ”type of administration of the plan;”; and (B) by inserting ”including the office at the Department of Labor through which partici- pants and beneficiaries may seek assistance or information regarding their rights under this Act and the Health Insurance Portability and Accountability Act of 1996 with respect to health benefits that are offered through a group health plan (as defined in section 706(a)(1))” after ”benefits under the plan”. (d) TREATMENT OF HEALTH INSURANCE ISSUERS OFFERING HEALTH INSURANCE COVERAGE TO NONCOVERED PLANS.\u2014Section 4(b) of such Act (29 U.S.C. 1003(b)) is amended by adding at the end (after and below paragraph (5)) the follow- ing: ”The provisions of part 7 of subtitle B shall not apply to a health insurance issuer (as defined in section 706(b)(2)) solely by reason of health in- surance coverage (as defined in section 706(b)(1)) provided by such issuer in connection with a group health plan (as defined in section 706(a)(1)) if the provisions of this title do not apply to such group health plan.”. (e) REPORTING AND ENFORCEMENT WITH RE- SPECT TO CERTAIN ARRANGEMENTS.\u2014 (1) IN GENERAL.\u2014Section 101 of such Act (29 U.S.C. 1021) is amended\u2014 (A) by redesignating subsection (g) as sub- section (h), and (B) by inserting after subsection (f) the fol- lowing new subsection: ”(g) REPORTING BY CERTAIN ARRANGE- MENTS.\u2014The Secretary may, by regulation, re- quire multiple employer welfare arrangements providing benefits consisting of medical care (within the meaning of section 706(a)(2)) which are not group health plans to report, not more frequently than annually, in such form and such manner as the Secretary may require for the purpose of determining the extent to which the requirements of part 7 are being carried out in connection with such benefits.”. (2) ENFORCEMENT.\u2014 (A) IN GENERAL.\u2014Section 502 of such Act (29 U.S.C. 1132) is amended\u2014 (i) in subsection (a)(6), by striking ”under subsection (c)(2) or (i) or (l)” and inserting ”under paragraph (2), (4), or (5) of subsection (c) or under subsection (i) or (l)”; and (ii) in the last 2 sentences of subsection (c), by striking ”For purposes of this paragraph” and all that follows through ”The Secretary and” and inserting the following: ”(5) The Secretary may assess a civil penalty against any person of up to $1,000 a day from the date of the person’s failure or refusal to file the information required to be filed by such per- son with the Secretary under regulations pre- scribed pursuant to section 101(g). ”(6) The Secretary and”. (B) TECHNICAL AND CONFORMING AMEND- MENT.\u2014Section 502(c)(1) of such Act (29 U.S.C. 1132(c)(1)) is amended by adding at the end the following sentence: ”For purposes of this para- graph, each violation described in subparagraph (A) with respect to any single participant, and each violation described in subparagraph (B) with respect to any single participant or bene- ficiary, shall be treated as a separate viola- tion.”. (3) COORDINATION.\u2014Section 506 of such Act (29 U.S.C. 1136) is amended by adding at the end the following new subsection: ”(c) COORDINATION OF ENFORCEMENT WITH STATES WITH RESPECT TO CERTAIN ARRANGE- MENTS.\u2014A State may enter into an agreement with the Secretary for delegation to the State of some or all of the Secretary’s authority under sections 502 and 504 to enforce the requirements under part 7 in connection with multiple em- ployer welfare arrangements, providing medical care (within the meaning of section 706(a)(2)), which are not group health plans.”. (f) CONFORMING AMENDMENTS.\u2014 (1) Section 514(b) of such Act (29 U.S.C. 1144(b)) is amended by adding at the end the following new paragraph: ”(9) For additional provisions relating to group health plans, see section 704.”. (2)(A) Part 6 of subtitle B of title I of such Act (29 U.S.C. 1161 et seq.) is amended by striking the heading and inserting the following: ”PART 6\u2014CONTINUATION COVERAGE AND ADDI- TIONAL STANDARDS FOR GROUP HEALTH PLANS”. (B) The table of contents in section 1 of such Act is amended by striking the item relating to the heading for part 6 of subtitle B of title I and inserting the following: CONGRESSIONAL RECORD \u2014 HOUSEH9478 July 31, 1996 ”PART 6\u2014CONTINUATION COVERAGE AND ADDI- TIONAL STANDARDS FOR GROUP HEALTH PLANS”. (3) The table of contents in section 1 of such Act (as amended by the preceding provisions of this section) is amended by inserting after the items relating to part 6 the following new items: ”PART 7\u2014GROUP HEALTH PLAN PORTABILITY, ACCESS, AND RENEWABILITY REQUIREMENTS ”Sec. 701. Increased portability through limita- tion on preexisting condition ex- clusions. ”Sec. 702. Prohibiting discrimination against individual participants and bene- ficiaries based on health status. ”Sec. 703. Guaranteed renewability in multiem- ployer plans and multiple em- ployer welfare arrangements. ”Sec. 704. Preemption; State flexibility; con- struction. ”Sec. 705. Special rules relating to group health plans. ”Sec. 706. Definitions. ”Sec. 707. Regulations.”. (g) EFFECTIVE DATES.\u2014 (1) IN GENERAL.\u2014Except as provided in this section, this section (and the amendments made by this section) shall apply with respect to group health plans for plan years beginning after June 30, 1997. (2) DETERMINATION OF CREDITABLE COV- ERAGE.\u2014 (A) PERIOD OF COVERAGE.\u2014 (i) IN GENERAL.\u2014Subject to clause (ii), no pe- riod before July 1, 1996, shall be taken into ac- count under part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (as added by this section) in determining creditable coverage. (ii) SPECIAL RULE FOR CERTAIN PERIODS.\u2014The Secretary of Labor, consistent with section 104, shall provide for a process whereby individuals who need to establish creditable coverage for pe- riods before July 1, 1996, and who would have such coverage credited but for clause (i) may be given credit for creditable coverage for such pe- riods through the presentation of documents or other means. (B) CERTIFICATIONS, ETC.\u2014 (i) IN GENERAL.\u2014Subject to clauses (ii) and (iii), subsection (e) of section 701 of the Em- ployee Retirement Income Security Act of 1974 (as added by this section) shall apply to events occurring after June 30, 1996. (ii) NO CERTIFICATION REQUIRED TO BE PRO- VIDED BEFORE JUNE 1, 1997.\u2014In no case is a cer- tification required to be provided under such subsection before June 1, 1997. (iii) CERTIFICATION ONLY ON WRITTEN REQUEST FOR EVENTS OCCURRING BEFORE OCTOBER 1, 1996.\u2014In the case of an event occurring after June 30, 1996, and before October 1, 1996, a cer- tification is not required to be provided under such subsection unless an individual (with re- spect to whom the certification is otherwise re- quired to be made) requests such certification in writing. (C) TRANSITIONAL RULE.\u2014In the case of an in- dividual who seeks to establish creditable cov- erage for any period for which certification is not required because it relates to an event oc- curring before June 30, 1996\u2014 (i) the individual may present other credible evidence of such coverage in order to establish the period of creditable coverage; and (ii) a group health plan and a health insur- ance issuer shall not be subject to any penalty or enforcement action with respect to the plan’s or issuer’s crediting (or not crediting) such cov- erage if the plan or issuer has sought to comply in good faith with the applicable requirements under the amendments made by this section. (3) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS.\u2014Except as provided in paragraph (2), in the case of a group health plan main- tained pursuant to 1 or more collective bargain- ing agreements between employee representa- tives and one or more employers ratified before the date of the enactment of this Act, part 7 of subtitle B of title I of Employee Retirement In- come Security Act of 1974 (other than section 701(e) thereof) shall not apply to plan years be- ginning before the later of\u2014 (A) the date on which the last of the collective bargaining agreements relating to the plan ter- minates (determined without regard to any ex- tension thereof agreed to after the date of the enactment of this Act), or (B) July 1, 1997. For purposes of subparagraph (A), any plan amendment made pursuant to a collective bar- gaining agreement relating to the plan which amends the plan solely to conform to any re- quirement of such part shall not be treated as a termination of such collective bargaining agree- ment. (4) TIMELY REGULATIONS.\u2014The Secretary of Labor, consistent with section 104, shall first issue by not later than April 1, 1997, such regu- lations as may be necessary to carry out the amendments made by this section. (5) LIMITATION ON ACTIONS.\u2014No enforcement action shall be taken, pursuant to the amend- ments made by this section, against a group health plan or health insurance issuer with re- spect to a violation of a requirement imposed by such amendments before January 1, 1998, or, if later, the date of issuance of regulations re- ferred to in paragraph (4), if the plan or issuer has sought to comply in good faith with such re- quirements. SEC. 102. THROUGH THE PUBLIC HEALTH SERV- ICE ACT. (a) IN GENERAL.\u2014The Public Health Service Act is amended by adding at the end the follow- ing new title: ”TITLE XXVII\u2014ASSURING PORTABILITY, AVAILABILITY, AND RENEWABILITY OF HEALTH INSURANCE COVERAGE ”PART A\u2014GROUP MARKET REFORMS ”SUBPART 1\u2014PORTABILITY, ACCESS, AND RENEWABILITY REQUIREMENTS ”SEC. 2701. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING CON- DITION EXCLUSIONS. ”(a) LIMITATION ON PREEXISTING CONDITION EXCLUSION PERIOD; CREDITING FOR PERIODS OF PREVIOUS COVERAGE.\u2014Subject to subsection (d), a group health plan, and a health insurance is- suer offering group health insurance coverage, may, with respect to a participant or bene- ficiary, impose a preexisting condition exclusion only if\u2014 ”(1) such exclusion relates to a condition (whether physical or mental), regardless of the cause of the condition, for which medical ad- vice, diagnosis, care, or treatment was rec- ommended or received within the 6-month period ending on the enrollment date; ”(2) such exclusion extends for a period of not more than 12 months (or 18 months in the case of a late enrollee) after the enrollment date; and ”(3) the period of any such preexisting condi- tion exclusion is reduced by the aggregate of the periods of creditable coverage (if any, as defined in subsection (c)(1)) applicable to the partici- pant or beneficiary as of the enrollment date. ”(b) DEFINITIONS.\u2014For purposes of this part\u2014 ”(1) PREEXISTING CONDITION EXCLUSION.\u2014 ”(A) IN GENERAL.\u2014The term ‘preexisting con- dition exclusion’ means, with respect to cov- erage, a limitation or exclusion of benefits relat- ing to a condition based on the fact that the condition was present before the date of enroll- ment for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date. ”(B) TREATMENT OF GENETIC INFORMATION.\u2014 Genetic information shall not be treated as a condition described in subsection (a)(1) in the absence of a diagnosis of the condition related to such information. ”(2) ENROLLMENT DATE.\u2014The term ‘enroll- ment date’ means, with respect to an individual covered under a group health plan or health in- surance coverage, the date of enrollment of the individual in the plan or coverage or, if earlier, the first day of the waiting period for such en- rollment. ”(3) LATE ENROLLEE.\u2014The term ‘late enrollee’ means, with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during\u2014 ”(A) the first period in which the individual is eligible to enroll under the plan, or ”(B) a special enrollment period under sub- section (f). ”(4) WAITING PERIOD.\u2014The term ‘waiting pe- riod’ means, with respect to a group health plan and an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the in- dividual is eligible to be covered for benefits under the terms of the plan. ”(c) RULES RELATING TO CREDITING PREVIOUS COVERAGE.\u2014 ”(1) CREDITABLE COVERAGE DEFINED.\u2014For purposes of this title, the term ‘creditable cov- erage’ means, with respect to an individual, cov- erage of the individual under any of the follow- ing: ”(A) A group health plan. ”(B) Health insurance coverage. ”(C) Part A or part B of title XVIII of the So- cial Security Act. ”(D) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928. ”(E) Chapter 55 of title 10, United States Code. ”(F) A medical care program of the Indian Health Service or of a tribal organization. ”(G) A State health benefits risk pool. ”(H) A health plan offered under chapter 89 of title 5, United States Code. ”(I) A public health plan (as defined in regu- lations). ”(J) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)). Such term does not include coverage consisting solely of coverage of excepted benefits (as de- fined in section 2791(c)). ”(2) NOT COUNTING PERIODS BEFORE SIGNIFI- CANT BREAKS IN COVERAGE.\u2014 ”(A) IN GENERAL.\u2014A period of creditable cov- erage shall not be counted, with respect to en- rollment of an individual under a group health plan, if, after such period and before the enroll- ment date, there was a 63-day period during all of which the individual was not covered under any creditable coverage. ”(B) WAITING PERIOD NOT TREATED AS A BREAK IN COVERAGE.\u2014For purposes of subpara- graph (A) and subsection (d)(4), any period that an individual is in a waiting period for any cov- erage under a group health plan (or for group health insurance coverage) or is in an affili- ation period (as defined in subsection (g)(2)) shall not be taken into account in determining the continuous period under subparagraph (A). ”(3) METHOD OF CREDITING COVERAGE.\u2014 ”(A) STANDARD METHOD.\u2014Except as otherwise provided under subparagraph (B), for purposes of applying subsection (a)(3), a group health plan, and a health insurance issuer offering group health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period. ”(B) ELECTION OF ALTERNATIVE METHOD.\u2014A group health plan, or a health insurance issuer offering group health insurance, may elect to apply subsection (a)(3) based on coverage of benefits within each of several classes or cat- egories of benefits specified in regulations rather than as provided under subparagraph (A). Such election shall be made on a uniform basis for all participants and beneficiaries. Under such elec- tion a group health plan or issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of bene- fits is covered within such class or category. ”(C) PLAN NOTICE.\u2014In the case of an election with respect to a group health plan under sub- paragraph (B) (whether or not health insurance CONGRESSIONAL RECORD \u2014 HOUSE H9479July 31, 1996 coverage is provided in connection with such plan), the plan shall\u2014 ”(i) prominently state in any disclosure state- ments concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made such election, and ”(ii) include in such statements a description of the effect of this election. ”(D) ISSUER NOTICE.\u2014In the case of an elec- tion under subparagraph (B) with respect to health insurance coverage offered by an issuer in the small or large group market, the issuer\u2014 ”(i) shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made such elec- tion, and ”(ii) shall include in such statements a de- scription of the effect of such election. ”(4) ESTABLISHMENT OF PERIOD.\u2014Periods of creditable coverage with respect to an individual shall be established through presentation of cer- tifications described in subsection (e) or in such other manner as may be specified in regulations. ”(d) EXCEPTIONS.\u2014 ”(1) EXCLUSION NOT APPLICABLE TO CERTAIN NEWBORNS.\u2014Subject to paragraph (4), a group health plan, and a health insurance issuer of- fering group health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the 30-day period beginning with the date of birth, is covered under creditable cov- erage. ”(2) EXCLUSION NOT APPLICABLE TO CERTAIN ADOPTED CHILDREN.\u2014Subject to paragraph (4), a group health plan, and a health insurance is- suer offering group health insurance coverage, may not impose any preexisting condition exclu- sion in the case of a child who is adopted or placed for adoption before attaining 18 years of age and who, as of the last day of the 30-day period beginning on the date of the adoption or placement for adoption, is covered under cred- itable coverage. The previous sentence shall not apply to coverage before the date of such adop- tion or placement for adoption. ”(3) EXCLUSION NOT APPLICABLE TO PREG- NANCY.\u2014A group health plan, and health insur- ance issuer offering group health insurance cov- erage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition. ”(4) LOSS IF BREAK IN COVERAGE.\u2014Para- graphs (1) and (2) shall no longer apply to an individual after the end of the first 63-day pe- riod during all of which the individual was not covered under any creditable coverage. ”(e) CERTIFICATIONS AND DISCLOSURE OF COV- ERAGE.\u2014 ”(1) REQUIREMENT FOR CERTIFICATION OF PE- RIOD OF CREDITABLE COVERAGE.\u2014 ”(A) IN GENERAL.\u2014A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide the certifi- cation described in subparagraph (B)\u2014 ”(i) at the time an individual ceases to be cov- ered under the plan or otherwise becomes cov- ered under a COBRA continuation provision, ”(ii) in the case of an individual becoming covered under such a provision, at the time the individual ceases to be covered under such pro- vision, and ”(iii) on the request on behalf of an individ- ual made not later than 24 months after the date of cessation of the coverage described in clause (i) or (ii), whichever is later. The certification under clause (i) may be pro- vided, to the extent practicable, at a time con- sistent with notices required under any applica- ble COBRA continuation provision. ”(B) CERTIFICATION.\u2014The certification de- scribed in this subparagraph is a written certifi- cation of\u2014 ”(i) the period of creditable coverage of the in- dividual under such plan and the coverage (if any) under such COBRA continuation provi- sion, and ”(ii) the waiting period (if any) (and affili- ation period, if applicable) imposed with respect to the individual for any coverage under such plan. ”(C) ISSUER COMPLIANCE.\u2014To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification re- quirement under this paragraph if the health insurance issuer offering the coverage provides for such certification in accordance with this paragraph. ”(2) DISCLOSURE OF INFORMATION ON PRE- VIOUS BENEFITS.\u2014In the case of an election de- scribed in subsection (c)(3)(B) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certifi- cation of coverage of the individual under para- graph (1)\u2014 ”(A) upon request of such plan or issuer, the entity which issued the certification provided by the individual shall promptly disclose to such requesting plan or issuer information on cov- erage of classes and categories of health benefits available under such entity’s plan or coverage, and ”(B) such entity may charge the requesting plan or issuer for the reasonable cost of disclos- ing such information. ”(3) REGULATIONS.\u2014The Secretary shall es- tablish rules to prevent an entity’s failure to provide information under paragraph (1) or (2) with respect to previous coverage of an individ- ual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage. ”(f) SPECIAL ENROLLMENT PERIODS.\u2014 ”(1) INDIVIDUALS LOSING OTHER COVERAGE.\u2014A group health plan, and a health insurance is- suer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not en- rolled, for coverage under the terms of the plan (or a dependent of such an employee if the de- pendent is eligible, but not enrolled, for cov- erage under such terms) to enroll for coverage under the terms of the plan if each of the fol- lowing conditions is met: ”(A) The employee or dependent was covered under a group health plan or had health insur- ance coverage at the time coverage was pre- viously offered to the employee or dependent. ”(B) The employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan spon- sor or issuer (if applicable) required such a statement at such time and provided the em- ployee with notice of such requirement (and the consequences of such requirement) at such time. ”(C) The employee’s or dependent’s coverage described in subparagraph (A)\u2014 ”(i) was under a COBRA continuation provi- sion and the coverage under such provision was exhausted; or ”(ii) was not under such a provision and ei- ther the coverage was terminated as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce, death, ter- mination of employment, or reduction in the number of hours of employment) or employer contributions towards such coverage were termi- nated. ”(D) Under the terms of the plan, the em- ployee requests such enrollment not later than 30 days after the date of exhaustion of coverage described in subparagraph (C)(i) or termination of coverage or employer contribution described in subparagraph (C)(ii). ”(2) FOR DEPENDENT BENEFICIARIES.\u2014 ”(A) IN GENERAL.\u2014If\u2014 ”(i) a group health plan makes coverage available with respect to a dependent of an indi- vidual, ”(ii) the individual is a participant under the plan (or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period), and ”(iii) a person becomes such a dependent of the individual through marriage, birth, or adop- tion or placement for adoption, the group health plan shall provide for a de- pendent special enrollment period described in subparagraph (B) during which the person (or, if not otherwise enrolled, the individual) may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adop- tion of a child, the spouse of the individual may be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage. ”(B) DEPENDENT SPECIAL ENROLLMENT PE- RIOD.\u2014A dependent special enrollment period under this subparagraph shall be a period of not less than 30 days and shall begin on the later of\u2014 ”(i) the date dependent coverage is made available, or ”(ii) the date of the marriage, birth, or adop- tion or placement for adoption (as the case may be) described in subparagraph (A)(iii). ”(C) NO WAITING PERIOD.\u2014If an individual seeks to enroll a dependent during the first 30 days of such a dependent special enrollment pe- riod, the coverage of the dependent shall become effective\u2014 ”(i) in the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is re- ceived; ”(ii) in the case of a dependent’s birth, as of the date of such birth; or ”(iii) in the case of a dependent’s adoption or placement for adoption, the date of such adop- tion or placement for adoption. ”(g) USE OF AFFILIATION PERIOD BY HMOS AS ALTERNATIVE TO PREEXISTING CONDITION EX- CLUSION.\u2014 ”(1) IN GENERAL.\u2014A health maintenance or- ganization which offers health insurance cov- erage in connection with a group health plan and which does not impose any preexisting con- dition exclusion allowed under subsection (a) with respect to any particular coverage option may impose an affiliation period for such cov- erage option, but only if\u2014 ”(A) such period is applied uniformly without regard to any health status-related factors; and ”(B) such period does not exceed 2 months (or 3 months in the case of a late enrollee). ”(2) AFFILIATION PERIOD.\u2014 ”(A) DEFINED.\u2014For purposes of this title, the term ‘affiliation period’ means a period which, under the terms of the health insurance cov- erage offered by the health maintenance organi- zation, must expire before the health insurance coverage becomes effective. The organization is not required to provide health care services or benefits during such period and no premium shall be charged to the participant or bene- ficiary for any coverage during the period. ”(B) BEGINNING.\u2014Such period shall begin on the enrollment date. ”(C) RUNS CONCURRENTLY WITH WAITING PERI- ODS.\u2014An affiliation period under a plan shall run concurrently with any waiting period under the plan. ”(3) ALTERNATIVE METHODS.\u2014A health main- tenance organization described in paragraph (1) may use alternative methods, from those de- scribed in such paragraph, to address adverse selection as approved by the State insurance commissioner or official or officials designated by the State to enforce the requirements of this part for the State involved with respect to such issuer. ”SEC. 2702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS AND BENEFICIARIES BASED ON HEALTH STATUS. ”(a) IN ELIGIBILITY TO ENROLL.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (2), a group health plan, and a health insurance is- suer offering group health insurance coverage CONGRESSIONAL RECORD \u2014 HOUSEH9480 July 31, 1996 in connection with a group health plan, may not establish rules for eligibility (including con- tinued eligibility) of any individual to enroll under the terms of the plan based on any of the following health status-related factors in rela- tion to the individual or a dependent of the in- dividual: ”(A) Health status. ”(B) Medical condition (including both phys- ical and mental illnesses). ”(C) Claims experience. ”(D) Receipt of health care. ”(E) Medical history. ”(F) Genetic information. ”(G) Evidence of insurability (including con- ditions arising out of acts of domestic violence). ”(H) Disability. ”(2) NO APPLICATION TO BENEFITS OR EXCLU- SIONS.\u2014To the extent consistent with section 701, paragraph (1) shall not be construed\u2014 ”(A) to require a group health plan, or group health insurance coverage, to provide particular benefits other than those provided under the terms of such plan or coverage, or ”(B) to prevent such a plan or coverage from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals en- rolled in the plan or coverage. ”(3) CONSTRUCTION.\u2014For purposes of para- graph (1), rules for eligibility to enroll under a plan include rules defining any applicable wait- ing periods for such enrollment. ”(b) IN PREMIUM CONTRIBUTIONS.\u2014 ”(1) IN GENERAL.\u2014A group health plan, and a health insurance issuer offering health insur- ance coverage in connection with a group health plan, may not require any individual (as a condition of enrollment or continued enroll- ment under the plan) to pay a premium or con- tribution which is greater than such premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health status-related factor in relation to the individ- ual or to an individual enrolled under the plan as a dependent of the individual. ”(2) CONSTRUCTION.\u2014Nothing in paragraph (1) shall be construed\u2014 ”(A) to restrict the amount that an employer may be charged for coverage under a group health plan; or ”(B) to prevent a group health plan, and a health insurance issuer offering group health insurance coverage, from establishing premium discounts or rebates or modifying otherwise ap- plicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention. ”SUBPART 2\u2014PROVISIONS APPLICABLE ONLY TO HEALTH INSURANCE ISSUERS ”SEC. 2711. GUARANTEED AVAILABILITY OF COV- ERAGE FOR EMPLOYERS IN THE GROUP MARKET. ”(a) ISSUANCE OF COVERAGE IN THE SMALL GROUP MARKET.\u2014 ”(1) IN GENERAL.\u2014Subject to subsections (c) through (f), each health insurance issuer that offers health insurance coverage in the small group market in a State\u2014 ”(A) must accept every small employer (as de- fined in section 2791(e)(4)) in the State that ap- plies for such coverage; and ”(B) must accept for enrollment under such coverage every eligible individual (as defined in paragraph (2)) who applies for enrollment dur- ing the period in which the individual first be- comes eligible to enroll under the terms of the group health plan and may not place any re- striction which is inconsistent with section 2702 on an eligible individual being a participant or beneficiary. ”(2) ELIGIBLE INDIVIDUAL DEFINED.\u2014For pur- poses of this section, the term ‘eligible individ- ual’ means, with respect to a health insurance issuer that offers health insurance coverage to a small employer in connection with a group health plan in the small group market, such an individual in relation to the employer as shall be determined\u2014 ”(A) in accordance with the terms of such plan, ”(B) as provided by the issuer under rules of the issuer which are uniformly applicable in a State to small employers in the small group mar- ket, and ”(C) in accordance with all applicable State laws governing such issuer and such market. ”(b) ASSURING ACCESS IN THE LARGE GROUP MARKET.\u2014 ”(1) REPORTS TO HHS.\u2014The Secretary shall re- quest that the chief executive officer of each State submit to the Secretary, by not later De- cember 31, 2000, and every 3 years thereafter a report on\u2014 ”(A) the access of large employers to health insurance coverage in the State, and ”(B) the circumstances for lack of access (if any) of large employers (or one or more classes of such employers) in the State to such cov- erage. ”(2) TRIENNIAL REPORTS TO CONGRESS.\u2014The Secretary, based on the reports submitted under paragraph (1) and such other information as the Secretary may use, shall prepare and submit to Congress, every 3 years, a report describing the extent to which large employers (and classes of such employers) that seek health insurance cov- erage in the different States are able to obtain access to such coverage. Such report shall in- clude such recommendations as the Secretary determines to be appropriate. ”(3) GAO REPORT ON LARGE EMPLOYER ACCESS TO HEALTH INSURANCE COVERAGE.\u2014The Comp- troller General shall provide for a study of the extent to which classes of large employers in the different States are able to obtain access to health insurance coverage and the cir- cumstances for lack of access (if any) to such coverage. The Comptroller General shall submit to Congress a report on such study not later than 18 months after the date of the enactment of this title. ”(c) SPECIAL RULES FOR NETWORK PLANS.\u2014 ”(1) IN GENERAL.\u2014In the case of a health in- surance issuer that offers health insurance cov- erage in the small group market through a net- work plan, the issuer may\u2014 ”(A) limit the employers that may apply for such coverage to those with eligible individuals who live, work, or reside in the service area for such network plan; and ”(B) within the service area of such plan, deny such coverage to such employers if the is- suer has demonstrated, if required, to the appli- cable State authority that\u2014 ”(i) it will not have the capacity to deliver services adequately to enrollees of any addi- tional groups because of its obligations to exist- ing group contract holders and enrollees, and ”(ii) it is applying this paragraph uniformly to all employers without regard to the claims ex- perience of those employers and their employees (and their dependents) or any health status-re- lated factor relating to such employees and de- pendents. ”(2) 180-DAY SUSPENSION UPON DENIAL OF COV- ERAGE.\u2014An issuer, upon denying health insur- ance coverage in any service area in accordance with paragraph (1)(B), may not offer coverage in the small group market within such service area for a period of 180 days after the date such coverage is denied. ”(d) APPLICATION OF FINANCIAL CAPACITY LIMITS.\u2014 ”(1) IN GENERAL.\u2014A health insurance issuer may deny health insurance coverage in the small group market if the issuer has dem- onstrated, if required, to the applicable State authority that\u2014 ”(A) it does not have the financial reserves necessary to underwrite additional coverage; and ”(B) it is applying this paragraph uniformly to all employers in the small group market in the State consistent with applicable State law and without regard to the claims experience of those employers and their employees (and their de- pendents) or any health status-related factor re- lating to such employees and dependents. ”(2) 180-DAY SUSPENSION UPON DENIAL OF COV- ERAGE.\u2014A health insurance issuer upon deny- ing health insurance coverage in connection with group health plans in accordance with paragraph (1) in a State may not offer coverage in connection with group health plans in the small group market in the State for a period of 180 days after the date such coverage is denied or until the issuer has demonstrated to the ap- plicable State authority, if required under appli- cable State law, that the issuer has sufficient fi- nancial reserves to underwrite additional cov- erage, whichever is later. An applicable State authority may provide for the application of this subsection on a service-area-specific basis. ”(e) EXCEPTION TO REQUIREMENT FOR FAIL- URE TO MEET CERTAIN MINIMUM PARTICIPATION OR CONTRIBUTION RULES.\u2014 ”(1) IN GENERAL.\u2014Subsection (a) shall not be construed to preclude a health insurance issuer from establishing employer contribution rules or group participation rules for the offering of health insurance coverage in connection with a group health plan in the small group market, as allowed under applicable State law. ”(2) RULES DEFINED.\u2014For purposes of para- graph (1)\u2014 ”(A) the term ’employer contribution rule’ means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of participants and beneficiaries; and ”(B) the term ‘group participation rule’ means a requirement relating to the minimum number of participants or beneficiaries that must be en- rolled in relation to a specified percentage or number of eligible individuals or employees of an employer. ”(f) EXCEPTION FOR COVERAGE OFFERED ONLY TO BONA FIDE ASSOCIATION MEMBERS.\u2014Sub- section (a) shall not apply to health insurance coverage offered by a health insurance issuer if such coverage is made available in the small group market only through one or more bona fide associations (as defined in section 2791(d)(3)). ”SEC. 2712. GUARANTEED RENEWABILITY OF COV- ERAGE FOR EMPLOYERS IN THE GROUP MARKET. ”(a) IN GENERAL.\u2014Except as provided in this section, if a health insurance issuer offers health insurance coverage in the small or large group market in connection with a group health plan, the issuer must renew or continue in force such coverage at the option of the plan sponsor of the plan. ”(b) GENERAL EXCEPTIONS.\u2014A health insur- ance issuer may nonrenew or discontinue health insurance coverage offered in connection with a group health plan in the small or large group market based only on one or more of the follow- ing: ”(1) NONPAYMENT OF PREMIUMS.\u2014The plan sponsor has failed to pay premiums or contribu- tions in accordance with the terms of the health insurance coverage or the issuer has not re- ceived timely premium payments. ”(2) FRAUD.\u2014The plan sponsor has performed an act or practice that constitutes fraud or made an intentional misrepresentation of mate- rial fact under the terms of the coverage. ”(3) VIOLATION OF PARTICIPATION OR CON- TRIBUTION RULES.\u2014The plan sponsor has failed to comply with a material plan provision relat- ing to employer contribution or group participa- tion rules, as permitted under section 2711(e) in the case of the small group market or pursuant to applicable State law in the case of the large group market. ”(4) TERMINATION OF COVERAGE.\u2014The issuer is ceasing to offer coverage in such market in accordance with subsection (c) and applicable State law. ”(5) MOVEMENT OUTSIDE SERVICE AREA.\u2014In the case of a health insurance issuer that offers CONGRESSIONAL RECORD \u2014 HOUSE H9481July 31, 1996 health insurance coverage in the market through a network plan, there is no longer any enrollee in connection with such plan who lives, resides, or works in the service area of the issuer (or in the area for which the issuer is authorized to do business) and, in the case of the small group market, the issuer would deny enrollment with respect to such plan under section 2711(c)(1)(A). ”(6) ASSOCIATION MEMBERSHIP CEASES.\u2014In the case of health insurance coverage that is made available in the small or large group market (as the case may be) only through one or more bona fide associations, the membership of an em- ployer in the association (on the basis of which the coverage is provided) ceases but only if such coverage is terminated under this paragraph uniformly without regard to any health status- related factor relating to any covered individ- ual. ”(c) REQUIREMENTS FOR UNIFORM TERMI- NATION OF COVERAGE.\u2014 ”(1) PARTICULAR TYPE OF COVERAGE NOT OF- FERED.\u2014In any case in which an issuer decides to discontinue offering a particular type of group health insurance coverage offered in the small or large group market, coverage of such type may be discontinued by the issuer in ac- cordance with applicable State law in such mar- ket only if\u2014 ”(A) the issuer provides notice to each plan sponsor provided coverage of this type in such market (and participants and beneficiaries cov- ered under such coverage) of such discontinu- ation at least 90 days prior to the date of the discontinuation of such coverage; ”(B) the issuer offers to each plan sponsor provided coverage of this type in such market, the option to purchase all (or, in the case of the large group market, any) other health insurance coverage currently being offered by the issuer to a group health plan in such market; and ”(C) in exercising the option to discontinue coverage of this type and in offering the option of coverage under subparagraph (B), the issuer acts uniformly without regard to the claims ex- perience of those sponsors or any health status- related factor relating to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for such coverage. ”(2) DISCONTINUANCE OF ALL COVERAGE.\u2014 ”(A) IN GENERAL.\u2014In any case in which a health insurance issuer elects to discontinue of- fering all health insurance coverage in the small group market or the large group market, or both markets, in a State, health insurance coverage may be discontinued by the issuer only in ac- cordance with applicable State law and if\u2014 ”(i) the issuer provides notice to the applica- ble State authority and to each plan sponsor (and participants and beneficiaries covered under such coverage) of such discontinuation at least 180 days prior to the date of the dis- continuation of such coverage; and ”(ii) all health insurance issued or delivered for issuance in the State in such market (or markets) are discontinued and coverage under such health insurance coverage in such market (or markets) is not renewed. ”(B) PROHIBITION ON MARKET REENTRY.\u2014In the case of a discontinuation under subpara- graph (A) in a market, the issuer may not pro- vide for the issuance of any health insurance coverage in the market and State involved dur- ing the 5-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed. ”(d) EXCEPTION FOR UNIFORM MODIFICATION OF COVERAGE.\u2014At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a product offered to a group health plan\u2014 ”(1) in the large group market; or ”(2) in the small group market if, for coverage that is available in such market other than only through one or more bona fide associations, such modification is consistent with State law and effective on a uniform basis among group health plans with that product. ”(e) APPLICATION TO COVERAGE OFFERED ONLY THROUGH ASSOCIATIONS.\u2014In applying this section in the case of health insurance coverage that is made available by a health insurance is- suer in the small or large group market to em- ployers only through one or more associations, a reference to ‘plan sponsor’ is deemed, with re- spect to coverage provided to an employer mem- ber of the association, to include a reference to such employer. ”SEC. 2713. DISCLOSURE OF INFORMATION. ”(a) DISCLOSURE OF INFORMATION BY HEALTH PLAN ISSUERS.\u2014In connection with the offering of any health insurance coverage to a small em- ployer, a health insurance issuer\u2014 ”(1) shall make a reasonable disclosure to such employer, as part of its solicitation and sales materials, of the availability of informa- tion described in subsection (b), and ”(2) upon request of such a small employer, provide such information. ”(b) INFORMATION DESCRIBED.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (3), with respect to a health insurance issuer offer- ing health insurance coverage to a small em- ployer, information described in this subsection is information concerning\u2014 ”(A) the provisions of such coverage concern- ing issuer’s right to change premium rates and the factors that may affect changes in premium rates; ”(B) the provisions of such coverage relating to renewability of coverage; ”(C) the provisions of such coverage relating to any preexisting condition exclusion; and ”(D) the benefits and premiums available under all health insurance coverage for which the employer is qualified. ”(2) FORM OF INFORMATION.\u2014Information under this subsection shall be provided to small employers in a manner determined to be under- standable by the average small employer, and shall be sufficient to reasonably inform small employers of their rights and obligations under the health insurance coverage. ”(3) EXCEPTION.\u2014An issuer is not required under this section to disclose any information that is proprietary and trade secret information under applicable law. ”SUBPART 3\u2014EXCLUSION OF PLANS; ENFORCEMENT; PREEMPTION ”SEC. 2721. EXCLUSION OF CERTAIN PLANS. ”(a) EXCEPTION FOR CERTAIN SMALL GROUP HEALTH PLANS.\u2014The requirements of subparts 1 and 2 shall not apply to any group health plan (and health insurance coverage offered in con- nection with a group health plan) for any plan year if, on the first day of such plan year, such plan has less than 2 participants who are cur- rent employees. ”(b) LIMITATION ON APPLICATION OF PROVI- SIONS RELATING TO GROUP HEALTH PLANS.\u2014 ”(1) IN GENERAL.\u2014The requirements of sub- parts 1 and 2 shall apply with respect to group health plans only\u2014 ”(A) subject to paragraph (2), in the case of a plan that is a nonfederal governmental plan, and ”(B) with respect to health insurance cov- erage offered in connection with a group health plan (including such a plan that is a church plan or a governmental plan). ”(2) TREATMENT OF NONFEDERAL GOVERN- MENTAL PLANS.\u2014 ”(A) ELECTION TO BE EXCLUDED.\u2014If the plan sponsor of a nonfederal governmental plan which is a group health plan to which the pro- visions of subparts 1 and 2 otherwise apply makes an election under this subparagraph (in such form and manner as the Secretary may by regulations prescribe), then the requirements of such subparts insofar as they apply directly to group health plans (and not merely to group health insurance coverage) shall not apply to such governmental plans for such period except as provided in this paragraph. ”(B) PERIOD OF ELECTION.\u2014An election under subparagraph (A) shall apply\u2014 ”(i) for a single specified plan year, or ”(ii) in the case of a plan provided pursuant to a collective bargaining agreement, for the term of such agreement. An election under clause (i) may be extended through subsequent elections under this para- graph. ”(C) NOTICE TO ENROLLEES.\u2014Under such an election, the plan shall provide for\u2014 ”(i) notice to enrollees (on an annual basis and at the time of enrollment under the plan) of the fact and consequences of such election, and ”(ii) certification and disclosure of creditable coverage under the plan with respect to enroll- ees in accordance with section 2701(e). ”(c) EXCEPTION FOR CERTAIN BENEFITS.\u2014The requirements of subparts 1 and 2 shall not apply to any group health plan (or group health in- surance coverage) in relation to its provision of excepted benefits described in section 2791(c)(1). ”(d) EXCEPTION FOR CERTAIN BENEFITS IF CERTAIN CONDITIONS MET.\u2014 ”(1) LIMITED, EXCEPTED BENEFITS.\u2014The re- quirements of subparts 1 and 2 shall not apply to any group health plan (and group health in- surance coverage offered in connection with a group health plan) in relation to its provision of excepted benefits described in section 2791(c)(2) if the benefits\u2014 ”(A) are provided under a separate policy, certificate, or contract of insurance; or ”(B) are otherwise not an integral part of the plan. ”(2) NONCOORDINATED, EXCEPTED BENEFITS.\u2014 The requirements of subparts 1 and 2 shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) in relation to its pro- vision of excepted benefits described in section 2791(c)(3) if all of the following conditions are met: ”(A) The benefits are provided under a sepa- rate policy, certificate, or contract of insurance. ”(B) There is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan main- tained by the same plan sponsor. ”(C) Such benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor. ”(3) SUPPLEMENTAL EXCEPTED BENEFITS.\u2014The requirements of this part shall not apply to any group health plan (and group health insurance coverage) in relation to its provision of excepted benefits described in section 27971(c)(4) if the benefits are provided under a separate policy, certificate, or contract of insurance. ”(e) TREATMENT OF PARTNERSHIPS.\u2014For pur- poses of this part\u2014 ”(1) TREATMENT AS A GROUP HEALTH PLAN.\u2014 Any plan, fund, or program which would not be (but for this subsection) an employee welfare benefit plan and which is established or main- tained by a partnership, to the extent that such plan, fund, or program provides medical care (including items and services paid for as medical care) to present or former partners in the part- nership or to their dependents (as defined under the terms of the plan, fund, or program), di- rectly or through insurance, reimbursement, or otherwise, shall be treated (subject to paragraph (2)) as an employee welfare benefit plan which is a group health plan. ”(2) EMPLOYER.\u2014In the case of a group health plan, the term ’employer’ also includes the partnership in relation to any partner. ”(3) PARTICIPANTS OF GROUP HEALTH PLANS.\u2014 In the case of a group health plan, the term ‘participant’ also includes\u2014 ”(A) in connection with a group health plan maintained by a partnership, an individual who is a partner in relation to the partnership, or ”(B) in connection with a group health plan maintained by a self-employed individual CONGRESSIONAL RECORD \u2014 HOUSEH9482 July 31, 1996 (under which one or more employees are partici- pants), the self-employed individual, if such individual is, or may become, eligible to receive a benefit under the plan or such individ- ual’s beneficiaries may be eligible to receive any such benefit. ”SEC. 2722. ENFORCEMENT. ”(a) STATE ENFORCEMENT.\u2014 ”(1) STATE AUTHORITY.\u2014Subject to section 2723, each State may require that health insur- ance issuers that issue, sell, renew, or offer health insurance coverage in the State in the small or large group markets meet the require- ments of this part with respect to such issuers. ”(2) FAILURE TO IMPLEMENT PROVISIONS.\u2014In the case of a determination by the Secretary that a State has failed to substantially enforce a provision (or provisions) in this part with re- spect to health insurance issuers in the State, the Secretary shall enforce such provision (or provisions) under subsection (b) insofar as they relate to the issuance, sale, renewal, and offer- ing of health insurance coverage in connection with group health plans in such State. ”(b) SECRETARIAL ENFORCEMENT AUTHOR- ITY.\u2014 ”(1) LIMITATION.\u2014The provisions of this sub- section shall apply to enforcement of a provision (or provisions) of this part only\u2014 ”(A) as provided under subsection (a)(2); and ”(B) with respect to group health plans that are nonfederal governmental plans. ”(2) IMPOSITION OF PENALTIES.\u2014In the cases described in paragraph (1)\u2014 ”(A) IN GENERAL.\u2014Subject to the succeeding provisions of this subsection, any nonfederal governmental plan that is a group health plan and any health insurance issuer that fails to meet a provision of this part applicable to such plan or issuer is subject to a civil money penalty under this subsection. ”(B) LIABILITY FOR PENALTY.\u2014In the case of a failure by\u2014 ”(i) a health insurance issuer, the issuer is liable for such penalty, or ”(ii) a group health plan that is a nonfederal governmental plan which is\u2014 ”(I) sponsored by 2 or more employers, the plan is liable for such penalty, or ”(II) not so sponsored, the employer is liable for such penalty. ”(C) AMOUNT OF PENALTY.\u2014 ”(i) IN GENERAL.\u2014The maximum amount of penalty imposed under this paragraph is $100 for each day for each individual with respect to which such a failure occurs. ”(ii) CONSIDERATIONS IN IMPOSITION.\u2014In de- termining the amount of any penalty to be as- sessed under this paragraph, the Secretary shall take into account the previous record of compli- ance of the entity being assessed with the appli- cable provisions of this part and the gravity of the violation. ”(iii) LIMITATIONS.\u2014 ”(I) PENALTY NOT TO APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILI- GENCE.\u2014No civil money penalty shall be imposed under this paragraph on any failure during any period for which it is established to the satisfac- tion of the Secretary that none of the entities against whom the penalty would be imposed knew, or exercising reasonable diligence would have known, that such failure existed. ”(II) PENALTY NOT TO APPLY TO FAILURES CORRECTED WITHIN 30 DAYS.\u2014No civil money penalty shall be imposed under this paragraph on any failure if such failure was due to reason- able cause and not to willful neglect, and such failure is corrected during the 30-day period be- ginning on the first day any of the entities against whom the penalty would be imposed knew, or exercising reasonable diligence would have known, that such failure existed. ”(D) ADMINISTRATIVE REVIEW.\u2014 ”(i) OPPORTUNITY FOR HEARING.\u2014The entity assessed shall be afforded an opportunity for hearing by the Secretary upon request made within 30 days after the date of the issuance of a notice of assessment. In such hearing the deci- sion shall be made on the record pursuant to section 554 of title 5, United States Code. If no hearing is requested, the assessment shall con- stitute a final and unappealable order. ”(ii) HEARING PROCEDURE.\u2014If a hearing is re- quested, the initial agency decision shall be made by an administrative law judge, and such decision shall become the final order unless the Secretary modifies or vacates the decision. No- tice of intent to modify or vacate the decision of the administrative law judge shall be issued to the parties within 30 days after the date of the decision of the judge. A final order which takes effect under this paragraph shall be subject to review only as provided under subparagraph (E). ”(E) JUDICIAL REVIEW.\u2014 ”(i) FILING OF ACTION FOR REVIEW.\u2014Any en- tity against whom an order imposing a civil money penalty has been entered after an agency hearing under this paragraph may obtain re- view by the United States district court for any district in which such entity is located or the United States District Court for the District of Columbia by filing a notice of appeal in such court within 30 days from the date of such order, and simultaneously sending a copy of such notice by registered mail to the Secretary. ”(ii) CERTIFICATION OF ADMINISTRATIVE RECORD.\u2014The Secretary shall promptly certify and file in such court the record upon which the penalty was imposed. ”(iii) STANDARD FOR REVIEW.\u2014The findings of the Secretary shall be set aside only if found to be unsupported by substantial evidence as pro- vided by section 706(2)(E) of title 5, United States Code. ”(iv) APPEAL.\u2014Any final decision, order, or judgment of the district court concerning such review shall be subject to appeal as provided in chapter 83 of title 28 of such Code. ”(F) FAILURE TO PAY ASSESSMENT; MAINTE- NANCE OF ACTION.\u2014 ”(i) FAILURE TO PAY ASSESSMENT.\u2014If any en- tity fails to pay an assessment after it has be- come a final and unappealable order, or after the court has entered final judgment in favor of the Secretary, the Secretary shall refer the mat- ter to the Attorney General who shall recover the amount assessed by action in the appro- priate United States district court. ”(ii) NONREVIEWABILITY.\u2014In such action the validity and appropriateness of the final order imposing the penalty shall not be subject to re- view. ”(G) PAYMENT OF PENALTIES.\u2014Except as oth- erwise provided, penalties collected under this paragraph shall be paid to the Secretary (or other officer) imposing the penalty and shall be available without appropriation and until ex- pended for the purpose of enforcing the provi- sions with respect to which the penalty was im- posed. ”SEC. 2723. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION. ”(a) CONTINUED APPLICABILITY OF STATE LAW WITH RESPECT TO HEALTH INSURANCE ISSUERS.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (2) and except as provided in subsection (b), this part and part C insofar as it relates to this part shall not be construed to supersede any provi- sion of State law which establishes, implements, or continues in effect any standard or require- ment solely relating to health insurance issuers in connection with group health insurance cov- erage except to the extent that such standard or requirement prevents the application of a re- quirement of this part. ”(2) CONTINUED PREEMPTION WITH RESPECT TO GROUP HEALTH PLANS.\u2014Nothing in this part shall be construed to affect or modify the provi- sions of section 514 of the Employee Retirement Income Security Act of 1974 with respect to group health plans. ”(b) SPECIAL RULES IN CASE OF PORTABILITY REQUIREMENTS.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (2), the provisions of this part relating to health in- surance coverage offered by a health insurance issuer supersede any provision of State law which establishes, implements, or continues in effect a standard or requirement applicable to imposition of a preexisting condition exclusion specifically governed by section 701 which dif- fers from the standards or requirements specified in such section. ”(2) EXCEPTIONS.\u2014Only in relation to health insurance coverage offered by a health insur- ance issuer, the provisions of this part do not supersede any provision of State law to the ex- tent that such provision\u2014 ”(i) substitutes for the reference to ‘6-month period’ in section 2701(a)(1) a reference to any shorter period of time; ”(ii) substitutes for the reference to ’12 months’ and ’18 months’ in section 2701(a)(2) a reference to any shorter period of time; ”(iii) substitutes for the references to ’63’ days in sections 2701(c)(2)(A) and 2701(d)(4)(A) a ref- erence to any greater number of days; ”(iv) substitutes for the reference to ’30-day period’ in sections 2701(b)(2) and 2701(d)(1) a reference to any greater period; ”(v) prohibits the imposition of any preexist- ing condition exclusion in cases not described in section 2701(d) or expands the exceptions de- scribed in such section; ”(vi) requires special enrollment periods in ad- dition to those required under section 2701(f); or ”(vii) reduces the maximum period permitted in an affiliation period under section 2701(g)(1)(B). ”(c) RULES OF CONSTRUCTION.\u2014Nothing in this part shall be construed as requiring a group health plan or health insurance coverage to pro- vide specific benefits under the terms of such plan or coverage. ”(d) DEFINITIONS.\u2014For purposes of this sec- tion\u2014 ”(1) STATE LAW.\u2014The term ‘State law’ in- cludes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State. A law of the United States applicable only to the District of Columbia shall be treated as a State law rather than a law of the United States. ”(2) STATE.\u2014The term ‘State’ includes a State (including the Northern Mariana Islands), any political subdivisions of a State or such Islands, or any agency or instrumentality of either. ”PART C\u2014DEFINITIONS; MISCELLANEOUS PROVISIONS ”SEC. 2791. DEFINITIONS. ”(a) GROUP HEALTH PLAN.\u2014 ”(1) DEFINITION.\u2014The term ‘group health plan’ means an employee welfare benefit plan (as defined in section 3(1) of the Employee Re- tirement Income Security Act of 1974) to the ex- tent that the plan provides medical care (as de- fined 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, reim- bursement, or otherwise. ”(2) MEDICAL CARE.\u2014The term ‘medical care’ means amounts paid for\u2014 ”(A) the diagnosis, cure, mitigation, treat- ment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body, ”(B) amounts paid for transportation pri- marily for and essential to medical care referred to in subparagraph (A), and ”(C) amounts paid for insurance covering medical care referred to in subparagraphs (A) and (B). ”(3) TREATMENT OF CERTAIN PLANS AS GROUP HEALTH PLAN FOR NOTICE PROVISION.\u2014A pro- gram under which creditable coverage described in subparagraph (C), (D), (E), or (F) of section 2701(c)(1) is provided shall be treated as a group health plan for purposes of applying section 2701(e). CONGRESSIONAL RECORD \u2014 HOUSE H9483July 31, 1996 ”(b) DEFINITIONS RELATING TO HEALTH INSUR- ANCE.\u2014 ”(1) HEALTH INSURANCE COVERAGE.\u2014The term ‘health insurance coverage’ means benefits con- sisting of medical care (provided directly, through insurance or reimbursement, or other- wise 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 or- ganization contract offered by a health insur- ance issuer. ”(2) HEALTH INSURANCE ISSUER.\u2014The term ‘health insurance issuer’ means an insurance company, insurance service, or insurance orga- nization (including a health maintenance orga- nization, as defined in paragraph (3)) 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. ”(3) HEALTH MAINTENANCE ORGANIZATION.\u2014 The term ‘health maintenance organization’ means\u2014 ”(A) a Federally qualified health mainte- nance organization (as defined in section 1301(a)), ”(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. ”(4) GROUP HEALTH INSURANCE COVERAGE.\u2014 The term ‘group health insurance coverage’ means, in connection with a group health plan, health insurance coverage offered in connection with such plan. ”(5) INDIVIDUAL HEALTH INSURANCE COV- ERAGE.\u2014The term ‘individual health insurance coverage’ means health insurance coverage of- fered to individuals in the individual market, but does not include short-term limited duration insurance. ”(c) EXCEPTED BENEFITS.\u2014For purposes of this title, the term ‘excepted benefits’ means benefits under one or more (or any combination thereof) of the following: ”(1) BENEFITS NOT SUBJECT TO REQUIRE- MENTS.\u2014 ”(A) Coverage only for accident, or disability income insurance, or any combination thereof. ”(B) Coverage issued as a supplement to li- ability insurance. ”(C) Liability insurance, including general li- ability insurance and automobile liability insur- ance. ”(D) Workers’ compensation or similar insur- ance. ”(E) Automobile medical payment insurance. ”(F) Credit-only insurance. ”(G) Coverage for on-site medical clinics. ”(H) Other similar insurance coverage, speci- fied in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits. ”(2) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED SEPARATELY.\u2014 ”(A) Limited scope dental or vision benefits. ”(B) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof. ”(C) Such other similar, limited benefits as are specified in regulations. ”(3) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED AS INDEPENDENT, NONCOORDINATED BENEFITS.\u2014 ”(A) Coverage only for a specified disease or illness. ”(B) Hospital indemnity or other fixed indem- nity insurance. ”(4) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED AS SEPARATE INSURANCE POLICY.\u2014 Medicare supplemental health insurance (as de- fined under section 1882(g)(1) of the Social Secu- rity Act), coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code, and similar supplemental coverage provided to coverage under a group health plan. ”(d) OTHER DEFINITIONS.\u2014 ”(1) APPLICABLE STATE AUTHORITY.\u2014The term ‘applicable State authority’ means, with respect to a health insurance issuer in a State, the State insurance commissioner or official or officials designated by the State to enforce the require- ments of this title for the State involved with re- spect to such issuer. ”(2) BENEFICIARY.\u2014The term ‘beneficiary’ has the meaning given such term under section 3(8) of the Employee Retirement Income Security Act of 1974. ”(3) BONA FIDE ASSOCIATION.\u2014The term ‘bona fide association’ means, with respect to health insurance coverage offered in a State, an asso- ciation which\u2014 ”(A) has been actively in existence for at least 5 years; ”(B) has been formed and maintained in good faith for purposes other than obtaining insur- ance; ”(C) does not condition membership in the as- sociation on any health status-related factor re- lating to an individual (including an employee of an employer or a dependent of an employee); ”(D) makes health insurance coverage offered through the association available to all members regardless of any health status-related factor re- lating to such members (or individuals eligible for coverage through a member); ”(E) does not make health insurance coverage offered through the association available other than in connection with a member of the asso- ciation; and ”(F) meets such additional requirements as may be imposed under State law. ”(4) COBRA CONTINUATION PROVISION.\u2014The term ‘COBRA continuation provision’ means any of the following: ”(A) Section 4980B of the Internal Revenue Code of 1986, other than subsection (f)(1) of such section insofar as it relates to pediatric vaccines. ”(B) Part 6 of subtitle B of title I of the Em- ployee Retirement Income Security Act of 1974, other than section 609 of such Act. ”(C) Title XXII of this Act. ”(5) EMPLOYEE.\u2014The term ’employee’ has the meaning given such term under section 3(6) of the Employee Retirement Income Security Act of 1974. ”(6) EMPLOYER.\u2014The term ’employer’ has the meaning given such term under section 3(5) of the Employee Retirement Income Security Act of 1974, except that such term shall include only employers of two or more employees. ”(7) CHURCH PLAN.\u2014The term ‘church plan’ has the meaning given such term under section 3(33) of the Employee Retirement Income Secu- rity Act of 1974. ”(8) GOVERNMENTAL PLAN.\u2014(A) The term ‘governmental plan’ has the meaning given such term under section 3(32) of the Employee Retire- ment Income Security Act of 1974 and any Fed- eral governmental plan. ”(B) FEDERAL GOVERNMENTAL PLAN.\u2014The term ‘Federal governmental plan’ means a gov- ernmental plan established or maintained for its employees by the Government of the United States or by any agency or instrumentality of such Government. ”(C) NONFEDERAL GOVERNMENTAL PLAN.\u2014The term ‘nonfederal governmental plan’ means a governmental plan that is not a Federal govern- mental plan. ”(9) HEALTH STATUS-RELATED FACTOR.\u2014The term ‘health status-related factor’ means any of the factors described in section 2702(a)(1). ”(10) NETWORK PLAN.\u2014The term ‘network plan’ means health insurance coverage of a health insurance issuer under which the financ- ing and delivery of medical care (including items and services paid for as medical care) are pro- vided, in whole or in part, through a defined set of providers under contract with the issuer. ”(11) PARTICIPANT.\u2014The term ‘participant’ has the meaning given such term under section 3(7) of the Employee Retirement Income Security Act of 1974. ”(12) PLACED FOR ADOPTION DEFINED.\u2014The term ‘placement’, or being ‘placed’, for adop- tion, in connection with any placement for adoption of a child with any person, means the assumption and retention by such person of a legal obligation for total or partial support of such child in anticipation of adoption of such child. The child’s placement with such person terminates upon the termination of such legal obligation. ”(13) PLAN SPONSOR.\u2014The term ‘plan sponsor’ has the meaning given such term under section 3(16)(B) of the Employee Retirement Income Se- curity Act of 1974. ”(14) STATE.\u2014The term ‘State’ means each of the several States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, Amer- ican Samoa, and the Northern Mariana Islands. ”(e) DEFINITIONS RELATING TO MARKETS AND SMALL EMPLOYERS.\u2014For purposes of this title: ”(1) INDIVIDUAL MARKET.\u2014 ”(A) IN GENERAL.\u2014The term ‘individual mar- ket’ means the market for health insurance cov- erage offered to individuals other than in con- nection with a group health plan. ”(B) TREATMENT OF VERY SMALL GROUPS.\u2014 ”(i) IN GENERAL.\u2014Subject to clause (ii), such terms includes coverage offered in connection with a group health plan that has fewer than two participants as current employees on the first day of the plan year. ”(ii) STATE EXCEPTION.\u2014Clause (i) shall not apply in the case of a State that elects to regu- late the coverage described in such clause as coverage in the small group market. ”(2) LARGE EMPLOYER.\u2014The term ‘large em- ployer’ means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an av- erage of at least 51 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year. ”(3) LARGE GROUP MARKET.\u2014The term ‘large group market’ means the health insurance mar- ket under which individuals obtain health in- surance coverage (directly or through any ar- rangement) on behalf of themselves (and their dependents) through a group health plan main- tained by a large employer. ”(4) SMALL EMPLOYER.\u2014The term ‘small em- ployer’ means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an av- erage of at least 2 but not more than 50 employ- ees on business days during the preceding cal- endar year and who employs at least 2 employ- ees on the first day of the plan year. ”(5) SMALL GROUP MARKET.\u2014The term ‘small group market’ means the health insurance mar- ket under which individuals obtain health in- surance coverage (directly or through any ar- rangement) on behalf of themselves (and their dependents) through a group health plan main- tained by a small employer. ”(6) APPLICATION OF CERTAIN RULES IN DETER- MINATION OF EMPLOYER SIZE.\u2014For purposes of this subsection\u2014 ”(A) APPLICATION OF AGGREGATION RULE FOR EMPLOYERS.\u2014all persons treated as a single em- ployer 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 PRECED- ING YEAR.\u2014In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small or large 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.\u2014Any reference in this subsection to an employer shall include a ref- erence to any predecessor of such employer. CONGRESSIONAL RECORD \u2014 HOUSEH9484 July 31, 1996 ”SEC. 2792. REGULATIONS. ”The Secretary, consistent with section 104 of the Health Care Portability and Accountability Act of 1996, may promulgate such regulations as may be necessary or appropriate to carry out the provisions of this title. The Secretary may promulgate any interim final rules as the Sec- retary determines are appropriate to carry out this title.”. (b) APPLICATION OF RULES BY CERTAIN HEALTH MAINTENANCE ORGANIZATIONS.\u2014Section 1301 of such Act (42 U.S.C. 300e) is amended by adding at the end the following new subsection: ”(d) An organization that offers health bene- fits coverage shall not be considered as failing to meet the requirements of this section notwith- standing that it provides, with respect to cov- erage offered in connection with a group health plan in the small or large group market (as de- fined in section 2791(e)), an affiliation period consistent with the provisions of section 2701(g).”. (c) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014Except as provided in this subsection, part A of title XXVII of the Public Health Service Act (as added by subsection (a)) shall apply with respect to group health plans, and health insurance coverage offered in con- nection with group health plans, for plan years beginning after June 30, 1997. (2) DETERMINATION OF CREDITABLE COV- ERAGE.\u2014 (A) PERIOD OF COVERAGE.\u2014 (i) IN GENERAL.\u2014Subject to clause (ii), no pe- riod before July 1, 1996, shall be taken into ac- count under part A of title XXVII of the Public Health Service Act (as added by this section) in determining creditable coverage. (ii) SPECIAL RULE FOR CERTAIN PERIODS.\u2014The Secretary of Health and Human Services, con- sistent with section 104, shall provide for a proc- ess whereby individuals who need to establish creditable coverage for periods before July 1, 1996, and who would have such coverage cred- ited but for clause (i) may be given credit for creditable coverage for such periods through the presentation of documents or other means. (B) CERTIFICATIONS, ETC.\u2014 (i) IN GENERAL.\u2014Subject to clauses (ii) and (iii), subsection (e) of section 2701 of the Public Health Service Act (as added by this section) shall apply to events occurring after June 30, 1996. (ii) NO CERTIFICATION REQUIRED TO BE PRO- VIDED BEFORE JUNE 1, 1997.\u2014In no case is a cer- tification required to be provided under such subsection before June 1, 1997. (iii) CERTIFICATION ONLY ON WRITTEN REQUEST FOR EVENTS OCCURRING BEFORE OCTOBER 1, 1996.\u2014In the case of an event occurring after June 30, 1996, and before October 1, 1996, a cer- tification is not required to be provided under such subsection unless an individual (with re- spect to whom the certification is otherwise re- quired to be made) requests such certification in writing. (C) TRANSITIONAL RULE.\u2014In the case of an in- dividual who seeks to establish creditable cov- erage for any period for which certification is not required because it relates to an event oc- curring before June 30, 1996\u2014 (i) the individual may present other credible evidence of such coverage in order to establish the period of creditable coverage; and (ii) a group health plan and a health insur- ance issuer shall not be subject to any penalty or enforcement action with respect to the plan’s or issuer’s crediting (or not crediting) such cov- erage if the plan or issuer has sought to comply in good faith with the applicable requirements under the amendments made by this section. (3) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS.\u2014Except as provided in paragraph (2)(B), in the case of a group health plan main- tained pursuant to 1 or more collective bargain- ing agreements between employee representa- tives and one or more employers ratified before the date of the enactment of this Act, part A of title XXVII of the Public Health Service Act (other than section 2701(e) thereof) shall not apply to plan years beginning before the later of\u2014 (A) the date on which the last of the collective bargaining agreements relating to the plan ter- minates (determined without regard to any ex- tension thereof agreed to after the date of the enactment of this Act), or (B) July 1, 1997. For purposes of subparagraph (A), any plan amendment made pursuant to a collective bar- gaining agreement relating to the plan which amends the plan solely to conform to any re- quirement of such part shall not be treated as a termination of such collective bargaining agree- ment. (4) TIMELY REGULATIONS.\u2014The Secretary of Health and Human Services, consistent with section 104, shall first issue by not later than April 1, 1997, such regulations as may be nec- essary to carry out the amendments made by this section and section 111. (5) LIMITATION ON ACTIONS.\u2014No enforcement action shall be taken, pursuant to the amend- ments made by this section, against a group health plan or health insurance issuer with re- spect to a violation of a requirement imposed by such amendments before January 1, 1998, or, if later, the date of issuance of regulations re- ferred to in paragraph (4), if the plan or issuer has sought to comply in good faith with such re- quirements. (d) MISCELLANEOUS CORRECTION.\u2014Section 2208(1) of the Public Health Service Act (42 U.S.C. 300bb 8(1)) is amended by striking ”sec- tion 162(i)(2)” and inserting ”5000(b)”. SEC. 103. REFERENCE TO IMPLEMENTATION THROUGH THE INTERNAL REVENUE CODE OF 1986. For provisions amending the Internal Revenue Code of 1986 to provide for application and en- forcement of rules for group health plans similar to those provided under the amendments made by section 101(a), see section 401. SEC. 104. ASSURING COORDINATION. The Secretary of the Treasury, the Secretary of Health and Human Services, and the Sec- retary of Labor shall ensure, through the execu- tion of an interagency memorandum of under- standing among such Secretaries, that\u2014 (1) regulations, rulings, and interpretations is- sued by such Secretaries relating to the same matter over which two or more such Secretaries have responsibility under this subtitle (and the amendments made by this subtitle and section 401) are administered so as to have the same ef- fect at all times; and (2) coordination of policies relating to enforc- ing the same requirements through such Sec- retaries in order to have a coordinated enforce- ment strategy that avoids duplication of en- forcement efforts and assigns priorities in en- forcement. Subtitle B\u2014Individual Market Rules SEC. 111. AMENDMENT TO PUBLIC HEALTH SERV- ICE ACT. (a) IN GENERAL.\u2014Title XXVII of the Public Health Service Act, as added by section 102(a) of this Act, is amended by inserting after part A the following new part: ”PART B\u2014INDIVIDUAL MARKET RULES ”SEC. 2741. GUARANTEED AVAILABILITY OF INDI- VIDUAL HEALTH INSURANCE COV- ERAGE TO CERTAIN INDIVIDUALS WITH PRIOR GROUP COVERAGE. ”(a) GUARANTEED AVAILABILITY.\u2014 ”(1) IN GENERAL.\u2014Subject to the succeeding subsections of this section and section 2744, each health insurance issuer that offers health insur- ance coverage (as defined in section 2791(b)(1)) in the individual market in a State may not, with respect to an eligible individual (as defined in subsection (b)) desiring to enroll in individual health insurance coverage\u2014 ”(A) decline to offer such coverage to, or deny enrollment of, such individual; or ”(B) impose any preexisting condition exclu- sion (as defined in section 2701(b)(1)(A)) with re- spect to such coverage. ”(2) SUBSTITUTION BY STATE OF ACCEPTABLE ALTERNATIVE MECHANISM.\u2014The requirement of paragraph (1) shall not apply to health insur- ance coverage offered in the individual market in a State in which the State is implementing an acceptable alternative mechanism under section 2744. ”(b) ELIGIBLE INDIVIDUAL DEFINED.\u2014In this part, the term ‘eligible individual’ means an in- dividual\u2014 ”(1)(A) for whom, as of the date on which the individual seeks coverage under this section, the aggregate of the periods of creditable coverage (as defined in section 2701(c)) is 18 or more months and (B) whose most recent prior cred- itable coverage was under a group health plan, governmental plan, or church plan (or health insurance coverage offered in connection with any such plan); ”(2) who is not eligible for coverage under (A) a group health plan, (B) part A or part B of title XVIII of the Social Security Act, or (C) a State plan under title XIX of such Act (or any successor program), and does not have other health insurance coverage; ”(3) with respect to whom the most recent cov- erage within the coverage period described in paragraph (1)(A) was not terminated based on a factor described in paragraph (1) or (2) of sec- tion 2712(b) (relating to nonpayment of pre- miums or fraud); ”(4) if the individual had been offered the op- tion of continuation coverage under a COBRA continuation provision or under a similar State program, who elected such coverage; and ”(5) who, if the individual elected such con- tinuation coverage, has exhausted such con- tinuation coverage under such provision or pro- gram. ”(c) ALTERNATIVE COVERAGE PERMITTED WHERE NO STATE MECHANISM.\u2014 ”(1) IN GENERAL.\u2014In the case of health insur- ance coverage offered in the individual market in a State in which the State is not implement- ing an acceptable alternative mechanism under section 2744, the health insurance issuer may elect to limit the coverage offered under sub- section (a) so long as it offers at least two dif- ferent policy forms of health insurance coverage both of which\u2014 ”(A) are designed for, made generally avail- able to, and actively marketed to, and enroll both eligible and other individuals by the issuer; and ”(B) meet the requirement of paragraph (2) or (3), as elected by the issuer. For purposes of this subsection, policy forms which have different cost-sharing arrangements or different riders shall be considered to be dif- ferent policy forms. ”(2) CHOICE OF MOST POPULAR POLICY FORMS.\u2014The requirement of this paragraph is met, for health insurance coverage policy forms offered by an issuer in the individual market, if the issuer offers the policy forms for individual health insurance coverage with the largest, and next to largest, premium volume of all such pol- icy forms offered by the issuer in the State or applicable marketing or service area (as may be prescribed in regulation) by the issuer in the in- dividual market in the period involved. ”(3) CHOICE OF 2 POLICY FORMS WITH REP- RESENTATIVE COVERAGE.\u2014 ”(A) IN GENERAL.\u2014The requirement of this paragraph is met, for health insurance coverage policy forms offered by an issuer in the individ- ual market, if the issuer offers a lower-level cov- erage policy form (as defined in subparagraph (B)) and a higher-level coverage policy form (as defined in subparagraph (C)) each of which in- cludes benefits substantially similar to other in- dividual health insurance coverage offered by the issuer in that State and each of which is covered under a method described in section CONGRESSIONAL RECORD \u2014 HOUSE H9485July 31, 1996 2744(c)(3)(A) (relating to risk adjustment, risk spreading, or financial subsidization). ”(B) LOWER-LEVEL OF COVERAGE DESCRIBED.\u2014 A policy form is described in this subparagraph if the actuarial value of the benefits under the coverage is at least 85 percent but not greater than 100 percent of a weighted average (de- scribed in subparagraph (D)). ”(C) HIGHER-LEVEL OF COVERAGE DE- SCRIBED.\u2014A policy form is described in this sub- paragraph if\u2014 ”(i) the actuarial value of the benefits under the coverage is at least 15 percent greater than the actuarial value of the coverage described in subparagraph (B) offered by the issuer in the area involved; and ”(ii) the actuarial value of the benefits under the coverage is at least 100 percent but not greater than 120 percent of a weighted average (described in subparagraph (D)). ”(D) WEIGHTED AVERAGE.\u2014For purposes of this paragraph, the weighted average described in this subparagraph is the average actuarial value of the benefits provided by all the health insurance coverage issued (as elected by the is- suer) either by that issuer or by all issuers in the State in the individual market during the pre- vious year (not including coverage issued under this section), weighted by enrollment for the dif- ferent coverage. ”(4) ELECTION.\u2014The issuer elections under this subsection shall apply uniformly to all eligi- ble individuals in the State for that issuer. Such an election shall be effective for policies offered during a period of not shorter than 2 years. ”(5) ASSUMPTIONS.\u2014For purposes of para- graph (3), the actuarial value of benefits pro- vided under individual health insurance cov- erage shall be calculated based on a standard- ized population and a set of standardized utili- zation and cost factors. ”(d) SPECIAL RULES FOR NETWORK PLANS.\u2014 ”(1) IN GENERAL.\u2014In the case of a health in- surance issuer that offers health insurance cov- erage in the individual market through a net- work plan, the issuer may\u2014 ”(A) limit the individuals who may be enrolled under such coverage to those who live, reside, or work within the service area for such network plan; and ”(B) within the service area of such plan, deny such coverage to such individuals if the is- suer has demonstrated, if required, to the appli- cable State authority that\u2014 ”(i) it will not have the capacity to deliver services adequately to additional individual en- rollees because of its obligations to existing group contract holders and enrollees and indi- vidual enrollees, and ”(ii) it is applying this paragraph uniformly to individuals without regard to any health sta- tus-related factor of such individuals and with- out regard to whether the individuals are eligi- ble individuals. ”(2) 180-DAY SUSPENSION UPON DENIAL OF COV- ERAGE.\u2014An issuer, upon denying health insur- ance coverage in any service area in accordance with paragraph (1)(B), may not offer coverage in the individual market within such service area for a period of 180 days after such coverage is denied. ”(e) APPLICATION OF FINANCIAL CAPACITY LIMITS.\u2014 ”(1) IN GENERAL.\u2014A health insurance issuer may deny health insurance coverage in the indi- vidual market to an eligible individual if the is- suer has demonstrated, if required, to the appli- cable State authority that\u2014 ”(A) it does not have the financial reserves necessary to underwrite additional coverage; and ”(B) it is applying this paragraph uniformly to all individuals in the individual market in the State consistent with applicable State law and without regard to any health status-related fac- tor of such individuals and without regard to whether the individuals are eligible individuals. ”(2) 180-DAY SUSPENSION UPON DENIAL OF COV- ERAGE.\u2014An issuer upon denying individual health insurance coverage in any service area in accordance with paragraph (1) may not offer such coverage in the individual market within such service area for a period of 180 days after the date such coverage is denied or until the is- suer has demonstrated, if required under appli- cable State law, to the applicable State author- ity that the issuer has sufficient financial re- serves to underwrite additional coverage, which- ever is later. A State may provide for the appli- cation of this paragraph on a service-area-spe- cific basis. ”(e) MARKET REQUIREMENTS.\u2014 ”(1) IN GENERAL.\u2014The provisions of sub- section (a) shall not be construed to require that a health insurance issuer offering health insur- ance coverage only in connection with group health plans or through one or more bona fide associations, or both, offer such health insur- ance coverage in the individual market. ”(2) CONVERSION POLICIES.\u2014A health insur- ance issuer offering health insurance coverage in connection with group health plans under this title shall not be deemed to be a health in- surance issuer offering individual health insur- ance coverage solely because such issuer offers a conversion policy. ”(f) CONSTRUCTION.\u2014Nothing in this section shall be construed\u2014 ”(1) to restrict the amount of the premium rates that an issuer may charge an individual for health insurance coverage provided in the individual market under applicable State law; or ”(2) to prevent a health insurance issuer of- fering health insurance coverage in the individ- ual market from establishing premium discounts or rebates or modifying otherwise applicable co- payments or deductibles in return for adherence to programs of health promotion and disease prevention. ”SEC. 2742. GUARANTEED RENEWABILITY OF IN- DIVIDUAL HEALTH INSURANCE COV- ERAGE. ”(a) IN GENERAL.\u2014Except as provided in this section, a health insurance issuer that provides individual health insurance coverage to an indi- vidual shall renew or continue in force such coverage at the option of the individual. ”(b) GENERAL EXCEPTIONS.\u2014A health insur- ance issuer may nonrenew or discontinue health insurance coverage of an individual in the indi- vidual market based only on one or more of the following: ”(1) NONPAYMENT OF PREMIUMS.\u2014The indi- vidual has failed to pay premiums or contribu- tions in accordance with the terms of the health insurance coverage or the issuer has not re- ceived timely premium payments. ”(2) FRAUD.\u2014The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of mate- rial fact under the terms of the coverage. ”(3) TERMINATION OF PLAN.\u2014The issuer is ceasing to offer coverage in the individual mar- ket in accordance with subsection (c) and appli- cable State law. ”(4) MOVEMENT OUTSIDE SERVICE AREA.\u2014In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, the individual no longer resides, lives, or works in the service area (or in an area for which the issuer is authorized to do business) but only if such coverage is ter- minated under this paragraph uniformly with- out regard to any health status-related factor of covered individuals. ”(5) ASSOCIATION MEMBERSHIP CEASES.\u2014In the case of health insurance coverage that is made available in the individual market only through one or more bona fide associations, the member- ship of the individual in the association (on the basis of which the coverage is provided) ceases but only if such coverage is terminated under this paragraph uniformly without regard to any health status-related factor of covered individ- uals. ”(c) REQUIREMENTS FOR UNIFORM TERMI- NATION OF COVERAGE.\u2014 ”(1) PARTICULAR TYPE OF COVERAGE NOT OF- FERED.\u2014In any case in which an issuer decides to discontinue offering a particular type of health insurance coverage offered in the indi- vidual market, coverage of such type may be discontinued by the issuer only if\u2014 ”(A) the issuer provides notice to each covered individual provided coverage of this type in such market of such discontinuation at least 90 days prior to the date of the discontinuation of such coverage; ”(B) the issuer offers to each individual in the individual market provided coverage of this type, the option to purchase any other individ- ual health insurance coverage currently being offered by the issuer for individuals in such market; and ”(C) in exercising the option to discontinue coverage of this type and in offering the option of coverage under subparagraph (B), the issuer acts uniformly without regard to any health status-related factor of enrolled individuals or individuals who may become eligible for such coverage. ”(2) DISCONTINUANCE OF ALL COVERAGE.\u2014 ”(A) IN GENERAL.\u2014Subject to subparagraph (C), in any case in which a health insurance is- suer elects to discontinue offering all health in- surance coverage in the individual market in a State, health insurance coverage may be discon- tinued by the issuer only if\u2014 ”(i) the issuer provides notice to the applica- ble State authority and to each individual of such discontinuation at least 180 days prior to the date of the expiration of such coverage, and ”(ii) all health insurance issued or delivered for issuance in the State in such market are dis- continued and coverage under such health in- surance coverage in such market is not renewed. ”(B) PROHIBITION ON MARKET REENTRY.\u2014In the case of a discontinuation under subpara- graph (A) in the individual market, the issuer may not provide for the issuance of any health insurance coverage in the market and State in- volved during the 5-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed. ”(d) EXCEPTION FOR UNIFORM MODIFICATION OF COVERAGE.\u2014At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a policy form offered to individuals in the individual market so long as such modification is consistent with State law and effective on a uniform basis among all indi- viduals with that policy form. ”(e) APPLICATION TO COVERAGE OFFERED ONLY THROUGH ASSOCIATIONS.\u2014In applying this section in the case of health insurance coverage that is made available by a health insurance is- suer in the individual market to individuals only through one or more associations, a ref- erence to an ‘individual’ is deemed to include a reference to such an association (of which the individual is a member). ”SEC. 2743. CERTIFICATION OF COVERAGE. ”The provisions of section 2701(e) shall apply to health insurance coverage offered by a health insurance issuer in the individual market in the same manner as it applies to health insurance coverage offered by a health insurance issuer in connection with a group health plan in the small or large group market. ”SEC. 2744. STATE FLEXIBILITY IN INDIVIDUAL MARKET REFORMS. ”(a) WAIVER OF REQUIREMENTS WHERE IM- PLEMENTATION OF ACCEPTABLE ALTERNATIVE MECHANISM.\u2014 ”(1) IN GENERAL.\u2014The requirements of section 2741 shall not apply with respect to health in- surance coverage offered in the individual mar- ket in the State so long as a State is found to be implementing, in accordance with this section and consistent with section 2746(b), an alter- native mechanism (in this section referred to as an ‘acceptable alternative mechanism’)\u2014 ”(A) under which all eligible individuals are provided a choice of health insurance coverage; CONGRESSIONAL RECORD \u2014 HOUSEH9486 July 31, 1996 ”(B) under which such coverage does not im- pose any preexisting condition exclusion with respect to such coverage; ”(C) under which such choice of coverage in- cludes at least one policy form of coverage that is comparable to comprehensive health insur- ance coverage offered in the individual market in such State or that is comparable to a stand- ard option of coverage available under the group or individual health insurance laws of such State; and ”(D) in a State which is implementing\u2014 ”(i) a model act described in subsection (c)(1), ”(ii) a qualified high risk pool described in subsection (c)(2), or ”(iii) a mechanism described in subsection (c)(3). ”(2) PERMISSIBLE FORMS OF MECHANISMS.\u2014A private or public individual health insurance mechanism (such as a health insurance coverage pool or programs, mandatory group conversion policies, guaranteed issue of one or more plans of individual health insurance coverage, or open enrollment by one or more health insurance is- suers), or combination of such mechanisms, that is designed to provide access to health benefits for individuals in the individual market in the State in accordance with this section may con- stitute an acceptable alternative mechanism. ”(b) APPLICATION OF ACCEPTABLE ALTER- NATIVE MECHANISMS.\u2014 ”(1) PRESUMPTION.\u2014 ”(A) IN GENERAL.\u2014Subject to the succeeding provisions of this subsection, a State is pre- sumed to be implementing an acceptable alter- native mechanism in accordance with this sec- tion as of July 1, 1997, if, by not later than April 1, 1997, the chief executive officer of a State\u2014 ”(i) notifies the Secretary that the State has enacted or intends to enact (by not later than January 1, 1998, or July 1, 1998, in the case of a State described in subparagraph (B)(ii)) any necessary legislation to provide for the imple- mentation of a mechanism reasonably designed to be an acceptable alternative mechanism as of January 1, 1998, (or, in the case of a State de- scribed in subparagraph (B)(ii), July 1, 1998); and ”(ii) provides the Secretary with such infor- mation as the Secretary may require to review the mechanism and its implementation (or pro- posed implementation) under this subsection. ”(B) DELAY PERMITTED FOR CERTAIN STATES.\u2014 ”(i) EFFECT OF DELAY.\u2014In the case of a State described in clause (ii) that provides notice under subparagraph (A)(i), for the presumption to continue on and after July 1, 1998, the chief executive officer of the State by April 1, 1998\u2014 ”(I) must notify the Secretary that the State has enacted any necessary legislation to provide for the implementation of a mechanism reason- ably designed to be an acceptable alternative mechanism as of July 1, 1998; and ”(II) must provide the Secretary with such in- formation as the Secretary may require to re- view the mechanism and its implementation (or proposed implementation) under this subsection. ”(ii) STATES DESCRIBED.\u2014A State described in this clause is a State that has a legislature that does not meet within the 12-month period begin- ning on the date of enactment of this Act. ”(C) CONTINUED APPLICATION.\u2014In order for a mechanism to continue to be presumed to be an acceptable alternative mechanism, the State shall provide the Secretary every 3 years with information described in subparagraph (A)(ii) or (B)(i)(II) (as the case may be). ”(2) NOTICE.\u2014If the Secretary finds, after re- view of information provided under paragraph (1) and in consultation with the chief executive officer of the State and the insurance commis- sioner or chief insurance regulatory official of the State, that such a mechanism is not an ac- ceptable alternative mechanism or is not (or no longer) being implemented, the Secretary\u2014 ”(A) shall notify the State of\u2014 ”(i) such preliminary determination, and ”(ii) the consequences under paragraph (3) of a failure to implement such a mechanism; and ”(B) shall permit the State a reasonable op- portunity in which to modify the mechanism (or to adopt another mechanism) in a manner so that may be an acceptable alternative mecha- nism or to provide for implementation of such a mechanism. ”(3) FINAL DETERMINATION.\u2014If, after provid- ing notice and opportunity under paragraph (2), the Secretary finds that the mechanism is not an acceptable alternative mechanism or the State is not implementing such a mechanism, the Sec- retary shall notify the State that the State is no longer considered to be implementing an accept- able alternative mechanism and that the re- quirements of section 2741 shall apply to health insurance coverage offered in the individual market in the State, effective as of a date speci- fied in the notice. ”(4) LIMITATION ON SECRETARIAL AUTHOR- ITY.\u2014The Secretary shall not make a determina- tion under paragraph (2) or (3) on any basis other than the basis that a mechanism is not an acceptable alternative mechanism or is not being implemented. ”(5) FUTURE ADOPTION OF MECHANISMS.\u2014If a State, after January 1, 1997, submits the notice and information described in paragraph (1), un- less the Secretary makes a finding described in paragraph (3) within the 90-day period begin- ning on the date of submission of the notice and information, the mechanism shall be considered to be an acceptable alternative mechanism for purposes of this section, effective 90 days after the end of such period, subject to the second sentence of paragraph (1). ”(c) PROVISION RELATED TO RISK.\u2014 ”(1) ADOPTION OF NAIC MODELS.\u2014The model act referred to in subsection (a)(1)(D)(i) is the Small Employer and Individual Health Insur- ance Availability Model Act (adopted by the Na- tional Association of Insurance Commissioners on June 3, 1996) insofar as it applies to individ- ual health insurance coverage or the Individual Health Insurance Portability Model Act (also adopted by such Association on such date). ”(2) QUALIFIED HIGH RISK POOL.\u2014For pur- poses of subsection (a)(1)(D)(ii), a ‘qualified high risk pool’ described in this paragraph is a high risk pool that\u2014 ”(A) provides to all eligible individuals health insurance coverage (or comparable coverage) that does not impose any preexisting condition exclusion with respect to such coverage for all eligible individuals, and ”(B) provides for premium rates and covered benefits for such coverage consistent with stand- ards included in the NAIC Model Health Plan for Uninsurable Individuals Act (as in effect as of the date of the enactment of this title). ”(3) OTHER MECHANISMS.\u2014For purposes of subsection (a)(1)(D)(iii), a mechanism described in this paragraph\u2014 ”(A) provides for risk adjustment, risk spread- ing, or a risk spreading mechanism (among issu- ers or policies of an issuer) or otherwise provides for some financial subsidization for eligible indi- viduals, including through assistance to partici- pating issuers; or ”(B) is a mechanism under which each eligible individual is provided a choice of all individual health insurance coverage otherwise available. ”SEC. 2745. ENFORCEMENT. ”(a) STATE ENFORCEMENT.\u2014 ”(1) STATE AUTHORITY.\u2014Subject to section 2746, each State may require that health insur- ance issuers that issue, sell, renew, or offer health insurance coverage in the State in the in- dividual market meet the requirements estab- lished under this part with respect to such issu- ers. ”(2) FAILURE TO IMPLEMENT REQUIREMENTS.\u2014 In the case of a State that fails to substantially enforce the requirements set forth in this part with respect to health insurance issuers in the State, the Secretary shall enforce the require- ments of this part under subsection (b) insofar as they relate to the issuance, sale, renewal, and offering of health insurance coverage in the individual market in such State. ”(b) SECRETARIAL ENFORCEMENT AUTHOR- ITY.\u2014The Secretary shall have the same author- ity in relation to enforcement of the provisions of this part with respect to issuers of health in- surance coverage in the individual market in a State as the Secretary has under section 2722(b)(2) in relation to the enforcement of the provisions of part A with respect to issuers of health insurance coverage in the small group market in the State. ”SEC. 2746. PREEMPTION. ”(a) IN GENERAL.\u2014Subject to subsection (b), nothing in this part (or part C insofar as it ap- plies to this part) shall be construed to prevent a State from establishing, implementing, or con- tinuing in effect standards and requirements unless such standards and requirements prevent the application of a requirement of this part. ”(b) RULES OF CONSTRUCTION.\u2014Nothing in this part (or part C insofar as it applies to this part) shall be construed to affect or modify the provisions of section 514 of the Employee Retire- ment Income Security Act of 1974 (29 U.S.C. 1144). ”SEC. 2747. GENERAL EXCEPTIONS. ”(a) EXCEPTION FOR CERTAIN BENEFITS.\u2014The requirements of this part shall not apply to any health insurance coverage in relation to its pro- vision of excepted benefits described in section 2791(c)(1). ”(b) EXCEPTION FOR CERTAIN BENEFITS IF CERTAIN CONDITIONS MET.\u2014The requirements of this part shall not apply to any health insur- ance coverage in relation to its provision of ex- cepted benefits described in paragraph (2), (3), or (4) of section 2791(c) if the benefits are pro- vided under a separate policy, certificate, or contract of insurance.”. (b) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014Except as provided in this subsection, part B of title XXVII of the Public Health Service Act (as inserted by subsection (a)) shall apply with respect to health insurance coverage offered, sold, issued, renewed, in ef- fect, or operated in the individual market after June 30, 1997, regardless of when a period of creditable coverage occurs. (2) APPLICATION OF CERTIFICATION RULES.\u2014 The provisions of section 102(d)(2) of this Act shall apply to section 2743 of the Public Health Service Act in the same manner as it applies to section 2701(e) of such Act. Subtitle C\u2014General and Miscellaneous Provisions SEC. 191. HEALTH COVERAGE AVAILABILITY STUDIES. (a) STUDIES.\u2014 (1) STUDY ON EFFECTIVENESS OF REFORMS.\u2014 The Secretary of Health and Human Services shall provide for a study on the effectiveness of the provisions of this title and the various State laws, in ensuring the availability of reasonably priced health coverage to employers purchasing group coverage and individuals purchasing cov- erage on a non-group basis. (2) STUDY ON ACCESS AND CHOICE.\u2014The Sec- retary also shall provide for a study on\u2014 (A) the extent to which patients have direct access to, and choice of, health care providers, including specialty providers, within a network plan, as well as the opportunity to utilize pro- viders outside of the network plan, under the various types of coverage offered under the pro- visions of this title; and (B) the cost and cost-effectiveness to health insurance issuers of providing access to out-of- network providers, and the potential impact of providing such access on the cost and quality of health insurance coverage offered under provi- sions of this title. (3) CONSULTATION.\u2014The studies under this subsection shall be conducted in consultation with the Secretary of Labor, representatives of CONGRESSIONAL RECORD \u2014 HOUSE H9487July 31, 1996 State officials, consumers, and other representa- tives of individuals and entities that have exper- tise in health insurance and employee benefits. (b) REPORTS.\u2014Not later than January 1, 2000, the Secretary shall submit to the appropriate committees of Congress a report on each of the studies under subsection (a). SEC. 192. REPORT ON MEDICARE REIMBURSE- MENT OF TELEMEDICINE. The Health Care Financing Administration shall complete its ongoing study of medicare re- imbursement of all telemedicine services and submit a report to Congress on medicare reim- bursement of telemedicine services by not later than March 1, 1997. The report shall\u2014 (1) utilize data compiled from the current dem- onstration projects already under review and gather data from other ongoing telemedicine networks; (2) include an analysis of the cost of services provided via telemedicine; and (3) include a proposal for medicare reimburse- ment of such services. SEC. 193. ALLOWING FEDERALLY-QUALIFIED HMOS TO OFFER HIGH DEDUCTIBLE PLANS. Section 1301(b) of the Public Health Service Act (42 U.S.C. 300e(b)) is amended by adding at the end the following new paragraph: ”(6) A health maintenance organization that otherwise meets the requirements of this title may offer a high-deductible health plan (as de- fined in section 220(c)(2) of the Internal Reve- nue Code of 1986).”. SEC. 194. VOLUNTEER SERVICES PROVIDED BY HEALTH PROFESSIONALS AT FREE CLINICS. Section 224 of the Public Health Service Act (42 U.S.C. 233) is amended by adding at the end the following subsection: ”(o)(1) For purposes of this section, a free clinic health professional shall in providing a qualifying health service to an individual be deemed to be an employee of the Public Health Service for a calendar year that begins during a fiscal year for which a transfer was made under paragraph (6)(D). The preceding sentence is subject to the provisions of this subsection. ”(2) In providing a health service to an indi- vidual, a health care practitioner shall for pur- poses of this subsection be considered to be a free clinic health professional if the following conditions are met: ”(A) The service is provided to the individual at a free clinic, or through offsite programs or events carried out by the free clinic. ”(B) The free clinic is sponsoring the health care practitioner pursuant to paragraph (5)(C). ”(C) The service is a qualifying health service (as defined in paragraph (4)). ”(D) Neither the health care practitioner nor the free clinic receives any compensation for the service from the individual or from any third- party payor (including reimbursement under any insurance policy or health plan, or under any Federal or State health benefits program). With respect to compliance with such condition: ”(i) The health care practitioner may receive repayment from the free clinic for reasonable ex- penses incurred by the health care practitioner in the provision of the service to the individual. ”(ii) The free clinic may accept voluntary do- nations for the provision of the service by the health care practitioner to the individual. ”(E) Before the service is provided, the health care practitioner or the free clinic provides writ- ten notice to the individual of the extent to which the legal liability of the health care prac- titioner is limited pursuant to this subsection (or in the case of an emergency, the written notice is provided to the individual as soon after the emergency as is practicable). If the individual is a minor or is otherwise legally incompetent, the condition under this subparagraph is that the written notice be provided to a legal guardian or other person with legal responsibility for the care of the individual. ”(F) At the time the service is provided, the health care practitioner is licensed or certified in accordance with applicable law regarding the provision of the service. ”(3)(A) For purposes of this subsection, the term ‘free clinic’ means a health care facility op- erated by a nonprofit private entity meeting the following requirements: ”(i) The entity does not, in providing health services through the facility, accept reimburse- ment from any third-party payor (including re- imbursement under any insurance policy or health plan, or under any Federal or State health benefits program). ”(ii) The entity, in providing health services through the facility, either does not impose charges on the individuals to whom the services are provided, or imposes a charge according to the ability of the individual involved to pay the charge. ”(iii) The entity is licensed or certified in ac- cordance with applicable law regarding the pro- vision of health services. ”(B) With respect to compliance with the con- ditions under subparagraph (A), the entity in- volved may accept voluntary donations for the provision of services. ”(4) For purposes of this subsection, the term ‘qualifying health service’ means any medical assistance required or authorized to be provided in the program under title XIX of the Social Se- curity Act, without regard to whether the medi- cal assistance is included in the plan submitted under such program by the State in which the health care practitioner involved provides the medical assistance. References in the preceding sentence to such program shall as applicable be considered to be references to any successor to such program. ”(5) Subsection (g) (other than paragraphs (3) through (5)) and subsections (h), (i), and (l) apply to a health care practitioner for purposes of this subsection to the same extent and in the same manner as such subsections apply to an officer, governing board member, employee, or contractor of an entity described in subsection (g)(4), subject to paragraph (6) and subject to the following: ”(A) The first sentence of paragraph (1) ap- plies in lieu of the first sentence of subsection (g)(1)(A). ”(B) This subsection may not be construed as deeming any free clinic to be an employee of the Public Health Service for purposes of this sec- tion. ”(C) With respect to a free clinic, a health care practitioner is not a free clinic health pro- fessional unless the free clinic sponsors the health care practitioner. For purposes of this subsection, the free clinic shall be considered to be sponsoring the health care practitioner if\u2014 ”(i) with respect to the health care practi- tioner, the free clinic submits to the Secretary an application meeting the requirements of sub- section (g)(1)(D); and ”(ii) the Secretary, pursuant to subsection (g)(1)(E), determines that the health care practi- tioner is deemed to be an employee of the Public Health Service. ”(D) In the case of a health care practitioner who is determined by the Secretary pursuant to subsection (g)(1)(E) to be a free clinic health professional, this subsection applies to the health care practitioner (with respect to the free clinic sponsoring the health care practitioner pursuant to subparagraph C)) for any cause of action arising from an act or omission of the health care practitioner occurring on or after the date on which the Secretary makes such de- termination. ”(E) Subsection (g)(1)(F) applies to a health care practitioner for purposes of this subsection only to the extent that, in providing health serv- ices to an individual, each of the conditions specified in paragraph (2) is met. ”(6)(A) For purposes of making payments for judgments against the United States (together with related fees and expenses of witnesses) pur- suant to this section arising from the acts or omissions of free clinic health professionals, there is authorized to be appropriated $10,000,000 for each fiscal year. ”(B) The Secretary shall establish a fund for purposes of this subsection. Each fiscal year amounts appropriated under subparagraph (A) shall be deposited in such fund. ”(C) Not later than May 1 of each fiscal year, the Attorney General, in consultation with the Secretary, shall submit to the Congress a report providing an estimate of the amount of claims (together with related fees and expenses of wit- nesses) that, by reason of the acts or omissions of free clinic health professionals, will be paid pursuant to this section during the calendar year that begins in the following fiscal year. Subsection (k)(1)(B) applies to the estimate under the preceding sentence regarding free clinic health professionals to the same extent and in the same manner as such subsection ap- plies to the estimate under such subsection re- garding officers, governing board members, em- ployees, and contractors of entities described in subsection (g)(4). ”(D) Not later than December 31 of each fiscal year, the Secretary shall transfer from the fund under subparagraph (B) to the appropriate ac- counts in the Treasury an amount equal to the estimate made under subparagraph (C) for the calendar year beginning in such fiscal year, subject to the extent of amounts in the fund. ”(7)(A) This subsection takes effect on the date of the enactment of the first appropriations Act that makes an appropriation under para- graph (6)(A), except as provided in subpara- graph (B)(i). ”(B)(i) Effective on the date of the enactment of the Health Insurance Portability and Ac- countability Act of 1996\u2014 ”(I) the Secretary may issue regulations for carrying out this subsection, and the Secretary may accept and consider applications submitted pursuant to paragraph (5)(C); and ”(II) reports under paragraph (6)(C) may be submitted to the Congress. ”(ii) For the first fiscal year for which an ap- propriation is made under subparagraph (A) of paragraph (6), if an estimate under subpara- graph (C) of such paragraph has not been made for the calendar year beginning in such fiscal year, the transfer under subparagraph (D) of such paragraph shall be made notwithstanding the lack of the estimate, and the transfer shall be made in an amount equal to the amount of such appropriation.”. SEC. 195. FINDINGS; SEVERABILITY. (a) FINDINGS RELATING TO EXERCISE OF COM- MERCE CLAUSE AUTHORITY.\u2014Congress finds the following in relation to the provisions of this title: (1) Provisions in group health plans and health insurance coverage that impose certain preexisting condition exclusions impact the abil- ity of employees to seek employment in inter- state commerce, thereby impeding such com- merce. (2) Health insurance coverage is commercial in nature and is in and affects interstate com- merce. (3) It is a necessary and proper exercise of Congressional authority to impose requirements under this title on group health plans and health insurance coverage (including coverage offered to individuals previously covered under group health plans) in order to promote com- merce among the States. (4) Congress, however, intends to defer to States, to the maximum extent practicable, in carrying out such requirements with respect to insurers and health maintenance organizations that are subject to State regulation, consistent with the provisions of the Employee Retirement Income Security Act of 1974. (b) SEVERABILITY.\u2014If any provision of this title or the application of such provision to any person or circumstance is held to be unconstitu- tional, the remainder of this title and the appli- cation of the provisions of such to any person or circumstance shall not be affected thereby. CONGRESSIONAL RECORD \u2014 HOUSEH9488 July 31, 1996 TITLE II\u2014PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION SEC. 200. REFERENCES IN TITLE. Except as otherwise specifically provided, whenever in this title an amendment is ex- pressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act. Subtitle A\u2014Fraud and Abuse Control Program SEC. 201. FRAUD AND ABUSE CONTROL PROGRAM. (a) ESTABLISHMENT OF PROGRAM.\u2014Title XI (42 U.S.C. 1301 et seq.) is amended by inserting after section 1128B the following new section: ”FRAUD AND ABUSE CONTROL PROGRAM ”SEC. 1128C. (a) ESTABLISHMENT OF PRO- GRAM.\u2014 ”(1) IN GENERAL.\u2014Not later than January 1, 1997, the Secretary, acting through the Office of the Inspector General of the Department of Health and Human Services, and the Attorney General shall establish a program\u2014 ”(A) to coordinate Federal, State, and local law enforcement programs to control fraud and abuse with respect to health plans, ”(B) to conduct investigations, audits, evalua- tions, and inspections relating to the delivery of and payment for health care in the United States, ”(C) to facilitate the enforcement of the provi- sions of sections 1128, 1128A, and 1128B and other statutes applicable to health care fraud and abuse, ”(D) to provide for the modification and es- tablishment of safe harbors and to issue advi- sory opinions and special fraud alerts pursuant to section 1128D, and ”(E) to provide for the reporting and disclo- sure of certain final adverse actions against health care providers, suppliers, or practitioners pursuant to the data collection system estab- lished under section 1128E. ”(2) COORDINATION WITH HEALTH PLANS.\u2014In carrying out the program established under paragraph (1), the Secretary and the Attorney General shall consult with, and arrange for the sharing of data with representatives of health plans. ”(3) GUIDELINES.\u2014 ”(A) IN GENERAL.\u2014The Secretary and the At- torney General shall issue guidelines to carry out the program under paragraph (1). The pro- visions of sections 553, 556, and 557 of title 5, United States Code, shall not apply in the issu- ance of such guidelines. ”(B) INFORMATION GUIDELINES.\u2014 ”(i) IN GENERAL.\u2014Such guidelines shall in- clude guidelines relating to the furnishing of in- formation by health plans, providers, and others to enable the Secretary and the Attorney Gen- eral to carry out the program (including coordi- nation with health plans under paragraph (2)). ”(ii) CONFIDENTIALITY.\u2014Such guidelines shall include procedures to assure that such informa- tion is provided and utilized in a manner that appropriately protects the confidentiality of the information and the privacy of individuals re- ceiving health care services and items. ”(iii) QUALIFIED IMMUNITY FOR PROVIDING IN- FORMATION.\u2014The provisions of section 1157(a) (relating to limitation on liability) shall apply to a person providing information to the Secretary or the Attorney General in conjunction with their performance of duties under this section. ”(4) ENSURING ACCESS TO DOCUMENTATION.\u2014 The Inspector General of the Department of Health and Human Services is authorized to ex- ercise such authority described in paragraphs (3) through (9) of section 6 of the Inspector Gen- eral Act of 1978 (5 U.S.C. App.) as necessary with respect to the activities under the fraud and abuse control program established under this subsection. ”(5) AUTHORITY OF INSPECTOR GENERAL.\u2014 Nothing in this Act shall be construed to dimin- ish the authority of any Inspector General, in- cluding such authority as provided in the In- spector General Act of 1978 (5 U.S.C. App.). ”(b) ADDITIONAL USE OF FUNDS BY INSPECTOR GENERAL.\u2014 ”(1) REIMBURSEMENTS FOR INVESTIGATIONS.\u2014 The Inspector General of the Department of Health and Human Services is authorized to re- ceive and retain for current use reimbursement for the costs of conducting investigations and audits and for monitoring compliance plans when such costs are ordered by a court, volun- tarily agreed to by the payor, or otherwise. ”(2) CREDITING.\u2014Funds received by the In- spector General under paragraph (1) as reim- bursement for costs of conducting investigations shall be deposited to the credit of the appropria- tion from which initially paid, or to appropria- tions for similar purposes currently available at the time of deposit, and shall remain available for obligation for 1 year from the date of the de- posit of such funds. ”(c) HEALTH PLAN DEFINED.\u2014For purposes of this section, the term ‘health plan’ means a plan or program that provides health benefits, wheth- er directly, through insurance, or otherwise, and includes\u2014 ”(1) a policy of health insurance; ”(2) a contract of a service benefit organiza- tion; and ”(3) a membership agreement with a health maintenance organization or other prepaid health plan.”. (b) ESTABLISHMENT OF HEALTH CARE FRAUD AND ABUSE CONTROL ACCOUNT IN FEDERAL HOS- PITAL INSURANCE TRUST FUND.\u2014Section 1817 (42 U.S.C. 1395i) is amended by adding at the end the following new subsection: ”(k) HEALTH CARE FRAUD AND ABUSE CON- TROL ACCOUNT.\u2014 ”(1) ESTABLISHMENT.\u2014There is hereby estab- lished in the Trust Fund an expenditure ac- count to be known as the ‘Health Care Fraud and Abuse Control Account’ (in this subsection referred to as the ‘Account’). ”(2) APPROPRIATED AMOUNTS TO TRUST FUND.\u2014 ”(A) IN GENERAL.\u2014There are hereby appro- priated to the Trust Fund\u2014 ”(i) such gifts and bequests as may be made as provided in subparagraph (B); ”(ii) such amounts as may be deposited in the Trust Fund as provided in sections 242(b) and 249(c) of the Health Insurance Portability and Accountability Act of 1996, and title XI; and ”(iii) such amounts as are transferred to the Trust Fund under subparagraph (C). ”(B) AUTHORIZATION TO ACCEPT GIFTS.\u2014The Trust Fund is authorized to accept on behalf of the United States money gifts and bequests made unconditionally to the Trust Fund, for the benefit of the Account or any activity financed through the Account. ”(C) TRANSFER OF AMOUNTS.\u2014The Managing Trustee shall transfer to the Trust Fund, under rules similar to the rules in section 9601 of the Internal Revenue Code of 1986, an amount equal to the sum of the following: ”(i) Criminal fines recovered in cases involv- ing a Federal health care offense (as defined in section 982(a)(6)(B) of title 18, United States Code). ”(ii) Civil monetary penalties and assessments imposed in health care cases, including amounts recovered under titles XI, XVIII, and XIX, and chapter 38 of title 31, United States Code (except as otherwise provided by law). ”(iii) Amounts resulting from the forfeiture of property by reason of a Federal health care of- fense. ”(iv) Penalties and damages obtained and otherwise creditable to miscellaneous receipts of the general fund of the Treasury obtained under sections 3729 through 3733 of title 31, United States Code (known as the False Claims Act), in cases involving claims related to the provision of health care items and services (other than funds awarded to a relator, for restitution or otherwise authorized by law). ”(D) APPLICATION.\u2014Nothing in subparagraph (C)(iii) shall be construed to limit the availabil- ity of recoveries and forfeitures obtained under title I of the Employee Retirement Income Secu- rity Act of 1974 for the purpose of providing eq- uitable or remedial relief for employee welfare benefit plans, and for participants and bene- ficiaries under such plans, as authorized under such title. ”(3) APPROPRIATED AMOUNTS TO ACCOUNT FOR FRAUD AND ABUSE CONTROL PROGRAM, ETC.\u2014 ”(A) DEPARTMENTS OF HEALTH AND HUMAN SERVICES AND JUSTICE.\u2014 ”(i) IN GENERAL.\u2014There are hereby appro- priated to the Account from the Trust Fund such sums as the Secretary and the Attorney General certify are necessary to carry out the purposes described in subparagraph (C), to be available without further appropriation, in an amount not to exceed\u2014 ”(I) for fiscal year 1997, $104,000,000, ”(II) for each of the fiscal years 1998 through 2003, the limit for the preceding fiscal year, in- creased by 15 percent; and ”(III) for each fiscal year after fiscal year 2003, the limit for fiscal year 2003. ”(ii) MEDICARE AND MEDICAID ACTIVITIES.\u2014 For each fiscal year, of the amount appro- priated in clause (i), the following amounts shall be available only for the purposes of the activities of the Office of the Inspector General of the Department of Health and Human Serv- ices with respect to the medicare and medicaid programs\u2014 ”(I) for fiscal year 1997, not less than $60,000,000 and not more than $70,000,000; ”(II) for fiscal year 1998, not less than $80,000,000 and not more than $90,000,000; ”(III) for fiscal year 1999, not less than $90,000,000 and not more than $100,000,000; ”(IV) for fiscal year 2000, not less than $110,000,000 and not more than $120,000,000; ”(V) for fiscal year 2001, not less than $120,000,000 and not more than $130,000,000; ”(VI) for fiscal year 2002, not less than $140,000,000 and not more than $150,000,000; and ”(VII) for each fiscal year after fiscal year 2002, not less than $150,000,000 and not more than $160,000,000. ”(B) FEDERAL BUREAU OF INVESTIGATION.\u2014 There are hereby appropriated from the general fund of the United States Treasury and hereby appropriated to the Account for transfer to the Federal Bureau of Investigation to carry out the purposes described in subparagraph (C), to be available without further appropriation\u2014 ”(i) for fiscal year 1997, $47,000,000; ”(ii) for fiscal year 1998, $56,000,000; ”(iii) for fiscal year 1999, $66,000,000; ”(iv) for fiscal year 2000, $76,000,000; ”(v) for fiscal year 2001, $88,000,000; ”(vi) for fiscal year 2002, $101,000,000; and ”(vii) for each fiscal year after fiscal year 2002, $114,000,000. ”(C) USE OF FUNDS.\u2014The purposes described in this subparagraph are to cover the costs (in- cluding equipment, salaries and benefits, and travel and training) of the administration and operation of the health care fraud and abuse control program established under section 1128C(a), including the costs of\u2014 ”(i) prosecuting health care matters (through criminal, civil, and administrative proceedings); ”(ii) investigations; ”(iii) financial and performance audits of health care programs and operations; ”(iv) inspections and other evaluations; and ”(v) provider and consumer education regard- ing compliance with the provisions of title XI. ”(4) APPROPRIATED AMOUNTS TO ACCOUNT FOR MEDICARE INTEGRITY PROGRAM.\u2014 ”(A) IN GENERAL.\u2014There are hereby appro- priated to the Account from the Trust Fund for each fiscal year such amounts as are necessary to carry out the Medicare Integrity Program under section 1893, subject to subparagraph (B) and to be available without further appropria- tion. CONGRESSIONAL RECORD \u2014 HOUSE H9489July 31, 1996 ”(B) AMOUNTS SPECIFIED.\u2014The amount ap- propriated under subparagraph (A) for a fiscal year is as follows: ”(i) For fiscal year 1997, such amount shall be not less than $430,000,000 and not more than $440,000,000. ”(ii) For fiscal year 1998, such amount shall be not less than $490,000,000 and not more than $500,000,000. ”(iii) For fiscal year 1999, such amount shall be not less than $550,000,000 and not more than $560,000,000. ”(iv) For fiscal year 2000, such amount shall be not less than $620,000,000 and not more than $630,000,000. ”(v) For fiscal year 2001, such amount shall be not less than $670,000,000 and not more than $680,000,000. ”(vi) For fiscal year 2002, such amount shall be not less than $690,000,000 and not more than $700,000,000. ”(vii) For each fiscal year after fiscal year 2002, such amount shall be not less than $710,000,000 and not more than $720,000,000. ”(5) ANNUAL REPORT.\u2014Not later than January 1, the Secretary and the Attorney General shall submit jointly a report to Congress which identi- fies\u2014 ”(A) the amounts appropriated to the Trust Fund for the previous fiscal year under para- graph (2)(A) and the source of such amounts; and ”(B) the amounts appropriated from the Trust Fund for such year under paragraph (3) and the justification for the expenditure of such amounts. ”(6) GAO REPORT.\u2014Not later than January 1 of 2000, 2002, and 2004, the Comptroller General of the United States shall submit a report to Congress which\u2014 ”(A) identifies\u2014 ”(i) the amounts appropriated to the Trust Fund for the previous two fiscal years under paragraph (2)(A) and the source of such amounts; and ”(ii) the amounts appropriated from the Trust Fund for such fiscal years under paragraph (3) and the justification for the expenditure of such amounts; ”(B) identifies any expenditures from the Trust Fund with respect to activities not involv- ing the medicare program under title XVIII; ”(C) identifies any savings to the Trust Fund, and any other savings, resulting from expendi- tures from the Trust Fund; and ”(D) analyzes such other aspects of the oper- ation of the Trust Fund as the Comptroller Gen- eral of the United States considers appro- priate.”. SEC. 202. MEDICARE INTEGRITY PROGRAM. (a) ESTABLISHMENT OF MEDICARE INTEGRITY PROGRAM.\u2014Title XVIII is amended by adding at the end the following new section: ”MEDICARE INTEGRITY PROGRAM ”SEC. 1893. (a) ESTABLISHMENT OF PRO- GRAM.\u2014There is hereby established the Medi- care Integrity Program (in this section referred to as the ‘Program’) under which the Secretary shall promote the integrity of the medicare pro- gram by entering into contracts in accordance with this section with eligible entities to carry out the activities described in subsection (b). ”(b) ACTIVITIES DESCRIBED.\u2014The activities described in this subsection are as follows: ”(1) Review of activities of providers of serv- ices or other individuals and entities furnishing items and services for which payment may be made under this title (including skilled nursing facilities and home health agencies), including medical and utilization review and fraud review (employing similar standards, processes, and technologies used by private health plans, in- cluding equipment and software technologies which surpass the capability of the equipment and technologies used in the review of claims under this title as of the date of the enactment of this section). ”(2) Audit of cost reports. ”(3) Determinations as to whether payment should not be, or should not have been, made under this title by reason of section 1862(b), and recovery of payments that should not have been made. ”(4) Education of providers of services, bene- ficiaries, and other persons with respect to pay- ment integrity and benefit quality assurance is- sues. ”(5) Developing (and periodically updating) a list of items of durable medical equipment in ac- cordance with section 1834(a)(15) which are sub- ject to prior authorization under such section. ”(c) ELIGIBILITY OF ENTITIES.\u2014An entity is el- igible to enter into a contract under the Pro- gram to carry out any of the activities described in subsection (b) if\u2014 ”(1) the entity has demonstrated capability to carry out such activities; ”(2) in carrying out such activities, the entity agrees to cooperate with the Inspector General of the Department of Health and Human Serv- ices, the Attorney General, and other law en- forcement agencies, as appropriate, in the inves- tigation and deterrence of fraud and abuse in relation to this title and in other cases arising out of such activities; ”(3) the entity complies with such conflict of interest standards as are generally applicable to Federal acquisition and procurement; and ”(4) the entity meets such other requirements as the Secretary may impose. In the case of the activity described in sub- section (b)(5), an entity shall be deemed to be el- igible to enter into a contract under the Pro- gram to carry out the activity if the entity is a carrier with a contract in effect under section 1842. ”(d) PROCESS FOR ENTERING INTO CON- TRACTS.\u2014The Secretary shall enter into con- tracts under the Program in accordance with such procedures as the Secretary shall by regu- lation establish, except that such procedures shall include the following: ”(1) Procedures for identifying, evaluating, and resolving organizational conflicts of interest that are generally applicable to Federal acquisi- tion and procurement. ”(2) Competitive procedures to be used\u2014 ”(A) when entering into new contracts under this section; ”(B) when entering into contracts that may result in the elimination of responsibilities of an individual fiscal intermediary or carrier under section 202(b) of the Health Insurance Port- ability and Accountability Act of 1996; and ”(C) at any other time considered appropriate by the Secretary, except that the Secretary may continue to con- tract with entities that are carrying out the ac- tivities described in this section pursuant to agreements under section 1816 or contracts under section 1842 in effect on the date of the enactment of this section. ”(3) Procedures under which a contract under this section may be renewed without regard to any provision of law requiring competition if the contractor has met or exceeded the performance requirements established in the current contract. The Secretary may enter into such contracts without regard to final rules having been pro- mulgated. ”(e) LIMITATION ON CONTRACTOR LIABILITY.\u2014 The Secretary shall by regulation provide for the limitation of a contractor’s liability for ac- tions taken to carry out a contract under the Program, and such regulation shall, to the ex- tent the Secretary finds appropriate, employ the same or comparable standards and other sub- stantive and procedural provisions as are con- tained in section 1157.”. (b) ELIMINATION OF FI AND CARRIER RESPON- SIBILITY FOR CARRYING OUT ACTIVITIES SUBJECT TO PROGRAM.\u2014 (1) RESPONSIBILITIES OF FISCAL INTERMEDIARIES UNDER PART A.\u2014Section 1816 (42 U.S.C. 1395h) is amended by adding at the end the following new subsection: ”(l) No agency or organization may carry out (or receive payment for carrying out) any activ- ity pursuant to an agreement under this section to the extent that the activity is carried out pur- suant to a contract under the Medicare Integ- rity Program under section 1893.”. (2) RESPONSIBILITIES OF CARRIERS UNDER PART B.\u2014Section 1842(c) (42 U.S.C. 1395u(c)) is amended by adding at the end the following new paragraph: ”(6) No carrier may carry out (or receive pay- ment for carrying out) any activity pursuant to a contract under this subsection to the extent that the activity is carried out pursuant to a contract under the Medicare Integrity Program under section 1893. The previous sentence shall not apply with respect to the activity described in section 1893(b)(5) (relating to prior authoriza- tion of certain items of durable medical equip- ment under section 1834(a)(15)).”. SEC. 203. BENEFICIARY INCENTIVE PROGRAMS. (a) CLARIFICATION OF REQUIREMENT TO PRO- VIDE EXPLANATION OF MEDICARE BENEFITS.\u2014 The Secretary of Health and Human Services (in this section referred to as the ”Secretary”) shall provide an explanation of benefits under the medicare program under title XVIII of the So- cial Security Act with respect to each item or service for which payment may be made under the program which is furnished to an individ- ual, without regard to whether or not a deduct- ible or coinsurance may be imposed against the individual with respect to the item or service. (b) PROGRAM TO COLLECT INFORMATION ON FRAUD AND ABUSE.\u2014 (1) ESTABLISHMENT OF PROGRAM.\u2014Not later than 3 months after the date of the enactment of this Act, the Secretary shall establish a pro- gram under which the Secretary shall encourage individuals to report to the Secretary informa- tion on individuals and entities who are engag- ing in or who have engaged in acts or omissions which constitute grounds for the imposition of a sanction under section 1128, 1128A, or 1128B of the Social Security Act, or who have otherwise engaged in fraud and abuse against the medi- care program under title XVIII of such act for which there is a sanction provided under law. The program shall discourage provision of, and not consider, information which is frivolous or otherwise not relevant or material to the imposi- tion of such a sanction. (2) PAYMENT OF PORTION OF AMOUNTS COL- LECTED.\u2014If an individual reports information to the Secretary under the program established under paragraph (1) which serves as the basis for the collection by the Secretary or the Attor- ney General of any amount of at least $100 (other than any amount paid as a penalty under section 1128B of the Social Security Act), the Secretary may pay a portion of the amount collected to the individual (under procedures similar to those applicable under section 7623 of the Internal Revenue Code of 1986 to payments to individuals providing information on viola- tions of such Code). (c) PROGRAM TO COLLECT INFORMATION ON PROGRAM EFFICIENCY.\u2014 (1) ESTABLISHMENT OF PROGRAM.\u2014Not later than 3 months after the date of the enactment of this Act, the Secretary shall establish a pro- gram under which the Secretary shall encourage individuals to submit to the Secretary sugges- tions on methods to improve the efficiency of the medicare program. (2) PAYMENT OF PORTION OF PROGRAM SAV- INGS.\u2014If an individual submits a suggestion to the Secretary under the program established under paragraph (1) which is adopted by the Secretary and which results in savings to the program, the Secretary may make a payment to the individual of such amount as the Secretary considers appropriate. CONGRESSIONAL RECORD \u2014 HOUSEH9490 July 31, 1996 SEC. 204. APPLICATION OF CERTAIN HEALTH ANTI-FRAUD AND ABUSE SANCTIONS TO FRAUD AND ABUSE AGAINST FED- ERAL HEALTH CARE PROGRAMS. (a) IN GENERAL.\u2014Section 1128B (42 U.S.C. 1320a 7b) is amended as follows: (1) In the heading, by striking ”MEDICARE OR STATE HEALTH CARE PROGRAMS” and inserting ”FEDERAL HEALTH CARE PROGRAMS”. (2) In subsection (a)(1), by striking ”a pro- gram under title XVIII or a State health care program (as defined in section 1128(h))” and in- serting ”a Federal health care program (as de- fined in subsection (f))”. (3) In subsection (a)(5), by striking ”a pro- gram under title XVIII or a State health care program” and inserting ”a Federal health care program”. (4) In the second sentence of subsection (a)\u2014 (A) by striking ”a State plan approved under title XIX” and inserting ”a Federal health care program”, and (B) by striking ”the State may at its option (notwithstanding any other provision of that title or of such plan)” and inserting ”the ad- ministrator of such program may at its option (notwithstanding any other provision of such program)”. (5) In subsection (b), by striking ”title XVIII or a State health care program” each place it appears and inserting ”a Federal health care program”. (6) In subsection (c), by inserting ”(as defined in section 1128(h))” after ”a State health care program”. (7) By adding at the end the following new subsection: ”(f) For purposes of this section, the term ‘Federal health care program’ means\u2014 ”(1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government (other than the health insurance program under chapter 89 of title 5, United States Code); or ”(2) any State health care program, as de- fined in section 1128(h).”. (b) EFFECTIVE DATE.\u2014The amendments made by this section shall take effect on January 1, 1997. SEC. 205. GUIDANCE REGARDING APPLICATION OF HEALTH CARE FRAUD AND ABUSE SANCTIONS. Title XI (42 U.S.C. 1301 et seq.), as amended by section 201, is amended by inserting after sec- tion 1128C the following new section: ”GUIDANCE REGARDING APPLICATION OF HEALTH CARE FRAUD AND ABUSE SANCTIONS ”SEC. 1128D. (a) SOLICITATION AND PUBLICA- TION OF MODIFICATIONS TO EXISTING SAFE HAR- BORS AND NEW SAFE HARBORS.\u2014 ”(1) IN GENERAL.\u2014 ”(A) SOLICITATION OF PROPOSALS FOR SAFE HARBORS.\u2014Not later than January 1, 1997, and not less than annually thereafter, the Secretary shall publish a notice in the Federal Register so- liciting proposals, which will be accepted during a 60-day period, for\u2014 ”(i) modifications to existing safe harbors is- sued pursuant to section 14(a) of the Medicare and Medicaid Patient and Program Protection Act of 1987 (42 U.S.C. 1320a 7b note); ”(ii) additional safe harbors specifying pay- ment practices that shall not be treated as a criminal offense under section 1128B(b) and shall not serve as the basis for an exclusion under section 1128(b)(7); ”(iii) advisory opinions to be issued pursuant to subsection (b); and ”(iv) special fraud alerts to be issued pursu- ant to subsection (c). ”(B) PUBLICATION OF PROPOSED MODIFICA- TIONS AND PROPOSED ADDITIONAL SAFE HAR- BORS.\u2014After considering the proposals described in clauses (i) and (ii) of subparagraph (A), the Secretary, in consultation with the Attorney General, shall publish in the Federal Register proposed modifications to existing safe harbors and proposed additional safe harbors, if appro- priate, with a 60-day comment period. After con- sidering any public comments received during this period, the Secretary shall issue final rules modifying the existing safe harbors and estab- lishing new safe harbors, as appropriate. ”(C) REPORT.\u2014The Inspector General of the Department of Health and Human Services (in this section referred to as the ‘Inspector Gen- eral’) shall, in an annual report to Congress or as part of the year-end semiannual report re- quired by section 5 of the Inspector General Act of 1978 (5 U.S.C. App.), describe the proposals received under clauses (i) and (ii) of subpara- graph (A) and explain which proposals were in- cluded in the publication described in subpara- graph (B), which proposals were not included in that publication, and the reasons for the rejec- tion of the proposals that were not included. ”(2) CRITERIA FOR MODIFYING AND ESTABLISH- ING SAFE HARBORS.\u2014In modifying and establish- ing safe harbors under paragraph (1)(B), the Secretary may consider the extent to which pro- viding a safe harbor for the specified payment practice may result in any of the following: ”(A) An increase or decrease in access to health care services. ”(B) An increase or decrease in the quality of health care services. ”(C) An increase or decrease in patient free- dom of choice among health care providers. ”(D) An increase or decrease in competition among health care providers. ”(E) An increase or decrease in the ability of health care facilities to provide services in medi- cally underserved areas or to medically under- served populations. ”(F) An increase or decrease in the cost to Federal health care programs (as defined in sec- tion 1128B(f)). ”(G) An increase or decrease in the potential overutilization of health care services. ”(H) The existence or nonexistence of any po- tential financial benefit to a health care profes- sional or provider which may vary based on their decisions of\u2014 ”(i) whether to order a health care item or service; or ”(ii) whether to arrange for a referral of health care items or services to a particular practitioner or provider. ”(I) Any other factors the Secretary deems ap- propriate in the interest of preventing fraud and abuse in Federal health care programs (as so de- fined). ”(b) ADVISORY OPINIONS.\u2014 ”(1) ISSUANCE OF ADVISORY OPINIONS.\u2014The Secretary, in consultation with the Attorney General, shall issue written advisory opinions as provided in this subsection. ”(2) MATTERS SUBJECT TO ADVISORY OPIN- IONS.\u2014The Secretary shall issue advisory opin- ions as to the following matters: ”(A) What constitutes prohibited remunera- tion within the meaning of section 1128B(b). ”(B) Whether an arrangement or proposed ar- rangement satisfies the criteria set forth in sec- tion 1128B(b)(3) for activities which do not re- sult in prohibited remuneration. ”(C) Whether an arrangement or proposed ar- rangement satisfies the criteria which the Sec- retary has established, or shall establish by reg- ulation for activities which do not result in pro- hibited remuneration. ”(D) What constitutes an inducement to re- duce or limit services to individuals entitled to benefits under title XVIII or title XIX within the meaning of section 1128B(b). ”(E) Whether any activity or proposed activ- ity constitutes grounds for the imposition of a sanction under section 1128, 1128A, or 1128B. ”(3) MATTERS NOT SUBJECT TO ADVISORY OPIN- IONS.\u2014Such advisory opinions shall not address the following matters: ”(A) Whether the fair market value shall be, or was paid or received for any goods, services or property. ”(B) Whether an individual is a bona fide em- ployee within the requirements of section 3121(d)(2) of the Internal Revenue Code of 1986. ”(4) EFFECT OF ADVISORY OPINIONS.\u2014 ”(A) BINDING AS TO SECRETARY AND PARTIES INVOLVED.\u2014Each advisory opinion issued by the Secretary shall be binding as to the Secretary and the party or parties requesting the opinion. ”(B) FAILURE TO SEEK OPINION.\u2014The failure of a party to seek an advisory opinion may not be introduced into evidence to prove that the party intended to violate the provisions of sec- tions 1128, 1128A, or 1128B. ”(5) REGULATIONS.\u2014 ”(A) IN GENERAL.\u2014Not later than 180 days after the date of the enactment of this section, the Secretary shall issue regulations to carry out this section. Such regulations shall provide for\u2014 ”(i) the procedure to be followed by a party applying for an advisory opinion; ”(ii) the procedure to be followed by the Sec- retary in responding to a request for an advi- sory opinion; ”(iii) the interval in which the Secretary shall respond; ”(iv) the reasonable fee to be charged to the party requesting an advisory opinion; and ”(v) the manner in which advisory opinions will be made available to the public. ”(B) SPECIFIC CONTENTS.\u2014Under the regula- tions promulgated pursuant to subparagraph (A)\u2014 ”(i) the Secretary shall be required to issue to a party requesting an advisory opinion by not later than 60 days after the request is received; and ”(ii) the fee charged to the party requesting an advisory opinion shall be equal to the costs incurred by the Secretary in responding to the request. ”(6) APPLICATION OF SUBSECTION.\u2014This sub- section shall apply to requests for advisory opin- ions made on or after the date which is 6 months after the date of enactment of this section and before the date which is 4 years after such date of enactment. ”(c) SPECIAL FRAUD ALERTS.\u2014 ”(1) IN GENERAL.\u2014 ”(A) REQUEST FOR SPECIAL FRAUD ALERTS.\u2014 Any person may present, at any time, a request to the Inspector General for a notice which in- forms the public of practices which the Inspec- tor General considers to be suspect or of particu- lar concern under the medicare program under title XVIII or a State health care program, as defined in section 1128(h) (in this subsection re- ferred to as a ‘special fraud alert’). ”(B) ISSUANCE AND PUBLICATION OF SPECIAL FRAUD ALERTS.\u2014Upon receipt of a request de- scribed in subparagraph (A), the Inspector Gen- eral shall investigate the subject matter of the request to determine whether a special fraud alert should be issued. If appropriate, the In- spector General shall issue a special fraud alert in response to the request. All special fraud alerts issued pursuant to this subparagraph shall be published in the Federal Register. ”(2) CRITERIA FOR SPECIAL FRAUD ALERTS.\u2014In determining whether to issue a special fraud alert upon a request described in paragraph (1), the Inspector General may consider\u2014 ”(A) whether and to what extent the practices that would be identified in the special fraud alert may result in any of the consequences de- scribed in subsection (a)(2); and ”(B) the volume and frequency of the conduct that would be identified in the special fraud alert.”. Subtitle B\u2014Revisions to Current Sanctions for Fraud and Abuse SEC. 211. MANDATORY EXCLUSION FROM PAR- TICIPATION IN MEDICARE AND STATE HEALTH CARE PROGRAMS. (a) INDIVIDUAL CONVICTED OF FELONY RELAT- ING TO HEALTH CARE FRAUD.\u2014 (1) IN GENERAL.\u2014Section 1128(a) (42 U.S.C. 1320a 7(a)) is amended by adding at the end the following new paragraph: ”(3) FELONY CONVICTION RELATING TO HEALTH CARE FRAUD.\u2014Any individual or entity that has CONGRESSIONAL RECORD \u2014 HOUSE H9491July 31, 1996 been convicted for an offense which occurred after the date of the enactment of the Health In- surance Portability and Accountability Act of 1996, under Federal or State law, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program (other than those specifi- cally described in paragraph (1)) operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary respon- sibility, or other financial misconduct.”. (2) CONFORMING AMENDMENT.\u2014Paragraph (1) of section 1128(b) (42 U.S.C. 1320a 7(b)) is amended to read as follows: ”(1) CONVICTION RELATING TO FRAUD.\u2014Any individual or entity that has been convicted for an offense which occurred after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, under Federal or State law\u2014 ”(A) of a criminal offense consisting of a mis- demeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other fi- nancial misconduct\u2014 ”(i) in connection with the delivery of a health care item or service, or ”(ii) with respect to any act or omission in a health care program (other than those specifi- cally described in subsection (a)(1)) operated by or financed in whole or in part by any Federal, State, or local government agency; or ”(B) of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary respon- sibility, or other financial misconduct with re- spect to any act or omission in a program (other than a health care program) operated by or fi- nanced in whole or in part by any Federal, State, or local government agency.”. (b) INDIVIDUAL CONVICTED OF FELONY RELAT- ING TO CONTROLLED SUBSTANCE.\u2014 (1) IN GENERAL.\u2014Section 1128(a) (42 U.S.C. 1320a 7(a)), as amended by subsection (a), is amended by adding at the end the following new paragraph: ”(4) FELONY CONVICTION RELATING TO CON- TROLLED SUBSTANCE.\u2014Any individual or entity that has been convicted for an offense which oc- curred after the date of the enactment of the Health Insurance Portability and Accountabil- ity Act of 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, pre- scription, or dispensing of a controlled sub- stance.”. (2) CONFORMING AMENDMENT.\u2014Section 1128(b)(3) (42 U.S.C. 1320a 7(b)(3)) is amended\u2014 (A) in the heading, by striking ”CONVICTION” and inserting ”MISDEMEANOR CONVICTION”; and (B) by striking ”criminal offense” and insert- ing ”criminal offense consisting of a mis- demeanor”. SEC. 212. ESTABLISHMENT OF MINIMUM PERIOD OF EXCLUSION FOR CERTAIN INDI- VIDUALS AND ENTITIES SUBJECT TO PERMISSIVE EXCLUSION FROM MED- ICARE AND STATE HEALTH CARE PROGRAMS. Section 1128(c)(3) (42 U.S.C. 1320a 7(c)(3)) is amended by adding at the end the following new subparagraphs: ”(D) In the case of an exclusion of an individ- ual or entity under paragraph (1), (2), or (3) of subsection (b), the period of the exclusion shall be 3 years, unless the Secretary determines in accordance with published regulations that a shorter period is appropriate because of mitigat- ing circumstances or that a longer period is ap- propriate because of aggravating circumstances. ”(E) In the case of an exclusion of an individ- ual or entity under subsection (b)(4) or (b)(5), the period of the exclusion shall not be less than the period during which the individual’s or enti- ty’s license to provide health care is revoked, suspended, or surrendered, or the individual or the entity is excluded or suspended from a Fed- eral or State health care program. ”(F) In the case of an exclusion of an individ- ual or entity under subsection (b)(6)(B), the pe- riod of the exclusion shall be not less than 1 year.”. SEC. 213. PERMISSIVE EXCLUSION OF INDIVID- UALS WITH OWNERSHIP OR CON- TROL INTEREST IN SANCTIONED EN- TITIES. Section 1128(b) (42 U.S.C. 1320a 7(b)) is amended by adding at the end the following new paragraph: ”(15) INDIVIDUALS CONTROLLING A SANCTIONED ENTITY.\u2014(A) Any individual\u2014 ”(i) who has a direct or indirect ownership or control interest in a sanctioned entity and who knows or should know (as defined in section 1128A(i)(6)) of the action constituting the basis for the conviction or exclusion described in sub- paragraph (B); or ”(ii) who is an officer or managing employee (as defined in section 1126(b)) of such an entity. ”(B) For purposes of subparagraph (A), the term ‘sanctioned entity’ means an entity\u2014 ”(i) that has been convicted of any offense de- scribed in subsection (a) or in paragraph (1), (2), or (3) of this subsection; or ”(ii) that has been excluded from participa- tion under a program under title XVIII or under a State health care program.”. SEC. 214. SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR FAILURE TO COMPLY WITH STATUTORY OBLIGA- TIONS. (a) MINIMUM PERIOD OF EXCLUSION FOR PRACTITIONERS AND PERSONS FAILING TO MEET STATUTORY OBLIGATIONS.\u2014 (1) IN GENERAL.\u2014The second sentence of sec- tion 1156(b)(1) (42 U.S.C. 1320c 5(b)(1)) is amended by striking ”may prescribe)” and in- serting ”may prescribe, except that such period may not be less than 1 year)”. (2) CONFORMING AMENDMENT.\u2014Section 1156(b)(2) (42 U.S.C. 1320c 5(b)(2)) is amended by striking ”shall remain” and inserting ”shall (subject to the minimum period specified in the second sentence of paragraph (1)) remain”. (b) REPEAL OF ”UNWILLING OR UNABLE” CON- DITION FOR IMPOSITION OF SANCTION.\u2014Section 1156(b)(1) (42 U.S.C. 1320c 5(b)(1)) is amended\u2014 (1) in the second sentence, by striking ”and determines” and all that follows through ”such obligations,”; and (2) by striking the third sentence. SEC. 215. INTERMEDIATE SANCTIONS FOR MEDI- CARE HEALTH MAINTENANCE ORGA- NIZATIONS. (a) APPLICATION OF INTERMEDIATE SANCTIONS FOR ANY PROGRAM VIOLATIONS.\u2014 (1) IN GENERAL.\u2014Section 1876(i)(1) (42 U.S.C. 1395mm(i)(1)) is amended by striking ”the Sec- retary may terminate” and all that follows and inserting ”in accordance with procedures estab- lished under paragraph (9), the Secretary may at any time terminate any such contract or may impose the intermediate sanctions described in paragraph (6)(B) or (6)(C) (whichever is appli- cable) on the eligible organization if the Sec- retary determines that the organization\u2014 ”(A) has failed substantially to carry out the contract; ”(B) is carrying out the contract in a manner substantially inconsistent with the efficient and effective administration of this section; or ”(C) no longer substantially meets the appli- cable conditions of subsections (b), (c), (e), and (f).”. (2) OTHER INTERMEDIATE SANCTIONS FOR MIS- CELLANEOUS PROGRAM VIOLATIONS.\u2014Section 1876(i)(6) (42 U.S.C. 1395mm(i)(6)) is amended by adding at the end the following new subpara- graph: ”(C) In the case of an eligible organization for which the Secretary makes a determination under paragraph (1), the basis of which is not described in subparagraph (A), the Secretary may apply the following intermediate sanctions: ”(i) Civil money penalties of not more than $25,000 for each determination under paragraph (1) if the deficiency that is the basis of the de- termination has directly adversely affected (or has the substantial likelihood of adversely af- fecting) an individual covered under the organi- zation’s contract. ”(ii) Civil money penalties of not more than $10,000 for each week beginning after the initi- ation of procedures by the Secretary under paragraph (9) during which the deficiency that is the basis of a determination under paragraph (1) exists. ”(iii) Suspension of enrollment of individuals under this section after the date the Secretary notifies the organization of a determination under paragraph (1) and until the Secretary is satisfied that the deficiency that is the basis for the determination has been corrected and is not likely to recur.”. (3) PROCEDURES FOR IMPOSING SANCTIONS.\u2014 Section 1876(i) (42 U.S.C. 1395mm(i)) is amended by adding at the end the following new para- graph: ”(9) The Secretary may terminate a contract with an eligible organization under this section or may impose the intermediate sanctions de- scribed in paragraph (6) on the organization in accordance with formal investigation and com- pliance procedures established by the Secretary under which\u2014 ”(A) the Secretary first provides the organiza- tion with the reasonable opportunity to develop and implement a corrective action plan to cor- rect the deficiencies that were the basis of the Secretary’s determination under paragraph (1) and the organization fails to develop or imple- ment such a plan; ”(B) in deciding whether to impose sanctions, the Secretary considers aggravating factors such as whether an organization has a history of de- ficiencies or has not taken action to correct defi- ciencies the Secretary has brought to the organi- zation’s attention; ”(C) there are no unreasonable or unneces- sary delays between the finding of a deficiency and the imposition of sanctions; and ”(D) the Secretary provides the organization with reasonable notice and opportunity for hearing (including the right to appeal an initial decision) before imposing any sanction or termi- nating the contract.”. (4) CONFORMING AMENDMENTS.\u2014Section 1876(i)(6)(B) (42 U.S.C. 1395mm(i)(6)(B)) is amended by striking the second sentence. (b) AGREEMENTS WITH PEER REVIEW ORGANI- ZATIONS.\u2014Section 1876(i)(7)(A) (42 U.S.C. 1395mm(i)(7)(A)) is amended by striking ”an agreement” and inserting ”a written agree- ment”. (c) EFFECTIVE DATE.\u2014The amendments made by this section shall apply with respect to con- tract years beginning on or after January 1, 1997. SEC. 216. ADDITIONAL EXCEPTION TO ANTI-KICK- BACK PENALTIES FOR RISK-SHARING ARRANGEMENTS. (a) IN GENERAL.\u2014Section 1128B(b)(3) (42 U.S.C. 1320a 7b(b)(3)) is amended\u2014 (1) by striking ”and” at the end of subpara- graph (D); (2) by striking the period at the end of sub- paragraph (E) and inserting ”; and”; and (3) by adding at the end the following new subparagraph: ”(F) any remuneration between an organiza- tion and an individual or entity providing items or services, or a combination thereof, pursuant to a written agreement between the organization and the individual or entity if the organization is an eligible organization under section 1876 or if the written agreement, through a risk-sharing arrangement, places the individual or entity at substantial financial risk for the cost or utiliza- tion of the items or services, or a combination thereof, which the individual or entity is obli- gated to provide.”. (b) NEGOTIATED RULEMAKING FOR RISK-SHAR- ING EXCEPTION.\u2014 (1) ESTABLISHMENT.\u2014 CONGRESSIONAL RECORD \u2014 HOUSEH9492 July 31, 1996 (A) IN GENERAL.\u2014The Secretary of Health and Human Services (in this subsection referred to as the ”Secretary”) shall establish, on an expe- dited basis and using a negotiated rulemaking process under subchapter 3 of chapter 5 of title 5, United States Code, standards relating to the exception for risk-sharing arrangements to the anti-kickback penalties described in section 1128B(b)(3)(F) of the Social Security Act, as added by subsection (a). (B) FACTORS TO CONSIDER.\u2014In establishing standards relating to the exception for risk- sharing arrangements to the anti-kickback pen- alties under subparagraph (A), the Secretary\u2014 (i) shall consult with the Attorney General and representatives of the hospital, physician, other health practitioner, and health plan com- munities, and other interested parties; and (ii) shall take into account\u2014 (I) the level of risk appropriate to the size and type of arrangement; (II) the frequency of assessment and distribu- tion of incentives; (III) the level of capital contribution; and (IV) the extent to which the risk-sharing ar- rangement provides incentives to control the cost and quality of health care services. (2) PUBLICATION OF NOTICE.\u2014In carrying out the rulemaking process under this subsection, the Secretary shall publish the notice provided for under section 564(a) of title 5, United States Code, by not later than 45 days after the date of the enactment of this Act. (3) TARGET DATE FOR PUBLICATION OF RULE.\u2014 As part of the notice under paragraph (2), and for purposes of this subsection, the ‘target date for publication’ (referred to in section 564(a)(5) of such title) shall be January 1, 1997. (4) ABBREVIATED PERIOD FOR SUBMISSION OF COMMENTS.\u2014In applying section 564(c) of such title under this subsection, ’15 days’ shall be substituted for ’30 days’. (5) APPOINTMENT OF NEGOTIATED RULEMAKING COMMITTEE AND FACILITATOR.\u2014The Secretary shall provide for\u2014 (A) the appointment of a negotiated rule- making committee under section 565(a) of such title by not later than 30 days after the end of the comment period provided for under section 564(c) of such title (as shortened under para- graph (4)), and (B) the nomination of a facilitator under sec- tion 566(c) of such title by not later than 10 days after the date of appointment of the committee. (6) PRELIMINARY COMMITTEE REPORT.\u2014The negotiated rulemaking committee appointed under paragraph (5) shall report to the Sec- retary, by not later than October 1, 1996, regard- ing the committee’s progress on achieving a con- sensus with regard to the rulemaking proceeding and whether such consensus is likely to occur before one month before the target date for pub- lication of the rule. If the committee reports that the committee has failed to make significant progress towards such consensus or is unlikely to reach such consensus by the target date, the Secretary may terminate such process and pro- vide for the publication of a rule under this sub- section through such other methods as the Sec- retary may provide. (7) FINAL COMMITTEE REPORT.\u2014If the commit- tee is not terminated under paragraph (6), the rulemaking committee shall submit a report con- taining a proposed rule by not later than one month before the target publication date. (8) INTERIM, FINAL EFFECT.\u2014The Secretary shall publish a rule under this subsection in the Federal Register by not later than the target publication date. Such rule shall be effective and final immediately on an interim basis, but is subject to change and revision after public no- tice and opportunity for a period (of not less than 60 days) for public comment. In connection with such rule, the Secretary shall specify the process for the timely review and approval of applications of entities to be certified as pro- vider-sponsored organizations pursuant to such rules and consistent with this subsection. (9) PUBLICATION OF RULE AFTER PUBLIC COM- MENT.\u2014The Secretary shall provide for consid- eration of such comments and republication of such rule by not later than 1 year after the tar- get publication date. (c) EFFECTIVE DATE.\u2014The amendments made by subsection (a) shall apply to written agree- ments entered into on or after January 1, 1997, without regard to whether regulations have been issued to implement such amendments. SEC. 217. CRIMINAL PENALTY FOR FRAUDULENT DISPOSITION OF ASSETS IN ORDER TO OBTAIN MEDICAID BENEFITS. Section 1128B(a) (42 U.S.C. 1320a 7b(a)) is amended\u2014 (1) by striking ”or” at the end of paragraph (4); (2) by adding ”or” at the end of paragraph (5); and (3) by inserting after paragraph (5) the follow- ing new paragraph: ”(6) knowingly and willfully disposes of assets (including by any transfer in trust) in order for an individual to become eligible for medical as- sistance under a State plan under title XIX, if disposing of the assets results in the imposition of a period of ineligibility for such assistance under section 1917(c),”. SEC. 218. EFFECTIVE DATE. Except as otherwise provided, the amendments made by this subtitle shall take effect January 1, 1997. Subtitle C\u2014Data Collection SEC. 221. ESTABLISHMENT OF THE HEALTH CARE FRAUD AND ABUSE DATA COLLEC- TION PROGRAM. (a) IN GENERAL.\u2014Title XI (42 U.S.C. 1301 et seq.), as amended by sections 201 and 205, is amended by inserting after section 1128D the following new section: ”HEALTH CARE FRAUD AND ABUSE DATA COLLECTION PROGRAM ”SEC. 1128E. (a) GENERAL PURPOSE.\u2014Not later than January 1, 1997, the Secretary shall estab- lish a national health care fraud and abuse data collection program for the reporting of final adverse actions (not including settlements in which no findings of liability have been made) against health care providers, suppliers, or practitioners as required by subsection (b), with access as set forth in subsection (c), and shall maintain a database of the information collected under this section. ”(b) REPORTING OF INFORMATION.\u2014 ”(1) IN GENERAL.\u2014Each Government agency and health plan shall report any final adverse action (not including settlements in which no findings of liability have been made) taken against a health care provider, supplier, or practitioner. ”(2) INFORMATION TO BE REPORTED.\u2014The in- formation to be reported under paragraph (1) in- cludes: ”(A) The name and TIN (as defined in section 7701(a)(41) of the Internal Revenue Code of 1986) of any health care provider, supplier, or practitioner who is the subject of a final adverse action. ”(B) The name (if known) of any health care entity with which a health care provider, sup- plier, or practitioner, who is the subject of a final adverse action, is affiliated or associated. ”(C) The nature of the final adverse action and whether such action is on appeal. ”(D) A description of the acts or omissions and injuries upon which the final adverse ac- tion was based, and such other information as the Secretary determines by regulation is re- quired for appropriate interpretation of infor- mation reported under this section. ”(3) CONFIDENTIALITY.\u2014In determining what information is required, the Secretary shall in- clude procedures to assure that the privacy of individuals receiving health care services is ap- propriately protected. ”(4) TIMING AND FORM OF REPORTING.\u2014The information required to be reported under this subsection shall be reported regularly (but not less often than monthly) and in such form and manner as the Secretary prescribes. Such infor- mation shall first be required to be reported on a date specified by the Secretary. ”(5) TO WHOM REPORTED.\u2014The information required to be reported under this subsection shall be reported to the Secretary. ”(c) DISCLOSURE AND CORRECTION OF INFOR- MATION.\u2014 ”(1) DISCLOSURE.\u2014With respect to the infor- mation about final adverse actions (not includ- ing settlements in which no findings of liability have been made) reported to the Secretary under this section with respect to a health care pro- vider, supplier, or practitioner, the Secretary shall, by regulation, provide for\u2014 ”(A) disclosure of the information, upon re- quest, to the health care provider, supplier, or licensed practitioner, and ”(B) procedures in the case of disputed accu- racy of the information. ”(2) CORRECTIONS.\u2014Each Government agency and health plan shall report corrections of in- formation already reported about any final ad- verse action taken against a health care pro- vider, supplier, or practitioner, in such form and manner that the Secretary prescribes by regula- tion. ”(d) ACCESS TO REPORTED INFORMATION.\u2014 ”(1) AVAILABILITY.\u2014The information in the database maintained under this section shall be available to Federal and State government agen- cies and health plans pursuant to procedures that the Secretary shall provide by regulation. ”(2) FEES FOR DISCLOSURE.\u2014The Secretary may establish or approve reasonable fees for the disclosure of information in such database (other than with respect to requests by Federal agencies). The amount of such a fee shall be sufficient to recover the full costs of operating the database. Such fees shall be available to the Secretary or, in the Secretary’s discretion to the agency designated under this section to cover such costs. ”(e) PROTECTION FROM LIABILITY FOR RE- PORTING.\u2014No person or entity, including the agency designated by the Secretary in sub- section (b)(5) shall be held liable in any civil ac- tion with respect to any report made as required by this section, without knowledge of the falsity of the information contained in the report. ”(f) COORDINATION WITH NATIONAL PRACTI- TIONER DATA BANK.\u2014The Secretary shall imple- ment this section in such a manner as to avoid duplication with the reporting requirements es- tablished for the National Practitioner Data Bank under the Health Care Quality Improve- ment Act of 1986 (42 U.S.C. 11101 et seq.). ”(g) DEFINITIONS AND SPECIAL RULES.\u2014For purposes of this section: ”(1) FINAL ADVERSE ACTION.\u2014 ”(A) IN GENERAL.\u2014The term ‘final adverse ac- tion’ includes: ”(i) Civil judgments against a health care pro- vider, supplier, or practitioner in Federal or State court related to the delivery of a health care item or service. ”(ii) Federal or State criminal convictions re- lated to the delivery of a health care item or service. ”(iii) Actions by Federal or State agencies re- sponsible for the licensing and certification of health care providers, suppliers, and licensed health care practitioners, including\u2014 ”(I) formal or official actions, such as revoca- tion or suspension of a license (and the length of any such suspension), reprimand, censure or probation, ”(II) any other loss of license or the right to apply for, or renew, a license of the provider, supplier, or practitioner, whether by operation of law, voluntary surrender, non-renewability, or otherwise, or ”(III) any other negative action or finding by such Federal or State agency that is publicly available information. ”(iv) Exclusion from participation in Federal or State health care programs (as defined in sec- tions 1128B(f) and 1128(h), respectively). CONGRESSIONAL RECORD \u2014 HOUSE H9493July 31, 1996 ”(v) Any other adjudicated actions or deci- sions that the Secretary shall establish by regu- lation. ”(B) EXCEPTION.\u2014The term does not include any action with respect to a malpractice claim. ”(2) PRACTITIONER.\u2014The terms ‘licensed health care practitioner’, ‘licensed practitioner’, and ‘practitioner’ mean, with respect to a State, an individual who is licensed or otherwise au- thorized by the State to provide health care services (or any individual who, without au- thority holds himself or herself out to be so li- censed or authorized). ”(3) GOVERNMENT AGENCY.\u2014The term ‘Gov- ernment agency’ shall include: ”(A) The Department of Justice. ”(B) The Department of Health and Human Services. ”(C) Any other Federal agency that either ad- ministers or provides payment for the delivery of health care services, including, but not limited to the Department of Defense and the Veterans’ Administration. ”(D) State law enforcement agencies. ”(E) State medicaid fraud control units. ”(F) Federal or State agencies responsible for the licensing and certification of health care providers and licensed health care practitioners. ”(4) HEALTH PLAN.\u2014The term ‘health plan’ has the meaning given such term by section 1128C(c). ”(5) DETERMINATION OF CONVICTION.\u2014For purposes of paragraph (1), the existence of a conviction shall be determined under paragraph (4) of section 1128(i).”. (b) IMPROVED PREVENTION IN ISSUANCE OF MEDICARE PROVIDER NUMBERS.\u2014Section 1842(r) (42 U.S.C. 1395u(r)) is amended by adding at the end the following new sentence: ”Under such system, the Secretary may impose appropriate fees on such physicians to cover the costs of in- vestigation and recertification activities with re- spect to the issuance of the identifiers.”. Subtitle D\u2014Civil Monetary Penalties SEC. 231. SOCIAL SECURITY ACT CIVIL MONETARY PENALTIES. (a) GENERAL CIVIL MONETARY PENALTIES.\u2014 Section 1128A (42 U.S.C. 1320a 7a) is amended as follows: (1) In the third sentence of subsection (a), by striking ”programs under title XVIII” and in- serting ”Federal health care programs (as de- fined in section 1128B(f)(1))”. (2) In subsection (f)\u2014 (A) by redesignating paragraph (3) as para- graph (4); and (B) by inserting after paragraph (2) the fol- lowing new paragraph: ”(3) With respect to amounts recovered arising out of a claim under a Federal health care pro- gram (as defined in section 1128B(f)), the por- tion of such amounts as is determined to have been paid by the program shall be repaid to the program, and the portion of such amounts at- tributable to the amounts recovered under this section by reason of the amendments made by the Health Insurance Portability and Account- ability Act of 1996 (as estimated by the Sec- retary) shall be deposited into the Federal Hos- pital Insurance Trust Fund pursuant to section 1817(k)(2)(C).”. (3) In subsection (i)\u2014 (A) in paragraph (2), by striking ”title V, XVIII, XIX, or XX of this Act” and inserting ”a Federal health care program (as defined in section 1128B(f))”, (B) in paragraph (4), by striking ”a health in- surance or medical services program under title XVIII or XIX of this Act” and inserting ”a Fed- eral health care program (as so defined)”, and (C) in paragraph (5), by striking ”title V, XVIII, XIX, or XX” and inserting ”a Federal health care program (as so defined)”. (4) By adding at the end the following new subsection: ”(m)(1) For purposes of this section, with re- spect to a Federal health care program not con- tained in this Act, references to the Secretary in this section shall be deemed to be references to the Secretary or Administrator of the depart- ment or agency with jurisdiction over such pro- gram and references to the Inspector General of the Department of Health and Human Services in this section shall be deemed to be references to the Inspector General of the applicable de- partment or agency. ”(2)(A) The Secretary and Administrator of the departments and agencies referred to in paragraph (1) may include in any action pursu- ant to this section, claims within the jurisdic- tion of other Federal departments or agencies as long as the following conditions are satisfied: ”(i) The case involves primarily claims submit- ted to the Federal health care programs of the department or agency initiating the action. ”(ii) The Secretary or Administrator of the de- partment or agency initiating the action gives notice and an opportunity to participate in the investigation to the Inspector General of the de- partment or agency with primary jurisdiction over the Federal health care programs to which the claims were submitted. ”(B) If the conditions specified in subpara- graph (A) are fulfilled, the Inspector General of the department or agency initiating the action is authorized to exercise all powers granted under the Inspector General Act of 1978 (5 U.S.C. App.) with respect to the claims submitted to the other departments or agencies to the same man- ner and extent as provided in that Act with re- spect to claims submitted to such departments or agencies.”. (b) EXCLUDED INDIVIDUAL RETAINING OWNER- SHIP OR CONTROL INTEREST IN PARTICIPATING ENTITY.\u2014Section 1128A(a) (42 U.S.C. 1320a 7a(a)) is amended\u2014 (1) by striking ”or” at the end of paragraph (1)(D); (2) by striking ”, or” at the end of paragraph (2) and inserting a semicolon; (3) by striking the semicolon at the end of paragraph (3) and inserting ”; or”; and (4) by inserting after paragraph (3) the follow- ing new paragraph: ”(4) in the case of a person who is not an or- ganization, agency, or other entity, is excluded from participating in a program under title XVIII or a State health care program in accord- ance with this subsection or under section 1128 and who, at the time of a violation of this sub- section\u2014 ”(A) retains a direct or indirect ownership or control interest in an entity that is participating in a program under title XVIII or a State health care program, and who knows or should know of the action constituting the basis for the ex- clusion; or ”(B) is an officer or managing employee (as defined in section 1126(b)) of such an entity;”. (c) MODIFICATIONS OF AMOUNTS OF PENALTIES AND ASSESSMENTS.\u2014Section 1128A(a) (42 U.S.C. 1320a 7a(a)), as amended by subsection (b), is amended in the matter following paragraph (4)\u2014 (1) by striking ”$2,000” and inserting ”$10,000”; (2) by inserting ”; in cases under paragraph (4), $10,000 for each day the prohibited relation- ship occurs” after ”false or misleading informa- tion was given”; and (3) by striking ”twice the amount” and insert- ing ”3 times the amount”. (d) CLARIFICATION OF LEVEL OF KNOWLEDGE REQUIRED FOR IMPOSITION OF CIVIL MONETARY PENALTIES.\u2014 (1) IN GENERAL.\u2014Section 1128A(a) (42 U.S.C. 1320a 7a(a)) is amended\u2014 (A) in paragraphs (1) and (2), by inserting ”knowingly” before ”presents” each place it appears; and (B) in paragraph (3), by striking ”gives” and inserting ”knowingly gives or causes to be given”. (2) DEFINITION OF STANDARD.\u2014Section 1128A(i) (42 U.S.C. 1320a 7a(i)), as amended by subsection (h)(2), is amended by adding at the end the following new paragraph: ”(7) The term ‘should know’ means that a per- son, with respect to information\u2014 ”(A) acts in deliberate ignorance of the truth or falsity of the information; or ”(B) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent to defraud is re- quired.”. (e) CLAIM FOR ITEM OR SERVICE BASED ON IN- CORRECT CODING OR MEDICALLY UNNECESSARY SERVICES.\u2014Section 1128A(a)(1) (42 U.S.C. 1320a 7a(a)(1)), as amended by subsection (b), is amended\u2014 (1) in subparagraph (A) by striking ”claimed,” and inserting ”claimed, including any person who engages in a pattern or practice of presenting or causing to be presented a claim for an item or service that is based on a code that the person knows or should know will re- sult in a greater payment to the person than the code the person knows or should know is appli- cable to the item or service actually provided,”; (2) in subparagraph (C), by striking ”or” at the end; (3) in subparagraph (D), by striking the semi- colon and inserting ”, or”; and (4) by inserting after subparagraph (D) the following new subparagraph: ”(E) is for a pattern of medical or other items or services that a person knows or should know are not medically necessary;”. (f) SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR FAILURE TO COMPLY WITH STATU- TORY OBLIGATIONS.\u2014Section 1156(b)(3) (42 U.S.C. 1320c 5(b)(3)) is amended by striking ”the actual or estimated cost” and inserting ”up to $10,000 for each instance”. (g) PROCEDURAL PROVISIONS.\u2014Section 1876(i)(6) (42 U.S.C. 1395mm(i)(6)), as amended by section 215(a)(2), is amended by adding at the end the following new subparagraph: ”(D) The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under subparagraph (B)(i) or (C)(i) in the same manner as such provisions apply to a civil money penalty or proceeding under section 1128A(a).”. (h) PROHIBITION AGAINST OFFERING INDUCE- MENTS TO INDIVIDUALS ENROLLED UNDER PRO- GRAMS OR PLANS.\u2014 (1) OFFER OF REMUNERATION.\u2014Section 1128A(a) (42 U.S.C. 1320a 7a(a)), as amended by subsection (b), is amended\u2014 (A) by striking ”or” at the end of paragraph (3); (B) by striking the semicolon at the end of paragraph (4) and inserting ”; or”; and (D) by inserting after paragraph (4) the fol- lowing new paragraph: ”(5) offers to or transfers remuneration to any individual eligible for benefits under title XVIII of this Act, or under a State health care pro- gram (as defined in section 1128(h)) that such person knows or should know is likely to influ- ence such individual to order or receive from a particular provider, practitioner, or supplier any item or service for which payment may be made, in whole or in part, under title XVIII, or a State health care program (as so defined);”. (2) REMUNERATION DEFINED.\u2014Section 1128A(i) (42 U.S.C. 1320a 7a(i)) is amended by adding at the end the following new paragraph: ”(6) The term ‘remuneration’ includes the waiver of coinsurance and deductible amounts (or any part thereof), and transfers of items or services for free or for other than fair market value. The term ‘remuneration’ does not in- clude\u2014 ”(A) the waiver of coinsurance and deductible amounts by a person, if\u2014 ”(i) the waiver is not offered as part of any advertisement or solicitation; ”(ii) the person does not routinely waive coin- surance or deductible amounts; and ”(iii) the person\u2014 CONGRESSIONAL RECORD \u2014 HOUSEH9494 July 31, 1996 ”(I) waives the coinsurance and deductible amounts after determining in good faith that the individual is in financial need; ”(II) fails to collect coinsurance or deductible amounts after making reasonable collection ef- forts; or ”(III) provides for any permissible waiver as specified in section 1128B(b)(3) or in regulations issued by the Secretary; ”(B) differentials in coinsurance and deduct- ible amounts as part of a benefit plan design as long as the differentials have been disclosed in writing to all beneficiaries, third party payers, and providers, to whom claims are presented and as long as the differentials meet the stand- ards as defined in regulations promulgated by the Secretary not later than 180 days after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996; or ”(C) incentives given to individuals to pro- mote the delivery of preventive care as deter- mined by the Secretary in regulations so pro- mulgated.”. (i) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to acts or omissions occurring on or after January 1, 1997. SEC. 232. PENALTY FOR FALSE CERTIFICATION FOR HOME HEALTH SERVICES. (a) IN GENERAL.\u2014Section 1128A(b) (42 U.S.C. 1320a 7a(b)) is amended by adding at the end the following new paragraph: ”(3)(A) Any physician who executes a docu- ment described in subparagraph (B) with respect to an individual knowing that all of the require- ments referred to in such subparagraph are not met with respect to the individual shall be sub- ject to a civil monetary penalty of not more than the greater of\u2014 ”(i) $5,000, or ”(ii) three times the amount of the payments under title XVIII for home health services which are made pursuant to such certification. ”(B) A document described in this subpara- graph is any document that certifies, for pur- poses of title XVIII, that an individual meets the requirements of section 1814(a)(2)(C) or 1835(a)(2)(A) in the case of home health services furnished to the individual.”. (b) EFFECTIVE DATE.\u2014The amendment made by subsection (a) shall apply to certifications made on or after the date of the enactment of this Act. Subtitle E\u2014Revisions to Criminal Law SEC. 241. DEFINITIONS RELATING TO FEDERAL HEALTH CARE OFFENSE. (a) IN GENERAL.\u2014Chapter 1 of title 18, United States Code, is amended by adding at the end the following: ” 24. Definitions relating to Federal health care offense ”(a) As used in this title, the term ‘Federal health care offense’ means a violation of, or a criminal conspiracy to violate\u2014 ”(1) section 669, 1035, 1347, or 1518 of this title; ”(2) section 287, 371, 664, 666, 1001, 1027, 1341, 1343, or 1954 of this title, if the violation or con- spiracy relates to a health care benefit program. ”(b) As used in this title, the term ‘health care benefit program’ means any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual, and includes any individual or entity who is providing a medical benefit, item, or service for which payment may be made under the plan or contract.”. (b) CLERICAL AMENDMENT.\u2014The table of sec- tions at the beginning of chapter 2 of title 18, United States Code, is amended by inserting after the item relating to section 23 the following new item: ”24. Definitions relating to Federal health care offense.”. SEC. 242. HEALTH CARE FRAUD. (a) OFFENSE.\u2014 (1) IN GENERAL.\u2014Chapter 63 of title 18, United States Code, is amended by adding at the end the following: ” 1347. Health care fraud ”Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice\u2014 ”(1) to defraud any health care benefit pro- gram; or ”(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.”. (2) CLERICAL AMENDMENT.\u2014The table of sec- tions at the beginning of chapter 63 of title 18, United States Code, is amended by adding at the end the following: ”1347. Health care fraud.”. (b) CRIMINAL FINES DEPOSITED IN FEDERAL HOSPITAL INSURANCE TRUST FUND.\u2014The Sec- retary of the Treasury shall deposit into the Federal Hospital Insurance Trust Fund pursu- ant to section 1817(k)(2)(C) of the Social Secu- rity Act (42 U.S.C. 1395i) an amount equal to the criminal fines imposed under section 1347 of title 18, United States Code (relating to health care fraud). SEC. 243. THEFT OR EMBEZZLEMENT. (a) IN GENERAL.\u2014Chapter 31 of title 18, Unit- ed States Code, is amended by adding at the end the following: ” 669. Theft or embezzlement in connection with health care ”(a) Whoever knowingly and willfully embez- zles, steals, or otherwise without authority con- verts to the use of any person other than the rightful owner, or intentionally misapplies any of the moneys, funds, securities, premiums, cred- its, property, or other assets of a health care benefit program, shall be fined under this title or imprisoned not more than 10 years, or both; but if the value of such property does not exceed the sum of $100 the defendant shall be fined under this title or imprisoned not more than one year, or both. ”(b) As used in this section, the term ‘health care benefit program’ has the meaning given such term in section 1347(b) of this title.”. (b) CLERICAL AMENDMENT.\u2014The table of sec- tions at the beginning of chapter 31 of title 18, United States Code, is amended by adding at the end the following: ”669. Theft or embezzlement in connection with health care.”. SEC. 244. FALSE STATEMENTS. (a) IN GENERAL.\u2014Chapter 47 of title 18, Unit- ed States Code, is amended by adding at the end the following: ” 1035. False statements relating to health care matters ”(a) Whoever, in any matter involving a health care benefit program, knowingly and willfully\u2014 ”(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact; or ”(2) makes any materially false, fictitious, or fraudulent statements or representations, or makes or uses any materially false writing or document knowing the same to contain any ma- terially false, fictitious, or fraudulent statement or entry, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 5 years, or both. ”(b) As used in this section, the term ‘health care benefit program’ has the meaning given such term in section 1347(b) of this title.”. (b) CLERICAL AMENDMENT.\u2014The table of sec- tions at the beginning of chapter 47 of title 18, United States Code, is amended by adding at the end the following new item: ”1035. False statements relating to health care matters.”. SEC. 245. OBSTRUCTION OF CRIMINAL INVES- TIGATIONS OF HEALTH CARE OF- FENSES. (a) IN GENERAL.\u2014Chapter 73 of title 18, Unit- ed States Code, is amended by adding at the end the following: ” 1518. Obstruction of criminal investigations of health care offenses ”(a) Whoever willfully prevents, obstructs, misleads, delays or attempts to prevent, ob- struct, mislead, or delay the communication of information or records relating to a violation of a Federal health care offense to a criminal in- vestigator shall be fined under this title or im- prisoned not more than 5 years, or both. ”(b) As used in this section the term ‘criminal investigator’ means any individual duly author- ized by a department, agency, or armed force of the United States to conduct or engage in inves- tigations for prosecutions for violations of health care offenses.”. (b) CLERICAL AMENDMENT.\u2014The table of sec- tions at the beginning of chapter 73 of title 18, United States Code, is amended by adding at the end the following new item: ”1518. Obstruction of criminal investigations of health care offenses.”. SEC. 246. LAUNDERING OF MONETARY INSTRU- MENTS. Section 1956(c)(7) of title 18, United States Code, is amended by adding at the end the fol- lowing: ”(F) Any act or activity constituting an of- fense involving a Federal health care offense.”. SEC. 247. INJUNCTIVE RELIEF RELATING TO HEALTH CARE OFFENSES. (a) IN GENERAL.\u2014Section 1345(a)(1) of title 18, United States Code, is amended\u2014 (1) by striking ”or” at the end of subpara- graph (A); (2) by inserting ”or” at the end of subpara- graph (B); and (3) by adding at the end the following: ”(C) committing or about to commit a Federal health care offense.”. (b) FREEZING OF ASSETS.\u2014Section 1345(a)(2) of title 18, United States Code, is amended by in- serting ”or a Federal health care offense” after ”title)”. SEC. 248. AUTHORIZED INVESTIGATIVE DEMAND PROCEDURES. (a) IN GENERAL.\u2014Chapter 223 of title 18, Unit- ed States Code, is amended by adding after sec- tion 3485 the following: ” 3486. Authorized investigative demand pro- cedures ”(a) AUTHORIZATION.\u2014(1) In any investiga- tion relating to any act or activity involving a Federal health care offense, the Attorney Gen- eral or the Attorney General’s designee may issue in writing and cause to be served a sub- poena\u2014 ”(A) requiring the production of any records (including any books, papers, documents, elec- tronic media, or other objects or tangible things), which may be relevant to an authorized law enforcement inquiry, that a person or legal entity may possess or have care, custody, or control; or ”(B) requiring a custodian of records to give testimony concerning the production and au- thentication of such records. ”(2) A subpoena under this subsection shall describe the objects required to be produced and prescribe a return date within a reasonable pe- riod of time within which the objects can be as- sembled and made available. ”(3) The production of records shall not be re- quired under this section at any place more than 500 miles distant from the place where the CONGRESSIONAL RECORD \u2014 HOUSE H9495July 31, 1996 subpoena for the production of such records is served. ”(4) Witnesses summoned under this section shall be paid the same fees and mileage that are paid witnesses in the courts of the United States. ”(b) SERVICE.\u2014A subpoena issued under this section may be served by any person who is at least 18 years of age and is designated in the subpoena to serve it. Service upon a natural person may be made by personal delivery of the subpoena to him. Service may be made upon a domestic or foreign corporation or upon a part- nership or other unincorporated association which is subject to suit under a common name, by delivering the subpoena to an officer, to a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process. The affidavit of the person serving the subpoena entered on a true copy thereof by the person serving it shall be proof of service. ”(c) ENFORCEMENT.\u2014In the case of contumacy by or refusal to obey a subpoena issued to any person, the Attorney General may invoke the aid of any court of the United States within the jurisdiction of which the investigation is carried on or of which the subpoenaed person is an in- habitant, or in which he carries on business or may be found, to compel compliance with the subpoena. The court may issue an order requir- ing the subpoenaed person to appear before the Attorney General to produce records, if so or- dered, or to give testimony concerning the pro- duction and authentication of such records. Any failure to obey the order of the court may be punished by the court as a contempt thereof. All process in any such case may be served in any judicial district in which such person may be found. ”(d) IMMUNITY FROM CIVIL LIABILITY.\u2014Not- withstanding any Federal, State, or local law, any person, including officers, agents, and em- ployees, receiving a summons under this section, who complies in good faith with the summons and thus produces the materials sought, shall not be liable in any court of any State or the United States to any customer or other person for such production or for nondisclosure of that production to the customer. ”(e) LIMITATION ON USE.\u2014(1) Health informa- tion about an individual that is disclosed under this section may not be used in, or disclosed to any person for use in, any administrative, civil, or criminal action or investigation directed against the individual who is the subject of the information unless the action or investigation arises out of and is directly related to receipt of health care or payment for health care or action involving a fraudulent claim related to health; or if authorized by an appropriate order of a court of competent jurisdiction, granted after application showing good cause therefor. ”(2) In assessing good cause, the court shall weigh the public interest and the need for dis- closure against the injury to the patient, to the physician-patient relationship, and to the treat- ment services. ”(3) Upon the granting of such order, the court, in determining the extent to which any disclosure of all or any part of any record is necessary, shall impose appropriate safeguards against unauthorized disclosure.”. (b) CLERICAL AMENDMENT.\u2014The table of sec- tions at the beginning of chapter 223 of title 18, United States Code, is amended by inserting after the item relating to section 3485 the follow- ing new item: ”3486. Authorized investigative demand proce- dures.”. (c) CONFORMING AMENDMENT.\u2014Section 1510(b)(3)(B) of title 18, United States Code, is amended by inserting ”or a Department of Jus- tice subpoena (issued under section 3486 of title 18),” after ”subpoena”. SEC. 249. FORFEITURES FOR FEDERAL HEALTH CARE OFFENSES. (a) IN GENERAL.\u2014Section 982(a) of title 18, United States Code, is amended by adding after paragraph (5) the following new paragraph: ”(6) The court, in imposing sentence on a per- son convicted of a Federal health care offense, shall order the person to forfeit property, real or personal, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of the offense.”. (b) CONFORMING AMENDMENT.\u2014Section 982(b)(1)(A) of title 18, United States Code, is amended by inserting ”or (a)(6)” after ”(a)(1)”. (c) PROPERTY FORFEITED DEPOSITED IN FED- ERAL HOSPITAL INSURANCE TRUST FUND.\u2014 (1) IN GENERAL.\u2014After the payment of the costs of asset forfeiture has been made and after all restoration payments (if any) have been made, and notwithstanding any other provision of law, the Secretary of the Treasury shall de- posit into the Federal Hospital Insurance Trust Fund pursuant to section 1817(k)(2)(C) of the Social Security Act, as added by section 301(b), an amount equal to the net amount realized from the forfeiture of property by reason of a Federal health care offense pursuant to section 982(a)(6) of title 18, United States Code. (2) COSTS OF ASSET FORFEITURE.\u2014For pur- poses of paragraph (1), the term ”payment of the costs of asset forfeiture” means\u2014 (A) the payment, at the discretion of the At- torney General, of any expenses necessary to seize, detain, inventory, safeguard, maintain, advertise, sell, or dispose of property under sei- zure, detention, or forfeited, or of any other necessary expenses incident to the seizure, de- tention, forfeiture, or disposal of such property, including payment for\u2014 (i) contract services; (ii) the employment of outside contractors to operate and manage properties or provide other specialized services necessary to dispose of such properties in an effort to maximize the return from such properties; and (iii) reimbursement of any Federal, State, or local agency for any expenditures made to per- form the functions described in this subpara- graph; (B) at the discretion of the Attorney General, the payment of awards for information or assist- ance leading to a civil or criminal forfeiture in- volving any Federal agency participating in the Health Care Fraud and Abuse Control Account; (C) the compromise and payment of valid liens and mortgages against property that has been forfeited, subject to the discretion of the Attor- ney General to determine the validity of any such lien or mortgage and the amount of pay- ment to be made, and the employment of attor- neys and other personnel skilled in State real es- tate law as necessary; (D) payment authorized in connection with remission or mitigation procedures relating to property forfeited; and (E) the payment of State and local property taxes on forfeited real property that accrued be- tween the date of the violation giving rise to the forfeiture and the date of the forfeiture order. (3) RESTORATION PAYMENT.\u2014Notwithstanding any other provision of law, if the Federal health care offense referred to in paragraph (1) re- sulted in a loss to an employee welfare benefit plan within the meaning of section 3(1) of the Employee Retirement Income Security Act of 1974, the Secretary of the Treasury shall trans- fer to such employee welfare benefit plan, from the amount realized from the forfeiture of prop- erty referred to in paragraph (1), an amount equal to such loss. For purposes of paragraph (1), the term ‘restoration payment’ means the amount transferred to an employee welfare ben- efit plan pursuant to this paragraph.”. SEC. 250. RELATION TO ERISA AUTHORITY. Nothing in this subtitle shall be construed as affecting the authority of the Secretary of Labor under section 506(b) of the Employee Retirement Income Security Act of 1974, including the Sec- retary’s authority with respect to violations of title 18, United States Code (as amended by this subtitle). Subtitle F\u2014Administrative Simplification SEC. 261. PURPOSE. It is the purpose of this subtitle to improve the medicare program under title XVIII of the So- cial Security Act, the medicaid program under title XIX of such Act, and the efficiency and ef- fectiveness of the health care system, by encour- aging the development of a health information system through the establishment of standards and requirements for the electronic transmission of certain health information. SEC. 262. ADMINISTRATIVE SIMPLIFICATION. (a) IN GENERAL.\u2014Title XI (42 U.S.C. 1301 et seq.) is amended by adding at the end the fol- lowing: ”PART C\u2014ADMINISTRATIVE SIMPLIFICATION ”DEFINITIONS ”SEC. 1171. For purposes of this part: ”(1) CODE SET.\u2014The term ‘code set’ means any set of codes used for encoding data ele- ments, such as tables of terms, medical concepts, medical diagnostic codes, or medical procedure codes. ”(2) HEALTH CARE CLEARINGHOUSE.\u2014The term ‘health care clearinghouse’ means a public or private entity that processes or facilitates the processing of nonstandard data elements of health information into standard data elements. ”(3) HEALTH CARE PROVIDER.\u2014The term ‘health care provider’ includes a provider of services (as defined in section 1861(u)), a pro- vider of medical or other health services (as de- fined in section 1861(s)), and any other person furnishing health care services or supplies. ”(4) HEALTH INFORMATION.\u2014The term ‘health information’ means any information, whether oral or recorded in any form or medium, that\u2014 ”(A) is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse; and ”(B) relates to the past, present, or future physical or mental health or condition of an in- dividual, the provision of health care to an indi- vidual, or the past, present, or future payment for the provision of health care to an individual. ”(5) HEALTH PLAN.\u2014The term ‘health plan’ means an individual or group plan that pro- vides, or pays the cost of, medical care (as such term is defined in section 2791 of the Public Health Service Act). Such term includes the fol- lowing, and any combination thereof: ”(A) A group health plan (as defined in sec- tion 2791(a) of the Public Health Service Act), but only if the plan\u2014 ”(i) has 50 or more participants (as defined in section 3(7) of the Employee Retirement Income Security Act of 1974); or ”(ii) is administered by an entity other than the employer who established and maintains the plan. ”(B) A health insurance issuer (as defined in section 2791(b) of the Public Health Service Act). ”(C) A health maintenance organization (as defined in section 2791(b) of the Public Health Service Act). ”(D) Part A or part B of the medicare pro- gram under title XVIII. ”(E) The medicaid program under title XIX. ”(F) A medicare supplemental policy (as de- fined in section 1882(g)(1)). ”(G) A long-term care policy, including a nursing home fixed indemnity policy (unless the Secretary determines that such a policy does not provide sufficiently comprehensive coverage of a benefit so that the policy should be treated as a health plan). ”(H) An employee welfare benefit plan or any other arrangement which is established or main- tained for the purpose of offering or providing health benefits to the employees of 2 or more em- ployers. ”(I) The health care program for active mili- tary personnel under title 10, United States Code. CONGRESSIONAL RECORD \u2014 HOUSEH9496 July 31, 1996 ”(J) The veterans health care program under chapter 17 of title 38, United States Code. ”(K) The Civilian Health and Medical Pro- gram of the Uniformed Services (CHAMPUS), as defined in section 1072(4) of title 10, United States Code. ”(L) The Indian health service program under the Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.). ”(M) The Federal Employees Health Benefit Plan under chapter 89 of title 5, United States Code. ”(6) INDIVIDUALLY IDENTIFIABLE HEALTH IN- FORMATION.\u2014The term ‘individually identifiable health information’ means any information, in- cluding demographic information collected from an individual, that\u2014 ”(A) is created or received by a health care provider, health plan, employer, or health care clearinghouse; and ”(B) relates to the past, present, or future physical or mental health or condition of an in- dividual, the provision of health care to an indi- vidual, or the past, present, or future payment for the provision of health care to an individual, and\u2014 ”(i) identifies the individual; or ”(ii) with respect to which there is a reason- able basis to believe that the information can be used to identify the individual. ”(7) STANDARD.\u2014The term ‘standard’, when used with reference to a data element of health information or a transaction referred to in sec- tion 1173(a)(1), means any such data element or transaction that meets each of the standards and implementation specifications adopted or established by the Secretary with respect to the data element or transaction under sections 1172 through 1174. ”(8) STANDARD SETTING ORGANIZATION.\u2014The term ‘standard setting organization’ means a standard setting organization accredited by the American National Standards Institute, includ- ing the National Council for Prescription Drug Programs, that develops standards for informa- tion transactions, data elements, or any other standard that is necessary to, or will facilitate, the implementation of this part. ”GENERAL REQUIREMENTS FOR ADOPTION OF STANDARDS ”SEC. 1172. (a) APPLICABILITY.\u2014Any standard adopted under this part shall apply, in whole or in part, to the following persons: ”(1) A health plan. ”(2) A health care clearinghouse. ”(3) A health care provider who transmits any health information in electronic form in connec- tion with a transaction referred to in section 1173(a)(1). ”(b) REDUCTION OF COSTS.\u2014Any standard adopted under this part shall be consistent with the objective of reducing the administrative costs of providing and paying for health care. ”(c) ROLE OF STANDARD SETTING ORGANIZA- TIONS.\u2014 ”(1) IN GENERAL.\u2014Except as provided in para- graph (2), any standard adopted under this part shall be a standard that has been developed, adopted, or modified by a standard setting orga- nization. ”(2) SPECIAL RULES.\u2014 ”(A) DIFFERENT STANDARDS.\u2014The Secretary may adopt a standard that is different from any standard developed, adopted, or modified by a standard setting organization, if\u2014 ”(i) the different standard will substantially reduce administrative costs to health care pro- viders and health plans compared to the alter- natives; and ”(ii) the standard is promulgated in accord- ance with the rulemaking procedures of sub- chapter III of chapter 5 of title 5, United States Code. ”(B) NO STANDARD BY STANDARD SETTING OR- GANIZATION.\u2014If no standard setting organiza- tion has developed, adopted, or modified any standard relating to a standard that the Sec- retary is authorized or required to adopt under this part\u2014 ”(i) paragraph (1) shall not apply; and ”(ii) subsection (f) shall apply. ”(3) CONSULTATION REQUIREMENT.\u2014 ”(A) IN GENERAL.\u2014A standard may not be adopted under this part unless\u2014 ”(i) in the case of a standard that has been developed, adopted, or modified by a standard setting organization, the organization consulted with each of the organizations described in sub- paragraph (B) in the course of such develop- ment, adoption, or modification; and ”(ii) in the case of any other standard, the Secretary, in complying with the requirements of subsection (f), consulted with each of the or- ganizations described in subparagraph (B) be- fore adopting the standard. ”(B) ORGANIZATIONS DESCRIBED.\u2014The organi- zations referred to in subparagraph (A) are the following: ”(i) The National Uniform Billing Committee. ”(ii) The National Uniform Claim Committee. ”(iii) The Workgroup for Electronic Data Interchange. ”(iv) The American Dental Association. ”(d) IMPLEMENTATION SPECIFICATIONS.\u2014The Secretary shall establish specifications for im- plementing each of the standards adopted under this part. ”(e) PROTECTION OF TRADE SECRETS.\u2014Except as otherwise required by law, a standard adopt- ed under this part shall not require disclosure of trade secrets or confidential commercial infor- mation by a person required to comply with this part. ”(f) ASSISTANCE TO THE SECRETARY.\u2014In com- plying with the requirements of this part, the Secretary shall rely on the recommendations of the National Committee on Vital and Health Statistics established under section 306(k) of the Public Health Service Act (42 U.S.C. 242k(k)), and shall consult with appropriate Federal and State agencies and private organizations. The Secretary shall publish in the Federal Register any recommendation of the National Committee on Vital and Health Statistics regarding the adoption of a standard under this part. ”(g) APPLICATION TO MODIFICATIONS OF STANDARDS.\u2014This section shall apply to a modi- fication to a standard (including an addition to a standard) adopted under section 1174(b) in the same manner as it applies to an initial standard adopted under section 1174(a). ”STANDARDS FOR INFORMATION TRANSACTIONS AND DATA ELEMENTS ”SEC. 1173. (a) STANDARDS TO ENABLE ELEC- TRONIC EXCHANGE.\u2014 ”(1) IN GENERAL.\u2014The Secretary shall adopt standards for transactions, and data elements for such transactions, to enable health informa- tion to be exchanged electronically, that are ap- propriate for\u2014 ”(A) the financial and administrative trans- actions described in paragraph (2); and ”(B) other financial and administrative trans- actions determined appropriate by the Sec- retary, consistent with the goals of improving the operation of the health care system and re- ducing administrative costs. ”(2) TRANSACTIONS.\u2014The transactions re- ferred to in paragraph (1)(A) are transactions with respect to the following: ”(A) Health claims or equivalent encounter information. ”(B) Health claims attachments. ”(C) Enrollment and disenrollment in a health plan. ”(D) Eligibility for a health plan. ”(E) Health care payment and remittance ad- vice. ”(F) Health plan premium payments. ”(G) First report of injury. ”(H) Health claim status. ”(I) Referral certification and authorization. ”(3) ACCOMMODATION OF SPECIFIC PROVID- ERS.\u2014The standards adopted by the Secretary under paragraph (1) shall accommodate the needs of different types of health care providers. ”(b) UNIQUE HEALTH IDENTIFIERS.\u2014 ”(1) IN GENERAL.\u2014The Secretary shall adopt standards providing for a standard unique health identifier for each individual, employer, health plan, and health care provider for use in the health care system. In carrying out the pre- ceding sentence for each health plan and health care provider, the Secretary shall take into ac- count multiple uses for identifiers and multiple locations and specialty classifications for health care providers. ”(2) USE OF IDENTIFIERS.\u2014The standards adopted under paragraphs (1) shall specify the purposes for which a unique health identifier may be used. ”(c) CODE SETS.\u2014 ”(1) IN GENERAL.\u2014The Secretary shall adopt standards that\u2014 ”(A) select code sets for appropriate data ele- ments for the transactions referred to in sub- section (a)(1) from among the code sets that have been developed by private and public enti- ties; or ”(B) establish code sets for such data elements if no code sets for the data elements have been developed. ”(2) DISTRIBUTION.\u2014The Secretary shall es- tablish efficient and low-cost procedures for dis- tribution (including electronic distribution) of code sets and modifications made to such code sets under section 1174(b). ”(d) SECURITY STANDARDS FOR HEALTH INFOR- MATION.\u2014 ”(1) SECURITY STANDARDS.\u2014The Secretary shall adopt security standards that\u2014 ”(A) take into account\u2014 ”(i) the technical capabilities of record sys- tems used to maintain health information; ”(ii) the costs of security measures; ”(iii) the need for training persons who have access to health information; ”(iv) the value of audit trails in computerized record systems; and ”(v) the needs and capabilities of small health care providers and rural health care providers (as such providers are defined by the Secretary); and ”(B) ensure that a health care clearinghouse, if it is part of a larger organization, has policies and security procedures which isolate the activi- ties of the health care clearinghouse with re- spect to processing information in a manner that prevents unauthorized access to such infor- mation by such larger organization. ”(2) SAFEGUARDS.\u2014Each person described in section 1172(a) who maintains or transmits health information shall maintain reasonable and appropriate administrative, technical, and physical safeguards\u2014 ”(A) to ensure the integrity and confidential- ity of the information; ”(B) to protect against any reasonably antici- pated\u2014 ”(i) threats or hazards to the security or in- tegrity of the information; and ”(ii) unauthorized uses or disclosures of the information; and ”(C) otherwise to ensure compliance with this part by the officers and employees of such per- son. ”(e) ELECTRONIC SIGNATURE.\u2014 ”(1) STANDARDS.\u2014The Secretary, in coordina- tion with the Secretary of Commerce, shall adopt standards specifying procedures for the electronic transmission and authentication of signatures with respect to the transactions re- ferred to in subsection (a)(1). ”(2) EFFECT OF COMPLIANCE.\u2014Compliance with the standards adopted under paragraph (1) shall be deemed to satisfy Federal and State statutory requirements for written signatures with respect to the transactions referred to in subsection (a)(1). ”(f) TRANSFER OF INFORMATION AMONG HEALTH PLANS.\u2014The Secretary shall adopt standards for transferring among health plans CONGRESSIONAL RECORD \u2014 HOUSE H9497July 31, 1996 appropriate standard data elements needed for the coordination of benefits, the sequential proc- essing of claims, and other data elements for in- dividuals who have more than one health plan. ”TIMETABLES FOR ADOPTION OF STANDARDS ”SEC. 1174. (a) INITIAL STANDARDS.\u2014The Sec- retary shall carry out section 1173 not later than 18 months after the date of the enactment of the Health Insurance Portability and Accountabil- ity Act of 1996, except that standards relating to claims attachments shall be adopted not later than 30 months after such date. ”(b) ADDITIONS AND MODIFICATIONS TO STANDARDS.\u2014 ”(1) IN GENERAL.\u2014Except as provided in para- graph (2), the Secretary shall review the stand- ards adopted under section 1173, and shall adopt modifications to the standards (including additions to the standards), as determined ap- propriate, but not more frequently than once every 12 months. Any addition or modification to a standard shall be completed in a manner which minimizes the disruption and cost of com- pliance. ”(2) SPECIAL RULES.\u2014 ”(A) FIRST 12-MONTH PERIOD.\u2014Except with re- spect to additions and modifications to code sets under subparagraph (B), the Secretary may not adopt any modification to a standard adopted under this part during the 12-month period be- ginning on the date the standard is initially adopted, unless the Secretary determines that the modification is necessary in order to permit compliance with the standard. ”(B) ADDITIONS AND MODIFICATIONS TO CODE SETS.\u2014 ”(i) IN GENERAL.\u2014The Secretary shall ensure that procedures exist for the routine mainte- nance, testing, enhancement, and expansion of code sets. ”(ii) ADDITIONAL RULES.\u2014If a code set is modified under this subsection, the modified code set shall include instructions on how data elements of health information that were en- coded prior to the modification may be con- verted or translated so as to preserve the infor- mational value of the data elements that existed before the modification. Any modification to a code set under this subsection shall be imple- mented in a manner that minimizes the disrup- tion and cost of complying with such modifica- tion. ”REQUIREMENTS ”SEC. 1175. (a) CONDUCT OF TRANSACTIONS BY PLANS.\u2014 ”(1) IN GENERAL.\u2014If a person desires to con- duct a transaction referred to in section 1173(a)(1) with a health plan as a standard transaction\u2014 ”(A) the health plan may not refuse to con- duct such transaction as a standard trans- action; ”(B) the insurance plan may not delay such transaction, or otherwise adversely affect, or at- tempt to adversely affect, the person or the transaction on the ground that the transaction is a standard transaction; and ”(C) the information transmitted and received in connection with the transaction shall be in the form of standard data elements of health in- formation. ”(2) SATISFACTION OF REQUIREMENTS.\u2014A health plan may satisfy the requirements under paragraph (1) by\u2014 ”(A) directly transmitting and receiving standard data elements of health information; or ”(B) submitting nonstandard data elements to a health care clearinghouse for processing into standard data elements and transmission by the health care clearinghouse, and receiving stand- ard data elements through the health care clear- inghouse. ”(3) TIMETABLE FOR COMPLIANCE.\u2014Paragraph (1) shall not be construed to require a health plan to comply with any standard, implementa- tion specification, or modification to a standard or specification adopted or established by the Secretary under sections 1172 through 1174 at any time prior to the date on which the plan is required to comply with the standard or speci- fication under subsection (b). ”(b) COMPLIANCE WITH STANDARDS.\u2014 ”(1) INITIAL COMPLIANCE.\u2014 ”(A) IN GENERAL.\u2014Not later than 24 months after the date on which an initial standard or implementation specification is adopted or es- tablished under sections 1172 and 1173, each per- son to whom the standard or implementation specification applies shall comply with the standard or specification. ”(B) SPECIAL RULE FOR SMALL HEALTH PLANS.\u2014In the case of a small health plan, paragraph (1) shall be applied by substituting ’36 months’ for ’24 months’. For purposes of this subsection, the Secretary shall determine the plans that qualify as small health plans. ”(2) COMPLIANCE WITH MODIFIED STAND- ARDS.\u2014If the Secretary adopts a modification to a standard or implementation specification under this part, each person to whom the stand- ard or implementation specification applies shall comply with the modified standard or implemen- tation specification at such time as the Sec- retary determines appropriate, taking into ac- count the time needed to comply due to the na- ture and extent of the modification. The time determined appropriate under the preceding sentence may not be earlier than the last day of the 180-day period beginning on the date such modification is adopted. The Secretary may ex- tend the time for compliance for small health plans, if the Secretary determines that such ex- tension is appropriate. ”(3) CONSTRUCTION.\u2014Nothing in this sub- section shall be construed to prohibit any person from complying with a standard or specification by\u2014 ”(A) submitting nonstandard data elements to a health care clearinghouse for processing into standard data elements and transmission by the health care clearinghouse; or ”(B) receiving standard data elements through a health care clearinghouse. ”GENERAL PENALTY FOR FAILURE TO COMPLY WITH REQUIREMENTS AND STANDARDS ”SEC. 1176. (a) GENERAL PENALTY.\u2014 ”(1) IN GENERAL.\u2014Except as provided in sub- section (b), the Secretary shall impose on any person who violates a provision of this part a penalty of not more than $100 for each such vio- lation, except that the total amount imposed on the person for all violations of an identical re- quirement or prohibition during a calendar year may not exceed $25,000. ”(2) PROCEDURES.\u2014The provisions of section 1128A (other than subsections (a) and (b) and the second sentence of subsection (f)) shall apply to the imposition of a civil money penalty under this subsection in the same manner as such provisions apply to the imposition of a penalty under such section 1128A. ”(b) LIMITATIONS.\u2014 ”(1) OFFENSES OTHERWISE PUNISHABLE.\u2014A penalty may not be imposed under subsection (a) with respect to an act if the act constitutes an offense punishable under section 1177. ”(2) NONCOMPLIANCE NOT DISCOVERED.\u2014A penalty may not be imposed under subsection (a) with respect to a provision of this part if it is established to the satisfaction of the Secretary that the person liable for the penalty did not know, and by exercising reasonable diligence would not have known, that such person vio- lated the provision. ”(3) FAILURES DUE TO REASONABLE CAUSE.\u2014 ”(A) IN GENERAL.\u2014Except as provided in sub- paragraph (B), a penalty may not be imposed under subsection (a) if\u2014 ”(i) the failure to comply was due to reason- able cause and not to willful neglect; and ”(ii) the failure to comply is corrected during the 30-day period beginning on the first date the person liable for the penalty knew, or by exer- cising reasonable diligence would have known, that the failure to comply occurred. ”(B) EXTENSION OF PERIOD.\u2014 ”(i) NO PENALTY.\u2014The period referred to in subparagraph (A)(ii) may be extended as deter- mined appropriate by the Secretary based on the nature and extent of the failure to comply. ”(ii) ASSISTANCE.\u2014If the Secretary determines that a person failed to comply because the per- son was unable to comply, the Secretary may provide technical assistance to the person dur- ing the period described in subparagraph (A)(ii). Such assistance shall be provided in any man- ner determined appropriate by the Secretary. ”(4) REDUCTION.\u2014In the case of a failure to comply which is due to reasonable cause and not to willful neglect, any penalty under sub- section (a) that is not entirely waived under paragraph (3) may be waived to the extent that the payment of such penalty would be excessive relative to the compliance failure involved. ”WRONGFUL DISCLOSURE OF INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION ”SEC. 1177. (a) OFFENSE.\u2014A person who knowingly and in violation of this part\u2014 ”(1) uses or causes to be used a unique health identifier; ”(2) obtains individually identifiable health information relating to an individual; or ”(3) discloses individually identifiable health information to another person, shall be punished as provided in subsection (b). ”(b) PENALTIES.\u2014A person described in sub- section (a) shall\u2014 ”(1) be fined not more than $50,000, impris- oned not more than 1 year, or both; ”(2) if the offense is committed under false pretenses, be fined not more than $100,000, im- prisoned not more than 5 years, or both; and ”(3) if the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, fined not more than $250,000, imprisoned not more than 10 years, or both. ”EFFECT ON STATE LAW ”SEC. 1178. (a) GENERAL EFFECT.\u2014 ”(1) GENERAL RULE.\u2014Except as provided in paragraph (2), a provision or requirement under this part, or a standard or implementation speci- fication adopted or established under sections 1172 through 1174, shall supersede any contrary provision of State law, including a provision of State law that requires medical or health plan records (including billing information) to be maintained or transmitted in written rather than electronic form. ”(2) EXCEPTIONS.\u2014A provision or requirement under this part, or a standard or implementa- tion specification adopted or established under sections 1172 through 1174, shall not supersede a contrary provision of State law, if the provision of State law\u2014 ”(A) is a provision the Secretary determines\u2014 ”(i) is necessary\u2014 ”(I) to prevent fraud and abuse; ”(II) to ensure appropriate State regulation of insurance and health plans; ”(III) for State reporting on health care deliv- ery or costs; or ”(IV) for other purposes; or ”(ii) addresses controlled substances; or ”(B) subject to section 264(c)(2) of the Health Insurance Portability and Accountability Act of 1996, relates to the privacy of individually iden- tifiable health information. ”(b) PUBLIC HEALTH.\u2014Nothing in this part shall be construed to invalidate or limit the au- thority, power, or procedures established under any law providing for the reporting of disease or injury, child abuse, birth, or death, public health surveillance, or public health investiga- tion or intervention. ”(c) STATE REGULATORY REPORTING.\u2014Noth- ing in this part shall limit the ability of a State to require a health plan to report, or to provide access to, information for management audits, CONGRESSIONAL RECORD \u2014 HOUSEH9498 July 31, 1996 financial audits, program monitoring and eval- uation, facility licensure or certification, or in- dividual licensure or certification. ”PROCESSING PAYMENT TRANSACTIONS BY FINANCIAL INSTITUTIONS ”SEC. 1179. To the extent that an entity is en- gaged in activities of a financial institution (as defined in section 1101 of the Right to Financial Privacy Act of 1978), or is engaged in authoriz- ing, processing, clearing, settling, billing, trans- ferring, reconciling, or collecting payments, for a financial institution, this part, and any standard adopted under this part, shall not apply to the entity with respect to such activi- ties, including the following: ”(1) The use or disclosure of information by the entity for authorizing, processing, clearing, settling, billing, transferring, reconciling or col- lecting, a payment for, or related to, health plan premiums or health care, where such payment is made by any means, including a credit, debit, or other payment card, an account, check, or elec- tronic funds transfer. ”(2) The request for, or the use or disclosure of, information by the entity with respect to a payment described in paragraph (1)\u2014 ”(A) for transferring receivables; ”(B) for auditing; ”(C) in connection with\u2014 ”(i) a customer dispute; or ”(ii) an inquiry from, or to, a customer; ”(D) in a communication to a customer of the entity regarding the customer’s transactions, payment card, account, check, or electronic funds transfer; ”(E) for reporting to consumer reporting agen- cies; or ”(F) for complying with\u2014 ”(i) a civil or criminal subpoena; or ”(ii) a Federal or State law regulating the en- tity.”. (b) CONFORMING AMENDMENTS.\u2014 (1) REQUIREMENT FOR MEDICARE PROVIDERS.\u2014 Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended\u2014 (A) by striking ”and” at the end of subpara- graph (P); (B) by striking the period at the end of sub- paragraph (Q) and inserting ”; and”; and (C) by inserting immediately after subpara- graph (Q) the following new subparagraph: ”(R) to contract only with a health care clear- inghouse (as defined in section 1171) that meets each standard and implementation specification adopted or established under part C of title XI on or after the date on which the health care clearinghouse is required to comply with the standard or specification.”. (2) TITLE HEADING.\u2014Title XI (42 U.S.C. 1301 et seq.) is amended by striking the title heading and inserting the following: ”TITLE XI\u2014GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE SIM- PLIFICATION”. SEC. 263. CHANGES IN MEMBERSHIP AND DUTIES OF NATIONAL COMMITTEE ON VITAL AND HEALTH STATISTICS. Section 306(k) of the Public Health Service Act (42 U.S.C. 242k(k)) is amended\u2014 (1) in paragraph (1), by striking ”16” and in- serting ”18”; (2) by amending paragraph (2) to read as fol- lows: ”(2) The members of the Committee shall be appointed from among persons who have distin- guished themselves in the fields of health statis- tics, electronic interchange of health care infor- mation, privacy and security of electronic infor- mation, population-based public health, pur- chasing or financing health care services, inte- grated computerized health information systems, health services research, consumer interests in health information, health data standards, epi- demiology, and the provision of health services. Members of the Committee shall be appointed for terms of 4 years.”; (3) by redesignating paragraphs (3) through (5) as paragraphs (4) through (6), respectively, and inserting after paragraph (2) the following: ”(3) Of the members of the Committee\u2014 ”(A) 1 shall be appointed, not later than 60 days after the date of the enactment of the Health Insurance Portability and Accountabil- ity Act of 1996, by the Speaker of the House of Representatives after consultation with the mi- nority leader of the House of Representatives; ”(B) 1 shall be appointed, not later than 60 days after the date of the enactment of the Health Insurance Portability and Accountabil- ity Act of 1996, by the President pro tempore of the Senate after consultation with the minority leader of the Senate; and ”(C) 16 shall be appointed by the Secretary.”; (4) by amending paragraph (5) (as so redesig- nated) to read as follows: ”(5) The Committee\u2014 ”(A) shall assist and advise the Secretary\u2014 ”(i) to delineate statistical problems bearing on health and health services which are of na- tional or international interest; ”(ii) to stimulate studies of such problems by other organizations and agencies whenever pos- sible or to make investigations of such problems through subcommittees; ”(iii) to determine, approve, and revise the terms, definitions, classifications, and guidelines for assessing health status and health services, their distribution and costs, for use (I) within the Department of Health and Human Services, (II) by all programs administered or funded by the Secretary, including the Federal-State-local cooperative health statistics system referred to in subsection (e), and (III) to the extent possible as determined by the head of the agency in- volved, by the Department of Veterans Affairs, the Department of Defense, and other Federal agencies concerned with health and health serv- ices; ”(iv) with respect to the design of and ap- proval of health statistical and health informa- tion systems concerned with the collection, proc- essing, and tabulation of health statistics within the Department of Health and Human Services, with respect to the Cooperative Health Statistics System established under subsection (e), and with respect to the standardized means for the collection of health information and statistics to be established by the Secretary under subsection (j)(1); ”(v) to review and comment on findings and proposals developed by other organizations and agencies and to make recommendations for their adoption or implementation by local, State, na- tional, or international agencies; ”(vi) to cooperate with national committees of other countries and with the World Health Or- ganization and other national agencies in the studies of problems of mutual interest; ”(vii) to issue an annual report on the state of the Nation’s health, its health services, their costs and distributions, and to make proposals for improvement of the Nation’s health statistics and health information systems; and ”(viii) in complying with the requirements im- posed on the Secretary under part C of title XI of the Social Security Act; ”(B) shall study the issues related to the adoption of uniform data standards for patient medical record information and the electronic exchange of such information; ”(C) shall report to the Secretary not later than 4 years after the date of the enactment of the Health Insurance Portability and Account- ability Act of 1996 recommendations and legisla- tive proposals for such standards and electronic exchange; and ”(D) shall be responsible generally for advis- ing the Secretary and the Congress on the status of the implementation of part C of title XI of the Social Security Act.”; and (5) by adding at the end the following: ”(7) Not later than 1 year after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, and annually thereafter, the Committee shall submit to the Congress, and make public, a report regarding the implementation of part C of title XI of the Social Security Act. Such report shall address the following subjects, to the extent that the Committee determines appropriate: ”(A) The extent to which persons required to comply with part C of title XI of the Social Se- curity Act are cooperating in implementing the standards adopted under such part. ”(B) The extent to which such entities are meeting the security standards adopted under such part and the types of penalties assessed for noncompliance with such standards. ”(C) Whether the Federal and State Govern- ments are receiving information of sufficient quality to meet their responsibilities under such part. ”(D) Any problems that exist with respect to implementation of such part. ”(E) The extent to which timetables under such part are being met.”. SEC. 264. RECOMMENDATIONS WITH RESPECT TO PRIVACY OF CERTAIN HEALTH IN- FORMATION. (a) IN GENERAL.\u2014Not later than the date that is 12 months after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to the Committee on Labor and Human Resources and the Committee on Fi- nance of the Senate and the Committee on Com- merce and the Committee on Ways and Means of the House of Representatives detailed rec- ommendations on standards with respect to the privacy of individually identifiable health infor- mation. (b) SUBJECTS FOR RECOMMENDATIONS.\u2014The recommendations under subsection (a) shall ad- dress at least the following: (1) The rights that an individual who is a sub- ject of individually identifiable health informa- tion should have. (2) The procedures that should be established for the exercise of such rights. (3) The uses and disclosures of such informa- tion that should be authorized or required. (c) REGULATIONS.\u2014 (1) IN GENERAL.\u2014If legislation governing standards with respect to the privacy of individ- ually identifiable health information transmit- ted in connection with the transactions de- scribed in section 1173(a) of the Social Security Act (as added by section 262) is not enacted by the date that is 36 months after the date of the enactment of this Act, the Secretary of Health and Human Services shall promulgate final reg- ulations containing such standards not later than the date that is 42 months after the date of the enactment of this Act. Such regulations shall address at least the subjects described in subsection (b). (2) PREEMPTION.\u2014A regulation promulgated under paragraph (1) shall not supercede a con- trary provision of State law, if the provision of State law imposes requirements, standards, or implementation specifications that are more stringent than the requirements, standards, or implementation specifications imposed under the regulation. (d) CONSULTATION.\u2014In carrying out this sec- tion, the Secretary of Health and Human Serv- ices shall consult with\u2014 (1) the National Committee on Vital and Health Statistics established under section 306(k) of the Public Health Service Act (42 U.S.C. 242k(k)); and (2) the Attorney General. Subtitle G\u2014Duplication and Coordination of Medicare-Related Plans SEC. 271. DUPLICATION AND COORDINATION OF MEDICARE-RELATED PLANS. (a) TREATMENT OF CERTAIN HEALTH INSUR- ANCE POLICIES AS NONDUPLICATIVE.\u2014Section 1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A)) is amended\u2014 (1) in clause (iii), by striking ”clause (i)” and inserting ”clause (i)(II)”; and (2) by adding at the end the following: ”(iv) For purposes of this subparagraph, a health insurance policy (other than a medicare CONGRESSIONAL RECORD \u2014 HOUSE H9499July 31, 1996 supplemental policy) providing for benefits which are payable to or on behalf of an individ- ual without regard to other health benefit cov- erage of such individual is not considered to ‘duplicate’ any health benefits under this title, under title XIX, or under a health insurance policy, and subclauses (I) and (III) of clause (i) do not apply to such a policy. ”(v) For purposes of this subparagraph, a health insurance policy (or a rider to an insur- ance contract which is not a health insurance policy) is not considered to ‘duplicate’ health benefits under this title or under another health insurance policy if it\u2014 ”(I) provides health care benefits only for long-term care, nursing home care, home health care, or community-based care, or any combina- tion thereof, ”(II) coordinates against or excludes items and services available or paid for under this title or under another health insurance policy, and ”(III) for policies sold or issued on or after the end of the 90-day period beginning on the date of enactment of the Health Insurance Port- ability and Accountability Act of 1996) discloses such coordination or exclusion in the policy’s outline of coverage. For purposes of this clause, the terms ‘coordi- nates’ and ‘coordination’ mean, with respect to a policy in relation to health benefits under this title or under another health insurance policy, that the policy under its terms is secondary to, or excludes from payment, items and services to the extent available or paid for under this title or under another health insurance policy. ”(vi)(I) An individual entitled to benefits under part A or enrolled under part B of this title who is applying for a health insurance pol- icy (other than a policy described in subclause (III)) shall be furnished a disclosure statement described in clause (vii) for the type of policy being applied for. Such statement shall be fur- nished as a part of (or together with) the appli- cation for such policy. ”(II) Whoever issues or sells a health insur- ance policy (other than a policy described in subclause (III)) to an individual described in subclause (I) and fails to furnish the appro- priate disclosure statement as required under such subclause shall be fined under title 18, United States Code, or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $25,000 (or $15,000 in the case of a person other than the is- suer of the policy) for each such violation. ”(III) A policy described in this subclause (to which subclauses (I) and (II) do not apply) is a medicare supplemental policy or a health insur- ance policy identified under 60 Federal Register 30880 (June 12, 1995) as a policy not required to have a disclosure statement. ”(IV) Any reference in this section to the re- vised NAIC model regulation (referred to in sub- section (m)(1)(A)) is deemed a reference to such regulation as revised by section 171(m)(2) of the Social Security Act Amendments of 1994 (Public Law 103 432) and as modified by substituting, for the disclosure required under section 16D(2), disclosure under subclause (I) of an appropriate disclosure statement under clause (vii). ”(vii) The disclosure statement described in this clause for a type of policy is the statement specified under subparagraph (D) of this para- graph (as in effect before the date of the enact- ment of the Health Insurance Portability and Accountability Act of 1996) for that type of pol- icy, as revised as follows: ”(I) In each statement, amend the second line to read as follows: ‘THIS IS NOT MEDICARE SUPPLEMENT INSURANCE’. ”(II) In each statement, strike the third line and insert the following: ‘Some health care services paid for by Medicare may also trigger the payment of benefits under this policy.’. ”(III) In each statement not described in sub- clause (V), strike the boldface matter that begins ‘This insurance’ and all that follows up to the next paragraph that begins ‘Medicare’. ”(IV) In each statement not described in sub- clause (V), insert before the boxed matter (that states ‘Before You Buy This Insurance’) the following: ‘This policy must pay benefits with- out regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.’. ”(V) In a statement relating to policies provid- ing both nursing home and non-institutional coverage, to policies providing nursing home benefits only, or policies providing home care benefits only, amend the sentence that begins ‘Federal law’ to read as follows: ‘Federal law requires us to inform you that in certain situa- tions this insurance may pay for some care also covered by Medicare.’. ”(viii)(I) Subject to subclause (II), nothing in this subparagraph shall restrict or preclude a State’s ability to regulate health insurance poli- cies, including any health insurance policy that is described in clause (iv), (v), or (vi)(III). ”(II) A State may not declare or specify, in statute, regulation, or otherwise, that a health insurance policy (other than a medicare supple- mental policy) or rider to an insurance contract which is not a health insurance policy, that is described in clause (iv), (v), or (vi)(III) and that is sold, issued, or renewed to an individual enti- tled to benefits under part A or enrolled under part B ‘duplicates’ health benefits under this title or under a medicare supplemental policy.”. (b) CONFORMING AMENDMENTS.\u2014Section 1882(d)(3) (42 U.S.C. 1395ss(d)(3)) is amended\u2014 (1) in subparagraph (C)\u2014 (A) by striking ”with respect to (i)” and in- serting ”with respect to”, and (B) by striking ”, (ii) the sale” and all that follows up to the period at the end; and (2) by striking subparagraph (D). (c) TRANSITIONAL PROVISION.\u2014 (1) NO PENALTIES.\u2014Subject to paragraph (3), no criminal or civil money penalty may be im- posed under section 1882(d)(3)(A) of the Social Security Act for any act or omission that oc- curred during the transition period (as defined in paragraph (4)) and that relates to any health insurance policy that is described in clause (iv) or (v) of such section (as amended by subsection (a)). (2) LIMITATION ON LEGAL ACTION.\u2014Subject to paragraph (3), no legal action shall be brought or continued in any Federal or State court inso- far as such action\u2014 (A) includes a cause of action which arose, or which is based on or evidenced by any act or omission which occurred, during the transition period; and (B) relates to the application of section 1882(d)(3)(A) of the Social Security Act to any act or omission with respect to the sale, issu- ance, or renewal of any health insurance policy that is described in clause (iv) or (v) of such sec- tion (as amended by subsection (a)). (3) DISCLOSURE CONDITION.\u2014In the case of a policy described in clause (iv) of section 1882(d)(3)(A) of the Social Security Act that is sold or issued on or after the effective date of statements under section 171(d)(3)(C) of the So- cial Security Act Amendments of 1994 and before the end of the 30-day period beginning on the date of the enactment of this Act, paragraphs (1) and (2) shall only apply if disclosure was made in accordance with section 1882(d)(3)(C)(ii) of the Social Security Act (as in effect before the date of the enactment of this Act). (4) TRANSITION PERIOD.\u2014In this subsection, the term ”transition period” means the period beginning on November 5, 1991, and ending on the date of the enactment of this Act. (d) EFFECTIVE DATE.\u2014(1) Except as provided in this subsection, the amendment made by sub- section (a) shall be effective as if included in the enactment of section 4354 of the Omnibus Budg- et Reconciliation Act of 1990. (2)(A) Clause (vi) of section 1882(d)(3)(A) of the Social Security Act, as added by subsection (a), shall only apply to individuals applying for\u2014 (i) a health insurance policy described in sec- tion 1882(d)(3)(A)(iv) of such Act (as added by subsection (a)), after the date of the enactment of this Act, or (ii) another health insurance policy after the end of the 30-day period beginning on the date of the enactment of this Act. (B) A seller or issuer of a health insurance policy may substitute, for the disclosure state- ment described in clause (vii) of such section, the statement specified under section 1882(d)(3)(D) of the Social Security Act (as in ef- fect before the date of the enactment of this Act), without the revision specified in such clause. Subtitle H\u2014Patent Extension SEC. 281. PATENT EXTENSION. (a) IN GENERAL.\u2014Any owner on the date of the enactment of this Act of the right to market a non-steroidal anti-inflammatory drug that\u2014 (1) contains a patented active agent, (2) has been reviewed by the Federal Food and Drug Administration for a period of more than 96 months as a new drug application, and (3) was approved as safe and effective by the Federal Food and Drug Administration on Jan- uary 31, 1991, shall be entitled, for the 2-year period beginning on February 28, 1997, to exclude others from making, using, offering for sale, selling, or im- porting into the United States such active agent, in accordance with section 154(a)(1) of title 35, United States Code. (b) INFRINGEMENT.\u2014Section 271 of title 35, United States Code, shall apply to the infringe- ment of the entitlement provided under sub- section (a) to the same extent as such section applies to infringement of a patent. (c) NOTIFICATION.\u2014Not later than 30 days after the date of the enactment of this Act, any owner granted an entitlement under subsection (a) shall notify the Commissioner of Patents and Trademarks and the Secretary for Health and Human Services of such entitlement. Not later than 7 days after the receipt of such notice, the Commissioner and the Secretary shall publish an appropriate notice of the receipt of such no- tice. (d) OFFSET.\u2014An owner described in sub- section (a) shall pay the amount of $10,000,000 to the Secretary of Health and Human Services in each of the fiscal years 1997 and 1998 as a condition for being eligible to qualify for the en- titlement under subsection (a). As a further con- dition for eligibility, such owner shall enter into a legally binding agreement with the Secretary of Health and Human Services which shall pro- vide a means for ensuring that the entitlement under subsection (a) shall not create any net costs to the States under the medicaid program under title XIX of the Social Security Act. TITLE III\u2014TAX-RELATED HEALTH PROVISIONS SEC. 300. AMENDMENT OF 1986 CODE. Except as otherwise expressly provided, when- ever in this title an amendment or repeal is ex- pressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. Subtitle A\u2014Medical Savings Accounts SEC. 301. MEDICAL SAVINGS ACCOUNTS. (a) IN GENERAL.\u2014Part VII of subchapter B of chapter 1 (relating to additional itemized deduc- tions for individuals) is amended by redesignat- ing section 220 as section 221 and by inserting after section 219 the following new section: ”SEC. 220. MEDICAL SAVINGS ACCOUNTS. ”(a) DEDUCTION ALLOWED.\u2014In the case of an individual who is an eligible individual for any month during the taxable year, there shall be CONGRESSIONAL RECORD \u2014 HOUSEH9500 July 31, 1996 allowed as a deduction for the taxable year an amount equal to the aggregate amount paid in cash during such taxable year by such individ- ual to a medical savings account of such indi- vidual. ”(b) LIMITATIONS.\u2014 ”(1) IN GENERAL.\u2014The amount allowable as a deduction under subsection (a) to an individual for the taxable year shall not exceed the sum of the monthly limitations for months during such taxable year that the individual is an eligible individual. ”(2) MONTHLY LIMITATION.\u2014The monthly lim- itation for any month is the amount equal to 1\u204412 of\u2014 ”(A) in the case of an individual who has self- only coverage under the high deductible health plan as of the first day of such month, 65 per- cent of the annual deductible under such cov- erage, and ”(B) in the case of an individual who has family coverage under the high deductible health plan as of the first day of such month, 75 percent of the annual deductible under such coverage. ”(3) SPECIAL RULE FOR MARRIED INDIVID- UALS.\u2014In the case of individuals who are mar- ried to each other, if either spouse has family coverage\u2014 ”(A) both spouses shall be treated as having only such family coverage (and if such spouses each have family coverage under different plans, as having the family coverage with the lowest annual deductible), and ”(B) the limitation under paragraph (1) (after the application of subparagraph (A) of this paragraph) shall be divided equally between them unless they agree on a different division. ”(4) DEDUCTION NOT TO EXCEED COMPENSA- TION.\u2014 ”(A) EMPLOYEES.\u2014The deduction allowed under subsection (a) for contributions as an eli- gible individual described in subclause (I) of subsection (c)(1)(A)(iii) shall not exceed such in- dividual’s wages, salaries, tips, and other em- ployee compensation which are attributable to such individual’s employment by the employer referred to in such subclause. ”(B) SELF-EMPLOYED INDIVIDUALS.\u2014The de- duction allowed under subsection (a) for con- tributions as an eligible individual described in subclause (II) of subsection (c)(1)(A)(iii) shall not exceed such individual’s earned income (as defined in section 401(c)(1)) derived by the tax- payer from the trade or business with respect to which the high deductible health plan is estab- lished. ”(C) COMMUNITY PROPERTY LAWS NOT TO APPLY.\u2014The limitations under this paragraph shall be determined without regard to commu- nity property laws. ”(5) COORDINATION WITH EXCLUSION FOR EM- PLOYER CONTRIBUTIONS.\u2014No deduction shall be allowed under this section for any amount paid for any taxable year to a medical savings ac- count of an individual if\u2014 ”(A) any amount is contributed to any medi- cal savings account of such individual for such year which is excludable from gross income under section 106(b), or ”(B) if such individual’s spouse is covered under the high deductible health plan covering such individual, any amount is contributed for such year to any medical savings account of such spouse which is so excludable. ”(6) DENIAL OF DEDUCTION TO DEPENDENTS.\u2014 No deduction shall be allowed under this section to any individual with respect to whom a deduc- tion under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s tax- able year begins. ”(c) DEFINITIONS.\u2014For purposes of this sec- tion\u2014 ”(1) ELIGIBLE INDIVIDUAL.\u2014 ”(A) IN GENERAL.\u2014The term ‘eligible individ- ual’ means, with respect to any month, any in- dividual if\u2014 ”(i) such individual is covered under a high deductible health plan as of the 1st day of such month, ”(ii) such individual is not, while covered under a high deductible health plan, covered under any health plan\u2014 ”(I) which is not a high deductible health plan, and ”(II) which provides coverage for any benefit which is covered under the high deductible health plan, and ”(iii)(I) the high deductible health plan cover- ing such individual is established and main- tained by the employer of such individual or of the spouse of such individual and such employer is a small employer, or ”(II) such individual is an employee (within the meaning of section 401(c)(1)) or the spouse of such an employee and the high deductible health plan covering such individual is not es- tablished or maintained by any employer of such individual or spouse. ”(B) CERTAIN COVERAGE DISREGARDED.\u2014Sub- paragraph (A)(ii) shall be applied without re- gard to\u2014 ”(i) coverage for any benefit provided by per- mitted insurance, and ”(ii) coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision care, or long-term care. ”(C) CONTINUED ELIGIBILITY OF EMPLOYEE AND SPOUSE ESTABLISHING MEDICAL SAVINGS AC- COUNTS.\u2014If, while an employer is a small em- ployer\u2014 ”(i) any amount is contributed to a medical savings account of an individual who is an em- ployee of such employer or the spouse of such an employee, and ”(ii) such amount is excludable from gross in- come under section 106(b) or allowable as a de- duction under this section, such individual shall not cease to meet the re- quirement of subparagraph (A)(iii)(I) by reason of such employer ceasing to be a small employer so long as such employee continues to be an em- ployee of such employer. ”(D) LIMITATIONS ON ELIGIBILITY.\u2014 ”For limitations on number of taxpayers who are eligible to have medical savings ac- counts, see subsection (i). ”(2) HIGH DEDUCTIBLE HEALTH PLAN.\u2014 ”(A) IN GENERAL.\u2014The term ‘high deductible health plan’ means a health plan\u2014 ”(i) in the case of self-only coverage, which has an annual deductible which is not less than $1,500 and not more than $2,250, ”(ii) in the case of family coverage, which has an annual deductible which is not less than $3,000 and not more than $4,500, and ”(iii) the annual out-of-pocket expenses re- quired to be paid under the plan (other than for premiums) for covered benefits does not exceed\u2014 ”(I) $3,000 for self-only coverage, and ”(II) $5,500 for family coverage. ”(B) SPECIAL RULES.\u2014 ”(i) EXCLUSION OF CERTAIN PLANS.\u2014Such term does not include a health plan if substantially all of its coverage is coverage described in para- graph (1)(B). ”(ii) SAFE HARBOR FOR ABSENCE OF PREVEN- TIVE CARE DEDUCTIBLE.\u2014A plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for pre- ventive care if the absence of a deductible for such care is required by State law. ”(3) PERMITTED INSURANCE.\u2014The term ‘per- mitted insurance’ means\u2014 ”(A) Medicare supplemental insurance, ”(B) insurance if substantially all of the cov- erage provided under such insurance relates to\u2014 ”(i) liabilities incurred under workers’ com- pensation laws, ”(ii) tort liabilities, ”(iii) liabilities relating to ownership or use of property, or ”(iv) such other similar liabilities as the Sec- retary may specify by regulations, ”(C) insurance for a specified disease or ill- ness, and ”(D) insurance paying a fixed amount per day (or other period) of hospitalization. ”(4) SMALL EMPLOYER.\u2014 ”(A) IN GENERAL.\u2014The term ‘small employer’ means, with respect to any calendar year, any employer if such employer employed an average of 50 or fewer employees on business days dur- ing either of the 2 preceding calendar years. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the employer was in existence throughout such year. ”(B) EMPLOYERS NOT IN EXISTENCE IN PRECED- ING YEAR.\u2014In the case of an employer which was not in existence throughout the 1st preced- ing calendar year, the determination under sub- paragraph (A) shall be based on the average number of employees that it is reasonably ex- pected such employer will employ on business days in the current calendar year. ”(C) CERTAIN GROWING EMPLOYERS RETAIN TREATMENT AS SMALL EMPLOYER.\u2014The term ‘small employer’ includes, with respect to any calendar year, any employer if\u2014 ”(i) such employer met the requirement of sub- paragraph (A) (determined without regard to subparagraph (B)) for any preceding calendar year after 1996, ”(ii) any amount was contributed to the medi- cal savings account of any employee of such em- ployer with respect to coverage of such employee under a high deductible health plan of such em- ployer during such preceding calendar year and such amount was excludable from gross income under section 106(b) or allowable as a deduction under this section, and ”(iii) such employer employed an average of 200 or fewer employees on business days during each preceding calendar year after 1996. ”(D) SPECIAL RULES.\u2014 ”(i) CONTROLLED GROUPS.\u2014For purposes of this paragraph, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer. ”(ii) PREDECESSORS.\u2014Any reference in this paragraph to an employer shall include a ref- erence to any predecessor of such employer. ”(5) FAMILY COVERAGE.\u2014The term ‘family coverage’ means any coverage other than self- only coverage. ”(d) MEDICAL SAVINGS ACCOUNT.\u2014For pur- poses of this section\u2014 ”(1) MEDICAL SAVINGS ACCOUNT.\u2014The term ‘medical savings account’ means a trust created or organized in the United States exclusively for the purpose of paying the qualified medical ex- penses of the account holder, but only if the written governing instrument creating the trust meets the following requirements: ”(A) Except in the case of a rollover contribu- tion described in subsection (f)(5), no contribu- tion will be accepted\u2014 ”(i) unless it is in cash, or ”(ii) to the extent such contribution, when added to previous contributions to the trust for the calendar year, exceeds 75 percent of the highest annual limit deductible permitted under subsection (c)(2)(A)(ii) for such calendar year. ”(B) The trustee is a bank (as defined in sec- tion 408(n)), an insurance company (as defined in section 816), or another person who dem- onstrates to the satisfaction of the Secretary that the manner in which such person will ad- minister the trust will be consistent with the re- quirements of this section. ”(C) No part of the trust assets will be in- vested in life insurance contracts. ”(D) The assets of the trust will not be com- mingled with other property except in a common trust fund or common investment fund. ”(E) The interest of an individual in the bal- ance in his account is nonforfeitable. ”(2) QUALIFIED MEDICAL EXPENSES.\u2014 ”(A) IN GENERAL.\u2014The term ‘qualified medi- cal expenses’ means, with respect to an account holder, amounts paid by such holder for medical CONGRESSIONAL RECORD \u2014 HOUSE H9501July 31, 1996 care (as defined in section 213(d)) for such indi- vidual, the spouse of such individual, and any dependent (as defined in section 152) of such in- dividual, but only to the extent such amounts are not compensated for by insurance or other- wise. ”(B) HEALTH INSURANCE MAY NOT BE PUR- CHASED FROM ACCOUNT.\u2014 ”(i) IN GENERAL.\u2014Subparagraph (A) shall not apply to any payment for insurance. ”(ii) EXCEPTIONS.\u2014Clause (i) shall not apply to any expense for coverage under\u2014 ”(I) a health plan during any period of con- tinuation coverage required under any Federal law, ”(II) a qualified long-term care insurance contract (as defined in section 7702B(b)), or ”(III) a health plan during a period in which the individual is receiving unemployment com- pensation under any Federal or State law. ”(C) MEDICAL EXPENSES OF INDIVIDUALS WHO ARE NOT ELIGIBLE INDIVIDUALS.\u2014Subparagraph (A) shall apply to an amount paid by an ac- count holder for medical care of an individual who is not an eligible individual for the month in which the expense for such care is incurred only if no amount is contributed (other than a rollover contribution) to any medical savings ac- count of such account holder for the taxable year which includes such month. This subpara- graph shall not apply to any expense for cov- erage described in subclause (I) or (III) of sub- paragraph (B)(ii). ”(3) ACCOUNT HOLDER.\u2014The term ‘account holder’ means the individual on whose behalf the medical savings account was established. ”(4) CERTAIN RULES TO APPLY.\u2014Rules similar to the following rules shall apply for purposes of this section: ”(A) Section 219(d)(2) (relating to no deduc- tion for rollovers). ”(B) Section 219(f)(3) (relating to time when contributions deemed made). ”(C) Except as provided in section 106(b), sec- tion 219(f)(5) (relating to employer payments). ”(D) Section 408(g) (relating to community property laws). ”(E) Section 408(h) (relating to custodial ac- counts). ”(e) TAX TREATMENT OF ACCOUNTS.\u2014 ”(1) IN GENERAL.\u2014A medical savings account is exempt from taxation under this subtitle un- less such account has ceased to be a medical savings account. Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposi- tion of tax on unrelated business income of charitable, etc. organizations). ”(2) ACCOUNT TERMINATIONS.\u2014Rules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to medical savings accounts, and any amount treated as distributed under such rules shall be treated as not used to pay qualified medical expenses. ”(f) TAX TREATMENT OF DISTRIBUTIONS.\u2014 ”(1) AMOUNTS USED FOR QUALIFIED MEDICAL EXPENSES.\u2014Any amount paid or distributed out of a medical savings account which is used ex- clusively to pay qualified medical expenses of any account holder shall not be includible in gross income. ”(2) INCLUSION OF AMOUNTS NOT USED FOR QUALIFIED MEDICAL EXPENSES.\u2014Any amount paid or distributed out of a medical savings ac- count which is not used exclusively to pay the qualified medical expenses of the account holder shall be included in the gross income of such holder. ”(3) EXCESS CONTRIBUTIONS RETURNED BEFORE DUE DATE OF RETURN.\u2014 ”(A) IN GENERAL.\u2014If any excess contribution is contributed for a taxable year to any medical savings account of an individual, paragraph (2) shall not apply to distributions from the medical savings accounts of such individual (to the ex- tent such distributions do not exceed the aggre- gate excess contributions to all such accounts of such individual for such year) if\u2014 ”(i) such distribution is received by the indi- vidual on or before the last day prescribed by law (including extensions of time) for filing such individual’s return for such taxable year, and ”(ii) such distribution is accompanied by the amount of net income attributable to such excess contribution. Any net income described in clause (ii) shall be included in the gross income of the individual for the taxable year in which it is received. ”(B) EXCESS CONTRIBUTION.\u2014For purposes of subparagraph (A), the term ‘excess contribution’ means any contribution (other than a rollover contribution) which is neither excludable from gross income under section 106(b) nor deductible under this section. ”(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT USED FOR QUALIFIED MEDICAL EXPENSES.\u2014 ”(A) IN GENERAL.\u2014The tax imposed by this chapter on the account holder for any taxable year in which there is a payment or distribution from a medical savings account of such holder which is includible in gross income under para- graph (2) shall be increased by 15 percent of the amount which is so includible. ”(B) EXCEPTION FOR DISABILITY OR DEATH.\u2014 Subparagraph (A) shall not apply if the pay- ment or distribution is made after the account holder becomes disabled within the meaning of section 72(m)(7) or dies. ”(C) EXCEPTION FOR DISTRIBUTIONS AFTER MEDICARE ELIGIBILITY.\u2014Subparagraph (A) shall not apply to any payment or distribution after the date on which the account holder attains the age specified in section 1811 of the Social Se- curity Act. ”(5) ROLLOVER CONTRIBUTION.\u2014An amount is described in this paragraph as a rollover con- tribution if it meets the requirements of subpara- graphs (A) and (B). ”(A) IN GENERAL.\u2014Paragraph (2) shall not apply to any amount paid or distributed from a medical savings account to the account holder to the extent the amount received is paid into a medical savings account for the benefit of such holder not later than the 60th day after the day on which the holder receives the payment or dis- tribution. ”(B) LIMITATION.\u2014This paragraph shall not apply to any amount described in subparagraph (A) received by an individual from a medical savings account if, at any time during the 1- year period ending on the day of such receipt, such individual received any other amount de- scribed in subparagraph (A) from a medical sav- ings account which was not includible in the in- dividual’s gross income because of the applica- tion of this paragraph. ”(6) COORDINATION WITH MEDICAL EXPENSE DEDUCTION.\u2014For purposes of determining the amount of the deduction under section 213, any payment or distribution out of a medical savings account for qualified medical expenses shall not be treated as an expense paid for medical care. ”(7) TRANSFER OF ACCOUNT INCIDENT TO DI- VORCE.\u2014The transfer of an individual’s interest in a medical savings account to an individual’s spouse or former spouse under a divorce or sepa- ration instrument described in subparagraph (A) of section 71(b)(2) shall not be considered a tax- able transfer made by such individual notwith- standing any other provision of this subtitle, and such interest shall, after such transfer, be treated as a medical savings account with re- spect to which such spouse is the account hold- er. ”(8) TREATMENT AFTER DEATH OF ACCOUNT HOLDER.\u2014 ”(A) TREATMENT IF DESIGNATED BENEFICIARY IS SPOUSE.\u2014If the account holder’s surviving spouse acquires such holder’s interest in a medi- cal savings account by reason of being the des- ignated beneficiary of such account at the death of the account holder, such medical savings ac- count shall be treated as if the spouse were the account holder. ”(B) OTHER CASES.\u2014 ”(i) IN GENERAL.\u2014If, by reason of the death of the account holder, any person acquires the ac- count holder’s interest in a medical savings ac- count in a case to which subparagraph (A) does not apply\u2014 ”(I) such account shall cease to be a medical savings account as of the date of death, and ”(II) an amount equal to the fair market value of the assets in such account on such date shall be includible if such person is not the es- tate of such holder, in such person’s gross in- come for the taxable year which includes such date, or if such person is the estate of such holder, in such holder’s gross income for the last taxable year of such holder. ”(ii) SPECIAL RULES.\u2014 ”(I) REDUCTION OF INCLUSION FOR PRE-DEATH EXPENSES.\u2014The amount includible in gross in- come under clause (i) by any person (other than the estate) shall be reduced by the amount of qualified medical expenses which were incurred by the decedent before the date of the decedent’s death and paid by such person within 1 year after such date. ”(II) DEDUCTION FOR ESTATE TAXES.\u2014An ap- propriate deduction shall be allowed under sec- tion 691(c) to any person (other than the dece- dent or the decedent’s spouse) with respect to amounts included in gross income under clause (i) by such person. ”(g) COST-OF-LIVING ADJUSTMENT.\u2014In the case of any taxable year beginning in a cal- endar year after 1998, each dollar amount in subsection (c)(2) shall be increased by an amount equal to\u2014 ”(1) such dollar amount, multiplied by ”(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting ‘calendar year 1997’ for ‘calendar year 1992’ in subparagraph (B) thereof. If any increase under the preceding sentence is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50. ”(h) REPORTS.\u2014The Secretary may require the trustee of a medical savings account to make such reports regarding such account to the Sec- retary and to the account holder with respect to contributions, distributions, and such other matters as the Secretary determines appropriate. The reports required by this subsection shall be filed at such time and in such manner and fur- nished to such individuals at such time and in such manner as may be required by the Sec- retary. ”(i) LIMITATION ON NUMBER OF TAXPAYERS HAVING MEDICAL SAVINGS ACCOUNTS.\u2014 ”(1) IN GENERAL.\u2014Except as provided in para- graph (5), no individual shall be treated as an eligible individual for any taxable year begin- ning after the cut-off year unless\u2014 ”(A) such individual was an active MSA par- ticipant for any taxable year ending on or be- fore the close of the cut-off year, or ”(B) such individual first became an active MSA participant for a taxable year ending after the cut-off year by reason of coverage under a high deductible health plan of an MSA partici- pating employer. ”(2) CUT-OFF YEAR.\u2014For purposes of para- graph (1), the term ‘cut-off year’ means the ear- lier of\u2014 ”(A) calendar year 2000, or ”(B) the first calendar year before 2000 for which the Secretary determines under sub- section (j) that the numerical limitation for such year has been exceeded. ”(3) ACTIVE MSA PARTICIPANT.\u2014For purposes of this subsection\u2014 ”(A) IN GENERAL.\u2014The term ‘active MSA par- ticipant’ means, with respect to any taxable year, any individual who is the account holder of any medical savings account into which any contribution was made which was excludable from gross income under section 106(b), or allow- able as a deduction under this section, for such taxable year. ”(B) SPECIAL RULE FOR CUT-OFF YEARS BE- FORE 2000.\u2014In the case of a cut-off year before 2000\u2014 CONGRESSIONAL RECORD \u2014 HOUSEH9502 July 31, 1996 ”(i) an individual shall not be treated as an eligible individual for any month of such year or an active MSA participant under paragraph (1)(A) unless such individual is, on or before the cut-off date, covered under a high deductible health plan, and ”(ii) an employer shall not be treated as an MSA-participating employer unless the em- ployer, on or before the cut-off date, offered coverage under a high deductible health plan to any employee. ”(C) CUT-OFF DATE.\u2014For purposes of sub- paragraph (B)\u2014 ”(i) IN GENERAL.\u2014Except as otherwise pro- vided in this subparagraph, the cut-off date is October 1 of the cut-off year. ”(ii) EMPLOYEES WITH ENROLLMENT PERIODS AFTER OCTOBER 1.\u2014In the case of an individual described in subclause (I) of subsection (c)(1)(A)(iii), if the regularly scheduled enroll- ment period for health plans of the individual’s employer occurs during the last 3 months of the cut-off year, the cut-off date is December 31 of the cut-off year. ”(iii) SELF-EMPLOYED INDIVIDUALS.\u2014In the case of an individual described in subclause (II) of subsection (c)(1)(A)(iii), the cut-off date is November 1 of the cut-off year. ”(iv) SPECIAL RULES FOR 1997.\u2014If 1997 is a cut- off year by reason of subsection (j)(1)(A)\u2014 ”(I) each of the cut-off dates under clauses (i) and (iii) shall be 1 month earlier than the date determined without regard to this clause, and ”(II) clause (ii) shall be applied by substitut- ing ‘4 months’ for ‘3 months’. ”(4) MSA-PARTICIPATING EMPLOYER.\u2014For purposes of this subsection, the term ‘MSA-par- ticipating employer’ means any small employer if\u2014 ”(A) such employer made any contribution to the medical savings account of any employee during the cut-off year or any preceding cal- endar year which was excludable from gross in- come under section 106(b), or ”(B) at least 20 percent of the employees of such employer who are eligible individuals for any month of the cut-off year by reason of cov- erage under a high deductible health plan of such employer each made a contribution of at least $100 to their medical savings accounts for any taxable year ending with or within the cut- off year which was allowable as a deduction under this section. ”(5) ADDITIONAL ELIGIBILITY AFTER CUT-OFF YEAR.\u2014If the Secretary determines under sub- section (j)(2)(A) that the numerical limit for the calendar year following a cut-off year described in paragraph (2)(B) has not been exceeded\u2014 ”(A) this subsection shall not apply to any otherwise eligible individual who is covered under a high deductible health plan during the first 6 months of the second calendar year fol- lowing the cut-off year (and such individual shall be treated as an active MSA participant for purposes of this subsection if a contribution is made to any medical savings account with re- spect to such coverage), and ”(B) any employer who offers coverage under a high deductible health plan to any employee during such 6-month period shall be treated as an MSA-participating employer for purposes of this subsection if the requirements of paragraph (4) are met with respect to such coverage. For purposes of this paragraph, subsection (j)(2)(A) shall be applied for 1998 by substituting ‘750,000’ for ‘600,000’. ”(j) DETERMINATION OF WHETHER NUMERICAL LIMITS ARE EXCEEDED.\u2014 ”(1) DETERMINATION OF WHETHER LIMIT EX- CEEDED FOR 1997.\u2014The numerical limitation for 1997 is exceeded if, based on the reports required under paragraph (4), the number of medical sav- ings accounts established as of\u2014 ”(A) April 30, 1997, exceeds 375,000, or ”(B) June 30, 1997, exceeds 525,000. ”(2) DETERMINATION OF WHETHER LIMIT EX- CEEDED FOR 1998 OR 1999.\u2014 ”(A) IN GENERAL.\u2014The numerical limitation for 1998 or 1999 is exceeded if the sum of\u2014 ”(i) the number of MSA returns filed on or be- fore April 15 of such calendar year for taxable years ending with or within the preceding cal- endar year, plus ”(ii) the Secretary’s estimate (determined on the basis of the returns described in clause (i)) of the number of MSA returns for such taxable years which will be filed after such date, exceeds 600,000 (750,000 in the case of 1999). For purposes of the preceding sentence, the term ‘MSA return’ means any return on which any exclusion is claimed under section 106(b) or any deduction is claimed under this section. ”(B) ALTERNATIVE COMPUTATION OF LIMITA- TION.\u2014The numerical limitation for 1998 or 1999 is also exceeded if the sum of\u2014 ”(i) 90 percent of the sum determined under subparagraph (A) for such calendar year, plus ”(ii) the product of 2.5 and the number of medical savings accounts established during the portion of such year preceding July 1 (based on the reports required under paragraph (4)) for taxable years beginning in such year, exceeds 750,000. ”(3) PREVIOUSLY UNINSURED INDIVIDUALS NOT INCLUDED IN DETERMINATION.\u2014 ”(A) IN GENERAL.\u2014The determination of whether any calendar year is a cut-off year shall be made by not counting the medical sav- ings account of any previously uninsured indi- vidual. ”(B) PREVIOUSLY UNINSURED INDIVIDUAL.\u2014 For purposes of this subsection, the term ‘pre- viously uninsured individual’ means, with re- spect to any medical savings account, any indi- vidual who had no health plan coverage (other than coverage referred to in subsection (c)(1)(B)) at any time during the 6-month period before the date such individual’s coverage under the high deductible health plan commences. ”(4) REPORTING BY MSA TRUSTEES.\u2014 ”(A) IN GENERAL.\u2014Not later than August 1 of 1997, 1998, and 1999, each person who is the trustee of a medical savings account established before July 1 of such calendar year shall make a report to the Secretary (in such form and manner as the Secretary shall specify) which specifies\u2014 ”(i) the number of medical savings accounts established before such July 1 (for taxable years beginning in such calendar year) of which such person is the trustee, ”(ii) the name and TIN of the account holder of each such account, and ”(iii) the number of such accounts which are accounts of previously uninsured individuals. ”(B) ADDITIONAL REPORT FOR 1997.\u2014Not later than June 1, 1997, each person who is the trust- ee of a medical savings account established be- fore May 1, 1997, shall make an additional re- port described in subparagraph (A) but only with respect to accounts established before May 1, 1997. ”(C) PENALTY FOR FAILURE TO FILE REPORT.\u2014 The penalty provided in section 6693(a) shall apply to any report required by this paragraph, except that\u2014 ”(i) such section shall be applied by substitut- ing ‘$25’ for ‘$50’, and ”(ii) the maximum penalty imposed on any trustee shall not exceed $5,000. ”(D) AGGREGATION OF ACCOUNTS.\u2014To the ex- tent practical, in determining the number of medical savings accounts on the basis of the re- ports under this paragraph, all medical savings accounts of an individual shall be treated as 1 account and all accounts of individuals who are married to each other shall be treated as 1 ac- count. ”(5) DATE OF MAKING DETERMINATIONS.\u2014Any determination under this subsection that a cal- endar year is a cut-off year shall be made by the Secretary and shall be published not later than October 1 of such year. (b) DEDUCTION ALLOWED WHETHER OR NOT INDIVIDUAL ITEMIZES OTHER DEDUCTIONS.\u2014Sub- section (a) of section 62 is amended by inserting after paragraph (15) the following new para- graph: ”(16) MEDICAL SAVINGS ACCOUNTS.\u2014The de- duction allowed by section 220.” (c) EXCLUSIONS FOR EMPLOYER CONTRIBU- TIONS TO MEDICAL SAVINGS ACCOUNTS.\u2014 (1) EXCLUSION FROM INCOME TAX.\u2014The text of section 106 (relating to contributions by em- ployer to accident and health plans) is amended to read as follows: ”(a) GENERAL RULE.\u2014Except as otherwise provided in this section, gross income of an em- ployee does not include employer-provided cov- erage under an accident or health plan. ”(b) CONTRIBUTIONS TO MEDICAL SAVINGS AC- COUNTS.\u2014 ”(1) IN GENERAL.\u2014In the case of an employee who is an eligible individual, amounts contrib- uted by such employee’s employer to any medi- cal savings account of such employee shall be treated as employer-provided coverage for medi- cal expenses under an accident or health plan to the extent such amounts do not exceed the limi- tation under section 220(b)(1) (determined with- out regard to this subsection) which is applica- ble to such employee for such taxable year. ”(2) NO CONSTRUCTIVE RECEIPT.\u2014No amount shall be included in the gross income of any em- ployee solely because the employee may choose between the contributions referred to in para- graph (1) and employer contributions to another health plan of the employer. ”(3) SPECIAL RULE FOR DEDUCTION OF EM- PLOYER CONTRIBUTIONS.\u2014Any employer con- tribution to a medical savings account, if other- wise allowable as a deduction under this chap- ter, shall be allowed only for the taxable year in which paid. ”(4) EMPLOYER MSA CONTRIBUTIONS REQUIRED TO BE SHOWN ON RETURN.\u2014Every individual re- quired to file a return under section 6012 for the taxable year shall include on such return the aggregate amount contributed by employers to the medical savings accounts of such individual or such individual’s spouse for such taxable year. ”(5) MSA CONTRIBUTIONS NOT PART OF COBRA COVERAGE.\u2014Paragraph (1) shall not apply for purposes of section 4980B. ”(6) DEFINITIONS.\u2014For purposes of this sub- section, the terms ‘eligible individual’ and ‘medi- cal savings account’ have the respective mean- ings given to such terms by section 220. ”(7) CROSS REFERENCE.\u2014 ”For penalty on failure by employer to make comparable contributions to the medical sav- ings accounts of comparable employees, see section 4980E.”. (2) EXCLUSION FROM EMPLOYMENT TAXES.\u2014 (A) RAILROAD RETIREMENT TAX.\u2014Subsection (e) of section 3231 is amended by adding at the end the following new paragraph: ”(10) MEDICAL SAVINGS ACCOUNT CONTRIBU- TIONS.\u2014The term ‘compensation’ shall not in- clude any payment made to or for the benefit of an employee if at the time of such payment it is reasonable to believe that the employee will be able to exclude such payment from income under section 106(b).” (B) UNEMPLOYMENT TAX.\u2014Subsection (b) of section 3306 is amended by striking ”or” at the end of paragraph (15), by striking the period at the end of paragraph (16) and inserting ”; or”, and by inserting after paragraph (16) the fol- lowing new paragraph: ”(17) any payment made to or for the benefit of an employee if at the time of such payment it is reasonable to believe that the employee will be able to exclude such payment from income under section 106(b).” (C) WITHHOLDING TAX.\u2014Subsection (a) of sec- tion 3401 is amended by striking ”or” at the end of paragraph (19), by striking the period at the end of paragraph (20) and inserting ”; or”, and by inserting after paragraph (20) the following new paragraph: ”(21) any payment made to or for the benefit of an employee if at the time of such payment it is reasonable to believe that the employee will be able to exclude such payment from income under section 106(b).” CONGRESSIONAL RECORD \u2014 HOUSE H9503July 31, 1996 (3) EMPLOYER CONTRIBUTIONS REQUIRED TO BE SHOWN ON W-2.\u2014Subsection (a) of section 6051 is amended by striking ”and” at the end of para- graph (9), by striking the period at the end of paragraph (10) and inserting ”, and”, and by inserting after paragraph (10) the following new paragraph: ”(11) the amount contributed to any medical savings account (as defined in section 220(d)) of such employee or such employee’s spouse.” (4) PENALTY FOR FAILURE OF EMPLOYER TO MAKE COMPARABLE MSA CONTRIBUTIONS.\u2014 (A) IN GENERAL.\u2014Chapter 43 is amended by adding after section 4980D the following new section: ”SEC. 4980E. FAILURE OF EMPLOYER TO MAKE COMPARABLE MEDICAL SAVINGS AC- COUNT CONTRIBUTIONS. ”(a) GENERAL RULE.\u2014In the case of an em- ployer who makes a contribution to the medical savings account of any employee with respect to coverage under a high deductible health plan of the employer during a calendar year, there is hereby imposed a tax on the failure of such em- ployer to meet the requirements of subsection (d) for such calendar year. ”(b) AMOUNT OF TAX.\u2014The amount of the tax imposed by subsection (a) on any failure for any calendar year is the amount equal to 35 percent of the aggregate amount contributed by the em- ployer to medical savings accounts of employees for taxable years of such employees ending with or within such calendar year. ”(c) WAIVER BY SECRETARY.\u2014In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that the payment of such tax would be excessive relative to the failure involved. ”(d) EMPLOYER REQUIRED TO MAKE COM- PARABLE MSA CONTRIBUTIONS FOR ALL PARTICI- PATING EMPLOYEES.\u2014 ”(1) IN GENERAL.\u2014An employer meets the re- quirements of this subsection for any calendar year if the employer makes available comparable contributions to the medical savings accounts of all comparable participating employees for each coverage period during such calendar year. ”(2) COMPARABLE CONTRIBUTIONS.\u2014 ”(A) IN GENERAL.\u2014For purposes of paragraph (1), the term ‘comparable contributions’ means contributions\u2014 ”(i) which are the same amount, or ”(ii) which are the same percentage of the an- nual deductible limit under the high deductible health plan covering the employees. ”(B) PART-YEAR EMPLOYEES.\u2014In the case of an employee who is employed by the employer for only a portion of the calendar year, a con- tribution to the medical savings account of such employee shall be treated as comparable if it is an amount which bears the same ratio to the comparable amount (determined without regard to this subparagraph) as such portion bears to the entire calendar year. ”(3) COMPARABLE PARTICIPATING EMPLOY- EES.\u2014For purposes of paragraph (1), the term ‘comparable participating employees’ means all employees\u2014 ”(A) who are eligible individuals covered under any high deductible health plan of the employer, and ”(B) who have the same category of coverage. For purposes of subparagraph (B), the cat- egories of coverage are self-only and family cov- erage. ”(4) PART-TIME EMPLOYEES.\u2014 ”(A) IN GENERAL.\u2014Paragraph (3) shall be ap- plied separately with respect to part-time em- ployees and other employees. ”(B) PART-TIME EMPLOYEE.\u2014For purposes of subparagraph (A), the term ‘part-time employee’ means any employee who is customarily em- ployed for fewer than 30 hours per week. ”(e) CONTROLLED GROUPS.\u2014For purposes of this section, all persons treated as a single em- ployer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer. ”(f) DEFINITIONS.\u2014Terms used in this section which are also used in section 220 have the re- spective meanings given such terms in section 220.” (B) CLERICAL AMENDMENT.\u2014The table of sec- tions for chapter 43 is amended by adding after the item relating to section 4980D the following new item: ”Sec. 4980E. Failure of employer to make com- parable medical savings account contributions.” (d) MEDICAL SAVINGS ACCOUNT CONTRIBU- TIONS NOT AVAILABLE UNDER CAFETERIA PLANS.\u2014Subsection (f) of section 125 of such Code is amended by inserting ”106(b),” before ”117”. (e) TAX ON EXCESS CONTRIBUTIONS.\u2014Section 4973 (relating to tax on excess contributions to individual retirement accounts, certain section 403(b) contracts, and certain individual retire- ment annuities) is amended\u2014 (1) by inserting ”medical savings accounts,” after ”accounts,” in the heading of such section, (2) by striking ”or” at the end of paragraph (1) of subsection (a), (3) by redesignating paragraph (2) of sub- section (a) as paragraph (3) and by inserting after paragraph (1) the following: ”(2) a medical savings account (within the meaning of section 220(d)), or”, and (4) by adding at the end the following new subsection: ”(d) EXCESS CONTRIBUTIONS TO MEDICAL SAV- INGS ACCOUNTS.\u2014For purposes of this section, in the case of medical savings accounts (within the meaning of section 220(d)), the term ‘excess con- tributions’ means the sum of\u2014 ”(1) the aggregate amount contributed for the taxable year to the accounts (other than rollover contributions described in section 220(f)(5)) which is neither excludable from gross income under section 106(b) nor allowable as a deduc- tion under section 220 for such year, and ”(2) the amount determined under this sub- section for the preceding taxable year, reduced by the sum of\u2014 ”(A) the distributions out of the accounts which were included in gross income under sec- tion 220(f)(2), and ”(B) the excess (if any) of\u2014 ”(i) the maximum amount allowable as a de- duction under section 220(b)(1) (determined without regard to section 106(b)) for the taxable year, over ”(ii) the amount contributed to the accounts for the taxable year. For purposes of this subsection, any contribu- tion which is distributed out of the medical sav- ings account in a distribution to which section 220(f)(3) applies shall be treated as an amount not contributed.” (f) TAX ON PROHIBITED TRANSACTIONS.\u2014 (1) Section 4975 (relating to tax on prohibited transactions) is amended by adding at the end of subsection (c) the following new paragraph: ”(4) SPECIAL RULE FOR MEDICAL SAVINGS AC- COUNTS.\u2014An individual for whose benefit a medical savings account (within the meaning of section 220(d)) is established shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if, with respect to such transaction, the account ceases to be a medical savings account by reason of the application of section 220(e)(2) to such account.” (2) Paragraph (1) of section 4975(e) is amended to read as follows: ”(1) PLAN.\u2014For purposes of this section, the term ‘plan’ means\u2014 ”(A) a trust described in section 401(a) which forms a part of a plan, or a plan described in section 403(a), which trust or plan is exempt from tax under section 501(a), ”(B) an individual retirement account de- scribed in section 408(a), ”(C) an individual retirement annuity de- scribed in section 408(b), ”(D) a medical savings account described in section 220(d), or ”(E) a trust, plan, account, or annuity which, at any time, has been determined by the Sec- retary to be described in any preceding subpara- graph of this paragraph.” (g) FAILURE TO PROVIDE REPORTS ON MEDI- CAL SAVINGS ACCOUNTS.\u2014 (1) Subsection (a) of section 6693 (relating to failure to provide reports on individual retire- ment accounts or annuities) is amended to read as follows: ”(a) REPORTS.\u2014 ”(1) IN GENERAL.\u2014If a person required to file a report under a provision referred to in para- graph (2) fails to file such report at the time and in the manner required by such provision, such person shall pay a penalty of $50 for each fail- ure unless it is shown that such failure is due to reasonable cause. ”(2) PROVISIONS.\u2014The provisions referred to in this paragraph are\u2014 ”(A) subsections (i) and (l) of section 408 (re- lating to individual retirement plans), and ”(B) section 220(h) (relating to medical sav- ings accounts).” (h) EXCEPTION FROM CAPITALIZATION OF POL- ICY ACQUISITION EXPENSES.\u2014Subparagraph (B) of section 848(e)(1) (defining specified insurance contract) is amended by striking ”and” at the end of clause (ii), by striking the period at the end of clause (iii) and inserting ”, and”, and by adding at the end the following new clause: ”(iv) any contract which is a medical savings account (as defined in section 220(d)).”. (i) CLERICAL AMENDMENT.\u2014The table of sec- tions for part VII of subchapter B of chapter 1 is amended by striking the last item and insert- ing the following: ”Sec. 220. Medical savings accounts. ”Sec. 221. Cross reference.”. (j) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to taxable years be- ginning after December 31, 1996. (k) MONITORING OF PARTICIPATION IN MEDI- CAL SAVINGS ACCOUNTS.\u2014The Secretary of the Treasury or his delegate shall\u2014 (1) during 1997, 1998, 1999, and 2000, regularly evaluate the number of individuals who are maintaining medical savings accounts and the reduction in revenues to the United States by reason of such accounts, and (2) provide such reports of such evaluations to Congress as such Secretary determines appro- priate. (l) STUDY OF EFFECTS OF MEDICAL SAVINGS ACCOUNTS ON SMALL GROUP MARKET.\u2014The Comptroller General of the United States shall enter into a contract with an organization with expertise in health economics, health insurance markets, and actuarial science to conduct a comprehensive study regarding the effects of medical savings accounts in the small group market on\u2014 (1) selection, including adverse selection, (2) health costs, including any impact on pre- miums of individuals with comprehensive cov- erage, (3) use of preventive care, (4) consumer choice, (5) the scope of coverage of high deductible plans purchased in conjunction with such ac- counts, and (6) other relevant items. A report on the results of the study conducted under this subsection shall be submitted to the Congress no later than January 1, 1999. Subtitle B\u2014Increase in Deduction for Health Insurance Costs of Self-Employed Individuals SEC. 311. INCREASE IN DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EM- PLOYED INDIVIDUALS. (a) IN GENERAL.\u2014Paragraph (1) of section 162(l) is amended to read as follows: ”(1) ALLOWANCE OF DEDUCTION.\u2014 ”(A) IN GENERAL.\u2014In the case of an individ- ual who is an employee within the meaning of CONGRESSIONAL RECORD \u2014 HOUSEH9504 July 31, 1996 section 401(c)(1), there shall be allowed as a de- duction under this section an amount equal to the applicable percentage of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents. ”(B) APPLICABLE PERCENTAGE.\u2014For purposes of subparagraph (A), the applicable percentage shall be determined under the following table: ”For taxable years beginning in The applicable in calendar year\u2014 percentage is\u2014 1997 …………………… 40 percent 1998 through 2002 …. 45 percent 2003 …………………… 50 percent 2004 …………………… 60 percent 2005 …………………… 70 percent 2006 or thereafter ….. 80 percent.”. (b) EXCLUSION FOR AMOUNTS RECEIVED UNDER CERTAIN SELF-INSURED PLANS.\u2014Paragraph (3) of section 104(a) is amended by inserting ”(or through an arrangement having the effect of ac- cident or health insurance)” after ”health in- surance”. (c) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to taxable years be- ginning after December 31, 1996. Subtitle C\u2014Long-Term Care Services and Contracts PART I\u2014GENERAL PROVISIONS SEC. 321. TREATMENT OF LONG-TERM CARE IN- SURANCE. (a) GENERAL RULE.\u2014Chapter 79 (relating to definitions) is amended by inserting after sec- tion 7702A the following new section: ”SEC. 7702B. TREATMENT OF QUALIFIED LONG- TERM CARE INSURANCE. ”(a) IN GENERAL.\u2014For purposes of this title\u2014 ”(1) a qualified long-term care insurance con- tract shall be treated as an accident and health insurance contract, ”(2) amounts (other than policyholder divi- dends, as defined in section 808, or premium re- funds) received under a qualified long-term care insurance contract shall be treated as amounts received for personal injuries and sickness and shall be treated as reimbursement for expenses actually incurred for medical care (as defined in section 213(d)), ”(3) any plan of an employer providing cov- erage under a qualified long-term care insur- ance contract shall be treated as an accident and health plan with respect to such coverage, ”(4) except as provided in subsection (e)(3), amounts paid for a qualified long-term care in- surance contract providing the benefits de- scribed in subsection (b)(2)(A) shall be treated as payments made for insurance for purposes of section 213(d)(1)(D), and ”(5) a qualified long-term care insurance con- tract shall be treated as a guaranteed renewable contract subject to the rules of section 816(e). ”(b) QUALIFIED LONG-TERM CARE INSURANCE CONTRACT.\u2014For purposes of this title\u2014 ”(1) IN GENERAL.\u2014The term ‘qualified long- term care insurance contract’ means any insur- ance contract if\u2014 ”(A) the only insurance protection provided under such contract is coverage of qualified long-term care services, ”(B) such contract does not pay or reimburse expenses incurred for services or items to the ex- tent that such expenses are reimbursable under title XVIII of the Social Security Act or would be so reimbursable but for the application of a deductible or coinsurance amount, ”(C) such contract is guaranteed renewable, ”(D) such contract does not provide for a cash surrender value or other money that can be\u2014 ”(i) paid, assigned, or pledged as collateral for a loan, or ”(ii) borrowed, other than as provided in subparagraph (E) or paragraph (2)(C), ”(E) all refunds of premiums, and all policy- holder dividends or similar amounts, under such contract are to be applied as a reduction in fu- ture premiums or to increase future benefits, and ”(F) such contract meets the requirements of subsection (g). ”(2) SPECIAL RULES.\u2014 ”(A) PER DIEM, ETC. PAYMENTS PERMITTED.\u2014 A contract shall not fail to be described in sub- paragraph (A) or (B) of paragraph (1) by reason of payments being made on a per diem or other periodic basis without regard to the expenses in- curred during the period to which the payments relate. ”(B) SPECIAL RULES RELATING TO MEDICARE.\u2014 ”(i) Paragraph (1)(B) shall not apply to ex- penses which are reimbursable under title XVIII of the Social Security Act only as a secondary payor. ”(ii) No provision of law shall be construed or applied so as to prohibit the offering of a quali- fied long-term care insurance contract on the basis that the contract coordinates its benefits with those provided under such title. ”(C) REFUNDS OF PREMIUMS.\u2014Paragraph (1)(E) shall not apply to any refund on the death of the insured, or on a complete surrender or cancellation of the contract, which cannot exceed the aggregate premiums paid under the contract. Any refund on a complete surrender or cancellation of the contract shall be includible in gross income to the extent that any deduction or exclusion was allowable with respect to the premiums. ”(c) QUALIFIED LONG-TERM CARE SERVICES.\u2014 For purposes of this section\u2014 ”(1) IN GENERAL.\u2014The term ‘qualified long- term care services’ means necessary diagnostic, preventive, therapeutic, curing, treating, miti- gating, and rehabilitative services, and mainte- nance or personal care services, which\u2014 ”(A) are required by a chronically ill individ- ual, and ”(B) are provided pursuant to a plan of care prescribed by a licensed health care practi- tioner. ”(2) CHRONICALLY ILL INDIVIDUAL.\u2014 ”(A) IN GENERAL.\u2014The term ‘chronically ill individual’ means any individual who has been certified by a licensed health care practitioner as\u2014 ”(i) being unable to perform (without substan- tial assistance from another individual) at least 2 activities of daily living for a period of at least 90 days due to a loss of functional capacity, ”(ii) having a level of disability similar (as de- termined under regulations prescribed by the Secretary in consultation with the Secretary of Health and Human Services) to the level of dis- ability described in clause (i), or ”(iii) requiring substantial supervision to pro- tect such individual from threats to health and safety due to severe cognitive impairment. Such term shall not include any individual oth- erwise meeting the requirements of the preceding sentence unless within the preceding 12-month period a licensed health care practitioner has certified that such individual meets such re- quirements. ”(B) ACTIVITIES OF DAILY LIVING.\u2014For pur- poses of subparagraph (A), each of the following is an activity of daily living: ”(i) Eating. ”(ii) Toileting. ”(iii) Transferring. ”(iv) Bathing. ”(v) Dressing. ”(vi) Continence. A contract shall not be treated as a qualified long-term care insurance contract unless the de- termination of whether an individual is a chron- ically ill individual takes into account at least 5 of such activities. ”(3) MAINTENANCE OR PERSONAL CARE SERV- ICES.\u2014The term ‘maintenance or personal care services’ means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (includ- ing the protection from threats to health and safety due to severe cognitive impairment). ”(4) LICENSED HEALTH CARE PRACTITIONER.\u2014 The term ‘licensed health care practitioner’ means any physician (as defined in section 1861(r)(1) of the Social Security Act) and any registered professional nurse, licensed social worker, or other individual who meets such re- quirements as may be prescribed by the Sec- retary. ”(d) AGGREGATE PAYMENTS IN EXCESS OF LIM- ITS.\u2014 ”(1) IN GENERAL.\u2014If the aggregate of\u2014 ”(A) the periodic payments received for any period under all qualified long-term care insur- ance contracts which are treated as made for qualified long-term care services for an insured, and ”(B) the periodic payments received for such period which are treated under section 101(g) as paid by reason of the death of such insured, exceeds the per diem limitation for such period, such excess shall be includible in gross income without regard to section 72. A payment shall not be taken into account under subparagraph (B) if the insured is a terminally ill individual (as defined in section 101(g)) at the time the payment is received. ”(2) PER DIEM LIMITATION.\u2014For purposes of paragraph (1), the per diem limitation for any period is an amount equal to the excess (if any) of\u2014 ”(A) the greater of\u2014 ”(i) the dollar amount in effect for such pe- riod under paragraph (4), or ”(ii) the costs incurred for qualified long-term care services provided for the insured for such period, over ”(B) the aggregate payments received as reim- bursements (through insurance or otherwise) for qualified long-term care services provided for the insured during such period. ”(3) AGGREGATION RULES.\u2014For purposes of this subsection\u2014 ”(A) all persons receiving periodic payments described in paragraph (1) with respect to the same insured shall be treated as 1 person, and ”(B) the per diem limitation determined under paragraph (2) shall be allocated first to the in- sured and any remaining limitation shall be al- located among the other such persons in such manner as the Secretary shall prescribe. ”(4) DOLLAR AMOUNT.\u2014The dollar amount in effect under this subsection shall be $175 per day (or the equivalent amount in the case of pay- ments on another periodic basis). ”(5) INFLATION ADJUSTMENT.\u2014In the case of a calendar year after 1997, the dollar amount con- tained in paragraph (4) shall be increased at the same time and in the same manner as amounts are increased pursuant to section 213(d)(10). ”(6) PERIODIC PAYMENTS.\u2014For purposes of this subsection, the term ‘periodic payment’ means any payment (whether on a periodic basis or otherwise) made without regard to the extent of the costs incurred by the payee for qualified long-term care services. ”(e) TREATMENT OF COVERAGE PROVIDED AS PART OF A LIFE INSURANCE CONTRACT.\u2014Except as otherwise provided in regulations prescribed by the Secretary, in the case of any long-term care insurance coverage (whether or not quali- fied) provided by a rider on or as part of a life insurance contract\u2014 ”(1) IN GENERAL.\u2014This section shall apply as if the portion of the contract providing such coverage is a separate contract. ”(2) APPLICATION OF 7702.\u2014Section 7702(c)(2) (relating to the guideline premium limitation) shall be applied by increasing the guideline pre- mium limitation with respect to a life insurance contract, as of any date\u2014 ”(A) by the sum of any charges (but not pre- mium payments) against the life insurance con- tract’s cash surrender value (within the mean- ing of section 7702(f)(2)(A)) for such coverage made to that date under the contract, less CONGRESSIONAL RECORD \u2014 HOUSE H9505July 31, 1996 ”(B) any such charges the imposition of which reduces the premiums paid for the con- tract (within the meaning of section 7702(f)(1)). ”(3) APPLICATION OF SECTION 213.\u2014No deduc- tion shall be allowed under section 213(a) for charges against the life insurance contract’s cash surrender value described in paragraph (2), unless such charges are includible in income as a result of the application of section 72(e)(10) and the rider is a qualified long-term care insur- ance contract under subsection (b). ”(4) PORTION DEFINED.\u2014For purposes of this subsection, the term ‘portion’ means only the terms and benefits under a life insurance con- tract that are in addition to the terms and bene- fits under the contract without regard to long- term care insurance coverage. ”(f) TREATMENT OF CERTAIN STATE-MAIN- TAINED PLANS.\u2014 ”(1) IN GENERAL.\u2014If\u2014 (A) an individual receives coverage for quali- fied long-term care services under a State long- term care plan, and ”(B) the terms of such plan would satisfy the requirements of subsection (b) were such plan an insurance contract, such plan shall be treated as a qualified long- term care insurance contract for purposes of this title. ”(2) STATE LONG-TERM CARE PLAN.\u2014For pur- poses of paragraph (1), the term ‘State long-term care plan’ means any plan\u2014 ”(A) which is established and maintained by a State or an instrumentality of a State, ”(B) which provides coverage only for quali- fied long-term care services, and ”(C) under which such coverage is provided only to\u2014 ”(i) employees and former employees of a State (or any political subdivision or instrumen- tality of a State), ”(ii) the spouses of such employees, and ”(iii) individuals bearing a relationship to such employees or spouses which is described in any of paragraphs (1) through (8) of section 152(a).” (b) RESERVE METHOD.\u2014Clause (iii) of section 807(d)(3)(A) is amended by inserting ”(other than a qualified long-term care insurance con- tract, as defined in section 7702B(b))” after ”in- surance contract”. (c) LONG-TERM CARE INSURANCE NOT PER- MITTED UNDER CAFETERIA PLANS OR FLEXIBLE SPENDING ARRANGEMENTS.\u2014 (1) CAFETERIA PLANS.\u2014Section 125(f) is amended by adding at the end the following new sentence: ”Such term shall not include any product which is advertised, marketed, or of- fered as long-term care insurance.” (2) FLEXIBLE SPENDING ARRANGEMENTS.\u2014Sec- tion 106 (relating to contributions by employer to accident and health plans), as amended by section 301(c), is amended by adding at the end the following new subsection: ”(c) INCLUSION OF LONG-TERM CARE BENEFITS PROVIDED THROUGH FLEXIBLE SPENDING AR- RANGEMENTS.\u2014 ”(1) IN GENERAL.\u2014Effective on and after Jan- uary 1, 1997, gross income of an employee shall include employer-provided coverage for qualified long-term care services (as defined in section 7702B(c)) to the extent that such coverage is provided through a flexible spending or similar arrangement. ”(2) FLEXIBLE SPENDING ARRANGEMENT.\u2014For purposes of this subsection, a flexible spending arrangement is a benefit program which pro- vides employees with coverage under which\u2014 ”(A) specified incurred expenses may be reim- bursed (subject to reimbursement maximums and other reasonable conditions), and ”(B) the maximum amount of reimbursement which is reasonably available to a participant for such coverage is less than 500 percent of the value of such coverage. In the case of an insured plan, the maximum amount reasonably available shall be deter- mined on the basis of the underlying coverage.” (d) CONTINUATION COVERAGE RULES NOT TO APPLY.\u2014 (1) Paragraph (2) of section 4980B(g) is amended by adding at the end the following new sentence: ”Such term shall not include any plan substantially all of the coverage under which is for qualified long-term care services (as defined in section 7702B(c)).” (2) Paragraph (1) of section 607 of the Em- ployee Retirement Income Security Act of 1974 is amended by adding at the end the following new sentence: ”Such term shall not include any plan substantially all of the coverage under which is for qualified long-term care services (as defined in section 7702B(c) of such Code).” (3) Paragraph (1) of section 2208 of the Public Health Service Act is amended by adding at the end the following new sentence: ”Such term shall not include any plan substantially all of the coverage under which is for qualified long- term care services (as defined in section 7702B(c) of such Code).” (e) CLERICAL AMENDMENT.\u2014The table of sec- tions for chapter 79 is amended by inserting after the item relating to section 7702A the fol- lowing new item: ”Sec. 7702B. Treatment of qualified long-term care insurance.”. (f) EFFECTIVE DATES.\u2014 (1) GENERAL EFFECTIVE DATE.\u2014 (A) IN GENERAL.\u2014Except as provided in sub- paragraph (B), the amendments made by this section shall apply to contracts issued after De- cember 31, 1996. (B) RESERVE METHOD.\u2014The amendment made by subsection (b) shall apply to contracts issued after December 31, 1997. (2) CONTINUATION OF EXISTING POLICIES.\u2014In the case of any contract issued before January 1, 1997, which met the long-term care insurance requirements of the State in which the contract was sitused at the time the contract was is- sued\u2014 (A) such contract shall be treated for purposes of the Internal Revenue Code of 1986 as a quali- fied long-term care insurance contract (as de- fined in section 7702B(b) of such Code), and (B) services provided under, or reimbursed by, such contract shall be treated for such purposes as qualified long-term care services (as defined in section 7702B(c) of such Code). In the case of an individual who is covered on December 31, 1996, under a State long-term care plan (as defined in section 7702B(f)(2) of such Code), the terms of such plan on such date shall be treated for purposes of the preceding sentence as a contract issued on such date which met the long-term care insurance requirements of such State. (3) EXCHANGES OF EXISTING POLICIES.\u2014If, after the date of enactment of this Act and be- fore January 1, 1998, a contract providing for long-term care insurance coverage is exchanged solely for a qualified long-term care insurance contract (as defined in section 7702B(b) of such Code), no gain or loss shall be recognized on the exchange. If, in addition to a qualified long- term care insurance contract, money or other property is received in the exchange, then any gain shall be recognized to the extent of the sum of the money and the fair market value of the other property received. For purposes of this paragraph, the cancellation of a contract pro- viding for long-term care insurance coverage and reinvestment of the cancellation proceeds in a qualified long-term care insurance contract within 60 days thereafter shall be treated as an exchange. (4) ISSUANCE OF CERTAIN RIDERS PERMITTED.\u2014 For purposes of applying sections 101(f), 7702, and 7702A of the Internal Revenue Code of 1986 to any contract\u2014 (A) the issuance of a rider which is treated as a qualified long-term care insurance contract under section 7702B, and (B) the addition of any provision required to conform any other long-term care rider to be so treated, shall not be treated as a modification or mate- rial change of such contract. (5) APPLICATION OF PER DIEM LIMITATION TO EXISTING CONTRACTS.\u2014The amount of per diem payments made under a contract issued on or before July 31, 1996, with respect to an insured which are excludable from gross income by rea- son of section 7702B of the Internal Revenue Code of 1986 (as added by this section) shall not be reduced under subsection (d)(2)(B) thereof by reason of reimbursements received under a con- tract issued on or before such date. The preced- ing sentence shall cease to apply as of the date (after July 31, 1996) such contract is exchanged or there is any contract modification which re- sults in an increase in the amount of such per diem payments or the amount of such reimburse- ments. (g) LONG-TERM CARE STUDY REQUEST.\u2014The Chairman of the Committee on Ways and Means of the House of Representatives and the Chair- man of the Committee on Finance of the Senate shall jointly request the National Association of Insurance Commissioners, in consultation with representatives of the insurance industry and consumer organizations, to formulate, develop, and conduct a study to determine the marketing and other effects of per diem limits on certain types of long-term care policies. If the National Association of Insurance Commissioners agrees to the study request, the National Association of Insurance Commissioners shall report the results of its study to such committees not later than 2 years after accepting the request. SEC. 322. QUALIFIED LONG-TERM CARE SERVICES TREATED AS MEDICAL CARE. (a) GENERAL RULE.\u2014Paragraph (1) of section 213(d) (defining medical care) is amended by striking ”or” at the end of subparagraph (B), by redesignating subparagraph (C) as subpara- graph (D), and by inserting after subparagraph (B) the following new subparagraph: ”(C) for qualified long-term care services (as defined in section 7702B(c)), or”. (b) TECHNICAL AMENDMENTS.\u2014 (1) Subparagraph (D) of section 213(d)(1) (as redesignated by subsection (a)) is amended by inserting before the period ”or for any qualified long-term care insurance contract (as defined in section 7702B(b))”. (2)(A) Paragraph (1) of section 213(d) is amended by adding at the end the following new flush sentence: ”In the case of a qualified long-term care insur- ance contract (as defined in section 7702B(b)), only eligible long-term care premiums (as de- fined in paragraph (10)) shall be taken into ac- count under subparagraph (D).” (B) Paragraph (2) of section 162(l) is amended by adding at the end the following new sub- paragraph: ”(C) LONG-TERM CARE PREMIUMS.\u2014In the case of a qualified long-term care insurance contract (as defined in section 7702B(b)), only eligible long-term care premiums (as defined in section 213(d)(10)) shall be taken into account under paragraph (1).” (C) Subsection (d) of section 213 is amended by adding at the end the following new para- graphs: ”(10) ELIGIBLE LONG-TERM CARE PREMIUMS.\u2014 ”(A) IN GENERAL.\u2014For purposes of this sec- tion, the term ‘eligible long-term care premiums’ means the amount paid during a taxable year for any qualified long-term care insurance con- tract (as defined in section 7702B(b)) covering an individual, to the extent such amount does not exceed the limitation determined under the following table: ”In the case of an in- dividual with an at- tained age before the close of the tax- able year of: The limitation is: 40 or less …………….. $200 More than 40 but not more than 50 ……….. 375 More than 50 but not more than 60 ……….. 750 CONGRESSIONAL RECORD \u2014 HOUSEH9506 July 31, 1996 ”In the case of an in- dividual with an at- tained age before the close of the tax- able year of: The limitation is: More than 60 but not more than 70 ……….. 2,000 More than 70 ……….. 2,500. ”(B) INDEXING.\u2014 ”(i) IN GENERAL.\u2014In the case of any taxable year beginning in a calendar year after 1997, each dollar amount contained in subparagraph (A) shall be increased by the medical care cost adjustment of such amount for such calendar year. If any increase determined under the pre- ceding sentence is not a multiple of $10, such in- crease shall be rounded to the nearest multiple of $10. ”(ii) MEDICAL CARE COST ADJUSTMENT.\u2014For purposes of clause (i), the medical care cost ad- justment for any calendar year is the percentage (if any) by which\u2014 ”(I) the medical care component of the Consumer Price Index (as defined in section 1(f)(5)) for August of the preceding calendar year, exceeds ”(II) such component for August of 1996. The Secretary shall, in consultation with the Secretary of Health and Human Services, pre- scribe an adjustment which the Secretary deter- mines is more appropriate for purposes of this paragraph than the adjustment described in the preceding sentence, and the adjustment so pre- scribed shall apply in lieu of the adjustment de- scribed in the preceding sentence. ”(11) CERTAIN PAYMENTS TO RELATIVES TREAT- ED AS NOT PAID FOR MEDICAL CARE.\u2014An amount paid for a qualified long-term care service (as defined in section 7702B(c)) provided to an indi- vidual shall be treated as not paid for medical care if such service is provided\u2014 ”(A) by the spouse of the individual or by a relative (directly or through a partnership, cor- poration, or other entity) unless the service is provided by a licensed professional with respect to such service, or ”(B) by a corporation or partnership which is related (within the meaning of section 267(b) or 707(b)) to the individual. For purposes of this paragraph, the term ‘rel- ative’ means an individual bearing a relation- ship to the individual which is described in any of paragraphs (1) through (8) of section 152(a). This paragraph shall not apply for purposes of section 105(b) with respect to reimbursements through insurance.” . (3) Paragraph (6) of section 213(d) is amend- ed\u2014 (A) by striking ”subparagraphs (A) and (B)” and inserting ”subparagraphs (A), (B), and (C)”, and (B) by striking ”paragraph (1)(C)” in sub- paragraph (A) and inserting ”paragraph (1)(D)”. (4) Paragraph (7) of section 213(d) is amended by striking ”subparagraphs (A) and (B)” and inserting ”subparagraphs (A), (B), and (C)”. (c) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to taxable years be- ginning after December 31, 1996. SEC. 323. REPORTING REQUIREMENTS. (a) IN GENERAL.\u2014Subpart B of part III of sub- chapter A of chapter 61 is amended by adding at the end the following new section: ”SEC. 6050Q. CERTAIN LONG-TERM CARE BENE- FITS. ”(a) REQUIREMENT OF REPORTING.\u2014Any per- son who pays long-term care benefits shall make a return, according to the forms or regulations prescribed by the Secretary, setting forth\u2014 ”(1) the aggregate amount of such benefits paid by such person to any individual during any calendar year, ”(2) whether or not such benefits are paid in whole or in part on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate, ”(3) the name, address, and TIN of such indi- vidual, and ”(4) the name, address, and TIN of the chron- ically ill or terminally ill individual on account of whose condition such benefits are paid. ”(b) STATEMENTS TO BE FURNISHED TO PER- SONS WITH RESPECT TO WHOM INFORMATION IS REQUIRED.\u2014Every person required to make a re- turn under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement show- ing\u2014 ”(1) the name of the person making the pay- ments, and ”(2) the aggregate amount of long-term care benefits paid to the individual which are re- quired to be shown on such return. The written statement required under the pre- ceding sentence shall be furnished to the indi- vidual on or before January 31 of the year fol- lowing the calendar year for which the return under subsection (a) was required to be made. ”(c) LONG-TERM CARE BENEFITS.\u2014For pur- poses of this section, the term ‘long-term care benefit’ means\u2014 ”(1) any payment under a product which is advertised, marketed, or offered as long-term care insurance, and ”(2) any payment which is excludable from gross income by reason of section 101(g).”. (b) PENALTIES.\u2014 (1) Subparagraph (B) of section 6724(d)(1) is amended by redesignating clauses (ix) through (xiv) as clauses (x) through (xv), respectively, and by inserting after clause (viii) the following new clause: ”(ix) section 6050Q (relating to certain long- term care benefits),”. (2) Paragraph (2) of section 6724(d) is amend- ed by redesignating subparagraphs (Q) through (T) as subparagraphs (R) through (U), respec- tively, and by inserting after subparagraph (P) the following new subparagraph: ”(Q) section 6050Q(b) (relating to certain long-term care benefits),”. (c) CLERICAL AMENDMENT.\u2014The table of sec- tions for subpart B of part III of subchapter A of chapter 61 is amended by adding at the end the following new item: ”Sec. 6050Q. Certain long-term care benefits.”. (d) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to benefits paid after December 31, 1996. PART II\u2014CONSUMER PROTECTION PROVISIONS SEC. 325. POLICY REQUIREMENTS. Section 7702B (as added by section 321) is amended by adding at the end the following new subsection: ”(g) CONSUMER PROTECTION PROVISIONS.\u2014 ”(1) IN GENERAL.\u2014The requirements of this subsection are met with respect to any contract if the contract meets\u2014 ”(A) the requirements of the model regulation and model Act described in paragraph (2), ”(B) the disclosure requirement of paragraph (3), and ”(C) the requirements relating to nonforfeit- ability under paragraph (4). ”(2) REQUIREMENTS OF MODEL REGULATION AND ACT.\u2014 ”(A) IN GENERAL.\u2014The requirements of this paragraph are met with respect to any contract if such contract meets\u2014 ”(i) MODEL REGULATION.\u2014The following re- quirements of the model regulation: ”(I) Section 7A (relating to guaranteed re- newal or noncancellability), and the require- ments of section 6B of the model Act relating to such section 7A. ”(II) Section 7B (relating to prohibitions on limitations and exclusions). ”(III) Section 7C (relating to extension of ben- efits). ”(IV) Section 7D (relating to continuation or conversion of coverage). ”(V) Section 7E (relating to discontinuance and replacement of policies). ”(VI) Section 8 (relating to unintentional lapse). ”(VII) Section 9 (relating to disclosure), other than section 9F thereof. ”(VIII) Section 10 (relating to prohibitions against post-claims underwriting). ”(IX) Section 11 (relating to minimum stand- ards). ”(X) Section 12 (relating to requirement to offer inflation protection), except that any re- quirement for a signature on a rejection of infla- tion protection shall permit the signature to be on an application or on a separate form. ”(XI) Section 23 (relating to prohibition against preexisting conditions and probationary periods in replacement policies or certificates). ”(ii) MODEL ACT.\u2014The following requirements of the model Act: ”(I) Section 6C (relating to preexisting condi- tions). ”(II) Section 6D (relating to prior hospitaliza- tion). ”(B) DEFINITIONS.\u2014For purposes of this para- graph\u2014 ”(i) MODEL PROVISIONS.\u2014The terms ‘model regulation’ and ‘model Act’ mean the long-term care insurance model regulation, and the long- term care insurance model Act, respectively, promulgated by the National Association of In- surance Commissioners (as adopted as of Janu- ary 1993). ”(ii) COORDINATION.\u2014Any provision of the model regulation or model Act listed under clause (i) or (ii) of subparagraph (A) shall be treated as including any other provision of such regulation or Act necessary to implement the provision. ”(iii) DETERMINATION.\u2014For purposes of this section and section 4980C, the determination of whether any requirement of a model regulation or the model Act has been met shall be made by the Secretary. ”(3) DISCLOSURE REQUIREMENT.\u2014The require- ment of this paragraph is met with respect to any contract if such contract meets the require- ments of section 4980C(d). ”(4) NONFORFEITURE REQUIREMENTS.\u2014 ”(A) IN GENERAL.\u2014The requirements of this paragraph are met with respect to any level pre- mium contract, if the issuer of such contract of- fers to the policyholder, including any group policyholder, a nonforfeiture provision meeting the requirements of subparagraph (B). ”(B) REQUIREMENTS OF PROVISION.\u2014The non- forfeiture provision required under subpara- graph (A) shall meet the following requirements: ”(i) The nonforfeiture provision shall be ap- propriately captioned. ”(ii) The nonforfeiture provision shall provide for a benefit available in the event of a default in the payment of any premiums and the amount of the benefit may be adjusted subse- quent to being initially granted only as nec- essary to reflect changes in claims, persistency, and interest as reflected in changes in rates for premium paying contracts approved by the Sec- retary for the same contract form. ”(iii) The nonforfeiture provision shall pro- vide at least one of the following: ”(I) Reduced paid-up insurance. ”(II) Extended term insurance. ”(III) Shortened benefit period. ”(IV) Other similar offerings approved by the Secretary. ”(5) CROSS REFERENCE.\u2014 ”For coordination of the requirements of this subsection with State requirements, see section 4980C(f).” SEC. 326. REQUIREMENTS FOR ISSUERS OF QUALIFIED LONG-TERM CARE INSUR- ANCE CONTRACTS. (a) IN GENERAL.\u2014Chapter 43 is amended by adding at the end the following new section: ”SEC. 4980C. REQUIREMENTS FOR ISSUERS OF QUALIFIED LONG-TERM CARE INSUR- ANCE CONTRACTS. ”(a) GENERAL RULE.\u2014There is hereby imposed on any person failing to meet the requirements CONGRESSIONAL RECORD \u2014 HOUSE H9507July 31, 1996 of subsection (c) or (d) a tax in the amount de- termined under subsection (b). ”(b) AMOUNT.\u2014 ”(1) IN GENERAL.\u2014The amount of the tax im- posed by subsection (a) shall be $100 per insured for each day any requirement of subsection (c) or (d) is not met with respect to each qualified long-term care insurance contract. ”(2) WAIVER.\u2014In the case of a failure which is due to reasonable cause and not to willful ne- glect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that payment of the tax would be excessive relative to the failure involved. ”(c) RESPONSIBILITIES.\u2014The requirements of this subsection are as follows: ”(1) REQUIREMENTS OF MODEL PROVISIONS.\u2014 ”(A) MODEL REGULATION.\u2014The following re- quirements of the model regulation must be met: ”(i) Section 13 (relating to application forms and replacement coverage). ”(ii) Section 14 (relating to reporting require- ments), except that the issuer shall also report at least annually the number of claims denied during the reporting period for each class of business (expressed as a percentage of claims de- nied), other than claims denied for failure to meet the waiting period or because of any appli- cable preexisting condition. ”(iii) Section 20 (relating to filing require- ments for marketing). ”(iv) Section 21 (relating to standards for mar- keting), including inaccurate completion of med- ical histories, other than sections 21C(1) and 21C(6) thereof, except that\u2014 ”(I) in addition to such requirements, no per- son shall, in selling or offering to sell a qualified long-term care insurance contract, misrepresent a material fact; and ”(II) no such requirements shall include a re- quirement to inquire or identify whether a pro- spective applicant or enrollee for long-term care insurance has accident and sickness insurance. ”(v) Section 22 (relating to appropriateness of recommended purchase). ”(vi) Section 24 (relating to standard format outline of coverage). ”(vii) Section 25 (relating to requirement to deliver shopper’s guide). ”(B) MODEL ACT.\u2014The following requirements of the model Act must be met: ”(i) Section 6F (relating to right to return), except that such section shall also apply to de- nials of applications and any refund shall be made within 30 days of the return or denial. ”(ii) Section 6G (relating to outline of cov- erage). ”(iii) Section 6H (relating to requirements for certificates under group plans). ”(iv) Section 6I (relating to policy summary). ”(v) Section 6J (relating to monthly reports on accelerated death benefits). ”(vi) Section 7 (relating to incontestability pe- riod). ”(C) DEFINITIONS.\u2014For purposes of this para- graph, the terms ‘model regulation’ and ‘model Act’ have the meanings given such terms by sec- tion 7702B(g)(2)(B). ”(2) DELIVERY OF POLICY.\u2014If an application for a qualified long-term care insurance con- tract (or for a certificate under such a contract for a group) is approved, the issuer shall deliver to the applicant (or policyholder or certificateholder) the contract (or certificate) of insurance not later than 30 days after the date of the approval. ”(3) INFORMATION ON DENIALS OF CLAIMS.\u2014If a claim under a qualified long-term care insur- ance contract is denied, the issuer shall, within 60 days of the date of a written request by the policyholder or certificateholder (or representa- tive)\u2014 ”(A) provide a written explanation of the rea- sons for the denial, and ”(B) make available all information directly relating to such denial. ”(d) DISCLOSURE.\u2014The requirements of this subsection are met if the issuer of a long-term care insurance policy discloses in such policy and in the outline of coverage required under subsection (c)(1)(B)(ii) that the policy is in- tended to be a qualified long-term care insur- ance contract under section 7702B(b). ”(e) QUALIFIED LONG-TERM CARE INSURANCE CONTRACT DEFINED.\u2014For purposes of this sec- tion, the term ‘qualified long-term care insur- ance contract’ has the meaning given such term by section 7702B. ”(f) COORDINATION WITH STATE REQUIRE- MENTS.\u2014If a State imposes any requirement which is more stringent than the analogous re- quirement imposed by this section or section 7702B(g), the requirement imposed by this sec- tion or section 7702B(g) shall be treated as met if the more stringent State requirement is met.”. (b) CONFORMING AMENDMENT.\u2014The table of sections for chapter 43 is amended by adding at the end the following new item: ”Sec. 4980C. Requirements for issuers of quali- fied long-term care insurance con- tracts.” SEC. 327. EFFECTIVE DATES. (a) IN GENERAL.\u2014The provisions of, and amendments made by, this part shall apply to contracts issued after December 31, 1996. The provisions of section 321(f) (relating to transi- tion rule) shall apply to such contracts. (b) ISSUERS.\u2014The amendments made by sec- tion 326 shall apply to actions taken after De- cember 31, 1996. Subtitle D\u2014Treatment of Accelerated Death Benefits SEC. 331. TREATMENT OF ACCELERATED DEATH BENEFITS BY RECIPIENT. (a) IN GENERAL.\u2014Section 101 (relating to cer- tain death benefits) is amended by adding at the end the following new subsection: ”(g) TREATMENT OF CERTAIN ACCELERATED DEATH BENEFITS.\u2014 ”(1) IN GENERAL.\u2014For purposes of this sec- tion, the following amounts shall be treated as an amount paid by reason of the death of an in- sured: ”(A) Any amount received under a life insur- ance contract on the life of an insured who is a terminally ill individual. ”(B) Any amount received under a life insur- ance contract on the life of an insured who is a chronically ill individual. ”(2) TREATMENT OF VIATICAL SETTLEMENTS.\u2014 ”(A) IN GENERAL.\u2014If any portion of the death benefit under a life insurance contract on the life of an insured described in paragraph (1) is sold or assigned to a viatical settlement pro- vider, the amount paid for the sale or assign- ment of such portion shall be treated as an amount paid under the life insurance contract by reason of the death of such insured. ”(B) VIATICAL SETTLEMENT PROVIDER.\u2014 ”(i) IN GENERAL.\u2014The term ‘viatical settle- ment provider’ means any person regularly en- gaged in the trade or business of purchasing, or taking assignments of, life insurance contracts on the lives of insureds described in paragraph (1) if\u2014 ”(I) such person is licensed for such purposes (with respect to insureds described in the same subparagraph of paragraph (1) as the insured) in the State in which the insured resides, or ”(II) in the case of an insured who resides in a State not requiring the licensing of such per- sons for such purposes with respect to such in- sured, such person meets the requirements of clause (ii) or (iii), whichever applies to such in- sured. ”(ii) TERMINALLY ILL INSUREDS.\u2014A person meets the requirements of this clause with re- spect to an insured who is a terminally ill indi- vidual if such person\u2014 ”(I) meets the requirements of sections 8 and 9 of the Viatical Settlements Model Act of the National Association of Insurance Commis- sioners, and ”(II) meets the requirements of the Model Reg- ulations of the National Association of Insur- ance Commissioners (relating to standards for evaluation of reasonable payments) in determin- ing amounts paid by such person in connection with such purchases or assignments. ”(iii) CHRONICALLY ILL INSUREDS.\u2014A person meets the requirements of this clause with re- spect to an insured who is a chronically ill indi- vidual if such person\u2014 ”(I) meets requirements similar to the require- ments referred to in clause (ii)(I), and ”(II) meets the standards (if any) of the Na- tional Association of Insurance Commissioners for evaluating the reasonableness of amounts paid by such person in connection with such purchases or assignments with respect to chron- ically ill individuals. ”(3) SPECIAL RULES FOR CHRONICALLY ILL INSUREDS.\u2014In the case of an insured who is a chronically ill individual\u2014 ”(A) IN GENERAL.\u2014Paragraphs (1) and (2) shall not apply to any payment received for any period unless\u2014 ”(i) such payment is for costs incurred by the payee (not compensated for by insurance or oth- erwise) for qualified long-term care services pro- vided for the insured for such period, and ”(ii) the terms of the contract giving rise to such payment satisfy\u2014 ”(I) the requirements of section 7702B(b)(1)(B), and ”(II) the requirements (if any) applicable under subparagraph (B). For purposes of the preceding sentence, the rule of section 7702B(b)(2)(B) shall apply. ”(B) OTHER REQUIREMENTS.\u2014The require- ments applicable under this subparagraph are\u2014 ”(i) those requirements of section 7702B(g) and section 4980C which the Secretary specifies as applying to such a purchase, assignment, or other arrangement, ”(ii) standards adopted by the National Asso- ciation of Insurance Commissioners which spe- cifically apply to chronically ill individuals (and, if such standards are adopted, the analo- gous requirements specified under clause (i) shall cease to apply), and ”(iii) standards adopted by the State in which the policyholder resides (and if such standards are adopted, the analogous requirements speci- fied under clause (i) and (subject to section 4980C(f)) standards under clause (ii), shall cease to apply). ”(C) PER DIEM PAYMENTS.\u2014A payment shall not fail to be described in subparagraph (A) by reason of being made on a per diem or other periodic basis without regard to the expenses in- curred during the period to which the payment relates. ”(D) LIMITATION ON EXCLUSION FOR PERIODIC PAYMENTS.\u2014 ”For limitation on amount of periodic pay- ments which are treated as described in para- graph (1), see section 7702B(d).” ”(4) DEFINITIONS.\u2014For purposes of this sub- section\u2014 ”(A) TERMINALLY ILL INDIVIDUAL.\u2014The term ‘terminally ill individual’ means an individual who has been certified by a physician as having an illness or physical condition which can rea- sonably be expected to result in death in 24 months or less after the date of the certification. ”(B) CHRONICALLY ILL INDIVIDUAL.\u2014The term ‘chronically ill individual’ has the meaning given such term by section 7702B(c)(2); except that such term shall not include a terminally ill individual. ”(C) QUALIFIED LONG-TERM CARE SERVICES.\u2014 The term ‘qualified long-term care services’ has the meaning given such term by section 7702B(c). ”(D) PHYSICIAN.\u2014The term ‘physician’ has the meaning given to such term by section 1861(r)(1) of the Social Security Act (42 U.S.C. 1395x(r)(1)). ”(5) EXCEPTION FOR BUSINESS-RELATED POLI- CIES.\u2014This subsection shall not apply in the case of any amount paid to any taxpayer other CONGRESSIONAL RECORD \u2014 HOUSEH9508 July 31, 1996 than the insured if such taxpayer has an insur- able interest with respect to the life of the in- sured by reason of the insured being a director, officer, or employee of the taxpayer or by reason of the insured being financially interested in any trade or business carried on by the tax- payer.”. (b) EFFECTIVE DATE.\u2014The amendment made by subsection (a) shall apply to amounts re- ceived after December 31, 1996. SEC. 332. TAX TREATMENT OF COMPANIES ISSU- ING QUALIFIED ACCELERATED DEATH BENEFIT RIDERS. (a) QUALIFIED ACCELERATED DEATH BENEFIT RIDERS TREATED AS LIFE INSURANCE.\u2014Section 818 (relating to other definitions and special rules) is amended by adding at the end the fol- lowing new subsection: ”(g) QUALIFIED ACCELERATED DEATH BENEFIT RIDERS TREATED AS LIFE INSURANCE.\u2014For pur- poses of this part\u2014 ”(1) IN GENERAL.\u2014Any reference to a life in- surance contract shall be treated as including a reference to a qualified accelerated death bene- fit rider on such contract. ”(2) QUALIFIED ACCELERATED DEATH BENEFIT RIDERS.\u2014For purposes of this subsection, the term ‘qualified accelerated death benefit rider’ means any rider on a life insurance contract if the only payments under the rider are payments meeting the requirements of section 101(g). ”(3) EXCEPTION FOR LONG-TERM CARE RID- ERS.\u2014Paragraph (1) shall not apply to any rider which is treated as a long-term care insurance contract under section 7702B.”. (b) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014The amendment made by this section shall take effect on January 1, 1997. (2) ISSUANCE OF RIDER NOT TREATED AS MATE- RIAL CHANGE.\u2014For purposes of applying sec- tions 101(f), 7702, and 7702A of the Internal Rev- enue Code of 1986 to any contract\u2014 (A) the issuance of a qualified accelerated death benefit rider (as defined in section 818(g) of such Code (as added by this Act)), and (B) the addition of any provision required to conform an accelerated death benefit rider to the requirements of such section 818(g), shall not be treated as a modification or mate- rial change of such contract. Subtitle E\u2014State Insurance Pools SEC. 341. EXEMPTION FROM INCOME TAX FOR STATE-SPONSORED ORGANIZATIONS PROVIDING HEALTH COVERAGE FOR HIGH-RISK INDIVIDUALS. (a) IN GENERAL.\u2014Subsection (c) of section 501 (relating to list of exempt organizations) is amended by adding at the end the following new paragraph: ”(26) Any membership organization if\u2014 ”(A) such organization is established by a State exclusively to provide coverage for medical care (as defined in section 213(d)) on a not-for- profit basis to individuals described in subpara- graph (B) through\u2014 ”(i) insurance issued by the organization, or ”(ii) a health maintenance organization under an arrangement with the organization, ”(B) the only individuals receiving such cov- erage through the organization are individ- uals\u2014 ”(i) who are residents of such State, and ”(ii) who, by reason of the existence or history of a medical condition\u2014 ”(I) are unable to acquire medical care cov- erage for such condition through insurance or from a health maintenance organization, or ”(II) are able to acquire such coverage only at a rate which is substantially in excess of the rate for such coverage through the membership organization, ”(C) the composition of the membership in such organization is specified by such State, and ”(D) no part of the net earnings of the organi- zation inures to the benefit of any private shareholder or individual.”. (b) EFFECTIVE DATE.\u2014The amendment made by this section shall apply to taxable years be- ginning after December 31, 1996. SEC. 342. EXEMPTION FROM INCOME TAX FOR STATE-SPONSORED WORKMEN’S COMPENSATION REINSURANCE OR- GANIZATIONS. (a) IN GENERAL.\u2014Subsection (c) of section 501 (relating to list of exempt organizations), as amended by section 341, is amended by adding at the end the following new paragraph: ”(27) Any membership organization if\u2014 ”(A) such organization is established before June 1, 1996, by a State exclusively to reimburse its members for losses arising under workmen’s compensation acts, ”(B) such State requires that the membership of such organization consist of\u2014 ”(i) all persons who issue insurance covering workmen’s compensation losses in such State, and ”(ii) all persons and governmental entities who self-insure against such losses, and ”(C) such organization operates as a non- profit organization by\u2014 ”(i) returning surplus income to its members or workmen’s compensation policyholders on a periodic basis, and ”(ii) reducing initial premiums in anticipation of investment income.” (b) EFFECTIVE DATE.\u2014The amendment made by this section shall apply to taxable years end- ing after the date of the enactment of this Act. Subtitle F\u2014Organizations Subject to Section 833 SEC. 351. ORGANIZATIONS SUBJECT TO SECTION 833. (a) IN GENERAL.\u2014Section 833(c) (relating to organization to which section applies) is amend- ed by adding at the end the following new para- graph: ”(4) TREATMENT AS EXISTING BLUE CROSS OR BLUE SHIELD ORGANIZATION.\u2014 ”(A) IN GENERAL.\u2014Paragraph (2) shall be ap- plied to an organization described in subpara- graph (B) as if it were a Blue Cross or Blue Shield organization. ”(B) APPLICABLE ORGANIZATION.\u2014An organi- zation is described in this subparagraph if it\u2014 ”(i) is organized under, and governed by, State laws which are specifically and exclu- sively applicable to not-for-profit health insur- ance or health service type organizations, and ”(ii) is not a Blue Cross or Blue Shield organi- zation or health maintenance organization.”. (b) EFFECTIVE DATE.\u2014The amendment made by this section shall apply to taxable years end- ing after December 31, 1996. Subtitle G\u2014IRA Distributions to the Unemployed SEC. 361. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITHOUT ADDITIONAL TAX TO PAY FINANCIALLY DEV- ASTATING MEDICAL EXPENSES. (a) IN GENERAL.\u2014Section 72(t)(3)(A) is amend- ed by striking ”(B),”. (b) DISTRIBUTIONS FOR PAYMENT OF HEALTH INSURANCE PREMIUMS OF CERTAIN UNEMPLOYED INDIVIDUALS.\u2014Paragraph (2) of section 72(t) is amended by adding at the end the following new subparagraph: ”(D) DISTRIBUTIONS TO UNEMPLOYED INDIVID- UALS FOR HEALTH INSURANCE PREMIUMS.\u2014 ”(i) IN GENERAL.\u2014Distributions from an indi- vidual retirement plan to an individual after separation from employment\u2014 ”(I) if such individual has received unemploy- ment compensation for 12 consecutive weeks under any Federal or State unemployment com- pensation law by reason of such separation, ”(II) if such distributions are made during any taxable year during which such unemploy- ment compensation is paid or the succeeding taxable year, and ”(III) to the extent such distributions do not exceed the amount paid during the taxable year for insurance described in section 213(d)(1)(D) with respect to the individual and the individ- ual’s spouse and dependents (as defined in sec- tion 152). ”(ii) DISTRIBUTIONS AFTER REEMPLOYMENT.\u2014 Clause (i) shall not apply to any distribution made after the individual has been employed for at least 60 days after the separation from em- ployment to which clause (i) applies. ”(iii) SELF-EMPLOYED INDIVIDUALS.\u2014To the extent provided in regulations, a self-employed individual shall be treated as meeting the re- quirements of clause (i)(I) if, under Federal or State law, the individual would have received unemployment compensation but for the fact the individual was self-employed.”. (c) CONFORMING AMENDMENT.\u2014Subparagraph (B) of section 72(t)(2) is amended by striking ”or (C)” and inserting ”, (C), or (D)”. (d) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to distributions after December 31, 1996. Subtitle H\u2014Organ and Tissue Donation Infor- mation Included With Income Tax Refund Payments SEC. 371. ORGAN AND TISSUE DONATION INFOR- MATION INCLUDED WITH INCOME TAX REFUND PAYMENTS. (a) IN GENERAL.\u2014The Secretary of the Treas- ury shall, to the extent practicable, include with the mailing of any payment of a refund of indi- vidual income tax made during the period begin- ning on February 1, 1997, and ending on June 30, 1997, a copy of the document described in subsection (b). (b) TEXT OF DOCUMENT.\u2014The Secretary of the Treasury shall, after consultation with the Sec- retary of Health and Human Services and orga- nizations promoting organ and tissue (including eye) donation, prepare a document suitable for inclusion with individual income tax refund payments which\u2014 (1) encourages organ and tissue donation; (2) includes a detachable organ and tissue donor card; and (3) urges recipients to\u2014 (A) sign the organ and tissue donor card; (B) discuss organ and tissue donation with family members and tell family members about the recipient’s desire to be an organ and tissue donor if the occasion arises; and (C) encourage family members to request or authorize organ and tissue donation if the occa- sion arises. TITLE IV\u2014APPLICATION AND ENFORCE- MENT OF GROUP HEALTH PLAN RE- QUIREMENTS Subtitle A\u2014Application and Enforcement of Group Health Plan Requirements SEC. 401. GROUP HEALTH PLAN PORTABILITY, AC- CESS, AND RENEWABILITY REQUIRE- MENTS. (a) IN GENERAL.\u2014The Internal Revenue Code of 1986 is amended by adding at the end the fol- lowing new subtitle: ”Subtitle K\u2014Group Health Plan Portability, Access, and Renewability Requirements ”Chapter 100. Group health plan portability, ac- cess, and renewability require- ments. ”CHAPTER 100\u2014GROUP HEALTH PLAN PORTABILITY, ACCESS, AND RENEW- ABILITY REQUIREMENTS ”Sec. 9801. Increased portability through limita- tion on preexisting condition ex- clusions. ”Sec. 9802. Prohibiting discrimination against individual participants and bene- ficiaries based on health status. ”Sec. 9803. Guaranteed renewability in multiem- ployer plans and certain multiple employer welfare arrangements. ”Sec. 9804. General exceptions. ”Sec. 9805. Definitions. ”Sec. 9806. Regulations. CONGRESSIONAL RECORD \u2014 HOUSE H9509July 31, 1996 ”SEC. 9801. INCREASED PORTABILITY THROUGH LIMITATION ON PREEXISTING CON- DITION EXCLUSIONS. ”(a) LIMITATION ON PREEXISTING CONDITION EXCLUSION PERIOD; CREDITING FOR PERIODS OF PREVIOUS COVERAGE.\u2014Subject to subsection (d), a group health plan may, with respect to a par- ticipant or beneficiary, impose a preexisting condition exclusion only if\u2014 ”(1) such exclusion relates to a condition (whether physical or mental), regardless of the cause of the condition, for which medical ad- vice, diagnosis, care, or treatment was rec- ommended or received within the 6-month period ending on the enrollment date; ”(2) such exclusion extends for a period of not more than 12 months (or 18 months in the case of a late enrollee) after the enrollment date; and ”(3) the period of any such preexisting condi- tion exclusion is reduced by the length of the aggregate of the periods of creditable coverage (if any) applicable to the participant or bene- ficiary as of the enrollment date. ”(b) DEFINITIONS.\u2014For purposes of this sec- tion\u2014 ”(1) PREEXISTING CONDITION EXCLUSION.\u2014 ”(A) IN GENERAL.\u2014The term ‘preexisting con- dition exclusion’ means, with respect to cov- erage, a limitation or exclusion of benefits relat- ing to a condition based on the fact that the condition was present before the date of enroll- ment for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date. ”(B) TREATMENT OF GENETIC INFORMATION.\u2014 For purposes of this section, genetic information shall not be treated as a condition described in subsection (a)(1) in the absence of a diagnosis of the condition related to such information. ”(2) ENROLLMENT DATE.\u2014The term ‘enroll- ment date’ means, with respect to an individual covered under a group health plan, the date of enrollment of the individual in the plan or, if earlier, the first day of the waiting period for such enrollment. ”(3) LATE ENROLLEE.\u2014The term ‘late enrollee’ means, with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during\u2014 ”(A) the first period in which the individual is eligible to enroll under the plan, or ”(B) a special enrollment period under sub- section (f). ”(4) WAITING PERIOD.\u2014The term ‘waiting pe- riod’ means, with respect to a group health plan and an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the in- dividual is eligible to be covered for benefits under the terms of the plan. ”(c) RULES RELATING TO CREDITING PREVIOUS COVERAGE.\u2014 ”(1) CREDITABLE COVERAGE DEFINED.\u2014For purposes of this part, the term ‘creditable cov- erage’ means, with respect to an individual, cov- erage of the individual under any of the follow- ing: ”(A) A group health plan. ”(B) Health insurance coverage. ”(C) Part A or part B of title XVIII of the So- cial Security Act. ”(D) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928. ”(E) Chapter 55 of title 10, United States Code. ”(F) A medical care program of the Indian Health Service or of a tribal organization. ”(G) A State health benefits risk pool. ”(H) A health plan offered under chapter 89 of title 5, United States Code. ”(I) A public health plan (as defined in regu- lations). ”(J) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e). Such term does not include coverage consisting solely of coverage of excepted benefits (as de- fined in section 9805(c)). ”(2) NOT COUNTING PERIODS BEFORE SIGNIFI- CANT BREAKS IN COVERAGE.\u2014 ”(A) IN GENERAL.\u2014A period of creditable cov- erage shall not be counted, with respect to en- rollment of an individual under a group health plan, if, after such period and before the enroll- ment date, there was a 63-day period during all of which the individual was not covered under any creditable coverage. ”(B) WAITING PERIOD NOT TREATED AS A BREAK IN COVERAGE.\u2014For purposes of subpara- graph (A) and subsection (d)(4), any period that an individual is in a waiting period for any cov- erage under a group health plan or is in an af- filiation period shall not be taken into account in determining the continuous period under sub- paragraph (A). ”(C) AFFILIATION PERIOD.\u2014 ”(i) IN GENERAL.\u2014For purposes of this section, the term ‘affiliation period’ means a period which, under the terms of the health insurance coverage offered by the health maintenance or- ganization, must expire before the health insur- ance coverage becomes effective. During such an affiliation period, the organization is not re- quired to provide health care services or benefits and no premium shall be charged to the partici- pant or beneficiary. ”(ii) BEGINNING.\u2014Such period shall begin on the enrollment date. ”(iii) RUNS CONCURRENTLY WITH WAITING PERI- ODS.\u2014Any such affiliation period shall run con- currently with any waiting period under the plan. ”(3) METHOD OF CREDITING COVERAGE.\u2014 ”(A) STANDARD METHOD.\u2014Except as otherwise provided under subparagraph (B), for purposes of applying subsection (a)(3), a group health plan shall count a period of creditable coverage without regard to the specific benefits for which coverage is offered during the period. ”(B) ELECTION OF ALTERNATIVE METHOD.\u2014A group health plan may elect to apply subsection (a)(3) based on coverage of any benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subparagraph (A). Such election shall be made on a uniform basis for all participants and beneficiaries. Under such election a group health plan shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category. ”(C) PLAN NOTICE.\u2014In the case of an election with respect to a group health plan under sub- paragraph (B), the plan shall\u2014 ”(i) prominently state in any disclosure state- ments concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made such election, and ”(ii) include in such statements a description of the effect of this election. ”(4) ESTABLISHMENT OF PERIOD.\u2014Periods of creditable coverage with respect to an individual shall be established through presentation of cer- tifications described in subsection (e) or in such other manner as may be specified in regulations. ”(d) EXCEPTIONS.\u2014 ”(1) EXCLUSION NOT APPLICABLE TO CERTAIN NEWBORNS.\u2014Subject to paragraph (4), a group health plan may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the 30-day period be- ginning with the date of birth, is covered under creditable coverage. ”(2) EXCLUSION NOT APPLICABLE TO CERTAIN ADOPTED CHILDREN.\u2014Subject to paragraph (4), a group health plan may not impose any preexist- ing condition exclusion in the case of a child who is adopted or placed for adoption before at- taining 18 years of age and who, as of the last day of the 30-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. The previous sentence shall not apply to coverage before the date of such adoption or placement for adop- tion. ”(3) EXCLUSION NOT APPLICABLE TO PREG- NANCY.\u2014For purposes of this section, a group health plan may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition. ”(4) LOSS IF BREAK IN COVERAGE.\u2014Para- graphs (1) and (2) shall no longer apply to an individual after the end of the first 63-day pe- riod during all of which the individual was not covered under any creditable coverage. ”(e) CERTIFICATIONS AND DISCLOSURE OF COV- ERAGE.\u2014 ”(1) REQUIREMENT FOR CERTIFICATION OF PE- RIOD OF CREDITABLE COVERAGE.\u2014 ”(A) IN GENERAL.\u2014A group health plan shall provide the certification described in subpara- graph (B)\u2014 ”(i) at the time an individual ceases to be cov- ered under the plan or otherwise becomes cov- ered under a COBRA continuation provision, ”(ii) in the case of an individual becoming covered under such a provision, at the time the individual ceases to be covered under such pro- vision, and ”(iii) on the request on behalf of an individ- ual made not later than 24 months after the date of cessation of the coverage described in clause (i) or (ii), whichever is later. The certification under clause (i) may be pro- vided, to the extent practicable, at a time con- sistent with notices required under any applica- ble COBRA continuation provision. ”(B) CERTIFICATION.\u2014The certification de- scribed in this subparagraph is a written certifi- cation of\u2014 ”(i) the period of creditable coverage of the in- dividual under such plan and the coverage under such COBRA continuation provision, and ”(ii) the waiting period (if any) (and affili- ation period, if applicable) imposed with respect to the individual for any coverage under such plan. ”(C) ISSUER COMPLIANCE.\u2014To the extent that medical care under a group health plan consists of health insurance coverage offered in connec- tion with the plan, the plan is deemed to have satisfied the certification requirement under this paragraph if the issuer provides for such certifi- cation in accordance with this paragraph. ”(2) DISCLOSURE OF INFORMATION ON PRE- VIOUS BENEFITS.\u2014 ”(A) IN GENERAL.\u2014In the case of an election described in subsection (c)(3)(B) by a group health plan, if the plan enrolls an individual for coverage under the plan and the individual pro- vides a certification of coverage of the individ- ual under paragraph (1)\u2014 ”(i) upon request of such plan, the entity which issued the certification provided by the individual shall promptly disclose to such re- questing plan information on coverage of classes and categories of health benefits available under such entity’s plan, and ”(ii) such entity may charge the requesting plan or issuer for the reasonable cost of disclos- ing such information. ”(3) REGULATIONS.\u2014The Secretary shall es- tablish rules to prevent an entity’s failure to provide information under paragraph (1) or (2) with respect to previous coverage of an individ- ual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage. ”(f) SPECIAL ENROLLMENT PERIODS.\u2014 ”(1) INDIVIDUALS LOSING OTHER COVERAGE.\u2014A group health plan shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not en- rolled, for coverage under such terms) to enroll for coverage under the terms of the plan if each of the following conditions is met: ”(A) The employee or dependent was covered under a group health plan or had health insur- ance coverage at the time coverage was pre- viously offered to the employee or individual. ”(B) The employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan spon- sor (or the health insurance issuer offering CONGRESSIONAL RECORD \u2014 HOUSEH9510 July 31, 1996 health insurance coverage in connection with the plan) required such a statement at such time and provided the employee with notice of such requirement (and the consequences of such re- quirement) at such time. ”(C) The employee’s or dependent’s coverage described in subparagraph (A)\u2014 ”(i) was under a COBRA continuation provi- sion and the coverage under such provision was exhausted; or ”(ii) was not under such a provision and ei- ther the coverage was terminated as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce, death, ter- mination of employment, or reduction in the number of hours of employment) or employer contributions towards such coverage were termi- nated. ”(D) Under the terms of the plan, the em- ployee requests such enrollment not later than 30 days after the date of exhaustion of coverage described in subparagraph (C)(i) or termination of coverage or employer contribution described in subparagraph (C)(ii). ”(2) FOR DEPENDENT BENEFICIARIES.\u2014 ”(A) IN GENERAL.\u2014If\u2014 ”(i) a group health plan makes coverage available with respect to a dependent of an indi- vidual, ”(ii) the individual is a participant under the plan (or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period), and ”(iii) a person becomes such a dependent of the individual through marriage, birth, or adop- tion or placement for adoption, the group health plan shall provide for a de- pendent special enrollment period described in subparagraph (B) during which the person (or, if not otherwise enrolled, the individual) may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adop- tion of a child, the spouse of the individual may be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage. ”(B) DEPENDENT SPECIAL ENROLLMENT PE- RIOD.\u2014The dependent special enrollment period under this subparagraph shall be a period of not less than 30 days and shall begin on the later of\u2014 ”(i) the date dependent coverage is made available, or ”(ii) the date of the marriage, birth, or adop- tion or placement for adoption (as the case may be) described in subparagraph (A)(iii). ”(C) NO WAITING PERIOD.\u2014If an individual seeks coverage of a dependent during the first 30 days of such a dependent special enrollment pe- riod, the coverage of the dependent shall become effective\u2014 ”(i) in the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is re- ceived; ”(ii) in the case of a dependent’s birth, as of the date of such birth; or ”(iii) in the case of a dependent’s adoption or placement for adoption, the date of such adop- tion or placement for adoption. ”SEC. 9802. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS AND BENEFICIARIES BASED ON HEALTH STATUS. ”(a) IN ELIGIBILITY TO ENROLL.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (2), a group health plan may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan based on any of the following factors in re- lation to the individual or a dependent of the individual: ”(A) Health status. ”(B) Medical condition (including both phys- ical and mental illnesses). ”(C) Claims experience. ”(D) Receipt of health care. ”(E) Medical history. ”(F) Genetic information. ”(G) Evidence of insurability (including con- ditions arising out of acts of domestic violence). ”(H) Disability. ”(2) NO APPLICATION TO BENEFITS OR EXCLU- SIONS.\u2014To the extent consistent with section 9801, paragraph (1) shall not be construed\u2014 ”(A) to require a group health plan to provide particular benefits (or benefits with respect to a specific procedure, treatment, or service) other than those provided under the terms of such plan; or ”(B) to prevent such a plan from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan or coverage. ”(3) CONSTRUCTION.\u2014For purposes of para- graph (1), rules for eligibility to enroll under a plan include rules defining any applicable wait- ing periods for such enrollment. ”(b) IN PREMIUM CONTRIBUTIONS.\u2014 ”(1) IN GENERAL.\u2014A group health plan may not require any individual (as a condition of en- rollment or continued enrollment under the plan) to pay a premium or contribution which is greater than such premium or contribution for a similarly situated individual enrolled in the plan on the basis of any factor described in sub- section (a)(1) in relation to the individual or to an individual enrolled under the plan as a de- pendent of the individual. ”(2) CONSTRUCTION.\u2014Nothing in paragraph (1) shall be construed\u2014 ”(A) to restrict the amount that an employer may be charged for coverage under a group health plan; or ”(B) to prevent a group health plan from es- tablishing premium discounts or rebates or modi- fying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention. ”SEC. 9803. GUARANTEED RENEWABILITY IN MUL- TIEMPLOYER PLANS AND CERTAIN MULTIPLE EMPLOYER WELFARE AR- RANGEMENTS. ”(a) IN GENERAL.\u2014A group health plan which is a multiemployer plan (as defined in section 414(f)) or which is a multiple employer welfare arrangement may not deny an employer contin- ued access to the same or different coverage under such plan, other than\u2014 ”(1) for nonpayment of contributions; ”(2) for fraud or other intentional misrepre- sentation of material fact by the employer; ”(3) for noncompliance with material plan provisions; ”(4) because the plan is ceasing to offer any coverage in a geographic area; ”(5) in the case of a plan that offers benefits through a network plan, because there is no longer any individual enrolled through the em- ployer who lives, resides, or works in the service area of the network plan and the plan applies this paragraph uniformly without regard to the claims experience of employers or a factor de- scribed in section 9802(a)(1) in relation to such individuals or their dependents; or ”(6) for failure to meet the terms of an appli- cable collective bargaining agreement, to renew a collective bargaining or other agreement re- quiring or authorizing contributions to the plan, or to employ employees covered by such an agreement. ”(b) MULTIPLE EMPLOYER WELFARE ARRANGE- MENT.\u2014For purposes of subsection (a), the term ‘multiple employer welfare arrangement’ has the meaning given such term by section 3(40) of the Employee Retirement Income Security Act of 1974, as in effect on the date of the enactment of this section. ”SEC. 9804. GENERAL EXCEPTIONS. ”(a) EXCEPTION FOR CERTAIN PLANS.\u2014The re- quirements of this chapter shall not apply to\u2014 ”(1) any governmental plan, and ”(2) any group health plan for any plan year if, on the first day of such plan year, such plan has less than 2 participants who are current em- ployees. ”(b) EXCEPTION FOR CERTAIN BENEFITS.\u2014The requirements of this chapter shall not apply to any group health plan in relation to its provi- sion of excepted benefits described in section 9805(c)(1). ”(c) EXCEPTION FOR CERTAIN BENEFITS IF CERTAIN CONDITIONS MET.\u2014 ”(1) LIMITED, EXCEPTED BENEFITS.\u2014The re- quirements of this chapter shall not apply to any group health plan in relation to its provi- sion of excepted benefits described in section 9805(c)(2) if the benefits\u2014 ”(A) are provided under a separate policy, certificate, or contract of insurance; or ”(B) are otherwise not an integral part of the plan. ”(2) NONCOORDINATED, EXCEPTED BENEFITS.\u2014 The requirements of this chapter shall not apply to any group health plan in relation to its provi- sion of excepted benefits described in section 9805(c)(3) if all of the following conditions are met: ”(A) The benefits are provided under a sepa- rate policy, certificate, or contract of insurance. ”(B) There is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan main- tained by the same plan sponsor. ”(C) Such benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor. ”(3) SUPPLEMENTAL EXCEPTED BENEFITS.\u2014The requirements of this chapter shall not apply to any group health plan in relation to its provi- sion of excepted benefits described in section 9805(c)(4) if the benefits are provided under a separate policy, certificate, or contract of insur- ance. ”SEC. 9805. DEFINITIONS. ”(a) GROUP HEALTH PLAN.\u2014For purposes of this chapter, the term ‘group health plan’ has the meaning given to such term by section 5000(b)(1). ”(b) DEFINITIONS RELATING TO HEALTH INSUR- ANCE.\u2014For purposes of this chapter\u2014 ”(1) HEALTH INSURANCE COVERAGE.\u2014 ”(A) IN GENERAL.\u2014Except as provided in sub- paragraph (B), the term ‘health insurance cov- erage’ means benefits consisting of medical care (provided directly, through insurance or reim- bursement, or otherwise) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health mainte- nance organization contract offered by a health insurance issuer. ”(B) NO APPLICATION TO CERTAIN EXCEPTED BENEFITS.\u2014In applying subparagraph (A), ex- cepted benefits described in subsection (c)(1) shall not be treated as benefits consisting of medical care. ”(2) HEALTH INSURANCE ISSUER.\u2014The term ‘health insurance issuer’ means an insurance company, insurance service, or insurance orga- nization (including a health maintenance orga- nization, as defined in paragraph (3)) 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, as in effect on the date of the enactment of this section). Such term does not include a group health plan. ”(3) HEALTH MAINTENANCE ORGANIZATION.\u2014 The term ‘health maintenance organization’ means\u2014 ”(A) a Federally qualified health mainte- nance organization (as defined in section 1301(a) of the Public Health Service Act (42 U.S.C. 300e(a))), ”(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 CONGRESSIONAL RECORD \u2014 HOUSE H9511July 31, 1996 to the same extent as such a health maintenance organization. ”(c) EXCEPTED BENEFITS.\u2014For purposes of this chapter, the term ‘excepted benefits’ means benefits under one or more (or any combination thereof) of the following: ”(1) BENEFITS NOT SUBJECT TO REQUIRE- MENTS.\u2014 ”(A) Coverage only for accident, or disability income insurance, or any combination thereof. ”(B) Coverage issued as a supplement to li- ability insurance. ”(C) Liability insurance, including general li- ability insurance and automobile liability insur- ance. ”(D) Workers’ compensation or similar insur- ance. ”(E) Automobile medical payment insurance. ”(F) Credit-only insurance. ”(G) Coverage for on-site medical clinics. ”(H) Other similar insurance coverage, speci- fied in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits. ”(2) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED SEPARATELY.\u2014 ”(A) Limited scope dental or vision benefits. ”(B) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof. ”(C) Such other similar, limited benefits as are specified in regulations. ”(3) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED AS INDEPENDENT, NONCOORDINATED BENEFITS.\u2014 ”(A) Coverage only for a specified disease or illness. ”(B) Hospital indemnity or other fixed indem- nity insurance. ”(4) BENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED AS SEPARATE INSURANCE POLICY.\u2014 Medicare supplemental health insurance (as de- fined under section 1882(g)(1) of the Social Secu- rity Act), coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code, and similar supplemental coverage provided to coverage under a group health plan. ”(d) OTHER DEFINITIONS.\u2014For purposes of this chapter\u2014 ”(1) COBRA CONTINUATION PROVISION.\u2014The term ‘COBRA continuation provision’ means any of the following: ”(A) Section 4980B, other than subsection (f)(1) thereof insofar as it relates to pediatric vaccines. ”(B) Part 6 of subtitle B of title I of the Em- ployee Retirement Income Security Act of 1974 (29 U.S.C. 1161 et seq.), other than section 609 of such Act. ”(C) Title XXII of the Public Health Service Act. ”(2) GOVERNMENTAL PLAN.\u2014The term ‘govern- mental plan’ has the meaning given such term by section 414(d). ”(3) MEDICAL CARE.\u2014The term ‘medical care’ has the meaning given such term by section 213(d) determined without regard to\u2014 ”(A) paragraph (1)(C) thereof, and ”(B) so much of paragraph (1)(D) thereof as relates to qualified long-term care insurance. ”(4) NETWORK PLAN.\u2014The term ‘network plan’ means health insurance coverage of a health insurance issuer under which the financ- ing and delivery of medical care are provided, in whole or in part, through a defined set of pro- viders under contract with the issuer. ”(5) PLACED FOR ADOPTION DEFINED.\u2014The term ‘placement’, or being ‘placed’, for adop- tion, in connection with any placement for adoption of a child with any person, means the assumption and retention by such person of a legal obligation for total or partial support of such child in anticipation of adoption of such child. The child’s placement with such person terminates upon the termination of such legal obligation. ”SEC. 9806. REGULATIONS. ”The Secretary, consistent with section 104 of the Health Care Portability and Accountability Act of 1996, may promulgate such regulations as may be necessary or appropriate to carry out the provisions of this chapter. The Secretary may promulgate any interim final rules as the Secretary determines are appropriate to carry out this chapter.” (b) CLERICAL AMENDMENT.\u2014The table of sub- titles of such Code is amended by adding at the end the following new item: ”Subtitle K. Group health plan portability, ac- cess, and renewability require- ments.” (c) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014The amendments made by this section shall apply to plan years beginning after June 30, 1997. (2) DETERMINATION OF CREDITABLE COV- ERAGE.\u2014 (A) PERIOD OF COVERAGE.\u2014 (i) IN GENERAL.\u2014Subject to clause (ii), no pe- riod before July 1, 1996, shall be taken into ac- count under chapter 100 of the Internal Revenue Code of 1986 (as added by this section) in deter- mining creditable coverage. (ii) SPECIAL RULE FOR CERTAIN PERIODS.\u2014The Secretary of the Treasury, consistent with sec- tion 104, shall provide for a process whereby in- dividuals who need to establish creditable cov- erage for periods before July 1, 1996, and who would have such coverage credited but for clause (i) may be given credit for creditable cov- erage for such periods through the presentation of documents or other means. (B) CERTIFICATIONS, ETC.\u2014 (i) IN GENERAL.\u2014Subject to clauses (ii) and (iii), subsection (e) of section 9801 of the Inter- nal Revenue Code of 1986 (as added by this sec- tion) shall apply to events occurring after June 30, 1996. (ii) NO CERTIFICATION REQUIRED TO BE PRO- VIDED BEFORE JUNE 1, 1997.\u2014In no case is a cer- tification required to be provided under such subsection before June 1, 1997. (iii) CERTIFICATION ONLY ON WRITTEN REQUEST FOR EVENTS OCCURRING BEFORE OCTOBER 1, 1996.\u2014In the case of an event occurring after June 30, 1996, and before October 1, 1996, a cer- tification is not required to be provided under such subsection unless an individual (with re- spect to whom the certification is otherwise re- quired to be made) requests such certification in writing. (C) TRANSITIONAL RULE.\u2014In the case of an in- dividual who seeks to establish creditable cov- erage for any period for which certification is not required because it relates to an event oc- curring before June 30, 1996\u2014 (i) the individual may present other credible evidence of such coverage in order to establish the period of creditable coverage; and (ii) a group health plan and a health insur- ance issuer shall not be subject to any penalty or enforcement action with respect to the plan’s or issuer’s crediting (or not crediting) such cov- erage if the plan or issuer has sought to comply in good faith with the applicable requirements under the amendments made by this section. (3) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS.\u2014Except as provided in paragraph (2), in the case of a group health plan main- tained pursuant to 1 or more collective bargain- ing agreements between employee representa- tives and one or more employers ratified before the date of the enactment of this Act, the amendments made by this section shall not apply to plan years beginning before the later of\u2014 (A) the date on which the last of the collective bargaining agreements relating to the plan ter- minates (determined without regard to any ex- tension thereof agreed to after the date of the enactment of this Act), or (B) July 1, 1997. For purposes of subparagraph (A), any plan amendment made pursuant to a collective bar- gaining agreement relating to the plan which amends the plan solely to conform to any re- quirement added by this section shall not be treated as a termination of such collective bar- gaining agreement. (4) TIMELY REGULATIONS.\u2014The Secretary of the Treasury, consistent with section 104, shall first issue by not later than April 1, 1997, such regulations as may be necessary to carry out the amendments made by this section. (5) LIMITATION ON ACTIONS.\u2014No enforcement action shall be taken, pursuant to the amend- ments made by this section, against a group health plan or health insurance issuer with re- spect to a violation of a requirement imposed by such amendments before January 1, 1998, or, if later, the date of issuance of regulations re- ferred to in paragraph (4), if the plan or issuer has sought to comply in good faith with such re- quirements. SEC. 402. PENALTY ON FAILURE TO MEET CER- TAIN GROUP HEALTH PLAN RE- QUIREMENTS. (a) IN GENERAL.\u2014Chapter 43 of the Internal Revenue Code of 1986 (relating to qualified pen- sion, etc., plans) is amended by adding after section 4980C the following new section: ”SEC. 4980D. FAILURE TO MEET CERTAIN GROUP HEALTH PLAN REQUIREMENTS. ”(a) GENERAL RULE.\u2014There is hereby imposed a tax on any failure of a group health plan to meet the requirements of chapter 100 (relating to group health plan portability, access, and re- newability requirements). ”(b) AMOUNT OF TAX.\u2014 ”(1) IN GENERAL.\u2014The amount of the tax im- posed by subsection (a) on any failure shall be $100 for each day in the noncompliance period with respect to each individual to whom such failure relates. ”(2) NONCOMPLIANCE PERIOD.\u2014For purposes of this section, the term ‘noncompliance period’ means, with respect to any failure, the period\u2014 ”(A) beginning on the date such failure first occurs, and ”(B) ending on the date such failure is cor- rected. ”(3) MINIMUM TAX FOR NONCOMPLIANCE PE- RIOD WHERE FAILURE DISCOVERED AFTER NOTICE OF EXAMINATION.\u2014Notwithstanding paragraphs (1) and (2) of subsection (c)\u2014 ”(A) IN GENERAL.\u2014In the case of 1 or more failures with respect to an individual\u2014 ”(i) which are not corrected before the date a notice of examination of income tax liability is sent to the employer, and ”(ii) which occurred or continued during the period under examination, the amount of tax imposed by subsection (a) by reason of such failures with respect to such in- dividual shall not be less than the lesser of $2,500 or the amount of tax which would be im- posed by subsection (a) without regard to such paragraphs. ”(B) HIGHER MINIMUM TAX WHERE VIOLATIONS ARE MORE THAN DE MINIMIS.\u2014To the extent vio- lations for which any person is liable under sub- section (e) for any year are more than de minimis, subparagraph (A) shall be applied by substituting ‘$15,000’ for ‘$2,500’ with respect to such person. ”(C) EXCEPTION FOR CHURCH PLANS.\u2014This paragraph shall not apply to any failure under a church plan (as defined in section 414(e)). ”(c) LIMITATIONS ON AMOUNT OF TAX.\u2014 ”(1) TAX NOT TO APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILI- GENCE.\u2014No tax shall be imposed by subsection (a) on any failure during any period for which it is established to the satisfaction of the Sec- retary that the person otherwise liable for such tax did not know, and exercising reasonable diligence would not have known, that such fail- ure existed. ”(2) TAX NOT TO APPLY TO FAILURES COR- RECTED WITHIN CERTAIN PERIODS.\u2014No tax shall be imposed by subsection (a) on any failure if\u2014 ”(A) such failure was due to reasonable cause and not to willful neglect, and ”(B)(i) in the case of a plan other than a church plan (as defined in section 414(e)), such CONGRESSIONAL RECORD \u2014 HOUSEH9512 July 31, 1996 failure is corrected during the 30-day period be- ginning on the 1st date the person otherwise lia- ble for such tax knew, or exercising reasonable diligence would have known, that such failure existed, and ”(ii) in the case of a church plan (as so de- fined), such failure is corrected before the close of the correction period (determined under the rules of section 414(e)(4)(C)). ”(3) OVERALL LIMITATION FOR UNINTENTIONAL FAILURES.\u2014In the case of failures which are due to reasonable cause and not to willful neglect\u2014 ”(A) SINGLE EMPLOYER PLANS.\u2014 ”(i) IN GENERAL.\u2014In the case of failures with respect to plans other than specified multiple employer health plans, the tax imposed by sub- section (a) for failures during the taxable year of the employer shall not exceed the amount equal to the lesser of\u2014 ”(I) 10 percent of the aggregate amount paid or incurred by the employer (or predecessor em- ployer) during the preceding taxable year for group health plans, or ”(II) $500,000. ”(ii) TAXABLE YEARS IN THE CASE OF CERTAIN CONTROLLED GROUPS.\u2014For purposes of this sub- paragraph, if not all persons who are treated as a single employer for purposes of this section have the same taxable year, the taxable years taken into account shall be determined under principles similar to the principles of section 1561. ”(B) SPECIFIED MULTIPLE EMPLOYER HEALTH PLANS.\u2014 ”(i) IN GENERAL.\u2014In the case of failures with respect to a specified multiple employer health plan, the tax imposed by subsection (a) for fail- ures during the taxable year of the trust forming part of such plan shall not exceed the amount equal to the lesser of\u2014 ”(I) 10 percent of the amount paid or incurred by such trust during such taxable year to pro- vide medical care (as defined in section 9805(d)(3)) directly or through insurance, reim- bursement, or otherwise, or ”(II) $500,000. For purposes of the preceding sentence, all plans of which the same trust forms a part shall be treated as 1 plan. ”(ii) SPECIAL RULE FOR EMPLOYERS REQUIRED TO PAY TAX.\u2014If an employer is assessed a tax imposed by subsection (a) by reason of a failure with respect to a specified multiple employer health plan, the limit shall be determined under subparagraph (A) (and not under this subpara- graph) and as if such plan were not a specified multiple employer health plan. ”(4) WAIVER BY SECRETARY.\u2014In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that the payment of such tax would be excessive relative to the failure involved. ”(d) TAX NOT TO APPLY TO CERTAIN INSURED SMALL EMPLOYER PLANS.\u2014 ”(1) IN GENERAL.\u2014In the case of a group health plan of a small employer which provides health insurance coverage solely through a con- tract with a health insurance issuer, no tax shall be imposed by this section on the employer on any failure which is solely because of the health insurance coverage offered by such is- suer. ”(2) SMALL EMPLOYER.\u2014 ”(A) IN GENERAL.\u2014For purposes of paragraph (1), the term ‘small employer’ means, with re- spect to a calendar year and a plan year, an employer who employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year. For purposes of the pre- ceding sentence, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer. ”(B) EMPLOYERS NOT IN EXISTENCE IN PRECED- ING YEAR.\u2014In 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.\u2014Any reference in this paragraph to an employer shall include a ref- erence to any predecessor of such employer. ”(3) HEALTH INSURANCE COVERAGE; HEALTH IN- SURANCE ISSUER.\u2014For purposes of paragraph (1), the terms ‘health insurance coverage’ and ‘health insurance issuer’ have the respective meanings given such terms by section 9805. ”(e) LIABILITY FOR TAX.\u2014The following shall be liable for the tax imposed by subsection (a) on a failure: ”(1) Except as otherwise provided in this sub- section, the employer. ”(2) In the case of a multiemployer plan, the plan. ”(3) In the case of a failure under section 9803 (relating to guaranteed renewability) with re- spect to a plan described in subsection (f)(2)(B), the plan. ”(f) DEFINITIONS.\u2014For purposes of this sec- tion\u2014 ”(1) GROUP HEALTH PLAN.\u2014The term ‘group health plan’ has the meaning given such term by section 9805(a). ”(2) SPECIFIED MULTIPLE EMPLOYER HEALTH PLAN.\u2014The term ‘specified multiple employer health plan’ means a group health plan which is\u2014 ”(A) any multiemployer plan, or ”(B) any multiple employer welfare arrange- ment (as defined in section 3(40) of the Em- ployee Retirement Income Secrurity Act of 1974, as in effect on the date of the enactment of this section). ”(3) CORRECTION.\u2014A failure of a group health plan shall be treated as corrected if\u2014 ”(A) such failure is retroactively undone to the extent possible, and ”(B) the person to whom the failure relates is placed in a financial position which is as good as such person would have been in had such failure not occurred.” (b) CLERICAL AMENDMENT.\u2014The table of sec- tions for chapter 43 of such Code is amended by adding after the item relating to section 4980C the following new item: ”Sec. 4980D. Failure to meet certain group health plan requirements.” (c) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to failures under chapter 100 of the Internal Revenue Code of 1986 (as added by section 401 of this Act). Subtitle B\u2014Clarification of Certain Continuation Coverage Requirements SEC. 421. COBRA CLARIFICATIONS. (a) PUBLIC HEALTH SERVICE ACT.\u2014 (1) PERIOD OF COVERAGE.\u2014Section 2202(2) of the Public Health Service Act (42 U.S.C. 300bb 2(2)) is amended\u2014 (A) in subparagraph (A)\u2014 (i) by transferring the sentence immediately preceding clause (iv) so as to appear imme- diately following such clause (iv); and (ii) in the last sentence (as so transferred)\u2014 (I) by striking ”an individual” and inserting ”a qualified beneficiary”; (II) by striking ”at the time of a qualifying event described in section 2203(2)” and inserting ”at any time during the first 60 days of continu- ation coverage under this title”; (III) by striking ”with respect to such event,”; and (IV) by inserting ”(with respect to all quali- fied beneficiaries)” after ”29 months”; (B) in subparagraph (D)(i), by inserting be- fore ”, or” the following: ”(other than such an exclusion or limitation which does not apply to (or is satisfied by) such beneficiary by reason of chapter 100 of the Internal Revenue Code of 1986, part 7 of subtitle B of title I of the Em- ployee Retirement Income Security Act of 1974, or title XXVII of this Act)”; and (C) in subparagraph (E), by striking ”at the time of a qualifying event described in section 2203(2)” and inserting ”at any time during the first 60 days of continuation coverage under this title”. (2) NOTICES.\u2014Section 2206(3) of the Public Health Service Act (42 U.S.C. 300bb 6(3)) is amended by striking ”at the time of a qualifying event described in section 2203(2)” and inserting ”at any time during the first 60 days of continu- ation coverage under this title”. (3) BIRTH OR ADOPTION OF A CHILD.\u2014Section 2208(3)(A) of the Public Health Service Act (42 U.S.C. 300bb 8(3)(A)) is amended by adding at the end thereof the following new flush sen- tence: ”Such term shall also include a child who is born to or placed for adoption with the covered employee during the period of continuation cov- erage under this title.”. (b) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.\u2014 (1) PERIOD OF COVERAGE.\u2014Section 602(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)) is amended\u2014 (A) in the last sentence of subparagraph (A)\u2014 (i) by striking ”an individual” and inserting ”a qualified beneficiary”; (ii) by striking ”at the time of a qualifying event described in section 603(2)” and inserting ”at any time during the first 60 days of continu- ation coverage under this part”; (iii) by striking ”with respect to such event”; and (iv) by inserting ”(with respect to all qualified beneficiaries)” after ”29 months”; (B) in subparagraph (D)(i), by inserting be- fore ”, or” the following: ”(other than such an exclusion or limitation which does not apply to (or is satisfied by) such beneficiary by reason of chapter 100 of the Internal Revenue Code of 1986, part 7 of this subtitle, or title XXVII of the Public Health Service Act)”; and (C) in subparagraph (E), by striking ”at the time of a qualifying event described in section 603(2)” and inserting ”at any time during the first 60 days of continuation coverage under this part”. (2) NOTICES.\u2014Section 606(a)(3) of the Em- ployee Retirement Income Security Act of 1974 (29 U.S.C. 1166(a)(3)) is amended by striking ”at the time of a qualifying event described in sec- tion 603(2)” and inserting ”at any time during the first 60 days of continuation coverage under this part”. (3) BIRTH OR ADOPTION OF A CHILD.\u2014Section 607(3)(A) of the Employee Retirement Income Se- curity Act of 1974 (29 U.S.C. 1167(3)) is amended by adding at the end thereof the following new flush sentence: ”Such term shall also include a child who is born to or placed for adoption with the covered employee during the period of continuation cov- erage under this part.”. (c) INTERNAL REVENUE CODE OF 1986.\u2014 (1) PERIOD OF COVERAGE.\u2014Section 4980B(f)(2)(B) of the Internal Revenue Code of 1986 is amended\u2014 (A) in the last sentence of clause (i)\u2014 (i) by striking ”at the time of a qualifying event described in paragraph (3)(B)” and insert- ing ”at any time during the first 60 days of con- tinuation coverage under this section”; (ii) by striking ”with respect to such event”; and (iii) by inserting ”(with respect to all qualified beneficiaries)” after ”29 months”; (B) in clause (iv)(I), by inserting before ”, or” the following: ”(other than such an exclusion or limitation which does not apply to (or is satis- fied by) such beneficiary by reason of chapter 100 of this title, part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, or title XXVII of the Public Health Service Act)”; and (C) in clause (v), by striking ”at the time of a qualifying event described in paragraph (3)(B)” and inserting ”at any time during the first 60 CONGRESSIONAL RECORD \u2014 HOUSE H9513July 31, 1996 days of continuation coverage under this sec- tion”. (2) NOTICES.\u2014Section 4980B(f)(6)(C) of the In- ternal Revenue Code of 1986 is amended by striking ”at the time of a qualifying event de- scribed in paragraph (3)(B)” and inserting ”at any time during the first 60 days of continu- ation coverage under this section”. (3) BIRTH OR ADOPTION OF A CHILD.\u2014Section 4980B(g)(1)(A) of the Internal Revenue Code of 1986 is amended by adding at the end thereof the following new flush sentence: ”Such term shall also include a child who is born to or placed for adoption with the covered employee during the period of continuation cov- erage under this section.”. (d) EFFECTIVE DATE.\u2014The amendments made by this section shall become effective on Janu- ary 1, 1997, regardless of whether the qualifying event occurred before, on, or after such date. (e) NOTIFICATION OF CHANGES.\u2014Not later than November 1, 1996, each group health plan (covered under title XXII of the Public Health Service Act, part 6 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, and section 4980B(f) of the Internal Reve- nue Code of 1986) shall notify each qualified beneficiary who has elected continuation cov- erage under such title, part or section of the amendments made by this section. TITLE V\u2014REVENUE OFFSETS SEC. 500. AMENDMENT OF 1986 CODE. Except as otherwise expressly provided, when- ever in this title an amendment or repeal is ex- pressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. Subtitle A\u2014Company-Owned Life Insurance SEC. 501. DENIAL OF DEDUCTION FOR INTEREST ON LOANS WITH RESPECT TO COM- PANY-OWNED LIFE INSURANCE. (a) IN GENERAL.\u2014Paragraph (4) of section 264(a) is amended\u2014 (1) by inserting ”, or any endowment or annu- ity contracts owned by the taxpayer covering any individual,” after ”the life of any individ- ual”, and (2) by striking all that follows ”carried on by the taxpayer” and inserting a period. (b) EXCEPTION FOR CONTRACTS RELATING TO KEY PERSONS; PERMISSIBLE INTEREST RATES.\u2014 Section 264 is amended\u2014 (1) by striking ”Any” in subsection (a)(4) and inserting ”Except as provided in subsection (d), any”, and (2) by adding at the end the following new subsection: ”(d) SPECIAL RULES FOR APPLICATION OF SUB- SECTION (a)(4).\u2014 ”(1) EXCEPTION FOR KEY PERSONS.\u2014Sub- section (a)(4) shall not apply to any interest paid or accrued on any indebtedness with re- spect to policies or contracts covering an indi- vidual who is a key person to the extent that the aggregate amount of such indebtedness with respect to policies and contracts covering such individual does not exceed $50,000. ”(2) INTEREST RATE CAP ON KEY PERSONS AND PRE-1986 CONTRACTS.\u2014 ”(A) IN GENERAL.\u2014No deduction shall be al- lowed by reason of paragraph (1) or the last sentence of subsection (a) with respect to inter- est paid or accrued for any month beginning after December 31, 1995, to the extent the amount of such interest exceeds the amount which would have been determined if the appli- cable rate of interest were used for such month. ”(B) APPLICABLE RATE OF INTEREST.\u2014For purposes of subparagraph (A)\u2014 ”(i) IN GENERAL.\u2014The applicable rate of inter- est for any month is the rate of interest de- scribed as Moody’s Corporate Bond Yield Aver- age-Monthly Average Corporates as published by Moody’s Investors Service, Inc., or any suc- cessor thereto, for such month. ”(ii) PRE-1986 CONTRACTS.\u2014In the case of in- debtedness on a contract purchased on or before June 20, 1986\u2014 ”(I) which is a contract providing a fixed rate of interest, the applicable rate of interest for any month shall be the Moody’s rate described in clause (i) for the month in which the contract was purchased, or ”(II) which is a contract providing a variable rate of interest, the applicable rate of interest for any month in an applicable period shall be such Moody’s rate for the third month preceding the first month in such period. For purposes of subclause (II), the taxpayer shall elect an applicable period for such con- tract on its return of tax imposed by this chap- ter for its first taxable year ending on or after October 13, 1995. Such applicable period shall be for any number of months (not greater than 12) specified in the election and may not be changed by the taxpayer without the consent of the Sec- retary. ”(3) KEY PERSON.\u2014For purposes of paragraph (1), the term ‘key person’ means an officer or 20- percent owner, except that the number of indi- viduals who may be treated as key persons with respect to any taxpayer shall not exceed the greater of\u2014 ”(A) 5 individuals, or ”(B) the lesser of 5 percent of the total officers and employees of the taxpayer or 20 individuals. ”(4) 20-PERCENT OWNER.\u2014For purposes of this subsection, the term ’20-percent owner’ means\u2014 ”(A) if the taxpayer is a corporation, any per- son who owns directly 20 percent or more of the outstanding stock of the corporation or stock possessing 20 percent or more of the total com- bined voting power of all stock of the corpora- tion, or ”(B) if the taxpayer is not a corporation, any person who owns 20 percent or more of the cap- ital or profits interest in the employer. ”(5) AGGREGATION RULES.\u2014 ”(A) IN GENERAL.\u2014For purposes of paragraph (4)(A) and applying the $50,000 limitation in paragraph (1)\u2014 ”(i) all members of a controlled group shall be treated as 1 taxpayer, and ”(ii) such limitation shall be allocated among the members of such group in such manner as the Secretary may prescribe. ”(B) CONTROLLED GROUP.\u2014For purposes of this paragraph, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as members of a controlled group.”. (c) EFFECTIVE DATES.\u2014 (1) IN GENERAL.\u2014The amendments made by this section shall apply to interest paid or ac- crued after October 13, 1995. (2) TRANSITION RULE FOR EXISTING INDEBTED- NESS.\u2014 (A) IN GENERAL.\u2014In the case of\u2014 (i) indebtedness incurred before January 1, 1996, or (ii) indebtedness incurred before January 1, 1997 with respect to any contract or policy en- tered into in 1994 or 1995, the amendments made by this section shall not apply to qualified interest paid or accrued on such indebtedness after October 13, 1995, and before January 1, 1999. (B) QUALIFIED INTEREST.\u2014For purposes of subparagraph (A), the qualified interest with re- spect to any indebtedness for any month is the amount of interest (otherwise deductible) which would be paid or accrued for such month on such indebtedness if\u2014 (i) in the case of any interest paid or accrued after December 31, 1995, indebtedness with re- spect to no more than 20,000 insured individuals were taken into account, and (ii) the lesser of the following rates of interest were used for such month: (I) The rate of interest specified under the terms of the indebtedness as in effect on October 13, 1995 (and without regard to modification of such terms after such date). (II) The applicable percentage of the rate of interest described as Moody’s Corporate Bond Yield Average-Monthly Average Corporates as published by Moody’s Investors Service, Inc., or any successor thereto, for such month. For purposes of clause (i), all persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 or subsection (m) or (o) of section 414 of such Code shall be treated as 1 person. Subclause (II) of clause (ii) shall not apply to any month be- fore January 1, 1996. (C) APPLICABLE PERCENTAGE.\u2014For purposes of subparagraph (B), the applicable percentage is as follows: For calendar year: The percentage is: 1996 ………………………… 100 percent 1997 ………………………… 90 percent 1998 ………………………… 80 percent. (3) SPECIAL RULE FOR GRANDFATHERED CON- TRACTS.\u2014This section shall not apply to any contract purchased on or before June 20, 1986, except that section 264(d)(2) of the Internal Rev- enue Code of 1986 shall apply to interest paid or accrued after October 13, 1995. (d) SPREAD OF INCOME INCLUSION ON SURREN- DER, ETC. OF CONTRACTS.\u2014 (1) IN GENERAL.\u2014If any amount is received under any life insurance policy or endowment or annuity contract described in paragraph (4) of section 264(a) of the Internal Revenue Code of 1986\u2014 (A) on the complete surrender, redemption, or maturity of such policy or contract during cal- endar year 1996, 1997, or 1998, or (B) in full discharge during any such cal- endar year of the obligation under the policy or contract which is in the nature of a refund of the consideration paid for the policy or con- tract, then (in lieu of any other inclusion in gross in- come) such amount shall be includible in gross income ratably over the 4-taxable year period beginning with the taxable year such amount would (but for this paragraph) be includible. The preceding sentence shall only apply to the extent the amount is includible in gross income for the taxable year in which the event de- scribed in subparagraph (A) or (B) occurs. (2) SPECIAL RULES FOR APPLYING SECTION 264.\u2014A contract shall not be treated as\u2014 (A) failing to meet the requirement of section 264(c)(1) of the Internal Revenue Code of 1986, or (B) a single premium contract under section 264(b)(1) of such Code, solely by reason of an occurrence described in subparagraph (A) or (B) of paragraph (1) of this subsection or solely by reason of no additional premiums being received under the contract by reason of a lapse occurring after October 13, 1995. (3) SPECIAL RULE FOR DEFERRED ACQUISITION COSTS.\u2014In the case of the occurrence of any event described in subparagraph (A) or (B) of paragraph (1) of this subsection with respect to any policy or contract\u2014 (A) section 848 of the Internal Revenue Code of 1986 shall not apply to the unamortized bal- ance (if any) of the specified policy acquisition expenses attributable to such policy or contract immediately before the insurance company’s taxable year in which such event occurs, and (B) there shall be allowed as a deduction to such company for such taxable year under chapter 1 of such Code an amount equal to such unamortized balance. Subtitle B\u2014Treatment of Individuals Who Lose United States Citizenship SEC. 511. REVISION OF INCOME, ESTATE, AND GIFT TAXES ON INDIVIDUALS WHO LOSE UNITED STATES CITIZENSHIP. (a) IN GENERAL.\u2014Subsection (a) of section 877 is amended to read as follows: ”(a) TREATMENT OF EXPATRIATES.\u2014 ”(1) IN GENERAL.\u2014Every nonresident alien in- dividual who, within the 10-year period imme- diately preceding the close of the taxable year, CONGRESSIONAL RECORD \u2014 HOUSEH9514 July 31, 1996 lost United States citizenship, unless such loss did not have for 1 of its principal purposes the avoidance of taxes under this subtitle or subtitle B, shall be taxable for such taxable year in the manner provided in subsection (b) if the tax im- posed pursuant to such subsection exceeds the tax which, without regard to this section, is im- posed pursuant to section 871. ”(2) CERTAIN INDIVIDUALS TREATED AS HAVING TAX AVOIDANCE PURPOSE.\u2014For purposes of paragraph (1), an individual shall be treated as having a principal purpose to avoid such taxes if\u2014 ”(A) the average annual net income tax (as defined in section 38(c)(1)) of such individual for the period of 5 taxable years ending before the date of the loss of United States citizenship is greater than $100,000, or ”(B) the net worth of the individual as of such date is $500,000 or more. In the case of the loss of United States citizen- ship in any calendar year after 1996, such $100,000 and $500,000 amounts shall be increased by an amount equal to such dollar amount mul- tiplied by the cost-of-living adjustment deter- mined under section 1(f)(3) for such calendar year by substituting ‘1994’ for ‘1992’ in subpara- graph (B) thereof. Any increase under the pre- ceding sentence shall be rounded to the nearest multiple of $1,000.”. (b) EXCEPTIONS.\u2014 (1) IN GENERAL.\u2014Section 877 is amended by striking subsection (d), by redesignating sub- section (c) as subsection (d), and by inserting after subsection (b) the following new sub- section: ”(c) TAX AVOIDANCE NOT PRESUMED IN CER- TAIN CASES.\u2014 ”(1) IN GENERAL.\u2014Subsection (a)(2) shall not apply to an individual if\u2014 ”(A) such individual is described in a sub- paragraph of paragraph (2) of this subsection, and ”(B) within the 1-year period beginning on the date of the loss of United States citizenship, such individual submits a ruling request for the Secretary’s determination as to whether such loss has for 1 of its principal purposes the avoid- ance of taxes under this subtitle or subtitle B. ”(2) INDIVIDUALS DESCRIBED.\u2014 ”(A) DUAL CITIZENSHIP, ETC.\u2014An individual is described in this subparagraph if\u2014 ”(i) the individual became at birth a citizen of the United States and a citizen of another coun- try and continues to be a citizen of such other country, or ”(ii) the individual becomes (not later than the close of a reasonable period after loss of United States citizenship) a citizen of the coun- try in which\u2014 ”(I) such individual was born, ”(II) if such individual is married, such indi- vidual’s spouse was born, or ”(III) either of such individual’s parents were born. ”(B) LONG-TERM FOREIGN RESIDENTS.\u2014An in- dividual is described in this subparagraph if, for each year in the 10-year period ending on the date of loss of United States citizenship, the in- dividual was present in the United States for 30 days or less. The rule of section 7701(b)(3)(D)(ii) shall apply for purposes of this subparagraph. ”(C) RENUNCIATION UPON REACHING AGE OF MAJORITY.\u2014An individual is described in this subparagraph if the individual’s loss of United States citizenship occurs before such individual attains age 181\u20442. ”(D) INDIVIDUALS SPECIFIED IN REGULA- TIONS.\u2014An individual is described in this sub- paragraph if the individual is described in a category of individuals prescribed by regulation by the Secretary.” (2) TECHNICAL AMENDMENT.\u2014Paragraph (1) of section 877(b) of such Code is amended by strik- ing ”subsection (c)” and inserting ”subsection (d)”. (c) TREATMENT OF PROPERTY DISPOSED OF IN NONRECOGNITION TRANSACTIONS; TREATMENT OF DISTRIBUTIONS FROM CERTAIN CONTROLLED FOREIGN CORPORATIONS.\u2014Subsection (d) of sec- tion 877, as redesignated by subsection (b), is amended to read as follows: ”(d) SPECIAL RULES FOR SOURCE, ETC.\u2014For purposes of subsection (b)\u2014 ”(1) SOURCE RULES.\u2014The following items of gross income shall be treated as income from sources within the United States: ”(A) SALE OF PROPERTY.\u2014Gains on the sale or exchange of property (other than stock or debt obligations) located in the United States. ”(B) STOCK OR DEBT OBLIGATIONS.\u2014Gains on the sale or exchange of stock issued by a domes- tic corporation or debt obligations of United States persons or of the United States, a State or political subdivision thereof, or the District of Columbia. ”(C) INCOME OR GAIN DERIVED FROM CON- TROLLED FOREIGN CORPORATION.\u2014Any income or gain derived from stock in a foreign corpora- tion but only\u2014 ”(i) if the individual losing United States citi- zenship owned (within the meaning of section 958(a)), or is considered as owning (by applying the ownership rules of section 958(b)), at any time during the 2-year period ending on the date of the loss of United States citizenship, more than 50 percent of\u2014 ”(I) the total combined voting power of all classes of stock entitled to vote of such corpora- tion, or ”(II) the total value of the stock of such cor- poration, and ”(ii) to the extent such income or gain does not exceed the earnings and profits attributable to such stock which were earned or accumulated before the loss of citizenship and during periods that the ownership requirements of clause (i) are met. ”(2) GAIN RECOGNITION ON CERTAIN EX- CHANGES.\u2014 ”(A) IN GENERAL.\u2014In the case of any ex- change of property to which this paragraph ap- plies, notwithstanding any other provision of this title, such property shall be treated as sold for its fair market value on the date of such ex- change, and any gain shall be recognized for the taxable year which includes such date. ”(B) EXCHANGES TO WHICH PARAGRAPH AP- PLIES.\u2014This paragraph shall apply to any ex- change during the 10-year period described in subsection (a) if\u2014 ”(i) gain would not (but for this paragraph) be recognized on such exchange in whole or in part for purposes of this subtitle, ”(ii) income derived from such property was from sources within the United States (or, if no income was so derived, would have been from such sources), and ”(iii) income derived from the property ac- quired in the exchange would be from sources outside the United States. ”(C) EXCEPTION.\u2014Subparagraph (A) shall not apply if the individual enters into an agreement with the Secretary which specifies that any in- come or gain derived from the property acquired in the exchange (or any other property which has a basis determined in whole or part by ref- erence to such property) during such 10-year pe- riod shall be treated as from sources within the United States. If the property transferred in the exchange is disposed of by the person acquiring such property, such agreement shall terminate and any gain which was not recognized by rea- son of such agreement shall be recognized as of the date of such disposition. ”(D) SECRETARY MAY EXTEND PERIOD.\u2014To the extent provided in regulations prescribed by the Secretary, subparagraph (B) shall be applied by substituting the 15-year period beginning 5 years before the loss of United States citizenship for the 10-year period referred to therein. ”(E) SECRETARY MAY REQUIRE RECOGNITION OF GAIN IN CERTAIN CASES.\u2014To the extent provided in regulations prescribed by the Secretary\u2014 ”(i) the removal of appreciated tangible per- sonal property from the United States, and ”(ii) any other occurrence which (without rec- ognition of gain) results in a change in the source of the income or gain from property from sources within the United States to sources out- side the United States, shall be treated as an exchange to which this paragraph applies. ”(3) SUBSTANTIAL DIMINISHING OF RISKS OF OWNERSHIP.\u2014For purposes of determining whether this section applies to any gain on the sale or exchange of any property, the running of the 10-year period described in subsection (a) shall be suspended for any period during which the individual’s risk of loss with respect to the property is substantially diminished by\u2014 ”(A) the holding of a put with respect to such property (or similar property), ”(B) the holding by another person of a right to acquire the property, or ”(C) a short sale or any other transaction. ”(4) TREATMENT OF PROPERTY CONTRIBUTED TO CONTROLLED FOREIGN CORPORATIONS.\u2014 ”(A) IN GENERAL.\u2014If\u2014 ”(i) an individual losing United States citizen- ship contributes property to any corporation which, at the time of the contribution, is de- scribed in subparagraph (B), and ”(ii) income derived from such property was from sources within the United States (or, if no income was so derived, would have been from such sources), during the 10-year period referred to in sub- section (a), any income or gain on such property (or any other property which has a basis deter- mined in whole or part by reference to such property) received or accrued by the corporation shall be treated as received or accrued directly by such individual and not by such corporation. The preceding sentence shall not apply to the extent the property has been treated under sub- paragraph (C) as having been sold by such cor- poration. ”(B) CORPORATION DESCRIBED.\u2014A corporation is described in this subparagraph with respect to an individual if, were such individual a United States citizen\u2014 ”(i) such corporation would be a controlled foreign corporation (as defined in 957), and ”(ii) such individual would be a United States shareholder (as defined in section 951(b)) with respect to such corporation. ”(C) DISPOSITION OF STOCK IN CORPORATION.\u2014 If stock in the corporation referred to in sub- paragraph (A) (or any other stock which has a basis determined in whole or part by reference to such stock) is disposed of during the 10-year period referred to in subsection (a) and while the property referred to in subparagraph (A) is held by such corporation, a pro rata share of such property (determined on the basis of the value of such stock) shall be treated as sold by the corporation immediately before such disposi- tion. ”(D) ANTI-ABUSE RULES.\u2014The Secretary shall prescribe such regulations as may be necessary to prevent the avoidance of the purposes of this paragraph, including where\u2014 ”(i) the property is sold to the corporation, and ”(ii) the property taken into account under subparagraph (A) is sold by the corporation. ”(E) INFORMATION REPORTING.\u2014The Secretary shall require such information reporting as is necessary to carry out the purposes of this para- graph.” (d) CREDIT FOR FOREIGN TAXES IMPOSED ON UNITED STATES SOURCE INCOME.\u2014 (1) Subsection (b) of section 877 is amended by adding at the end the following new sentence: ”The tax imposed solely by reason of this sec- tion shall be reduced (but not below zero) by the amount of any income, war profits, and excess profits taxes (within the meaning of section 903) paid to any foreign country or possession of the United States on any income of the taxpayer on which tax is imposed solely by reason of this section.” CONGRESSIONAL RECORD \u2014 HOUSE H9515July 31, 1996 (2) Subsection (a) of section 877, as amended by subsection (a), is amended by inserting ”(after any reduction in such tax under the last sentence of such subsection)” after ”such sub- section”. (e) COMPARABLE ESTATE AND GIFT TAX TREATMENT.\u2014 (1) ESTATE TAX.\u2014 (A) IN GENERAL.\u2014Subsection (a) of section 2107 is amended to read as follows: ”(a) TREATMENT OF EXPATRIATES.\u2014 ”(1) RATE OF TAX.\u2014A tax computed in accord- ance with the table contained in section 2001 is hereby imposed on the transfer of the taxable es- tate, determined as provided in section 2106, of every decedent nonresident not a citizen of the United States if, within the 10-year period end- ing with the date of death, such decedent lost United States citizenship, unless such loss did not have for 1 of its principal purposes the avoidance of taxes under this subtitle or subtitle A. ”(2) CERTAIN INDIVIDUALS TREATED AS HAVING TAX AVOIDANCE PURPOSE.\u2014 ”(A) IN GENERAL.\u2014For purposes of paragraph (1), an individual shall be treated as having a principal purpose to avoid such taxes if such in- dividual is so treated under section 877(a)(2). ”(B) EXCEPTION.\u2014Subparagraph (A) shall not apply to a decedent meeting the requirements of section 877(c)(1).”. (B) CREDIT FOR FOREIGN DEATH TAXES.\u2014Sub- section (c) of section 2107 is amended by redesig- nating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph: ”(2) CREDIT FOR FOREIGN DEATH TAXES.\u2014 ”(A) IN GENERAL.\u2014The tax imposed by sub- section (a) shall be credited with the amount of any estate, inheritance, legacy, or succession taxes actually paid to any foreign country in re- spect of any property which is included in the gross estate solely by reason of subsection (b). ”(B) LIMITATION ON CREDIT.\u2014The credit al- lowed by subparagraph (A) for such taxes paid to a foreign country shall not exceed the lesser of\u2014 ”(i) the amount which bears the same ratio to the amount of such taxes actually paid to such foreign country in respect of property included in the gross estate as the value of the property included in the gross estate solely by reason of subsection (b) bears to the value of all property subjected to such taxes by such foreign country, or ”(ii) such property’s proportionate share of the excess of\u2014 ”(I) the tax imposed by subsection (a), over ”(II) the tax which would be imposed by sec- tion 2101 but for this section. ”(C) PROPORTIONATE SHARE.\u2014For purposes of subparagraph (B), a property’s proportionate share is the percentage of the value of the prop- erty which is included in the gross estate solely by reason of subsection (b) bears to the total value of the gross estate.”. (C) EXPANSION OF INCLUSION IN GROSS ESTATE OF STOCK OF FOREIGN CORPORATIONS.\u2014Para- graph (2) of section 2107(b) is amended by strik- ing ”more than 50 percent of” and all that fol- lows and inserting ”more than 50 percent of\u2014 ”(A) the total combined voting power of all classes of stock entitled to vote of such corpora- tion, or ”(B) the total value of the stock of such cor- poration,”. (2) GIFT TAX.\u2014 (A) IN GENERAL.\u2014Paragraph (3) of section 2501(a) is amended to read as follows: ”(3) EXCEPTION.\u2014 ”(A) CERTAIN INDIVIDUALS.\u2014Paragraph (2) shall not apply in the case of a donor who, within the 10-year period ending with the date of transfer, lost United States citizenship, unless such loss did not have for 1 of its principal pur- poses the avoidance of taxes under this subtitle or subtitle A. ”(B) CERTAIN INDIVIDUALS TREATED AS HAVING TAX AVOIDANCE PURPOSE.\u2014For purposes of sub- paragraph (A), an individual shall be treated as having a principal purpose to avoid such taxes if such individual is so treated under section 877(a)(2). ”(C) EXCEPTION FOR CERTAIN INDIVIDUALS.\u2014 Subparagraph (B) shall not apply to a decedent meeting the requirements of section 877(c)(1). ”(D) CREDIT FOR FOREIGN GIFT TAXES.\u2014The tax imposed by this section solely by reason of this paragraph shall be credited with the amount of any gift tax actually paid to any for- eign country in respect of any gift which is tax- able under this section solely by reason of this paragraph.”. (f) COMPARABLE TREATMENT OF LAWFUL PER- MANENT RESIDENTS WHO CEASE TO BE TAXED AS RESIDENTS.\u2014 (1) IN GENERAL.\u2014Section 877 is amended by re- designating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: ”(e) COMPARABLE TREATMENT OF LAWFUL PERMANENT RESIDENTS WHO CEASE TO BE TAXED AS RESIDENTS.\u2014 ”(1) IN GENERAL.\u2014Any long-term resident of the United States who\u2014 ”(A) ceases to be a lawful permanent resident of the United States (within the meaning of sec- tion 7701(b)(6)), or ”(B) commences to be treated as a resident of a foreign country under the provisions of a tax treaty between the United States and the for- eign country and who does not waive the bene- fits of such treaty applicable to residents of the foreign country, shall be treated for purposes of this section and sections 2107, 2501, and 6039F in the same man- ner as if such resident were a citizen of the United States who lost United States citizenship on the date of such cessation or commencement. ”(2) LONG-TERM RESIDENT.\u2014For purposes of this subsection, the term ‘long-term resident’ means any individual (other than a citizen of the United States) who is a lawful permanent resident of the United States in at least 8 tax- able years during the period of 15 taxable years ending with the taxable year during which the event described in subparagraph (A) or (B) of paragraph (1) occurs. For purposes of the pre- ceding sentence, an individual shall not be treated as a lawful permanent resident for any taxable year if such individual is treated as a resident of a foreign country for the taxable year under the provisions of a tax treaty be- tween the United States and the foreign country and does not waive the benefits of such treaty applicable to residents of the foreign country. ”(3) SPECIAL RULES.\u2014 ”(A) EXCEPTIONS NOT TO APPLY.\u2014Subsection (c) shall not apply to an individual who is treat- ed as provided in paragraph (1). ”(B) STEP-UP IN BASIS.\u2014Solely for purposes of determining any tax imposed by reason of this subsection, property which was held by the long-term resident on the date the individual first became a resident of the United States shall be treated as having a basis on such date of not less than the fair market value of such property on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable. ”(4) AUTHORITY TO EXEMPT INDIVIDUALS.\u2014 This subsection shall not apply to an individual who is described in a category of individuals prescribed by regulation by the Secretary. ”(5) REGULATIONS.\u2014The Secretary shall pre- scribe such regulations as may be appropriate to carry out this subsection, including regulations providing for the application of this subsection in cases where an alien individual becomes a resident of the United States during the 10-year period after being treated as provided in para- graph (1).”. (2) CONFORMING AMENDMENTS.\u2014 (A) Section 2107 is amended by striking sub- section (d), by redesignating subsection (e) as subsection (d), and by inserting after subsection (d) (as so redesignated) the following new sub- section: ”(e) CROSS REFERENCE.\u2014 ”For comparable treatment of long-term lawful permanent residents who ceased to be taxed as residents, see section 877(e).”. (B) Paragraph (3) of section 2501(a) (as amended by subsection (e)) is amended by add- ing at the end the following new subparagraph: ”(E) CROSS REFERENCE.\u2014 ”For comparable treatment of long-term lawful permanent residents who ceased to be taxed as residents, see section 877(e).”. (g) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014The amendments made by this section shall apply to\u2014 (A) individuals losing United States citizen- ship (within the meaning of section 877 of the Internal Revenue Code of 1986) on or after Feb- ruary 6, 1995, and (B) long-term residents of the United States with respect to whom an event described in sub- paragraph (A) or (B) of section 877(e)(1) of such Code occurs on or after February 6, 1995. (2) RULING REQUESTS.\u2014In no event shall the 1-year period referred to in section 877(c)(1)(B) of such Code, as amended by this section, expire before the date which is 90 days after the date of the enactment of this Act. (3) SPECIAL RULE.\u2014 (A) IN GENERAL.\u2014In the case of an individual who performed an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1) (4)) before February 6, 1995, but who did not, on or before such date, furnish to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the per- formance of such act, the amendments made by this section and section 512 shall apply to such individual except that the 10-year period de- scribed in section 877(a) of such Code shall not expire before the end of the 10-year period be- ginning on the date such statement is so fur- nished. (B) EXCEPTION.\u2014Subparagraph (A) shall not apply if the individual establishes to the satis- faction of the Secretary of the Treasury that such loss of United States citizenship occurred before February 6, 1994. SEC. 512. INFORMATION ON INDIVIDUALS LOSING UNITED STATES CITIZENSHIP. (a) IN GENERAL.\u2014Subpart A of part III of sub- chapter A of chapter 61 is amended by inserting after section 6039E the following new section: ”SEC. 6039F. INFORMATION ON INDIVIDUALS LOS- ING UNITED STATES CITIZENSHIP. ”(a) IN GENERAL.\u2014Notwithstanding any other provision of law, any individual who loses Unit- ed States citizenship (within the meaning of sec- tion 877(a)) shall provide a statement which in- cludes the information described in subsection (b). Such statement shall be\u2014 ”(1) provided not later than the earliest date of any act referred to in subsection (c), and ”(2) provided to the person or court referred to in subsection (c) with respect to such act. ”(b) INFORMATION TO BE PROVIDED.\u2014Infor- mation required under subsection (a) shall in- clude\u2014 ”(1) the taxpayer’s TIN, ”(2) the mailing address of such individual’s principal foreign residence, ”(3) the foreign country in which such indi- vidual is residing, ”(4) the foreign country of which such indi- vidual is a citizen, ”(5) in the case of an individual having a net worth of at least the dollar amount applicable under section 877(a)(2)(B), information detailing the assets and liabilities of such individual, and ”(6) such other information as the Secretary may prescribe. ”(c) ACTS DESCRIBED.\u2014For purposes of this section, the acts referred to in this subsection are\u2014 CONGRESSIONAL RECORD \u2014 HOUSEH9516 July 31, 1996 ”(1) the individual’s renunciation of his Unit- ed States nationality before a diplomatic or con- sular officer of the United States pursuant to paragraph (5) of section 349(a) of the Immigra- tion and Nationality Act (8 U.S.C. 1481(a)(5)), ”(2) the individual’s furnishing to the United States Department of State a signed statement of voluntary relinquishment of United States na- tionality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1) (4)), ”(3) the issuance by the United States Depart- ment of State of a certificate of loss of national- ity to the individual, or ”(4) the cancellation by a court of the United States of a naturalized citizen’s certificate of naturalization. ”(d) PENALTY.\u2014Any individual failing to pro- vide a statement required under subsection (a) shall be subject to a penalty for each year (of the 10-year period beginning on the date of loss of United States citizenship) during any portion of which such failure continues in an amount equal to the greater of\u2014 ”(1) 5 percent of the tax required to be paid under section 877 for the taxable year ending during such year, or ”(2) $1,000, unless it is shown that such failure is due to reasonable cause and not to willful neglect. ”(e) INFORMATION TO BE PROVIDED TO SEC- RETARY.\u2014Notwithstanding any other provision of law\u2014 ”(1) any Federal agency or court which col- lects (or is required to collect) the statement under subsection (a) shall provide to the Sec- retary\u2014 ”(A) a copy of any such statement, and ”(B) the name (and any other identifying in- formation) of any individual refusing to comply with the provisions of subsection (a), ”(2) the Secretary of State shall provide to the Secretary a copy of each certificate as to the loss of American nationality under section 358 of the Immigration and Nationality Act which is approved by the Secretary of State, and ”(3) the Federal agency primarily responsible for administering the immigration laws shall provide to the Secretary the name of each law- ful permanent resident of the United States (within the meaning of section 7701(b)(6)) whose status as such has been revoked or has been ad- ministratively or judicially determined to have been abandoned. Notwithstanding any other provision of law, not later than 30 days after the close of each cal- endar quarter, the Secretary shall publish in the Federal Register the name of each individual losing United States citizenship (within the meaning of section 877(a)) with respect to whom the Secretary receives information under the preceding sentence during such quarter. ”(f) REPORTING BY LONG-TERM LAWFUL PER- MANENT RESIDENTS WHO CEASE TO BE TAXED AS RESIDENTS.\u2014In lieu of applying the last sen- tence of subsection (a), any individual who is required to provide a statement under this sec- tion by reason of section 877(e)(1) shall provide such statement with the return of tax imposed by chapter 1 for the taxable year during which the event described in such section occurs. ”(g) EXEMPTION.\u2014The Secretary may by regu- lations exempt any class of individuals from the requirements of this section if he determines that applying this section to such individuals is not necessary to carry out the purposes of this section.”. (b) CLERICAL AMENDMENT.\u2014The table of sec- tions for such subpart A is amended by inserting after the item relating to section 6039E the fol- lowing new item: ”Sec. 6039F. Information on individuals losing United States citizenship.”. (c) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to\u2014 (1) individuals losing United States citizenship (within the meaning of section 877 of the Inter- nal Revenue Code of 1986) on or after February 6, 1995, and (2) long-term residents of the United States with respect to whom an event described in sub- paragraph (A) or (B) of section 877(e)(1) of such Code occurs on or after such date. In no event shall any statement required by such amendments be due before the 90th day after the date of the enactment of this Act. SEC. 513. REPORT ON TAX COMPLIANCE BY UNIT- ED STATES CITIZENS AND RESI- DENTS LIVING ABROAD. Not later than 90 days after the date of the enactment of this Act, the Secretary of the Treasury shall prepare and submit to the Com- mittee on Ways and Means of the House of Rep- resentatives and the Committee on Finance of the Senate a report\u2014 (1) describing the compliance with subtitle A of the Internal Revenue Code of 1986 by citizens and lawful permanent residents of the United States (within the meaning of section 7701(b)(6) of such Code) residing outside the United States, and (2) recommending measures to improve such compliance (including improved coordination between executive branch agencies). Subtitle C\u2014Repeal of Financial Institution Transition Rule to Interest Allocation Rules SEC. 521. REPEAL OF FINANCIAL INSTITUTION TRANSITION RULE TO INTEREST AL- LOCATION RULES. (a) IN GENERAL.\u2014Paragraph (5) of section 1215(c) of the Tax Reform Act of 1986 (Public Law 99 514, 100 Stat. 2548) is hereby repealed. (b) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014The amendment made by this section shall apply to taxable years begin- ning after December 31, 1995. (2) SPECIAL RULE.\u2014In the case of the first tax- able year beginning after December 31, 1995, the pre-effective date portion of the interest expense of the corporation referred to in such paragraph (5) of such section 1215(c) for such taxable year shall be allocated and apportioned without re- gard to such amendment. For purposes of the preceding sentence, the pre-effective date por- tion is the amount which bears the same ratio to the interest expense for such taxable year as the number of days during such taxable year before the date of the enactment of this Act bears to 366. And the Senate agree to the same. BILL ARCHER, BILL THOMAS, TOM BLILEY, MICHAEL BILIRAKIS, WILLIAM F. GOODLING, H.W. FAWELL, HENRY HYDE, BILL MCCOLLUM, J. DENNIS HASTERT, Managers on the Part of the House. BILL ROTH, NANCY LANDON KASSEBAUM, TRENT LOTT, TED KENNEDY, Managers on the Part of the Senate. JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE The managers on the part of the House and the Senate at the conference on the disagree- ing votes of the two Houses on the amend- ment of the Senate to the bill (H.R. 3103) to amend the Internal Revenue Code of 1986 to improve portability and continuity of health insurance coverage in the group and individ- ual markets, to combat waste, fraud, and abuse in health insurance and health care de- livery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and for other purposes, submit the following joint statement to the House and the Senate in ex- planation of the effect of the action agreed upon by the managers and recommended in the accompanying conference report: The Senate amendment struck all of the House bill after the enacting clause and in- serted a substitute text. The House recedes from its disagreement to the amendment of the Senate with an amendment that is a substitute for the House bill and the Senate amendment. The differences between the House bill, the Sen- ate amendment, and the substitute agreed to in conference are noted below, except for clerical corrections, conforming changes made necessary by agreements reached by the conferees, and minor drafting and cleri- cal changes. TITLE I.\u2014HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY I. STRUCTURE House bill The House bill would amend the Internal Revenue Code (IRC) and the Employee Re- tirement Income Security Act of 1974 (ERISA), and includes free-standing provi- sions. Senate amendment The Senate amendment includes free- standing provisions. Conference agreement The conference agreement adds new provi- sions to the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Services (PHS) Act, and the Internal Revenue Code (IRC). II. AVAILABILITY AND PORTABILITY OF GROUP HEALTH PLANS Current law Current federal law does not impose any requirements on employers to provide or contribute toward the health insurance cov- erage of their employees or their employees’ dependents. However, specific federal re- quirements do apply to existing employer- sponsored health plans (e.g., fiduciary, noti- fication and disclosure requirements under ERISA and COBRA continuation coverage, non-discrimination requirements under ERISA and the Internal Revenue Code.) House bill The House bill would provide for federal re- quirements on group health plans (and insur- ers and health maintenance organizations (HMOs) selling to such plans) relating to portability, the use of preexisting medical condition, and discrimination based on health status. Senate amendment The Senate amendment would provide for federal requirements on group health plans, health plan issuers (entities licensed by the state to offer a group or individual health plan) and employee health benefit plans, re- lating to portability, the use of preexisting medical conditions, and discrimination based on health status. Conference agreement The conference agreement provides for fed- eral requirements on group health and health insurance issuers offering group health insurance coverage relating to port- ability, access, and renewability. A. DEFINITIONS (Also see item IX below.) Current law Section 5000(b)(1) of the Internal Revenue Code (IRC) defines a group health plan as a plan (including a self-insured plan) of, or contributed to by, an employer (including a self-employed person) or employee organiza- tion to provide health care (directly or oth- erwise) to the employees, former employees, CONGRESSIONAL RECORD \u2014 HOUSE H9517July 31, 1996 the employer, others associated or formerly associated with the employer in a business relationship, or their families. Section 607(1) of ERISA defines a group health plan as an employee welfare benefit plan providing medical care to participants or beneficiaries directly or through insur- ance, reimbursement, or otherwise. Church plans are excluded from federal re- quirements on existing employer plans such as ERISA’s requirements on employee health benefit plans and COBRA continuation cov- erage requirements under the IRC and ERISA. House bill Group health plan means an employee wel- fare benefit plan to the extent that the plan provides medical care employees and their dependent directly or through insurance, re- imbursement, or otherwise, and includes a group health plan within the meaning of sec- tion 5000(b)(1) of the IRC. The provisions of this subtitle (other than those relating to individual coverage) apply to group health plans with 2 or more partici- pants as current employees on the first day of the plan year. The requirements would not apply to church plans unless such plans met the ex- emption for multiple employer health plans under subtitle c (see item V). For purposes of applying the provisions related to qualified prior coverage (II(B) below), a group health plan could elect to disregard periods of cov- erage of an individual under a church plan that is not subject to this subtitle. Governmental plans could elect not to be a group health plan covered under the subtitle. For purposes of applying the provisions re- lated to qualified prior coverage, a group health plan could elect not to include cov- erage under a governmental plan that elect- ed to be excluded from this subtitle’s re- quirements. Senate amendment Employee health benefit plan means any employee welfare benefit plan, governmental plan, or church plan, or any health benefit plan under section 5(e) of the Peace Corps Act, that provides or pays for health benefit for participants or beneficiaries whether di- rectly, through a group health plan offered by a health plan issuer (see item III(A) below), or otherwise. Conference agreement The conference agreement defines a group health plan as an employee welfare benefit plan to the extent that the plan provides medical care to employees or their depend- ents directly or through insurance, reim- bursement, or otherwise. Both governmental and church plans are included, but certain plans with limited coverage are excluded. The portability and guaranteed availabil- ity provisions (other than those relating to individual coverage) apply to group health plans with 2 or more participants who are ac- tive employees on the first day of the plan year. These provisions would apply to non- federal governmental plans, unless they elected to be excluded as described below, and to church and governmental plans. (See section III(B)(3) below for exceptions from availability, renewability, and portability requirements for group health plans and group health insurance coverage for certain benefits.) Nonfederal governmental plans could elect not to be a group health plan covered under the amendments to the PHS. An election would apply for a single specified plan year, or, in the case of a plan provided pursuant to a collective bargaining agreement, for the term of such agreement. If a nonfederal gov- ernmental plan makes this election, it must notify enrollees of the fact and consequences of the election. The plan must still provide certification and disclosure of creditable coverage under the plan to enrollees who leave the plan, for purposes of portability. Upon request, Medicare, Medicaid, a pro- gram of the Indian Health Service or a tribal organization, and military-sponsored health care programs must also provide notice of previous creditable coverage to individuals who leave such coverage. B. PORTABILITY OF COVERAGE FOR PREVIOUSLY COVERED INDIVIDUALS Current law No provision. House bill The House bill would provide that in gen- eral, a group health plan and an insurer or HMO offering health insurance coverage in connection with a group health plan would have to reduce any preexisting condition limitation period by the length of the aggre- gate period of prior coverage. Prior coverage would not qualify under this provision if there was more than a 60-day break in cov- erage under a group health plan. (Waiting pe- riods would not be considered a break in cov- erage.) Qualified coverage would include cov- erage of the individual under a group health plan, health insurance coverage, Medicare, Medicaid, Tricare, a program of the Indian Health Service, and State health insurance coverage or risk pool, and coverage under the Federal Employees Health Benefit Pro- gram (FEHBP). Senate amendment The Senate Amendment is similar. An em- ployee benefit plan or a health plan issuer of- fering a group health plan would have to re- duce any preexisting condition limitation period by 1 month for each month for which the person was in a period of previous quali- fying coverage. This provision would not apply if there was a break of more than 30 days. (Waiting periods would not be consid- ered a break in coverage.) Previous qualify- ing coverage includes enrollment under an employee health benefit plan, group health plan, individual health plan, or under a pub- lic or private health plan established under federal or state law. Conference agreement The conference agreement provides that in general, group health plans, and health in- surance issuers offering group health insur- ance coverage, would have to reduce any pre- existing condition limitation period by the length of the aggregate period of prior cred- itable coverage. Prior coverage would not qualify under this provision if there was a break in coverage under a group health plan that was longer than a 63-day period. (Wait- ing periods and affiliation periods would not be considered a break in coverage.) Cred- itable coverage includes coverage of the indi- vidual under a group health plan (including a governmental or church plan), health insur- ance coverage (either group or individual in- surance), Medicare, Medicaid, military-spon- sored health care, a program of the Indian Health Service, a State health benefits risk pool, the FEHBP, a public health plan as de- fined in regulations, and any health benefit plan under section 5(e) of the Peace Corps Act. An individual would establish a cred- itable coverage period through presentation of certifications describing previous cov- erage, or through other procedures specified in regulations to carry out this provision. The conferees intend that creditable cov- erage includes short-term, limited coverage. 1. Method for establishing qualified coverage periods Current law No provision. House bill The House bill would provide that a group health plan or insurer or HMO offering health insurance coverage in connection with a group health plan could determine qualified coverage periods without regard to the specific benefits offered, referred to as the standard method. Alternatively, it could make such determination on a benefit-spe- cific basis and not include as a qualified cov- erage period a specific benefit that had not been included at the end of the most recent period of coverage. If this alternative meth- od were to be used, the group plan or insurer would be required to state prominently in any disclosure statements and to each en- rollee at the time of enrollment that such a method of determining qualifying coverage was being used, and include a description of the effect of this method. The plan, insurer, or HMO would request a certification from prior plan administrators, insurers, or HMOs which discloses the plan statement related to health benefits under the plan or other de- tailed benefit information on the benefits available under the previous plan or cov- erage. The entity providing the certification could charge the reasonable cost for provid- ing the benefit information to the requesting plan or insurer. Senate bill The Senate Amendment would provide that an employee health benefit plan or health plan issuer offering a group plan could impose a limitation or exclusion of benefits relating to the treatment of a pre- existing condition only to the extent that such service or benefit was not previously covered under the plan in which the partici- pant or beneficiary was enrolled imme- diately prior to enrollment in the plan in- volved. Conference agreement The conference agreement provides that a group health plan, and issuer offering group health insurance coverage, could determine creditable coverage periods without regard to the specific benefits covered during the period. Alternatively, it could make such de- termination based on several classes or cat- egories of benefits, as specified in regula- tions. A group health plan and issuer would be required to count a period of creditable coverage with respect to any class or cat- egory of benefits if any level of benefits is provided. This alternative would have to be used uniformity for all participants and beneficiaries. It is the intent of the conferees that the al- ternate method be available to account for significant differences in benefits. For exam- ple, the inclusion versus exclusion of a cat- egory of benefits such as pharmaceuticals could be considered a difference in classes of benefits. Similarly, significant differentials in deductibles could be considered dif- ferences in classes of benefits, but the alter- native method would not apply to small dif- ferences in deductibles, such as $250 versus $200. The alternative method would not apply for differences in specific services or treatments. If the alternate method were to be used, the group health plan and issuer would be re- quired to state prominently in any disclo- sure statements that such a method of deter- mining qualifying coverage was being used, and would be required to include a descrip- tion of the effect of this election. A group health plan using the alternate method would be required to notify each enrollee at the time of enrollment that the plan had made such an election, and describe the ef- fect. An issuer would be required to notify each employer at the time of offer or sale of the coverage. 2. Certification of prior coverage Current law No provision. CONGRESSIONAL RECORD \u2014 HOUSEH9518 July 31, 1996 House bill The House bill would require the plan ad- ministrator of a group health plan, or the in- surer or HMO offering health insurance cov- erage to a group plan, on request made on behalf of an individual covered or previously covered within the past 18 months under the plan or coverage, to provide for a certifi- cation of the period of coverage of the indi- vidual under the plan and of the waiting pe- riod (if any) imposed. Senate amendment The Senate Amendment would require an employee health plan to provide documenta- tion of coverage to participants and bene- ficiaries whose coverage was terminated under the plan. As specified by regulation, the duty of an employee health benefit plan to verify previous qualifying coverage would be discharged when such plan provided docu- mentation to the participant or beneficiary including the following information: (1) the dates that the person was covered under the plan; and (2) the benefits and costs-sharing arrangement available to the person under the plan. Conference agreement The conference agreement requires the group health plan, and health insurance is- suer offering group health insurance cov- erage, to provide a certification of the period of creditable coverage under the plan, the coverage under any applicable COBRA con- tinuation provision, and waiting period (if any) (and affiliation period if applicable) im- posed on the individual. This certification would have to be provided when the individ- ual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision, after any COBRA continuation coverage ceases, and on the re- quest of an individual not later than 24 months after coverage ceased. The certifi- cation may be provided, to the extent prac- ticable, at a time consistent with notices re- quired under any applicable COBRA continu- ation provision. A group health plan offering medical care through health insurance cov- erage would not be required to provide cer- tification if the health insurance issuer pro- vides certification. If a group health plan or health insurance issuer elects the alternative method of cred- iting coverage, the plan or issuer would re- quest, from prior entities providing cov- erage, information on coverage of classes and categories of benefits available under the previous plan or coverage. The entity provid- ing the certification could charge the rea- sonable cost for providing such information to the requesting plan or insurer. The Sec- retary is required to establish rules to pre- vent an entity’s failure to provide informa- tion on health benefits under previous cov- erage from adversely affecting any subse- quent coverage under another group health plan or health insurance coverage. C. RESTRICTIONS ON USE OF PRE-EXISTING CONDITION LIMITATION PERIOD Current law No provision. House bill The House bill would restrict the use of preexisting condition limitation periods in group health plans and in plans offered by in- surers and HMOs to group health plans. Senate amendment The Senate Amendment is similar but would apply to employee health benefit plans and group plans offered by health plan issuers. Conference agreement The conference agreement restricts the use of preexisting conditions limitation exclu- sions by group health plans and health insur- ance issuers offering group health insurance coverage. 1. Definition of preexisting condition Current law No provision. House bill The House bill would define a preexisting condition to be a condition, regardless of the cause of condition, for which medical advice, diagnosis, care, or treatment was rec- ommended or received within the 6-months ending on the day before the effective date of the coverage or the earliest date upon which such coverage would have been effective if no waiting period was applicable, whichever was earlier. Genetic information would not be considered a preexisting condition, so long as the treatment of the condition to which the information was applicable had not been sought in the 6-month period just described. Senate amendment The Senate Amendment provides a similar definition of preexisting condition. It does not include the genetic information lan- guage. Conference agreement The conference agreement defines a pre- existing condition exclusion to be a limita- tion or exclusion of benefits relating to a condition, whether physical or mental, based on the fact that the condition was present before the enrollment date, whether or not any medical advice, diagnosis, care, or treat- ment was recommended or received before that date. Genetic information would not be considered a condition in the absence of a di- agnosis of the condition related to such in- formation. 2. Restrictions on limitation period Current law No provision. House bill The House bill would prohibit a group health plan, and an insurer or HMO offering health insurance coverage in connection with a group health plan from imposing a preexisting condition limitation period in excess of 12 months, or 18 months in the event of a late enrollment. A preexisting condition limitation period could not be ap- plied to a newborn, adopted child, or child placed for adoption, so long as the individual became covered within 30 days of birth or adoption or placement for adoption. Pre- existing condition limitation periods would not apply to pregnancies. An HMO could im- pose an eligibility period as an alternative to a preexisting condition limitation period but only if it did not exceed 60 days for timely enrollment and 90 days for late enrollment. An HMO could use alternative methods to address adverse selection as approved by state regulators. Senate amendment The Senate Amendment includes a similar provision, but with respect to affiliation pe- riods of an HMO, would specify that during such a period the plan could not be required to provide health care services or benefits and no premium could be charged to the par- ticipant or beneficiary. Conference agreement The conference agreement permits a group health plan and health insurance issuers to impose a preexisting condition exclusion if the exclusion relates to a condition (whether physical or mental), regardless of the cause of condition, for which medical advice, diag- nosis, care, or treatment was recommended or received within the 6-month period ending on the enrollment date. The exclusion could extend to not more than 12 months (18 months for late enrollees) after the enroll- ment date. The exclusion would be reduced by the aggregate of the periods of creditable coverage. Enrollment date is defined as the date of enrollment in the plan or coverage or, if earlier, the first day of the waiting pe- riod for such enrollment. Any waiting period or affiliation period would run concurrently with any preexisting condition exclusion period. A preexisting condition limitation period could not be ap- plied to a newborn, an adopted child or child placed for adoption under age 18, so long as the individual becomes covered under cred- itable coverage within 30 days of birth or adoption or placement for adoption. These exceptions for newborns and certain adopted children would not apply if the individual had a break in coverage longer than a 63-day period. Preexisting condition exclusions could not apply to pregnancies. A group health plan offering health insur- ance coverage through an HMO, or an HMO which offers health insurance coverage in connection with a group health plan, may impose an affiliation period only if no pre- existing condition exclusion is imposed, the period is imposed uniformly without regard to health status, and does not exceed 2 months for timely enrollment and 3 months for late enrollment. It is the intent of the conferees that any affiliation period would apply to all new enrollees and beneficiaries. During the affiliation period, the HMO could not be required to provide health care serv- ices or benefits and no premium could be charged to the participant or beneficiary. The affiliation period would begin on the en- rollment date and would run concurrently with any other applicable waiting period under the plan. An HMO could use alter- native methods to address adverse selection as approved by state regulators. D. PROHIBITING EXCLUSIONS BASED ON HEALTH STATUS (ACCESS) Current law Under section 510 of ERISA, an employee benefit plan may not discriminate against a particular beneficiary for exercising any right to which he or she is entitled under the provisions of an employee benefit plan. Sec- tion 105(h) of the IRC prohibits discrimina- tion in favor of highly compensated individ- uals by self-insured employer health plans. House bill Except as specified below, a group health plan, and an insurer or HMO offering cov- erage in connection with a plan, cannot ex- clude an employee or his or her beneficiary from being (or continuing to be enrolled) as a participant or beneficiary under the plan based on health status. Health status in- cludes, with respect to an individual, medi- cal condition, claims experience, receipt of health care, medical history, genetic infor- mation, evidence of insurability (including conditions arising out of domestic violence), or disability. A group health plan and an in- surer or HMO offering coverage in connec- tion with a group health plan cannot require a premium or contribution which is greater than such premium or contribution for a similarly situated participant or beneficiary solely on the basis of health status. It can, however, very the premium or contribution based on factors that are not directly related to health status (such as scope of benefits, geographic area of resident, or wage levels). The House bill provides that nothing is in- tended to affect the premium rates an in- surer or HMO could charge an employer for health insurance coverage provided in con- nection with a group health plan. A group health plan (or insurer or HMO providing coverage in connection to a group plan) could establish premium discounts or CONGRESSIONAL RECORD \u2014 HOUSE H9519July 31, 1996 modify otherwise applicable copayments or deductibles in return for adherence to pro- grams of health promotion and disease pre- vention. Senate amendment Except as specified below, a health plan is- suer offering a group health plan may not de- cline to offer whole group coverage to a group purchaser desiring to purchase the coverage. An employee health benefit plan or a health plan issuer offering a group health plan could not condition eligibility, enroll- ment, or premium contribution require- ments based on health status, medical condi- tion, claims experience, receipt of health care, medical history, evidence of insurabil- ity (including conditions arising out of do- mestic violence), genetic information, or dis- ability. The bill does not include a specific rule of construction relating to premium rates charged to group health plans other than a prohibition of premium contribution require- ments based on health status. A group health plan (or insurer of HMO providing coverage in connection to a group plan) could establish premium discounts or modify otherwise applicable copayments or deductibles in return for adherence to pro- grams of health promotion and disease pre- vention. Conference agreement Except as specified below, a group health plan, and a health insurance issuer offering group health insurance coverage, cannot es- tablish rules for eligibility (including contin- ued eligibility) of an individual to enroll under the terms of the plan based on any of the following health-related factors in rela- tion to the individual or a dependent of the individual: health status, medical condition (including both physical and mental illness), claims experience, receipt of health care, medical history, genetic information, evi- dence of insurability (including conditions arising out of domestic violence), or disabil- ity. The inclusion of evidence of insurability in the definition of health status is intended to ensure, among other things, that individuals are not excluded from health care coverage due to their participation in activities such as motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, skiing and other similar activities. It is the intent of the conferees that a plan cannot knowingly be designed to exclude in- dividuals and their dependents on the basis of health status. However, generally applica- ble terms of the plan may have a disparate impact on individual enrollees. For example, a plan may exclude all coverage of a specific condition, or may include a lifetime cap on all benefits, or a lifetime cap on specific ben- efits. Although individuals with the specific condition would be adversely affected by an exclusion of coverage for that condition, and individuals with serious illnesses may be ad- versely affected by a lifetime cap on all or specific benefits, such plan characteristics would be permitted as long as they are not directed at individual sick employees or de- pendents. The Conference agreement does not require a group health plan or health insurance cov- erage to provide particular benefits other than those provided under the terms of the plan or coverage. Nor does it prevent any plan or coverage from establishing limita- tions or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan or coverage. Rules defining any ap- plicable waiting periods for enrollment may not be established based on health status re- lated factors. It is the intent of the conferees that a plan or coverage cannot single out an individual based on the health status or health status related factors of that individual for denial of a benefit otherwise provided other individ- uals covered under the plan or coverage. For example, the plan or coverage may not deny coverage for prescription drugs to a particu- lar beneficiary or dependent if such coverage is available to other similarly situated indi- vidual covered under the plan or coverage. However, the plan or coverage could deny coverage for prescription drugs to all bene- ficiaries and dependents. The term ”simi- larly situated” means that a plan or cov- erage would be permitted to vary benefits available to different groups of employees, such as full-time versus part-time employees or employees in different geographic loca- tions. In addition, a plan or coverage could have different benefit schedules for different collective bargaining units. The conference agreement provides that a group health plan and an issuer offering group coverage cannot require a premium or contribution which is greater than such pre- mium or contribution for a similarly situ- ated individual enrolled in the plan on the basis of any health status-related factor re- lating to the individual or to any individual enrolled under the plan as a dependent of the individual. It does not restrict the amount that an employer may be charged for cov- erage under a group health plan. The group health plan and health insurance issuer may establish premium discounts or rebates, or modify otherwise applicable copayments or deductibles in return for adherence to pro- grams of health promotion and disease pre- vention. The conferees intend that these provisions preclude insurance companies from denying coverage to employers based on health sta- tus and related factors that they have tradi- tionally used. In addition, this provision is meant to prohibit insurers or employers from excluding employees in a group from coverage or charging them higher premiums based on their health status and other relat- ed factors that could lead to higher health costs. This does not mean that an entire group cannot be charged more. But it does preclude health plans from singling out indi- viduals in the group for higher premiums or dropping them from coverage altogether. 1. Exceptions to the non-discrimination requirement Current law No provision. House bill No provision for group health plans (i.e., the plans of the employer). See item III(B) below on requirements on insurers and HMOs. Senate amendment Exceptions are provided to health plan is- suers with respect to enrollment in the event that: (1) the health plan ceases to offer cov- erage to any additional group purchasers; or (2) the issuer can demonstrate to the state insurance regulator that to enroll new peo- ple would impair its financial or provider ca- pacity. See item III B(3) below. Conference agreement See item III(B) below on requirements for health plan issuers offering group health in- surance coverage. E. ENROLLMENT OF ELIGIBLE INDIVIDUALS WHO LOSE OTHER COVERAGE Current law No provision. House bill The House bill would require group health plans to permit an uncovered employee (or uncovered dependent) otherwise eligible for coverage to enroll under at least one benefit option if certain conditions are met: (1) the person was already covered when the plan was previously offered; (2) the person stated in writing at such time that another source of coverage was the reason for declining en- rollment; (3) the person lost coverage as a re- sult of a loss of eligibility or termination from or reduction in hours of employment; and (4) the person requested enrollment within 30 days after the date of the cov- erage’s termination. If a group health plan offered dependent coverage, it could not require, as a condition of coverage as a dependent, a waiting period applicable to: (1) a newborn, (2) adopted child or child placed for adoption, or (3) a spouse, at the time of marriage if the person had met any applicable waiting period. Enrollment of a participant’s beneficiary would be considered to be timely if a request for enrollment were made within 30 days of the date family coverage was first made available or, in the case of a newborn or adoption or placement for adoption, within 30 days of that event; and in the case of mar- riage, within 30 days of the date of the mar- riage, if family coverage was available. Senate amendment The Senate Amendment would require em- ployee health benefit plans to provide for special enrollment periods extending for a reasonable time after certain qualifying events to permit the participant to change individual or family basis of coverage or to enroll in the plan if coverage would have otherwise been available. The qualifying events would be: (1) changes in family status affecting eligibility under a plan including marriage, separation, divorce, death, birth, or placement of a child for adoption; (2) changes in employment status that would otherwise cause the loss of eligibility for coverage (other than COBRA continuation coverage); or (3) changes in employment sta- tus of a family member that results in a loss of eligibility under a group, individual, or employee health benefit plan. The special enrollment period would have to ensure that a child born or placed for adoption was deemed covered as of the date of birth or placement so long as the child was enrolled within 30 days. Conference agreement The conference agreement requires special enrollment periods for certain individuals losing other coverage and for certain depend- ent beneficiaries. It requires group health plans, and health insurance issuers offering group health insurance coverage, to permit eligible employees or dependents who lose other coverage to enroll under the terms of the plan if each of the following conditions is met: (1) the employee or dependent was al- ready covered when the plan was previously offered; (2) the employee stated in writing at such time that another source of coverage was the reason for declining enrollment, but only if the plan sponsor or issuer required such a statement and provided the employee with notice of this requirement; (3) the per- son was covered under COBRA continuation coverage which was exhausted, or coverage was not under a COBRA continuation provi- sion and was terminated as a result of a loss of eligibility for the coverage (including as a result of legal separation, divorce, death, termination of employment, or reduction in hours of employment) or termination of em- ployer contributions towards such coverage; and (4) the person requested enrollment not later than 30 days after the loss of other cov- erage. If a group health plan offers dependent cov- erage, it must offer a dependent special en- rollment period for persons becoming a de- pendent through marriage, birth, or adoption or placement for adoption. The dependent CONGRESSIONAL RECORD \u2014 HOUSEH9520 July 31, 1996 special enrollment period must last for not less than 30 days. The dependent may be en- rolled as a dependent of the individual. If the individual is eligible for enrollment, but not enrolled, the individual may also enroll at this time. Moreover, in the case of the birth or adoption of a child, the spouse of the indi- vidual also may be enrolled as a dependent of the individual if the spouse is otherwise eli- gible for coverage but not already enrolled. If an individual seeks to enroll a dependent during the first 30 days of a dependent spe- cial enrollment period, the coverage would become effective as of the date of birth, of adoption or placement for adoption, or, in the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment was received. F. APPLICABILITY OF RENEWAL REQUIREMENTS TO MULTIPLE EMPLOYER ARRANGEMENTS Current law Under section 3(37) of ERISA, a multiem- ployer plan is one in which more than one employer contributes and which is estab- lished through a collective bargaining agree- ment. (Such plans are commonly found in unionized sectors of the building and con- struction, publishing, and entertainment trades, and the lumber, maritime, retail, food, hotel, and restaurant industries.) Under section 3(40) of ERISA, a multiple em- ployer welfare arrangement (MEWA) is an employee welfare benefit plan or any other arrangement which offers or provides health benefits and meets additional criteria, (e.g., it must offer such benefits to the employees of 2 or more employers). There is no provi- sion or definition under current law for ”multiple employer health plans.” House bill Such plans could not deny an employer who employees are covered under the plan or arrangement continued access to the same or different coverage except: (1) for cause (e.g., nonpayment of premiums, fraud, and non- compliance with plan provisions); (2) because the plan is not offering coverage in a geo- graphic area; or (3) due to a failure to meet the terms of an applicable collective bar- gaining agreement. Certain collectively bar- gained arrangements and ”multiple em- ployer health plans” (MEHPs) would be re- quired to meet specific requirements relat- ing to the nondiscrimination requirements. (MEHPs are established under this bill (see item V below) and are generally non-fully-in- sured MEWAs that meet certain require- ments excepting them from state regula- tion.) Senate amendment No provision. (Note that the rules regard- ing group and individual health plans (e.g., guaranteed renewal, nondiscrimination, and portability) or state laws not preempted by the Senate Amendment also apply to health plans offered by health plan issuers to a pur- chasing cooperative. See item VIII below). Conference agreement The conference agreement provides that a group health plan which is a multiemployer plan or a multiple employer welfare arrange- ment may not deny an employer continued access to the same or different coverage under the terms of such plan except: (1) for nonpayment of contributions; (2) for fraud; (3) for noncompliance with plan provisions; (4) because the plan is ceasing to offer any coverage in a geographic area; (5) in the case of a network plan, there is no longer any in- dividual enrolled through the employer who lives, resides, or works in the service area of the network plan, and the plan applies this provision uniformly without regard to claims experience or health status-related factors; or (6) due to a failure to meet the terms of an applicable collective bargaining agreement, to renew a collective bargaining agreement or other agreement requiring or authorizing contributions to the plan, or to employ employees covered by such an agree- ment. G. ENFORCEMENT OF GROUP HEALTH PLAN REQUIREMENTS Current law Federal requirements on existing group health plans are enforced through various laws, including ERISA, the Public Health Service (PHS) Act, the IRC, and Medicare. House bill The House bill would provide for enforce- ment of the federal group health plan avail- ability and portability requirements through the IRC, ERISA, and through civil monetary penalties imposed through the Secretary of Health and Human Services Senate amendment The Senate Amendment would provide for enforcement of the federal group health plan availability and portability requirements through the Secretary of Labor, in consulta- tion with the Secretary of Health and Human Services using ERISA civil enforce- ment provisions. Conference agreement The conference agreement provides for en- forcement of the federal group health plan availability and portability requirements through the IRC, ERISA, and through civil monetary penalties imposed through the Secretary of Health and Human Services (HHS). 1. Enforcement through COBRA provisions of IRC Current law Plans that fail to comply with the IRC COBRA provision are subject to an excise tax of $100 per day per violation. The tax is not applied where the failure was determined to be unintentional or if the failure was cor- rected within 30 days. An overall limitation on the tax applies in the event of an uninten- tional failure. House bill The House bill would provide that non- complying plans and insurers and HMOs sell- ing to group health plans would be subject to an excise tax of $100 per day per violation en- forced through the COBRA provisions of the IRC. Penalties would not be assessed if the failure was determined to be unintentional or a correction was made within 30 days. No tax could be imposed on a noncomplying in- surer or HMO subject to state insurance reg- ulation if the Secretary of Health and Human Services (HHS) determined that the state had an effective enforcement mecha- nism. In the case of a group health plan of a small employer that provided coverage sole- ly through a contract with an insurer or HMO, no tax would be imposed upon the em- ployer if the failure was solely because of the product offered by the insurer or HMO. No tax penalty would be assessed for a failure under this provision if a sanction had been imposed under ERISA or by the Secretary of HHS. Senate amendment No provision. Conference agreement See Title IV. 2. Enforcement through ERISA Current law Under section 502 of ERISA, employee ben- efit plans that fail to comply with applicable requirements can be sued for relief and be subject to civil money penalties, and can be sued to recover any benefits due under the plan. Section 504 of ERISA provides the Sec- retary of Labor with investigative authority to determine whether any person is out of compliance with the law’s requirements. Section 506 provides for coordination and re- sponsibility of agencies in enforcement. Sec- tion 510 prohibits a health plan from dis- criminating against a participant or bene- ficiary for exercising any right under the plan. House bill The House bill would provide that ERISA sanctions apply to group health plans by deeming the provisions of subtitle A and sub- title D (insofar as it is applicable to this sub- title) to be provisions of title I of ERISA. Such sanctions also would apply to an in- surer or HMO that was subject to state law in the event that the Secretary of Labor de- termined that the state had not provided for enforcement of the above provisions of this Act. Sanctions would not apply in the event that the Secretary of Labor established that none of the persons against whom the liabil- ity would be imposed knew, or exercising reasonable diligence, would have known that a failure existed, or if the noncomplying en- tity acted within 30 days to correct the fail- ure. In no case would a civil money penalty be imposed under ERISA for a violation for which an excise tax under the COBRA en- forcement provisions was imposed or for which a civil money penalty was imposed by the Secretary of HHS. Senate amendment The Senate Amendment would provide that for employee health benefit plans, the Secretary would be required to enforce the reform standards established by the bill in the same manner as provided under sections 502, 504, 506, and 510 of ERISA. (See item IV(I) below for enforcement provisions relat- ing to health plan issuers and group health plans sold to employers and others.) Conference agreement The conference agreement provides that provisions with respect to group health plans would be enforced under Title I of ERISA as under current law. The Secretary of Labor would not enforce the provisions of Title I applicable to health insurance issuers. How- ever, private right of action under part V of ERISA would apply to such issuers. Enforce- ment of provisions with respect to health in- surance issuers generally would be limited to civil remedies established under the PHS Act amendments (as described in the following subsection). The conference agreement provides that a state may enter into an agreement with the Secretary for delegation to the state of some or all of the Secretary’s authority under sec- tions 502 and 504 of ERISA to enforce the re- quirements of this part in connection with MEWAs providing medical care which are not group health plans. 3. Enforcement through civil money penalties Current law No provision. House bill The House bill would provide that a group health plan, insurer, or HMO that failed to meet the above requirements would be sub- ject to a civil money penalty. Rules similar to those imposed under the COBRA penalties would apply. The maximum amount of pen- alty would be $100 for each day for each indi- vidual with respect to which a failure oc- curred. In determining the penalty amount, the Secretary of HHS would have to take into account the previous record of compli- ance of the person being assessed with the applicable requirements of this subtitle, the gravity of the violation, and the overall lim- itations for unintentional failures provided CONGRESSIONAL RECORD \u2014 HOUSE H9521July 31, 1996 under the IRC COBRA provisions. No penalty could be assessed if the failure was not inten- tional or if the failure was corrected within 30 days. A procedure would be available for administrative and judicial review of a pen- alty assessment. Collected penalties would be paid to the Secretary of HHS and would be available for the purpose of enforcing the provisions with respect to which the penalty was imposed. The authority for the Secretary of HHS to impose civil money penalties would not apply to enforcement with respect to any en- tity which offered health insurance coverage and which was an insurer or HMO subject to state regulation by an applicable state au- thority if the Secretary of HHS determined that the state had established an effective enforcement plan. In no case would a civil money penalty be imposed under this provi- sion for a violation for which an excise tax under COBRA or civil money penalty under ERISA was assessed. Senate amendment No provision. Conference agreement The conference agreement provides that each state may require that health insurance issuers that issue, sell, renew, or offer health insurance coverage in the state in the small or large group markets meet the Act’s re- quirements. In the case of a determination by the Secretary of HHS that a state has failed to substantially enforce a provision or provisions of part A with respect to health insurance issuers in the state, the Secretary would enforce such provision or provisions insofar as they relate to the issuance, sale, renewal, and offering of health insurance coverage in connection with group health plans in the state. Secretarial enforcement would apply only in the absence of state en- forcement and with respect to group health plans that are nonfederal governmental plans. In the case of a failure by a health insur- ance issuer, the issuer is liable for any pen- alty. In the case of failure by a group health plan that is a nonfederal governmental plan, the plan is liable if it is sponsored by 2 or more employers; otherwise the employer is liable. Rules similar to those imposed under the COBRA penalties would apply. The maxi- mum amount of penalty for noncompliance would be $100 per day per individual. In de- termining the penalty amount, the Sec- retary of HHS would have to take into ac- count the previous record of compliance and the gravity of the violation. No penalty could be assessed if the failure was not inten- tional or if the failure was corrected within 30 days. A procedure would be available for administrative and judicial review of a pen- alty assessment. Collected penalties would be paid to the Secretary of HHS and would be available for the purpose of enforcing the provisions with respect to which the penalty was imposed. 4. Coordination in administration Current law Section 506 of ERISA provides for coordi- nation of other federal agencies (e.g., the In- ternal Revenue Service) with the Depart- ment of Labor in enforcing ERISA. House bill The House bill would require the Secretar- ies of Treasury, Labor, and HHS to issue reg- ulations that are not duplicative to carry out this subtitle. The bill would require these regulations to be issued in a manner that assures coordination and nonduplica- tion in their activities under this subtitle. Senate amendment No provision. Conference agreement The conference agreement provides that the Secretaries of Treasury, Labor, and HHS would ensure, through execution of an inter- agency memorandum of understanding, that regulations, rulings, and interpretations are administered so as to have the same effect at all times. It requires the Secretaries to co- ordinate enforcement policies for the same requirements to avoid duplication of enforce- ment efforts and assign priorities in enforce- ment. It is the intent of the conferees that the committees of jurisdiction should work to- gether to assure the coordination of policies under this Act. Such coordination is consid- ered necessary to maintain consistency in the IRC, ERISA, and the PHS Act. III. AVAILABILITY, PORTABILITY, AND RENEW- ABILITY REQUIREMENTS ON INSURERS, HMOS, AND ISSUERS OF HEALTH PLANS IN THE GROUP MARKET Current law The McCarran Ferguson Act of 1945 (P.L. 79 15) exempts the business of insurance from federal antitrust regulation to the ex- tent that it is regulated by the states and in- dicates that no federal law should be inter- preted as overriding state insurance regula- tion unless it does so explicitly. Section 514(b)(2)(A) of ERISA leaves to the states the regulation of insurance. (Employee benefit plans are not insurance and are regulated by the federal government.) House bill The House bill would establish federal re- quirements on insurers and HMOs selling in the group market to provide for guaranteed availability of health insurance coverage. Senate amendment The Senate Amendment is similar but would apply requirements to health plan is- suers offering plans in the group market. Conference agreement The conference agreement establishes fed- eral requirements on health insurance issu- ers offering group health insurance coverage to provide for guaranteed availability of health insurance coverage. A. DEFINITIONS Current law No provision. House bill The House bill would define insurer to mean an insurance company, insurance serv- ice, or insurance organization which is li- censed to engage in the business of insurance in a state and which (except for the purposes of individual health insurance availability provisions of this subtitle) is subject to state law which regulates insurance within the meaning of section 514(b)(2)(A) of ERISA. The House bill would define a health main- tenance organization to mean (a) a federally qualified HMO, (b) an organization recog- nized under state law as an HMO, or (c) a similar organization regulated under state law for solvency in the same manner and ex- tent as an HMO, if (other than for the pur- poses of individual health insurance avail- ability provisions of the bill) it is subject to state law which regulates insurance within the meaning of section 514(b)(2) of ERISA. Under the House bill, a bona fide associa- tion would be defined as an association which (a) has been actively in existence for at least 5 years; (b) has been formed and maintained in good faith for purposes other than obtaining insurance; (c) does not condi- tion membership in the association on health status; (d) makes health insurance coverage offered through the association available to any individual who is a member (or dependent of a member) of the associa- tion at the time the coverage is initially is- sued; (e) does not make health insurance coverage offered through the association available to any member who is not a mem- ber (or dependent of a member) of the asso- ciation at the time coverage is initially is- sued; (f) does not impose preexisting condi- tion exclusions consistent with the require- ments of this bill relating to group health plans; and (g) provides for renewal and con- tinuation of coverage consistent with the re- quirements of this bill. Senate amendment The Senate Amendment would define health plan issuer as any entity that is li- censed (prior to or after the date of enact- ment of this Act) by a state to offer a group health plan or an individual health plan. The Senate Amendment does not use the terms health maintenance organization, or bona fide association. Conference agreement The conference agreement defines a health insurance issuer as an insurance company, insurance service, or insurance organization, including an HMO, which is licensed to en- gage in the business of insurance in a state and which is subject to state law which regu- lates insurance within the meaning of sec- tion 514(b)(2) of ERISA. A group health plan is not a health insurance issuer. An HMO is: (a) a federally qualified HMO, (b) an organization recognized under state law as an HMO, or (c) a similar organization regulated under state law for solvency in the same manner and extent as an HMO. A bona fide association is an association which: (a) has been actively in existence for at least 5 years; (b) has been formed and maintained in good faith for purposes other than obtaining insurance; (c) does not condi- tion membership in the association on any health status-related factor; (d) makes health insurance coverage offered through the association available to any member, or individuals eligible for coverage through such member, regardless of any health sta- tus-related factor; (e) does not make health insurance coverage offered through the asso- ciation available other than in connection with a member of the association; and (f) meets additional requirements as may be im- posed under state law. B. GUARANTEED AVAILABILITY OF COVERAGE Current law No provision. House bill The House bill would require each insurer or HMO offering health insurance coverage in the small group market to accept every small employer in the state that applied for coverage and to accept for enrollment under such coverage every eligible individual who applied for enrollment during the initial en- rollment period in which the individual first became eligible for the group coverage. No restriction could be imposed on an eligible individual based on his or her health status. An eligible individual is determined in ac- cordance with the terms of the plan consist- ent with all applicable state laws. Senate amendment The Senate Amendment would require a health plan issuer offering a group health plan to accept the whole group desiring to purchase the coverage. A health plan issuer offering a group health plan could not condi- tion eligibility, continuation of eligibility, enrollment, or premium contribution re- quirements based on health status. (Health status is defined the same as under the House bill.) Conference agreement The conference agreement requires each health insurance issuer that offers health in- surance coverage in the small group market in a state to accept every small employer in CONGRESSIONAL RECORD \u2014 HOUSEH9522 July 31, 1996 the state that applies for coverage, and to accept for enrollment under such coverage every eligible individual who applies for en- rollment during the period in which the indi- vidual first became eligible to enroll under the terms of the group health plan. The health plan issuer may not impose restric- tions on any eligible individual being a par- ticipant or beneficiary based on his or her health status, or the health status of depend- ents. An eligible individual is determined in accordance with the terms of the plan, as provided by the health insurance issuer under the rules of the issuer which are uni- formly applicable in a state to small employ- ers in the small group market, and consist- ent with all applicable state laws governing the issuer and market. 1. Scope of requirement Current law No provision. House bill The House bill provides that the guaran- teed availability requirement apply to the small group market only. Small groups are those with 2 to 50 employees. Senate amendment The Senate Amendment provides that the guaranteed availability requirement apply to all health plan issuers and group health plans. Conference agreement The conference agreement provides that the guaranteed availability requirement ap- plies to the small group market only. Small groups are those with 2 to 50 employees on a typical business day. To assure access in the large group mar- ket, the conference agreement provides that the Secretary of HHS request that the chief executive officer of each state submit a re- port on the access of large employers to health insurance coverage and the cir- cumstances for lack of access to coverage, if any, of large employers, and classes of em- ployers. The Secretary shall request the re- ports not later than December 31, 2000 and every 3 years thereafter. Based on the state reports and other information, the Secretary would be required to prepare a report for Congress, every 3 years, describing the ac- cess to health insurance for large employers, and classes of employers in each state. The Secretary may include recommendations to assure access. In addition, the Comptroller General will submit to Congress not later than 18 months after the date of enactment of this act, a re- port on access of classes of large employers to health insurance coverage in the different states, and the circumstances for lack of ac- cess, if any. 2. Restrictions on preexisting condition limitation periods Current law No provision. House bill The House bill would provide for the same restrictions on the use of preexisting condi- tion limitations by each insurer and HMO that offers health insurance coverage in con- nection with a group health plan as those de- scribed in above item II (C). Senate amendment The Senate amendment would provide for the same restrictions on the use of preexist- ing condition limitations by health plan is- suers as described in above item II (C). Conference agreement The conference agreement provides us for the same restrictions on the use of preexist- ing condition limitations by each health in- surance issuer that offers group health insur- ance coverage as those described in above item II (C). 3. Exceptions to guaranteed availability Current law No provision. House bill The House bill would provide that an HMO or an insurer offering coverage in the small group market through a network plan could: (1) limit employers for such coverage to those with eligible individuals whose place of employment or residence was in the plan’s or HMO’s service area; (2) limit the individuals who might be enrolled to those whose place of residence or employment was within the service area; (3) within the service area, deny coverage if the plan or HMO demonstrated lack of capacity to deliver services ade- quately, but only if it was applying the ca- pacity limit to all employers without regard to the group’s claims experience or the health status of its participants and bene- ficiaries. Those denying coverage on the basis of capacity could not offer small groups coverage in the service area for 180 days. Similar exceptions would apply in the event of financial capacity limits. Senate amendment The Senate amendment would provide that a health plan issuer offering a group health plan could cease offering coverage to group purchasers if (1) the plan ceased to offer cov- erage to any additional group purchasers, and (2) the issuer could demonstrate to the applicable certifying authority that its fi- nancial or provider capacity would be im- paired if the issuer were required to offer coverage to additional group purchasers. Such an issuer would be prohibited from of- fering coverage for 6 months or until the is- suer could demonstrate that the capacity was adequate, whichever was later. An issuer would only be eligible for this exception if it offered coverage on a first-come-first-served basis or other basis established by a state to ensure a fair opportunity to enroll and avoid risk selection. Conference agreement The conference agreement provides that a health insurance issuer offering coverage in the small group market through a network plan could: (1) limit employers for such cov- erage to those with eligible individuals who live, work, or reside in the service area for the network plan; (2) within the service area, deny coverage to small employers if the is- suer has demonstrated, if required, to the ap- plicable state authority, the lack of capacity to deliver services adequately to additional groups, but only if it was applying the capac- ity limit to all employers uniformly without regard to claims experience or any health status-related factor. An issuer denying cov- erage on the basis of capacity could not offer coverage in the small group market in the service area for 180 days. A health insurance issuer may deny cov- erage in the small group market if the issuer has demonstrated, if required, to the applica- ble state authority, that it does not have the financial reserves necessary to underwrite additional coverage. The issuer would be re- quired to apply the financial capacity limit to all employers in the small group market in the state, consistent with applicable state law, and without regard to claims experience or health status-related factors. An issuer denying coverage on the basis of financial capacity could not offer coverage in the small group market in the service area for 180 days or until the issuer has dem- onstrated, if required, to the applicable state authority, that it has adequate capacity, whichever is later. A State may provide for determination of adequate capacity on a service-area-specific basis. It is the intent of the conferees that an issuer denying cov- erage on the basis of capacity limitations may demonstrate compliance if enrollment is provided on a first-come first-serve basis, or other state approved method. The conference agreement imposes require- ments for renewal and continuation on issu- ers offering health insurance plans to bona fide associations, but does not require these issuers to guarantee issue of the coverage of- fered to bona fide associations. The conferees do not intend the provision to mean that is- suers of coverage to an association have to offer a particular association plan to any other employer. Thus issuers offering cov- erage to associations are not required to guarantee issue the association’s plan to other small employers. Nondiscrimination rules would apply to these association plans, and no employee or dependent could be ex- cluded from coverage on the basis of any health status-related factor. The conference agreement provides excep- tions to the availability, renewability and portability requirements for group health plans and group health insurance coverage for certain benefits, sometimes under certain conditions. First, these requirements would not apply to provision of certain excepted benefits including: coverage only for acci- dent, or disability insurance, or any com- bination thereof; coverage issued as a supple- ment to liability insurance; liability insur- ance; workers’ compensation or similar in- surance; automobile medical payment insur- ance; credit-only insurance; coverage for on- site medical clinics; and, other similar cov- erage, as specified in regulations, under which benefits for medical care are second- ary or incidental to other insurance benefits. Second, if the following benefits are (a) provided under a separate policy, certificate, or contract or insurance, or (b) if the bene- fits are otherwise not an integral part of the plan, the requirements would not apply to: limited scope dental or vision benefits; bene- fits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or, similar limited benefits as specified in regulations. Third, if the following benefits: (a) are pro- vided under a separate policy, certificate, or contract of insurance; (b) there is no coordi- nation between the provision of these bene- fits and any exclusion of benefits under any group health plan maintained by the same plan sponsor; and (c) such benefits are paid with respect to an event without regard to whether benefits are provided for that event under any group health plan maintained by the same plan sponsor, the requirements would not apply to: coverage only for a spec- ified disease or illness, or hospital indemnity or other fixed indemnity insurance. Fourth, if the following benefits are pro- vided under a separate policy, certificate, or contract of insurance, the requirements would not apply to: Medicare supplemental health insurance; coverage supplemental to coverage provided under military health care; and, similar supplemental coverage provided to coverage under a group health plan. 4. Exceptions for failure to meet participation or contribution rules Current law No provision. House bill The House bill would provide that an ex- ception to the guaranteed availability re- quirement would apply in the case of any group health plan which failed to meet the participation or contribution rules of the in- surer or HMO. Such participation and con- tribution rules would have to be uniformly applicable and in accordance with state law. CONGRESSIONAL RECORD \u2014 HOUSE H9523July 31, 1996 Senate amendment No provision. Conference agreement The conference agreement provides that an exception to the guaranteed availability re- quirement would apply in the case of any group health plan which failed to meet the participation or contribution rules of the health insurance issuer. Such participation and contribution rules would have to be in accordance with state law. C. GUARANTEED RENEWABILITY Current law No provision. House bill The House bill would provide that regard- less of the size of the group, insurers and HMOs would be required to renew or con- tinue in force coverage at the option of the covered employer with certain exceptions. Senate amendment The Senate provision is similar but at the option of the group purchaser. Conference agreement The conference agreement provides that a health insurance issuer offering group health insurance coverage in the small or large group market would be required to renew or continue in force coverage at the option of the plan sponsor of the plan. 1. Exceptions to guaranteed renewability of group coverage Current law No provision. House bill The House bill would provide exceptions to the guaranteed renewability requirement for: nonpayment of premiums, fraud, viola- tion of participation and contribution rules, termination of the plan in a state or geo- graphic area, or the employer moved outside the service area (but only if this last provi- sion was applied uniformly without regard to health status). Exceptions to guaranteed re- newability would also apply in the event that the insurer or plan no longer offered a particular type of coverage but only if prior notice was provided, the employer was given the chance to buy another plan offered by the insurer or HMO, and the termination was applied uniformly without regard to health status or insurability. An exception would also apply in the event of discontinuance of all coverage, but only if certain conditions were met. In this instance, the insurer or HMO could not market small and\/or large group coverage for 5 years. Senate amendment The Senate Amendment is similar. It would include as exceptions to the guaran- teed renewability requirement the loss of eli- gibility of COBRA continuation coverage, and failure of a participant or beneficiary to meet requirements for eligibility for cov- erage under the group health plan that are not prohibited by this subtitle. A network plan could deny continued par- ticipation under the plan to participant or beneficiaries who did not live, reside, or work in an area in which the plan was of- fered, but only if the denial was applied uni- formly, without regard to health status or insurability. The provisions relating to discontinuation of a plan or of coverage in general are simi- lar to the House bill. Conference agreement The conference agreement provides excep- tions to the guaranteed renewability require- ment for one or more of the following: (1) nonpayment of premiums; (2) fraud; (3) viola- tion of participation or contribution rules; (4) termination of coverage in the market in accordance with applicable state law, as out- lined below; (5) for network plans, no enroll- ees connected to the plan live, reside, or work in the service area of the issuer, or area for which the issuer is authorized to do business, and, in the case of the small group market only if the issuer would deny enroll- ment to the plan under regulations govern- ing guaranteed availability of coverage; (6) for coverage made available to bona fide as- sociations, if membership in the association ceases, but only if coverage is terminated uniformly without regard to any health sta- tus-related factor relating to any covered in- dividual. Exceptions to guaranteed renewability would also apply if the issuer or plan no longer offered a particular type of group cov- erage in the small or large group market so long as the issuer, in accordance with appli- cable state law: (1) provided prior notice to each plan sponsor and participants and bene- ficiaries; (2) gave the plan sponsor the chance to purchase all (or, in the case of the large group market, any) other plans offered by the issuer in such market; and (3) applied the termination uniformly without regard to the claims experience of the sponsors or any health status-related factor to any partici- pants or beneficiaries covered or new partici- pants or beneficiaries who may become eligi- ble for such coverage. An exception would also apply in the event of discontinuance of all coverage, but only if certain conditions were met. In this in- stance, the issuer could not offer coverage in the market and state involved for 5 years. Issuers would be permitted to modify the health insurance coverage for a product of- fered to a group health plan in the large group market, and in the small group mar- ket if the modification was effective on a uniform basis among group health plans with that product. For example, the conferees intend that is- suers could uniformly modify the terms of treatment for particular conditions among group health plans within a type of coverage. An exception would apply to coverage avail- able in the small group market only through 1 or more bona fide associations. Issuers could modify a product offered to a group plan in the large group market. See section B(3) above for exceptions from availability, renewability, and portability requirements for certain benefits. D. DISCLOSURE OF INFORMATION BY HEALTH PLAN ISSUERS Current law Section 101 of ERISA requires covered plans to furnish summary plan descriptions and other information and notices to plan participants and the Secretary of Labor. Sec- tion 104 of ERISA requires covered plans to file certain information with the Secretary of Labor and to furnish certain information to plan participants. House bill The House bill does not include a provi- sion. Senate amendment The Senate Amendment would require that in connection with the offering of any group health plan to a small employer (defined under state law or, if not so defined, one with not more than 50 employees), that a health plan issuer make a reasonable disclo- sure as part of its solicitation and sales ma- terials of certain information, such as the provisions of the plan concerning the right of the issuer to change premium rates and the factors that could affect such changes, the provision of the plan relating to renewability and any preexisting condition provisions, and descriptive information about the plan’s benefits and premiums. The information would have to be understandable by the aver- age small employer and sufficiently accurate and comprehensive to reasonably inform em- ployers, participants, and beneficiaries of their rights and obligations under the plan. These requirements would not apply to pro- prietary and trade secret information under applicable law and do not preempt state re- porting and disclosure requirements. The Senate Amendment would amend sec- tion 104(b)(1) of ERISA relating to the sum- mary plan description to provide that if there is a modification or change described in the summary plan description that is a material reduction in covered services or benefits provided, a summary of such changes would have to be furnished to par- ticipants within 60 days after the date of its adoption. Alternatively, plans sponsors could provide such a description at regular inter- vals of not more than 90 days. The bill re- quires the Secretary of Labor to issue regu- lations providing alternative mechanisms to delivering by mail through which employee benefit plans may notify participants of ma- terial reductions in covered services. It fur- ther amends the summary plan description provisions of ERISA to require the inclusion of certain information. Conference agreement The conference agreement requires a health plan issuer offering any health insur- ance coverage to a small employer to make a reasonable disclosure of the availability of information as part of its solicitation and sales materials. At the small employer’s re- quest, the issuer must provide the provisions of the plan concerning the right of the issuer to change premium rates and the factors that could affect such changes, the provi- sions of the plan relating to renewability and any preexisting condition provisions, and the benefits and premiums under all health in- surance coverage for which the employer is qualified. The information would have to be understandable by the average small em- ployer and sufficient to reasonably inform small employers of their rights and obliga- tions under the health insurance coverage. These requirements would not apply to pro- prietary and trade secret information under applicable law. The conference agreement would amend section 104(b)(1) of ERISA relating to the summary plan description to provide that if there is a material reduction in covered serv- ices or benefits, a summary of such changes would have to be furnished to participants within 60 days after the date of its adoption. Alternatively, plan sponsors could provide a description at regular intervals of not more than 90 days. The conference agreement re- quires the Secretary of Labor to issue regu- lations within 180 days of enactment of this Act which would provide for alternative mechanisms, besides delivery by mail, through which employee benefit plans may notify participants of material reductions in covered services. It further amends the sum- mary plan description provisions of ERISA to require the inclusion of certain informa- tion. The conference agreement would amend section 101 of ERISA to permit the Sec- retary, in accordance with regulations pre- scribed by the Secretary, to require MEWAs that provide medical care benefits, but are not group health plans, to report, not more frequently than annually, in such form and manner as the Secretary may require to de- termine the extent to which the require- ments of this part are being carried out. E. STATE FLEXIBILITY Current law The McCarran Ferguson Act of 1945 (P.L. 79 15) exempts the business of insurance CONGRESSIONAL RECORD \u2014 HOUSEH9524 July 31, 1996 from federal antitrust regulation to the ex- tent that it is regulated by the states and in- dicates that no federal law should be inter- preted as overriding state insurance regula- tion unless it does so explicitly. Section 514 of ERISA leaves to the states the regulation of insurance. (Employee benefit plans are not insurance and are regulated by the fed- eral government.) House bill The House bill would provide that unless preempted by section 514 of ERISA, state laws would not be preempted that (1) related to matters not specifically addressed in sub- titles A and B, or (2) that required insurers or HMOs to: (a) impose a limitation or exclu- sion of benefits relating to the treatment of a preexisting condition for periods shorter than specified in the bill, (b) allowed persons to be considered to be in a period of previous qualifying coverage if they experienced a lapse in coverage greater than 60 days, or (c) had a look-back provision shorter than 6 months. Senate amendment The Senate Amendment does not include ”related to matters not specifically ad- dressed in subtitles A and B.” The Senate Amendment would provide that unless pre- empted by section 514 of ERISA, state laws would not be preempted that (1) required health plan issuers to impose a limitation or exclusion of benefits relating to the treat- ment of a preexisting condition for periods that are shorter than specified in the bill; (2) allowed individuals, participants, and bene- ficiaries to be considered in a period of pre- vious qualifying coverage if such person ex- perienced a lapse in coverage that was great- er than the 30-days provided under this bill; or (3) required issuers to have a lookback pe- riod shorter than provided for under this subtitle. Conference agreement The conference agreement provides that any provision of state law which establishes, implements, or continues in effect any standard or requirement solely relating to health insurance issuers in connection with health insurance coverage would not be su- perseded unless the state standard or re- quirement prevents the application of a fed- eral requirement of this part. Nothing in this part of the Act would affect or modify the provisions of section 514 of ERISA with re- spect to group health plans. The conferees intend the narrowest pre- emption. State laws which are broader than federal requirements would not prevent the application of federal requirements. For ex- ample, states may require guaranteed avail- ability of coverage for groups of more than 50 employees, or for groups of 1. The conference agreement provides special rules in the case of portability requirements. State laws applicable to a preexisting condi- tion exclusion which differ from the stand- ards or requirements specified in this part would be superseded except if they: (1) short- en the lookback period in determination of a preexisting condition limitation (from 6 months to any shorter period of time); (2) shorter the length of a preexisting condition limitation exclusion (from 12 months, or 18 months for late enrollees, to any shorter pe- riod); (3) lengthen the break in coverage time from 63 days to any greater number; (4) lengthen the time for enrollment of newborns, or certain children adopted or placed for adoption, from 30 days to any greater number; (5) prohibit the imposition of any preexisting condition exclusions in cases not described, or expand the exclusions described; (6) require additional special en- rollment periods; (7) reduce the maximum period permitted in an affiliation period. A group health plan or health insurance coverage is not required to provide specific benefits other than those provided under the terms of such plan or coverage. IV. INDIVIDUAL MARKET RULES Current law The individual health insurance market is currently regulated by the states. As of De- cember, 1995, 11 states required that individ- ual insurers write policies on a guaranteed issue basis; 16 states required guaranteed re- newal; and 22 states limited the use of pre- existing condition limitation periods. House bill The House bill would provide for federal re- quirements to guarantee availability of indi- vidual health insurance coverage to certain qualified individuals with prior group cov- erage, without limitation or exclusion of benefits, and to guarantee renewability of in- dividual health insurance coverage. Senate amendment Similar. Conference agreement The conference agreement provides for fed- eral requirements to guarantee availability of individual health insurance coverage to certain qualified individuals with prior group coverage, without limitation or exclu- sion of benefits, and to guarantee renewabil- ity of individual health insurance coverage. A. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH INSURANCE COVERAGE Current law No provision. House bill The House bill would include goals that any qualifying individual would be able to obtain qualifying coverage and that qualify- ing individuals would receive credit for prior coverage toward the new coverage’s preexist- ing condition exclusion period, if any. If states fail to implement programs meeting these goals, a federal fall back requirement would take effect requiring that each indi- vidual insurer enroll all eligible individuals and that such persons receive credit for their prior coverage toward any preexisting condi- tion limitation period. (See item IV(D) below on exceptions for network plans and HMOs.) The House bill would require that any pre- existing condition exclusion period be re- duced by the length of the aggregate period of qualified prior coverage. To determine qualified coverage, the plan could choose one of two alternatives: (1) it could disregard specific benefits covered and include all peri- ods of coverage from qualified sources; or (2) it could examine prior coverage on a benefit- specific basis, and exclude from qualified coverage any specific benefits not covered under the most recent prior plan. If the sec- ond method were chosen, plans would be re- quired to disclose this procedure at the time of enrollment or sale of the plan. Senate amendment The Senate Amendment would provide that all health plan issuers that issue or renew individual health plans must enroll all eligible individuals except if the insurer demonstrates that it would have financial problems, or, that its ability to service indi- viduals already enrolled in the plan would di- minish if new enrollees were allowed to join the plan. In these cases, the insurer would be prohibited from enrolling new individuals for a period of 6 months, or, if later, when the insurer could demonstrate that they could properly service new entrants. An insurer would have to enroll individuals on a first- come-first-served basis, or other basis deter- mined by the state, to be eligible for this limitation. States implementing guaranteed availability programs meeting certain re- quirements would be excepted from the fed- eral requirements. The Senate amendment would provide that a health plan issuer may not impose a limi- tation or exclusion of benefits on benefits that were covered under prior health plans. Conference agreement The conference agreement provides that each health insurance issuer that offers health insurance coverage in the individual market in a state may not decline to offer coverage to, or deny enrollment of an eligi- ble individual and may not impose any pre- existing condition exclusions with respect to such coverage. This requirement will not apply in States with acceptable alternative mechanisms as described in section IV(E) below. In addition, in States without an ac- ceptable alternative mechanism, a health in- surance issuer may limit the coverage of- fered as described in section IV(C). B. QUALIFYING\/ELIGIBLE INDIVIDUALS Current law No provision. House bill The House bill would provide that qualify- ing individuals are individuals: with 18 or more months of qualified coverage periods; with most recent prior coverage from a group health plan, governmental plan, or church plan; ineligible for group health cov- erage, Medicare Parts A or B, Medicaid, and without individual coverage; not terminated from most recent prior coverage for nonpay- ment of premiums or fraud; who, if eligible for continuation coverage under COBRA or similar state program, elected and exhausted this coverage; and who applied for individual coverage not more than 60 days after the last day of coverage under a group plan, or the termination date of COBRA benefits. Senate amendment Similar, but individual would have to apply for individual coverage not more than 30 days after the last day of coverage under a group plan. Conference agreement The conference agreement defines eligible individuals as individuals: with 18 or more months of aggregate creditable coverage; with most recent prior coverage from a group health plan, governmental plan, or church plan (or health insurance coverage of- fered in connection with any such plan); in- eligible for group health coverage, Medicare Parts A or B, Medicaid (or any successor pro- gram), and without any other health insur- ance coverage; not terminated from their most recent prior coverage for nonpayment of premiums or fraud; and who, if eligible for continuation coverage under COBRA or a similar state program, elected and exhausted this coverage. C. QUALIFYING COVERAGE Current law No provision. House bill The House bill would require coverage with an actuarial value of benefits not less than the weighted average actuarial value of the benefits provided by all the individual health insurance coverage (excluding coverage is- sued under this section) during the previous year, issued by: (1) the insurer or HMO in the state; or (2) all insurers and HMOs in the state. Requires that the actuarial value of benefits be calculated based on a standard- ized population and a set of standardized uti- lization and cost factors. Senate amendment No provision. Conference agreement The conference agreement requires individ- ual health insurance issuers to offer cov- erage to eligible individuals under all policy CONGRESSIONAL RECORD \u2014 HOUSE H9525July 31, 1996 forms with exceptions. First, a health insur- ance issuer may not offer coverage under all policy forms if the state is implementing an acceptable alternative mechanism (see sec- tion IV(E) below). If a state is not imple- menting an acceptable alternative mecha- nism, the health insurance issuer may elect to limit the policy forms offered to eligible individuals so long as it offers at least two different policy forms of health insurance coverage both of which are designed for, made generally available and actively mar- keted to, and enroll both eligible and other individuals by the issuer. In addition, the 2 policy forms must meet one of the following: (1) the 2 policy forms have the largest and next to the largest premium volume; or (2) the 2 policy forms are representative of indi- vidual health insurance coverage by the is- suer. An issuer must apply the election uni- formly to all eligible individuals in the state for that issuer, and the election will be effec- tive for policies offered for not less than 2 years. The 2 representative policy forms would in- clude a lower and higher-level of coverage, each of which has benefits substantially similar to other individual health insurance coverage offered by the issuer in the state. The lower-level policy form would have bene- fits with an actuarial value at least 85 per- cent, but not greater than 100 percent of a weighted average benefit. The higher-level policy form would have benefits with an ac- tuarial value: (1) at least 15 percent greater than the actuarial value of the lower-level policy form; and (2) between 100 and 120 per- cent of the weighted average benefit. Both products must include benefits substantially similar to other individual health insurance coverage offered by the issuer in the state. The weighted average may be either: (1) the average actuarial value of the benefits from individual coverage provided by the issuer; or (2) the average actuarial value of the ben- efits from individual coverage provided by all issuers in the state. The weighted average will be based on coverage provided during the previous year and exclude coverage of el- igible individuals. Actuarial values will be calculated based on a standardized popu- lation and a set of standardize utilization and cost factors. Network plans may limit coverage to those who live, reside, or work within the service area for the network plan. Within the service area for the plan, the issuer may deny cov- erage to individuals if the issuer has dem- onstrated, if required, to the applicable state authority that it will not have the capacity to deliver services adequately to additional individual enrollees. Denial must be made uniformly to individuals without regard to any health status-related factor and without regard to whether the individuals are eligi- ble individuals. Upon denial, the issuer may not offer coverage in the individual market within the service area for 180 days. Similar rules apply for financial capacity limits. D. GUARANTEED RENEWAL Current law No provision. House bill The House bill would require that individ- ual coverage is renewable at the option of the individual except for: nonpayment; fraud; termination of all individual coverage by the insurer or HMO, or termination of coverage in a geographic area in the case of network or HMO plan; movement of the indi- vidual outside the insurer’s service area; ter- mination of the particular type of coverage by the insurer or HMO, after the insurer has provided 90 day notice, offered the option to purchase any other coverage, and acted with- out regard to health status or insurability; discontinuation of all individual coverage by the insurer or HMO, after 180 days notice; uniform modification of all health plans within the individual’s type of coverage. Senate amendment The Senate Amendment would require that individual coverage is renewable at the op- tion of the individual except for: nonpay- ment; fraud; termination of the particular type of coverage by the insurer or HMO, which has provided 90 day notice, offered the option to purchase any other coverage, and acted without regard to health status or in- surability; termination of all individual cov- erage by the insurer or HMO, after 180 days notice, and prohibition against market re- entry for 5 years; change such that the indi- vidual lives or works outside the insurer’s service area but only if denial of coverage is applied uniformly without regard to the health status or insurability of the individ- ual. Conference agreement The conference agreement provides that a health insurance issuer that provides indi- vidual health insurance coverage to an indi- vidual must renew or continue in force such coverage at the option of the individual. It provides exceptions to the guaranteed renew- ability requirement for one or more of the following: (1) nonpayment of premiums or untimely payment; (2) fraud; (3) termination of coverage in the market (as outlined below) in accordance with applicable state law; (4) for network plans, the individual no longer lives, resides, or works in the service area of the issuer, or area for which the is- suer is authorized to do business but only if coverage is terminated uniformly without regard to any health status-related factor; (5) for coverage made available to bona fide associations, if membership in the associa- tion ceases, but only if the coverage is termi- nated uniformly without regard to any health status-related factor. An issuer may discontinue a particular type of coverage in the individual market only if the issuer: (1) provides prior notice to each covered individual; (2) offers each indi- vidual the option to purchase any other indi- vidual health insurance coverage offered by the issuer for individuals; and (3) acts uni- formly without regard to any health status- related factor of enrolled individuals or indi- viduals who may become eligible for such coverage. An issuer may elect to discontinue offering all health insurance coverage in the individual market in a state only if certain conditions are met. In this case, the issuer could not issue coverage in the market and state involved for 5 years. Issuers could mod- ify the health insurance coverage for a pol- icy form offered to individuals in the individ- ual market so long as the modification was consistent with state law and was effective on a uniform basis among all individuals with that policy form. In the case of health insurance coverage that is made available by a health insurance issuer in the individual market to individ- uals only through one or more associations, the issuer would be required to meet the Act’s requirements related to individuals. Health insurance issuers in the individual market must provide certifications of cov- erage in the same manner as health insur- ance issuers in the small group market. E. OPTIONAL STATE PROGRAMS\/STATE FLEXIBILITY 1. In general Current law No provision. House bill. The House bill would provide that a state may establish public or private mechanisms to meet the goals of guaranteed availability of coverage. The chief executive officer of the state must notify the Secretary of HHS if the state elects to use state mechanisms. Under a state mechanism, a state may define qualified coverage as coverage with benefits not less than the weighted average actuarial value of the benefits provided by all the indi- vidual health insurance coverage (excluding coverage issued under this section) during the previous year, issued by: the insurer or HMO in the state; or all insurers and HMOs in the state. The state may elect to establish qualified coverage for all insurers and HMOs in the state after it has established qualified coverage for each insurer or HMO. State mechanisms could include one or more, or a combination of: health insurance coverage pools or programs authorized or es- tablished by the state; mandatory group con- version policies; guaranteed issue of one or more plans; or open enrollment by one or more insurers or HMOs. This list is not ex- clusive. A state with a health insurance coverage pool or risk pool in effect on March 12, 1996, which offers qualified coverage, would auto- matically be considered to have met the Fed- eral access objectives. In general, states would have until July 1, 1997 to implement a state program. States without a regular legislative session between January 1, 1997 and June 30, 1997 would have a deadline of July 1, 1998. Senate amendment Similar. The Senate Amendment would provide that a state may adopt alternative public or private mechanisms to provide ac- cess to affordable health benefits for eligible individuals. The Governor of the state must notify the Secretary of Health and Human Services that the state has adopted an alter- native mechanism which achieves the goals of portability and renewability, and that the state intends to implement this mechanism. State mechanisms could include guaran- teed issue, open enrollment by one or more health plan issuers, high-risk pools, manda- tory conversion policies, or any combination of these mechanisms. A state high risk pool would meet the portability and renewability requirements if it is: (a) open to eligible indi- viduals; (b) limits preexisting condition waiting periods; and (c) is consistent with premium rates and covered benefits in the National Association of Insurance Commis- sioners (NAIC) Model Health Plan for Unin- surable Individuals Act. States which adopt a NAIC model act, including group to indi- vidual market portability provisions that meet the Federal portability and renewabil- ity goals, would not be subject to federal rules. A state may notify the Secretary, within 6 months after enactment of this Act, that state alternate mechanism(s) would meet portability and renewability goals. The Sec- retary would not determine if the state mechanism meets the goals until 12 months after the initial state notification, or Janu- ary 1, 1998, whichever is later. The Secretary would not make a determination until Janu- ary 1, 1999 for states without legislative ses- sions within the 12 months after enactment of this Act. Conference agreement The conference agreement provides that a state may implement an acceptable alter- native mechanism that is designed to pro- vide access to health benefits for individuals. This mechanism must: (1) provide a choice of health insurance coverage to all eligible in- dividuals; (2) not impose any preexisting con- dition exclusions; and (3) include at least one policy form of coverage that is comparable to either comprehensive health insurance coverage offered in the individual market in CONGRESSIONAL RECORD \u2014 HOUSEH9526 July 31, 1996 the state or a standard option of coverage available under the group or individual health insurance laws in the state. If a state elects to implement the following mecha- nisms, the state must also meet the preced- ing requirements. These mechanisms are: (1) the NAIC Small Employer and Individual Health Insurance Availability Model Act (as it applies to individual health insurance cov- erage) or the Individual Health Insurance Portability Model Act; (2) a qualified high risk pool that meets certain specified re- quirements; or (3) other mechanisms that provide for risk adjustment, risk spreading, or a risk spreading mechanism (by an issuer or among issuers or policies of an issuer), or otherwise provide some financial subsidies for participating insurers or eligible individ- uals, or, alternatively, a mechanism under which each eligible individual is provided a choice of all individual health insurance cov- erage otherwise available. Examples of potential alternative mecha- nisms include health insurance coverage pools or programs, mandatory group conver- sion policies, guaranteed issue of one or more plans of individual health insurance coverage, or open enrollment by one or more health insurance issuers, or a combination of such mechanisms. A state is presumed to be implementing an acceptable alternative mechanism as of Jan- uary 1, 1998, by not later than July 1, 1997, the chief executive officer of the state noti- fies the Secretary that the state has enacted any necessary legislation as of January 1, 1998 and provides the Secretary with infor- mation needed to review the mechanism and its implementation, or proposed implemen- tation. The state must provide this informa- tion to the Secretary every 3 years to con- tinue to be presumed to have an acceptable alternative mechanism. If a state submits notice and information after July 1, 1997, and the Secretary makes no determination with- in 90 days, the mechanism will be considered acceptable after 90 days. F. CONSTRUCTION\/PREEMPTION Current law No provision. House bill The House bill would provide that states are not prevented from: (1) implementing guaranteed availability mechanisms before the deadline; (2) continuing state mecha- nisms that were in effect before the enact- ment of this act; (3) offering guaranteed availability of coverage that is not qualify- ing coverage; or (4) offering guaranteed availability of coverage to individuals who are not qualifying individuals Senate amendment The Senate Amendment would provide that states are not required to replace or dis- solve high risk pools or other similar state mechanisms which are designed to provide individuals in those states with access to health benefits. Conference agreement The conference agreement provides that nothing in this part would prevent a state from establishing, implementing, or continu- ing in effect standards and requirements un- less they prevent the application of a re- quirement in this part. Nothing in this part would affect or modify the provisions of sec- tion 514 of ERISA. G. FEDERAL RULES (FALLBACK OR IN ABSENCE OF STATE ALTERNATIVE) Current law No provision. House bill The House bill would provide that the Sec- retary of HHS notify a state that federal rules would apply if: (1) the state has not elected to use a state mechanism; or (2) if the Secretary finds, after consultation with state officials, that the state mechanism would not meet the federal availability goals, and the state has had reasonable op- portunity to change or implement a state mechanism to meet the goals. Federal rules would provide that each in- surer or HMO which issues individual health insurance coverage in the state would have to offer qualifying coverage to qualifying in- dividuals, and credit prior coverage toward any preexisting condition exclusion periods. In addition, no individual could be refused coverage based on health status. Network plans or HMOs could refuse coverage to indi- viduals who did not reside or work in the plan’s service area, or if network or financial capacity limits would be exceeded. Federal rules would cease to apply if the state imple- ments a mechanism designed to meet the federal goals of availability. Senate amendment The Senate Amendment would provide that federal standards would apply if the state does not notify the Secretary of HHS of its intent to implement state mechanisms, or if the Secretary finds that the state mech- anism fails to: (1) offer coverage to eligible individuals; (2) prohibit preexisting condi- tion limitations or exclusions for benefits covered under previous health plans; (3) offer eligible individuals a choice of individual health plans, including at least one com- prehensive plan, or a plan comparable to a standard option plan available under the group or individual health insurance laws of the state; or (4) implement a risk spreading mechanism, cross subsidy mechanism, risk adjustment mechanism, rating limitation or other mechanism designed to reduce the var- iation in costs of coverage for eligible indi- viduals and other plans offered by the carrier or available in the state. The bill would waive the requirement for a risk spreading mechanism if all individual health plans available in the market are also available to eligible individuals. It would provide that if the Secretary de- termines that the state alternative mecha- nism fails to meet the above criteria, or if the state mechanism is no longer being im- plemented, the Secretary would have to no- tify the Governor of the failure to meet the goals of portability and renewability, and permit the state to come into compliance. Federal individual health plan portability rules would apply if the state still does not meet these criteria. Under these rules, a plan issuer could not, with respect to an eligible individual, decline to offer coverage to or deny enrollment of the individual or impose a limitation or exclusion of benefits, other- wise available under the plan, for which cov- erage was available under the group health plan or employee health benefit plan in which the person was previously enrolled. (This would not prevent a health plan issuer from establishing premium discounts or modifying otherwise applicable copayments or deductibles in return for adherence to pro- grams of health promotion or disease preven- tion.) Future adoptions of a state mechanism would be subject to the same procedures of: (1) notification of the Secretary; and (2) de- termination of satisfaction of criteria for compliance, except in the cases of adoption of the NAIC model or high risk pool. Conference agreement The conference agreement provides that if the Secretary finds that the state mecha- nism is not acceptable or is no longer being implemented, the Secretary must notify the state of the preliminary determination and consequences of failure to implement an ac- ceptable mechanism. The state will have a reasonable opportunity to modify the mecha- nism, or adopt a new mechanism. If the Sec- retary finds that the state mechanism is not acceptable, or is not being implemented, the Secretary must notify the state of the effec- tive date of federal requirements for guaran- teed availability. Each issuer would then be required to guarantee issue health insurance coverage to any individual, but could limit coverage to 2 policy forms as outlined in sec- tion IV(C) above. Secretarial authority would be limited to determinations based only on whether a state mechanism is not an acceptable alternative mechanism or is not being implemented. It is the intent of Con- gress that the risk adjustment, risk spread- ing, risk spreading mechanism and financial subsidization standards provide meaningful financial protection and assistance for eligi- ble individuals, both in the case of a state al- ternative system and alternative coverage provided under section 2741(c). H. CONSTRUCTION (PREMIUMS, MARKET RE- QUIREMENTS, ASSOCIATION COVERAGE AND MARKETING) Current law No provision. House bill The House bill would provide that insurers or HMOs are free to determine the premiums for individual health insurance coverage under applicable state law. Insurers or HMOs which only insure groups or associations would not be required to offer individual health insurance coverage. Insurers or HMOs that offer conversion policies in connection with a group health plan would not be re- quired to offer individual coverage. Insurers or HMOs that offer coverage only in connec- tion with a group health plan or in connec- tion with individuals based on affiliation with one or more bona fide associations would not be considered to be offering indi- vidual coverage. A state could require that insurers or HMOs offering individual coverage actively market this coverage. Senate bill The Senate Amendment is similar but did not include a provision relating to associa- tions. Conference agreement Premiums that an issuer may charge an in- dividual for individual health insurance cov- erage are not restricted by the conference agreement, but must comply with state law. The health insurance issuer may establish premium discounts or rebates, or modify otherwise applicable copayments or deductibles in return for adherence to pro- grams of health promotion and disease pre- vention. Under the conference agreement, health in- surance issuers offering health insurance coverage in connection with group health plans, or through one or more bona fide asso- ciations, or both, are not required to offer health insurance coverage in the individual market. A health insurance issuer offering group health coverage is not considered to be a health insurance issuer offering individual health insurance coverage solely because the issuer offers a conversion policy. I. ENFORCEMENT OF REQUIREMENTS ON INDIVID- UAL INSURERS, HMO’S, AND HEALTH PLAN IS- SUERS Current law Under section 502 of ERISA, employee ben- efit plans that fail to comply with applicable requirements can be sued for relief and be subject to civil money penalties, and can be sued to recover any benefits due under the plan. Section 504 of ERISA provides the Sec- retary of Labor with investigative authority CONGRESSIONAL RECORD \u2014 HOUSE H9527July 31, 1996 to determine whether any person is out of compliance with the law’s requirements. Section 506 provides for coordination and re- sponsibility of agencies in enforcement. Sec- tion 510 prohibits a health plan from dis- criminating against a participant or bene- ficiary for exercising any right under the plan. House bill Noncomplying insurers and HMOs would be subject to enforcement through federal civil money penalties (in the same manner as im- posed above (see item II(G)) but only in the event that the Secretary of HHS has deter- mined that the state in which the insurer or HMO is selling coverage is not providing for enforcement. Senate amendment Noncomplying individual health plans of- fered by a health plan issuer would be sub- ject to state enforcement. Each state would require each individual health plan issued, sold, renewed, or offered for sale or operated in the state by a health plan issuer to meet the Act’s standards pursuant to an enforce- ment plan filed with the Secretary of Labor. The state would be required to submit such information as required by the Secretary demonstrating effective implementation of the enforcement plan. In the event that the state failed to substantially enforce the Act’s standards and requirements, the Sec- retary of Labor, in consultation with the Secretary of HHS, would implement an en- forcement plan. Issuers would then be sub- ject to civil enforcement as provided under sections 502, 504, 506 and 510 of ERISA. The Secretary of Labor could issue such regula- tions as needed to carry out this Act. Conference agreement Each state may require health insurance issuers that issue, sell, renew, or offer health insurance coverage in the individual market to meet the requirements under this part with respect to such issuers. If a state fails to substantially enforce the federal require- ments, the Secretary will provide enforce- ment in the same manner as in the small group market (see section II(G) above). V. MULTIPLE EMPLOYER POOLING ARRANGEMENTS A. CLARIFICATION OF DUTY OF THE SECRETARY OF LABOR TO IMPLEMENT CURRENT LAW PRO- VIDING FOR EXEMPTIONS FROM STATE REGU- LATION OF MULTIPLE EMPLOYER HEALTH PLANS (MEHPS) Current law Section 3(40) of ERISA defines a multiple employer welfare benefit plan, or any other arrangement which offers or provides health benefits and meets additional criteria, (e.g., it must offer such benefits to the employees or 2 or more employers and cannot be a plan established under a collective bargaining agreement, a rural electric cooperative, or rural telephone cooperative association). Two or more trades or businesses, whether or not incorporated, are deemed a single em- ployer and thus not a MEWA if such trades or businesses are within the same control group. Section 514 of ERISA treats fully-insured MEWAs differently from those that are not fully-insured (i.e., that are partly or fully-in- sured). With respect to a fully-insured MEWA, a state may apply and enforce its in- surance laws (section 514(b)(6)(A)(i)). With respect to a not-fully-insured MEWA, a state may apply and enforce its insurance laws so long as such laws or regulations are not in- consistent with ERISA (section 514(b)(6)(A)(ii). Section 514(b)(6)(B) provides that the Department of Labor (DOL) may issue an exemption from state law with re- spect to non-fully-insured MEWAs. (No such exemptions have been issued.) House bill The House bill would add a new Part 7 (Rules Governing State Regulation of Mul- tiple Employer Health Plans) to Title I of ERISA. It would define the following terms: in- surer, fully-insured, HMO, participating em- ployer, sponsor, and state insurance comis- sioner. The House bill would define a mul- tiple employer health plan as a MEWA which provides medical care and which is or has been exempt under section 514(b)(6)(B) of ERISA. The bill clarifies the conditions under which multiple employer health plans (MEHPs)\u2014non-fully-insured multiple em- ployer arrangements providing medical care\u2014may apply for an exemption from cer- tain state laws. In provides that only certain legitimate association health plans and other arrangements (described below) which are not fully insured are eligible for an ex- emption. This is accomplished by clarifying the duty of the Secretary of Labor to imple- ment the provisions of current law section 514(b)(6)(B) to provide exemption from state law for MEHPS. The bill would establish criteria which a not fully-insured arrangement must meet to qualify for an exemption and thus become a MEHP. The Secretary could grant an exemp- tion to an arrangement only if: (1) a com- plete application has been filed, accompanied by the filing fee of $5,000; (2) the application demonstrates compliance with requirements established in new sections 703 and 704 de- scribed below; (3) the Secretary finds that the exemption is administratively feasible, not adverse to the interests of the individ- uals covered under it, and protective of the rights and benefits of the individuals covered under the arrangement, and (4) all other terms of the exemption are met (including fi- nancial, actuarial, reporting, participation, and such other requirements as may be spec- ified as a condition of the exemption). The application must include: (1) identifying in- formation about the arrangement and the states in which it will operate; (2) evidence that ERISA’s bonding requirements will be met; (3) copies of all plan documents and agreements with service providers; (4) a funding report indicating that the reserve re- quirements of new section 705 will be met, that contribution rates will be adequate to cover obligations, and that a qualified actu- ary (a member in good standing of the Amer- ican Academy of Actuaries or an actuary meeting such other standards the Secretary considers adequate) has issued an opinion with respect to the arrangement’s assets, li- abilities, and projected costs; and (5) any other information prescribed by the Sec- retary. Exempt arrangements must notify the Secretary of any material changes in this information at any time, must file an- nual reports with the Secretary, and must engage a qualified actuary. In addition, the bill would provide for a class exemption from section 514(b)(6)(B)(ii) of ERISA for large MEHPs that have been in operation for at least five years on the date of enactment. An arrangement would qualify for this class exemption if, in addition to all other requirements: (1) at the time of appli- cation for exemption; the arrangement cov- ers at least 1,000 participants and bene- ficiaries, or has at least 2,000 employees of eligible participating employers ; (2) a com- plete application has been filed and is pend- ing; and (3) the application meets require- ments established by the Secretary with re- spect to class exemptions. Class exemptions would be treated as having been granted with respect to the arrangement unless the Secretary provide appropriate notice that the exemption has been denied. 1. Requirements relating to MEHP sponsors, board of trustees, plan operations, and cov- ered persons The House bill would establish eligibility requirements for MEHPs. Applications must comply with requirements established by the Secretary. They must demonstrate that the arrangement’s sponsor has been in existence for a continuous period of at least 5 years and is organized and maintained in good faith, with a constitution and by laws spe- cifically starting its purpose and providing for at least annual meetings, as a trade asso- ciation, an industry association, a profes- sional association, or a chamber of com- merce (or similar business group, including a corporation or similar organization that op- erates on a cooperative basis within the meaning of section 1381 of the IRC) for pur- poses other than that of obtaining or provid- ing medical care. Also, the applicant must demonstrate that the sponsor is established as a permanent entity, has the active sup- port of its members, and collects dues from its members without conditioning such on the basis of the health status or claims expe- rience of plan participants or beneficiaries or on the basis of the member’s participation in the MEHP. The bill would require that the arrange- ment be operated, pursuant to a trust agree- ment, by a ”board of trustees” which has complete fiscal control and which is respon- sible for all operations of the arrangement. The board of trustees must develop rules of operation and financial control based on a three-year plan of operation which is ade- quate to carry out the terms of the arrange- ment and to meet all applicable require- ments of the exemption and Title I of ERISA. With respect to covered persons, the bill would require that all employers who are as- sociation members be eligible for participa- tion under the terms of the plan. Eligible in- dividuals of such participating employers cannot be excluded from enrolling in the plan because of health status (as required under section 103 of the Act as described in item I-(B) above). The rules also stipulate that premium rates established under the plan with respect to any particular partici- pating employer cannot be based on the claims experience of the particular em- ployer. 2. Additional entities eligible to be MEHPs In addition to the associations described above, certain other entities would be pro- vided eligibility to seek an exemption as MEHPs under section 514(b)(6)(B). These in- clude (1) franchise networks (section 703(b)), (2) certain existing collectively bargained ar- rangements which fail to meet the statutory exemption criteria (section 703(c)), and (3) certain arrangements not meeting the statu- tory exemption criteria for single employer plans (section 703(d)). (Section 709 of ERISA, added by section 166 of this subtitle, also makes eligible certain church plans electing to seek an exemption.) 3. Other requirements for exemption The House bill would require a MEHP to meet the following additional requirements: (1) its governing instruments must provide that the board of trustees serves as the named fiduciary and plan administrator, that the sponsor serves as plan sponsor, and that the reserve requirements of new section 705 are met; (2) the contribution rates must be adequate, and (3) any other requirements set out in regulations by the Secretary of Labor must be met. 4. Maintenance of reserves The House bill would require that MEHPs establish and maintain reserves sufficient for unearned contributions, benefit liabil- ities incurred but not yet satisfied, and for CONGRESSIONAL RECORD \u2014 HOUSEH9528 July 31, 1996 which risk of loss has not been transferred, expected administrative costs, and any other obligations and margin for error rec- ommended by the qualified actuary. The minimum reserves must be no less than 25% of expected incurred claims and expenses for the year or $400,000, whichever is greater. The Secretary may provide additional re- quirements relating to reserves and excess\/ stop loss coverage and may provide adjust- ments to the levels of reserves otherwise re- quired to take into account excess\/stop loss coverage or other financial arrangements. The bill provides for an alternative means of compliance in which the Secretary could permit an arrangement to substitute, for all or part of the requirements of this section, such security, guarantee, hold-harmless ar- rangement, or other financial arrangement as the Secretary of Labor determined to be adequate to enable the arrangement to fully meet its financial obligations on a timely basis. 5. Notice requirements for voluntary termination The House bill would provide that, except as permitted in new section 707 below, a MEHP may terminate only if the board of trustees provides 60 days advance written no- tice to participants and beneficiaries and submits to the Secretary a plan providing for timely payment of all benefit obligations. 6. Corrective actions and mandatory termination The House bill would require a MEHP to continue to meet the reserve requirements even if its exemption is no longer in effect. The board of trustees must quarterly deter- mine whether the reserve requirements of new section 705 (as described above) are being met and, if they are not, must, in con- sultation with the qualified actuary, develop a plan to ensure compliance and report such information to the Secretary. In any case where a MEHP notifies the Secretary that it has failed to meet the reserve requirements and corrective action has not restored com- pliance, and the Secretary of Labor deter- mines that the failure will result in a con- tinuing failure to pay benefit obligations, the Secretary may direct the board to termi- nate the arrangement and take action need- ed to ensure that the arrangement’s affairs are resolved in a manner which will result in timely provision of all benefits for which the arrangement is obligated. 7. Temporary application of state laws a. Provides for exclusion of arrangements from the small group market in any state upon the state’s certification of guaranteed access to health insurance coverage in such state (i.e, state opt-out). Provides that a state which certifies to the Secretary that it provides guaranteed access to health cov- erage may deny a MEHP the right to offer coverage in the small group market (or oth- erwise regulate such MEHP with respect to such coverage), except as described below. The certification triggering the state opt-out could be in effect no longer than 3 years. A state is considered to provide such guar- anteed access, if (1) the state certifies that at least 90% of all state residents are covered by a group health plan or otherwise have health insurance coverage, or (2) the state has, in the small group market, provided for guaranteed issue of at least one standard benefits package and for rating reforms de- signed to make health insurance coverage more affordable. In states without such guar- anteed access, MEHPs could offer coverage in the small group market in the state as long as they met the standards set forth in Part 7 (as established by this subtitle). b. Provides for exceptions to the exclusion of MEHPs from state small group markets. Provides a limited exception to the state opt out for certain large, multi-state arrange- ments. The State opt out would not apply to new and existing MEHPs that meet the fol- lowing criteria: (1) the sponsor operates in a majority of the 50 states and in at least 2 of the regions of the country; (2) the arrange- ment covers or will cover at least 7,500 par- ticipants and beneficiaries; and (30 at the time the application to become a MEHP is filed, the arrangement does not have pending against it any enforcement action by the state. In addition, the state opt out would not apply in a state in which an arrangement meeting the MEHP standards operates on March 6, 1996, to the extent a state enforce- ment action is not pending against such an entity at the time an application for an ex- emption is made. The above two exceptions do not apply to any state which, as of January 1, 1996, either (1) has enacted a law providing for guaran- teed issue of fully community rated individ- ual health insurance coverage offered by in- surers and HMOs, or (2) requires insurers of- fering group health coverage to reimburse insurers offering individual coverage for losses resulting from their offering individ- ual coverage on an open enrollment basis. Regulations may also provide for an exemp- tion to the application of state law for cer- tain single industry plans. c. Premium tax assessment authority with respect to new arrangements. Provides that a state could assess new association-based MEHPs (formed after March 6, 1996) non- discriminatory state premium taxes set at a rate no greater than that applicable to any insurer or health maintenance organization offering health insurance coverage in the state. MEHPs existing as of March 6, 1996 would remain exempt from state premium taxes. However, if they expanded into a new state, the state could apply the above rule. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. VI. STATE AUTHORITY OVER NON-EXEMPT MEWAS Current law Under section 514(6)(A) of ERISA, a state may apply and enforce state insurance laws with respect to a MEWA so long as the law or regulation is not inconsistent with ERISA. House bill The House bill would provide that states have the authority under ERISA to regulate without limitation non-fully-insured MEWAs which are not provided an exemption under new Part 7 of ERISA (see item V above). In other words, states can continue to regulate MEWAs that are not MEHPs. Senate amendment No provision. Conference agreement the conference agreement does not include the House provision. VII. ADDITIONAL MEWA AND RELATED PROVISIONS A. CLARIFICATION OF TREATMENT OF SINGLE- EMPLOYER ARRANGEMENTS Current law Section 3(40) of ERISA defines a MEWA and specifies the conditions under which two or more trades or businesses shall be deemed a single employer, if such trades or busi- nesses are within the same control group. Common control could not be based on an in- terest of less than 25%. House bill The House bill would modify the treatment of certain single employer arrangements under section 3(40) of ERISA. The treatment of a single employer plan as being excluded from the definition of a MEWA (and thus from state law) is clarified by defining the minimum interest required for two or more entities to be in ”common control” as a per- centage which cannot be required to be greater than 25%. Also a plan would be con- sidered a single employer plan if less than 25% of the covered employees are employed by other participating employers. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. B. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY-BARGAINED ARRANGEMENTS Current law Under section 3(40) of ERISA, a MEWA is defined not to include any plan or arrange- ment which is established or maintained under or pursuant to one or more agree- ments which the Secretary finds to be collec- tive bargaining agreements, or by a rural electric cooperative. (No such Secretarial finding has ever been issued). House bill The House bill would establish the condi- tions under which multiemployer and other collectively-bargained arrangements are ex- empted from the MEWA definition, and thus exempt from state law. Amends the defini- tion of a MEWA to exclude a plan or arrange- ment which is established or maintained under or pursuant to a collective bargaining arrangement (as described in the National Labor Relations Act, the Railway Labor Act, and similar state public employee relations laws). It then specifies additional conditions which must be met for such a plan to be a statutorily excluded collectively bargained arrangement and thus not a MEWA. These conditions include: (1) The plan can- not utilize the services of any licensed insur- ance agent or broker to solicit or enroll em- ployers or pay a commission or other form of compensation to certain persons that is re- lated to the volume or number of employers or individuals solicited or enrolled in the plan; (2) a maximum 15 percent rule applies to the number of covered individuals in the plan who are not employees (or their bene- ficiaries) within a bargaining unit covered by any of the collective bargaining agree- ments with a participating employer or who are not present or former employees (or their beneficiaries) of sponsoring employee organi- zations or employers who are or were a party to any of the collective bargaining agree- ments (provides for a higher maximum in the case of certain plans or arrangements in ex- istence as of the date of enactment); and (3) the employee organization or other entity sponsoring the plan or arrangement must certify annually to the Secretary the plan has met the previous requirements. If the plan or arrangement is not fully in- sured, it must be a multiemployer plan meeting specific requirements of the Labor Management Relations Act (i.e., the require- ment for joint labor-management trustee- ship under section 302(c)(5)(B)). If the plan or arrangement is not in effect as of the date of enactment, the employee or- ganization or other entity sponsoring the plan or arrangement must have existed for at least 3 years or have been affiliated with another employee organization in existence for at least 3 years, or demonstrates to the Secretary that certain of the above require- ments have been met. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. CONGRESSIONAL RECORD \u2014 HOUSE H9529July 31, 1996 C. TREATMENT OF CHURCH PLANS Current law Section 4(b)(2) of ERISA exempts from its requirements church plans that do not elect to participate in qualified pension plans under the IRC. House bill The House bill would add a new section 709 to ERISA treating certain church plans (in- cluding a church, convention or association of churches or similar organization) as a MEWA and permitting such plans to volun- tarily elect to apply to the Department of Labor for an exemption from state laws that would otherwise apply to a MEWA under sec- tion 514(b)(6)(B) and in accordance with new ERISA Part 7. An exempted church plan would, with certain exceptions, have to com- ply with the provisions of ERISA Title I in order to receive an exception from state law. The election to be covered by ERISA would be irrevocable. A church plan is covered under this section if the plan provides bene- fits which include medical care and some or all of the benefits are not fully insured. (Cer- tain provisions of ERISA, such as its COBRA continuation coverage requirements, would not apply to the church plans described here- in.) Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. D. ENFORCEMENT PROVISIONS RELATING MEWAs Current law MEWAs are subject to ERISA’s enforce- ment and other provisions of title I. House bill The House bill would amend ERISA to es- tablish enforcement provisions relating to the multiple employer elements of the bill: (1) a civil penalty would apply for failure of MEWAs to file registration statements; (2) state enforcement would be authorized through Federal courts with respect to viola- tions by multiple employer health plans, subject to the existence of enforcement agreements between the states and the fed- eral government; (3) willful misrepresenta- tion that an entity is an exempted MEWA or collectively-bargained arrangement could re- sult in criminal penalties; (4) cease activity orders could be issued for arrangements found to be neither licensed, registered, or otherwise approved under State insurance law, or operating in accordance with the terms of an exemption granted by the Sec- retary under new part 7; and (5) provides that each MEHP require its fiduciary or board of trustees to comply with the required claims procedure under ERISA. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. E. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES Current law Section 506 of ERISA provides for coordi- nation between the Department of Labor and other federal agencies in the enforcement of ERISA. The Secretary is authorized to use the facilities or services of the states, with the consent of the affected departments, agencies, or establishments in enforcing ERISA. House bill The House bill would amend section 506 of ERISA to specify State responsibility with respect to self-insured MEHPs and voluntary health insurance associations (VHIAs). A State could enter into an agreement with the Secretary for delegation to the State of some or all of the Secretary’s authority to enforce provisions of ERISA applicable to ex- empted MEHPs or to VHIAs. The Secretary would be required to enter into the agree- ment if the Secretary determined that dele- gation to the State would not result in a lower level or quality of enforcement. How- ever, if the Secretary delegated authority to a State, the Secretary could continue to ex- ercise such authority concurrently with the State. The Secretary would be required to provide enforcement assistance to the States with respect to MEWAs. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. F. FILING AND DISCLOSURE REQUIREMENTS FOR MEWAs OFFERING HEALTH BENEFITS Current law ERISA provides for certain reporting and disclosure requirements. House bill The reporting and disclosure requirements of ERISA would be amended to require MEWAs offering health benefits to file with the Secretary a registration statement with- in 60 days before beginning operations (for those starting on or after January 1, 1997) and no later than February 15 of each year. In addition, MEWAs providing medical care would be required to issue to participating employers certain information including summary plan descriptions, contribution rates, and the status of the arrangement (whether fully-insured or an exempted self- insured plan). Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. G. SINGLE ANNUAL FILING FOR ALL PARTICIPATING EMPLOYERS Current law Section 110 of ERISA provides for alter- native methods of compliance with reporting and disclosure requirements to those speci- fied in previous sections of the law. House bill This section would amend ERISA’s section 110 to provide for a single annual filing for all participating employers of fully insured MEWAs. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. H. EFFECTIVE DATES\/TRANSITION RULES Current law No provision. House bill The House bill would provide that in gen- eral, the amendments made by this title would be effective January 1, 1998. In addi- tion, the Secretary would be required to issue all regulations needed to carry out the amendments before January 1, 1998. The bill would provide for transition rules for self-insured MEWAs which meet the re- quirements of Part 7 and which are in oper- ation as of the effective date so that those applying to the Secretary for an exemption from State regulation are deemed to be ex- cluded for a period not to exceed 18 months unless the Secretary denies the exemption or finds the MEWAs application deficient, pro- vided that the arrangement does not have pending against it an enforcement action by a state. The Secretary could revoke the ex- emption at any time if it would be detrimen- tal to the interests of individuals covered under the Act. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. VIII. VOLUNTARY HEALTH INSURANCE ASSO- CIATIONS\/HEALTH PLAN PURCHASING CO- OPERATIVES (HPPCS) Current law While the states regulate insurance sold to purchasing cooperatives, a purchasing coop- erative that is also a MEWA is also regulated under ERISA. Under ERISA, a state may apply and enforce its insurance laws with re- spect to fully-insured MEWAs. As of December 1995, 15 states had enacted laws relating to voluntary purchasing alli- ances\/cooperatives. House bill The House bill would add a new subsection (d) to section 514 of ERISA defining under ERISA voluntary health insurance associa- tions and establishing federal requirements for such associations. Associations meeting these requirements would be exempt from specific state laws. Senate amendment The Senate Amendment would provide for limited exemptions from state laws for health insurance purchasing cooperatives that meet the requirements established by this section. Conference agreement The conference agreement does not include the House or Senate provision. A. DEFINITIONS\/NATURE OF ORGANIZATION Current law No provision. House bill The House bill would define a voluntary health insurance association as a multiple employer welfare arrangement, maintained by a qualified association, under which all medical benefits are fully-insured, under which no employer is excluded as a partici- pating employer (subject to minimum par- ticipation requirements of an insurer), under which the enrollment requirements of sec- tion 103 of the Act apply (see item II above), under which all health insurance coverage options are aggressively marketed, and under which the health insurance coverage is provided by an insurer or HMO to which the laws of the state in which it operates apply. A qualified association would be an asso- ciation in which the sponsor of the associa- tion is, and has been (together with its im- mediate predecessor, if any) for a continuous period of not less than 5 years, organized and maintained in good faith, with a constitu- tion and bylaws specifically stating its pur- pose, as a trade association, an industry as- sociation, a professional association, or a chamber of commerce (or similar business group), for substantial purposes other than that of obtaining or providing medical care, is established as a permanent entity which receives the active support of its members and meets at least annually, and collects dues without conditioning such dues on the basis of the health status or claims experi- ence of plan participants or beneficiaries or on the basis of participation in a VHIA. A ”small employer” would be defined as one who employs at least 2 but fewer than 51 employees on a typical business day in the year. CONGRESSIONAL RECORD \u2014 HOUSEH9530 July 31, 1996 Senate amendment The Senate Amendment would define a ”health plan purchasing cooperative” or HPPC to mean a group of employees or a group of individuals and employers that, on a voluntary basis and in accordance with this section, form a cooperative for the pur- pose of purchasing an individual health plan or group health plans offered by health plan issuers. An HPPC could not: (a) perform any activ- ity relating to the licensing of health plan issuers; (b) assume financial risk directly or indirectly (that is, it would have to be fully- insured); (c) establish eligibility, enrollment, or premium contribution requirements for individual participants or beneficiaries based on health status, medical condition, claims experience, receipt of health care, medical history, evidence of insurability, genetic in- formation, or disability; (d) operate on a for- profit or other basis where the legal struc- ture of the cooperative permits profits to be made and not returned to the members of the cooperative, or (e) perform any other ac- tivities that conflict or are inconsistent with the performance of its duties under this Act. A for-profit cooperative could be formed by a nonprofit organization or organizations in which: (1) membership in such organization is not based on health status, medical condi- tion, claims experience, receipt of health care, medical history, evidence of insurabil- ity, genetic information, or disability and (2) that accepts as members all employers or in- dividuals on a first-come, first-serve basis, subject to any established limit on the maxi- mum size of an employer that may become a member. Conference agreement The conference agreement does not include the House or Senate provision. B. CERTIFICATION Current law No provision. House bill No provision. Senate agreement The Senate Amendment would provide that a state certify a group as a HPPC if it appropriately notifies the state and the Sec- retary of Labor that it wants to form a HPPC under the requirements of this sec- tion. The state would be required to deter- mine in a timely fashion whether the group is in compliance with the section’s require- ments and to oversee the operations of the HPPC to ensure continued compliance with the requirements. Each certified HPPC would have to register with the Secretary of Labor. If a state failed to implement a HPPC cer- tification program in accordance with this Act’s standards, the Secretary of Labor would certify and oversee the HPPCs in that state. However, the Secretary would not certify a HPPC if, upon submission of an application of the state to the Secretary, the Secretary determined that a state law was in effect on the date of enactment of this Act providing that all small employers in the state had a means readily available that ensured: (a) that individuals and employees had a choice of multiple, unaffiliated health plan issuers; (b) that health plan coverage was subject to state premium rating requirements that were not based on the health and other risk factors described above and that contained a mandatory minimum loss ratio; (c) that comparative health plan materials were dis- seminated (including information about cost, quality, benefits, and other informa- tion); and that (d) the state program other- wise met the objectives of this Act. A HPPC operating in more than one state would be certified by the state in which the cooperative was domiciled. States could enter into cooperative agreements for the purpose of overseeing a HPPC’s operation. A HPPC would be considered to be domiciled in the state in which most of the members of the HPPC reside. Conference agreement The conference agreement does not include the Senate provision. C. STRUCTURE AND RESPONSIBILITIES OF ORGANIZATION Current law No provision. House bill The House bill would provide that VHIAs and qualified associations meet certain con- ditions (described in items VIII(A) and VIII(D)) to qualify as a VHIA and therefore for exemption from state insurance laws. Senate amendment The Senate Amendment would provide for the following requirements for HPPCs: I. Board of Directors.\u2014Requires each HPPC to be governed by a board of directors that would be responsible for ensuring the performance of the HPPC. The board would have to be composed of a cross-section of representatives of employers, employees, and individuals participating in the HPPC. The board members could not be compensated but could receive reimbursement for reason- able and necessary expenses incurred in per- forming their HPPC responsibilities. 2. Membership and marketing area.\u2014Per- mits a HPPC to establish limits on the maxi- mum size of employers who could become members and to determine whether to allow individuals to be members. Once membership limits were established, the HPPC would be required to accept all employers (or individ- uals) residing within the area served by the HPPC who met the membership require- ments on a first-come, first-served basis, or on another basis established by the state to ensure equitable access to the HPPC. 3. Duties and responsibilities.\u2014Requires a HPPC to: (a) objectively evaluate potential health plan issuers and enter into agree- ments with multiple, unaffiliated ones, ex- cept that this requirement would not apply in regions, such as remote or frontier areas, where compliance was not possible; (b) enter into agreements with employers and individ- uals who become members; (c) participate in any program of risk-adjustment or reinsur- ance, or any similar program established by the state; (d) prepare and disseminate com- parative health plan materials concerning the plans offered through the HPPC; (e) broadly solicit and actively market to all el- igible employers and individuals residing within the service area; and (f) act as an om- budsman for enrollees. 4. Permissible activities.\u2014Permits a HPPC to perform other functions as needed to fur- ther the purposes of this Act, such as: (a) col- lecting and distributing premiums and per- forming other administrative functions; (b) collecting and analyzing surveys of satisfac- tion; (c) charging fees for membership and participation fees to issuers; (d) cooperating with (or accepting as members) employers who provide health benefits directly but only for the purpose of negotiating with provid- ers; and (5) negotiating with health care pro- viders and health plan issuers. 5. Limitation on cooperative activities.\u2014 see item VIII(A) above. 6. Conflict of interest.\u2014Prohibits any indi- vidual, partnership, or corporation from serving on the HPPC board, being employed by or receiving compensation from the HPPC, or initiating or financing a HPPC if such individual, partnership, or corporation (a) fails to discharge the duties and respon- sibilities in a manner that is solely in the in- terest of the members; or (b) derives personal benefit from the sale of, or financial interest in, health plans, services, or products sold through the HPPC. However, a HPPC could contract with third parties to provide admin- istrative, marketing, consultive, or other services. Conference agreement The conference agreement does not include the House or Senate provision. D. PREEMPTION OF STATE LAWS Current law Section 514(a) of ERISA preempts state laws relating to employee benefit plans. Sec- tion 514(b)(2) of ERISA provides that state laws apply in the case of the regulation of in- surance. House bill The House bill would amend section 514 of ERISA to preempt the following state laws: (1) laws that preclude an insurer or HMO from offering health insurance coverage under VHIAs; (2) laws that preclude an in- surer or HMO from setting premium rates under a VHIA based on the claims experience of the VHIA (except the VHIA’s premium rates could not vary on the basis of any par- ticular employer’s claims experience); (3) laws that require coverage in connection with a VHIA to include specific items or services of medical care or that require an insurer or HMO offering coverage in connec- tion with a VHIA to include specific item or services consisting of medical care, except to the extent that such state laws prohibit an exclusion for a specific disease in such cov- erage. This preemption of mandated benefits would apply only with respect to those items and services specified in a list which would be prescribed in regulations by the Secretary of Labor. In general, states would be able to apply their laws if they had in place guaranteed ac- cess measures meeting certain conditions. A state which certified to the Secretary that it provided ”guaranteed access” to health cov- erage could deny a VHIA the right to offer coverage in the small group market (or oth- erwise regulate such VHIA with respect to such coverage), except as described below. (The certification could not be in effect for more than 3 years.) A state would be considered to provide such guaranteed access, if (1) it certified that at least 90% of all state residents were cov- ered by a group health plan or otherwise had health insurance coverage, or (2) that it had, in the small group market, provided for guaranteed issue of at least one option of coverage and for small group rating reforms designed to make health insurance coverage more affordable. However, an exception to this provision would apply for certain large, multi-state arrangements that demonstrated to the Secretary that it met the following criteria. In other words, state laws would not apply if: (1) the VHIA sponsor operates in a majority of the 50 states and in at least 2 of the regions of the country; (2) the arrange- ment covers or will cover (in the case of new VHIAs) at least 7,500 participants and bene- ficiaries; and (3) under the terms of the ar- rangement, either the qualified association does not exclude from membership any small employer in the state, or the arrangement accepts every small employer in the state that applies for coverage. In addition, state laws would not apply in a state in which a VHIA operated on March 6, 1996 and under the terms of the arrangement, either the qualified association does not exclude from membership any small employer in the state, or the arrangement accepts every small em- ployer in the state that applies for coverage. CONGRESSIONAL RECORD \u2014 HOUSE H9531July 31, 1996 The exemption from state laws for multistate plans and existing plans would not apply to any state which, as of January 1, 1996, either (1) had enacted a law providing for guaranteed issue of fully community rated individual health insurance coverage offered by insurers and HMOs, or (2) required insurers offering group health coverage to reimburse insurers offering individual cov- erage for losses resulting from their offering individual coverage on an open enrollment basis. In other words, such states could apply their insurance laws. Senate amendment The Senate Amendment would provide that HPPCs that meet the requirements of this Act would be exempt from state ficti- tious group laws. A health plan issuer offering a group or in- dividual health plan through a HPPC meet- ing the requirements of this Act would be re- quired to comply with all otherwise applica- ble state rating requirements if the plan were to be offered outside the cooperative except a state would be required to permit an issuer to reduce its premiums negotiated with a HPPC to reflect savings derived from administrative costs, marketing costs, profit margins, economies of scale, or other fac- tors. However, such premium reductions could not be based on the health status, de- mographic factors, industry type, duration, or other indicators of risk of HPPC members. Health plan issuers offering coverage through the HPPC would be required to com- ply with state mandated benefit laws. How- ever, in states that have enacted laws au- thorizing alternative benefit plans for small employers, such issuers could offer such small employer plan through a HPPC. Conference agreement The conference agreement does not include the House or Senate provision. E. RULES OF CONSTRUCTION Current law No provision. House bill No provision. Senate amendment The Senate Amendment would provide that nothing in this section should be con- strued to: (1) require that a state organize, operate, or create HPPCs; (2) otherwise es- tablish HPPCs; (3) require individuals, plan sponsors, or employers to purchase coverage through a HPPC; (4) preempt a state from re- quiring licensure for individuals who are in- volved in directly supplying advice or selling health plans on behalf of a HPPC; (5) require that a HPPC be the only type of purchasing arrangement permitted to operate in a state; (6) confer authority upon a state that the state would not otherwise have to regulate health plan issuers or employee health bene- fit plans; (7) confer authority upon a state (or the federal government) that it would not otherwise have to regulate group purchasing arrangements, coalitions, association plans, or similar entities that do not desire to be- come a HPPC; or (8) except as specifically provided for above, prevent the application of state laws and regulations otherwise to health plan issuers offering coverage through a HPPC. Conference agreement The conference agreement does not include the Senate provision. F. ENFORCEMENT THROUGH ERISA Current law Part 4 of subtitle B of title I of ERISA pro- vides for fiduciary responsibilities, including the fiduciary duties of a plan sponsor and prohibited transactions; part 5 provides for administration and enforcement, including criminal and civil penalties. House bill The House bill contains no specific provi- sion (but as MEWAs, VHIAs would be subject to ERISA requirements including those re- lated to fiduciary responsibilities and admin- istration and enforcement, including en- forcement of the new VHIA rules as added by this subtitle.) Senate amendment The Senate Amendment would provide that for enforcement purposes only, that parts 4 and 5 of subtitle B of title I of ERISA apply to a HPPC as if such plan were an em- ployee benefit plan. Conference agreement The conference agreement does not include the Senate provision. IX. ADDITIONAL DEFINITIONS\/OTHER PROVISIONS Current law Section 3 of ERISA defines numerous terms relating to pension and employee wel- fare benefit plans. House bill The House bill: A. Defines the following terms: group health plan, including treatment of govern- mental and church plans, and defines Medic- aid, medicare, and the Indian Health Service programs as group health plans. B. Incorporates specific ERISA definitions such as beneficiary, participant, employee, and employer. C. Provides additional definitions includ- ing applicable state authority, bona fide as- sociation, COBRA continuation provision, health insurance coverage, health mainte- nance organization, health status, individual health insurance coverage, insurer, medical care network plan, and waiting period. D. Provides for the treatment of partner- ships. E. Provides definitions related to markets and small employers, including individual market, large group market, small employer and small group market. Senate bill The Senate Amendment: A. Defines an employee health benefit plan to include a governmental or church plan. An employee health benefit plan is not a group health plan, individual plan, or a health plan. Provides different definition for group health plan. B. Similarly incorporates many ERISA definitions such as that for beneficiary, par- ticipant, employee, and employer. C. Defines group purchaser and health plan issuer. Conference agreement The conference agreement: A. Defines under ERISA the following terms relating to health insurance: health insurance coverage, health insurance issuer, health maintenance organization, group health insurance coverage, and excepted ben- efits. Also defines placed for adoption. B. Defines under PHS Act the following terms relating to health insurance: health insurance coverage, health insurance issuer, health maintenance organization, group health insurance coverage, and excepted ben- efits. C. Defines under the PHS Act: state, appli- cable state authority, state law, beneficiary, and bona fide association. Also, provides definitions under the PHS Act relating to markets and small employers for: large group market, small employer, and small group market. D. Provides definitions under ERISA and the PHS Act relating to portability for: pre- existing condition exclusion, enrollment date, late enrollee, waiting period, creditable coverage, and affiliation period. E. Defines under ERISA and the PHS Act group health plan, medical care, COBRA con- tinuation provision, and health status-relat- ed factor. The definition of medical care is intended to parallel that of the IRC using current law, and is intended to be broad enough to encom- pass the services of Christian Science practi- tioners, nurses, and sanatoriums and nursing facilities. F. Amends ERISA to provide for the treat- ment of partnerships. G. Incorporated in the PHS Act specific ERISA definitions such as employee, em- ployer, beneficiary, church plan, govern- mental plan, participant, plan sponsor. H. Provides definitions under the PHS Act for federal governmental plan, nonfederal governmental plan, and placed for adoption. X. EFFECTIVE DATES Current law No provision. House bill The House bill, except as otherwise pro- vided, would apply with respect to (a) group health plans, and health insurance coverage offered in connection with group health plans, for plan years beginning on or after January 1, 1998; (b) individual health insur- ance coverage issued, renewed, in effect, or operated on or after July 1, 1998. The bill would require the Secretaries of HHS, Treas- ury, and Labor to jointly establish rules re- garding the treatment of certain coverage periods before the applicable effective dates, and would require the 3 Secretaries to issue such regulations on a timely basis. Senate amendment The Senate Amendment, except as other- wise provided, (a) with respect to group health plans, would apply to plans offered, sold, issued, renewed, in effect, or operated on or after January 1, 1997; (b) with respect to individual health plans, would apply to plans offered, sold, issued, renewed, in effect, or operated on or after the date that is 6 months after enactment or January 1, 1997, whichever is later; and (c) with respect to employee health benefit plans, would apply on the first day of the first plan year begin- ning on or after January 1, 1997, whichever is later. Conference agreement The conference agreement, except as oth- erwise provided, would apply with respect to (a) group health plans, and health insurance coverage offered in connection with group health plans, for plan years beginning after July 1, 1997; (b) individual health insurance coverage offered, sold, issued, renewed, in ef- fect, or operated after July 1, 1997. In gen- eral, group health plans and health plan issu- ers would be required to issue certifications of coverage for periods of coverage after July 1, 1996; actual certifications need not be is- sued before October 1, 1996. A special rule di- rects the Secretaries to provide for a process whereby individuals who need to establish creditable coverage for periods before July 1, 1996 may be given credit through the presen- tation of documents or other means. A spe- cial rule would apply to collective bargain- ing agreements. A good faith compliance provision is pro- vided with respect to a transition period. XI. HEALTH COVERAGE AVAILABILITY STUDIES Current law No provision. House bill No provision. Senate amendment The Senate Amendment would require the Secretary of HHS, in consultation with the Secretary of Labor, representatives of state CONGRESSIONAL RECORD \u2014 HOUSEH9532 July 31, 1996 officials, consumers, and other representa- tives of individuals and entities that have expertise in health insurance and employee benefits, to conduct a three-part study and prepare and submit reports. (A) By January 1, 1998, the Secretary would be required to prepare and submit to Congress an evalua- tion of the various mechanisms used to en- sure the availability of reasonably priced health coverage and whether standards that limit premium variations would further the purposes of this Act. (B) No later than Janu- ary 1, 1999, the Secretary would be required to prepare and submit to Congress a report concerning the effectiveness of provisions of the Act and various state laws in ensuring the availability of reasonably priced health coverage. (C) No later than January 1, 1998, the Secretary would be required to prepare and submit to Congress a report (1) evaluat- ing the extent to which patients have direct access to, and choice of, health care provid- ers, as well as the opportunity to utilize pro- viders outside of the network, under the var- ious types of coverage offered under the pro- visions of this Act; (2) evaluating the cost to the insurer of providing out-of-network ac- cess to providers and the feasibility of offer- ing out-of-network access under all plans of- fered under this Act; and (3) evaluating the percent of premium used for medical care ad- ministration of the various types of coverage offered. Conference agreement The conference agreement requires the Secretary of HHS, in consultation with the Secretary of Labor, representatives of state officials, consumers, and other representa- tives of individuals and entities that have expertise in health insurance and employee benefits, to conduct two studies by January 1, 2000. The first study, on the effectiveness of federal and state reforms, would examine the availability of reasonably priced health coverage to employers purchasing group cov- erage and individuals purchasing coverage on a non-group basis. The second study, on ac- cess and choice, would examine the extent to which patients have direct access to, and choice of, health care providers, including specialty providers, within a network plan, as well as the opportunity to use providers outside of the network plan, under the var- ious types of coverage offered under the pro- visions of this title. This study will also ex- amine the cost and cost-effectiveness to health insurance issuers of providing access to out-of-network providers, and the poten- tial impact of providing such access on the cost and quality of health insurance cov- erage offered under provisions of this title. XII. REIMBURSEMENT OF TELEMEDICINE Current law No provision. House bill No provision. Senate amendment The Senate amendment would direct the Health Care Financing Administration (HCFA) to complete its ongoing study of re- imbursement of all telemedicine services and submit a report to Congress with a proposal for reimbursement of fee-for-service medi- cine by March 1, 1997. The report would be required to use data compiled from the cur- rent demonstration projects already under review and gather data from other ongoing telemedicine networks, and include an anal- ysis of the cost of services provided via tele- medicine. Conference agreement The conference agreement directs the HCFA to complete its ongoing study of Medi- care reimbursement of all telemedicine serv- ices and submit a report to Congress on re- imbursement of telemedicine services by March 1, 1997. The report would be required to use data compiled from the current dem- onstration projects already under review and gather data from other ongoing telemedicine networks, include an analysis of the cost of services provided via telemedicine, and in- clude a proposal for Medicare reimbursement of telemedicine services. XIII. HMOS AND MEDICAL SAVINGS ACCOUNTS (MSAS) Current law Under the Public Health Service Act, fed- erally qualified HMOs may require enrollees to pay only nominal copayments and a rea- sonable deductible if services are obtained from an out-of-network provider. House bill No provision, but see Title III, Subtitle A on Medical Savings Accounts. Senate amendment The PHS Act would be amended to allow federally-qualified HMOs, at the request of the HMO member, to charge a deductible to the HMO member if he or she has an MSA. Provides that it is the sense of the Com- mittee on Labor and Human Resources that the establishment of MSAs should be encour- aged as part of any health insurance reform legislation passed by the Senate through the use of tax incentives relating to contribu- tions to, the income growth of, and the qualified use of, such accounts. Provides that it is the sense of the Senate that Congress should take measures to fur- ther the purposes of this Act, including any necessary changes to the Internal Revenue Code to encourage groups and individuals to obtain health coverage, and to promote ac- cess, equity, portability, affordability, and security of health benefits. Conference agreement The conference agreement amends the PHS Act to allow federally qualified HMOs to offer a high-deductible health plan as defined in the IRC. All other requirements of the fed- eral HMO Act remain in effect. XIV. VOLUNTEER SERVICES PROVIDED BY HEALTH PROFESSIONALS AT FREE CLINICS See report language for Title II. XV. FINDINGS; SEVERABILITY Current law No provision. House bill The House bill would provide that Congress finds: (1) that group health plans and health insurance coverage that impose preexisting conditions impact the ability of employees to seek employment in interstate commerce and thereby impedes such commerce; (2) that health insurance coverage is commercial in nature and is in and affects interstate com- merce; (3) that it is a necessary and proper exercise of congressional authority to im- pose requirements on group health plans and health insurance coverage to promote com- merce among states; and (4) that Congress intends however to defer to the states to the maximum extent practicable in carrying out requirements with respect to insurers and HMOs that are subject to state regulation, consistent with ERISA. Senate amendment The Senate Amendment would provide that if any provision of the Act or applica- tion of a provision of the Act to any person or circumstance is held to be unconstitu- tional, the remainder of the Act and the ap- plication of the provisions of such to any person or circumstances would not be af- fected. Conference agreement The conference agreement provides that Congress finds: (1) that group health plans and health insurance coverage that impose preexisting conditions impact the ability of employees to seek employment in interstate commerce and thereby impedes such com- merce; (2) that health insurance coverage is commercial in nature and is in and affects interstate commerce; (3) that it is a nec- essary and proper exercise of congressional authority to impose requirements under this title on group health plans and health insur- ance coverage, including coverage offered to individuals previously covered under group health plans, to promote commerce among states; and (4) that Congress intends to defer to the states, to the maximum extent prac- ticable, in carrying out such requirements with respect to insurers and HMOs that are subject to state regulation, consistent with ERISA. The conference agreement provides that if any provision of this title or application of such provision to any person or cir- cumstance is held to be unconstitutional, the remainder of this title and the applica- tion of the provisions of such to any person or circumstances would not be affected. XVI. COBRA CLARIFICATIONS Current law Title X of the Consolidated Omnibus Budg- et Reconciliation Act of 1985 (COBRA, P.L. 99 272) amends the Internal Revenue Code (IRC), ERISA, and the Public Health Service Act to require employers who provide group health plans with 20 or more employees to offer continuation coverage to employees and their dependents who experience specific qualifying events, including changes in job or family status. In general, when a covered employee experiences termination or reduc- tions in hours of employment, the continued coverage of the employee and any qualified beneficiaries is for 18 months. For other qualifying events (e.g., death, divorce, legal separation, and child turns age of majority under the plan), the duration of coverage is 3 years. The Omnibus Budget Reconciliation Act of 1989 (P.L. 10 239) provides that if a covered employee is determined to be dis- abled under the Social Security Act at the time in which he or she terminates or re- duces hours of employment, then the em- ployee is eligible for 29 months of continued coverage. House bill No provision. Senate amendment The Senate Amendment would amend the PHS Act, ERISA, and the IRC to provide for clarifications of COBRA continuation re- quirements. Provides that individuals who have disabled family members or who be- come disabled at any time during their cov- erage under an initial COBRA period (the first 18 months) be able to extend their cov- erage for the additional 11 month period cur- rently available only to workers who are dis- abled at the time they lose their coverage. Provides that newborns and children who are placed for adoption may be covered im- mediately under a parent’s COBRA policy. Conference agreement See Title IV, Subtitle B. XVII. SENSE OF THE COMMITTEE REGARDING MEDICARE Current law No provision. House bill No provision. Senate amendment The Committee on Labor and Human Re- sources notes that the Medicare trustees concluded in their 1995 report that: (i) the Medicare program is unsustainable in its present form; (ii) that the hospital insurance CONGRESSIONAL RECORD \u2014 HOUSE H9533July 31, 1996 trust fund will only be able to pay for bene- fits for about 7 years and is severely out of financial balance in the long run; and (iii) the Public Trustees recommended that the problems be urgently addressed on a com- prehensive basis including a review of the program’s financing methods, benefit provi- sions, and delivery mechanisms. The provi- sion expresses the sense of the Committee that the Senate should take up measures necessary to reform the Medicare program, to provide increased choice for seniors, and to respond to the findings of the Public Trustees by protecting the short term sol- vency and long-term sustainability of the Medicare program. Conference agreement The conference agreement does not include the Senate provision. XVIII. PARITY FOR MENTAL HEALTH SERVICES Current law No provision. House bill No provision. Senate amendment The Senate Amendment would prohibit an employee health benefit plan, or a health plan issuer offering a group health plan or individual health plan from imposing treat- ment limitations or financial requirements on the coverage of mental health services if similar requirements are not imposed on coverage for services for other conditions. It would provide for a rule of construction that the preceding should not be construed as prohibiting an employee health benefit plan or a health plan issuer offering a group or individual health plan from requiring preadmission screening prior to the author- ization of services covered under the plan or from applying other limitations that restrict coverage for mental health services to those services that are medically necessary. Conference agreement The conference agreement does not include the Senate provision. XIX. WAIVER OF FOREIGN COUNTRY RESIDENCE WITH RESPECT TO INTERNATIONAL MEDICAL GRADUATES Current law The Immigration and Nationality Tech- nical Corrections Act of 1994 provides for a waiver of the requirement that non- immigrant international medical graduates entering as J exchange visitors return to their country of nationality for two years before being eligible to return to the U.S. The provision applies to aliens admitted to the U.S. before June 1, 1996. House bill No provision. Senate bill The Senate Amendment would extend waivers for the requirement that non- immigrant international medical graduates entering as J exchange visitors return to their country of nationality for two years before being eligible to return to the U.S. through June 1, 2002. It would amend provisions related to feder- ally requested waivers requested by an inter- ested U.S. agency on behalf of certain aliens. Conference agreement The conference agreement does not include the Senate provision. XX. ORGAN AND TISSUE DONATION INFORMA- TION INCLUDED WITH INCOME TAX REFUND PAYMENTS Current law No provision. House bill No provision. Senate bill The Senate Amendment would require the Secretary of Treasury to include with any payment of a refund of individual income tax made during the period beginning on Feb- ruary 1, 1997 through June 30, 1997, a copy of the document developed in consultation with the Secretary of HHS and organizations pro- moting organ and tissue donation which en- courages organ and tissue donation. The doc- ument would also include a detachable organ and tissue donor card, and would urge recipi- ents to sign the card, discuss organ and tis- sue donations with family members, and en- courage family members to request or au- thorize organ and tissue donation if the oc- casion arises. Conference agreement The conference agreement does not include the Senate provision. XXI. SENSE OF THE SENATE REGARDING ADE- QUATE HEALTH CARE COVERAGE FOR ALL CHILDREN AND PREGNANT WOMEN Current law No provision. House bill No provision. Senate amendment The Senate Amendment provides that the Senate finds that the health care coverage of mothers and children in the United States is unacceptable, with more than 9.3 million children and 500,000 expectant mothers hav- ing no health insurance, in addition to there being high levels of infant and maternal mortality and other enumerated indicators of inadequate access to care. The Senate Amendment provides that it is the sense of the Senate that the issue of ade- quate health care for our mothers and chil- dren is important to the future of the United States, and in consideration of the impor- tance of such issue, the Senate should pass health care legislation that will ensure health care coverage for all of the United States’ pregnant women and children. Conference agreement The conference agreement does not include the Senate provision. XXII. SENSE OF THE SENATE REGARDING AVAILABLE TREATMENTS Current law No provision. House bill No provision. Senate amendment The Senate Amendment provides that it is the sense of the Senate that patients deserve to know the full range of treatments avail- able to them and Congress should thought- fully examine these issues to ensure that all patients get the care they deserve. Conference agreement The conference agreement does not include the Senate provision. XXIII. RULE OF CONSTRUCTION Current law No provision. House bill The House bill would provide that nothing in this title or any amendment made by it may be construed to require (or to authorize any regulation that requires) the coverage of any specific procedure, treatment, or service under a group health plan or health insur- ance coverage. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision, but see section III(E). TITLE II\u2014PREVENTING HEALTH CARE FRAUD AND ABUSE: ADMINISTRATIVE SIMPLIFICATION; MEDICAL LIABILITY REFORM 1. Fraud and abuse control program (Subtitle A of title II of the House bill; title V of the Senate amendment.) I. IN GENERAL A. FRAUD AND ABUSE CONTROL PROGRAM (Section 201 of the House bill; section 501 of the Senate amendment.) Current law Currently, the investigation and prosecu- tion of fraud related to Federal health pro- grams is the responsibility of the Depart- ment of Health and Human Services (DHHS), the FBI and the Department of Justice. The DHHS Office of Inspector General inves- tigates Federal cases of fraud regarding Med- icare, Medicaid, and the Maternal and Child Health Block Grant programs and is author- ized by the Secretary to impose civil mone- tary penalties and program exclusions on fraudulent providers. The FBI can inves- tigate both Federal and private payer cases of fraud but cannot impose sanctions. Both the Office of Inspector General and the FBI refer investigative findings to the Depart- ment of Justice which may prosecute per- sons for violations of federal criminal laws. State Medicaid fraud control units are re- sponsible for the investigation, prosecution, or referral for prosecution, of fraudulent ac- tivities associated with State Medicaid pro- grams. House bill The Secretary of the Department of Health and Human Services (acting through the Of- fice of the Inspector General) and the Attor- ney General would be required to jointly es- tablish a national health care fraud and abuse control program to coordinate Fed- eral, State and local law enforcement to combat fraud with respect to health plans. To facilitate the enforcement of this fraud and abuse control program the Secretary and Attorney General would be authorized to conduct investigations, audits, evaluations and inspections relating to the delivery of and payment for health care, and would be required to arrange for the sharing of data with representatives of public and private third party payers. This program, imple- mented by guidelines issued by the Secretary and the Attorney General, would also facili- tate the enforcement of applicable Federal statutes relating to health care fraud and abuse, and would provide for the provision of guidance to health care providers through the issuance of safe harbors, advisory opin- ions and special fraud alerts. The Secretary and Attorney General would consult with and share data with representa- tives of health plans. Guidelines issued by the Secretary and Attorney General would ensure the confidentiality of information furnished by health plans, providers and oth- ers, as well as the privacy of individuals re- ceiving health care services. The Inspector General would retain all current authorities. For purposes of this section the term ”health plan” means a plan or program that provides health benefits through insurance or otherwise. Such plans include health in- surance policies, contracts of service benefit organizations, and membership agreements with health maintenance organizations or other prepaid health plans. The Health Care Fraud and Abuse Control Account would be established as an expendi- ture account within the Federal Hospital In- surance (HI) Trust Fund. Amounts equal to monies derived from the coordinated health care anti-fraud and abuse programs from the imposition of civil money penalties, fines, CONGRESSIONAL RECORD \u2014 HOUSEH9534 July 31, 1996 forfeitures and damages assessed in criminal, civil or administrative health care cases, along with any gifts or bequests would be transferred into the Medicare HI trust fund from the U.S. Treasury. There are appro- priated from the HI trust fund to the Ac- count such sums as the Secretary and the Attorney General certify are necessary to carry out certain functions, subject to speci- fied limits to each fiscal year beginning with 1997. There would be appropriated from the gen- eral fund of the U.S. Treasury to the Fraud and Abuse Account for transfer to the FBI certain funds, subject to fiscal year limita- tions, for specified functions. These func- tions include prosecuting health care mat- ters, investigations, audits of health care programs and operations, inspections and other evaluations, and provider and consumer education regarding compliance with fraud and abuse provisions. Specified amounts in the Account would also be avail- able to carry out the Medicare Integrity Pro- gram. The Secretary and the Attorney Gen- eral would be required to submit a joint an- nual report to Congress on the revenues and expenditures, and the justification for such disbursements from the Health Care Fraud and Abuse Control Account. Senate amendment Similar. Conference agreement The conference agreement includes the House provision with an amendment adding a requirement that the Comptroller General submit to Congress a report for certain fiscal years regarding amounts deposited in the Hospital Insurance Trust Fund under this section. The conference agreement also in- cludes a provision regarding the availability of recoveries and forfeitures for purposes of certain provisions of the Employee Retire- ment Income Security Act of 1974. B. MEDICARE INTEGRITY PROGRAM (Section 202 of the House bill; section 502 of the Senate amendment.) Current law Currently Medicare’s program integrity functions are subsumed under Medicare’s general administrative budget. These func- tions are performed, along with general claims processing functions, by insurance companies under contract with the Health Care Financing Administration. House bill Establishes a Medicare Integrity Program under which the Secretary would promote the integrity of the Medicare program by en- tering into contracts with eligible private entities to carry out certain activities. These activities would include the following: (1) review of activities of providers of serv- ices or other individuals and entities furnish- ing items and services for which payment may be made under the Medicare program, including medical and utilization review and fraud review, (2) audit of cost reports, (3) de- terminations as to whether payment should not be, or should not have been, made by rea- son of Medicare as secondary payor provi- sions and recovery of payments that should not have been made, (4) education of provid- ers of services, beneficiaries and other per- sons with respect to payment integrity and benefit quality assurance issues, and (5) de- veloping and updating a list of durable medi- cal equipment pursuant to section 1834(a)(15) of the Social Security Act. An entity is eligi- ble to enter into a contract under this pro- gram if it meets certain requirements, in- cluding demonstrating to the Secretary that the entity’s financial holdings, interests, or relationships will not interfere with its abil- ity to perform the required functions. Senate amendment Similar except for differences in applicable conflict of interest requirements with regard to entities eligible to enter into contracts under this program. Conference agreement The conference agreement includes the House provision with a modification of the applicable conflict of interest requirements for eligible entities and assurance that cur- rent contractors meeting applicable require- ments may compete for contracts on new program integrity activities. C. BENEFICIARY INCENTIVE PROGRAMS (Section 203 of the House bill; section 503 of the Senate amendment.) Current law No provision. House bill The Secretary would be required to provide an explanation of Medicare benefits with re- spect to each item or service for which pay- ment may be made, without regard to wheth- er a deductible or coinsurance may be im- posed with respect to the item or service. This provision would require the Sec- retary, within three months after enactment of this bill, to establish a program to encour- age individuals to report to the Secretary in- formation on individuals and entities who are engaging or who have engaged in acts or omissions that constitute grounds for sanc- tions under sections 1128, 1128A, or 1128B of the Social Security Act, or who have other- wise engaged in fraud and abuse against the Medicare program. If an individual reports information to the Secretary under this pro- gram that serves as a basis for the collection by the Secretary or the Attorney General of any amount of at least $100 (other than amounts paid as a penalty under section 1128B), the Secretary may pay a portion of the amount collected to the individual, under procedures similar to those applicable under section 7623 of the Internal Revenue Code of 1986. The Secretary would be required, within three months after enactment of this bill, to establish a program to encourage individuals to submit to the Secretary suggestions on methods to improve the efficiency of the Medicare program. If the Secretary adopts a suggestion and savings to the program re- sult, the Secretary would make a payment to the individual of an amount the Secretary considers appropriate. Senate amendment Identical. Conference agreement The conference agreement includes the House provision. D. APPLICATION OF CERTAIN HEALTH ANTI- FRAUD AND ABUSE SANCTIONS TO FRAUD AND ABUSE AGAINST FEDERAL HEALTH CARE PRO- GRAMS (Section 204 of the House bill; section 504 of the Senate amendment.) Current law Section 1128B provides for certain criminal penalties for convictions of Medicare and Medicaid (and certain other state health care programs) program-related fraud. House bill This provision would extend certain crimi- nal penalties for fraud and abuse violations under the Medicare and Medicaid programs to similar violations in Federal health care programs generally. The term ”Federal health care program” would mean any plan or program that provides health benefits, whether directly, through insurance, or oth- erwise which is funded directly, in whole or in part by the United States Government (other than the Federal Employee Health Benefit Program, Chapter 89 of Title 5 of the United States Code). The term also would in- clude any state health care program, which under section 1128(h), includes Medicaid, the Maternal and Child Health Services Block Grant Program and the Social Services Block Grant Program. Senate amendment Identical. Conference agreement The conference agreement includes the House provision. E. GUIDANCE REGARDING APPLICATION OF HEALTH CARE FRAUD AND ABUSE SANCTIONS (Section 205 of House bill, section 505 of Senate amendment.) Current law The 1987 Medicare and Medicaid Patient and Program Protection Act specified var- ious payment practices which, although po- tentially capable of including referrals of business under Medicare or State health care programs, are protected from criminal pros- ecution or civil sanction under the anti- kickback provisions of the law. The 1987 law also established authority for the Secretary to promulgate regulations specifying addi- tional payment practices, known as ”safe harbors,” which will not be subject to sanc- tions under the fraud and abuse provisions. House bill The Secretary would publish an annual no- tice in the Federal Register soliciting pro- posals for modifications to existing safe har- bors and new safe harbors. After considering such proposals the Secretary, in consulta- tion with the Attorney General, would issue final rules modifying existing safe harbors and establishing new safe harbors, as appro- priate. The Inspector General would submit an annual report to Congress describing the proposals received, as well as the action taken regarding the proposals. The Sec- retary, in considering proposals, may con- sider a number of factors including the ex- tent to which the proposals would affect ac- cess to health care services, quality of care services, patient freedom of choice among health care providers, competition among health care providers, ability of health care facilities to provide services in medically un- derserved areas or to medically underserved populations, and the like. The Secretary of Health and Human Serv- ices would publish the first notice in the Federal Register soliciting proposals for new or modified safe harbors no later than Janu- ary 1, 1997. The Secretary would issue written advi- sory opinions regarding what constitutes prohibited remuneration under section 1128B(b), whether an arrangement or pro- posed arrangement satisfies the criteria for activities which do not result in prohibited remuneration, what constitutes an induce- ment to reduce or limit services to individ- uals entitled to benefits, and, whether an ac- tivity constitutes grounds for the imposition of civil or criminal sanctions under sections 1128, 1128A or 1128B. Advisory opinions would be binding as to the Secretary and the party requesting the opinion. Any person would be able to request the Inspector General to issue a special fraud alert informing the public of practices which the Inspector General considers to be suspect or of particular concern under the Medicare program or a State health care program, as defined in section 1128(h) of the Social Secu- rity Act. After investigation of the subject matter of the request, and, if appropriate, the Inspector General would issue a special fraud alert in response to the request, pub- lished in the Federal Register. CONGRESSIONAL RECORD \u2014 HOUSE H9535July 31, 1996 Senate amendment Identical to the House bill provisions re- garding the issuance of safe harbors and spe- cial fraud alerts. However, provides for the issuance of ”interpretative rulings” instead of ”advisory opinions” by the Secretary. Conference agreement The conference agreement includes the House provision with modifications to the advisory opinion provisions. The Secretary will be required to issue to a party request- ing an advisory opinion within 60 days and the advisory opinion provisions will apply to requests made for opinions on or after the date which is 6 months after the date of en- actment of this section and before the date which is 4 years after such date of enact- ment. II. REVISION TO CURRENT SANCTIONS FOR FRAUD AND ABUSE (Subtitle B of the House bill; subtitle B of the Senate amendment.) A. MANDATORY EXCLUSION FROM PARTICIPATION IN MEDICARE AND STATE HEALTH CARE PRO- GRAMS (Section 211 of the House bill; section 511 of the Senate amendment.) Current law Section 1128 of the Social Security Act au- thorizes the Secretary to impose mandatory and permissive exclusions of individuals and entities from participation in the Medicare program, Medicaid program and programs receiving funds under the Maternal and Child Health Service Block Grant, or the Social Services Block Grant. Mandatory exclusions are authorized for convictions of criminal of- fenses related to the delivery of health care services under Medicare and State health care programs, as well as for convictions re- lating to patient abuse in connection with the delivery of a health care item or service. In the case of an exclusion under the manda- tory exclusion authority the minimum pe- riod of exclusion could be no less than 5 years, with certain exceptions. Permissive exclusions are authorized for a number of of- fenses relating to fraud, kickbacks, obstruc- tion of an investigation, and controlled sub- stances, and activities relating to license revocations or suspensions, claims for exces- sive charges or unnecessary services, and the like. Thee are no specified minimum periods of exclusion under the permissive exclusion authority. Under Section 1128A of the Social Security Act civil monetary penalties may be imposed for false and fraudulent claims for reim- bursement under the Medicare and State health care programs. Under section 1128B, upon conviction of a program-related felony, an individual may be fined not more than $25,000 or imprisoned for not more than five years, or both. House bill The provision would require the Secretary to exclude individuals and entities from Medicare and State health care programs who have been convicted of felony offenses relating to health care fraud for a minimum five year period. The Secretary would also retain the discretionary authority to exclude individuals from Medicare and State health care programs who have been convicted of misdemeanor criminal health care fraud of- fenses, or who have been convicted of a criminal offense relating to fraud, theft, em- bezzlement, breach of fiduciary responsibil- ity, or other financial misconduct in pro- grams (other than health care programs) funded in whole or part by any Federal, State or local agency. The Secretary would also be required to exclude individuals and entities from Medi- care and State health care programs who have been convicted of felony offenses relat- ing to controlled substances for a minimum five year period. The Secretary would retain the discretionary authority to exclude indi- viduals from Medicare and State health care programs who have been convicted of mis- demeanor offenses relating to controlled sub- stances. Senate amendment Identical. Conference agreement The conference agreement includes the House provision. B. ESTABLISHMENT OF MINIMUM PERIOD OF EX- CLUSION FOR CERTAIN INDIVIDUALS AND ENTI- TIES SUBJECT TO PERMISSIVE EXCLUSION FROM MEDICARE (Section 212 of the House bill; section 512 of the Senate amendment.) Current law See above. House bill This section would establish a minimum period of exclusion for certain permissive ex- clusions from participation in Medicare and State health care programs. For convictions of misdemeanor criminal health care fraud offenses, criminal offenses relating to fraud in non-health care Federal or State programs, convictions relating to obstruction of an investigation of health care fraud offenses, and convictions of mis- demeanor offenses relating to controlled sub- stances, the minimum period of exclusion would be three years, unless the Secretary determines that a longer or shorter period is appropriate, due to aggravating or mitigat- ing circumstances. For permissive exclusions from Medicare or State health care programs due to the revocation or suspension of a health care li- cense of an individual or entity, the mini- mum period of exclusion would not be less than the period during which the individual’s or entity’s license was revoked or suspended. For permissive exclusions from Medicare or State health care programs due to exclu- sion from any Federal health care program or State health care program for reasons bearing on an individual’s or entity’s profes- sional competence of financial integrity, the minimum period of exclusion would not be less than the period the individual or entity is excluded or suspended from a Federal or State health care program. For permissive exclusions from Medicare or State health care programs due to a deter- mination by the Secretary that an individual or entity has furnish items or services to pa- tients substantially in excess of the needs of such patients or of a quality which fails to meet professionally recognized standards of health care, the period of exclusion would be not less than one year. Senate amendment Identical. Conference agreement The conference agreement includes the House provision. C. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH OWNERSHIP OR CONTROL INTEREST IN SANC- TIONED ENTITIES (Section 213 of the House bill; section 513 of the Senate amendment.) Current law See above. House bill Under this provision an individual who has a direct or indirect ownership or control in- terest in a sanctioned entity and who knows or should know of the action constituting the basis for the conviction or exclusion, or who is an officer or managing employee of such an entity, may also be excluded from participation in Medicare and State health care programs by the Secretary if the entity has been convicted of an offense listed in sec- tion 1129(a) or (b)(1), (2) or (3) or otherwise excluded from program participation. Under this provision, the culpable individual would also be subject to program exclusion, even if not initially convicted or excluded. Senate amendment Identical. Conference agreement The conference agreement includes the House provision. D. SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR FAILURE TO COMPLY WITH STATUTORY OBLIGATIONS (Section 214 of the House bill; section 514 of the Senate amendment.) Current law See above. House bill Under this provision the Secretary may ex- clude a practitioner or person who has failed to comply with certain statutory obligations relating to quality of health care for such pe- riod as the Secretary may prescribe, except that such period shall be not less than one year. The Secretary, in making his determina- tion that a practitioner or person should be sanctioned for failure to comply with certain statutory obligations relating to quality of health care, will no longer be required to prove that the individual was either unwill- ing or unable to comply with such obliga- tions. Senate amendment Identical. Conference agreement The conference agreement includes the House provision. E. INTERMEDIATE SANCTIONS FOR MEDICARE HEALTH MAINTENANCE ORGANIZATIONS (Section 215 of the House bill; section 515 of the Senate amendment.) Current law A contract between the Secretary and a Medicare Health Maintenance Organization (HMO) is generally for a 1 year term, with an option for automatic renewal. However, the Secretary may terminate any such contract at any time, after reasonable notice and an opportunity for a hearing, if the Medicare HMO has failed substantially to carry out the contract, or is carrying out the contract in a manner inconsistent with the efficient and effective administration of the require- ments of section 1876 of the Social Security Act, or if the Medicare HMO no longer sub- stantially meets the statutory requirements contained in Section 1876(b), (c), (e) and (f). House bill Under this section the Secretary may ter- minate a contract with a Medicare Health Maintenance Organization (HMO) or may im- pose certain intermediate sanctions on the organization if the Secretary determines that the Medicare HMO has failed substan- tially to carry out the contract; is carrying out the contract in a manner substantially inconsistent with the efficient and effective administration of this section; or, if the Medicare HMO no longer substantially meets the statutory requirements contained in Sec- tion 1876(b), (c), (e) and (f) of the Social Secu- rity Act. If the basis for the determination by the Secretary that intermediate sanctions should be imposed on an eligible organiza- tion is other than that the organization has failed substantially to carry out its contract with the Secretary, then the Secretary may CONGRESSIONAL RECORD \u2014 HOUSEH9536 July 31, 1996 apply intermediate sanctions as follows: civil money penalties of not more than $25,000 for each determination if the defi- ciency that is the basis of the determination has directly adversely affected (or has the substantial likelihood of adversely affecting) an individual covered under the organiza- tion’s contract; civil money penalties or not more than $10,000 for each week of a continu- ing violation; and suspension of enrollment of individuals until the Secretary is satisfied that the deficiency has been corrected and is not likely to recur. Whenever the Secretary seeks to either terminate a Medicare HMO contract or im- pose intermediate sanctions on such an orga- nization, the Secretary must do so pursuant to a formal investigation and under compli- ance procedures which provide the organiza- tion with a reasonable opportunity to de- velop and implement a corrective action plan to correct the deficiencies that were the basis of the Secretary’s adverse determina- tion. In making a decision whether to impose sanctions the Secretary is required to con- sider aggravating factors such as whether an entity has a history of deficiencies or has not taken action to correct deficiencies the Secretary has brought to their attention. The Secretary’s compliance procedures must also include notice and opportunity for a hearing (including the right to appeal an ini- tial decision) before the Secretary imposes any sanction or terminates the contract of a Medicare HMO, and there must not be any unreasonable or unnecessary delay between the finding of a deficiency and the imposi- tion of sanctions. Under this section each risk-sharing con- tract with a Medicare HMO must provide that the organization will maintain a writ- ten agreement with a utilization and quality control peer review organization or similar organization for quality review functions. The amendments made by this section would apply to contract years beginning on or after January 1, 1996. Senate amendment Same as the House bill provision except specifies a different effective date, i.e., Janu- ary 1, 1997. Conference agreement The Conference agreement includes the House provision, but with an effective date of January 1, 1997. F. ADDITIONAL EXCEPTION TO ANTI-KICKBACK PENALTIES FOR RISK-SHARING ARRANGEMENTS (Section 216 of the House bill; section 516 of the Senate amendment,) Current law The anti-kickback provision in section 1128B(b) contains several exceptions. These exceptions include discounts or other reduc- tions in price obtained by a provider of serv- ices or other entity under Medicare or a State health care program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity under Medi- care or a State health care program; any amount paid by an employer to an employee for employment in the provision of covered items or services; any amount paid by a ven- dor of goods or services to a person author- ized to act as a purchasing agent for a group of individuals or entities under specified con- ditions; a waiver of any co-insurance under Part B of Medicare by a federally qualified health care center with respect to an individ- ual who qualifies for subsidized services under a provision of the Public Health Serv- ice Act; and any payment practice specified by the Secretary as a safe harbor exception. House bill This section would add a new exception to the anti-kickback provisions allowing remu- neration between an eligible organization under section 1876 and an individual or en- tity providing items or services pursuant to a written agreement between an eligible or- ganization under section 1876 and the indi- vidual or entity. Remuneration would also be allowed between an organization and an individual or entity if a written agreement places the individual or entity at substantial financial risk for the cost or utilization of the items or services which the individual or entity is obligated to provide. The risk ar- rangement may be provided through a with- hold, capitation, incentive pool, per diem payment or other similar risk arrangement. This amendment would apply to acts of omissions occurring after January 1, 1997. Senate amendment Similar. However, the House provision spe- cifically lists two permissible risk arrange- ments, i.e., incentive pools, and per diem payments, which are not listed in the Senate provision, and the Senate provision provides for the issuance of regulations by the Sec- retary, in consultation with the Attorney General, to define substantial financial risk as necessary to protect program or patient abuse. Conference agreement The conference agreement includes the House provision with modifications to the definition of allowable remuneration. In ad- dition, the conference agreement adds a pro- vision setting forth a negotiated rulemaking process for standards relating to the new ex- ception to the anti-kickback penalties added by this section. G. CRIMINAL PENALTY FOR FRAUDULENT DIS- POSITION OF ASSETS IN ORDER TO OBTAIN MEDICAID BENEFITS (Section 217 of the House bill.) Current law Under section 1128B, upon conviction of a program-related felony, an individual may be fined not more than $25,000 or imprisoned for not more than five years or both. House bill This provision would add a new crime to the list of prohibited activities under section 1128B of the Social Security Act for cases where a person knowingly and willfully dis- poses of assets by transferring assets in order to become eligible for benefits under the Medicaid program, if disposing of the as- sets results in the imposition of a period of ineligibility. Senate amendment No provision. Conference agreement The conference agreement includes the House provision. III. DATA COLLECTION (Subtitle C of the House bill; subtitle C of the Senate amendment.) A. ESTABLISHMENT OF THE HEALTH CARE FRAUD AND ABUSE DATA COLLECTION PROGRAM (Section 221 of the House bill; section 521 of the Senate amendment.) Current law No provision. House bill The Secretary of Health and Human Serv- ices would be required to establish a national health care fraud and abuse data collection program for reporting final adverse actions (not including settlements in which no find- ings of liability have been made) against health care providers, suppliers, or practi- tioners. Each government agency and health plan would, on a monthly basis, report any final adverse action taken against a health care provider, supplier, or practitioner. Certain information would be included in the report, including a description of the acts or omis- sions and injuries upon which the final ad- verse action was taken. The Secretary would, however, protect the privacy of indi- viduals receiving health care services. The Secretary would, by regulation, pro- vide for disclosure of the information about adverse actions, upon request, to the health care provider, supplier, or licensed practi- tioner and provide procedures in the case of disputed accuracy of the information. Each government agency and health plan is re- quired to report corrections of information already reported about any final adverse ac- tion taken against a health care provider, supplier, or practitioner in such form and manner that the Secretary prescribes by reg- ulation. The information in the database would be available to Federal and State government agencies and health plans. The Secretary may approve reasonable fees for the disclo- sure of information in the data base (other than with respect to requests by Federal agencies). The amount of such a fee shall be sufficient to recover the full costs of operat- ing the data base. No person or entity would be held liable in any civil action with respect to any report made as required by this section, unless the person or entity knows the information is false. The Secretary may impose appropriate fees on physicians to cover the costs of in- vestigation and recertification activities with respect to the issuance of identifiers for physicians who furnish services for which Medicare payments are made. Senate amendment Similar with one additional provision re- quiring that the Secretary implement this section in such a manner as to avoid duplica- tion with the reporting requirements estab- lished for the National Practitioner Data Bank. Conference agreement The conference agreement includes the House provision with a modification direct- ing the Secretary to implement this section so as to avoid duplication with the reporting requirements of the National Practitioner Data Bank under the Health Care Quality Improvement Act of 1986. IV. CIVIL MONETARY PENALTIES (Subtitle D of the House bill; subtitle D of the Senate amendment.) A. SOCIAL SECURITY ACT CIVIL MONETARY PENALTIES (Section 231 of the House bill; section 531 of the Senate amendment.) Current law Under Section 1128A of the Social Security Act civil monetary penalties may be imposed for false and fraudulent claims for reim- bursement under the Medicare and State health care programs. House bill The Medicare and Medicaid program provi- sions providing for civil monetary penalties for specified fraud and abuse violations would apply to similar violations involving other Federal health care programs. Federal health care programs would include any health insurance plans or programs funded, in whole or part, by the Federal government, such as CHAMPUS. Civil monetary penalties and assessments received by the Secretary would be deposited into the Health Care Fraud and Abuse Control Account estab- lished under this Act. Any person who has been excluded from participating in Medicare or a State health care program and who retains a direct or in- direct ownership or control interest in an en- tity that is participating in a program under CONGRESSIONAL RECORD \u2014 HOUSE H9537July 31, 1996 Medicare or a State health care program, and who knows or should know of the action constituting the basis for the exclusion, or who is an officer or managing employee of such an entity, would be subject to a civil monetary penalty of not more than $10,000 for each day the prohibited relationship oc- curs. Amends the civil monetary penalty provi- sions of Section 1128A(a) by increasing the amount of a civil money penalty from $2,000 to $10,000 for each item or service involved. Also increases the assessment which a per- son may be subject to from ”not more than twice the amount” to ”not more than three times the amount” claimed for each such item or service in lieu of damages sustained by the United States or a State agency be- cause of such claim. Adds two practices to the list of prohibited practices for which civil money penalties may be assessed. The first occurs when a per- son engages in a pattern or practice of pre- senting a claim for an item or service based on a code that the person knows or should know will result in greater payments than appropriate. The second is the practice whereby a person submits a claim or claims that the person knows or should know is for a medical item or service which is not medi- cally necessary. The sanction against practitioners and per- sons who fail to comply with certain statu- tory obligations is changed from an amount equal to ”the actual or estimated cost” of the medically improper or unnecessary serv- ices provided, to ”up to $10,000 for each in- stance of medically improper or unnecessary services provided. The procedural provisions outlined in Sec- tion 1128A, such as notice, hearings, and ju- dicial review rights, would apply to civil monetary penalties assessed against Medi- care Health Maintenance Organizations in the same manner as they apply to civil mon- etary penalties assessed against health care providers generally. This provision also adds a new practice to the list of prohibited practices for which civil monetary penalties could be assessed. Any person who offers remuneration to an individual eligible for benefits under Medi- care or a State health care program that such individual knows or should know is likely to influence such individual to order or received from a particular provider, prac- titioner or supplier any item or service reim- bursable under Medicare or a State health care program would be subject to the various civil monetary penalties, assessments and exclusion provisions of section 1128A of the Social Security Act. The term ”remuneration” is defined to in- clude the waiver of part or all of coinsurance and deductible amounts, as well as transfers of items or services for free, or for other than fair market value. There would be ex- ceptions to this definition. The waiver of part or all of coinsurance and deductible amounts would not be considered remunera- tion under this section if the waiver is not offered as part of any advertisement or solic- itation, the person does not routinely waive coinsurence or deductible amounts, and the person either waives the coinsurance and de- ductible amounts because the individual is in financial need, or fails to collect the amounts after reasonable collection efforts, or provides for a permissible waiver under regulations issued by the Secretary. In addi- tion, the term remuneration would not in- clude differentials in coinsurance and de- ductible amounts as part of a benefit plan design if the differentials have been disclosed in writing to all beneficiaries, third party payors, and providers, and if the differentials meeting the standards defined in the Sec- retary’s regulations. Remuneration would also not include incentives given to individ- uals to promote the delivery of preventive care under the Secretary’s regulations. The effective date of these provisions is January 1, 1997. Senate amendment Identical. Conference agreement The conference agreement includes the House provision. The conferees do not intend that the language of section 231(d) create any new standard for coverage of a claim. The intent is to assure that a proper evalua- tion by a practitioner is completed and evi- dence of treatment need is established before services are delivered for which claims are submitted. The conferees recognize that under current law the reasonableness of a service provided by a non-medical practi- tioner, including a practitioner of alter- native medicine, in judged by the application of principles particular to such non-medical health care professions. For example, the provision and reasonableness of chiropractic services under Medicare is judged by the ap- plication of chiropractic principles. There is significant concern regarding the impact of the anti-fraud provisions on the practice of complementary or alternative medicine and health care. The practice of complementary or alternative medical or health care practice itself would not con- stitute fraud. The conferees do not intend to penalize the exercise of medical judgment of health care treatment choices made in good faith and which are supported by significant evidence or held by a respectable minority of those providers who customarily provide similar methods of treatment. The Act is not in- tended to penalize providers simply because of a professional difference of opinion regard- ing diagnosis or treatment. A sanction is not intended for providers who submit claims they know will not be considered reimbursable as medically nec- essary services, but who are required to sub- mit the claims because their patients need to document that Medicare will not reimburse the service. In submitting such claims, pro- viders shall notify carriers that a claim is being submitted solely for purpose of seeking reimbursement from secondary payers. Moreover, the conferees intend that a pen- alty will be imposed on presentation of a claim that is false or fraudulent. No sanction is intended for providers who simply inform beneficiaries that are particular service is not covered by Medicare. Moreover, nothing in this section is intended to supersede the limitation on liability provisions established under Section 1879 of the Social Security Act. In addition, the conferees intend, with re- spect to allowable remuneration, that this provision not preclude the provision of items and services of nominal value, including, for example, refreshments, medical literature, complimentary local transportation serv- ices, or participation in free health fairs. B. CLARIFICATION OF LEVEL OF INTENT REQUIRED FOR IMPOSITION OF SANCTIONS (Section 232 of the House bill.) Current law Civil monetary penalties may be imposed for seeking reimbursement under the Medi- care and Medicaid programs for items of services not provided or for services provided by someone who is not a licensed physician, whose license was obtained through mis- representation, or who misrepresented his or her qualification as a specialist, or where the claim is otherwise fraudulent. Civil penalties may also be sought for presenting a claim due for payments which are in violation of (1) contracts payment due to assignment of a patient, (2) agreements with state agencies limiting permitted charges, (3) agreements with participating physicians or suppliers, and (4) agreements with providers of serv- ices. Civil monetary penalties may also be sought against persons who provide false or misleading information that could reason- ably be expected to influence a decision to discharge a person from a hospital. A person is subject to these provisions if he or she pre- sented a claim and he or she ”knows or should have known” that the claim fell into one of the categories listed above. House bill This provision adds a requirement, similar to the False Claims Act, that a person is sub- ject to this provision when the person ”knowingly” presents a claim that the per- son ”knows or should know” falls into one of the prohibited categories. Thus, an assess- ment under this provision would only be made where a person had actual knowledge that he or she had submitted a claim or had provided false or misleading information, and where the person had actual knowledge of the fraudulent nature of the claim, acted in deliberate ignorance, or acted in reckless disregard of the truth or falsity of the infor- mation. The requirement that a person ”knowingly” present a claim or ”know- ingly” make a false or misleading statement which influences discharge would prevent charging persons who inadvertently perform these acts. Senate amendment No provision. Conference agreement The conference agreement includes the House provision, but this provision has been added to the section of this bill entitled ”So- cial Security Act Civil Monetary Penalties”, above. C. PENALTY FOR FALSE CERTIFICATION FOR HOME HEALTH SERVICES (Section 233 of the House bill.) Current law No provision. House bill This provision would add an additional civil monetary penalty of not more than three times the amount of the payments, or $5,000, whichever is greater, for a physician who certifies that an individual meets all of Medicare’s requirements to receive home health care while knowing that the individ- ual does not meet all such requirements. This provision would apply to certifications made on or after the date of enactment of this Act. Senate amendment No provision. Conference agreement The conference agreement includes the House provision. V. REVISIONS TO CRIMINAL LAW (Subtitle E of the House bill; subtitle E of the Senate amendment.) A. DEFINITIONS RELATING TO FEDERAL HEALTH CARE OFFENSE (Section 241 of the House bill; section 542 of the Senate amendment.) Current law No provision. House bill This provision defines the term ”Federal health care offense” to include violations of, or criminal conspiracies to violate, section 669, 1035, 1347 or 1518 of Title 18 of the United States Code, or section 287, 371, 664, 666, 1001, 1027, 1341, 1343, or 1954 of this title, if the vio- lation or conspiracy relates to a health care benefit program. A ”health care benefit pro- gram” is any public or private plan affecting CONGRESSIONAL RECORD \u2014 HOUSEH9538 July 31, 1996 commerce under which any medical benefit, item or service is provided to any individual, and includes any individual or entity provid- ing such a medical benefit, item or service for which payment may be made under the plan. Senate amendment The Senate amendment defines ”Federal health care offense” as a violation of, or a criminal conspiracy to violate section 1128B of the Social Security Act, section 1347 of this title, and sections 287, 371, 664, 666, 669, 1001, 1027, 1341, 1343, or 1954 of this title if the violation or conspiracy relates to health care fraud. Conference agreement The conference agreement includes the House provision. B. HEALTH CARE FRAUD (Section 242 of the House bill; section 541 of the Senate amendment.) Current law Depending on the facts of a particular case, criminal penalties may be imposed on per- sons engaged in health care fraud under fed- eral mail and wire fraud statutes, the False Claims Act, false statement statues, money laundering statutes, racketeering, and other related laws. House bill Under this provision criminal penalties would be imposed for knowingly executing or attempting to execute a scheme or artifice (1) to defraud any health care benefit pro- gram; or (2) to obtain, by means of false or fraudulent pretense, money or property owned by, or under the custody or control of, any health care benefit program. Penalties include fines and up to 10 years imprison- ment. If the violation results in serious bod- ily injury, the person may be imprisoned up to 20 years. If the violation results in death, the person may be imprisoned for life. Senate amendment Similar. However, the Senate provision provides that the crime be commended ”will- fully” as well as knowingly, and the pen- alties are listed as ”any term of years” if the violation results in serious bodily injury. The Senate provision also provides that criminal fines imposed under this section be deposited into the Federal Hospital Insur- ance Trust Fund. Conference agreement The conference agreement includes the House provision with a modification specify- ing that the standard of intent will be ”knowingly and willfully”. There has been significant concern regard- ing the impact of the anti-fraud provisions on the practice of complementary and alter- native medicine and health care. The prac- tice of complementary, alternative, innova- tive, experimental or investigational medi- cal or health care itself would not constitute fraud. The conferees intend that this pro- posal not be interpreted as a prohibition of the practice of these types of medical or health care. The Act is not intended to pe- nalize a person who exercises a health care treatment choice or makes a medical or health care judgment in good faith simply because there is a difference of opinion re- garding the form of diagnosis or treatment. Nor does this provision in general prohibit plans from covering specific types of treat- ment. Whether certain complementary and alternative practices will be covered is and should be a decision left to health care plan administrators. C. THEFT OR EMBEZZLEMENT Section 243 of the House bill; section 546 of the Senate amendment) Current law No provision. House bill Criminal penalties would be imposed for embezzling, stealing, or otherwise without authority knowingly converting or inten- tionally misapplying any of the moneys, funds, securities, premiums, credits, prop- erty, or other assets of a health care benefit program. A person convicted under this pro- vision would be subject to a fine under Title 18 of the United States Code, or imprisoned not more than 10 years, or both. If the value of property does not exceed $100, the defend- ant would be fined or imprisoned not more than one year, or both. Senate amendment Requires that this crime be committed ”willfully”, and the person convicted is sub- ject to a fine under this title or imprison- ment of not more than 10 years, or both. Conference agreement The conference agreement includes the House provision with a modification specify- ing that the standard of intent will be ”knowingly and willfully”. D. FALSE STATEMENTS (Section 244 of the Hose bill; section 544 of the Senate amendment.) Current law The Federal false statements provision at 18 U.S.C. 1001 generally prohibits false statements with regard to any matter within the jurisdiction of a Federal department or agency. House bill Criminal penalties would be imposed for knowingly falsifying, concealing, or covering up by any trick, scheme, or device a material fact, or making false, fictitious, or fraudu- lent statements or representations, or mak- ing or using any falsewriting or document knowing the same to contain any false, ficti- tious, or fraudulent statement or entry in any matter involving a health care benefit program. A person convicted under this pro- vision may be punished by the imposition of fines under title 18 of the United States Code, or by imprisonment of not more than 5 years, or both. Senate amendment Contains additional elements of the crime of false statements, including the words ”willfully” and ”materially”. The House bill language specifying that the false state- ments be ”in connection with the delivery of or payment for health care benefits, items, or services” does not appear in the Senate amendment provision. Conference agreement The conference agreement includes the House provision with a modification specify- ing that the standard of intent will be ”knowingly and willfully”. E. OBSTRUCTION OF CRIMINAL INVESTIGATIONS OF HEALTH CARE OFFENSES (Section 245 of the House bill; section 545 of the Senate amendment.) Current law Under current law, criminal penalties are imposed for obstructing, delaying or prevent- ing the communication of information to law enforcement officials regarding the violation of criminal statues by using bribery, intimi- dation, threats, corrupt persuasion, or har- assment. House bill Criminal penalties would be imposed for willfully preventing, obstructing, mislead- ing, delaying or attempting to prevent, ob- struct, mislead or delay the communication of information or records relating to a Fed- eral health care offense to a criminal inves- tigator. A person convicted under this provi- sion could be punished by the imposition of fines under title 18 of the United States Code or by imprisonment of not more than 5 years, or both. Criminal investigator would mean any individual duly authorized by a de- partment, agency, or armed force of the United States to conduct or engage inves- tigations for prosecution for violations of health care offenses. Senate amendment Similar, with only minor drafting dif- ferences. Conference agreement The conference agreement includes the House provision. F. LAUNDERING OF MONETARY INSTRUMENTS (Section 246 of the House bill; section 547 of the Senate amendment.) Current law The current Federal money laundering pro- vision is found at 18 U.S.C. 1956(c)(7), but does not include money laundering as related to health care fraud. House bill An act or activity constituting a Federal health care offense would be considered a ”specified unlawful activity” for purposes of the prohibition on money laundering, so that any person who engages in money laundering in connection with a Federal health care of- fense would be subject to existing criminal penalties. Senate amendment Similar, with only minor drafting dif- ferences. Conference agreement The conference agreement includes the House provision. G. INJUNCTIVE RELIEF RELATING TO HEALTH CARE OFFENSES (Section 247 of the House bill; section 543 of the Senate amendment.) Current law Depending on the facts of a particular case, injunctive relief may be imposed on persons who are committing or about to commit health care fraud under federal racketeering statutes and other related laws. House bill If a person is violating or about to commit a Federal health care offense, the Attorney General of the United States could com- mence a civil action in any Federal court to enjoin such a violation. If a person is alien- ating or disposing of property or intends to alienate or dispose of property obtained as a result of a Federal health care offense, the Attorney General could seek to enjoin such alienation or disposition, or could seek a re- straining order to prohibit the person from withdrawing, transferring, removing, dis- sipating or disposing of any such property or property of equivalent value and appoint a temporary receiver to administer such re- straining order. Senate amendment Similar. Conference agreement The conference agreement includes the House provision. H. AUTHORIZED INVESTIGATIVE DEMAND PROCEDURES (Section 248 of the House bill; section 548 of the Senate amendment.) Current law No provision. House bill This provision would establish procedures for the Attorney General to make investiga- tive demands in cases regarding health care CONGRESSIONAL RECORD \u2014 HOUSE H9539July 31, 1996 fraud. Under this section, the Attorney Gen- eral could issue a summons for records and\/ or a witness to authenticate the records. Administrative summons would be author- ized for investigations of any scheme to de- fraud an health care benefit program in con- nection with the delivery of or payment for health care. This section would provide for service of a subpoena and enforcement of a subpoena in all United States courts, as well as a grant of immunity to persons respond- ing to a subpoena from civil liability for dis- closure of such information. The provision would also provide that health information about an individual that is disclosed under this section may not be used in, or disclosed to any person for use in any administrative, civil, or criminal action or investigation directed against the individ- ual who is the subject of the information un- less the action or investigation arises out of, and is directly related to, receipt of health care of payment for health care or action in- volving a fraudulent claim related to health, or if good cause is shown. Senate amendment Contains additional language relating to testimony by a custodian of records, the pro- duction of records, witness fees, and adminis- trative summons. Conference agreement The conference agreement includes the House provision with an amendment to in- clude Senate bill language relating to testi- mony by a custodian of records. I. FORFEITURES FOR FEDERAL HEALTH CARE OFFENSES (Section 249 of the House bill; section 542 of the Senate amendment.) Current law Depending on the facts of a particular case, criminal forfeiture may be imposed on per- sons convicted under federal money launder- ing statutes, racketeering statutes, and other related laws. House bill A court imposing a sentence on a person convicted of a Federal health care offense could order the person to forfeit all real or personal property that is derived, directly or indirectly, from proceeds traceable to the commission of the offense. After payment of the costs of asset forfeiture have been made, the Secretary of the Treasury would deposit into the Federal Hospital Insurance Trust Fund an amount equal to the net amount re- alized from the forfeiture of property by rea- son of a federal health care offense. Senate amendment Identical. Conference agreement The conference agreement includes the House provision. J. RELATION TO ERISA AUTHORITY (Section 250 of the House bill.) Current law The Employee Retirement Income Secu- rity Act of 1974 sets forth comprehensive re- quirements for employee pension and welfare benefit plans, including reporting and disclo- sure requirements and fiduciary standards for trustees and fiduciaries; pension plans are also subject to funding, participation, and vesting requirements. House bill The provision states that nothing in this subtitle (Revisions to Criminal law), shall af- fect the authority of the Secretary of Labor under section 506(b) of ERISA to detect and investigate civil and criminal violations re- lated to ERISA. Senate amendment No provision. Conference agreement The conference agreement includes the House provision. 2. Administrative simplification (Sections 251 and 252 of subtitle F of title II of the House bill.) Current law No provision. House bill The bill would provide that the purpose of the subtitle was to improve the Medicare and Medicaid programs, and the efficiency and effectiveness of the health care system, by encouraging the development of health infor- mation network through the establishment of standards and requirements for the elec- tronic transmission of certain health infor- mation. Amends title XI of the Social Secu- rity Act by adding Part C\u2014Administrative Simplification. Senate amendment No provision. Conference agreement The conference agreement includes the House provision. A. DEFINITIONS (New section 1171 of the Social Security Act.) Current law No provision. House bill The bill would provide definitions for this part of the Act including the following: clearinghouse, code set, coordination of ben- efits, health care provider, health informa- tion, health plan, individually identifiable health information, standard, and standard setting organization. Senate amendment No provision. Conference agreement The conference agreement includes the House provision with an amendment to ex- clude a definition for coordination of bene- fits and clarifies the definition of health plan. B. GENERAL REQUIREMENTS FOR ADOPTION OF STANDARDS (New section 1172 of the Social Security Act.) Current law No provision. House bill The bill would require that any standard or modification of a standard adopted would apply to the following: (1) a health plan, (2) a clearinghouse, or (3) a health care provider, but only to the extent that the provider was conducting electronic transactions referred to in the bill. The bill would require that any standard or modification of a standard adopted must reduce the administrative cost of providing and paying for health care. The standard setting organization would be re- quired to develop or modify any standard or modification adopted. The Secretary could adopt a standard or modification of a stand- ard that was different from any standard de- veloped by such organization if the different standard or modification was promulgated in accordance with rulemaking procedures and would substantially reduce administrative costs to providers and plans. The Secretary would be required to establish specifications for implementing each of the standards and modifications adopted. The standards adopt- ed would be prohibited from requiring disclo- sure of trade secrets or confidential commer- cial information by a participant in the health information network. In complying with the requirements of this part, the Sec- retary would be required to rely on the rec- ommendations of the Health Information Ad- visory Committee established by the bill, and consult with appropriate Federal and State agencies and private organizations. Senate amendment No provision. Conference agreement The conference agreement includes the House provision with a modification that re- quires the Secretary to rely on the rec- ommendations of the National Committee on Vital and Health Statistics. The standard- setting organization should consult with the National Uniform Billing Committee, the National Uniform Claim Committee, the Working Group for Electronic Data Inter- change, and the American Dental Associa- tion. C. STANDARDS FOR INFORMATION TRANSACTIONS AND DATA ELEMENTS New section 1173 of the Social Security Act.) Current law No provision. House bill The bill would require the Secretary to adopt appropriate standards for financial and administrative transactions and data ele- ments exchanged electronically that are con- sistent with the goals of improving the oper- ation of the health care system and reducing administrative costs. Financial and adminis- trative transactions would include claims, claims attachments, enrollment and disenrollment, eligibility, health care pay- ment and remittance advice, premium pay- ments, first report of injury, claims status, and referral certification and authorization. Standards adopted by the Secretary would be required to accommodate the needs of dif- ferent types of health care providers. The Secretary would be required to adopt standards providing for a standard unique health identifier for each individual, em- ployer, health plan, and health care provider for use in the health care system. The Sec- retary would be required to establish secu- rity standards that (1) take into account the technical capabilities of record systems to maintain health information, the costs of se- curity measures, the need for training per- sons with access to health information, the value of audit trails in computerized record systems used, and the needs and capabilities of small health care providers and rural health care providers; and (2) ensure that a clearinghouse, if it is part of a larger organi- zation, has policies and security procedures which isolate the activities of such service to prevent unauthorized access to such infor- mation by such larger organization. The Sec- retary would be required to establish stand- ards and modifications to such standards re- garding the privacy of individually identifi- able health information that is in the health information network. The Secretary, in co- ordination with the Secretary of Commerce, would be required to adopt standards specify- ing procedures for the electronic trans- mission and authentication of signatures, compliance with which would be deemed to satisfy Federal and State statutory require- ments for written signatures with respect to the transactions specified by the bill. This part would not be construed to prohibit the payment of health care services or health plan premiums by debit, credit, payment card or numbers, or other electronic means. The Secretary would be required to adopt standards for determining the financial li- ability of health plans when health benefits are payable under two or more health plans, the sequential processing of claims, and other data elements for individuals who have more than one health plan. CONGRESSIONAL RECORD \u2014 HOUSEH9540 July 31, 1996 Senate amendment No provision. Conference agreement The conference agreement includes the House provision. The conferees recognize that certain uses of in- dividually identifiable information are ap- propriate, and do not compromise the pri- vacy of an individual. Examples of such use of information include the transfer of infor- mation when making referrals from primary care to specialty care, and the transfer of information from a health plan to an orga- nization for the sole purpose of conducting health care-related research. As health plans and providers continue to focus on outcomes research and innovation, it is im- portant that the exchange and aggregated use of health care data be allowed. The conference agreement includes a modifica- tion that this part would not be construed to regulate the payment of health care serv- ices or health care premiums by debit, cred- it, payment card or other electronic means. D. TIMETABLES FOR ADOPTION OF STANDARDS (New section 1174 of the Social Security Act.) Current law No provision. House bill The bill would require the Secretary to adopt standards relating to the transactions, data elements of health information, secu- rity and privacy by not later than 18 months after the date of enactment of the part, ex- cept that standards relating to claims at- tachments would be required to be adopted not later than 30 months after enactment. The Secretary would be required to review the adopted standards and adopt additional or modified standards as appropriate, but not more frequently than once every 6 months, except during the first 12-month period after the standards are adopted unless the Sec- retary determines that a modification is nec- essary in order to permit compliance with the standards. The Secretary would also be required to ensure that procedures exist for the routine maintenance, testing, enhance- ment, and expansion of code sets. Senate amendment No provision. Conference agreement The conference agreement includes the House provision with a modification that the Secretary would be required to adopt addi- tional or modified standards not more fre- quently than 12 months. E. REQUIREMENTS (New section 1175 of the Social Security Act.) Current law No provision. House bill The bill would establish that if a person desires to conduct a financial or administra- tive transaction with a health plan as a standard transaction, (1) the health plan may not refuse to conduct such transaction as a standard transaction, (2) the health plan may not delay such transaction, or other- wise adversely affect, or attempt to ad- versely affect, the person or the transaction on the grounds that the transaction is a standard transaction, and (3) the informa- tion transmitted and received in connection with the transaction would be required to be in a form of standard data elements for health information. Health plans could sat- isfy the transmission of information by di- rectly transmitting standard data elements of health information, or submitting non- standard data elements to a clearinghouse for processing in to standard data elements and transmission. Not later than 24 months after the date on which standard or imple- mentation specification was adopted or es- tablished under this part, each person to which the standard applied would be required to comply with the standard or specification. Small health plans, determined by the Sec- retary, would be required to comply not later than 36 months after standards were adopted. Senate amendment No provision. Conference agreement The conference agreement includes the House provision. F. GENERAL PENALTY FOR FAILURE TO COMPLY WITH REQUIREMENTS AND STANDARDS (Section 1176 of the Social Security Act.) Current law No provision. House bill The bill would require the Secretary to im- pose on any person who violates a provision under the bill a penalty of not more than $100 for each such violation of a specific standard or requirement, except that the total amount imposed on the person for all such violations during a calendar year would not exceed $25,000. A penalty would not be imposed if it was established that the person liable for the penalty did not know, and by exercising reasonable diligence would not have known, that such person violated the provision. A penalty would not be imposed if (1) the failure to comply was due to reason- able cause and not willful neglect, and (2) the failure to comply with corrected during the 30-day period beginning on the first date the person liable for the penalty knows, or would have known, that the failure to comply oc- curred. Senate amendment No provision. Conference agreement. The conference agreement includes the House provision. G. WRONGFUL DISCLOSURE OF INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION (New section 1177 of the Social Security Act.) Current law No provision. House bill The bill would define the offense of wrong- ful disclosure of individually identifiable health information as instances when a per- son who knowingly (1) uses or causes to be used a unique health identifier violation of a provision in this part, (2) obtains individ- ually identifiable health information relat- ing to an individual in violation of a provi- sion in this part, or (3) discloses individually identifiable health information to another person in violation of this part. A person committing such an offense would be re- quired to (1) be fined not more than $50,000, imprisoned not more than 1 year, or both; (2) if the offense was committed under false pre- tenses, be fined not more than $100,000, im- prisoned not more than 5 years, or both; and (3) if the offense was committed with intent to sell, transfer, or use individually identifi- able health information for commercial ad- vantage, personal gain, or malicious harm, fined not more than $250,000, imprisoned not more than 10 years, or both. Senate amendment No provision. Conference agreement The conference agreement includes the House provision. H. EFFECT ON STATE LAW (New section 1178 of the Social Security Act.) Current law No provision. House bill The bill would require that a provision, re- quirement, or standard provided by the bill supersede any contrary provision of state law, including a provision of state law that required medical or health plan records (in- cluding billing information) to be main- tained or transmitted in written rather that electronic form. A provision under the bill would not supersede a contrary provision of state law if the provision of state law (1) was more stringent than the requirements of the bill with respect to privacy or individually identifiable health information, or (2) was a provision the Secretary determined was nec- essary to prevent fraud and abuse with re- spect to controlled substances or for other purposes. Senate amendment No provision. Conference agreement The conference agreement includes the House provision with a modification, that the provision would not supersede a contrary State law only if the Secretary determines that the State law (1) is necessary to prevent fraud and abuse; (2) to ensure appropriation State regulation of insurance and health plans; (3) for state reporting on health care delivery or costs, or for other purposes; or (4) addresses controlled substances. The conference agreement also includes the requirement that any standard adopted under this part would not apply to the fol- lowing: (1) the use or disclosure of informa- tion for authorizing, processing, clearing, settling, billing, transferring, collecting, or reconciling a payment for, health plan pre- miums or health care, where such payment is made by means of a credit, debit, or other payment card, or by an account, check, elec- tronic funds transfer or other such means; (2) the use or disclosure of information relating to a payment described above for transfer- ring receivables, resolving customer disputes or inquiries, auditing, supplying a statement to a consumer of a financial institution re- garding the customer’s account with such an institution, reporting to customer reporting agencies, or complying with a civil or crimi- nal subpoena or a Federal or State law regu- lating financial institutions. The conferees do not intend to exclude the activities of financial institutions or their contractors from compliance with the stand- ards adopted under this part if such activi- ties would be subject to this part. However, conferees intend that this part does not apply to use or disclosure of information when an individual utilizes a payment sys- tem to make a payment for, or related to, health plan premiums or health care. For ex- ample, the exchange of information between participants in a credit card system in con- nection with processing a credit card pay- ment for health care would not be covered by this part. Similarly sending a checking ac- count statement to an account holder who uses a credit or debit card to pay for health care services, would not be covered by this part. However, this part does apply if a com- pany clears health care claims, the health care claims activities remain subject to the requirements of this part. 1. CHANGES IN MEMBERSHIP AND DUTIES OF NA- TIONAL COMMITTEE ON VITAL AND HEALTH STATISTICS (Section 253 of the House bill.) Current law No provision. CONGRESSIONAL RECORD \u2014 HOUSE H9541July 31, 1996 House bill The bill would amend the membership and duties of the National Committee on Vital and Health Statistics, authorized under sec- tion 306(k) of the Public Health Service Act, as amended, by increasing the number of members to 18. The committee would be re- quired to (1) provide assistance and advice to the Secretary on issues related to health sta- tistical and health information; health with complying with the requirements of the bill; (2) study the issues related to the adoption of uniform data standards for patient medical record information and electronic exchange of such information; (3) report to the Sec- retary not later than 4 years after enact- ment of the Health Coverage Availability and Affordability Act of 1996, and annually thereafter, recommendations and legislative proposals for such standards and electronic exchange; and (4) be generally advising the Secretary and the Congress on the status of the future of the health information net- work. The committee would be required, not later than 1 year after enactment, to report to Congress, health care providers, health plans, and other entities using the health in- formation network regarding (1) the extent to which entities using the network were meeting the standards adopted and working together to form an integrated network that meets the needs of its users; (2) the extent to which entities were meeting the privacy and security standards, and the types of pen- alties assessed for noncompliance; (3) wheth- er the federal and state governments were receiving information of sufficient quality to meet their responsibilities; (4) any problems that exist with implementation of the net- work; and (5) the extent to which timetables established by under this part of the bill were being met. Senate amendment No provision. Conference agreement The conference agreement includes the House provision. The conference agreement also includes a requirement that the Secretary submit de- tailed recommendations on standards with respect to the privacy of individually identi- fiable health information not later than 12 months after enactment. The recommenda- tions would be required to address at least: (1) the rights an individual should have re- lating to individually identifiable health in- formation; (2) the procedures that should be established for the exercise of such rights; and (3) the uses and disclosures of such infor- mation that should be authorized or re- quired. The Secretary would be required to consult with the Attorney General, and the National Committee on Vital and Health Statistics for carrying out this requirement. If Congress fails to enact privacy legislation, the Secretary is required to develop stand- ards with respect to privacy of individually identifiable health information not later than 42 months from the date of enactment. The conferees recognize that industry ex- perts are essential to the membership of the National Committee on Vital and Health Statistics. It is the conferees’ intent that the Committee select representatives from the insurer, HMO, provider, employer, accredita- tion communities, and a representative from the Workgroup for Electronic Data Inter- change (WEDI). The conferees recognize that technological innovation with respect to electronic trans- mission of health-care related transactions is progressing rapidly in the marketplace. The conferees do not intend to stifle innova- tion in this area. Therefore, the conferees in- tend that the Committee take into account private sector initiatives. 3. Duplication and coordination of Medicare- related plans (Subtitle G of title II of the House bill.) A. DUPLICATION AND COORDINATION OF MEDICARE-RELATED PLANS (Section 281 of House bill.) Current law Many Medicare beneficiaries purchase pri- vate health insurance to supplement their Medicare coverage. These individually pur- chased policies are known as Medigap poli- cies. The Omnibus Budget Reconciliation Act of 1990 (OBRA 1990, P.L. 101 508) provided for a standardization of Medigap policies. OBRA also substantially modified the antiduplication provision contained in law. The intent of the OBRA 1990 anti-duplication provision was to prohibit sales of duplicative Medigap policies. However, the statutory language applied, with very limited excep- tions, to all ”health insurance policies” sold to Medicare beneficiaries. Observers noted that this provision could thus apply to a broad range of policies including hospital in- demnity plans, dread disease policies, and long-term care insurance policies. The Social Security Amendments of 1994 (P.L. 103 432) included a number of technical modifications to the Medigap statute, in- cluding modifications to the anti-duplication provisions contained in section 1882(d)(3) of the Act. Under the revised language, it is il- legal to sell or issue the following policies to Medicare beneficiaries: (i) a health insurance policy with knowledge that is duplicates Medicare or Medicaid benefits to which a beneficiary is otherwise entitled; (ii) a Medigap policy, with knowledge that the beneficiary already has a Medigap policy; or (iii) a health insurance policy (other than Medigap) with knowledge that it duplicates private health benefits to which the bene- ficiary is already entitled. A number of exceptions to these prohibi- tions are established. The sale of a medigap policy is not in violation of the provisions relating to duplication of Medicaid coverage if: (i) the State Medicaid program pays the premiums for the policy; (ii) in the case of qualified Medicare beneficiaries (QMBs), the policy includes prescription drug coverage; or (iii) the only Medicaid assistance the indi- vidual is entitled to is payment of Medicare Part B premiums. The sale of a health insurance policy (other than a Medigap policy) that dupli- cates private coverage is not prohibited if the policy pays benefits directly to the indi- vidual without regard to other coverage. Further, the sale of a health insurance pol- icy (other than a Medigap policy to an indi- vidual entitled to Medicaid) is not in viola- tion of the prohibition relating to selling of a policy duplicating Medicare or Medicaid, if the benefits are paid without regard to the duplication in coverage. This exception is conditional on the prominent disclosure of the extent of the duplication, as part of or together with, the application statement. P.L. 103 432 provided for the development by the National Association of Insurance Commissioners (NAIC) of disclosure state- ments describing the extent of duplication for each of the types of private health insur- ance policies. Statements were to be devel- oped, at a minimum, for policies paying fixed cash benefits directly to the beneficiary and policies limiting benefits to specific diseases. The NAIC identified 10 types of health insur- ance policies requiring disclosure statements and developed statements for them. These were approved by the Secretary and pub- lished in the Federal Register on June 12, 1995. House bill The provision would modify the anti-dupli- cation provisions. The requirement for ob- taining a written application statement would be limited to the sale of Medigap poli- cies to persons already having Medigap poli- cies. Anti-duplicative provisions would specifi- cally state that a policy which pays benefits to or on behalf of an individual without re- gard to other health benefit coverage would not be considered to duplicate any health benefits under Medicare, Medicaid, or a health insurance policy. Further, such poli- cies would be excluded from the sales prohi- bitions. The provision would specifically state that a health insurance policy (or a rider to an in- surance contract which is not a health pol- icy) which provides benefits for long term care, nursing home care, home health care or community-based care and that coordinates or excludes against services covered under Medicare would not be considered duplica- tive, provided such coordination or exclusion was disclosed in the policy’s outline of cov- erage. The provision would specify that a health insurance policy (which may be a contract with a health maintenance organization), provided to a disabled beneficiary, that is a replacement product for another policy that is being terminated by the insurer would not be considered duplicative if it coordinates with Medicare. The provision would prohibit the imposi- tion of criminal or civil penalties, or taking of legal action, with respect to any actions which occurred between enactment of P.L. 103 432 and enactment of this measure, pro- vided the policies the policies met the new requirements. The provision would prohibit States from imposing duplication requirements with re- spect to a policy (other than Medigap policy) or rider to an insurance contract which is not a health policy if the policy or rider pays benefits without regard to other benefits coverage or if it is a long-term care, policy or policy sold to the disabled (as such poli- cies are described above). The provision would also delete current language relating to required disclosure statements. Senate amendment No provision. Conference agreement The conference agreement includes the House provision with modifications. The agreement would clarify that policies offer- ing only long-term care nursing home care, home health care, or community based care, or any combination thereof would be allowed to coordinate benefits with Medicare and not be considered duplicative, provided such co- ordination was disclosed. The conference agreement does not include the provision re- lating to replacement policies sold to dis- abled persons. The conference agreement would modify, rather than repeal, the current law require- ment for disclosure statements for policies that pay regardless of other coverage. Dis- closure statements, for the type of policy being applied for, would be furnished to a Medicare beneficiary applying for a health insurance policy. The statement would be furnished as a part of (or together with) the policy application. The conference agreement would specify that whoever issues or sells a health insur- ance policy to a Medicare beneficiary and fails to furnish the required disclosure state- ment would be fined under title 18 of the United States Code, or imprisoned not more than five years or both. In addition, or in lieu of the criminal penalty, a civil money penalty of $25,000 (or $15,000 in the case of someone who is not an issuer) could be im- posed for each violation. CONGRESSIONAL RECORD \u2014 HOUSEH9542 July 31, 1996 The disclosure requirements would not apply to Medigap policies or health insur- ance policies identified in the July 12, 1995 Federal Register notice (i.e. policies that do not duplicate Medicare (even incidentally), life insurance policies that contain long- term care riders or accelerated death bene- fits, disability insurance policies, property and casualty policies, employer and union group health plans, managed care organiza- tions with Medicare contracts, and health care prepayment plans (HCPPs) that provide some or all of Part B benefits under an agreement with HCFA.) The conference agreement would modify existing disclosure statements to remove the wording that implies the policies duplicate Medicare coverage. New language would be substituted which states that: ”Some health care services paid for by Medicare may also trigger the payment of benefits under this policy”. The agreement would further modify the required statement for policies providing both nursing home and non-institutional coverage, nursing home benefits only, or home health care benefits only. The ref- erence to Federal law would be modified to read: ”Federal law requires us to inform you that in certain situations this insurance may pay for some care also covered by Medicare”. All other policies would be required to in- clude the following statement: ”This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.” The conference agreement would further modify the language relating to State ac- tions. The law would specifically state that nothing in the provision restricts or pre- cludes a State’s ability to regulate health in- surance, including the policies subject to dis- closure requirements. However, a State may not declare or specify, in statute, regulation, or otherwise, that a health insurance policy (other than a Medigap policy) or rider to an insurance contract which is not a health in- surance policy that pays regardless of other coverage duplicates Medicare or Medigap benefits. The conference agreement further narrows the language relating to application of pen- alties and legal action with respect to non- duplication requirements during a transition period, defined as beginning on November 5, 1991 and ending on the date of enactment. No criminal or civil monetary penalty could be imposed for an act or omission that occurred during the transition period relating to poli- cies that pay benefits without regard to other coverage or long-term care policies. No legal action could be brought or continued in any Federal or State court with respect to the sale of such policies insofar as such ac- tion includes a cause of action which arose or is based on action occurring during the transition period and relating to non-dupli- cation requirements. This limitation on legal actions would be conditional on the ex- isting disclosure requirements being met with respect to any policy sold during the period beginning on the effective date of the disclosure requirements required by the 1994 Act (i.e. August 11, 1995) and ending 30 days after enactment. The conference agreement further provides that the new disclosure rules only apply after enactment to health insurance policies that pay regardless of other coverage and 30- days after enactment to another health in- surance policy. The conference agreement would further permit a seller or issuer of a health insur- ance policy to use current disclosure state- ments rather than the new disclosure state- ments. 4. Medical liability reform (Subtitle H of title II of the House bill; sec- tion 310 of title I of the Senate amendment.) I. GENERAL PROVISIONS A. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS (Section 271 of House bill.) Current law There are no uniform Federal standards governing health care liability actions. House bill (1) Applicability. The provision would pro- vide for Federal reform of health care liabil- ity actions. It would apply to any health care liability action brought in any State or Federal court. The provisions would not apply to any action for damages arising from a vaccine-related injury or death or to the extent that the provisions of the National Vaccine Injury Compensation Program apply. The provisions would also not apply to actions under the Employment Retire- ment Income Security Act. (2) Preemption; Effect on Sovereign Immu- nity. The provisions would preempt State law to the extent State law provisions were inconsistent with the new requirements. However, it would not preempt State law to the extent State law provisions were more stringent. The provision specifies that noth- ing in the preemption provision could be con- strued to: (i) waive or affect any defense of sovereign immunity asserted by any State under any provision of law; (ii) waive or af- fect any defense of sovereign immunity as- serted by the U.S.: (iii) affect any provision of the Foreign Services Immunity Act of 1976; (iv) preempt State choice-of-law rules with respect to claims brought by a Foreign nation or a citizen of a foreign nation; or (v) affect the right of any court to transfer venue or to apply the law of a foreign nation or to dismiss a claim of a foreign nation or of a citizen of a foreign nation on the ground of inconvenient forum. (3) Amount in Controversy; Federal Court Jurisdiction. The provision would specify that in the case of a health care liability ac- tion brought under section 1332 of Title 28 of the U.S. Code, the amount of noneconomic and punitive damages and attorneys fees would not be included in establishing the amount in controversy for purposes of estab- lishing original jurisdiction. Further, the provision would specify that nothing in this subtitle would be construed to establish any jurisdiction in the U.S. district courts over health care liability action on the basis of Federal question grounds specified in section 1331 or 1337 of title 28 of the U.S. Code. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. B. DEFINITIONS (Section 272 of House bill.) Current law No provision. House bill The provision would define the following terms for purposes of the Federal reforms: actual damages; alternative dispute resolu- tion system; claimant; clear and convincing evidence; collateral source payments; drug; economic loss; harm; health benefit plan; health care liability action; health care li- ability claim; health care provider; health care service; medical device; noneconomic damages; person; product seller; punitive damages; and State. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. C. EFFECTIVE DATE (Section 273 of House bill.) Current law No provision. House bill The provision would specify that Federal reforms apply to any health care liability ac- tion brought in any State or Federal court that is initiated after the date of enactment. The provision would also apply to any health care liability claim subject to an alternative dispute resolution system, Any health care liability claim or action arising from an in- jury occurring prior to enactment would be governed by the statute of limitations in ef- fect at the time the injury occurred. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. II. UNIFORM STANDARDS FOR HEALTH CARE LIABILITY ACTIONS A. STATUTE OF LIMITATIONS (Section 281 of House bill.) Current law To date reforms of the malpractice system have occurred primarily at the State level and have generally involved changes in the rules governing tort cases. (A tort case is a civil action to recover damages, other than for a breach of contract.) House bill The provision would establish a uniform statute of limitations. Actions could not be brought more than two years after the injury was discovered or reasonably should have been discovered. In no event could the action be brought more than five years after the date of the alleged injury. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. B. CALCULATION AND PAYMENT OF DAMAGES (Section 282 of House bill.) Current bill No provision. House bill 1. Noneconomic Damages. The provision would limit noneconomic damages to $250,000 in a particular case. The limit would apply regardless of the number of persons against whom the action was brought or the number of actions brought. The provision would specify that a defend- ant would only be liable for the amount of noneconomic damages attributable to that defendant’s proportionate share of the fault or responsibility for that claimant’s injury. 2. Punitive Damages. The provision would permit the award of punitive damages (to the extent allowed under State law) only if the claimant established by clear and convincing evidence either that the harm was the result of conduct that specifically intended to cause harm or the conduct manifested a con- scious flagrant indifference to the rights or safety of others. The amount of punitive damages awarded could not exceed $250,000 or three times the amount of economic dam- ages, whichever was greater. The determina- tion of punitive damages would be deter- mined by the court and not be disclosed to the jury. The provision would not create a cause of action for punitive damages. Fur- ther, it would not preempt or supersede any State or Federal law to the extent that such law would further limit punitive damage awards. CONGRESSIONAL RECORD \u2014 HOUSE H9543July 31, 1996 The provision would permit either party to request a separate proceeding (bifurcation) on the issue of whether punitive damages should be awarded and in what amount. If a separate proceeding was requested, evidence related only to the claim of punitive dam- ages would be inadmissible in any proceeding to determine whether actual damages should be awarded. The provision would prohibit the award of punitive damages in a case where the drug or device was subject to premarket approval by the Food and Drug Administration, unless there was misrepresentation or fraud. A manufacturer or product seller would not be held liable for punitive damages related to adequacy of required tamper resistant pack- aging unless the packaging or labeling was found by clear and convincing evidence to be substantially out of compliance with the reg- ulations. 3. Periodic Payments for Future Losses. The provision would permit the periodic (rather than lump sum) payment of future losses in excess of $50,000. The judgment of a court awarding periodic payments could not, in the absence of fraud, be reopened at any time to contest, amended, or modify the schedule or amount of payments. The provi- sion would not preclude a lump sum settle- ment. 4. Treatment of Collateral Source Pay- ments. the provision would permit a defend- ant to introduce evidence of collateral source payments. Such payments are those which are any amounts paid or reasonably likely to be paid by health or accident insur- ance, disability coverage, workers compensa- tion, or other third party sources. If such evidence was introduced, the claimant could introduce evidence of any amount paid or reasonably likely to be paid to secure the right to such collateral source payments. No provider of collateral source payments would be permitted to recover any amount against the claimant or against the claimant’s re- covery. The provision would apply to settle- ments as well as actions resolved by the courts. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. C. ALTERNATIVE DISPUTE RESOLUTION (Section 283 of House bill.) Current law No provision. House bill The provision would require that any al- ternative dispute resolution system used to resolve health care liability actions or claims must include provisions identical to those specified in the bill. Senate amendment No provision. Conference agreement The conference agreement does not include the House provision. III. MEDICAL VOLUNTEERS (Section 310 of Senate bill.) Current law The Federally Supported Health Centers Assistance Act of 1992 (P.L. 102 501) provides protection from legal liability for certain health professionals providing services under the Public Health Service Act P.L. 104 73 made the provision permanent. House bill No provision. Senate amendment Section 310 of the bill would be known as the Medical Volunteer Act. It would provide that under certain circumstances a health care professional would be regarded for pur- poses of a malpractice claim to be a Federal employee for purposes of the Federal tort claims provisions of title 28 of the U.S. Code. Specifically this would occur when such pro- fessional provided services to a medically underserved person without receiving com- pensation for such services. The professional would be deemed to have provided services without providing compensation only if prior to furnishing services the professional: (i) agreed to furnish services without charge to any person, including any health insurance plan or program under which the recipient is covered; and (ii) provided the recipient with adequate notice (as determined by the Sec- retary) of the limited liability of the profes- sional. These provisions would preempt any State law to the extent such law was incon- sistent; they would not preempt any State law that provided greater incentives or pro- tections. A medically underserved person would be defined as a person residing in either: (I) a medically underserved area as defined for purposes of determining a medically under- served population under section 330 of the Public Health Service Act; or (ii) a health professional shortage area as defined in sec- tion 332 of that Act. Further the individual would have to receive care in a facility sub- stantially comparable to any of those des- ignated in the Federally-Supported Health Centers Act, as determined in regulations of the Secretary. Conference agreement The conference agreement includes the Senate provision. The provision extends Fed- eral Tort Claims Act coverage to certain medical volunteers in free clinics in order to expand access to health care services to low- income individuals in medically underserved areas. Such coverage is currently provided in the Public Health Service Act to certain community and other health centers under the Federally Supported Health Centers As- sistance Act. The provision tracks to the ex- tent possible the provisions of that Act with respect to the coverage provided, quality as- surance, and the process by which a free clin- ic applies to have a free clinic health profes- sional deemed an employee of the Public Health Service. Health professionals must meet certain conditions before they are deemed employees of the Public health Service Act. They must be licensed or certified in accordance with applicable law and they must be volunteers; they may not receive compensation for the services in the form of salary, fees, or third- party payments. However, they may receive reimbursement from the clinic for reason- able expenses, such as costs of transpor- tation and the cost of supplies they provide. Further, the free clinic may receive a vol- untary donation from the individual served. Eligible health professionals must provide qualifying services (i.e., otherwise available for Medicaid reimbursement) at a free clinic or through programs or events conducted by the clinic. These programs or events may in- clude the provision of health services in a clinic-owned or clinic-operated mobile van or at a booth in a health fair. They may not in- clude the provision of health services in a private physician’s office following a referral from the free clinic. The health care profes- sional or the free clinic must provide prior written notice of the extent of the limited li- ability to the individual. The free clinic must be licensed or cer- tified under applicable law and may not im- pose a charge on or accept reimbursement from any private or public third-party payor. The free clinic may, however, receive vol- untary donations from individuals receiving health care services and is not precluded from receiving donations, grants, contracts, or awards from private or public sources for the general support of the clinic, or for spe- cific purposes other than for payment or re- imbursement for a health care service. A free clinic must apply, consistent with the provisions applicable to community health centers, to have each health care pro- fessional ”deemed” an employee of the Pub- lic Health Service Act, and therefore eligible for coverage under the Federal Tort Claims Act. A free clinic may not be deemed such an employee under this provision. The Committee is aware that each of the 50 states have passed laws to limit the liability of volunteers in a variety of circumstances. This provision does not preempt those laws beyond the preemption provided in the Fed- eral Tort Claims Act. Instead, the United States shall be liable in the same manner and to the same extent as a private individ- ual in the same circumstances under State law. The provision applies only to causes of ac- tion filed against a health professional for acts or omissions occurring on or after the date on which the health professional is de- termined by the Secretary to be a ”free clin- ic health professional.” The provision establishes for free clinics funding and estimating mechanisms that match to the extent possible those for com- munity health centers. No funds appro- priated for purposes of community health centers will be available to free clinics. 4. Other provisions I. EXTENSION OF MEDICARE SECONDARY PAYER PROVISIONS (Sec. 621 of Senate Amendment.) Current law Generally Medicare is the ”primary payer,” that is, it pays health claims first, with an individual’s private or other public insurance filling in some or all of Medicare’s coverage gaps. However, in certain instances, the individual’s other coverage pays first, while Medicare is the secondary payer. This phenomenon is referred to as the MSP pro- gram. A group health plan offered by an em- ployer (with 20 or more employees is re- quired to offer workers age 65 or over (and workers spouses age 65 or over) the same group health insurance coverage as is offered to younger workers. If the worker accepts the coverage, the employer is the primary payer, with Medicare becoming the second- ary payer. Similarly, a group health plan offered by a large employer (100 or more employees) is the primary payer for employees or their de- pendents who are on the Medicare disability program. The provision applies only to per- sons covered under the group plan because the employee is in ”current employment sta- tus” (i.e. is an employee or is treated as an employee by the employer). The MSP provi- sion for the disabled population expires Oc- tober 1, 1998. The MSP provisions apply to end-stage renal (ESRD) beneficiaries with employer group health plans, regardless of employer size. The group health plan is the primary payer for 18 months for persons who become eligible for Medicare ESRD benefits. The em- ployer’s role as primary payer is limited to a maximum of 21 months (18 months plus the usual 3-month waiting period for Medicare ESRD coverage). The 18-month MSP provi- sions for the ESRD population expire Octo- ber 1, 1998; at that time the period would re- vert to 12 months. The law authorizes a data match program which is intended to identify potential sec- ondary payer situations. Medicare bene- ficiaries are matched against data contained CONGRESSIONAL RECORD \u2014 HOUSEH9544 July 31, 1996 in Social Security Administration (SSA) and Internal Revenue Service (IRS) files to iden- tify cases in which a working beneficiary (or working spouse) may have employer-based health insurance coverage. Cases of previous incorrect Medicare payments are identified and recoveries are attempted. The authority for the program extends through Sept. 30, 1998. House bill No provision. Senate Amendment The provision would make permanent the MSP provisions for the disabled and the 18- month period for the ESRD population. It would also make permanent the data match requirement. Conference agreement The conference agreement does not include the Senate provision. TITLE III. TAX-RELATED HEALTH PROVISIONS A. MEDICAL SAVINGS ACCOUNTS (Sec. 301 of the House bill.) Present law The tax treatment of health expenses de- pends on whether the individual is an em- ployee or self employed, and whether the in- dividual is covered under an employer-spon- sored health plan. Employer contributions to a health plan for coverage for the employee and the employee’s spouse and dependents is excludable from the employee’s income and wages for social security tax purposes. Self- employed individuals are entitled to deduct 30 percent of the amount paid for health in- surance for a self-employed individual and his or her spouse or dependents. Any individ- ual who itemizes tax deductions may deduct unreimbursed medical expenses (including expenses for medical insurance) paid during the year to the extent that the total of such expenses exceeds 7.5 percent of the individ- ual’s adjusted gross income (”AGI”). Present law does not contain any special rules for medical savings accounts. House bill In general Within limits, contributions to a medical savings account (”MSA”) are deductible if made by an eligible individual and are ex- cludable from income (and wages for social security purposes) if made by the employer of an eligible individual. Earnings on amounts in an MSA are not currently tax- able. Distributions from an MSA for medical expenses are not taxable. Eligible individuals An individual is eligible to make a deduct- ible contribution to an MSA (or to have em- ployer contributions made on his or her be- half) if the individual is covered under a high deductible health plan and is not covered under another health plan (other than a plan that provides certain permitted coverage). An individual with other coverage in addi- tion to a high deductible plan is still eligible for an MSA if such other coverage is certain permitted insurance or is coverage (whether provided through insurance to otherwise) for accidents, disability, dental care, vision care, or long-term care. Permitted insurance is (1) Medicare supplemental insurance; (2) insurance if substantially all of the coverage provided under such insurance relates to (a) liabilities incurred under worker’s com- pensation law, (b) tort liabilities, (c) liabil- ities relating to ownership or use of property (e.g., auto insurance), or (d) such other simi- lar liabilities as the Secretary may prescribe by regulations, (3) insurance for a specified disease or illness, and (4) insurance that pro- vides a fixed payment for hospitalization. An individual is not eligible to make deductible contributions to an MSA for a year if any employer contributions are made to an MSA on behalf of the individual for the year. Tax treatment of and limits on contributions Individuals contributions to an MSA are deductible (within limits) in determining AGI. Employer contributions are excludable (within the same limits) from gross income and wages for employment tax purposes, ex- cept that this exclusion does not apply to contributions made through a cafeteria plan. The maximum amount of contributions that can be deducted or excluded for a year is equal to the lesser of (1) the deductible under the high deductible health plan or (2) $2,000 in the case of single coverage and $4,000 if the high deductible plan covers the individ- ual and a spouse or dependent. The annual limit is the sum of the limits determined separately for each month, based on the indi- vidual’s status as of the first day of the month. The maximum contribution limit to an MSA is determined separately for each spouse in a married couple. In no event can the maximum contribution limit exceed $4,000 for a family. The dollar limits are in- dexed for medical inflation and rounded to the nearest multiple of $50. Definition of high deductible health plan A high deductible health plan is a health plan with a deductible of at least $1,500 in the case of single coverage and $3,000 in the case of coverage of more than one individual. These dollar limits are indexed for medical inflation, rounded to the nearest multiple of $50. Tax treatment of MSAs Earnings on amounts in an MSA are not currently includible in income. Taxation of distributions Distributions from an MSA for the medical expenses of the individual and his or her spouse or dependents are excludable from in- come. For this purpose, medical expenses do not include expenses for insurance other than long-term care insurance, premiums for health care continuation coverage, and pre- miums for health care coverage while an in- dividual is receiving unemployment com- pensation under Federal or State law. Distributions that are not for medical ex- penses are includible in income. Such dis- tributions are also subject to an additional 10-percent tax unless made after age 591\u20442, death or disability. Upon death, if the beneficiary is the indi- vidual’s surviving spouse, the spouse may continue the MSA as his or her own. Other- wise, the beneficiary must include the MSA balance in income in the year of death. If there is no beneficiary, the MSA balance is includible on the final return of the dece- dent. In any case, no estate tax applies. Definition of MSA In general, an MSA is a trust or custodial account created exclusively for the benefit of the account holder and is subject to rules similar to those applicable to individual re- tirement arrangements. Effective date Taxable years beginning after December 31, 1996. Senate amendment The Senate amendment does not contain provisions providing favorable tax treatment for MSAs. However, the Senate amendment amends the Public Health Services Act to permit health maintenance organizations to charge deductibles to individuals with an MSA. In addition, the Senate amendment provides that it is the sense of the Commit- tee on Labor and Human Resources that the establishment of MSAs should be encouraged as part of any health insurance legislation passed by the Senate through the use of tax incentives relating to contributions to, the income growth of, and the qualified use of, MSAs. The Senate amendment also provides that it is the sense of the Senate that the Congress should take measures to further the purposes of the Senate amendment, in- cluding any necessary changes to the Inter- nal Revenue Code to encourage groups and individuals to obtain health coverage, and to promote access, equity, portability, afford- ability, and security of health benefits. Conference agreement The conference agreement follows the House bill, with modifications. In general Within limits, contributions to a medical savings account (”MSA”) are deductible if made by an eligible individual and are ex- cludable if made by the employer of an eligi- ble individual. Earnings on amounts in an MSA are not currently taxable. Distribu- tions from an MSA for medical expenses are not taxable. Eligible individuals Beginning in 1997, MSAs are available to employees covered under an employer-spon- sored high deductible plan of a small em- ployer and self-employed individuals. An em- ployer is a small employer if it employed, on average, no more than 50 employees during either the preceding or the second preceding year. In determining whether an employer is a small employer, a preceding year is not taken into account unless the employer was in existence throughout such year. In the case of an employer that was not in exist- ence through the first preceding year, the de- termination of whether the employer has no more than 50 employees is based on the aver- age number of employees that the employer reasonably expects to employ in the current year. In determining the number of employ- ees of an employer, employers under com- mon control are treated as a single em- ployer. In order for an employee of an eligible em- ployer to be eligible to make MSA contribu- tions (or to have employer contributions made on his or her behalf), the employee must be covered under an employer-spon- sored high deductible health plan and must not be covered under any other health plan (other than a plan that provides certain per- mitted coverage). In the case of an employee, contributions can be made to an MSA either by the individual or by the individual’s em- ployer. However, an individual is not eligible to make contributions to an MSA for a year if any employer contributions are made to an MSA on behalf of the individual for the year. Similarly, in order to be eligible to make contributions to an MSA, a self-employed in- dividual must be covered under a high de- ductible health plan and no other health plan (other than a plan that provides certain permitted coverage). An individual with other coverage in addi- tion to a high deductible plan is till eligible for an MSA if such other coverage is certain permitted insurance or is coverage (whether provided through insurance to otherwise) for accidents, disability, dental care, vision care, or long-term care. Permitted insurance is: (1) Medicare supplemental insurance; (2) insurance if substantially all of the coverage provided under such insurance relates to (a) liabilities incurred under worker’s com- pensation law, (b) tort liabilities, (c) liabil- ities relating to ownership or use of property (e.g., auto insurance), or (d) such other simi- lar liabilities as the Secretary may prescribe by regulations, (3) insurance for a specified disease or illness, and (4) insurance that pro- vides a fixed payment for hospitalization. CONGRESSIONAL RECORD \u2014 HOUSE H9545July 31, 1996 If a small employer with an MSA plan (i.e., the employer or its employees made con- tributions to an MSA) ceases to become a small employer (i.e., exceeds the 50-employee limit), then the employer (and its employ- ees) can continue to establish and make con- tributions to MSAs (including contributions for new employees and employees that did not previously have an MSA) until the year following the first year in which the em- ployer has more than 200 employees. After that, those employees who had an MSA (to which individual or employer contributions were made in any year) can continue to make contributions (or have contributions made on their behalf) even if the employer has more than 200 employees. For example, suppose Employer A has 48 employees in 1995 and 1996, and 205 employees in 1997 and 1998. A would be a small employer in 1997 and 1998 because it has 50 or fewer employees in the preceding or the second preceding year. Em- ployer A would still be considered a small employer in 1999. However, in years after 1999, Employer A would not be considered a small employer (even if the number of em- ployees fell to 50 or below), and in years after 1999, only employees who previously had MSA contributions (or have employer con- tributions made on their behalf). Tax treatment of and limits on contributions Individual contributions to an MSA are de- ductible (within limits) in determining AGI (i.e., ”above the line”). In addition, employer contributions are excludable (within the same limits), except that this exclusion does not apply to contributions made through a cafeteria plan. In the case of a self-employed individual, the deduction cannot exceed the individual’s earned income from the trade or business with respect to which the high deductible plan is established. In the case of an em- ployee, the deduction cannot exceed the indi- vidual’s compensation attributable to the employer sponsoring the high deductible plan in which the individual is enrolled. The maximum annual contribution that can be made to an MSA for a year is 65 per- cent of the deductible under the high deduct- ible plan in the case of individual coverage and 75 percent of the deductible in the case of family coverage. No other dollar limits on the maximum contribution apply. The an- nual contribution limit is the sum of the limits determined separately for each month, based on the individual’s status and health plan coverage as of the first day of the month. Contributions for a year can be made until the due date for the individual’s tax return for the year (determined without regard to extensions). In order to facilitate application of the cap on the number of MSA participants, de- scribed below, the employer is required to re- port employer MSA contributions, and the individual is required to report such em- ployer MSA contributions on the individual’s tax return. Comparability rule for employer contributions If an employer provides high deductible health plan coverage coupled with an MSA to employees and makes employer contribu- tions to the MSAs, the employer must make available a comparable contribution on be- half of all employees with comparable cov- erage during the same period. Contributions are considered comparable if they are either of the same amount or the same percentage of the deductible under the high deductible plan. The comparability rule is applied sepa- rately to part-time employees (i.e., employ- ees who are customarily employed for fewer than 30 hours per week). No restrictions are placed on the ability of the employer to offer different plans to different groups of employ- ees. For example, suppose an employer main- tains two high deductible plans, Plan A, with a deductible of $1,500 for individual coverage and $3,000 for family coverage, and Plan B, with a deductible of $2,000 for individual cov- erage and $4,000 for family coverage. The em- ployer offers an MSA contribution to full- time employees in Plan A of $500 for individ- ual coverage and $750 for family coverage. In order to satisfy the comparability rule, the employer would have to offer full-time em- ployees covered under Plan B one of the fol- lowing MSA contributions (1) $500 for em- ployees with individual coverage and $750 for employees with family coverage or (2) $667 for employees with individual coverage and $1,000 for employees with family coverage. Different contributions (or no contributions) could be made for part-time employees cov- ered under either high deductible plan. If employer contributions do not comply with the comparability rule during a period, then the employer is subject to an excise tax equal to 35 percent of the aggregate amount contributed by the employer to MSAs of the employer for that period. The excise tax is designed as a proxy for the denial of em- ployer contributions. In the case of a failure to comply with the comparability rule which is due to reasonable cause and not to willful neglect, the Secretary may waive part of all of the tax imposed to the extent that the payment of the tax would be excessive rel- ative to the failure involved. For purposes of the comparability rule, employers under common control are aggre- gated in the same manner as in determining whether the employer is a small employer. The comparability rule does not fail to be satisfied in a year if the employer is pre- cluded from making contributions for all employees with high deductible plan cov- erage because the employer has more than 200 employees or due to operation of the cap during the initial 4-year period. Definition of high deductible plan A high deductible plan is a health plan with an annual deductible of a least $1,500 and no more than $2,250 in the case of indi- vidual coverage and at least $3,000 and no more than $4,500 in the case of family cov- erage. In addition, the maximum out-of- pocket expenses with respect to allowed costs (including the deductible) must be no more than $3,000 in the case of individual coverage and no more than $5,500 in the case of family coverage. Beginning after 1998, these dollar amounts are indexed for infla- tion in $50 dollar increments based on the consumer price index. In plan does not fail to qualify as a high deductible plan merely be- cause it does not have a deductible for pre- ventive care as required by State law. As under present law, State insurance commissions would have oversight over the issuance of high deductible plans issued in conjunction with MSAs and could impose ad- ditional consumer protections. It is intended that the National Association of Insurance Commissioners (”NAIC”) will develop model standards for high deductible plans that indi- vidual States could adopt. Tax treatment of MSAs Earnings on amounts in an MSA are not currently includible in income. Taxation of distributions Distributions from an MSA for the medical expenses of the individual and his or her spouse or dependents generally are exclud- able from income. However, in any year for which a contribution is made to an MSA, withdrawals from an MSA maintained by that individual are excludable from income only if the individual for whom the expenses were incurred was eligible to make an MSA contribution at the time the expenses were incurred. This rule is designed to ensure that MSAs are in fact used in conjunction with a high deductible plan, and that they are not primarily used by other individuals who have health plans that are not high deductible plans. For example, suppose that, in 1997, in- dividual A is covered by a high deductible plan, and A’s spouse (”B”) is covered by a health plan that is not a high deductible plan. A makes contributions to an MSA for 1997. Withdrawals from the MSA to pay B’s medical expenses incurred in 1997 would be includible in income (and subject to the ad- ditional tax on nonmedical withdrawals) be- cause B is not covered by a high deductible plan. For this purpose, medical expenses are de- fined as under the itemized deduction for medical expenses, except that medical ex- penses do not include expenses for insurance other than long-term care insurance, pre- miums for health care continuation cov- erage, and premiums for health care cov- erage while an individual is receiving unem- ployment compensation under Federal or State law. Distributions that are not for medical ex- penses are includible in income. Such dis- tributions are also subject to an additional 15-percent tax unless made after age 65, death, or disability. Estate tax treatment Upon death, any balance remaining in the decedent’s MSA is includible in his or her gross estate. If the account holder’s surviving spouse is the named beneficiary of the MSA, then, after the death of the account holder, the MSA becomes the MSA of the surviving spouse and the amount of the MSA balance may be deducted in computing the dece- dent’s taxable estate, pursuant to the estate tax marital deduction provided in Code sec- tion 2056. The MSA qualifies for the marital deduction because the account holder has sole control over disposition of the assets in the MSA. The surviving spouse is not re- quired to include any amount in income as a result of the death; the general rules applica- ble to MSAs apply to the surviving spouse’s MSA (e.g., the surviving spouse is subject to income tax only on distributions from the MSA for nonmedical purposes). The surviv- ing spouse can exclude from income amounts withdrawn from the MSA for expenses in- curred by the decedent prior to death, to the extent they otherwise are qualified medical expenses. If, upon death, the MSA passes to a named beneficiary other than the decedent’s surviv- ing spouse, the MSA ceases to be an MSA as of the date of the decedent’s death, and the beneficiary is required to include the fair market value of MSA assets as of the date of death in gross income for the taxable year that includes the date of death. The amount includable in income is reduced by the amount in the MSA used, within one year of the death, to pay qualified medical expenses incurred prior to the death. As is the case with other MSA distributions, whether the expenses are qualified medical expenses is determined as of the time the expenses were incurred. In computing taxable income, the beneficiary may claim a deduction for that portion of the Federal estate tax on the decendent’s estate that was attributable to the amount of the MSA balance (calculated in accordance with the present-law rules re- lating to income in respect of a decedent set forth in sec. 691(c)). If there is no named beneficiary for the de- cedent’s MSA, the MSA ceases to be an MSA as of the date of death, and the fair market value of the assets in the MSA as of such date are includible in the decedent’s gross in- come for the year of the death. This rule ap- plies in all cases in which there is no named CONGRESSIONAL RECORD \u2014 HOUSEH9546 July 31, 1996 1 Permitted coverage, as described above, does not constitute coverage under a health insurance plan for this purpose. 2 This report would include the name and social se- curity number of taxpayers establishing an MSA. Failures to report are subject to a penalty of $25 for each MSA up to a maximum of $5,000. A trustee or custodian required to report could elect to do so on a company-wide or branch-by-branch basis. 3 That is, the report would not include MSAs to which contributions are made for the prior year. 4 Each income tax return on which an MSA con- tribution is shown is treated as one taxpayer for purposes of the cap. It is anticipated that the IRS would adjust the actual return information to take into account MSAs that may have been established by late filers. beneficiary, even if the surviving spouse ulti- mately obtains the right to MSA assets (e.g., if the surviving spouse is the sole beneficiary of the decedent’s estate). Because of the sig- nificant tax consequences if a married indi- vidual fails to name his or her spouse as the MSA beneficiary, even if the rights to MSA assets are otherwise acquired by the surviv- ing spouse, it is anticipated that the market- ing materials describing other tax aspects of MSAs will explain the consequences of fail- ure to name the spouse as the beneficiary. Cap on taxpayers utilizing MSAs In general.\u2014The number of taxpayers bene- fiting annually from an MSA contribution is limited to a threshold level (generally 750,000 taxpayers). If it is determined in a year that the threshold level has been exceeded (called a ”cut-off” year) then, in general, for suc- ceeding years during the 4-year pilot period 1997 2000, only those individuals who (1) made an MSA contribution or had an em- ployer MSA contribution for the year or a preceding year (i.e. are active MSA partici- pants) or (2) are employed by a participating employer, would be eligible for an MSA con- tribution. In determining whether the threshold for any year has been exceeded, MSAs of individuals who were not covered under a health insurance plan for the six month period ending on the date on which coverage under a high deductible plan com- mences would not be taken into account.1 However, if the threshold level is exceeded in a year, previously uninsured individuals would be subject to the same restriction on contributions in succeeding years as other individuals. That is, they would not be eligi- ble for an MSA contribution for a year fol- lowing a cut-off-year unless they are an ac- tive MSA participant (i.e. had an MSA con- tribution for the year or a preceding year) or are employed by a participating employer. In a year after a cut-off year, employees of a participating employer can establish new MSAs and make new contributions (even if the employee is a new employee or did not previously have an MSA). An employer is a participating employer if (1) the employer made any MSA contributions on behalf of employees in any preceding year or (2) at least 20 percent of the employees covered under a high deductible plan made an MSA contribution of at least $100 in the preceding year. In the case of a cut-off year before 2000, an individual is not an eligible individual or an active MSA participant unless the individual was first covered under a high deductible plan on or before the cut-off date. The cut-off date is generally October 1 of the cut-off year. However, if the individual was enrolled in a plan pursuant to a regularly scheduled enrollment period, then the cut-off date is December 31. Similarly, an employer is not considered a participating employer if it first offered coverage after October 1 of a cut-off year unless the high deductible plan is offered pursuant to a regularly scheduled enrollment period. In addition, a self-em- ployed individual is not considered an eligi- ble individual or an active MSA participant unless the individual was covered under a high deductible plan on or before November 1 of a cut-off year. These rules are designed to prevent high deductible plans from being offered just be- fore the limitation on MSAs is effective in order to avoid application of the cap. They are not, however, intended to preclude indi- viduals who first enroll in an employer-spon- sored high deductible health plan or employ- ees of employers that adopt a high deduct- ible plan in a cut-off year due to normal health plan operation from having MSAs. For example, suppose a small employer of- fers a high deductible plan that provides that new employees may be covered under the plan beginning the first day of the month after the month in which they are hired. New employee A (whose previous coverage was not high deductible coverage) is hired on Oc- tober 15, and is enrolled in the high deduct- ible plan November 1 of that year. If the year is a cut-off year, Employee A is an eligible individual and, if he has an MSA contribu- tion for the year, an active participant for the year because he was enrolled pursuant to a regularly scheduled enrollment period. Similarly, suppose that employer A is a small employer and does not currently offer health care coverage. In 1997, A decides to offer health plan coverage to its employees, including a high deductible plan coupled with an MSA. A takes steps to provide such coverage on or before October 1 of the year (e.g., making arrangements with insurance companies or distributing plan material to employees). The first enrollment period for the health plans begins September 1, and coverage under the plan will begin November 1. If the year is a cut-off year, the employer is a participating employer because the plan was established pursuant to a regularly scheduled enrollment period. Under certain circumstances, MSA partici- pation may be reopened after a cut-off year so that MSAs are again available to all indi- viduals in the qualifying group of self-em- ployed individuals and employees of small employers. For the 1997 tax year, taxpayers are per- mitted to establish MSAs provided that they are in the qualifying group of self-employed individuals or employees working for small employers. Rules for 1997 On or before June 1, 1997, each trustee or custodian of an MSA (e.g., insurance com- pany or financial institution) is required to report to the Internal Revenue Service (”IRS”) the total number of MSAs estab- lished as of April 30, 1997, for which it acts as trustee or custodian, including the number of MSAs established for previously uninsured individuals.2 If, based on this reporting, the number of MSAs established (but excluding those established for previously uninsured individuals) as of April 30, 1997, exceeds 375,000 (50 percent of 750,000), on or before September 1, 1997, the IRS would publish guidance providing that only active MSA participants or employees of participating employers would be eligible for an MSA con- tribution for the 1998 tax year and there- after. If this threshold is exceeded, an indi- vidual who is first covered by an employer- sponsored high deductible health plan after September 1, 1997, is not an eligible individ- ual or an active MSA participant (and there- fore cannot have an MSA for 1997 or a subse- quent year) unless the high deductible cov- erage is elected pursuant to a regularly scheduled enrollment period. Similarly, an employer is not considered a participating employer if it first offered a high deductible plan after September 1, 1997, unless the plan was offered pursuant to a regularly sched- uled enrollment period. Also, a self-employed individual would not be an eligible individ- ual or an active MSA participant unless the individual was first covered under a high de- ductible plan on or before October 1, 1997. If the 375,000 cap is not exceeded, then an- other determination of MSA participation will be made, as follows. On or before August 1, 1997, each trustee or custodian of an MSA (e.g., insurance company or financial institu- tion) is required to report to the Internal Revenue Service (”IRS”) the total number of MSAs established as of June 30, 1997, for which it acts as trustee or custodian, includ- ing the number of MSAs established for pre- viously uninsured individuals. If, based on this reporting, the number of MSAs estab- lished (but excluding those established for previously uninsured individuals) exceeds the 1997 threshold level of 525,000 (70 percent of 750,000), on or before October 1, 1997, the IRS would publish guidance providing that only active MSA participants or employees of participating employers would be eligible for an MSA contribution for the 1998 tax year and thereafter. If the 1997 threshold is ex- ceeded, an individual who is first covered by an employer-sponsored high deductible health plan after October 1, 1997, is not an el- igible individual or an active MSA partici- pant (and therefore cannot have an MSA for 1997 or a subsequent year) unless the high de- ductible coverage is elected pursuant to a regularly scheduled enrollment period. Simi- larly, an employer is not considered a par- ticipating employer if it first offered a high deductible plan after October 1, 1997, unless the plan was offered pursuant to a regularly scheduled enrollment period. Also, a self-em- ployed individual would not be an eligible in- dividual or an active MSA participant unless the individual was first covered under a high deductible plan on or before November 1, 1997. If the 1997 threshold level is not exceeded, all taxpayers in the qualifying eligible group (i.e., self-employed individuals and employ- ees working for employers with 50 or fewer employees) would be permitted to have MSA contributions for the 1998 tax year. Rules for 1998 and succeeding years In general\u2014In 1998 and succeeding years, on or before August 1 of the year, each trustee or custodian of an MSA is required to report to the IRS the total number of MSAs estab- lished as of June 30 for the current year,3 in- cluding the number of such MSAs estab- lished for previously uninsured individuals. In addition, the IRS is directed to collect data with respect to the number of taxpayers showing an MSA contribution on their indi- vidual income tax returns for the prior year and the extent to which such taxpayers were previously uninsured.4 If, based on this infor- mation, the IRS determines as described below that the number of taxpayers antici- pated to have MSA contributions (disregard- ing previously uninsured individuals) ex- ceeds the applicable threshold level, the IRS is required to issue guidance to the public by no later than October 1. If this guidance is issued, then only taxpayers who are active MSA participants or who are employed by a participating employer would be entitled to MSA contributions in tax years following the year the guidance is issued. For 1998 and succeeding years, the thresh- old is exceeded if either of the following lim- its are exceeded. The numerical limit is ex- ceeded if: (1) the number of MSA returns filed on or before April 1 of the year, plus the estimate of the number of MSA returns for such year that will be filed after such date exceeds the threshold, or (2) 90 percent of the amount determined under (1), plus 15\/6ths of the MSAs established for the year before July 1 exceeds $750,000. CONGRESSIONAL RECORD \u2014 HOUSE H9547July 31, 1996 1998.\u2014In 1998, the IRS would analyze the return data from the filing of 1997 tax year returns and would determine, based on this data, the number of taxpayers with MSA contributions for 1997 and who were not pre- viously uninsured. If the IRS determines that (1) MSA returns filed on or before April 15, 1998, plus the estimated number of MSA return for 1997 filed after such date exceeds 600,000, or (2) that 90 percent of the MSA re- turns in (1), plus 15\/6ths of the number of MSAs established for 1998 between January 1 and July 1, 1998, the IRS would publish guid- ance on or before October 1, 1998, advising taxpayers that only taxpayers who had pre- viously had MSA contributions (i.e., for ei- ther the 1997 or 1998 tax year) or who are em- ployed by a participating employer would be eligible for MSA contributions in succeeding tax years. If the 1998 threshold is exceeded, an individual who is first covered by an em- ployer-sponsored high deductible health plan after October 1, 1998, is not an eligible indi- vidual or an active MSA participant (and therefore cannot have an MSA for 1998 or a subsequent year) unless the high deductible coverage is elected pursuant to a regularly scheduled enrollment period. Similarly, an employer is not considered a participating employer if it first offered a high deductible plan after October 1, 1998, unless the plan was offered pursuant to a regularly sched- uled enrollment period. Also, a self-employed individual would not be an eligible individ- ual or an active MSA participant unless the individual was first covered under a high de- ductible plan on or before November 1, 1998. In the event that the threshold level had not been exceeded, all taxpayers in the quali- fying eligible group would be permitted to establish MSAs during the 1999 tax year. 1999.\u2014In 1999, the IRS would analyze the return data from the filing of 1998 tax year returns and would determine, based on this data, the number of taxpayers with MSA contributions for 1998 and who were not pre- viously uninsured. If the IRS determines that (1) MSA returns filed on or before April 15, 1999, plus the estimated number of MSA returns for 1998 filed after such date exceeds 600,000, or (2) that 90 percent of the MSA re- turns in (1), plus 15\/6ths of the number of MSAs established for 1998 between January 1 and July 1, 1999, the IRS would publish guid- ance on or before October 1, 1999, advising taxpayers that only taxpayers who had pre- viously had MSA contributions (i.e., for the 1997, 1998, or 1999 tax year) or who are em- ployed by a participating employer would be eligible for MSA contributions in succeeding tax years. If the 1999 threshold is exceeded, an individual who is first covered by an em- ployer-sponsored high deductible health plan after October 1, 1999, is not an eligible indi- vidual or an active MSA participant (and therefore cannot have an MSA for 1999 or a subsequent year) unless the high deductible coverage is elected pursuant to a regularly scheduled enrollment period. Similarly, an employer is not considered a participating employer if it first offered a high deductible plan after October 1, 1999, unless the plan was offered pursuant to a regularly sched- uled enrollment period. Also, a self-employed individual would not be an eligible individ- ual or an active MSA participant unless the individual was first covered under a high de- ductible plan on or before November 1, 1999. In the event that the threshold level had not been exceeded, all taxpayers in the quali- fying eligible group would be permitted to establish MSAs during the 2000 tax year. Reopening of MSA participation.\u2014If 1997 is a cut-off year, then in 1998, the IRS would (as described above) analyze the return data from the filing of 1997 tax year returns and would determine, based on this data, the number of taxpayers with MSA contribu- tions for 1997 and who were not previously uninsured. If the IRS determines that MSA returns filed on or before April 15, 1998, plus the estimated number of MSA return for 1997 filed after such date (disregarding MSAs of previously uninsured individuals) exceeds 750,000, then the IRS will announce by Octo- ber 1, 1998, that MSAs will be available to all eligible individuals in the qualifying eligible group of self-employed individuals and em- ployees of small employers covered under a high deductible health plan during the first 6 months of 1999. Similarly, if 1998, is a cut-off year, then in 1999, MSA returns filed on or before April 15, 1999, plus the estimated num- ber of MSA returns for 1998 filed after such date (disregarding MSAs of previously unin- sured individuals) exceeds 750,000, then IRS will announce by October 1, 1998, that MSAs will be available to all eligible individuals in the qualifying eligible group of self-em- ployed individual and employees of small employers with high deductible plan cov- erage during the first 6 months of 2000. End of pilot project After December 31, 2000, no new contribu- tions may be made to MSAs except by or on behalf of individuals who previously had MSA contributions and employees who are employed by a participating employer. An employer is a participating employer if (1) the employer made any MSA contributions for any year to an MSA on behalf of employ- ees or (2) at least 20 percent of the employees covered under a high deductible plan made MSA contributions of at least $100 in the year 2000. Self-employed individuals who made con- tributions to an MSA during the period 1997 2000 also may continue to make contribu- tions after 2000. Measuring the effects of MSAs During 1997 2000, the Department of the Treasury will evaluate MSA participation and the reduction in Federal revenues due to such participation and make such reports of such evaluations to the Congress as the Sec- retary determines appropriate. The General Accounting Office is directed to contract with an organization with exper- tise in health economics, health insurance markets and actuarial science to conduct a study regarding the effects of MSAs in the small group market on (1) selection (includ- ing adverse selection), (2) health costs, in- cluding the impact on premiums of individ- uals with comprehensive coverage, (3) use of preventive care, (4) consumer choice, (5) the scope of coverage of high deductible plans purchased in conjunction with an MSA and (6) other relevant issues, to be submitted to the Congress by January 1, 1999. The conferees intend that the study be broad in scope, gather sufficient data to fully evaluate the relevant issues, and be ade- quately funded. The conferees expect the study to utilize appropriate techniques to measure the impact of MSAs on the broader health care market, including in-depth anal- ysis of local markets with high penetration. The conferees expect the study to evaluate the impact of MSAs on individuals and fami- lies experience high health care costs, espe- cially low- and middle-income families. Definiton of MSA In general, an MSA is a trust or custodial account created exclusively for the benefit of the account holder and his subject to rules similar to those applicable to individual re- tirement arrangements. Effective date The provisions are effective for taxable years beginning after December 31, 1996. B. INCREASE IN DEDUCTION FOR HEALTH INSUR- ANCE EXPENSES OF SELF-EMPLOYED INDIVID- UALS (Sec. 311 of the House bill and sec. 401 of the Senate amendment.) Present law Under present law, self-employed individ- uals are entitled to deduct 30 percent of the amount, paid for health insurance for the self-employed individual and the individual’s spouse and dependents. The deduction is not available for any month in which the tax- payer is eligible to participate in a sub- sidized health plan maintained by the em- ployer of the taxpayer of the taxpayer’s spouse. The 30-percent deduction is available in the case of self insurance as well as com- mercial insurance. The self-insured plan must in fact be insurance (e.g., there must be appropriate risk shifting) and not merely a reimbursement arrangement. House bill Under the House bill, the deduction for health insurance for self-employed individ- uals is phased up to 50 percent as follows: for taxable years beginning in 1998, the amount of the deduction would be 35 percent of health insurance expenses; for taxable years beginning in 1999, 2000, and 2001, 40 percent; for taxable years beginning in 2002, 45 per- cent; and for taxable years beginning in 2003 and thereafter, 50 percent. Effective date.\u2014The provision is effective for taxable years beginning after December 31, 1997. Senate amendment Beginning in 1997, the Senate amendment phases up the deduction in 5 percent incre- ments until it is 80 percent in 2006 and there- after. Effective date.\u2014The provision is effective for taxable years beginning after December 31, 1996. Conference agreement The conference agreement increases the deduction for health insurance of self-em- ployed individuals as follows: the deduction would be 40 percent in 1997; 45 percent in 1998 through 2002, 50 percent in 2003; 60 percent in 2004, 70 percent in 2005; and 80 percent in 2006 and thereafter. The conference agreement also provides that payments for personal injury or sick- ness through and arrangements having the effect of accident or health insurance (and that are not merely reimbursement arrange- ments) are excludable from income. In order for the exclusion to apply, the arrangement must be insurance (e.g., there must be ade- quate risk shifting). This provision equalizes the treatment of payments under commer- cial insurance and arrangements other than commercial insurance that have the effect of insurance. Under this provision, a self-em- ployed individual who receives payments from such an arrangement could exclude the payments from income. Effective date.\u2014The provision is effective for taxable years beginning after December 31, 1996. No inference is intended with respect to the excludability of payments under ar- rangements having the effect of accident or health insurance under present law. C. TREATMENT OF LONG-TERM CARE INSURANCE AND SERVICES (Secs. 321 323 and 325 328 of the House bill and secs. 411 415 and 421 424 of the Senate amendment.) Present law In general Present law generally does not provide ex- plicit rules relating to the tax treatment of long-term care insurance contracts or long- term care services. Thus, the treatment of CONGRESSIONAL RECORD \u2014 HOUSEH9548 July 31, 1996 5 These requirements include a requirement that a health FSA can only provide reimbursement for medical expenses (as defined in sec. 213) and cannot provide reimbursement for premium payments for other health coverage and that the maximum amount of reimbursement under a health FSA must be available at all times during the period of cov- erage. 6 The bill does not otherwise modify the require- ments relating to FSAs. An FSA is defined as a ben- efit program providing employees with coverage under which specified incurred expenses may be re- imbursed (subject to maximums and other reason- able conditions), and the maximum amount of reim- bursement that is reasonably available to a partici- pant is less than 500 percent of the value of the cov- erage. 7 The 90-day period is not a waiting period. Thus, for example, an individual can be certified was chronically ill if the licensed health care practi- tioner certifies that the individual will be unable to perform at least 2 activities of daily living for at least 90 days. 8 Nothing in the bill requires the contract to take into account all of the activities of daily living. For example, a contract could require that an individual be unable to perform (without substantial assist- ance) 2 out of any 5 such activities, or for another example, 3 out of the 6 activities. long-term care contracts and services is un- clear. Present law does provide rules relating to medical expenses and accident or health insurance. Itemized deduction for medical expenses In determining taxable income for Federal income tax purposes, a taxpayer is allowed an itemized deduction for unreimbursed ex- penses that are paid by the taxpayer during the taxable year for medical care of the tax- payer, the taxpayer’s spouse, or a dependent of the taxpayer, to the extent that such ex- penses exceed 7.5 percent of the adjusted gross income of the taxpayer for such year (sec. 213). For this purpose, expenses paid for medical care generally are defined as amounts paid: (1) for the diagnosis, cure, mitigation, treatment, or prevention of dis- ease (including prescription medicines or drugs and insulin), or for the purpose of af- fecting any structure or function of the body (other than cosmetic surgery not related to disease, deformity, or accident); (2) for trans- portation primarily for, and essential to, medical care referred to in (1); or (3) for in- surance (including Part B Medicare pre- miums) covering medical care referred to in (1) and (2). Exclusion for amounts received under acci- dent or health insurance Amounts received by a taxpayer under ac- cident or health insurance for personal inju- ries or sickness generally are excluded from gross income to the extent that the amounts received are not attributable to medical ex- penses that were allowed as a deduction for a prior taxable year (sec. 104). Treatment of accident or health plans main- tained by employers Contributions of an employer to an acci- dent or health plan that provides compensa- tion (through insurance or otherwise) to an employee for personal injuries or sickness of the employee, the employee’s spouse, or a de- pendent of the employee, are excluded from the gross income of the employee (sec. 106). In addition, amounts received by an em- ployee under such a plan generally are ex- cluded from gross income to the extent that the amounts received are paid, directly or in- directly, to reimburse the employee for ex- penses for the medical care of the employee, the employee’s spouse, or a dependent of the employee (sec. 105). for this purpose, ex- penses incurred for medical care are defined in the same manner as under the rules re- garding the deduction for medical expenses. A cafeteria plan is an employer-sponsored arrangement under which employees can elect among cash and certain employer-pro- vided qualified benefits. No amount is in- cluded in the gross income of a participant in a cafeteria plan merely because the par- ticipant has the opportunity to make such an election (sec. 125). Employer-provided ac- cident or health coverage is one of the bene- fits that may be offered under a cafeteria plan. A flexible spending arrangement (”FSA”) is an arrangement under which an employee is reimbursed for medical expenses or other nontaxable employer-provided benefits, such as dependent care, and under which the max- imum amount of reimbursement that is rea- sonably available to a participant for a pe- riod of coverage is not substantially in ex- cess of the total premium (including both employee-paid and employer-paid portions of the premium) for such participant’s cov- erage. Under proposed Treasury regulations, a maximum amount of reimbursement is not substantially in excess of the total premium if such maximum amount is less than 500 percent of the premium. An FSA may be part of a cafeteria plan or provided by an em- ployer outside a cafeteria plan. FSAs are commonly used to reimburse employees for medical expenses not covered by insurance. If certain requirements are satisfied,5 amounts reimbursed for nontaxable benefits from an FSA are excludable from income. Health care continuation rules The health care continuation rules require that an employer must provide qualified beneficiaries the opportunity to continue to participate for a specified period in the em- ployer’s health plan after the occurrence of certain events (such as termination of em- ployment) that would have terminated such participation (sec. 4980B). Individuals elect- ing continuation coverage can be required to pay for such coverage. House bill Tax treatment and definition of long-term care insurance contracts and qualified long-term care services Exclusion of long-term care proceeds.\u2014A long-term care insurance contract generally is treated as an accident and health insur- ance contract. Amounts (other than policy- holder dividends or premium refunds) re- ceived under a long-term care insurance con- tract generally are excludable as amounts received for personal injuries and sickness, subject to a cap of $175 per day, or $63,875 an- nually, on per diem contracts only. If the ag- gregate amount of periodic payments under all qualified long-term care contracts ex- ceeds the dollar cap for the period, then the amount of such excess payments is exclud- able only to the extent of the individual’s costs (that are not otherwise compensated for by insurance or otherwise) for long-term care services during the period. The dollar cap is indexed by the medical care cost com- ponent of the consumer price index. Exclusion for employer-provided long-term care coverage.\u2014A plan of an employer provid- ing coverage under a long-term care insur- ance contract generally is treated as an acci- dent and health plan. Employer-provided coverage under a long-term care insurance contract is not, however, excludable by an employee if provided through a cafeteria plan; similarly, expenses for long-term care services cannot be reimbursed under an FSA.6 Definition of long-term care insurance con- tract.\u2014A long-term care insurance contract is defined as any insurance contract that provides only coverage of qualified long-term care services and that meets other require- ments. The other requirements are that (1) the contract is guaranteed renewable, (2) the contract does not provide for a cash surren- der value or other money that can be paid, assigned, pledged or borrowed, (3) refunds (other than refunds on the death of the in- sured or complete surrender or cancellation of the contract) and dividends under the con- tract may be used only to reduce future pre- miums or increase future benefits, and (4) the contract generally does not pay or reim- burse expenses reimbursable under Medicare (except where Medicare is a secondary payor, or the contract makes per diem or other periodic payments without regard to ex- penses). A contract does not fail to be treated as a long-term care insurance contract solely be- cause it provides for payments on a per diem or other periodic basis without regard to ex- penses incurred during the period. Medicare duplication rules.\u2014The bill pro- vides that no provision of law shall be con- strued or applied so as to prohibit the offer- ing of a long-term care insurance contract on the basis that the contract coordinates its benefits with those provided under Medi- care. Thus, long-term care insurance con- tracts are not subject to the rules requiring duplication of Medicare benefits. Definition of qualified long-term care serv- ices.\u2014Qualified long-term care services means necessary diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance or personal care services that are required by a chronically ill individual and that are pro- vided pursuant to a plan of care prescribed by a licensed health care practitioner. Chronically ill individual.\u2014A chronically ill individual is one who has been certified with- in the previous 12 months by a licensed health care practitioner as (1) being unable to perform (without substantial assistance) at least 2 activities of daily living for at least 90 days 7 due to a loss of functional ca- pacity, (2) having a similar level of disability as determined by the Secretary of the Treas- ury in consultation with the Secretary of Health and Human Services, or (3) requiring substantial supervision to protect such indi- vidual from threats to health and safety due to severe cognitive impairment. Activities of daily living are eating, toileting, transfer- ring, bathing, dressing and continence.8 it is intended that an individual who is physically able but has a cognitive impair- ment such as Alzheimer’s disease or another form of irreversible loss of mental capacity be treated similarly to an individual who is unable to perform (without substantial as- sistance) at least 2 activities of daily living. Because of the concern that eligibility for the medical expense deduction not be diag- nosis-driven, the provision requires the cog- nitive impairment to be severe. It is in- tended that severe cognitive impairment mean a deterioration or loss in intellectual capacity that is measured by clinical evi- dence and standardized tests which reliably measure impairment in: (1) short- or long- term memory; (2) orientation to people, places or time; and (3) deductive or abstract reasoning. In addition, it is intended that such deterioration or loss place the individ- ual in jeopardy of harming self or others and therefore require substantial supervision by another individual. A licensed health care practitioner is a physician (as defined in sec. 1861(r)(l) of the Social Security Act) and any registered pro- fessional nurse, licensed social worker or other individual who meets such require- ments as may be prescribed by the Secretary of the Treasury. Expenses for long-term care services treated as medical expenses.\u2014Unreimbursed expenses for qualified long-term care services provided to the taxpayer or the taxpayer’s spouse or de- pendents are treated as medical expenses for CONGRESSIONAL RECORD \u2014 HOUSE H9549July 31, 1996 9 The rule limiting such services provided by a rel- ative or a related corporation does not apply for pur- poses of the exclusion for amounts received under a long-term care insurance contract, whether the con- tract is employer-provided or purchased by an indi- vidual. The limitation in unnecessary in such cases because it is anticipated that the insurer will mon- itor reimbursements to limit opportunities for fraud in connection with the performance of services by the taxpayer’s relative or a related corporation. 10 Similarly, within certain limits, in the case of a rider to a life insurance contract, charges against the life insurance contract’s cash surrender value that are includible in income are treated as medical expenses (provided the rider constitutes a long-term care insurance contract). 11 Terminally ill is defined as under the provision of the bill relating to accelerated death benefits. In general, under that provision, an individual is con- sidered to be terminally ill if he or she is certified as having an illness or physical condition that rea- sonably can be expected to result in death within 24 months of the date of the certification. purposes of the itemized deduction for medi- cal expenses (subject to the present-law floor of 7.5 percent of adjusted gross income). For this purpose, amounts received under a long- term care insurance contract (regardless of whether the contract reimburses expenses or pays benefits on a per diem or other periodic basis) are treated as reimbursement for ex- penses actually incurred for medical care. For purposes of the deduction for medical expenses, qualified long-term care services do not include services provided to an indi- vidual by a relative or spouse (directly, or through a partnership, corporation, or other entity), unless the relative is a licensed pro- fessional with respect to such services, or by a related corporation (within the meaning of Code section 267(b) or 707(b)).9 Long-term care insurance premiums treated as medical expenses.\u2014Long-term care insurance premiums that do not exceed specified dollar limits are treated as medical expenses for purposes of the itemized deduction for medi- cal expenses.10 The limits are as follows: In the case of an indi- vidual with an at- tained age before the close of the tax- able year of: The limitation on premiums paid for such taxable years is: Not more than 40 ……………………. $200 More than 40 but not more than 50 ……………………………………….. 375 More than 50 but not more than 60 ……………………………………….. 750 More than 60 but not more than 70 ……………………………………….. 2,000 More than 70 ………………………….. 2,500 For taxable years beginning after 1997, these dollar limits are indexed for increases in the medical care component of the consumer price index. The Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, is directed to develop a more appropriate index to be ap- plied in lieu of the foregoing. Such an alter- native might appropriately be based on in- creases in skilled nursing facility and home health care costs. It is intended that the Treasury Secretary annually publish the in- dexed amount of the limits as early in the year as they can be calculated. Deduction for long-term care insurance of self-employed individuals.\u2014The present-law 30 percent deduction for health insurance ex- penses of self-employed individuals is phased up to 50 percent under the bill. Because the bill treats payments of eligible long-term care insurance premiums in the same man- ner as medical insurance premiums, the self- employed health insurance deduction applies to eligible long-term care insurance pre- miums under the bill. Long-term care riders on life insurance con- tracts.\u2014In the case of long-term care insur- ance coverage provided by a rider on or as part of a life insurance contract, the require- ments applicable to long-term care insur- ance contracts apply as if the portion of the contract providing such coverage were a sep- arate contract. The term ”portion” means only the terms and benefits that are in addi- tion to the terms and benefits under the life insurance contract without regard to long- term care coverage. As a result, if the appli- cable requirements are met by the long-term care portion of the contract, amounts re- ceived under the contract as provided by the rider are treated in the same manner as long-term care insurance benefits, whether or not the payment of such amounts causes a reduction in the contract’s death benefit or cash surrender value. The guideline premium limitation applicable under section 7702(c)(2) is increased by the sum of charges (but not premium payments) against the life insur- ance contract’s cash surrender value, the im- position of which reduces premiums paid for the contract (within the meaning of sec. 7702(f)(1)). In addition, it is anticipated that Treasury regulations will provide for appro- priate reduction in premiums paid (within the meaning of sec. 7702(f)(1)) to reflect the payment of benefits under the rider that re- duce the cash surrender value of the life in- surance contract. A similar rule should apply in the case of a contract governed by section 101(f) and in the case of the payments under a rider that are excludable under sec- tion 101(g) of the Code (as added by this bill). Health care continuation rules.\u2014The health care continuation rules do not apply to cov- erage under a long-term care insurance con- tract. Inclusion of excess long-term care benefits In general, the bill provides that the maxi- mum annual amount of long-term care bene- fits under a per diem type contract that is excludable from income with respect to an insured who is chronically ill (not including amounts received by reason of the individual being terminally ill) 11 cannot exceed the equivalent of $175 per day for each day the individual is chronically ill. Thus, for per diem type contracts, the maximum annual exclusion for long-term care benefits with respect to any chronically ill individual (not including amounts received by reason of the individual being terminally ill) is $63,875 (for 1997). If payments under such contracts ex- ceed the dollar limit, then the excess is ex- cludable only to the extent the individual has incurred actual costs for long-term care services. If the insured is not the same as the holder of the contract, the insured may as- sign some or all of this limit to the contract holder at the time and manner prescribed by the Secretary. This $175 per day limit is indexed for infla- tion after 1997 for increases in the medical care component of the consumer price index. The Treasury Secretary, in consultation with the Secretary of Health and Human Services, is directed to develop a more ap- propriate index, to be applied in lieu of the foregoing. Such an alternative might appro- priately be based on increases in skilled nursing facility and home health care costs. It is intended that the Treasury Secretary annually publish the indexed amount of the limit as early in the year as it can be cal- culated. A payor of long-term care benefits (defined for this purpose to include any amount paid under a product advertised, marketed or of- fered as long-term care insurance) is re- quired to report to the IRS the aggregate amount of such benefits paid to any individ- ual during any calendar year, and the name, address and taxypayer identification number of such individual. A copy of the report must be provided to the payee by January 31 fol- lowing the year of payment, showing the name of the payor and the aggregate amount of benefits paid to the individual during the calendar year. Failure to file the report or provide the copy to the payee is subject to the generally applicable penalties for failure to file similar information reports. Consumer protection provisions Under the bill, long-term care insurance contracts, and issuers of contracts, are re- quired to satisfy certain provisions of the long-term care insurance model Act and model regulations promulgated by the Na- tional Association of Insurance Commis- sioners (as adopted as of January 1993). The policy requirements relate to disclosure, nonforfeitability, guaranteed renewal or noncancellability, prohibitions on limita- tions and exclusions, extension of benefits, continuation or conversion of coverage, dis- continuance and replacement of policies, un- intentional lapse, post-claims underwriting, minimum standards, inflation protection, preexisting conditions, and prior hospitaliza- tion. The bill also provides disclosure and nonforfeiture requirements. The nonforfeit- ure provision gives consumers the option of selecting reduced paid-up insurance, ex- tended term insurance, or a shortened bene- fit period in the event a policyholder who elects a nonforfeiture provision is unable to continue to pay premiums. The requirements for issuers of long-term care insurance con- tracts relate to application forms, reporting requirements, marketing, appropriateness of purchase, format, delivering a shopper’s guide, right to return, outline of coverage, group plans, policy summary, monthly re- ports on accelerated death benefits, and in- contestability period. A tax is imposed equal to $100 per policy per day for failure to sat- isfy these requirements. Nothing in the bill prevents a State from establishing, implementing or continuing standards related to the protection of policy- holders of long-term care insurance policies, if such standards are not inconsistent with standards established under the bill. Effective date The provisions defining long-term care in- surance contracts and qualified long-term care services apply to contracts issued after December 31, 1996. Any contract issued be- fore January 1, 1997, that met the long-term care insurance requirements in the State in which the policy was sitused at the time it was issued shall be treated as a long-term care insurance contract, and services pro- vided under or reimbursed by the contract treated as qualified long-term care services. A contract providing for long-term care in- surance may be exchanged for a long-term care insurance contract (or the former can- celled and the proceeds reinvested in the lat- ter within 60 days) tax free between the date of enactment and January 1, 1998. Taxable gain would be recognized to the extent money or other property is received in the exchange. The issuance or conformance of a rider to a life insurance contract providing long-term care insurance coverage is not treated as a modification or a material change for pur- poses of applying sections 101(f), 7702, and 7702A of the Code. The provision relating to treatment of eli- gible long-term care premiums as a medical expense is effective for taxable years begin- ning after December 31, 1996. The provision treating amounts paid for long-term care services as a medical expense (for purposes of the medical expense deduction) is effective for services furnished in taxable years begin- ning after December 31, 1997. The provisions relating to the maximum exclusion for certain long-term care benefits and reporting are effective for taxable years CONGRESSIONAL RECORD \u2014 HOUSEH9550 July 31, 1996 12 See item D, below. beginning after December 31, 1996. Thus, the initial year in which reports will be filed with the IRS and copies provided to the payee will be 1998, with respect to long-term care benefits paid in 1997. Senate amendment The Senate amendment is the same as the House bill, except as follows. Life insurance company reserves In determining reserves for insurance com- pany tax purposes, the Senate amendment provides that the Federal income tax reserve method applicable for a long-term care in- surance contract issued after December 31, 1996, is the method prescribed by the Na- tional Association of Insurance Commis- sioners (”NAIC”) (or, if no reserve method has been so prescribed, a method consistent with the tax reserve method for life insur- ance, annuity or noncancellable accident and health insurance contracts, whichever is most appropriate). The method currently prescribed by the NAIC for long-term care insurance contracts is the one-year full pre- liminary term method. As under present law, however, in no event may the tax reserve for a contract as of any time exceed the amount which would be taken into account with re- spect to the contract as of such time in de- termining statutory reserves. Exchanges of life insurance and other con- tracts for long-term care insurance con- tracts The exchange of a life insurance contract or an endowment or annuity contract for a qualified long-term care insurance contract is not taxable under the Senate amendment. Distributions from IRAs and retirement plans for long-term care insurance The Senate amendment permits certain plans to make distributions to pay premiums for long-term care insurance for the individ- ual or the individual’s spouse and provides that the 10-percent tax on early withdrawals does not apply to such distributions. The provision applies to distributions from indi- vidual retirement arrangements (”IRAs”) and distributions attributable to elective de- ferrals to qualified cash or deferred arrange- ments (sec. 401(k) plans), tax-sheltered annu- ities (sec. 403(b) plans), nonqualified deferred compensation plans of governmental or tax- exempt employers (sec. 457 plans), and sec- tion 501(c)(18) plans used to pay premiums for long-term care insurance for the individ- ual or the individual’s spouse. Such distribu- tions are includable in income (as under present law). Effective dates The effective dates are the same as the House bill, except as follows. The provision treating long-term care serv- ices as a medical expense is effective for tax- able years beginning after December 31, 1996. The change in treatment of reserves for long-term care insurance contracts is effec- tive for contracts issued after December 31, 1996. The provision relating to tax-free ex- changes of life insurance, endowment and an- nuity contracts for long-term care insurance contracts is effective for taxable years begin- ning after December 31, 1997. The provision relating to certain distribu- tions from IRSs and elective deferrals used to pay long-term care insurance premiums is effective for payments and distributions after December 31, 1996. Conference agreement The conference agreement generally fol- lows the House bill, except as follows. Tax treatment and definition of long-term care insurance contracts and qualified long-term care services Chronically ill individual.\u2014The conference agreement provides that, for purposes of de- termining whether an individual is chron- ically ill, the number of activities of daily living that are taken into account under the contract may not be less than five. For ex- ample, a contract could require that an indi- vidual be unable to perform (without sub- stantial assistance) two out of any five of the activities listed in the bill. By contrast, a contract does not meet this requirement if it required that an individual be unable to perform two out of any four of the activities listed in the bill. In addition, the conference agreement modifies the second test for whether an indi- vidual is chronically ill (i.e., that the indi- vidual has a level of disability similar to an individual who is unable to perform (without substantial assistance) at least two activi- ties of daily living). Under the conference agreement, this test is met if the individual has been certified within the previous 12 months by a licensed health care practi- tioner as having a similar level of disability, as determined under regulations prescribed by the Secretary in consultation with the Secretary of Health and Human Services. Health care continuation rules.\u2014The health care continuation rules do not apply to cov- erage under a plan, substantially all of the coverage under which is for qualified long- term care services. State-maintained plans.\u2014The conference agreement modifies the definition of a quali- fied long-term care insurance contract. Under the conference agreement, an arrange- ment is treated as a qualified long-term care insurance contract if an individual receives coverage for qualified long-term care serv- ices under a State long-term care plan, and the terms of the arrangement would satisfy the requirements for a long-term care insur- ance contract under the provision, were the arrangement an insurance contract. For this purpose, a State long-term care plan is any plan established and maintained by a State (or instrumentality of such State) under which only employees (and former employ- ees, including retirees) of a State or of a po- litical subdivision or instrumentality of the State, and their relatives, and their spouses and spouses’ relatives, may receive coverage only for qualified long-term care services. Relative is defined as under section 152(a)(1) (8). No inference is intended with respect to the tax consequences of such arrangements under present law. Inclusions of excess long-term care benefits The conference agreement modifies the calculation of the dollar cap applicable to aggregate payments under per diem type long-term care insurance contracts and amounts received with respect to a chron- ically ill individual pursuant to a life insur- ance contract.12 The amount of the dollar cap with respect to any one chronically ill individual (who is not terminally ill) is $175 per day ($63,875 annually, as indexed), re- duced by the amount of reimbursements and payments received by anyone for the cost of qualified long-term care services for the chronically ill individual. If more than one payee receives payments with respect to any one chronically ill individual, then everyone receiving periodic payments with respect to the same insured is treated as one person for purposes of the dollar cap. The amount of the dollar cap is utilized first by the chron- ically ill person, and any remaining amount is allocated in accordance with Treasury reg- ulations. If payments under such contracts exceed the dollar cap, then the excess is ex- cludable only to the extent of actual costs (in excess of the dollar cap) incurred for long-term care services. Amounts in excess of the dollar cap, with respect to which no actual costs were incurred for long-term care services, are fully includable in income with- out regard to rules relating to return of basis under Code section 72. The managers of the bill wish to clarify that, although the legislation imposes a daily (or equivalent) dollar cap on the amount of excludable benefits under certain types of long-term care insurance in certain circumstances, this limitation is not in- tended to suggest a preference or otherwise convey or facilitate a competitive advantage to one type of long-term care insurance com- pared to another type of long-term care in- surance. The Chairmen of the House Committee on Ways and Means and the Senate Finance Committee shall jointly request that the NAIC, in consultation with representatives of the insurance industry and consumer or- ganizations, develop and conduct a study to determine the marketing and other effects, if any, of the dollar limit on excludable long- term care benefits under certain types of long-term care insurance contracts under the bill. Such Chairmen are to request that the NAIC, if it agrees to such request, shall submit the results of its study to the such Committees by no later than two years after agreeing to the request. The conference agreement modifies the re- porting requirement for payors of amounts excludable under the provision. Thus, in ad- dition to the reporting requirements of the House bill, a payor is required to report the name, address, and taxpayer identification number of the chronically ill individual on account of whose condition such amounts are paid, and whether the contract under which the amount is paid is a per diem-type contract. A grandfather rule is provided under the conference agreement in the case of a per diem type contract issued to a policyholder on or before July 31, 1996. Under the grand- father rule, the amount of the dollar cap with respect to such a per diem contract is calculated without any reduction for reim- bursements for qualified long-term care serv- ices under any other contract issued with re- spect to the same insured on or before July 31, 1996. The other provisions of the dollar cap are not affected by the grandfather rule. The grandfather rule ceases to apply as of the time that any of the contracts issued on or before July 31, 1996, with respect to the in- sured are exchanged, or benefits are in- creased. Life insurance company reserves The conference agreement includes the Senate amendment provision with respect to life insurance reserves. Thus, under the con- ference agreement, in determining reserves for insurance company tax purposes, the Senate amendment provides that the Federal income tax reserve method applicable for a long-term care insurance contract is the method prescribed by the NAIC (or, if no re- serve method has been so prescribed, a meth- od consistent with the tax reserve method for life insurance, annuity or noncancellable accident and health insurance contracts, whichever is most appropriate). As under present law, in no event may the tax reserve for a contract as of any time exceed the amount which would be taken into account with respect to the contract as of such time in determining statutory reserves. Consumer protection provisions The conference agreement clarifies and modifies the category of contracts to which the consumer protection provisions apply. The conference agreement clarifies that the consumer protection provisions that apply with respect to the terms of the contract apply only for purposes of determining whether a contract is a qualified long-term CONGRESSIONAL RECORD \u2014 HOUSE H9551July 31, 1996 13 Prop. Treas. Reg. Secs. 1.101 8, 1.7702.0, 1.7702.2, and 1.7702A 1 (December 15, 1992). 14 For purposes of determining the present value under the proposed regulations, the maximum per- missible discount rate would be the greater of (1) the applicable Federal rate that applies under the dis- counting rules for property and casualty insurance loss reserves, and (2) the interest rate applicable to policy loans under the contract. Also, the present value would be determined assuming that the death benefit would have been paid twelve months after payment of the accelerated death benefit. 15 A physician is defined for these purposes as in section 1861(r)(1) of the Social Security Act, which provides that a physician means a doctor of medi- cine or osteopathy legally authorized to practice medicine and surgery by the State in which he per- forms such function or action (including a physician within the meaning of section 1101(a)(7) of that Act). Section 1101(a)(7) of that Act provides that the term physician includes osteopathic practitioners within the scope of their practice as defined by State law. 16 Thus, a chronically ill individual is one who has been certified within the previous 12 months by a li- censed health care practitioner as (1) being unable to perform (without substantial assistance) at least 2 activities of daily living for at least 90 days due to a loss of functional capacity, (2) having a similar level of disability as determined by the Secretary of the Treasury in consultation with the Secretary of Health and Human Services, or (3) requiring sub- stantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment. Activities of daily living are eating, toileting, transferring, bathing, dressing and con- tinence. Nothing in the bill requires the contract to take into account all of the activities of daily liv- ing. care insurance contract (within the meaning of the bill). The conference agreement provides that, for purposes of both the requirements as to contract terms and the requirements relat- ing to issuers of contracts, the determina- tion of whether any requirement of a model regulation or model Act has been met is made by the Secretary of the Treasury. It is not intended that the Secretary create a Federal standard, but rather, look to appli- cable or appropriate State standards or to those provided specifically in the model reg- ulation or model Act. The conference agreement modifies the $100-per-day tax on failure to satisfy the re- quirements for issuers of contracts, to pro- vide that the amount of the tax imposed is $100 per insured per day. The conference agreement provides that the consumer pro- tection requirements for issues of contracts apply with respect to contracts that are qualified long-term care insurance contracts (within the meaning of the bill). The conference agreement modifies the rule relating to State establishment of standards relating to contract terms or issu- ers of contracts. The conference agreement provides that an otherwise qualified long- term care insurance contract will not fail to be a qualified long-term care insurance con- tract, and will not be treated as failing to meet the analogous requirement under the conference agreement, solely because it sat- isfies a consumer protection standard im- posed under applicable State law that is more stringent than the analogous standard provided in the bill. The conference agree- ment does not preclude States from enacting more stringent consumer protection provi- sions than the analogous standards under the bill. Effective date The conference agreement follows the Sen- ate amendment with respect to the effective date of the provision treating long-term care services as a medical expenses. Thus, under the conference agreement, this provision is effective for taxable years beginning after December 31, 1996. The conference agreement provides that the provision relating to life insurance com- pany reserves is effective for contracts is- sued after December 31, 1997. D. TREATMENT OF ACCELERATED DEATH BENEFITS UNDER LIFE INSURANCE CONTRACTS (Secs. 331 332 of the House bill and secs. 431 432 of the Senate amendment). Present law Treatment of amounts received under a life in- surance contract If a contract meets the definition of a life insurance contract, gross income does not include insurance proceeds that are paid pur- suant to the contract by reason of the death of the insured (sec. 101(a)). In addition, the undistributed investment income (”inside buildup”) earned on premiums credited under the contract is not subject to current taxation to the owner of the contract. The exclusion under section 101 applies regard- less of whether the death benefits are paid as a lump sum or otherwise. Amounts received under a life insurance contract (other than a modified endowment contract) prior to the death of the insured are includable in the gross income of the re- cipient to the extent that the amount re- ceived constitutes cash value in excess of the taxpayer’s investment in the contract (gen- erally, the investment in the contract is the aggregate amount of premiums paid less amounts previously received that were ex- cluded from gross income). If a contract fails to be treated as a life in- surance contract under section 7702(a), inside buildup on the contract is generally subject to tax (sec. 7702(g)). Requirements for a life insurance contract To qualify as a life insurance contract for Federal income tax purposes, a contract must be a life insurance contract under the applicable State or foreign law and must sat- isfy either of two alternative tests: (1) cash value accumulation test or (2) a test consist- ing of a guideline premium requirement and a cash value corridor requirement (sec. 7702(a)). A contract satisfies the cash value accumulation test if the cash surrender value of the contract may not at any time exceed the net single premium that would have to be paid at such time to fund future benefits under the contract. A contract sat- isfies the guideline premium and cash value corridor tests if the premiums paid under the contract do not at any time exceed the greater of the guideline single premium or the sum of the guideline level premiums, and if the death benefit under the contract is not less than a varying statutory percentage of the cash surrender value of the contract. Proposed regulations on accelerated death benefits The Treasury Department has issued pro- posed regulations 13 under which certain ”qualified accelerated death benefits” paid by reason of the terminal illness of an in- sured would be treated as paid by reason of the death of the insured and therefore qual- ify for exclusion under section 101. In addi- tion, the proposed regulations would permit an insurance contract that includes a quali- fied accelerated death benefit rider to qual- ify as a life insurance contract under section 7702. Thus, the proposed regulations provide that including this benefit would not cause an insurance contract to fail to meet the def- inition of a life insurance contract. Under the proposed regulations, a benefit would qualify as a qualified accelerated death benefit only if it meets three require- ments. First, the accelerated death benefit can be payable only if the insured becomes terminally ill. Second, the amount of the benefit must equal or exceed the present value of the reduction in the death benefit otherwise payable.14 Third, the cash surren- der value and the death benefit payable under the policy must be reduced proportion- ately as a result of the accelerated death benefit. For purposes of the proposed regulations, an insured would be treated as terminally ill if he or she has an illness that, despite ap- propriate medical care, the insurer reason- ably expects to result in death within twelve months from the payment of the accelerated death benefit. The proposed regulations would not apply to viatical settlements. House bill The House bill provides an exclusion from gross income as an amount paid by reason of the death of an insured for (1) amounts re- ceived under a life insurance contract and (2) amount received for the sale or assignment of a life insurance contract to a qualified viatical settlement provider, provided that the insured under the life insurance contract is either terminally ill or chronically ill. The exclusion for amounts received under a life insurance contract on the life of an insured who is chronically ill applies if the amount is received under a rider or other provision of the contract that is treated as a long-term care insurance contract under section 7702B (as added by the bill), and the amount is ex- cludable as a payment for long-term care services under section 7702B (including under the dollar cap on per diem type payments ($175 per day, or $63,875 annually, in 1997). The provision does not apply in the case of an amount paid to any taxpayer other than the insured, if such taxpayer has an insur- able interest by reason of the insured being a director, officer or employee of the tax- payer, or by reason of the insured being fi- nancial interested in any trade or business carried on by the taxpayer. A terminally ill individual is defined as one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months of the date of certification. A physician is defined for this purpose in the same manner as under the long-term care in- surance rules of the bill.15 A chronically ill individual is defined under the long-term care provisions of the bill.16 In the case of amounts received with respect to a chronically ill individual (but not amounts received by reason of the indi- vidual being terminally ill), the $175 per day ($63,875 annual) limitation on excludable benefits that applies for per diem type long- term care insurance contracts also limits amounts that are excludable with respect to such contracts under this provision. The payor of a payment to which this pro- vision applies is required to report to the IRS the aggregate amount of such benefits paid to any individual during any calendar year, and the name, address and taxpayer identification number of such individual. A copy of the report must be provided to the payee by January 31 following the year of payment, showing the name of the payer and the aggregate amount of such benefits paid to the individual during the calendar year. Failure to file the report or provide the copy to the payee is subject to the generally ap- plicable penalties for failure to file similar information reports. A qualified viatical settlement provider is any person that regularly purchases or takes assignments of life insurance contracts on the lives of the terminally ill individuals and either (1) is licensed for such purposes in the State in which the insured resides; or (2) if the person is not required to be licensed by that State, meets the requirements of sec- tions 8 and 9 of the Viatical Settlements Model Act (issued by the National Associa- tion of Insurance Commissioners (NAIC)), and also meets the section of the NAIC CONGRESSIONAL RECORD \u2014 HOUSEH9552 July 31, 1996 17 See item C, above. Viatical Settlements Model Regulation re- lating to standards for evaluation of reason- able payments, including discount rates, in determining amounts paid by the viatical settlement provider. For life insurance company tax purposes, the bill provides that a life insurance con- tract is treated as including a reference to a qualified accelerated death benefit rider to a life insurance contract (except in the case of any rider that is treated as a long-term care insurance contract under section 7702B, as added by the bill). A qualified accelerated death benefit rider is any rider on a life in- surance contract that provides only for pay- ments of a type that are excludable under this provision. Effective date The provision applies to amounts received after December 31, 1996. The provision treat- ing a qualified accelerated death benefit rider as life insurance for life insurance com- pany tax purposes takes effect on January 1, 1997. The issuance of a qualified accelerated death benefit rider to a life insurance con- tract, or the addition of any provision re- quired to conform an accelerated death bene- fit rider to these provisions, is not treated as a modification or material change to the contract (and is not intended to affect the issue date of any contract under section 101(f)). Senate amendment The Senate amendment is the same as the House bill, except that, in the case of a chronically ill insured, while the Senate amendment does provide that the exclusion for amounts received under a life insurance contract applies if the amount is received under a rider or other provision of the con- tract that is treated as a long-term care in- surance contract under section 7702B (as added by the bill), the Senate amendment does not include the explicit language of the House bill requiring that the amount be treated as a payment for long-term care services under section 7702B. Conference agreement The conference agreement follows the House bill and the Senate amendment, with technical modifications and clarifications. The conference agreement provides that the amount paid for the sale or assignment of any portion of the death benefit under a life insurance contract on the life of a termi- nally or chronically ill individual to a viatical settlement provider is excludable by the recipient as an amount paid under the contract by reason of the death of the in- sured. For example, the sale or assignment of a life insurance contract that has a rider providing for long-term care insurance, pay- ments under which rider are funded by and reduce the death benefit, is considered the sale or assignment of the death benefit. Sale or assignment of a stand-alone rider provid- ing for long-term care insurance (where pay- ments under the rider are not funded by re- ductions in the death benefit), however, is not considered the sale or assignment of the death benefit. The conference agreement provides that a viatical settlement provider is any person regularly engaged in the trade or business of purchasing or taking assignments of life in- surance contracts on the lives of insured in- dividuals who are terminally ill or chron- ically ill, so long as the viatical settlement provider meets certain requirements. The viatical settlement provider must either (1) be licensed, in the State where the insured resides, to engage in such transactions with terminally ill individuals (if the insured is terminally ill) or with chronically ill indi- viduals (if the insured is chronically ill), or (2) if such licensing with respect to the in- sured individual is not required in the State, meet other requirements depending on whether the insured is terminally or chron- ically ill. If the insured is terminally ill, the viatical settlement provider must meet the requirements of sections 8 and 9 of the Viatical Settlements Model Act, relating to disclosure and general rules (issued by the National Association of Insurance Commis- sioner (NAIC)), and also meet the section of the NAIC Viatical Settlements Model Regu- lation relating to standards for evaluation of reasonable payments, including discount rates, in determining amounts paid by the viatical settlement provider. If the insured is chronically ill, the viatical settlement pro- vider must meet requirements similar to those of sections 8 and 9 of the NAIC Viatical Settlements Model Act, and also must meet the standards, if any, promulgated by the NAIC for evaluating the reasonableness of amounts paid in viatical settlement trans- actions with chronically ill individuals. The conference agreement clarifies the rules for chronically ill insureds so that the tax treatment of payments with respect to chronically ill individuals is reasonably similar under the long-term care rules of the bill and under this provision. In the case of a chronically ill individual, the exclusion under this provision with respect to amounts paid under a life insurance contract and amounts paid in a sale or assignment to a viatical settlement provider applies if the payment received is for costs incurred by the payee (not compensated by insurance or oth- erwise) for qualified long-term care services (as defined under the long-term care rules of the bill) for the insured person for the pe- riod, and two other requirements (similar to requirements applicable to long-term care insurance contracts under the bill) are met. The first requirement is that under the terms of the contract giving rise to the pay- ment, the payment is not a payment or reim- bursement of expenses reimbursable under Medicare (except where Medicare is a second- ary payor under the arrangement, or the ar- rangement provides for per diem or other periodic payments without regard to ex- penses for qualified long-term care services). The conference agreement provides that no provision of law shall be construed or applied so as to prohibit the offering of such a con- tract giving rise to such a payment on the basis that the contract coordinates its pay- ments with those provided under Medicare. The second requirement is that the arrange- ment complies with those consumer protec- tion provisions applicable under the bill to long-term care insurance contracts and issu- ers that are specified in Treasury regula- tions. It is intended that such guidance in- corporate rules similar to those of section 6F (relating to right to return, permitting the payee 30 days to rescind the arrangement) of the NAIC Long-Term Care Insurance Model Act, and section 13 (relating to requirements for application, requiring that the payee be asked if he or she already has long-term care insurance, Medicaid, or similar coverage) of the NAIC Long-Term Care Insurance Model Regulations. If the NAIC or the State in which the policyholder resides issues stand- ards relating to chronically ill individuals, then the analogous requirements under Treasury regulations cease to apply. An individual who meets the definition of a terminally ill individual is not treated as chronically ill, for purposes of this provision. Payments made on a per diem or other periodic basis, without regard to expenses in- curred for qualified long-term care services, are nevertheless excludable under this provi- sion, subject to the dollar cap on excludable benefits that applies for amounts that are excludable under per diem type long-term care insurance contracts. The conference agreement modifies the calculation of the dollar cap applicable to aggregate payments under per diem type long-term care insur- ance contracts and amounts received with respect to a chronically ill individual pursu- ant to a life insurance contract.17 The amount of the dollar cap with respect to the aggregate amount received under per diem type long-term care insurance contracts and this provision with respect to any one chron- ically ill individual (who is not terminally ill) is $175 per day ($63,875 annually) (in- dexed), reduced by the amount of reimburse- ments and payments received by anyone for the cost of qualified long-term care services for the chronically ill individual. If more than one payee receives payments with re- spect to any one chronically ill individual, the amount of the dollar cap is utilized first by the chronically ill person, and any re- maining amount is allocated in accordance with Treasury regulations. If payments under such contracts exceed the dollar cap, then the excess is excludable only to the ex- tent of actual costs incurred for long-term care services. Amounts in excess of the dol- lar cap, with respect to which no actual costs (in excess of the dollar cap) were in- curred for long-term care services, are fully includable in income without regard to rules relating to return of basis under Code sec- tion 72. The conference agreement modifies the re- porting requirement for payors of amounts excludable under the provision. Thus, in ad- dition to the reporting requirements of the House bill, a payor is required to report the name, address, and taxpayer identification number of the chronically ill individual on account of whose condition such amounts are paid, and whether the contract under which the amount is paid is a per diem-type contract. E. EXEMPTION FROM INCOME TAX FOR STATE- SPONSORED ORGANIZATIONS PROVIDING HEALTH COVERAGE FOR HIGH-RISK INDIVID- UALS; EXEMPTION FROM INCOME TAX FOR STATE-SPONSORED WORKERS’ COMPENSATION REINSURANCE ORGANIZATIONS (Sec. 341 of the House bill and sec. 451 of the Senate amendment). Present law In general, the Internal Revenue Service (”IRS”) takes the position that organiza- tions that provide insurance for their mem- bers or other individuals are not considered to be engaged in a tax-exempt activity. The IRS maintains that such insurance activity is either (1) a regular business of a kind ordi- narily carried on for profit, or (2) an econ- omy or convenience in the conduct of mem- bers’ businesses because it relieves the mem- bers from obtaining insurance on an individ- ual basis. Certain insurance risk pools have qualified for tax exemption under Code section 501(c)(6). In general, these organizations (1) assign any insurance policies and adminis- trative functions to their member organiza- tions (although they may reimburse their members for amounts paid and expenses), (2) serve an important common business inter- est of their members, and (3) must be mem- bership organizations financed, at least in part, by membership dues. State insurance risk pools may also qual- ify for tax-exempt status under section 501(c)(4) as a social welfare organizations or under section 115 as serving an essential gov- ernmental function of a State. In seeking qualification under section 501(c)(4), insur- ance organizations generally are constrained by the restrictions on the provision of ”com- mercial-type insurance” contained in section CONGRESSIONAL RECORD \u2014 HOUSE H9553July 31, 1996 18 No inference is intended as to the tax treatment of other types of State-sponsored organizations. 501(m). Section 115 generally provides that gross income does not include income de- rived from the exercise of any essential gov- ernmental function and accruing to a State or any political subdivision thereof. How- ever, the IRS may be reluctant to rule that particular State risk-pooling entities satisfy the section 501(c)(4) or 115 requirements for tax-exempt status. House bill Health coverage for high-risk individuals The House bill provides tax-exempt status to any membership organization that is es- tablished by a State exclusively to provide coverage for medical care on a nonprofit basis to certain high-risk individuals, pro- vided certain criteria are satisfied.18 The or- ganization may provide coverage for medical care either by issuing insurance itself or by entering into an arrangement with a health maintenance organization (”HMO”). High-risk individuals eligible to receive medical care coverage from the organization must be residents of the State who, due to a pre-existing medical condition, are unable to obtain health coverage for such condition through insurance or an HMO, or are able to acquire such coverage only at a rate that is substantially higher than the rate charged for such coverage by the organization. The State must determine the composition of membership in the organization. For exam- ple, a State could mandate that all organiza- tions that are subject to insurance regula- tion by the State must be members of the or- ganization. The House bill further requires the State or members of the organization to fund the liabilities of the organization to the extent that premiums charged to eligible individ- uals are insufficient to cover such liabilities. Finally, no part of the net earnings of the or- ganization can inure to the benefit of any private shareholder or individual. Effective date.\u2014The provision applies to taxable years beginning after December 31, 1996. Workers’ compensation reinsurance organiza- tions No provision. Senate amendment The Senate amendment is the same as the House bill. Conference agreement Health coverage for high-risk individuals The conference agreement follows the House bill and the Senate amendment. Workers’ compensation reinsurance organiza- tions The conference agreement provides tax-ex- empt status to any membership organization that is established by a State before June 1, 1996, exclusively to reimburse its members for workers’ compensation insurance losses, and that satisfies certain other conditions. A State must require that the membership of the organization consist of all persons who issue insurance covering workers’ compensa- tion losses in such State, and all persons who issue insurance covering workers’ compensa- tion losses in such State, and all persons and governmental entities who self-insure against such losses. In addition, the organi- zation must operate as a nonprofit organiza- tion by returning surplus income to mem- bers or to workers’ compensation policy- holders on a periodic basis and by reducing initial premiums in anticipation of invest- ment income. Effective date.\u2014The provision applies to taxable years ending after the date of enact- ment. F. HEALTH INSURANCE ORGANIZATIONS ELIGIBLE FOR BENEFITS OF SECTION 833 (Sec. 351 of the House bill). Present law An organization described in sections 501(c)(3) or (4) of the Code is exempt from tax only if no substantial part of its activities consists of providing commercial-type insur- ance (sec. 501(m)). Special rules apply to cer- tain eligible health insurance organizations. Eligible health insurance organizations are (1) Blue Cross and Blue Shield organizations existing on August 16, 1986, which have not experienced a material change in structure or operations since that date, and (2) other organizations that meet certain community- service related requirements and substan- tially all of whose activities involve the pro- viding of health insurance. Section 833 pro- vides that eligible organizations are gen- erally treated as stock property and casualty insurance companies. Section 833 provides a special deduction for eligible organizations, equal to 25 percent of the claims and expenses incurred during the year, less the adjusted surplus at the begin- ning of the year. This deduction is calculated by computing surplus, taxable income, claims incurred, expenses incurred, tax-ex- empt income, net operating loss carryovers, and other items attributable to health ex- penses. The deduction may not exceed tax- able income attributable to health business for the year (calculated without regard to this deduction). In addition, section 833 eliminates, for eli- gible organizations, the 20 percent reduction in unearned premium reserves that applies generally to all property and casualty insur- ance companies. House bill The House bill applies the special rules under section 833 to the same extent they are provided to certain existing Blue Cross or Blue Shield organizations, in the case of any organization that (1) is not a Blue Cross or Blue Shield organization existing on August 16, 1986, and (2) otherwise meets the require- ments of section 833(c)(2) (including the re- quirement of no material change in oper- ations or structure since August 16, 1986). Under the provision, an organization quali- fies for this treatment only if (1) it is not a health maintenance organization and (2) it is organized under and governed by State laws which are specifically and exclusively appli- cable to not-for-profit health insurance or health service type organizations. Effective date.\u2014The provision is effective for taxable years ending after December 31, 1996. Senate amendment No provision. Conference agreement The conference agreement follows the House bill. G. PENALTY-FREE WITHDRAWALS FROM IRAS FOR MEDICAL EXPENSES (Sec. 461 of the Senate amendment). Present law Amounts withdrawn from an individual re- tirement arrangement (”IRA”) are includ- ible in income (except to the extent of any nondeductible contributions). In addition, a 10-percent additional tax applies to with- drawals from IRAs made before age 591\u20442, un- less the withdrawal is made on account of death or disability or is made in the form of annuity payments. A similar additional tax applies to early withdrawals from employer-sponsored tax- qualified pension plans. However, the 10-per- cent additional tax does not apply to with- drawals form such plans to the extent used for medical expenses that exceed 7.5 percent of adjusted gross income (”AGI”). House bill No provision. Senate amendment The Senate amendment extends the excep- tion to the 10-percent tax for medical ex- penses in excess of 7.5 percent of AGI to withdrawals from IRAs. In addition, the Sen- ate amendment provides that the 10-percent additional tax does not apply to withdrawals for medical insurance (without regard to the 7.5 percent of AGI floor) if the individual (in- cluding a self-employed individual) has re- ceived unemployment compensation under Federal or State law for at least 12 weeks, and the withdrawal is made in the year such unemployment compensation is received or the following year. If a self-employed indi- vidual is not eligible for unemployment com- pensation under applicable law, then, to the extent provided in regulations, a self-em- ployed individual is treated as having re- ceived unemployment compensation for at least 12 weeks if the individual would have received unemployment compensation but for the fact that the individual was self-em- ployed. Effective date.\u2014The provision is effective for taxable years beginning after December 31, 1996. Conference agreement The conference agreement follows the Sen- ate amendment, with the modification that the exception ceases to apply if the individ- ual has been reemployed for at least 60 days. H. REQUIRE TREASURY TO INCLUDE ORGAN AND TISSUE DONATION INFORMATION WITH TAX RE- FUNDS (Sec. 307 of the Senate amendment). Present law There is no statutory requirement that Treasury include organ and tissue donation information with any payment of a refund of individual income taxes. House bill No provision. Senate amendment The Senate amendment requires Treasury to include organ and tissue donation infor- mation with any payment of a refund of indi- vidual income taxes made on or after Feb- ruary 1, 1997, through June 30, 1997. Effective date.\u2014The provision is effective for refunds made on or after February 1, 1997, through June 30, 1997. Conference agreement The conference agreement generally fol- lows the Senate amendment, with two tech- nical modifications. the first modification requires that the organ donor card be in- cluded to the extent particable. The second modification clarifies that the organ donor card is to be included with the mailing of any payment of a refund of individual in- come taxes. Effective date.\u2014The provision is effective for refunds made on or after February 1, 1997, through June 30, 1997. TITLE IV. APPLICATION AND ENFORCEMENT OF GROUP HEALTH PLAN REQUIREMENTS A. APPLICATION AND ENFORCEMENT OF GROUP HEALTH PLAN PORTABILITY, ACCESS, AND RE- NEWABILITY REQUIREMENTS (Sec. 104(b) of the House bill). Present Law Under present law, the health care con- tinuation rules (referred to as ”COBRA” rules, after the Consolidated Omnibus Budg- et Reconciliation Act of 1985 in which they were enacted) require that most employer- sponsored group health plans must offer cer- tain employees and their dependents (”quali- fied beneficiaries”) the option of purchasing CONGRESSIONAL RECORD \u2014 HOUSEH9554 July 31, 1996 19 These requirements are discussed earlier in greater detail. 20 In the case of a church plan, this correction is generally extended to 270 days after the date of mailing by the Secretary of a notice of default with respect to a failure to comply with the group health plan requirements. continued health coverage in the case of cer- tain qualifying events. These qualifying events include: termination or reduction in hours of employment, death, divorce or legal separation, enrollment in Medicare, or the end of a child’s dependency under a parent’s health plan. In general, the maximum period of COBRA coverage is 18 months. An em- ployer is permitted to charge qualified bene- ficiaries 102 percent of the applicable pre- mium for COBRA coverage. A tax is imposed on the failure of a group health plan to satisfy the COBRA rules. The tax must be imposed on the employer spon- soring the plan in the case of a plan other than a multiemployer plan, on the plan in the case of a multiemployer plan, or on each person who is responsible for administering or providing benefits under the plan if such person has, by written agreement, assumed responsibility for performing the act pursu- ant to which the violation occurs. The amount of the tax is generally equal to $100 per day for each day on which there is a violation. The tax applies separately with respect to each qualified beneficiary for whom a failure occurs. In general, a tax will not be imposed if the violation was uninten- tional and is corrected within 30 days. The maximum tax for unintentional violations that can be imposed for a taxable year gen- erally is the lesser of (1) 10 percent of the employer’s payments under group health plans (or under the trust funding the plan in the case of a multiemployer plan), or (2) $500,000. If the tax is imposed on another per- son responsible for administering or provid- ing benefits under the plan, the maximum penalty for failures during the year is $2 mil- lion. The Secretary may waive all or part of the tax to the extent that payment of the tax would be excessive relative to the failure involved. Other than the COBRA rules, there are no other requirements in the Code which apply to group health plans (or insurers or health maintenance organizations (”HMOs”)) re- garding portability through limitations on preexisting condition exclusions, prohibi- tions on excluding individuals from coverage based on health status, and guaranteed re- newability of health plan coverage. House bill Under the House bill, group health plans, insurers, and HMOs are subject to certain re- quirements regarding portability through limitations on preexisting condition exclu- sions and prohibitions on excluding individ- uals from coverage based on health status. The House bill generally extends the tax for failures to satisfy the COBRA rules to fail- ures to comply with these requirements. No tax is imposed on an insurer or HMO that is governed under a State law that the Secretary of Health and Human Services has determined to provide enforcement of simi- lar requirements. In addition, no tax may be imposed on a small employer (defined as an employer who employs at least 2, but fewer than 51 employees on a typical business day) that provides health care benefits through a contract with an insurer or HMO and the vio- lation is solely because of the product of- fered by the insurer or HMO under such con- tract. In addition, no tax is imposed if there has been enforcement by the Secretary of Labor or the Secretary of Health and Human Services. Effective date.\u2014The provision generally is effective with respect to plan years begin- ning on or after January 1, 1998. Senate amendment No provision. The requirements in the Sen- ate amendment on group health plans, insur- ers, and HMOs regarding portability through limitations on preexisting condition exclu- sions and prohibitions on excluding individ- uals from coverage based on health status are not applied or enforced through the Code. Conference agreement Under the conference agreement, group health plans are subject to certain require- ments regarding portability through limita- tions on preexisting condition exclusions, prohibitions on excluding individuals from coverage based on health status, and guaran- teed renewability of health insurance cov- erage.19 The conference agreement incor- porates these requirements into the Code and generally imposes a tax with respect to any failure of a group health plan to comply with the requirements. The tax may gen- erally be imposed on the employer sponsor- ing the plan. However, the tax may be im- posed on the plan in the case of a multiem- ployer plan, and, with respect to violations of the requirements relating to guaranteed renewability, on the arrangement in the case of a multiple employer welfare arrangement. The group health plan requirements con- tained in the Code do not apply to govern- mental plans and plans which on the first day of the plan year cover less than 2 current employees. In addition, no tax may be im- posed on a small employer (defined as an em- ployer who employed an average of 50 or fewer employees on business days during the preceding calendar year) that provides health care benefits through a contract with an insurer or HMO and the violation is solely because of the coverage offered by the in- surer or HMO. The amount of the tax is generally equal to $100 per day for each day during which a failure occurs until the failure is corrected. The tax applies separately with respect to each individual affected by the failure. In general, a tax will not be imposed if the vio- lation was unintentional and is corrected within 30 days.20 The maximum tax for unin- tentional violations that can be imposed generally is the lesser of (1) 10 percent of the employer’s payments during the taxable year in which the failure occurred under group health plans (or 10 percent of the amount paid by the multiemployer plan or multiple employer welfare arrangement during the plan year in which the failure occurred for medical care, if applicable), or (2) $500,000. The Secretary may waive all or part of the tax to the extent that payment of the tax would be excessive relative to the failure in- volved. Effective date.\u2014The provision applies with respect to failures of group health plans to satisfy the requirements regarding port- ability through limitations on preexisting condition exclusions, prohibitions on exclud- ing individuals from coverage based on health status, and guaranteed renewability of health insurance coverage. B. CLARIFICATION OF CERTAIN COBRA HEALTH CARE CONTINUATION REQUIREMENTS (Sec. 121 of the Senate amendment). Present law Under present law, the health care con- tinuation rules (referred to as ”COBRA” rules, after the Consolidated Omnibus Budg- et Reconciliation Act of 1985 in which they were enacted) require that most employer- sponsored group health plans must offer cer- tain employees and their dependents (”quali- fied beneficiaries”) the option of purchasing continued health coverage in the case of cer- tain qualifying events. These qualifying events include; termination or reduction in hours of employment, death, divorce or legal separation, enrollment in Medicare, or the end of a child’s dependency under a parent’s health plan. In general, the maximum period of COBRA coverage is 18 months. An em- ployer is permitted to charge qualified bene- ficiaries 102 percent of the applicable pre- mium for COBRA coverage. A $100 per day tax generally may be assessed against em- ployers (plans in the case of multiemployer plans) for failures to comply with the COBRA rules, subject to certain exceptions and limitations. The 18-month maximum COBRA coverage period is extended to 29 months if the quali- fied beneficiary is determined under the So- cial Security Act to have been disabled at the time of the qualifying event and the qualified beneficiary provides notice of such determination to the employer before the end of the 18-month period. A qualified bene- ficiary has 60 days to notify the employer of a disability determination. During the 11- month period of extended COBRA coverage, the qualified beneficiary may be charged 150 percent of the applicable premium. COBRA coverage may be terminated before the 18-month maximum coverage period in the case of certain events. These include: the employer ceases to maintain any group health plan, the qualified beneficiary fails to pay the premium, the qualified beneficiary becomes covered under another group health plan with no preexisting condition limita- tion or exclusion, or the qualified bene- ficiary becomes entitled to Medicare. Under present law, the term qualified bene- ficiary only includes individuals who were either the spouse or the dependent of the covered employee at the time of the qualify- ing event. A group health plan is required to notify each covered employee and the covered em- ployee’s spouse of their COBRA rights upon commencement of participation in the plan. Further, the group health plan adminis- trator must notify each qualified beneficiary of their COBRA rights within 14 days after notification of the occurrence of a qualifying event. House bill No provision. However, the House bill modifies the COBRA rules so that the pen- alties applicable to failures to comply with the COBRA rules generally apply to failures to comply with the requirements in the House bill on group health plans, insurers, and health maintenance organizations (”HMOs”) regarding portability through lim- itations on preexisting condition exclusions and prohibitions on excluding individuals from coverage based on health status. Senate amendment The Senate amendment modifies the COBRA rules by clarifying that the extended maximum COBRA coverage period of 29 months in cases of disability also applies to the disabled qualified beneficiary of the cov- ered employee. In addition, the Senate amendment provides the extended COBRA coverage if the disability exists at any time during the initial 18-month COBRA coverage period as opposed to requiring the disability to exist at the time of the qualifying event. As under present law, the disability deter- mination still has to be made, and the notice of the disability still has to be given, before the end of the initial COBRA coverage pe- riod. CONGRESSIONAL RECORD \u2014 HOUSE H9555July 31, 1996 21 This favorable tax treatment is available only if a life insurance contract meets certain requirements designed to limit the investment character of the contract (sec. 7702). Distributions from a life insur- ance contract (other than a modified endowment contract) that are made prior to the death of the in- sured generally are includible in income, to the ex- tent that the amounts distributed exceed the tax- payer’s basis in the contract; such distributions gen- erally are treated first as a tax-free recovery of basis, and then as income (sec. 72(e)). In the case of a modified endowment contract, however, in gen- eral, distributions are treated as income first, loans are treated as distributions (i.e., income rather than basis recovery first), and an additional 10 percent tax is imposed on the income portion of distribu- tions made before age 59 1\u20442 and in certain other cir- cumstances (secs. 72 (e) and (v)). A modified endow- ment contract is a life insurance contract that does not meet a statutory ”7-pay” test, i.e., generally is funded more rapidly than 7 annual level premiums (sec. 7702A). 22 The statute provides that the $50,000 limitation applies only with respect to contracts purchased after June 20, 1986. However, additional limitations are imposed on the deductibility of interest with re- spect to single premium contracts (sec. 264(a)(2)), and on the deductibility of premiums paid on a life insurance contract covering the life of any officer or employee or person financially interested in a trade or business of the taxpayer when the taxpayer is di- rectly or indirectly a beneficiary under the contract (sec. 264(a)(1)). 23 Interest deductions are disallowed if any of the disallowance rules of section 264(a) (2) (4) apply. The disallowance rule of section 264(a)(3) is not applica- ble if one of the exceptions of section 264(c), such as the 4-out-of-7 rule (sec. 264(c)(1)) is satisfied. In addi- tion to the specific disallowance rules of section 264, generally applicable principles of tax law apply. The Senate amendment coordinates the COBRA rules with the new requirements re- garding preexisting condition exclusions so that COBRA coverage can be terminated if a qualified beneficiary becomes covered under another group health plan, even if such group health plan contains a preexisting con- dition limitation or exclusion, provided the preexisting condition limitation or exclusion does not apply to the qualified beneficiary by reason of the new requirements restricting the application of preexisting condition limi- tations and exclusions. The Senate amendment also modifies the definition of qualified beneficiary to include a child born to our placed for adoption with the covered employee during the period of COBRA coverage. Consequently, since the health care availability provisions in the Senate amendment require group health plans to allow participants to change their coverage status (i.e., to change from individ- ual coverage to family coverage, or to add on the new child) upon the birth or adoption of a new child, COBRA participants would also be allowed to change their coverage status upon the birth or adoption of a new child. The Senate amendment requires a group health plan to notify each qualified bene- ficiary who has elected COBRA coverage of the changes to the COBRA rules contained in the Senate amendment no later than Novem- ber 1, 1996. Effective date.\u2014The provision applies to qualifying events occurring on or after the date of enactment for plan years beginning after December 31, 1997. Conference agreement The conference agreement follows the Sen- ate amendment, except the extended period of COBRA coverage in cases of disability ap- plies if the disability exists at any time dur- ing the first 60 days of COBRA coverage. Effective date.\u2014The provision is effective on January 1, 1997, regardless of whether the qualifying event occurred before, on, or after such date. TITLE V. REVENUE OFFSETS A. DISALLOW INTEREST DEDUCTION FOR COR- PORATE-OWNED LIFE INSURANCE POLICY LOANS (Sec. 495 of the Senate amendment). Present law No Federal income tax generally is im- posed on a policyholder with respect to the earnings under a life insurance contract (”inside buildup”). 21 Further, an exclusion from Federal income tax is provided for amounts received under a life insurance con- tract paid by reason of the death of the in- sured (sec. 101(a)). The policyholder may bor- row with respect to the life insurance con- tract without affecting these exclusions, sub- ject to certain limitations. The limitations on borrowing with respect to a life insurance contract under present law provide that no deduction is allowed for any interest paid or accrued on any indebt- edness with respect to one or more life insur- ance policies owned by the taxpayer covering the life of any individual who (1) is an officer or employee of, or (2) is financially inter- ested in, any trade or business carried on by the taxpayer to the extent that the aggre- gate amount of such debt with respect to policies covering the individual exceeds $50,000 (sec. 264(a)(4)). Further, no deduction is allowed for any amount paid or accrued on debt incurred or continued to purchase or carry a life insur- ance, endowment, or annuity contract pursu- ant to a plan of purchase that contemplates the systematic direct or indirect borrowing of part or all of the increases in the cash value of the contract.22 An exception to the latter rule is provided, permitting deduct- ibility of interest on bona fide debt that is part of such a plan, if no part of 4 of the an- nual premiums due during the first 7 years is paid by means of debt (the ”4-out-of-7 rule”) (sec. 264(c)(1)). Provided the transaction gives rise to debt for Federal income tax pur- poses, and provided the 4-out-of-7 rule is met,23 a company may under present law borrow up to $50,000 per employee, officer, or financially interested person to purchase or carry a life insurance contract covering such a person, and is not precluded under section 264 from deducting the interest on the debt, even though the earnings inside the life in- surance contract (inside buildup) are tax- free, and in fact the taxpayer has full use of the borrowed funds. House bill No provision. Senate amendment Under the Senate amendment, no deduc- tion is allowed for interest paid or accrued on any indebtedness with respect to one or more life insurance policies or annuity or en- dowment contracts owned by the taxpayer covering any individual who is (1) an officer or employee of, or (2) financially interested in, any trade or business carried on by the taxpayer, regardless of the aggregate amount of debt with respect to policies or contracts covering the individual. An exception is provided retaining present law for interest on indebtedness with respect to life insurance policies covering up to 10 key persons. A key person is an individual who is either an officer or a 20-percent owner of the taxpayer. The number of individuals that can be treated as key persons may not exceed the greater of (1) 5 individuals, or (2) the lesser of 5 percent of the total number of officers and employees of the taxpayer or 10 individuals. Interest paid or accrued on debt with respect to a life insurance contract cov- ering a key person is deductible only to the extent the rate of interest does not exceed Moody’s Corporate Bond Yield Average\u2014 Monthly Average Corporates for each month interest is paid or accrued. Effective date.\u2014The Senate amendment provision generally is effective with respect to interest paid or accrued after December 31, 1995 (subject to a phase-in rule). The phase-in rule provides that with re- spect to debt incurred before January 1, 1996, any otherwise deductible interest paid or ac- crued after October 13, 1995, and before Janu- ary 1, 1999, is allowed to the extent the rate of interest does not exceed the lesser of (1) the borrowing rate specified in the contract as of October 13, 1995, or (2) a percentage of Moody’s Corporate Bond Yield Average\u2014 Monthly Average Corporates for each month the interest is paid or accrued. For interest paid or accrued after October 13, 1995, and be- fore January 1, 1996, the percentage of the Moody’s rate is 100 percent; for interest paid or accrued in 1996, the percentage is 90 per- cent; for interest paid or accrued in 1997, the percentage is 80 percent; for 1998, the per- centage is 70 percent; for 1999 and thereafter, the percentage is 0 percent. Only interest that would have been allowed as a deduction but for the provision is allowed under the phase-in. Interest that is deductible under the phase-in rules does not include interest on borrowings by the taxpayer with respect to contracts on the lives of more than 20,000 insured individuals, effective for interest paid or accrued after December 31, 1995. For this purpose, all persons treated as a single employer are treated as one taxpayer. An exception is provided under the effec- tive date with respect to any life insurance contract entered into during 1994 or 1995. In the case of such contracts, with respect to debt incurred before January 1, 1997, a deduc- tion is allowed for interest (that is otherwise deductible) only (1) with respect to policies that satisfy the key person exception, and (2) as provided under the phase-in rule. Thus, with respect to interest on amounts bor- rowed during 1996 with respect to such a con- tract, the phase-in rule applies, capping the rate for determining the amount of deduct- ible interest at the lesser of (1) the borrow- ing rate specified in the contracts as of Octo- ber 13, 1995, or (2) the applicable percentage of Moody’s Corporate Bond Yield Average\u2014 Monthly Average Corporates for each month the interest is paid or accrued. For example, for interest paid or accrued in 1996 on amounts borrowed in 1996 with respect to such a contract, the applicable percentage is 90 percent. The provision generally does not apply to interest on debt with respect to contracts purchased on or before June 20, 1986 (thus generally continuing the effective date pro- vision of the $50,000 limitation enacted in the 1986 Act.) If the policy loan interest rate under such a contract provides for a fixed rate of interest, then interest on such a con- tract paid or accrued after October 13, 1995, is allowable only to the extent the fixed rate of interest does not exceed Moody’s Cor- porate Bond Yield Average\u2014Monthly Aver- age Corporates for the month in which the contract was purchased. If the policy loan in- terest rate under such a contract does not provide for a fixed rate of interest, then in- terest on such a contract paid or accrued after October 13, 1995, is allowable only to the extent the rate of interest for each fixed period selected by the taxpayer does not ex- ceed Moody’s Corporate Bond Yield Aver- age\u2014Monthly Average Corporates, for the month immediately preceding the beginning of the fixed period. The fixed period must be 12 months or less. it is intended that con- forming a contract to satisfy this interest rate limitation not be treated as a material modification for purposes of this grandfather rule or sections 101(f), 7702 or 7702A. No infer- ence is intended as to whether such a change is a material modification under present law. Any amount included in income during 1996, 1997, or 1998, that is received under a contract described in the proposal on the CONGRESSIONAL RECORD \u2014 HOUSEH9556 July 31, 1996 complete surrender, redemption or maturity of the contract or in full discharge of the ob- ligation under the contract that is in the na- ture of a refund of the consideration paid for the contract, is includable ratably over the first 4 taxable years beginning with the tax- able year the amount would otherwise have been includable. Utilization of this 4-year in- come-spreading rule does not cause interest paid or accrued prior to January 1, 1999, to be nondeductible solely by reason of (1) failure to meet the 4-out-or-7 rule, or (2) causing the contract to be treated as single premium contract within the meaning of section 264(b)(1) (i.e., a contract in which substan- tially all of the premiums are paid within 4 years after the date of purchase). In addi- tion, the lapse of a contract after October 13, 1995, due to nonpayment of premiums does not cause interest paid or accrued prior to January 1, 1999, to be nondeductible solely by reason of (1) failure to meet the 4-out-of- 7 rule, or (2) causing the contract to be treat- ed as a single premium contract within the meaning of section 264(b)(1). In the case of an insurance company, the unamortized balance of policy expense at- tributable to a contract with respect to which the 4-year income-spreading treat- ment is allowed to the policyholder is de- ductible in the year in which the transaction giving rise to income-spreading occurs. No inference, is intended as to the treat- ment of interest paid or accrued under present law. Conference agreement The conference agreement follows the Sen- ate amendment, with the following modifica- tions. The exception relating to key persons is modified to apply to life insurance policies covering up to 20 key persons. Thus, under the conference agreement, the number of in- dividuals that can be treated as key persons may not exceed the greater of (1) 5 individ- uals, or (2) the lesser of 5 percent of the total number of officers and employees of the tax- payer or 20 individuals. The cap (based on Moody’s Corporate Bond Yield Average\u2014Monthly Average Corpo- rates) on deductible interest paid or accrued with respect to (1) interest paid or accrued on debt with respect to a life insurance con- tract covering a key person, and (2) interest on debt with respect to contracts purchased on or before June 20, 1986, applies only for in- terest paid or accrued for any month begin- ning after December 31, 1995. In addition, in the case of a contract pur- chased on or before June 20, 1986, where the policy loan interest rate under the contract does not provide for a fixed rate of interest, the interest is allowable only to the extent the rate of interest for each period does not exceed Moody’s Corporate Bond Yield Aver- age\u2014Monthly Average Corporates for the third month preceding the first month pre- ceding the first month preceding the period. Effective date.\u2014The conference agreement modifies the percentages of the Moody’s Cor- porate Bond Yield Average\u2014Monthly Aver- age Corporates that apply with respect to qualified interest under the phase-in rule. Thus, under the conference agreement, the percentage of the Moody’s rate is 100 percent for interest paid or accrued in 1996; 90 per- cent for interest paid or accrued in 1997; 80 percent for interest paid or accrued in 1998; and 0 percent thereafter. The rule limiting deductible interest to the applicable percent- age of the Moody’s rate does not apply for in- terest paid or accrued in any month begin- ning before January 1, 1996. B. EXPATRIATION TAX PROVISIONS (Secs. 421 423 of the House bill and secs. 471 473 of the Senate amendment.) Present law Individuals who relinquish U.S. citizenship with a principal purpose of avoiding U.S. taxes are subject to special tax provisions for 10 years after expatriation. The determina- tion of who is U.S. citizen for tax purposes, and when such citizenship is lost, is governed by the provisions of the Immigration and Na- tionality Act, 8 U.S.C. section 1401, et seq. An individual who relinquishes his U.S. citizenship with a principal purpose of avoid- ing U.S. taxes is subject to tax on his or her U.S. source income at the rates applicable to U.S. citizens, rather than the rates applica- ble to other non-resident aliens, for 10 years after expatriation. In addition, the scope of items treated as U.S. source income for this purpose is broader than those items gen- erally considered to be U.S. source income. For example, gains on the sale of personal property located in the United States and gains on the sale or exchange of stock or se- curities issued by U.S. persons are treated as U.S. source income. This alternative method of income taxation applies only if it results in higher U.S. tax liability. Rules applicable in the estate and gift tax contexts expand the categories of items that are subject to the gift and estate taxes in the case of a U.S. citizen who relinquished citi- zenship with a principal purpose of avoiding U.S. taxes within the 10-year period ending on the date of the transfer. For example, U.S. property held through a foreign cor- poration controlled by such individual and related persons is included in his or her es- tate and gifts of U.S.-situs intangible prop- erty by such individual are subject to the gift tax. House bill Overview The House bill expands and substantially strengthens in several ways the present-law provisions that subject U.S. citizens who lose their citizenship for tax avoidance purposes to special tax rules for 10 years after such loss of citizenship (secs. 877, 2107, and 2501(a)(3)). First, the House bill extends the expatriation tax provisions to apply not only to U.S. citizens who lose their citizenship but also to certain long-term residents of the United States whose U.S. residency is termi- nated. Second, the House bill subjects cer- tain individuals to the expatriation tax pro- visions without inquiry as to their motive for losing their U.S. citizenship or residency, but allows certain categories of citizens to show an absence of tax-avoidance motive if they request a ruling from the Secretary of the Treasury as to whether the loss of citi- zenship had a principal purpose of tax avoid- ance. Third, the House bill expands the cat- egories of income and gains that are treated as U.S. source (and therefore subject to U.S. income tax under section 877) if earned by an individual who is subject to the expatriation tax provisions and includes provisions de- signed to eliminate the ability to engage in certain transactions that under current law partially or completely circumvent the 10- year reach of section 877. Further, the House bill provides relief from double taxation in circumstances where another country im- poses tax on items that would be subject to U.S. tax under the expatriation tax provi- sions. The House bill also contains provisions to enhance compliance with the expatriation tax provisions. The House bill imposes infor- mation reporting obligations on U.S. citizens who lose their citizenship and long-term residents whose U.S. residency is terminated at the time of expatriation. In addition, the House bill directs the Treasury Department to undertake a study regarding compliance by individuals living abroad with their U.S. tax reporting obligations and to make rec- ommendations with respect to improving such compliance. Individuals covered The present-law expatriation tax provi- sions apply only to certain U.S. citizens who lose their citizenship. The House bill extends these expatriation tax provisions to apply also to long-term residents of the United States whose U.S. residency is terminated. For this purpose, a long-term resident is any individual who was a lawful permanent resi- dent of the United States for at least 8 out of the 15 taxable year sending with the year in which such termination occurs. In applying this 8-year test, an individual is not consid- ered to be a lawful permanent resident for any year in which the individual is taxed as a resident of another country under a treaty tie-breaker rule. An individual’s U.S. resi- dency is considered to be terminated when either the individual ceases to be a lawful permanent resident pursuant to section 7701(b)(6) (i.e., the individual loses his or her green-card status) or the individual is treat- ed as a resident of another country under a tie-breaker provision of a tax treaty (and the individual does not elect to waive the bene- fits of such treaty). Furthermore, a long- term resident may elect to use the fair mar- ket value basis of property on the date the individual became a U.S. resident (rather than the property’s historical basis) to deter- mine the amount of gain subject to the expa- triation tax provisions if the asset is sold within the 10-year period. Under present law, the expatriation tax provisions are applicable to a U.S. citizen who loses his or her citizenship unless such loss did not have as a principal purpose the avoidance of taxes. Under the House bill, U.S. citizens who lose their citizenship and long-term residents whose U.S. residency is terminated are generally treated as having lost such citizenship or terminated such resi- dency with a principal purpose of the avoid- ance of taxes if either: (1) the individual’s av- erage annual U.S. Federal income tax liabil- ity for the 5 taxable years ending before the date of such loss or termination is greater than $100,000 (the ”tax liability test”), or (2) the individual’s net worth as of the date of such loss or termination is $500,000 or more (the ”net worth test”). The dollar amount thresholds contained in the tax liability test and the net worth test are indexed for infla- tion in the case of a loss of citizenship or ter- mination of residency occurring in any cal- endar year after 1996. An individual who falls below the thresholds specified in both the tax liability test and the net worth test is subject to the expatriation tax provisions unless the individual’s loss of citizenship or termination of residency did not have as a principal purpose the avoidance of tax (as under present law in the case of U.S. citi- zens). A U.S. citizen, who loses his or her citizen- ship and who satisfies either the tax liability test or the net worth test, is not subject to the expatriation tax provisions if such indi- vidual can demonstrate that he or she did not have a principal purpose of tax avoidance and the individual is within one of the fol- lowing categories: (1) the individual was born with dual citizenship and retains only the non-U.S. citizenship; (2) the individual be- comes a citizen of the country in which the individual, the individual’s spouse, or one of the individual’s parents, was born; (3) the in- dividual was present in the United States for no more than 30 days during any year in the 10-year period immediately preceding the date of his or her loss of citizenship; (4) the individual relinquishes his or her citizenship before reaching age 181\u20442; or (5) any other cat- egory of individuals prescribed by Treasury regulations. In all of these situations, the in- dividual would have been subject to tax on CONGRESSIONAL RECORD \u2014 HOUSE H9557July 31, 1996 24 Under present law, all nonresident aliens (in- cluding expatriates) are subject to U.S. income tax at graduated rates on certain types of income. Such income includes income effectively connected with a U.S. trade or business and gains from the disposition of interests in U.S. real property. For example, com- pensation (including deferred compensation) paid with respect to services performed in the United States is subject to such tax. Thus, under current law, a U.S. citizen who earns a stock option while employed in the United States and delays the exer- cise of such option until after such individual loses his or her citizenship is subject to U.S. tax on the compensation income recognized upon exercise of the stock option (even if the stock received upon the exercise is stock in a foreign corporation). his or her worldwide income (as are all U.S. citizens) until the time of expatriation. In order to qualify for one of these exceptions, the former U.S. citizen must, within one year from the date of loss of citizenship, sub- mit a ruling request for a determination by the Secretary of the Treasury as to whether such loss had as one of its principal purposes the avoidance of taxes. A former U.S. citizen who submits such a ruling request is entitled to challenge an adverse determination by the Secretary of the Treasury. However, a former U.S. citizen who fails to submit a timely ruling request is not eligible for these exceptions. It is expected that in making a determination as to the presence of a prin- cipal purpose of tax avoidance, the Secretary of the Treasury will take into account fac- tors such as the substantiality of the former citizen’s ties to the United States (including ownership of U.S. assets) prior to expatria- tion, the retention of U.S. citizenship by the former citizen’s spouse, and the extent to which the former citizen resides in a country that imposes little or no tax. The foregoing exceptions are not available to long-term residents whose U.S. residency is terminated. However, the House bill au- thorizes the Secretary of the Treasury to prescribe regulations to exempt certain cat- egories of long-term residents from the House bill’s provisions. Items subject to section 877 Under section 877, an individual covered by the expatriation tax provisions is subject to tax on U.S. source income and gains for a 10- year period after expatriation at the grad- uated rates applicable to U.S. citizens.24 The tax under section 877 applies to U.S. source income and gains of the individual for the 10- year period, without regard to whether the property giving rise to such income or gains was acquired before or after the date the in- dividual became subject to the expatriation tax provisions. For example, a U.S. citizen who inherits an appreciated asset imme- diately before losing citizenship and disposes of the asset immediately after such loss would not recognize any taxable gain on such disposition (because of the date of death fair market value basis accorded to inherited assets), but the individual would continue to be subject to tax under section 877 on the in- come or gain derived from any U.S. property acquired with the proceeds from such dis- position. In addition, section 877 currently re- characterizes as U.S. source income certain gains of individuals who are subject to the expatriation tax provisions, thereby subject- ing such individuals to U.S. income tax on such gains. Under this rule, gain on the sale or exchange of stock of a U.S. corporation or debt of a U.S. person is treated as U.S. source income. In this regard, under current law, the substitution of a foreign obligor for a U.S. obligor is generally treated as a tax- able exchange of the debt instrument, and therefore any gain on such exchange is sub- ject to tax under section 877. The House bill extends this recharacterization to income and gains derived from property obtained in certain transactions on which gain or loss is not recognized under present law. An indi- vidual covered by section 877 who exchanges property that would produce U.S. source in- come for property that would produce for- eign source income is required to recognize immediately as U.S. source income any gain on such exchange (determined as if the prop- erty had been sold for its fair market value on such date). To the extent gain is recog- nized under this provision, the property would be accorded the step-up in basis pro- vided under current law. This rule requiring immediate gain recognition does not apply if the individual enters into an agreement with the Secretary of the Treasury specifying that any income or gains derived from the property received in the exchange during the 10-year period after the loss of citizenship (or termination of U.S. residency, as applicable) would be treated as U.S. source income. Such a gain recognition agreement terminates if the property transferred in the exchange is disposed of by the acquiror, and any gain that had not been recognized by reason of such agreement is recognized as U.S. source as of such date. It is expected that a gain recognition agreement would be entered into not later than the due date for the tax return for the year of the exchange. In this regard, the Secretary of the Treasury is authorized to issue regulations providing similar treat- ment for nonrecognition transactions that occur within 5 years immediately prior to the date of loss of citizenship (or termi- nation of U.S. residency, as applicable). The Secretary of Treasury is authorized to issue regulations to treat removal of tan- gible personal property from the United States, and other circumstances that result in a conversion of U.S. source income to for- eign source income without recognition of any unrealized gain, as exchange for pur- poses of computing gain subject to section 877. The taxpayer may defer the recognition of the gain if he or she enters into a gain rec- ognition agreement as described above. For example, a former citizen who removes ap- preciated artwork that he or she owns from the United States could be subject to imme- diate tax on the appreciation under this pro- vision unless the individual enters into a gain recognition agreement. The foregoing rules regarding the treat- ment under section 877 of nonrecognition transactions are illustrated by the following examples: Ms. A loses her U.S. citizenship on January 1, 1996, and is subject to section 877. On June 30, 1997, Ms. A transfers the stock she owns in a U.S. corporation, USCo, to a wholly-owned foreign corporation, FCo, in a transaction that qualifies for tax-free treat- ment under section 351. At the time of such transfer, A’s basis in the stock of USCo is $100,000 and the fair market value of the stock is $150,000. Under present law, Ms. A. would not be subject to U.S. tax on the $50,000 of gain realized on the exchange. Moreover, Ms. A would not be subject to U.S. tax on any distribution of the proceeds from a subsequent disposition of the USCo stock by FCo. Under the House bill, if Ms. A does not enter into a gain recognition agreement with the Secretary of the Treasury, Ms. A would be deemed to have sold the USCo stock for $150,000 on the date of the transfer, and would be subject to U.S. tax in 1997 on the $50,000 of gain realized. Alternatively, if Ms. A enters into a gain recognition agree- ment, she would not be required to recognize for U.S. tax purposes in 1997 the $50,000 of gain realized upon the transfer of the USCo stock to FCo. However, under the gain rec- ognition agreement, for the 10-year period ending on December 31, 2005, any income (e.g., dividends) or gain with respect to the FCo stock would be treated as U.S. source, and therefore Ms. A would be subject to tax on such income or gain under section 877. If FCo disposes of the USCo stock on January 1, 2002, Ms. A’s gain recognition agreement would terminate on such date, and Ms. A would be required to recognize as U.S. source income at that time the $50,000 of gain that she previously deferred under the gain rec- ognition agreement. (The amount of gain re- quired to be recognized by Ms. A in this situ- ation would not be affected by any changes in the value of the USCo stock since her June 30, 1997 transfer of such stock to FCo.) The House bill also extends the re- characterization rules of section 877 to treat as U.S. source any income and gains derived from stock in a foreign corporation if the in- dividual losing citizenship or terminating residency owns, directly or indirectly, more than 50 percent of the vote or value of the stock of the corporation on the date of such loss or termination or at any time during the 2 years preceding such date. Such income and gains are recharacterized as U.S. source only to the extent of the amount of earnings and profits attributable to such stock earned or accumulated prior to the date of loss of citizenship (or termination of residency, as applicable) and while such ownership re- quirement is satisfied. The following example illustrates this rule: Mr. B loses his U.S. citizenship on July 1, 1996 and is subject to section 877. Mr. B has owned all of the stock of a foreign corpora- tion, FCo, since its incorporation in 1991. As of FCo’s December 31, 1995 year-end, FCo has accumulated earnings and profits of $500,000. FCo has earnings and profits of $100,000 for 1996 and does not have any subpart F income (as defined in sec. 952). FCo makes a $100,000 distribution to Mr. B in each of 1997 and 1998. On January 1, 1999, Mr. B disposes of all his stock of FCo and realizes $400,000 of gain. Under present law, neither the distributions from FCo nor the gain on the disposition of the FCo stock would be subject to U.S. tax. Under the House bill, the distributions from FCo and the gain on the sale of the stock of FCo would be treated as U.S. source income and would be taxed to Mr. B under section 877, subject to the earnings and profits limi- tation. For this purpose, the amount of FCo’s earnings and profits for 1996 is pro- rated based on the number of days during 1996 that Mr. B is a U.S. citizen. Thus, the amount of FCo’s earnings and profits earned or accumulated before Mr. B’s loss of citizen- ship is $550,000. Accordingly, the $100,000 dis- tributions from FCo in 1997 and 1998 would be treated as U.S. source income taxable to Mr. B under section 877 in such years. In addi- tion, $350,000 of the gain realized from the sale of the stock of FCo in 1999 would be treated as U.S. source income taxable to Mr. B under section 877 in that year. Special rule for shift in risks of ownership Section 877 applies to income and gains for the 10-year period following the loss of citi- zenship (or termination of residency, as ap- plicable). For purposes of applying section 877, the House bill suspends this 10-year pe- riod for gains derived from a particular prop- erty during any period in which the individ- ual’s risk of loss with respect to such prop- erty is substantially diminished. For exam- ple, Ms. C loses her citizenship on January 1, 1996 and is subject to section 877. On that date Ms. C owns 10,000 shares of stock of a U.S. corporation, USCo, with a value of $1 million. On the same date Ms. C enters into an equity swap with respect to such USCo stock with a 5-year term. under the trans- action, Ms. C will transfer to the counter- party an amount equal to the dividends on the USCo stock and any increase in the value of the USCo stock for the 5-year pe- riod. The counter-party will transfer to Ms. C an amount equal to a market rate of inter- est on $1 million and any decrease in the CONGRESSIONAL RECORD \u2014 HOUSEH9558 July 31, 1996 value of the USCo stock for the same period. Ms. C’s risk of loss with respect to the USCo stock is substantially diminished during the 5-year period in which the equity swap is in effect, and therefore, under the House bill, the 10-year period under section 877 is sus- pended during such period. Accordingly, under the House bill, if Ms. C sells here USCo stock for a gain on January 1, 2010, such gain would be treated as U.S. source income tax- able to Ms. C under section 877. Such gain would not be subject to U.S. tax under present law. Double tax relief In order to avoid the double taxation of in- dividuals subject to the expatriation tax pro- visions, the House bill provides a credit against the U.S. tax imposed under such pro- visions for any foreign income, gift, estate or similar taxes paid with respect to the items subject to such taxation. This credit is avail- able only against the tax imposed solely as a result of the expatriation tax provisions, and is not available to be used to offset any other U.S. tax liability. For example, Mr. D loses his citizenship on January 1, 1996 and is sub- ject to section 877. Mr. D becomes a resident of Country X. During 1996, Mr. D recognizes a $100,000 gain upon the sale of stock of a U.S. corporation, USCo. Country X imposes $20,000 tax on this capital gain. But for the double tax relief provision, Mr. D would be subject to tax of $28,000 on this gain under section 877. However, Mr. D’s U.S. tax under section 877 would be reduced by the $20,000 of foreign tax paid, and Mr. D’s resulting U.S. tax on this gain would be $8,000. Effect on tax treaties While it is believed that the expatriation tax provisions, as amended by the House bill, are generally consistent with the underlying principles of income tax treaties to the ex- tent the House bill provides a foreign tax credit for items taxed by another country, it is intended that the purpose of the expatria- tion tax provisions, as amended, not be de- feated by any treaty provision. The Treasury Department is expected to review all out- standing treaties to determine whether the expatriation tax provisions, as revised, po- tentially conflict with treaty provisions and to eliminate any such potential conflicts through renegotiation of the affected trea- ties as necessary. Beginning on the tenth an- niversary of the enactment of the House bill, any conflicting treaty provisions that re- main in force would take precedence over the expatriation tax provisions as revised. Required information reporting and sharing Under the House bill, a U.S. citizen who loses his or her citizenship is required to pro- vide a statement to the State Department (or other designated government entity) which includes the individual’s social secu- rity number, forwarding foreign address, new country of residence and citizenship and, in the case of individuals with a net worth of at least $500,000, a balance sheet. The entity to which such statement is to be provided is re- quired to provide the Secretary of the Treas- ury copies of all statements received and the names of individuals who refuse to provide such statements. A long-term resident whose U.S. residency is terminated is required to attach a similar statement to his or her U.S. income tax return for the year of such termi- nation. An individual’s failure to provide the required statement results in the imposition of a penalty for each year the failure contin- ues equal to the greater of (1) 5 percent of the individual’s expatriation tax liability for such year, or (2) $1,000. The House bill requires the State Depart- ment to provide the Secretary of the Treas- ury with a copy of each certificate of loss of nationality (CLN) approved by the State De- partment. Similarly, the House bill requires the agency administering the immigration laws to provide the Secretary of the Treas- ury with the name of each individual whose status as a lawful permanent resident has been revoked or has been determined to have been abandoned. Further, the House bill requires the Sec- retary of the Treasury to publish in the Fed- eral Register the names of all former U.S. citizens from whom it receives the required statements or whose names it receives under the foregoing information-sharing provi- sions. Treasury report on tax compliance by U.S. citizens and residents living abroad The Treasury Department is directed to undertake a study on the tax compliance of U.S. citizens and green-card holders residing outside the United States and to make rec- ommendations regarding the improvement of such compliance. The findings of such study and such recommendations are required to be reported to the House Committee on Ways and Means and the Senate Committee on Fi- nance within 90 days of the date of enact- ment. During the course of the 1995 Joint Com- mittee on Taxation staff study on expatria- tion (see Joint Committee on Taxation, Is- sues Presented by Proposals to Modify the Tax Treatment of Expatriation (JCS 17 95), June 1, 1995), a specific issue was identified regarding the difficulty in determining when a U.S. citizen has committed an expatriating act with the requisite intent, and thus no longer has the obligation to continue to pay U.S. taxes on his or her worldwide income due to the fact that the individual is no longer a U.S. citizen. Neither the Immigra- tion and Nationality Act nor any other Fed- eral law requires an individual to request a CLN within a specified amount of time after an expatriating act has been committed, even though the expatriating act terminates the status of the individual as a U.S. citizen for all purposes, including the status of being subject to U.S. tax on worldwide income. Ac- cordingly, it is anticipated that the Treasury report, in evaluating whether improved co- ordination between executive branch agen- cies could improve compliance with the re- quirements of the Internal Revenue Code, will review the process through which the State Department determines when citizen- ship has been lost, and make recommenda- tions regarding changes to such process to recognize the importance of such date for tax purposes. In particular, it is anticipated that the Treasury Department will explore ways of working with the State Department to in- sure that the State Department will not issue a CLN confirming the commission of an expatriating act with the requisite intent necessary to terminate citizenship in the ab- sence of adequate evidence of both the occur- rence of the expatriating act (e.g., the join- ing of a foreign army) and the existence of the requisite intent. Effective date The expatriation tax provisions as modi- fied by the House bill generally apply to any individual who loses U.S. citizenship, and any long-term residents whose U.S. resi- dency is terminated, on or after February 6, 1995. For citizens, the determination of the date of loss of citizenship remains the same as under present law (i.e., the date of loss of citizenship is the date of the expatriating act). However, a special transition rule ap- plies to individuals who committed an expa- triating act within one year prior to Feb- ruary 6, 1995, but had not applied for a CLN as of such date. Such an individual is subject to the expatriation tax provisions as amend- ed by the House bill as of the date of applica- tion for the CLN, but is not retroactively lia- ble for U.S. income taxes on his or her world- wide income. In order to qualify for the ex- ceptions provided for individuals who fall within one of the specified categories, such individual is required to submit a ruling re- quest within 1 year after the date of enact- ment of the House bill. The special transition rule is illustrated by the following example. Mr. E joined a foreign army on October 1, 1994 with the intent to re- linquish his U.S. citizenship, but Mr. E does not apply for a CLN until October 1, 1995. Mr. E would be subject to the expatriation tax provisions (as amended) for the 10-year pe- riod beginning on October 1, 1995. Moreover, if Mr. E falls within one of the specified cat- egories (i.e., Mr. E is age 18 when he joins the foreign army), in order to qualify for the ex- ception provided for such individuals, Mr. E would be required to submit his ruling re- quest within 1 year after the date of enact- ment of the House bill. Mr. E would not, however, be liable for U.S. income taxes on his worldwide income for any period after October 1, 1994. Senate amendment In general The Senate amendment replaces the present-law expatriation income tax rules with rules that generally subject certain U.S. citizens who relinquish their U.S. citi- zenship and certain long-term U.S. residents who relinquish their U.S. residency to tax on the net unrealized gain in their property as if such property were sold for fair market value on the expatriation date. The Senate amendment also imposes information report- ing obligations on U.S. citizens who relin- quish their citizenship and long-term resi- dents whose U.S. residency is terminated. Individuals covered The Senate amendment applies the expa- triation tax to certain U.S. citizens and long-term residents who terminate their U.S. citizenship or residency. For this purpose, a long-term resident is any individual who was a lawful permanent resident of the United States for at least 8 out of the 15 taxable years ending with the year in which the ter- mination of residency occurs. In applying this 8-year test, an individual is not consid- ered to be a lawful permanent resident of the United States for any year in which the indi- vidual is taxed as a resident of another coun- try under a treaty tie-breaker rule. An indi- vidual’s U.S. residency is considered to be terminated when either the individual ceases to be a lawful permanent resident pursuant to section 7701(b)(6) (i.e., the individual loses his or her green-card status) or the individ- ual is treated as a resident of another coun- try under a tie-breaker provision of a tax treaty (and the individual does not elect to waive the benefits of such treaty). The expatriation tax under the Senate amendment applies only to individuals whose average income tax liability or net worth exceeds specified levels. U.S. citizens who lose their citizenship and long-term residents who terminate U.S. residency are subject to the expatriation tax if they meet either of the following tests: (1) the individ- ual’s average annual U.S. Federal income tax liability for the 5 taxable years ending before the date of such loss or termination is great- er than $100,000, or (2) the individual’s net worth as of the date of such loss or termi- nation is $500,000 or more. The dollar amount thresholds contained in these tests are in- dexed for inflation in the case of a loss of citizenship or termination of residency oc- curring in any calendar year after 1996. Exceptions from the expatriation tax under the Senate amendment are provided for individuals in two situations. The first exception applies to an individual who was CONGRESSIONAL RECORD \u2014 HOUSE H9559July 31, 1996 born with citizenship both in the United States and in another country, provided that (1) as of the date of relinquishment of U.S. citizenship the individual continues to be a citizen of, and is taxed as a resident of, such other country, and (2) the individual was a resident of the United States for no more than 8 out of the 15 taxable years ending with the year in which the relinquishment of U.S. citizenship occurred. The second excep- tion applies to a U.S. citizen who relin- quishes citizenship before reaching age 181\u20442, provided that the individual was a resident of the United States for no more than 5 tax- able years before such relinquishment. Deemed sale of property upon expatriation Under the Senate amendment, individuals who are subject to the expatriation tax gen- erally are treated as having sold all of their property at fair market value immediately prior to the relinquishment of citizenship or termination of residency. Gain or loss from the deemed sale of property is recognized at that time, generally without regard to provi- sions of the Code that would otherwise pro- vide nonrecognition treatment. The net gain, if any, on the deemed said of all such prop- erty is subject to U.S. tax at such time to the extent it exceeds $600,000 ($1.2 million in the case of married individuals filing a joint return, both of whom expatriate). The deemed sale rule of the Senate amend- ment generally applies to all property inter- ests held by the individual on the date of re- linquishment of citizenship or termination of residency, provided that the gain on such property interest would be includible in the individual’s gross income if such property in- terest were sold for its fair market value on such date. Special rules apply in the case of trust interests (see ”Interests in trusts,” below). U.S. real property interests, which remain subject to U.S. taxing jurisdiction in the hands of nonresident aliens, generally are excepted from the Senate amendment. An exception also applies to interests in qualified retirement plans and, subject to a limit of $500,000, interests in certain foreign pension plans as prescribed by regulations. The Secretary of the Treasury is authorized to issue regulations exempting other prop- erty interests as appropriate. For example, an exclusion may be provided for an interest in a nonqualified compensation plan of a U.S. employer, where payments from such plan to the individual following expatriation would continue to be subject to U.S. with- holding tax. Under the Senate amendment, an individ- ual who is subject to the expatriation tax is required to pay a tentative tax equal to the amount of tax that would be due for a hypo- thetical short tax year ending on the date the individual relinquished citizenship or terminated residency. Thus, the tentative tax is based on all income, gain, deductions, loss and credits of the individual for the year through such date, including amounts real- ized from the deemed sale of property. The tentative tax is due on the 90th day after the date of relinquishment of citizenship or ter- mination of residency. Deferral of payment of tax Under the Senate amendment, an individ- ual is permitted to elect to defer payment of the expatriation tax with respect to the deemed sale of any property. Under this elec- tion, the expatriation tax with respect to a particular property, plus interest thereon, is due when the property is subsequently dis- posed of. For this purpose, except as provided in regulations, the disposition of property in a nonrecognition transaction constitutes a disposition. In addition, if an individual holds property until his or her death, the in- dividual is treated as having disposed of the property immediately before death. In order to elect deferral of the expatriation tax, the individual is required to provide adequate se- curity to ensure that the deferred expatria- tion tax and interest ultimately will be paid. A bond in the amount of the deferred tax and interest constitutes adequate security. Other security mechanisms are also permitted pro- vided that the individual establishes to the satisfaction of the Security of the Treasury that the security is adequate. In the event that the security provided with respect to a particular property subsequently becomes inadequate and the individual fails to cor- rect such situation, the deferred expatriation tax and interest with respect to such prop- erty will become due. As a further condition to making this election, the individual is re- quired to consent to the waiver of any treaty rights that would preclude the collection of the expatriation tax. Interests in trusts In general.\u2014Under the Senate amendment, special rules apply to trust interests held by the individual at the time of relinquishment of citizenship or termination of residency. The treatment of trust interests depends upon whether the trust is a qualified trust. For this purpose, a ”qualified trust” is a trust that is organized under and governed by U.S. law and that is required by its in- struments to have at least one U.S. trustee. Constructive ownership rules apply to a trust beneficiary that is a corporation, part- nership, trust or estate. In such cases, the shareholders, partners or beneficiaries of the entity are deemed to be the direct bene- ficiaries of the trust for purposes of applying these provisions. In addition, an individual who holds (or who is treated as holding) a trust interest at the time of relinquishment of citizenship or termination of residency is required to disclose on his or her tax return the methodology used to determine his or her interest in the trust, and whether such individual knows (or has reason to know) that any other beneficiary of the trust uses a different method. Nonqualified trusts.\u2014If an individual holds an interest in a trust that is not a qualified trust, a special rule applies for purposes of determining the amount of the expatriation tax due with respect to such trust interest. The individuals interest in the trust is treat- ed as a separate trust consisting of the trust assets allocable to such interest. Such sepa- rate trust is treated as having sold its assets as of the date of relinquishment of citizen- ship or termination of residency and having distributed all proceeds to the individual, and the individual is treated as having re- contributed such proceeds to the trust. The individual is subject to the expatriation tax with respect to any net income or gain aris- ing from the deemed distribution from the trust. The election to defer payment is avail- able for the expatriation tax attributable to a nonqualifed trust interest. A beneficiary’s interest in a nonqualified trust is determined on the basis of all facts and circumstances. These include the terms of the trust instrument itself, any letter of wishes or similar document, historical pat- terns of trust distributions, and the role of any trust protector or similar advisor. Qualified trusts.\u2014If the individual has an interest in a qualified trust, a different set of rules applies. Under these rules, the amount of unrealized gain allocable to the individ- ual’s trust interest is calculated at the time of expatriation. In determining this amount, all contingencies and discretionary interests are assumed to be resolved in the individ- ual’s favor (i.e., the individual is allocated the maximum amount that he or she poten- tially could receive under the terms of the trust instrument). the expatriation tax im- posed on such gains generally is collected when the individual receives distributions from the trust, or, if earlier, upon the indi- vidual’s death. Interest is charged for the pe- riod between the date of expatriation and the date on which the tax is paid. If an individual has an interest in a quali- fied trust, the individual is subject to expa- triation tax upon the receipt of any distribu- tion from the trust. Such distributions may also be subject to U.S. income tax. For any distribution from a qualified trust made to an individual after he or she has expatriated, expatriation tax is imposed in an amount equal to the amount of the distribution mul- tiplied by the highest tax rate generally ap- plicable to trusts and estates, but in no event will the tax imposed exceed the de- ferred tax amount with respect to such trust interest. The ”deferred tax amount” would be equal to (1) the tax calculated with re- spect to the unrealized gain allocable to the trust interest at the time of expatriation, (2) increased by interest thereon, and (3) re- duced by the tax imposed under this provi- sion with respect to prior trust distributions to the individual. If an individual’s interest in a trust is vest- ed as of the expatriation date (e.g., if the in- dividual’s interest in the trust is non-contin- gent and non-discretionary), the gain alloca- ble to the individual’s trust interest is deter- mined based on the truth assets allocable to his or her trust interest. If the individual’s interest in the trust is not vested as of the expatriation date (e.g., if the individual’s trust interest is a contingent or discre- tionary interest), the gain allocable to his or her trust interest is determined based on all of the trust assets that could be allocable to his or her trust interest, determined by re- solving all contingencies and discretionary powers in the individual’s favor. In the case where more than one trust beneficiary is subject to the expatriation tax with respect to trust interests that are not vested, the rules are intended to apply so that the same unrealized gain with respect to assets in the trust is not taxed to both individuals. If the individual disposes of his or her trust interest, the trust ceases to be a qualified trust, or the individual dies, expatriation tax is imposed as of such date. The amount of such tax equal to the lesser of (1) the tax cal- culated under the rules for nonqualified trust interests applied as of such date or (2) the deferred tax amount with respect to the trust interest as of such date. If the individual agrees to waive any trea- ty rights that would preclude collection of the tax, the tax is imposed under this provi- sion with respect to distributions from a qualified trust to the individual deducted and withheld from distributions. If the indi- vidual does not agree to such a waiver of treaty rights, the tax with respect to dis- tributions to the individual is imposed on the trust, the trustee is personally liable therefore, and any other beneficiary of the trust has a right of contribution against such individual with respect to such tax. Similarly, in the case of the tax imposed in connection with an individual’s disposition of a trust interest, the individual’s death while holding a trust interest or the individ- ual’s holding of an interest in a trust that ceases to be qualified, the tax is imposed on the trust, the trustee is personnaly liable therefor, and any other beneficiary of the trust has a right of contribution against such individual with respect to such tax. Election to be treated as a U.S. citizen Under the Senate amendment, an individ- ual is permitted to make an irrevocable elec- tion to continue to be taxed as a U.S. citizen with respect to all property that otherwise is CONGRESSIONAL RECORD \u2014 HOUSEH9560 July 31, 1996 covered by the expatriation tax. This elec- tion is an ”all-or-nothing” election; an indi- vidual is not permitted to elect this treat- ment for some property but not other prop- erty. The election, if made, applies to all property that would be subject to the expa- triation tax and to any property the basis of which is determined by reference to such property. Under this election, the individual continues to pay U.S. income taxes at the rates applicable to U.S. citizens following ex- patriation on any income generated by the property and on any gain realized on the dis- position of the property, as well as any ex- cise tax imposed with respect to property (see, e.g., sec 1491). In addition, the property continues to be subject to U.S. gift, estate, and generation-shipping taxes. However, the amount of any transfer tax so imposed is limited to the amount of income tax that would have been due if the property had been sold for its fair market value immediately before the transfer or death. The $600,000 ex- clusion provided with respect to the expa- triation tax under the Senate amendment is available to reduce the tax imposed by rea- son of this election. In order to make this election, the taxpayer is required to waive any treaty rights that would preclude the collection of the tax. The individual is also required to provide security to ensure pay- ment of the tax under this election in such form, manner, and amount as the Secretary of the Treasury requires. Date of relinquishment of citizenship Under the Senate amendment, as individ- ual is treated as having relinquished U.S. citizenship on the date that the individual first makes known to U.S. government of consular officer his or her intention to relin- quish U.S. citizenship. Thus, a U.S. citizen who relinquishes citizenship by formally re- nouncing his or her U.S. nationality before a diplomatic or consular officer for the United States is treated as having relinquished ciizenship on that date, provided that the re- nunciation is later confirmed by the issuance of a CLN. A U.S. citizen who furnishes to the State Department a signed statement of vol- untary relinquishment of U.S. nationality confirming the performance of an expatriat- ing act with the requisite interest to relin- quish his or her citizenship is treated as hav- ing relinquished his or her citizenship on the date the statement is so furnished (regard- less of when the expatriating act was per- formed), provided that the voluntary relin- quishment is later confirmed by the issuance of a CLN. If neither of these circumstances exist, the individual is treated as having re- linquished citizenship on the date a CLN is issued or a certificate of naturalization is cancelled. The date of relinquishment of citi- zenship determined under the Senate amend- ment applies for all purposes. Effect on present-law expatriation provisions Under the Senate amendment, the present- law income tax provisions with respect to U.S. citizens who expatriate with a principal purpose of avoiding tax (sec. 877) and certain aliens who have a break in residency status (sec. 7701(b)(10)) do applying to U.S. citizens who are treated as relinquishing their citi- zenship on or after February 6, 1995 or to long-term U.S. residents who terminate their residency on or after such date. The special estate and gift tax provisions with respect to individuals who expatriate with a principal purpose of avoiding tax (secs. 2107 and 2501(a)(3)), however, continue to apply; a credit against the tax imposed solely by rea- son of such special provisions is allowed for the expatriation tax imposed with respect to the same property. Treatment of gifts and inheritances from an expatriate Under the Senate amendment, the exclu- sion from income provided in section 102 does not apply to the value of any property re- ceived by gift or inheritance from an individ- ual who was subject to the expatriation tax (i.e., an individual who relinquished citizen- ship or terminated residency and to whom the expatriation tax was applicable). Accord- ingly, a U.S. taxpayer who receives a gift or inheritance from such an individual is re- quired to include the value of such gift or in- heritance in gross income and is subject to U.S. income tax on such amount. Required information reporting and sharing Under the Senate amendment, an individ- ual who relinquishes citizenship or termi- nates residency is required to provide a statement which includes the individual’s so- cial security number, forwarding foreign ad- dress, new country of residence and citizen- ship and, in the case of individuals with a net worth of at least $500,000, a balance sheet. In the case of a former citizen, such statement is due not later than the date the individual’s citizenship is treated as relin- quished and is to be provided to the State Department (or other government entity in- volved in the administration of such relin- quishment). The entity to which the state- ment is to be provided by former citizens is required to provide to the Secretary of the Treasury copies of all statements received and the names of individuals who refuse to provide such statements. In the case of a former long-term resident, the statement is provided to the Secretary of the Treasury with the individual’s tax return for the year in which the individual’s U.S. residency is terminated. An individual’s failure to pro- vide the statement required under this provi- sion results in the imposition of a penalty for each year the failure continues equal to the greater of (1) 5 percent of the individual’s expatriation tax liability for such year or (2) $1,000. The Senate amendment requires the State Department to provide the Secretary of the Treasury with a copy of each CLN approved by the State Department. Similarly, the Senate amendment requires the agency ad- ministering the immigration laws to provide the Secretary of the Treasury with the name of each individual whose status as a lawful permanent resident has been revoked or has been determined to have been abandoned. Further, the Senate amendment requires the Secretary of the Treasury to publish in the Federal Register the names of all former U.S. citizens with respect to whom it re- ceives the required statements or whose names it receives under the foregoing infor- mation-sharing provisions. Treasury report on tax compliance by U.S. citizens and residents living abroad The Treasury Department is directed to undertake a study on the tax compliance of U.S. citizens and green-card holders residing outside the United States and to make rec- ommendations regarding the improvement of such compliance. The findings of such study and such recommendations are required to be reported to the House Committee on Ways and Means and the Senate Committee on Fi- nance within 90 days of the date of enact- ment. Effective date The provision is effective for U.S. citizens whose date of relinquishment of citizenship (as determined under the Senate amend- ment, see ”Date of relinquishment of citizen- ship” above) occurs on or after February 6, 1995. Similarly, the provision is effective for long-term residents who terminate their U.S. residency on or after February 6, 1995. U.S. citizens who committed an expatriat- ing act with the requisite intent to relin- quish their U.S. citizenship prior to Feb- ruary 6, 1995, but whose date of relinquish- ment of citizenship (as determined under the Senate amendment) does not occur until after such date, are subject to the expatria- tion tax under the Senate amendment as of date of relinquishment of citizenship. How- ever, the individual is not subject retro- actively to worldwide tax as a U.S. citizen for the period after he or she committed the expatriating act (and therefore ceased being U.S. citizen for tax purposes under present law). Such an individual continues to be sub- ject to the expatriation tax imposed by present-law section 877 until the individual’s date of relinquishment of citizenship (at which time the individual would be subject to the expatriation tax of the Senate amend- ment). The rules described in this paragraph do not apply to an individual who committed an expatriating act prior to February 6, 1995, but did not do so with the requisite intent to relinquish his or her U.S. citizenship. The tentative tax is not required to be paid, and the reporting requirements would not be required to be met, until 90 days after the date of enactment. Such provisions apply to all individuals whose date of relinquish- ment of U.S. citizenship or termination of U.S. residency occurs on or after February 6, 1995. Conference agreement The conference agreement follows the House bill with modifications. Under the conference agreement, modified rules apply if an individual who is covered by section 877 contributes property that would produce U.S. source income to a foreign corporation if (1) the individual, directly or indirectly, owns 10 percent or more (by vote) of the stock of such corporation and (2) the individ- ual, directly, indirectly or constructively, owns more than 50 percent (by vote or by value) of the stock of such corporation. For purposes of determining indirect and con- structive ownership, the rules of section 958 apply. Under the modified rules, for the ten- year period following expatriation the indi- vidual is treated as receiving or accruing di- rectly the income or gains received or ac- crued by the foreign corporation with re- spect to the contributed property (or other property which has a basis determined by reference to the basis of such contributed property). Moreover, if the individual dis- poses of the stock of the foreign corporation, the individual is subject to U.S. tax on the gain that would have been recognized if the corporation had sold such property imme- diately before the disposition. If the individ- ual disposes of less than all of his or her stock in the foreign corporation, such dis- position is treated as a disposition of a pro rata share (determined based on value) of such contributed property (e.g., if the indi- vidual owns 100 shares of the foreign corpora- tion’s stock and disposes of 10 of such shares, such disposition is treated as a disposition of 10 percent of the property contributed to the foreign corporation). Regulatory authority is provided to prescribe regulations to prevent the avoidance of this rule. Information re- porting will be required as necessary to carry out the purposes of this rule. In addi- tion, under the conference agreement, in the case of any former U.S. citizen, a request for a ruling that such individual’s loss of citi- zenship would be due not earlier than 90 days after date of enactment. C. TREATMENT OF BAD DEBT DEDUCTIONS OF THRIFT INSTITUTIONS (Sec. 401 of the House bill and and sec. 611 of the Senate amendment.) Present law Generally, a taxpayer engaged in a trade or business may deduct the amount of any debt that becomes wholly or partially worthless during the year (the ”specific charge-off” CONGRESSIONAL RECORD \u2014 HOUSE H9561July 31, 1996 25 In the case of a married individual who files a joint return with his or her spouse, the income for purposes of these tests is the combined income of the couple. method of sec. 166). Certain thrift institu- tions (building and loan associations, mutual savings banks, or cooperative banks) are allow deductions for bad debts under meth- ods more favorable than those granted to other taxpayers (and more favorable than the rules applicable to other financial insti- tutions). Qualified thrift institutions may compute deductions for bad debts using ei- ther the specific charge-off method or the re- serve method of section 593. Under section 593, a thrift institution an- nually may elect to deduct bad debts under either (1) the ”percentage of taxable in- come” method applicable only to thrift in- stitutions, or (2) the ”experience” method that also is available to small banks. Under the ”percentage of taxable income” method, a thrift institution generally is allowed a de- duction for an addition to its bad debt re- serve equal to 8 percent of its taxable income (determined without regard to this deduction and with additional adjustments). Under the experience method, a thrift institution gen- erally is allowed a deduction for an addition to its bad debt reserve equal to the greater of (1) an amount based on its actual average ex- perience for losses in the current and five preceding taxable years, or (2) an amount necessary to restore the reserve to its bal- ance as of the close of the base year. If a thrift institution becomes ineligible to use the section 593 method, it is required to change its method of accounting for bad debts and, under proposed Treasury regula- tions, is required to recapture all or a por- tion of its bad debt reserve. In addition, a thrift institution eligible to use the section 593 method may be subject to a form of re- serve recapture if the institution makes cer- tain excessive distributions to its sharehold- ers (sec. 593(e)). House bill Repeal of section 593 The House bill repeals the section 593 re- serve method of accounting for bad debts by thrift institutions, effective for taxable years beginning after 1995. Thrift institu- tions that would be treated as small banks are allowed to utilize the experience method applicable to such institutions, while thrift institutions that are treated as large banks are required to use only the specific charge- off method. Thus, the percentage of taxable income method of accounting for bad debts is no longer available for any financial institu- tion. Treatment of recapture of bad debt reserves A thrift institution required to change its method of computing reserves for bad debts will treat such change as a change in a meth- od of accounting, initiated by the taxpayer, and having been made with the consent of the Secretary of the Treasury. Any section 481(a) adjustment required to be recaptured with respect to such change generally will be determined solely with respect to the ”appli- cable excess reserves” of the taxpayer. The amount of applicable excess reserves will be taken into account ratably over a six-tax- able year period, beginning with the first taxable year beginning after 1995, subject to the residential loan requirement described below. In the case of a thrift institution that becomes a large bank, the amount of the in- stitution’s applicable excess reserves gen- erally is the excess of (1) the balances of its reserve for losses on qualifying real property loans and its reserve for losses on non- qualifying loans as of the close of its last taxable year beginning before January 1, 1996, over (2) the balances of such reserves as of the close of its last taxable year beginning before January 1, 1988 (i.e., the ”pre-1988 re- serves.”) Similar rules are provided for small banks that are allowed to use the experience method. For taxable years that begin after Decem- ber 31, 1995, and before January 1, 1998, if the taxpayer continues to make a certain level of residential loans, the recapture of the ap- plicable excess reserves otherwise required to be taken into account for such years will be suspended. The balance of the pre-1988 reserves is sub- ject to the provisions of section 593(e), as modified by the House bill (requiring recap- ture in the case of certain excessive distribu- tions to shareholders.) Other special recapture rules are provided if a thrift institution no longer qualifies as a bank or if a thrift institution becomes a credit union. Effective date The provision generally is effective for tax- able years beginning after December 31, 1995. Senate amendment The Senate amendment generally is the same as the House bill, with certain modi- fications. Conference agreement The conference agreement does not include either the provision in the House bill or the provision in the Senate amendment. D. EARNED INCOME CREDIT PROVISIONS (Sec. 411 of the House bill.) Present law In general Certain eligible low-income workers are entitled to claim a refundable credit on their income tax return. The amount of the credit an eligible individual may claim depends upon whether the individual has one, more than one or no qualifying children and is de- termined by multiplying the credit rate by the individual’s 25 earned income up to an earned income amount. The maximum amount of the credit is the product of the credit rate and the earned income amount. For individuals with earned income (or ad- justed gross income (AGI), if greater) in ex- cess of the beginning of the phaseout range, the maximum credit amount is reduced by the phaseout rate multiplied by the amount of earned income (or AGI, if greater) in ex- cess of the beginning of the phaseout range. For individuals with earned income (or AGI, if greater) in excess of the end of the phase- out range, no credit is allowed. The parameters for the credit depend upon the number of qualifying children the indi- vidual claims. For 1996, the parameters are given in the following table: Two or more qualifying children\u2014 One qualify- ing child\u2014 No qualify- ing chil- dren\u2014 Credit rate (percent) …………….. 40.00 34.00 7.65 Earned income amount …………. $8,890 $6,330 $4,220 Maximum credit …………………… $3,356 $2,152 $323 Phaseout begins ………………….. $11,610 $11,610 $5,280 Phaseout rate (percent) ………… 21.06 15.98 7.65 Phaseout ends …………………….. $28,495 $25,078 $9,500 For years after 1996, the credit rates and the phaseout rates will be the same as in the preceding table. The earned income amount and the beginning of the phaseout range are indexed for inflation; because the end of the phaseout range depends on those amounts as well as the phaseout rate and the credit rate, the end of the phaseout range will also in- crease if there is inflation. In order to claim the credit, an individual must either have a qualifying child or meet other requirements. A qualifying child must meet a relationship test, an age test, an identification test, and a residence test. In order to claim the credit without a qualify- ing child, an individual must not be a de- pendent and must be over age 24 and under age 65. To satisfy the identification test, individ- uals must include on their tax return the name and age of each qualifying child. For returns filed with respect to tax year 1996, individuals must provide a taxpayer identi- fication number (TIN) for all qualifying chil- dren born on or before November 30, 1996. For returns filed with respect to tax year 1997 and all subsequent years, individuals must provide TINs for all qualifying children, re- gardless of their age. An individual’s TIN is generally that individual’s social security number. Mathematical or clerical errors The IRS may summarily assess additional tax due as a result of a mathematical or cler- ical error without sending the taxpayer a no- tice of deficiency and giving the taxpayer an opportunity to petition the Tax Court. Where the IRS uses the summary assessment procedure for mathematical or clerical er- rors, the taxpayer must be given an expla- nation of the asserted error and a period of 60 days to request that the IRS abate its as- sessment. The IRS may not proceed to col- lect the amount of the assessment until the taxpayer has agreed to it or has allowed the 60-day period for objecting to expire. If the taxpayer files a request for abatement of the assessment specified in the notice, the IRS must abate the assessment. Any reassess- ment of the abated amount is subject to the ordinary deficiency procedures. The request for abatement of the assessment is the only procedure a taxpayer may use prior to pay- ing the assessed amount in order to contest an assessment arising out of a mathematical or clerical error. Once the assessment is sat- isfied, however, the taxpayer may file a claim for refund if he or she believes the as- sessment was made in error. House bill Under the House bill, individuals are not eligible for the credit if they do not include their taxpayer identification number (and, if married, their spouse’s taxpayer identifica- tion number) on their tax return. Solely for these purposes and for purposes of the present-law identification test for a qualify- ing child, a taxpayer identification number is defined as a social security number issued to an individual by the Social Security Ad- ministration other than a number issued under section 205(c)(2)(B)(i)(II) (or that por- tion of sec. 205(c)(2)(B)(i)(III) relating to it) of the Social Security Act (regarding the is- suance of a number to an individual applying for or receiving Federally funded benefits). If an individual fails to provide a correct taxpayer identification number, such omis- sion will be treated as a mathematical or clerical error. If an individual who claims the credit with respect to net earnings from self-employment fails to pay the proper amount of self-employment tax on such net earnings, the failure will be treated as a mathematical or clerical error for purposes of the amount of credit allowed. Effective date.\u2014The provision is effective for taxable years beginning after December 31, 1995. Senate amendment No provision. Conference agreement The conference agreement does not include the House bill provision. E. MODIFY TREATMENT OF FOREIGN TRUSTS (Secs. 601 606 of the Senate amendment). Present law Inbound grantor trusts with foreign grantors Under the grantor trust rules (secs. 671 679), a grantor that retains certain rights or CONGRESSIONAL RECORD \u2014 HOUSEH9562 July 31, 1996 26 The exception does not apply to the portion of any such trust attributable to any transfers made after September 19, 1995. powers generally is treated as the owner of the trust’s assets without regard to whether the grantor is a domestic or foreign person. Under these rules, U.S. trust beneficiaries are not subject to U.S. tax on distributions from a trust where a foreign grantor is treat- ed as owner of the trust, even though no tax may be imposed on the trust income by any jurisdiction. In addition, a special rule pro- vides that if a U.S. beneficiary of an inbound grantor trust transfers property to the for- eign grantor by gift, that U.S. beneficiary is treated as the grantor of the trust to the ex- tent of the transfer. Foreign trusts that are not grantor trusts Under the accumulation distribution rules (which generally apply to distributions from a trust in excess of the trust’s distributable net income for the taxable year), a distribu- tion by a foreign nongrantor trust of pre- viously accumulated income generally is taxed at the U.S. beneficiary’s average mar- ginal rate for the prior 5 years, plus interest (secs. 666 and 667). Interest is computed at a fixed annual rate of 6 percent, with no compounding (sec. 668). If adequate records of the trust are not available to determine the proper application of the rules relating to accumulation distributions to any dis- tribution from a trust, the distribution is treated as an accumulation distribution out of income earned during the first year of the trust (sec. 666(d)). If a foreign nongrantor trust makes a loan to one of its beneficiaries, the principal of such a loan generally is not taxable as in- come to the beneficiary. Outbound foreign grantor trusts with U.S. grantors Under the grantor trust rules, a U.S. per- son that transfers property to a foreign trust generally is treated as the owner of the por- tion of the trust comprising that property for any taxable year in which there is a U.S. beneficiary of any portion of the trust (sec. 679(a)). This treatment generally does not apply, however, to transfers by reason of death, to transfers made before the trans- feror became a U.S. person, or to transfers that represent sales or exchanges of property at fair market value where gain is recognized to the transferor. Residence of trusts and estates An estate or trust is treated as foreign if it is not subject to U.S. income taxation on its income that is neither derived from U.S. sources nor effectively connected with the conduct of a U.S. trade or business. Thus, if a trust is taxed in a manner similar to a non- resident alien individual, it is considered to be a foreign trust. Any other trust is treated as domestic. Section 1491 generally imposes a 35-percent excise tax on a U.S. person that transfers ap- preciated property to certain foreign enti- ties, including a foreign trust. In the case of a domestic trust that changes its situs and becomes a foreign trust, it is unclear wheth- er property has been transferred from a U.S. person to a foreign entity and, thus, whether the transfer is subject to the excise tax. Information reporting and penalties related to foreign trusts Any U.S. person that creates a foreign trust or transfers money or property to a for- eign trust is required to report that event to the Treasury Department without regard to whether the trust is a grantor trust or a non- grantor trust. Similarly, any U.S. person that transfers property to a foreign trust that has one or more U.S. beneficiaries is re- quired to report annually to the Treasury Department. In addition, any U.S. person that makes a transfer described in section 1491 is required to report the transfer to the Treasury Department. Any person that fails to file a required re- port with respect to the creation of, or a transfer to, a foreign trust may be subject to a penalty of 5 percent of the amount trans- ferred to the foreign trust. Similarly, any person that fails to file a required annual re- port with respect to a foreign trust with U.S. beneficiaries may be subject to a penalty of 5 percent of the value of the corpus of the trust at the close of the taxable year. The maximum amount of the penalty imposed under either case may not exceed $1,000. A reasonable cause exception is available. Reporting of foreign gifts There is no requirement to report gifts or bequests from foreign sources. House bill No provision. Senate amendment Inbound grantor trusts with foreign grantors The Senate amendment generally applies the grantor trust rules only to the extent that they result, directly or indirectly, in in- come or other amounts being currently taken into account in computing the income of a U.S. citizen or resident or a domestic corporation. Certain exceptions apply to this general rule. Under one exception, the grant- or trust rules continue to apply to a rev- ocable trust. Under another exception, the grantor trust rules continue to apply to a trust where the only amounts distributable during the lifetime of the grantor are to the grantor or the grantor’s spouse. The general rule denying grantor trust status does not apply to trusts established to pay compensa- tion, and certain trusts in existence as of September 19, 1995 provided that such trust is treated as owned by the grantor under sec- tion 676 or 677 (other than sec. 677(a)(3)).26 In addition, the grantor trust rules generally apply where the grantor is a controlled for- eign corporation (as defined in sec. 957). Fi- nally, the grantor trust rules continue to apply in determining whether a foreign cor- poration is characterized as a passive foreign investment company (”PFIC”). Thus, a for- eign corporation cannot avoid PFIC status by transferring its assets to a grantor trust. If a U.S. beneficiary of an inbound grantor trust transfers property to the foreign grant- or, such beneficiary generally is treated as a grantor of a portion of the trust to the ex- tent of the transfer. This rule applies with- out regard to whether the foreign grantor is otherwise treated as the owner of any por- tion of such trust. However, this rule does not apply if the transfer is a gift that quali- fies for the annual exclusion described in section 2503(b). The Senate amendment provides a special rule that allows the Secretary of the Treas- ury to recharacterize a transfer, directly or indirectly, from a partnership or foreign cor- poration which the transferee treats as a gift or bequest, to prevent the avoidance of the purpose of section 672(f). In a case where a foreign person (that would be treated as the owner of a trust but for the above rule) actu- ally pays tax on the income of the trust to a foreign country, it is anticipated that Treas- ury regulations will provide that, for foreign tax credit purposes, U.S. beneficiaries that are subject to U.S. income tax on the same income will be treated as having paid the foreign taxes that are paid by the foreign grantor. Any resulting foreign tax credits will be subject to applicable foreign tax cred- it limitations. Effective date.\u2014The provisions described in this part are effective on the date of enact- ment. Foreign trusts that are not grantor trusts The Senate amendment changes the inter- est rate applicable to accumulation distribu- tions from foreign trusts from simple inter- est at a fixed rate of 6 percent to compound interest determined in the same manner as interest imposed on underpayments of tax under section 6621(a)(2). Simple interest is accrued at the rate of 6 percent through 1995. Beginning on January 1, 1996 compound in- terest based on the underpayment rate is im- posed on tax amounts determined under the accumulation distribution rules and the total simple interest for pre-1996 periods, if any. For purposes of computing the interest charge, the accumulation distribution is al- located proportionately to prior trust years in which the trust has undistributed net in- come (and the beneficiary receiving the dis- tribution was a U.S. citizen or resident), rather than to the earliest of such years. An accumulation distribution is treated as re- ducing proportionately the undistributed net income from prior years. In the case of a loan of cash or marketable securities by the foreign trust to a U.S. grantor or a U.S. beneficiary (or a U.S. per- son related to such grantor or beneficiary), except to the extent provided by Treasury regulations, the Senate amendment treats the full amount of the loan as distributed to the grantor or beneficiary. It is expected that the Treasury regulations will provide an exception from this treatment for loans with arm’s-length terms. In applying this ex- ception, it is further expected that consider- ation be given to whether there is a reason- able expectation that a loan will be repaid. In addition, any subsequent transaction be- tween the trust and the original borrower re- garding the principal of the loan (e.g., repay- ment) is disregarded for all purposes of the Code. This provision does not apply to loans made to persons that are exempt from U.S. income tax. Effective date.\u2014The provision to modify the interest charge on accumulation distribu- tions applies to distributions after the date of enactment. The provision with respect to loans to U.S. grantors, U.S. beneficiaries or a U.S. person related to such a grantor or beneficiary applies to loans made after Sep- tember 19, 1995. Outbound foreign grantor trusts with U.S. grantors The Senate amendment makes several modifications to the general rule of section 679(a)(1) under which a U.S. person who transfers property to a foreign trust gen- erally is treated as the owner of the portion of the trust comprising that property for any taxable year in which there is a U.S. bene- ficiary of the trust. The Senate amendment also conforms the definition of certain for- eign corporations the income of which is deemed to be accumulated for the benefit of a U.S. beneficiary to the definition of con- trolled foreign corporations (as defined in sec. 957(a)). Sale or exchange at market value.\u2014Present law contains several exceptions to grantor trust treatment under section 679(a)(1) de- scribed above. Under one of the exceptions, grantor trust treatment does not result from a transfer of property by a U.S. person to a foreign trust in the form of a sale or ex- change at fair market value where gain is recognized to the transferor. In determining whether the trust paid fair market value to the transferor, the Senator amendment pro- vides that obligations issued (or, to the ex- tent provided by regulations, guaranteed) by the trust, by any grantor or beneficiary of the trust, or by any person related to any grantor or beneficiary (referred to as ”trust obligations”) are not taken into account ex- cept as provided in Treasury regulations. It CONGRESSIONAL RECORD \u2014 HOUSE H9563July 31, 1996 is expected that the Treasury regulations will provide an exception from this treat- ment for loans with arm’s-length terms. In applying this exception, it is further ex- pected that consideration be given to wheth- er there is a reasonable expectation that a loan will be repaid. Principal payments by the trust on any such trust obligations gen- erally will reduce the portion of the trust at- tributable to the property transferred (i.e., the portion of which the transferor is treated as the grantor). Other transfers.\u2014The Senate amendment adds a new exception to the general rule of section 679(a)(1) described above. Under the Senate amendment, a transfer of property to certain charitable trusts is exempt from the application of the rules treating foreign trusts with U.S. grantors and U.S. bene- ficiaries as grantor trusts. Transferors or beneficiaries who become U.S. persons.\u2014The Senate amendment applies the rule of section 679(a)(1) to certain foreign persons who transfer property to a foreign trust and subsequently become U.S. persons. A nonresident alien individual who transfers property, directly or indirectly, to a foreign trust and then becomes a resident of the United States within 5 years after the trans- fer generally is treated as making a transfer to the foreign trust on the individual’s U.S. residency starting date (as defined in sec. 7701(b)(2)(A)). The amount of the deemed transfer is the portion of the trust (including undistributed earnings) attributable to the property previously transferred. Con- sequently, the individual generally is treated under section 679(a)(1) as the owner of that portion of the trust in any taxable year in which the trust has U.S. beneficiaries. Outbound trust migrations.\u2014The Senate amendment applies the rules of section 679(a)(1) to a U.S. person that transferred property to a domestic trust if the trust sub- sequently becomes a foreign trust while the transferor is still alive. Such a person is deemed to make a transfer to the foreign trust on the date of the migration. The amount of the deemed transfer is the portion of the trust (including undistributed earn- ings) attributable to the property previously transferred. Consequently, the individual generally is treated under the rules of sec- tion 679(a)(1) as the owner of that portion of the trust in any taxable year in which the trust has U.S. beneficiaries. Effective date.\u2014The provisions to amend section 679 apply to transfers of property after February 6, 1995. Anti-abuse regulatory authority The Senate amendment includes an anti- abuse rule which authorizes the Secretary of the Treasury to issue regulations, on or after the date of enactment, that may be nec- essary or appropriate to carry out the pur- poses of the rules applicable to estates, trusts and beneficiaries, including regula- tions to prevent the avoidance of those pur- poses. Effective date.\u2014The provision is effective on the date of enactment. Residence of trusts and estates The Senate amendment establishes a two- part objective test for determining for tax purposes whether a trust is foreign or domes- tic. If both parts of the test are satisfied, the trust is treated as domestic. Only the first part of the test applies to estates. Under the first part of the test, if a U.S. court (i.e., Federal, State, or local) exercises primary supervision over the administration of a trust or estate, the trust or estate is treated as domestic. Under the second part of the test, in order for a trust to be treated as do- mestic, one or more U.S. fiduciaries must have the authority to control all substantial decisions of the trust. Under the Senate amendment, if a domes- tic trust changes its situs and becomes a for- eign trust, the trust is treated as having made a transfer of its assets to a foreign trust and is subject to the 35-percent excise tax imposed by present-law section 1491 un- less one of the exceptions to this excise tax is applicable. Effective date.\u2014The provision to modify the treatment of a trust or estate as a U.S. per- son applies to taxable years beginning after December 31, 1996. In addition, if the trustee of a trust so elects, the provision would apply to taxable years ending after the date of enactment. The amendment to section 1491 is effective on the date of enactment. Information reporting and penalties relating to foreign trusts The Senate amendment generally requires the grantor, transferor or executor (i.e., the ”responsible party”) to notify the Treasury Department upon the occurrence of certain reportable events. The term ”reportable event” means the creation of any foreign trust by a U.S. person, the direct and indi- rect transfer of any money or property to a foreign trust, including a transfer by reason of death, and the death of a U.S. citizen or resident if any portion of a foreign trust was included in the gross estate of the decedent. In addition, a U.S. owner of any portion of a foreign trust is required to ensure that the trust files an annual return to provide full accounting of all the trust activities for the taxable year. Finally, any U.S. person that relieves (directly or indirectly) any distribu- tion from a foreign trust is required to file a return to report the aggregate amount of the distributions received during the year. The Senate amendment provides that if a U.S. owner of any portion of a foreign trust fails to appoint a limited U.S. agent to ac- cept service of process with respect to any requests and summons by the Secretary of the Treasury in connection with the tax treatment of any items related to the trust, the Secretary of the Treasury may deter- mine the tax consequences of amounts to be taken into account under the grantor trust rules. In cases where adequate records are not provided to the Secretary of Treasury to determine the proper treatment of any dis- tributions from a foreign trust, the distribu- tion is includible in the gross income of the U.S. distributee and is treated as an accumu- lation distribution from the middle year of a foreign trust (i.e., computed by taking the number of years that the trust has been in existence divided by 2) for purposes of com- puting the interest charge applicable to such distribution, unless the foreign trust elects to have a U.S. agent for the limited purpose of accepting service of process (as described above). Under the Senate amendment, a person that fails to provide the required notice or return in cases involving the transfer of property to a new or existing foreign trust, or a distribution by a foreign trust to a U.S. person, is subject to an initial penalty equal to 35 percent of the gross reportable amount (generally the value of the property involved in the transaction). A failure to provide an annual reporting of trust activities will re- sult in an initial penalty equal to 5 percent of the gross reportable amount. An addi- tional $10,000 penalty is imposed for contin- ued failure for each 30-day period (or fraction thereof) beginning 90 days after the Treasury Department notifies the responsible party of such failure. Such penalties are subject to a reasonable cause exception. In no event will the total amount of penalties exceed the gross reportable amount. Effective date.\u2014The reporting requirements and applicable penalties generally apply to reportable events occurring or distributions received after the date of enactment. The an- nual reporting requirement and penalties ap- plicable to U.S. grantors apply to taxable years of such persons beginning after the date of enactment. Reporting of foreign gifts The Senate amendment generally requires any U.S. person (other than certain tax-ex- empt organizations) that receives purported gifts or bequests from foreign sources total- ing more than $10,000 during the taxable year to report them to the Treasury Department. The threshold for this reporting requirement is indexed for inflation. The definition of a gift to a U.S. person for this purpose ex- cludes amounts that are qualified tuition or medical payments made on behalf of the U.S. person, as defined for gift tax purposes (sec. 2503(e)(2)). If the U.S. person fails, without reasonable cause, to report foreign gifts as required, the Treasury Secretary is author- ized to determine, in his sole discretion, the tax treatment of the unreported gifts. In ad- dition, the U.S. person is subject to a pen- alty equal to 5 percent of the amount of the gift for each month that the failure contin- ues, with the total penalty not to exceed 25 percent of such amount. Effective date.\u2014The provision applies to amounts received after the date of enact- ment. Conference agreement The conference agreement does not include the Senate amendment. F. REPEAL OF FINANCIAL INSTITUTION TRANSI- TION RULE TO INTEREST ALLOCATION RULES Present law For foreign tax credit purposes, taxpayers generally are required to allocate and appor- tion interest expense between U.S. and for- eign source income based on the proportion of the taxpayer’s total assets in each loca- tion. Such allocation and apportionment is required to be made for affiliated groups (as defined in sec. 864(e)(5)) as a whole rather than on a subsidiary-by-subsidiary basis. However, certain types of financial institu- tions that are members of an affiliated group are treated as members of a separate affili- ated group for purposes of allocating and ap- portioning their interest expense. Section 1215(c)(5) of the Tax Reform Act of 1986 (P.L. 99 514, 100 Stat. 2548) includes a targeted rule which treats a certain corporation as a fi- nancial institution for this purpose. House bill No provision. Senate amendment No provision. However, section 1606 of the Senate amendment to H.R. 3448 (Small Busi- ness Job Protection Act of 1996) contained a provision that repeals section 1215(c)(5) of the Tax Reform Act of 1986. Effective date.\u2014Taxable years beginning after December 31, 1995. Conference agreement The conference agreement includes the provision in the Senate amendment to H.R. 3448 with one modification. The conference agreement repeals section 1215(c)(5) of the Tax Reform Act of 1986 effective on the date of enactment. Under the conference agree- ment, a taxpayer will perform two computa- tions with respect to its taxable year that includes the enactment date. Under the first computation, the taxpayer’s pre-effective date interest expense is allocated and appor- tioned taking into account the targeted rule, and under the second computation, the tax- payer’s post-effective date interest expense is allocated and apportioned without regard to the targeted rule. These computations will not require a closing of a taxpayer’s books and records and it is intended that an CONGRESSIONAL RECORD \u2014 HOUSEH9564 July 31, 1996 administratively simple approach be used in applying this rule. BILL ARCHER, BILL THOMAS, TOM BLILEY, MICHAEL BILIRAKIS, WILLIAM F. GOODLING, H.W. FAWELL, HENRY HYDE, BILL MCCOLLUM, J. DENNIS HASTERT, Managers on the Part of the House. BILL ROTH NANCY LANDON KASSEBAUM, TRENT LOTT, TED KENNEDY, Managers on the Part of the Senate. f SPECIAL ORDERS GRANTED By unanimous consent, permission to address the House, following the legis- lative program and any special orders heretofore entered, was granted to: (The following Members (at the re- quest of Mr. BROWN of California) to re- vise and extend their remarks and in- clude extraneous material:) Mrs. COLLINS of Illinois, for 5 min- utes, today. Mr. STUPAK, for 5 minutes, today. Ms. MILLENDER-MCDONALD, for 5 min- utes, today. Mr. BROWN of California, for 5 min- utes, today. Ms. JACKSON-LEE of Texas, for 5 min- utes, today. (The following Members (at the re- quest of Mr. DREIER) to revise and ex- tend their remarks and include extra- neous material:) Mr. RIGGS, for 5 minutes, today. Mr. METCALF, for 5 minutes, today. Mr. FOLEY for 5 minutes, today and August 1. Mr. TORKILDSEN, for 5 minutes, today and August 1. Mr. MILLER of Florida, for 5 minutes, today. Mr. DREIER, for 5 minutes, today and August 1. (The following Member (at his own request) to revise and extend his re- marks and include extraneous mate- rial:) Mr. LONGLEY, for 5 minutes, today. (The following Members (at his own request) to revise and extend his re- marks and include extraneous mate- rial:) Mr. LONGLEY, for 5 minutes, today. f EXTENSION OF REMARKS By unanimous consent, permission to revise and extend remarks was granted to: (The following Members (at the re- quest of Mr. BROWN of California) and to include extraneous material:) Mrs. COLLINS of Illinois. Mrs. MINK of Hawaii. Mr. EVANS. Mr. SISISKY. Mr. TORRES. Mr. CLAY. Mrs. MALONEY. Mr. TORRICELLI. Mr. FRAZER. Mr. WYNN. Mr. VENTO. Mr. LIPINSKI. Ms. VELA\u0301ZQUEZ. (The following Members (at the re- quest of Mr. DREIER) and to include ex- traneous matter:) Mr. FIELDS of Texas. Mr. DUNCAN. Mr. DAVIS. Mr. WOLF. Mr. SCHIFF. Mr. THOMAS. Mr. SOLOMON in two instances. Mr. ZELIFF. Mr. SAXTON. Mr. DORNAN. Mr. HANSEN. (The following Members (at the re- quest of Mr. HASTERT) and to include extraneous matter:) Mr. PAYNE of New Jersey. Mr. BARCIA. f ADJOURNMENT Mr. HASTERT. Mr. Speaker, I move that the House do now adjourn. The motion was agreed to; accord- ingly (at 11 o’clock and 44 minutes p.m.), the House adjourned until to- morrow, Thursday, August 1, 1996, at 10 a.m. f EXECUTIVE COMMUNICATIONS, ETC. Under clause 2 of rule XXIV, execu- tive communications were taken from the Speaker’s table and referred as fol- lows: 4456. A letter from the Administrator, Ag- ricultural Marketing Service, transmitting the Service’s final rule\u2014Dried Prunes Pro- duced in California; Assessment Rate [Dock- et No. FV96 993 1 IFR] received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- mittee on Agriculture. 4457. A letter from the Administrator, Ag- ricultural Marketing Service, transmitting the Service’s final rule\u2014Onions Grown in Certain Designated Counties in Idaho, and Malheur, Oregon; Relaxation of Pack and Marketing Requirements [FV96 958 3 IFR] received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Agri- culture. 4458. A letter from the Administrator, Ag- ricultural Marketing Service, transmitting the Service’s final rule\u2014Almonds Grown in California; Assessment Rate [Docket No. FV96 981 2 IFR] received July 31, 1996, pursu- ant to 5 U.S.C. 801(a)(1)(A); to the Committee on Agriculture. 4459. A letter from the Congressional Re- view Coordinator, Animal and Plant Health Inspection Service, transmitting the Serv- ice’s final rule\u2014Horses from Mexico; Quar- antine Requirements [Docket No. 96 052 1] received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Agri- culture. 4460. A letter from the Chief, Programs and Legislation Division, Office of Legislative Liaison, Department of the Air Force, trans- mitting notification that the Commander of Air Force Space Command is initiating a multifunction cost comparison of portions of communications, civil engineering, informa- tion management, and services and person- nel activities at Vandenberg AFB, CA, pursu- ant to 38 U.S.C. 5010(c)(5) (96 Stat. 1448); to the Committee on National Security. 4461. A letter from the Chief, Programs and Legislation Division, Office of Legislative Liaison, Department of the Air Force, trans- mitting notification that the Commander of Air Force Space Command is initiating a multifunction cost comparison of portions of communications, civil engineering, informa- tion management, and services and person- nel activities at Peterson AFB, CO, pursuant to 38 U.S.C. 5010(c)(5) (96 Stat. 1448); to the Committee on National Security. 4462. A letter from the Chief, Programs and Legislation Division, Office of Legislative Liaison, Department of the Air Force, trans- mitting notification that the Commander of Air Force Space Command is initiating a multifunction cost comparison of portions of communications, civil engineering, informa- tion management, and services and person- nel activities at Patrick AFB, FL, pursuant to 38 U.S.C. 5010(c)(5) (96 Stat. 1448); to the Committee on National Security. 4463. A letter from the General Counsel, Federal Emergency Management Agency, transmitting the Agency’s final rule\u2014Na- tional Flood Insurance Program; Assistance to Private Sector Property Insurers (RIN: 3067 AC26) received July 30, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Banking and Financial Services. 4464. A letter from the Managing Director, Federal Housing Finance Board, transmit- ting the Board’s final rule\u2014Modification of Definition of Deposits in Banks or Trust Companies [No. 96 48] received July 30, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- mittee on Banking and Financial Services. 4465. A letter from the Director, Office of Regulatory Management and Information, Environmental Protection Agency, transmit- ting the Agency’s final rule\u2014Accidental Re- lease Prevention Requirements: Risk Man- agement Programs Under Clean Air Act Sec- tion 112(r)(7) (FRL 5516 5) (RIN: 2050 AD26) received July 29, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Commerce. 4466. A letter from the Director, Office of Regulatory Management and Information, Environmental Protection Agency, transmit- ting the Agency’s final rule\u2014Approval and Promulgation of Implementation Plans; Illi- nois (FRL 5424 4) received July 29, 1996, pur- suant to 5 U.S.C. 801(a)(1)(A); to the Commit- tee on Commerce. 4467. A letter from the Director, Office of Regulatory Management and Information, Environmental Protection Agency, transmit- ting the Agency’s final rule\u2014Approval and Promulgation of Air Quality Implementa- tion Plans; Pennsylvania Emission State- ment Program (FRL 5427 2) received July 29, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Commerce. 4468. A letter from the Director, Office of Regulatory Management and Information, Environmental Protection Agency, transmit- ting the Agency’s final rule\u2014Interim Final Determination that State has Corrected the Deficiency; Ohio (FRL 5462 2) received July 9, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Commerce. 4469. A letter from the Director, Office of Regulatory Management and Information, Environmental Protection Agency, transmit- ting the Agency’s final rule\u2014Designation of Areas for Air Quality Planning Purposes; Michigan [MI45 01 7240a; FRL 5545 2] re- ceived July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Commerce. 4470. A letter from the Director, Office of Regulatory Management and Information, Environmental Protection Agency, transmit- ting the Agency’s final rule\u2014Designation of Areas for Air Quality Planning Purposes; Il- linois [IL146 1a; FRL 5540 6] received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Commerce. CONGRESSIONAL RECORD \u2014 HOUSE H9565July 31, 1996 4471. A letter from the Director, Office of Regulatory Management and Information, Environmental Protection Agency, transmit- ting the Agency’s final rule\u2014Illinois: Final Authorization of Revisions to State Hazard- ous Waste Management Program (FRL 5544 9) received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Commerce. 4472. A letter from the Chair, Federal En- ergy Regulatory Commission, transmitting the Commission’s final rule\u2014Standards for Business Practices of Interstate Natural Gas Pipelines [Docket No. RM96 1 000] received July 30, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Commerce. 4473. A letter from the Chair, Federal En- ergy Regulatory Commission, transmitting the Commission’s final rule\u2014Oil Pipelines Cost-of-Service Filing Requirements [Docket No. RM96 10 000] received July 30, 1996, pur- suant to 5 U.S.C. 801(a)(1)(A); to the Commit- tee on Commerce. 4474. A letter from the Director, Regula- tions Policy Management Staff, Office of Policy, Food and Drug Administration, transmitting the Administration’s final rule\u2014Medical Devices; Medical Device Dis- tributor and Manufacturer Reporting; Cer- tification, Registration, Listing, and Pre- market Notification Submission; Stay of Ef- fective Date; Revocation of Final Rule [Docket No. 91N 0295] (RIN: 0910 AA09) re- ceived July 30, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Commerce, 4475. A letter from the Assistant Legal Ad- viser for Treaty Affairs, Department of State, transmitting copies of international agreement, other than treaties, entered into by the United States, pursuant to 1 U.S.C. 112b(a); to the Committee on International Relations. 4476. A letter from the Acting Director, Of- fice of Fisheries Conservation and Manage- ment, National Marine Fisheries Service Agency, transmitting the Service’s final rule\u2014Fisheries of the Northeastern United States; Framework Adjustment 8 Gear Re- strictions [Docket No. 950615156 6193 02; I.D. 070196C] received July 30, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Re- sources. 4477. A letter from the Director, Office of Surface Mining, transmitting the Office’s final rule\u2014Wyoming Regulatory Program (shrub density stocking requirements and wildlife habitat) [SPATS No. WY 022] re- ceived July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Resources. 4478. A letter from the Under Secretary of Commerce for Technology, Department of Commerce, transmitting the Department’s final rule\u2014Acquisition and Protection of Foreign Rights in Inventions; Licensing of Foreign Patents Acquired by the Govern- ment; Uniform Patent Policy for Rights in Inventions Made by Government Employees [Docket No. 960604157 6157 01] (RIN: 0692 AA15) received July 30, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on the Judiciary. 4479. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Airworthiness Directives; Boeing Model 767 Series Air- planes (Federal Aviation Administration) [Docket No. 96 NM 161 AD; Amendment 39 9695; AD 96 14 51] (RIN: 2120 AA64) received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transpor- tation and Infrastructure. 4480. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Airworthiness Directives; British Aerospace Model BAe 146 100A, 200A, and 300A Series Airplanes (Fed- eral Aviation Administration) [Docket No. 96 NM 162 AD; Amendment 39 9694; AD 96 14 09] (RIN: 2120 AA64) received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- mittee on Transportation and Infrastruc- ture. 4481. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Amendment to Class E Airspace, Ames, IA (Federal Aviation Administration) [Airspace Docket No. 96 ACE 5] (RIN: 2120 AA66) received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transportation and Infra- structure. 4482. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Amendment to Class E Airspace, McCook, NE (Federal Avia- tion Administration) [Docket No. 96 ACE 8] received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transpor- tation and Infrastructure. 4483. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Amendment to Class E Airspace, Russell, KS (Federal Avia- tion Administration) [Docket No. 96 ACE 7] received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transpor- tation and Infrastructure. 4484. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Modification of Class E Airspace; Rice Lake, WI (Federal Aviation Administration) [Airspace Docket No. 95 AGL 19] received July 31, 1996, pursu- ant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transportation and Infrastructure. 4485. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014IFR Altitudes; Miscellaneous Amendments (Federal Avia- tion Administration) [Docket No. 28621; Amdt. No. 397] received July 31, 1996, pursu- ant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transportation and Infrastructure. 4486. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Amendment to Definition of ”Substance Abuse Profes- sional” (RIN: 2105 AC33) received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transportation and Infra- structure. 4487. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Amendments to Laboratory Certification Requirements [OST Docket No. OST 96 1532] (RIN: 2105 AC37) re- ceived July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transpor- tation and Infrastructure. 4488. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Safety Zone: Cuyahoga River, Cleveland, OH (U.S. Coast Guard) [CGD09 95 018] received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- mittee on Transportation and Infrastruc- ture. 4489. A letter from the General Counsel, Department of Transportation, transmitting the Department’s final rule\u2014Federal Motor Vehicle Safety Standards; Air Brake Sys- tems; Long-Stroke Brake Chambers [Docket No. 93 54, Notice 3] (RIN: 2127 AG25) received July 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Transpor- tation and Infrastructure. 4490. A letter from the Comptroller General of the United States, transmitting a report entitled ”Financial Audit: Federal Deposit Insurance Corporation’s 1995 and 1994 Finan- cial Statements” [GAO\/AIMD 96 89] July 1996, pursuant to 31 U.S.C. 9106(a); jointly, to the Committees on Government Reform and Oversight and Banking and Financial Serv- ices. REPORTS OF COMMITTEES ON PUBLIC BILLS AND RESOLUTIONS Under clause 2 of rule XIII, reports of committees were delivered to the Clerk for printing and reference to the proper calendar, as follows: Mr. LIVINGSTON: Committee on Appro- priations. Revised subdivision of budget to- tals for fiscal year 1997 (Rept. 104 727). Re- ferred to the Committee of the Whole House on the State of the Union. Mr. CANADY: Committee on the Judici- ary. H.R. 351. A bill to amend the Voting Rights Act of 1965 to eliminate certain provi- sions relating to bilingual voting require- ments; with an amendment (Rept. 104 728). Referred to the Committee of the Whole House on the State of the Union. Mr. SOLOMON: Committee on Rules. House Resolution 495. Resolution waiving points of order against the conference report to accompany the bill (H.R. 3734) to provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997 (Rept. 104 729). Re- ferred to the House Calendar. Mr. GOSS: Committee on Rules. House Resolution 496. Resolution waiving points of order against the conference report to ac- company the bill (H.R. 3603) making appro- priations for Agriculture, Rural Develop- ment, Food and Drug Administration, and related agencies program for the fiscal year ending September 30, 1997, and for other pur- poses (Rept. 104 730). Referred to the House Calendar. Ms. PRYCE: Committee on Rules. House Resolution 497. Resolution waiving points of order against the conference report to ac- company the bill (H.R. 3517) making appro- priations for military construction, family housing, and base realignment and closure for the Department of Defense for the fiscal year ending September 30, 1997, and for other purposes (Rept. 104 731). Referred to the House Calendar. Mr. SOLOMON: Committee on Rules. House Resolution 498. Resolution waiving points of order against the conference report to accompany the bill (H.R. 3230) to author- ize appropriations for fiscal year 1997 for military activities of the Department of De- fense, to prescribe military personnel strengths for fiscal year 1997, and for other purposes (Rept. 104 732). Referred to the House Calendar. Mr. PACKARD: Committee on Conference. Conference report on H.R. 3754. A bill mak- ing appropriations for the legislative branch for the fiscal year ending September 30, 1997, and for other purposes (Rept. 104 733). Or- dered to be printed. Mr. LINDER: Committee on Rules. House Resolution 499. Resolution providing for con- sideration of the bill (H.R. 123) to amend title 4, United States Code, to declare Eng- lish as the official language of the Govern- ment of the United States (Rept. 104 734). Referred to the House Calendar. Mr. GOSS: Committee on Rules. House Resolution 500. Resolution waiving a require- ment of clause 4(b) of rule XI with respect to consideration of a certain resolution re- ported from the Committee on Rules (Rept. 104 735). Referred to the House Calendar. Mr. HASTERT: Committee of Conference. Conference report on H.R. 3103. A bill to amend the Internal Revenue Code of 1986 to improve portability and continuity of health insurance coverage in the group and individ- ual markets, to combat waste, fraud, and abuse in health insurance and health care de- livery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and for CONGRESSIONAL RECORD \u2014 HOUSEH9566 July 31, 1996 other purposes (Rept. 104 736). Ordered to be printed. f PUBLIC BILLS AND RESOLUTIONS Under clause 5 of rule X and clause 4 of rule XXII, public bills and resolu- tions were introduced and severally re- ferred as follows: By Mr. SHUSTER (for himself, Mr. DUNCAN, Mr. OBERSTAR, Mr. LIPINSKI, Mr. HUTCHINSON, Mr. BAKER of Cali- fornia, Mr. FRANKS of New Jersey, Mr. BLUTE, Mr. EHLERS, Mr. BACHUS, Ms. BROWN of Florida, Mr. LATHAM, Mrs. KELLY, Mr. LATOURETTE, Mr. MASCARA, Mr. LAZIO of New York, and Mr. LAHOOD): H.R. 3923. A bill to amend title 49, United States Code, to require the National Trans- portation Safety Board and individual air carriers to take actions to address the needs of families of passengers involved in aircraft accidents; to the Committee on Transpor- tation and Infrastructure. By Mr. HORN (for himself and Mrs. MALONEY): H.R. 3924. A bill to provide uniform safe- guards for the confidentiality of information acquired for exclusively statistical purposes, and to improve the efficiency of Federal sta- tistical programs and the quality of Federal statistics by permitting limited sharing of records for statistical purposes under strong safeguards; to the Committee on Govern- ment Reform and Oversight. By Mr. DORNAN (for himself, Mr. HUN- TER, Mr. CHAMBLISS, Mr. STEARNS, and Mr. CRANE): H.R. 3925. A bill to amend title 10, United States Code, to restore the regulations pro- hibiting service of homosexuals in the Armed Forces; to the Committee on National Security. H.R. 3926. A bill to amend title 10, United States Code, to require the separation from military service under certain circumstances of members of the Armed Forces diagnosed with the HIV 1 virus; to the Committee on National Security. By Mr. EVANS (for himself, Mr. GUTIERREZ, Mr. FILNER, Mr. STOCK- MAN, Mr. ACKERMAN, Mr. KILDEE, Mrs. THURMAN, Mr. FALEOMAVAEGA, Mr. FROST, Ms. MCKINNEY, Mr. JOHN- SON of South Dakota, Mr. MCDERMOTT, and Mr. METCALF): H.R. 3927. A bill to amend title 38, United States Code, to provide benefits for certain children of Vietnam veterans who are born with spina bifida, and for other purposes; to the Committee on Veterans’ Affairs. By Mr. FRANK of Massachusetts: H.R. 3928. A bill to amend the Immigration and Nationality Act with respect to waiver of exclusion for certain excludable aliens; to the Committee on the Judiciary. By Mr. STUMP (for himself, Mr. SHADEGG, and Mr. HAYWORTH): H.R. 3929. A bill to direct the Secretary of the Interior to utilize certain Federal lands in Arizona to acquire by eminent domain State trust lands located in or adjacent to the other Federal lands in Arizona; to the Committee on Resources, and in addition to the Committee on Veterans’ Affairs, for a pe- riod to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdic- tion of the committee concerned. By Mr. TOWNS: H.R. 3930. A bill to protect the personal pri- vacy rights of insurance customers and claimants, and for other purposes; to the Committee on Commerce, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speak- er, in each case for consideration of such pro- visions as fall within the jurisdiction of the committee concerned. By Ms. VELAZQUEZ (for herself, Mr. RANGEL, Mr. SCHUMER, Mrs. MALONEY, Mr. MANTON, Mr. ACKER- MAN, Mr. TOWNS, Mrs. LOWEY, Mr. FLAKE, Mr. NADLER, Mr. OWENS, Mr. SERRANO, Mr. ENGEL, Mr. GILMAN, Mr. HINCHEY, and Mr. KING): H.R. 3931. A bill to amend the Financial In- stitutions Reform, Recovery, and Enforce- ment Act of 1989 to require the development and implementation of a national financial crimes strategy to combat financial crimes involving money laundering and other relat- ed activities, and for other purposes; to the Committee on Banking and Financial Serv- ices, and in addition to the Committee on the Judiciary, for a period to be subse- quently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned. By Mr. WISE: H.R. 3932. A bill to amend title II of the So- cial Security Act to provide that the waiting period for disability benefits shall not be ap- plicable in the case of a disabled individual suffering from a terminal illness; to the Committee on Ways and Means. By Mr. WOLF (for himself, Mr. LIVING- STON, Mr. SAM JOHNSON, Mr. DAVIS, Mr. BLILEY, Mr. GOODLATTE, Mr. MORAN, Mr. PAYNE of Virginia, Mr. BOUCHER, Mr. PICKETT, Mr. SISISKY, Mr. BATEMAN, and Mr. SCOTT): H.R. 3933. A bill to authorize construction of the Smithsonian Institution National Air and Space Museum Dulles Center at Wash- ington Dulles International Airport, and for other purposes; to the Committee on Trans- portation and Infrastructure. By Mr. ZELIFF (for himself, Mr. PAXON, and Mr. QUINN): H.R. 3934. A bill to provide protections against bundling of contract requirements in Federal procurement; to the Committee on National Security, and in addition to the Committee on Government Reform and Oversight, for a period to be subsequently de- termined by the Speaker, in each case for consideration of such provisions as fall with- in the jurisdiction of the committee con- cerned. By Mrs. MALONEY (for herself, Mr. YATES, and Mrs. LOWEY): H. Res. 501. Resolution calling upon the Government of Germany to negotiate in good faith regarding expansion of eligibility for Holocaust survivor compensation; to the Committee on International Relations. f MEMORIALS Under clause 4 of rule XXII, 239. The SPEAKER presented a memorial of the Senate of the Commonwealth of Mas- sachusetts, relative to momorializing Con- gress to require the Federal Railway Admin- istration to postpone a ruling relative to the sounding of train whistles; to the Committee on Transportation and Infrastructure. f PRIVATE BILLS AND RESOLUTIONS Under clause 1 of rule XXII, Mr. HEFLEY introduced a bill (H.R. 3935) to authorize the Secretary of Transportation to issue a certificate of documentation with appropriate endorsement for employment in the coastwise trade for each of the vessels High Hopes and High Hopes II; which was re- ferred to the Committee on Transportation and Infrastructure. H.R. 249: Mr. WELDON of Pennsylvania. H.R. 878: Mr. PALLONE and Mr. HOYER. H.R. 1073: Mr. BEREUTER, Mr. TORRICELLI, Mr. CHRYSLER, Mr. WICKER, and Mrs. MYRICK. H.R. 1074: Mr. BEREUTER, Mr. TORRICELLI, Mr. POMEROY, Mr. CHRYSLER, Mr. WICKER, and Mrs. MYRICK. H.R. 1090: Mr. SMITH, of New Jersey. H.R. 1309: Mr. FRAZER, Mr. GONZALEZ, Mr. TORRICELLI, Mr. GREEN of Texas, Mrs. CLAY- TON, Mr. BROWN of Ohio, Mr. MASCARA, Mr. PARKER, and Ms. NORTON. H.R. 1386: Mr. STEARNS. H.R. 1389: Ms. McKinney. H.R. 1406: Mr. MCKEON, Mr. HOBSON, and Mr. STOKES. H.R. 1711: Mr. WICKER. H.R. 1923: Mr. STEARNS. H.R. 2011: Mrs. LOWEY, Mr. STOCKMAN, Mr. RANGEL, and Mr. COYNE. H.R. 2193: Mr. POMBO. H.R. 2270: Mr. BARR. H.R. 2320: Mr. FARR. H.R. 2472: Ms. NORTON and Ms. EDDIE BER- NICE JOHNSON of Texas. H.R. 2582: Mr. TAYLOR of North Carolina, Mr. MORAN, and Mr. FOX. H.R. 2603: Mr. QUINN. H.R. 2651: Mr. POMBO. H.R. 2654: Mr. LAFALCE. H.R. 2928: Mr. FUNDERBURK. H.R. 3022: Mr. MARKEY, Mr. MASCARA, and Mr. PAYNE of Virginia. H.R. 3047: Mr. CONDIT. H.R. 3117: Mr. DELLUMS. H.R. 3119: Mr. DELLUMS. H.R. 3181: Mr. CLYBURN and Mr. DEFAZIO. H.R. 3187: Mr. KENNEDY of Rhode Island and Mr. BOEHLERT. H.R. 3195: Mr. SENSENBRENNER, Mr. TAUZIN, and Mr. COLLINS of Georgia. H.R. 3202: Mr. CONYERS and Ms. WOOLSEY. H.R. 3207: Ms. KAPTUR. H.R. 3211: Mr. CALVERT and Mr. WICKER. H.R. 3226: Mr. YATES. H.R. 3251: Mr. CAMP. H.R. 3374: Mr. COBURN and Mr. SMITH of New Jersey. H.R. 3391: Mrs. VUCANOVICH. H.R. 3401: Ms. PRYCE, Mr. CONDIT, and Mr. DORNAN. H.R. 3430: Mr. WISE, Mr. BLILEY, Mr. SCARBOROUGH, Mr. BREWSTER, and Mr. ABER- CROMBIE. H.R. 3467: Mr. NETHERCUTT. H.R. 3498: Mr. MARTINEZ and Mr. SPRATT. H.R. 3565: Mrs. SEASTRAND. H.R. 3578: Mr. DELLUMS. H.R. 3633: Mr. BURR. H.R. 3636: Ms. PRYCE. H.R. 3645: Mr. GREENWOOD, Mr. REGULA, Mr. PASTOR, Mr. GUTIERREZ, Ms. FURSE, and Mr. KENNEDY of Rhode Island. H.R. 3654: Mr. LAHOOD, Mr. JOHNSON of South Dakota, Mr. KLUG, and Mr. MEEHAN. H.R. 3688: Mr. COYNE and Mr. DURBIN. H.R. 3714: Mr. FRANK of Massachusetts, Mr. ROGERS, and Mr. CLYBURN. H.R. 3747: Mr. TORRES, Mr. MCDERMOTT, Mrs. MEEK of Florida, and Mr. BEILENSON. H.R. 3790: Mr. CHRISTENSEN. H.R. 3830: Mr. OWENS, Mr. SANDERS, Mr. FRAZER, Mr. HASTINGS of Florida, and Mr. STUDDS. H.R. 3849: Mr. GILLMOR. H.R. 3863: Mr. ROHRABACHER, Mr. EWING, Mr. WATTS of Oklahoma, Ms. GREENE of Utah, Mr. PALLONE, Mr. GREEN of Texas, Mr. HOLDEN, and Mr. FLAKE. H.R. 3902: Mr. POMEROY. H.R. 3905: Mr. HUTCHINSON. H.J. Res. 97: Ms. DELAURO and Mr. MILLER of California. H.J. Res. 114: Ms. DELAURO. H. Con. Res. 100: Mr. WICKER. H. Con. Res. 200: Mr. DEFAZIO, Mr. DORNAN, Mr. POMBO, Mr. STEARNS, Mr. TORRICELLI, Mr. HAYWORTH, Mr. KLECZKA, Mrs. KEN- NELLY, Mr. MCNULTY, Mr. EVERETT, Mr. LI- PINSKI, Mr. HASTINGS of Florida, Mr. SHADEGG, Mr. LIVINGSTON, Mr. TANNER, Mr. MONTGOMERY, Mr. MCCOLLUM, Ms. MILLENDER-MCDONALD, and Mr. SPRATT. H. Res. 470: Mr. FRANKS of Connecticut, Mr. CAMPBELL, Ms. FURSE, and Mr. LIPINSKI. H. Res. 478: Ms. GREENE of Utah and Mr. BOUCHER. Congressional Record UN UM E PLURIBUS United States of America PROCEEDINGS AND DEBATES OF THE 104th CONGRESS, SECOND SESSION \u2211 This ”bullet” symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. . S9209 Vol. 142 WASHINGTON, WEDNESDAY, JULY 31, 1996 No. 115 Senate The Senate met at 9 a.m., and was called to order by the President pro tempore [Mr. THURMOND]. PRAYER The Chaplain, Dr. Lloyd John Ogilvie, offered the following prayer: Holy Lord God, we admit that we often try to live our lives within the narrow, limited dimensions of our own wisdom and strength. As a result, we order our lives around our own abilities and skills and miss the adventure of life You have prepared for us. We con- fess to You all the things we do not at- tempt; the courageous deeds we con- template but are afraid we cannot do, the gracious thoughts we do not ex- press; the forgiveness we feel, but do not communicate. Forgive us, Lord, for settling for a life which is a mere shad- ow of what You have prepared for us, forgetting that You are able to do in and through us what we could never do by ourselves. Plant in us the vivid picture of what You are able to do with lives like ours, and give us the gift of new excitement about living life by Your triumphant power in the name of our Lord and Sav- iour. Amen. f RECOGNITION OF THE ACTING MAJORITY LEADER The PRESIDENT pro tempore. The able Senator from Idaho is recognized. f SCHEDULE Mr. CRAIG. Mr. President, this morning the Senate will immediately turn to the consideration of S. 1936, the Nuclear Waste Policy Act. The bill will be considered under a previous unani- mous-consent agreement that limits the bill to eight first-degree amend- ments with 1 hour of debate equally di- vided on each. Following disposition of that bill, the Senate will resume con- sideration of the transportation appro- priations bill which will also be consid- ered under an agreement limiting first- degree amendments to that bill. Fol- lowing disposition of those bills, the Senate may also be asked to turn to consideration of the VA HUD appro- priations bill. Therefore, Senators can expect a full legislative day with roll- call votes expected throughout the day and into the evening in order to com- plete action on the bills just mentioned or any other items cleared for action. f RESERVATION OF LEADER TIME The PRESIDING OFFICER. Under the previous order, the leadership time is reserved. f NUCLEAR WASTE POLICY ACT OF 1996 The PRESIDING OFFICER (Mr. INHOFE). The Chair lays before the Sen- ate S. 1936, which the clerk will report. The assistant legislative clerk read as follows: A bill (S. 1936) to amend the Nuclear Waste Policy Act of 1982. The Senate resumed consideration of the bill. AMENDMENT NO. 5055 Mr. MURKOWSKI. Mr. President, I call up amendment No. 5055 which is at the desk. The PRESIDING OFFICER. The clerk will report the amendment. The assistant legislative clerk read as follows: The Senator from Alaska [Mr. MURKOWSKI] proposes an amendment numbered 5055. Mr. MURKOWSKI. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. (The text of the amendment is print- ed in today’s RECORD under ”Amend- ments Submitted.”) Mr. MURKOWSKI. Mr. President, this amendment will solve a pressing environmental problem, a major envi- ronmental problem in our Nation, a problem that is looming as a liability to the taxpayers, and this will end an era of irresponsible delay. This major environmental issue is simple to understand. That is, do we want 80 nuclear waste dumps in 41 States serving 110 commercial reactors and defense sites across the country\u2014 near our neighbors, our schools and populated cities? Or do we want just one in the remote, unpopulated Nevada desert where we tested and exploded nuclear weapons for decades? Mr. President, I am going to yield some time on the amendment to the distinguished Senator from South Carolina, the Senate President pro tempore, Senator THURMOND, without losing my right to the floor. Mr. THURMOND. I thank the able Senator from Alaska. The PRESIDING OFFICER. The Sen- ator from South Carolina. Mr. THURMOND. Mr. President, I rise today in strong support of S. 1936, the Nuclear Waste Policy Act of 1996. In 1982, Congress passed the Nuclear Waste Policy Act, which directed the Department of Energy to develop a per- manent repository for highly radio- active waste from nuclear powerplants and defense facilities. This act was amended in 1987 to limit DOE’s reposi- tory development activities to a single site at Yucca Mountain, NV. Since 1983, electric consumers have been taxed almost $12 billion to finance the development of a permanent storage site. Despite DOE’s obligation to take title to spent nuclear fuel in 1998, a permanent repository at Yucca Moun- tain will not be ready to accept this waste until the year 2010, at the ear- liest. Mr. President, a July 16, 1996, Wash- ington Post editorial states that the nuclear waste storage situation is not VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00001 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9210 July 31, 1996 yet a fully urgent problem. I believe that it is a fully urgent problem. Cur- rently, nuclear waste is stored in 41 States at facilities that were never in- tended for long-term storage. At least 23 nuclear reactors are nearing full storage capacity for their spent fuel. According to a Washington Post article from December 31, 1995, every day, 6 more tons of high-level radioactive waste pile up at the Nation’s 109 nu- clear powerplants, a total of some 30,000 tons of spent fuel rods so far. If it were all shaped into midsize cars, it would fill every parking space at the Pentagon\u2014twice over\u2014with material that will be dangerous for centuries. And there’s nowhere for it to go. On July 23, 1996, the U.S. Court of Ap- peals for the District of Columbia Cir- cuit correctly ruled that DOE must begin disposing of this waste by 1998. Unless we designate an appropriate storage site soon, DOE will be unable to safely fulfill this obligation. With- out a central interim site, DOE may be forced to use existing DOE facilities that are unsuitable for waste storage. Or, if DOE continues to evade its obli- gation to store waste by 1998, facility operators may then have to expand on- site storage at an additional cost to ratepayers. Powerplants may have to close down, adversely affecting the re- liability of electric services and deplet- ing funding for the Federal disposal program. Because DOE will fail to pro- vide an appropriate facility for this waste on time, we must designate a temporary central storage site imme- diately. Anything less would be irre- sponsible and dangerous to the envi- ronment. The most logical location for an in- terim site is Yucca Mountain. Trans- portation of spent nuclear fuel is a delicate undertaking, so it is sensible to locate an interim facility as near to the likely permanent facility as is pos- sible. We have already spent 13 years and $6 billion to find a permanent re- pository site and conduct development activities at Yucca Mountain. Desig- nating a central interim storage facil- ity and continuing to develop a perma- nent repository at Yucca Mountain is our most reasonable course of action. S. 1936 provides a safe, efficient, and responsible means for reaching this ob- jective. I would like to commend Sen- ator CRAIG and Senator MURKOWSKI for their excellent work on this bill, and I urge my colleagues to vote in favor of final passage. Mr. President, I yield the floor. Again, I thank the Senator from Alas- ka. Mr. MURKOWSKI addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Alaska. Mr. MURKOWSKI. I thank the Chair and I thank my good friend and col- league for his support in addressing once and for all the issue of high-level nuclear waste in this country. Mr. President, I think it is signifi- cant to reflect that at last we have in our extended debate with our good friends from Nevada basically broken the filibuster on this issue. Today the Senate is going to have the chance to debate the issue and reach conclusions. We are demonstrating, I think, that we do have the courage to address this dif- ficult problem, recognizing that it is one of the major environmental issues before the U.S. Senate. Two weeks ago Senator CRAIG, Sen- ator JOHNSTON, and I stood on this floor and said the Government had an obligation to take this spent fuel. Of course, some disagreed with us. Some argued that the Government had no such obligation. But a curious thing happened last week. A Federal appeals court unanimously ruled the Govern- ment does, indeed, have an obligation to take the spent fuel; as a matter of fact, a statutory obligation. Mr. President, this is a landmark de- cision, because it makes it imperative for us to pass this bill today. The situa- tion has radically changed since our last vote. I appeal to my colleagues, if you did not vote with us last time, there is a good reason to vote with us today. That reason is very simple: The court unanimously ruled that the Govern- ment does have an obligation to take the spent fuel. Again, Mr. President, that is a statutory obligation. The courts have confirmed our contention that the Federal Government has the obligation to take spent commercial fuel. Failure to pass this bill and build an interim repository means the Govern- ment will have to take the fuel and put it somewhere else, or simply pay the damages. The court has not specified the amount of the damages yet be- cause, technically, the Government has not yet broken its promise. But the damages could run into the billions of dollars if the Government reneges on its obligation. If we do not build an in- terim repository in Nevada, the Gov- ernment might have to store the fuel at other Federal facilities around the Nation. The interesting thing about this problem, Mr. President, you simply cannot just throw spent fuel up in the air and defer the decision about where to store it. It has to come down some- where. It has to be stored somewhere. Perhaps it will be the naval fuel stor- age facility in Connecticut, or maybe Rocky Flats or Fort St. Vrain in Colo- rado, or maybe the Pinellas plant in Florida, or maybe in Ohio, Ports- mouth, Mound or Fernald, or maybe West Valley in New York, or perhaps Paducah in Kentucky, or perhaps it will be in Hanford on the Columbia River, which flows through Oregon and Washington. Therefore, Senators, I appeal to you, those from Connecticut, Colorado, Florida, Ohio, New York, Kentucky, Oregon, those who did not vote with us for cloture on the motion to proceed, you might want to reexamine your po- sition in light of the recent court deci- sion, which simply states the Federal Government has to take it. The court has said the Government must take the spent fuel. As I have said, it has to go somewhere. If you are saying no to Ne- vada, you may be saying yes to your own State. You are certainly saying yes to someplace else. Last night I received a letter from Secretary of Energy O’Leary that criti- cizes Senate bill 1936 because it pro- vides for the Department of Energy to begin accepting waste in 1999 and not 1998. I repeat, Mr. President, last night we did receive a letter from the Sec- retary criticizing Senate bill 1936 be- cause it provides for the DOE to begin accepting waste in 1999, not 1998. This criticism is almost humorous in light of the fact that the current administra- tion would not provide for the accept- ance of waste at a central facility until the year 2010 at the earliest. Even under the most optimistic scenario, the Department of Energy would be in breach of its contract for 12 years. Further, the letter is inconsistent on its face because it then proceeds to criticize Senate bill 1936 for providing unrealistic schedules. It seems the ad- ministration believes our bill would provide an interim storage facility both too late or perhaps too soon. Senate bill 1936 provides a valid, real- istic plan for the construction of a safe, centralized interim storage facility. I have personally sent over four letters to the President over the last 18 months asking for his plan if he op- posed any legislation pending before this body. I have received only support for the status quo. Again, I repeat, if you were not with us before, you have reason to be with us today. The court’s decision has made it clear that the status quo is not an acceptable option. Now, Mr. President, I make a few comments for the benefit of those Sen- ators who did not vote with us 2 weeks ago. That is, very realistically, the ratepayers in your State are getting ripped off. They paid for something, and they are not getting anything in return. Instead of saving more for their children’s college fund or saving for their dream home, consumers paid into the nuclear waste fund through their individual electric bill. They paid somewhere in the neighborhood of al- most $12 billion. They have paid this money with the expectation that the Government would live up to their part of the bargain and remove the waste as it promised. But the Government sim- ply has not performed. The waste is still there. It is near the homes, near the schools, it is near the neighbor- hoods. The opponents of this legisla- tion are working to keep the status quo, and to keep the waste where it is. I want to again run down the list of States where those Senators did not vote with us, or at least one of the Sen- ators did, and repeat how much the consumers of those States have spent for the nuclear waste fund. The State of Arkansas has contributed $266 mil- lion into that fund, and they receive 33 VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00002 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9211 July 31, 1996 percent of their electric power from nuclear energy; California, $645 million has been paid by the ratepayers, they receive 26 percent of their electricity from nuclear power; Connecticut, $429 million paid in, and they receive 73 per- cent of their power from nuclear en- ergy. It is rather interesting, as well, be- cause I was reminded by my friend from Idaho that we build various sub- marines in Connecticut; after they are decommissioned they are cut up, and various parts of the reactors go to Han- ford, where they are buried, and the fuel goes to Idaho, where they are cur- rently stored. The point is, Mr. Presi- dent, we all have an interest in this issue of what to do with nuclear waste. Florida, $557 million from ratepayers, for receiving 18 percent on nuclear en- ergy; Massachusetts, $319 million paid by the ratepayers, 14 percent dependent on nuclear energy; Maryland, $257 mil- lion, 24 percent of their power is nu- clear; New York, $734 million rate- payers in New York have paid into the fund and they are 28 percent dependent on nuclear energy; Ohio, $253 million has been paid in, 7 percent dependent on nuclear energy; Wisconsin, $336 mil- lion paid by the ratepayer, 23 percent of their energy comes from nuclear. There are other States with no nu- clear plants that, nevertheless, depend on nuclear power from neighboring States, and they have also paid into that fund. Those States are: Delaware, $29 million; Indiana, $288 million; Iowa, $192 million; Kentucky, $81 million; New Mexico, $32 million; North Da- kota, $11 million; Rhode Island, $8 mil- lion. Mr. President, that adds up to a total of $4.537 billion. That is a lot of money to throw away without results. That is not our money, Mr. President; that was money collected from Ameri- cans to deal with nuclear waste. Do we really want to tell consumers from those States that after allowing this money to be taken from their elec- tric bills, we are not going to use that money to solve the nuclear waste prob- lem? Do we want to tell consumers that we are going to make them pay, once again, for additional waste stor- age at reactor sites, or that we will ex- pose them and all taxpayers to tremen- dous liabilities arising out of the court cases I mentioned earlier? The extent of these liabilities are very difficult to estimate, but we know they are going to be high. There are yet other reasons to join us in supporting this amendment, and I appeal to my colleagues. After the 65- to-34 cloture vote on the motion to pro- ceed to Senate bill 1936 2 weeks ago, we received many constructive sugges- tions for improving the bill. Amendment No. 5055 would replace the text of Senate bill 1936 with new language and incorporate these changes. The most important of the changes are as follows: A role for the EPA. The amendment provides that the Environmental Pro- tection Agency shall issue standards for the protection of the public from releases of radioactive materials from a permanent nuclear waste repository. The Nuclear Regulatory Commission is required to base its licensing deter- mination on whether the repository can be operated in accordance with EPA’s radiation protection standards. Another issue was transportation routing. The amendment includes the language of an amendment that was filed by Senator MOSELEY-BRAUN, which provides for further assurance of the safe transportation of these mate- rials by requiring the Secretary of En- ergy to use routes that minimize, to the maximum practical extent, trans- portation through populated and sen- sitive environmental areas. Elimination of civil service exemp- tion. As requested by Senator GLENN, the amendment strikes the provisions in title VII that would have exempted the nuclear waste program from civil service laws and regulations. Elimination of train inspection limi- tation. The amendment includes lan- guage provided by Senator PRESSLER that strikes any reference to who shall perform inspections of trains. This is to address concerns that the language in Senate bill 1936 would change exist- ing law with regard to train inspec- tions. Clarify scope of the Department of Transportation training standards. The amendment clarifies that the Nuclear Regulatory Commission has primary authority for the training of workers in nuclear-related activities. However, the Department of Transportation is authorized to promulgate worker safe- ty training standards for removal and transportation of spent fuel if it finds that there are gaps in the NRC regula- tions. Next, Mr. President, is elimination of permanent disposal research provi- sions. This amendment eliminates the section requiring the Department of Energy to establish an office to study new technologies for the disposal of nu- clear waste. Elimination of budget priorities. This amendment eliminates a section pro- viding that the Secretary must prioritize funds appropriated to the nu- clear waste program to the construc- tion of the interim storage facility. This provision, obviously, is no longer needed in light of DOE’s reevaluation of its budget requirements for the pro- gram. Elimination of direct reference to Chalk Mountain route. The amendment eliminates the reference to the map outlining the heavy haul route through Nellis Air Force Base. The amendment simply provides that the DOE must use heavy haul to transport casks from the intermodal transfer facility at Caliente, NV, and does not specify any particular route. Remove failure to finalize viability assessment as a trigger for raising size of phase 2. Senate bill 1936 provides that phase 2 of the interim storage fa- cility will be no larger than the 40,000 metric tons of spent fuel, but provides a series of triggers that will allow the Department of Energy to expand the facility to 60,000 metric tons. The amendment eliminates DOE’s failure to complete a viability assess- ment of the permanent repository in 1998 as a trigger, making the first trig- ger the license application for the per- manent repository in the year 2002. Limitation and clarification of ”pre- liminary decisionmaking” language. The amendment clarifies that the prelicensing construction activities au- thorized by 203(e)(1) are the only con- struction activities that will be consid- ered to be ”preliminary decision- making” activities. Further, the amendment corrects this section by indicating that the use of the existing E-Mad facility at the in- terim storage site for emergency fuel handling in phase 1 is considered to be a preliminary decisionmaking activity. Senate bill 1936 mistakenly refers to use of facilities use authorized another section, which was the entire interim storage facility. Mr. President, we believe these changes, in addition to those already made in Senate bill 1936, provide addi- tional assurance that the construction and the operation of an integrated management system will be carried out with the utmost sensitivity to environ- mental and safety concerns. However, Senate bill 1936 will still allow the Department of Energy to re- solve this urgent environmental prob- lem by meeting its obligation to store and dispose of spent fuel and nuclear waste in a timely manner. Obviously, I urge my colleagues to consider the merits of this amendment and support final passage of Senate bill 1936. Mr. JOHNSTON. Mr. President, I un- derstand that there may be some ambi- guity in the unanimous-consent re- quest and that it may give 4 hours to the distinguished Senator from Alaska and 4 hours to the less distinguished Senator from Louisiana. I think that would really be a good way to do it, but, unfortunately, my friends from Nevada are insistent that they be granted equal time. So I ask unanimous consent that, to the extent there is ambiguity, the Sen- ator from Alaska have his 4 hours, and the other 4 hours be under the control of the distinguished senior Senator from Nevada. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. MURKOWSKI. Mr. President, I believe it would be appropriate to defer to our colleagues from Nevada at this time. How much time do I have remaining? The PRESIDING OFFICER. The Sen- ator has 7 minutes 36 seconds. Mr. MURKOWSKI. I am sure that my friend from Louisiana, as well as Sen- ator CRAIG, would like to be heard from. But I think we should perhaps go to the other side at this time. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00003 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9212 July 31, 1996 The PRESIDING OFFICER. The Sen- ator from Nevada, [Mr. REID] is recog- nized. Mr. REID. Will the Chair advise the Senator from Nevada when he has used 10 minutes? The PRESIDING OFFICER. Yes. Mr. REID. Mr. President, the sub- stitute is nothing more than a regurgi- tation of S. 1936. It changes absolutely nothing. It is just a rearranging of words. That is all it is. There are no constructive suggestions. It answers none of the questions that have been propounded by a number of Senators on this issue. There has been the term used that the ratepayers are being ripped off. Mr. President, the only rip-off occurring to the taxpayers of this country would be if this travesty, S. 1936, is allowed to pass. The substitute offered by my friend from Alaska does not address any of the substantive problems regarding the underlying legislation. This is still bad legislation, unnecessary legislation, and still very dangerous legislation. This is effectively at least the third substitute for the original bill, S. 1271. We went from S. 1271 to S. 1936 to the chairman’s substitute, and now to this substitute amendment. They are all the same. There are no changes. Chang- ing the number of the legislation will not help the substantive aspect of this legislation. As each of the earlier versions were shown to be seriously flawed, a cos- metic substitute was offered. This amendment contains that same failed strategy\u2014change the number and talk about the great changes in the bill. A loose examination\u2014not a close exam- ination\u2014a loose examination indicates that there are literally no changes. None of these substitutes have ad- dressed the fundamental flaws of the proposed legislation. This version, as well as the previous one, tramples on our environment, our safety, and our health laws. There has been nothing done to answer why this legislation is necessary. It is not. There has been nothing to indicate why the risk standard is 400 percent higher than any other risk standard. There is nothing to answer why we preempt Federal law. There is nothing to an- swer how you are going to handle the difficult transportation problems. There is nothing to answer the most\u2014 and it is so interesting that there is never a word from the proponents of this legislation about the report to Congress from the Secretary of Energy that was filed this year by the Nuclear Waste Technical Review Board where they said, ”Is there urgent technical need for centralized storage of com- mercial spent fuel?” And the answer is clearly no. The board ”sees no compel- ling technical or safety reason to move spent fuel to a centralized storage fa- cility. The methods now used to store spent fuel at reactor sites are safe and will remain safe for decades to come.” There has never been a response to this except legislate them out of busi- ness. That is what this legislation does. If you do not agree with the proponents of the powerful nuclear lobby, then leg- islate them out of business. That is what they have done here. It is also quite interesting that they have done nothing to address the re- sults of a court case last year. They come and talk about a spin. They should sign on to one of the Presi- dential campaigns. The court case does not help their case. The court case set- tles the contractual dispute between Michigan-Indiana Power and the De- partment of Energy. We will talk about that later. But in the briefs filed by the power utilities they did not even seek to re- lieve these people who gave the deci- sion. There is nothing wrong with the decision. We have an amendment that is going to incorporate the results of that opinion into this legislation\u2014but anything to confuse and to get the ideas of the powerful nuclear lobby in the eyes of the public with full-page ads in newspapers all over the country. Who pays for that? Mr. President, I think that we should recognize that every environmental group in America\u2014not those that are to the left nor those to the right\u2014 every environmental group in America is opposed to this legislation; is op- posed to this amendment. Public Citizen yesterday came out because it was a letter sent to Senators by the other side saying we should pass this nuclear waste bill because EPA’s authority has been restored. Wrong again\u2014false advertising. And it ex- plains why. Another group, National Resources Defense Council: On behalf of the quarter million members of the National Resources Defense Council, I am writing you to urge you to oppose 1936 and the amendment. It would curtail a broad range of environmental health and safety laws. It would quadruple allowable radiation standards for waste storage. It would exacer- bate the risk of transportation of nuclear waste throughout the country. Please vote no on 1936. Before turning this over to my col- league from Nevada, Mr. President, I want to refer to part of a letter that was sent to all Senators last week. Here is part of the language from it. S. 1936 is a bill only a polluter could love. The measure attacks the Environmental Protection Agency, curtails Federal environ- mental regulations, preempts State laws . . . And I should have a little editorial ”exempts Federal laws. . . . and sets a repository standard that al- lows four times the radiation exposure of current regulations. Oppose S. 1936. That says it all. I yield to my colleague from Nevada. I reserve the remainder of my time. Mr. MURKOWSKI. Mr. President, I yield 6 minutes to the Senator from Louisiana. The PRESIDING OFFICER. The Sen- ator from Louisiana is recognized for 6 minutes. Mr. JOHNSTON. I thank my col- league. Mr. President, this may be the last bill that I will floor manage as a U.S. Senator. It happens to be on a subject matter that it has fallen my lot to deal with for some 20 years now\u2014dealing with nuclear waste. It is a lot that has fallen to me because of jurisdictions on the committees of which I have been involved. I have not enjoyed being in opposi- tion to my friends from Nevada who have done an absolutely marvelous job with an absolutely bankrupt case in my view which means that the people of Nevada to the extent they agree with their Nevada Senators ought to be greatly appreciative of the excellent job they have done, as I say, with a weak case. When I say a weak case, Mr. President, the amazing thing to me is that Nevada can be so opposed to hav- ing a nuclear waste site when at the same time they have been so anxious to have a nuclear test site for explod- ing nuclear bombs because with nu- clear bombs all they did was dig a hole and shoot the bombs underground\u2014 some even as low as the water table\u2014 hundreds of these nuclear tests that in- volved all of the radioactivity mate- rials that are present in nuclear waste: Thorium, cesium 137, strontium 90, plu- tonium\u2014all of these daughter elements of a nuclear explosion, the same thing as you have in nuclear wastes. Nevada was not only willing to have these nu- clear tests but anxious to have the nu- clear tests. As chairman of the Energy and Water Appropriations Subcommittee I sit shoulder to shoulder with my friends from Nevada, the Senators from Ne- vada, in seeking more nuclear tests. My motive was that I thought we ought to have reliability and safety in our nuclear arsenal and, therefore, a few years ago I proposed that. My friends from Nevada argued the same thing and also argued the economy of Nevada in seeking additional tests. Mr. President, when you have these explosions which leave a cavity in the ground with all of these\u2014cesium, strontium, et cetera\u2014in the cavity, it is not sealed over by a waste package. We hope and we believe that these waste packages may be good for 10,000 years, even if they were thrown some- where where they had exposure to the water. We think that the waste pack- age itself is going to be sufficient. And, moreover, in Yucca Mountain the waste packages will be buried some 200 meters above the water table. So it is many times better, if you are con- cerned about the contamination of the ground and the water, it is many times better to have a nuclear waste site such as Yucca Mountain than it is to have a test site. That is common sense\u2014absolutely common sense\u2014because, on the one hand, you have the explosion, some in the water table, and hundreds of these explosions. On the other hand, you have a Yucca Mountain which is 200 meters that is more than 600 feet above the water table in one of the driest places on the face of the Earth. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00004 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9213 July 31, 1996 So we start with that, Mr. President. That is why I say my colleagues from Nevada have an exceedingly weak case. On the question of the pending amendment, to say that it eviscerates the role of EPA is just not correct. We set the standard at 100 millirems which is the same standard that you have for the International Commission on Radi- ological Protection, the National Coun- cil on Radiation Protection and Meas- urements, the United States Nuclear Regulatory Commission, the Environ- mental Protection Agency, and the International Atomic Energy Agency. That is where we get the 100 millirems. What we say is, if EPA believes that poses an unreasonable risk to health and safety, we give to EPA the right, the duty, and the mandate to set it at such level as they think will protect health and safety. So, Mr. President, that argument simply does not hold water. Moreover, I would say, Mr. President, that, again to compare it to the nu- clear test site, it is exceedingly more safe than the nuclear test site. We have upwards of 40,000 metric tons of nuclear waste in some 70 sites around the country. If we do not put away this waste in an interim storage facility, then it will take, according to testimony before the Energy and Nat- ural Resources Committee, some $5 bil- lion to build what we call dry cask storage, which, according to the Court of Appeals of the District of Columbia in a decision just last week, is the re- sponsibility of the Federal Govern- ment. So what we are dealing with on this interim storage facility is a $5 bil- lion bill to the United States of Amer- ica. We are told in letters from the ad- ministration that if we build this in- terim storage facility, we may have to move the waste twice. Not so, Mr. President. The present legislation on which we will vote very clearly states that you may not begin construction on the interim facility until and unless the repository, that is, the underground facility, is declared to be suitable, or I think the word is via- ble, which is a defined word in the leg- islation. So that not until 1998, when the nuclear waste administrator says he can and will make that decision, may you begin construction on the in- terim facility. So by that time we will know whether or not this is a suitable facility for the repository. Why do we say pick the facility now and begin construction? Simply be- cause we have about 21\u20442 or 3 years of what we call long-lead-time items which are necessary before you begin construction\u2014such things as the envi- ronmental impact statement, the de- sign, picking the routes of transpor- tation. Those things can and should be done at this point so as to save the bil- lions of dollars that are involved. We urge Senators to vote for the pending amendment. The PRESIDING OFFICER. The Sen- ator’s time has expired. Mr. MURKOWSKI. Mr. President, I ask for the yeas and nays on the pend- ing amendment. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. Mr. MURKOWSKI. Mr. President, recognizing there is time on the other side, I anticipate a vote on the pending amendment at the conclusion of the Senators from Nevada speaking on this amendment, because I think our time has just about expired. How much time do we have? The PRESIDING OFFICER. The Sen- ator is correct. Time has expired. Mr. MURKOWSKI. I thank the Chair. So all Senators should be advised that will be\u2014I guess the Senators from Ne- vada can give us a better idea, but I would imagine 15 or 20 minutes. Mr. BRYAN. May I inquire of the Chair as to how much time remains? The PRESIDING OFFICER. The Sen- ators from Nevada have 24 minutes re- maining. Mr. BRYAN. I thank the Chair. Mr. President, let me just make a couple of preliminary observations. Our good friend, the distinguished senior Senator from South Carolina, rose this morning to express his strong support for this legislation. I say with great affection and great respect that the irony of his position could not have been more acute. In this morning’s En- ergy Daily, we read that the State of South Carolina, the State that he has so ably represented and defended since 1954, has filed suit against the Depart- ment of Energy because they are con- cerned about safety standards as it re- lates to the shipment of foreign nu- clear fuel into the State of South Caro- lina. I guess I would have to repeat, Mr. President, an old expression that I think would be understood down home: ”What’s sauce for the goose ought to be sauce for the gander.” I respect and greatly admire the Senator’s concern about the health and safety of his own State. I just wish he shared that same perspective in terms of the health and safety of the entire Nation, because that is one of the principal objections we have to this piece of legislation. Let me in the time that I have try to address the issues that were so funda- mental to the debate in S. 1936, be- cause, as my senior colleague has pointed out, with respect to the core issues nothing has changed. There has been some language that has been mas- saged, but nothing has been changed. Let me take my colleagues for a great leap through the bill itself. We have expressed strong opposition, not on behalf of Nevada but on behalf of the Nation, to a piece of legislation that would effectively emasculate major pieces of the environmental leg- islation that affects all Americans. The National Environmental Policy Act provides the framework for making major policy decisions that affect the environment, and nobody denies that the legislation before us, the siting of an interim storage facility, has pro- found implications in terms of its im- pact. So here is what we have in the act itself under section 204. OK, first of all, and I paraphrase, it says, ”The Na- tional Environmental Policy Act shall apply.” That is like saying the Con- stitution and the Bill of Rights shall apply. And then it goes on to say that such environmental impact statements shall not consider the need for interim storage, the time of the initial avail- ability of interim storage, any alter- natives to the storage, any alternatives to design criteria, the environmental impacts of the storage beyond the ini- tial term. We are talking about something that lasts tens of thousands of years, and they are talking about something that would be limited to the initial term of the license, which is a matter of years. Then they go on to deprive the court of jurisdiction to review the environ- mental impact statement as it is being developed, and then goes on to say, in what is the height of arrogance\u2014our colleagues have railed against the costs that have been incurred over the years in seeking a solution to the dis- position of high-level nuclear waste. Much of those costs have been incurred as a result of unrealistic time lines generated by the zeal of the nuclear utility industry in America. The stor- age of interim waste has been for more than 30 years their Holy Grail. That is what they want, and the only reason we are having this debate today is be- cause the nuclear utilities want in- terim storage. But the irony and the ultimate travesty that I refer to is, after talking about the environmental policy act, it goes on to say none of the activities carried out pursuant to this paragraph shall delay or otherwise af- fect the development or construction, licensing or operation. So, yes, the Constitution and the Bill of Rights by way of analogy would apply, but the amendments that all of us rely upon for our protection, by way of analogy, would not apply here. So far as the contention has been made that there has been an effort to address environmental concerns, that is simply false. And I will not take the time at this point, but we will discuss it in more detail. The letter sent by the Administrator of the Environmental Protection Agen- cy makes a very compelling argument. So for the purposes of this act, we, in effect, wipe out the National Environ- mental Policy Act. Let me go on and talk about the standards because we have talked a good bit about that. The standards that we are concerned about are the radioactive exposure standards. Nowhere in the world, for no other project on the face of the Earth is a radiation standard\u2014if I could get that chart\u2014no other place in the world do we have a radiation standard that proposes 100 millirems from a single source. No place. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00005 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9214 July 31, 1996 The EPA safe drinking water stand- ard is 4; the WIPP standard is 15. Let me refresh my colleague’s memory. In this Congress, this year, our distin- guished colleague from New Mexico got up, and properly so, expressed concern about EPA’s ability to establish stand- ards for the WIPP facility, the reposi- tory for transuranic waste. The National Academy of Sciences has recommended between 10 and 30 millirems of exposure. What do we have in Nevada? Mr. President, 100 millirems. That is just simply uncon- scionable. That is simply unconscion- able. Oh, yes, they say, the EPA is brought back into the process. Not as one would expect it. That is the standard unless they are able to disprove that 100 millirems would have no adverse im- pact on health and safety, another con- cern raised by the EPA, which makes no equivocation at all about the fact that that presents a public health risk. Every Member in this body, whatever his or her view is on an interim storage facility, should be concerned as Ameri- cans about what is being done with re- spect to this provision. Moreover, the EPA is restricted and the NRC is restricted in terms of how to apply the standards. We will talk a little bit more about that during the course of this debate. The National Academy of Sciences has indicated, as one example, that there are health and safety concerns for 10,000 years and be- yond. The statute we are being asked to consider in this very amendment would limit the ability to consider this only to the first 1,000 years. That is not the most critical time. It is after 1,000 years that the canisters are supposed to fail and then it migrates into the underground repository itself. I could go on and on. We have talked about the preemption. Make no mis- take, I say to my colleagues, this amendment in effect preempts the en- vironmental laws of America, all of these provisions here. I will not take time to read all of them because we are under some time constraints on this amendment. Look at them: Federal Land Policy Act, RCRA, clean air, clean water, Superfund. None of those apply if they are in conflict with the provisions of this act, none. This is simply an outrage, whatever one’s view is about transporting nuclear waste across the country, and much more will be said about that later. The fiscal impact of this has been discussed. I want to comment briefly on this. It has been clear since the very beginning of the Nuclear Waste Policy Act of 1982, that the fundamental premise of that act, as contained in all the provisions, indicates the first and primary responsibility from a financial point of view will be the utilities’ themselves. That is the first and fore- most responsibility. This amendment very cleverly changes that. Mr. President, how much time do I have remaining? The PRESIDING OFFICER. The Sen- ator has 14 minutes remaining. Mr. BRYAN. It very cleverly changes that. Remember the premise in the 1982 Nuclear Policy Act itself was the re- sponsibility will be that of the utili- ties, in terms of the financial responsi- bility. Repeatedly\u2014over and over again. The responsibility goes far beyond the initial licensing period. We are talking about something that lasts for tens of thousands of years. But this is why this is the nuclear industry bail- out or relief act. What they have done is limited the liability of the utility by saying, until 2002, the maximum amount that can be contributed into the nuclear waste fund, a fund that is generated by a 1 mill levy on each kilo- watt hour of energy generated, will be 1 mill. The people who have looked at that, the General Accounting Office and oth- ers, have concluded that the fund cur- rently is underfunded between $4 and $8 billion. It gets better. After the year 2002, the utilities’ liability is further limited to the amount of the annual appropriation. So there is nothing that is being done with respect to the long- term implications of this piece of legis- lation, in terms of the storage of nu- clear wastes. Let me be clear that by the year 2033, for the utilities, nuclear utilities that are currently licensed, those licensing periods expire. What this means is that the American taxpayer, people who have never received 1 kilowatt of nu- clear-generated power, will pick up the balance. Let me be clear on that. His- torically, since the establishment of the Nuclear Waste Policy Act, it has been the financial responsibility of the utilities to handle the storage, the fi- nancial responsibility. This now changes dramatically and there are limitations\u2014the 1 mill limitation and, after the year 2002, only the amount that is appropriated. This year, for ex- ample, that would have been roughly one-third of a mill. The balance all shifts to the taxpayer. So, you talk about an unfunded mandate on the American taxpayer, this is it. Let me respond briefly to a couple of comments that were made, and I know our time will conclude. First of all, our friend from Louisiana makes the point that Nevada has hosted the Nevada test site and nuclear detonations have occurred there for many years. I hope none of us is going to be penalized be- cause Nevada, as part of the national defense effort beginning during the height of the cold war in the 1950’s, agreed to accept the Nevada test site. That was part of our national defense effort and Nevadans assumed that re- sponsibility, and proudly so. Now, with respect to the amount of radioactivity generated, all the tests conducted out there would amount to less than 1 ton. That would be the cu- mulative impact of all of that radioac- tivity. What we are talking about\u2014\u2014 Mr. JOHNSTON. Will the Senator yield at that point? Mr. BRYAN. Yes. Mr. JOHNSTON. You are speaking of the radioactivity released to the air at this point, are you not? Mr. BRYAN. No. We are referring to the total volume of radioactivity, un- derground as well. Mr. JOHNSTON. It amounts to how much? Mr. BRYAN. One ton. Mr. JOHNSTON. One ton? Mr. BRYAN. Yes. The point I am trying to make is, by way of comparison, we are talking about tens of thousands of metric tons, so the degree of risk is immeasurably greater as a result. Let me turn next to the question of the lawsuit. Much has been made of the lawsuit. The lawsuit changes abso- lutely nothing, as my colleague point- ed out. In point of fact, what the law- suit said is there is an obligation on the part of the Department of Energy, and we look to the provisions of the contract to determine how that liabil- ity will be ascertained. At no time\u2014 and I emphasize\u2014at no time was it contended by the utilities that there would be a need to commence some type of transportation on February 1, 1988. In point of fact, in the briefs, the legal briefs filed by the utilities, they make it very clear that they do not as- sert that there should be a mandatory injunction requiring the transfer of anything, or the movement of anything on January 31, 1998. What they say, and our amendment that we will offer later indicates that, is that becomes a mat- ter of contract adjudication, depending upon the nature of the delay. I believe it is fair to point out the Secretary of Energy makes that point in her letter, that the lawsuit changes nothing. It is a smokescreen. The utilities did not seek nor does the lawsuit decision re- quire the transport of anything on Jan- uary 31, 1988. At most it would require an adjustment of the fees paid by utili- ties into the nuclear waste fund, to the extent that they incur additional costs to expand that storage. I might say, parenthetically, the Senators from Nevada have introduced legislation to that effect for the last 7 years. So the lawsuit means absolutely nothing. It is plain the ratepayers are not get- ting what they paid for. Let me say that certainly is not the fault of the citizens of Nevada. Frankly, it is the fault of the way the nuclear utilities themselves have constantly tried to jam unrealistic deadlines, to make pol- itics rather than science the deter- miner of this program. The original program suggested we should search the country, find the best site, send three sites, after they have been stud- ied, to the President of the United States, and have the President make the determination. That did not occur. Politics\u2014politics intervened, nuclear politics. The folks in the Northeast, and understandably, said we do not want granite in the study, so they were taken out of the equation. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00006 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9215 July 31, 1996 The folks in the Southeast, I can un- derstand, said, ”My gosh, we don’t want salt domes.” So what happened in 1987\u2014and no scientist worthy of the de- scription of scientist would ever con- tend that from a scientific point of view, forcing all of the study to occur at a single site is the best from a sci- entific perspective, and the fact they have encountered technical problems dealing with health and safety cer- tainly is not the fault of Nevadans. Frankly, the decision to embark upon nuclear energy carried with it certain risks for the utilities, and part of that risk is the financial responsi- bility of dealing with the waste. So I simply say to my colleagues that none of the provisions that relate to the heart and core of our concerns\u2014 the National Environmental Policy Act, the preemption provisions, the standards or the fiscal impact for the American taxpayers\u2014not a single pro- vision in this new amendment changes the impact from the debate that we had in S. 1936, and none of my col- leagues should be misled as a result. May I inquire as to how much time I have left? The PRESIDING OFFICER (Mr. CAMPBELL). The Senator has 5 minutes 53 seconds. Mr. BRYAN. I reserve the remainder of my time. Mr. REID addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Nevada, [Mr. REID], is recog- nized. Mr. REID. Mr. President, there has been a suggestion by my friend, the senior Senator from Louisiana, that this is a bankrupt case, the defense of S. 1936, the opposition to S. 1936. Mr. President, the exact opposite is true. For example, the opposition to S. 1936 is supported by the President of the United States. He has done it vocally and in writing. The case is supported by the Secretary of Energy. There is a letter that will be entered into the RECORD where she vehemently dis- agrees with not only the underlying legislation but the amendment. No one can ever think that the Secretary of Energy would do anything to assist this Senator from Nevada. This Sen- ator and the Secretary of Energy have been in a longstanding dispute over various issues, but her letter is direct and to the point that not only is the legislation bad, but the amendment is bad. The Environmental Protection Agen- cy Administrator sent a letter that is succinct, to the point, that outlines why the legislation is bad and why the amendment is bad. The Council for Environmental Qual- ity opposes this legislation. The Nu- clear Waste Technical Review Board is opposed to what they are trying to do, and, as we talked about before, all en- vironmental organizations. Mr. President, let me say that the only case for S. 1936 is a powerful nu- clear industry. They are the only sup- porters of this legislation. The Senators from Nevada have indi- cated that we would not require a roll- call vote on this amendment. We have been told that the advocates of this amendment want a vote on it. I can only speak for this Senator, but this amendment does not help anything. I say to all my colleagues, it does not help anything in the underlying legis- lation, and it does not hurt it. It is just as bad after you adopt it as before. My colleagues can go ahead and vote for this if they want. It makes abso- lutely no difference, because the ulti- mate test of this legislation will come on final passage when we will deter- mine whether or not the President of the United States is going to have to oppose this legislation by veto and whether the request, the pleas by the President, the Secretary of Energy, the Vice President of the United States, the Environmental Protection Agency, the Council for Environmental Quality, the Nuclear Waste Technical Review Board and all environmental organiza- tions are going to land on deaf ears. I reserve the remainder of our time on this amendment. The PRESIDING OFFICER. The Sen- ators from Nevada still have 2 minutes 56 seconds. Who yields time? Mr. REID. I reserve the 2 minutes 56 seconds to the underlying bill. Parliamentary inquiry, Mr. Presi- dent. Can we reserve the time on the other amendments on the bill itself? The PRESIDING OFFICER. The Chair will state to the Senator the time will continue to roll unless the Senator seeks unanimous consent to stop the time. Mr. REID. Mr. President, I ask unan- imous consent that all time be no longer counted against the opponents of this amendment and that, if there is going to be a rollcall, we have it. The PRESIDING OFFICER. Is there objection? Mr. MURKOWSKI. That is fine. We would like a rollcall vote. I have asked for the yeas and nays. The PRESIDING OFFICER. Without objection, it is so ordered. The question is on agreeing to amendment No. 5055. The yeas and nays have been ordered. The clerk will call the roll. The legislative clerk called the roll. Mr. NICKLES. I announce that the Senator from New Hampshire [Mr. GREGG] is necessarily absent. Mr. FORD. I announce that the Sen- ator from Ohio [Mr. GLENN] is nec- essarily absent. The PRESIDING OFFICER. Are there any other Senators in the Chamber de- siring to vote? The result was announced\u2014yeas 86, nays 12, as follows: [Rollcall Vote No. 256 Leg.] YEAS\u201486 Abraham Akaka Ashcroft Bennett Bingaman Bond Bradley Breaux Brown Bumpers Burns Byrd Campbell Chafee Coats Cochran Cohen Coverdell Craig D’Amato DeWine Dodd Domenici Dorgan Exon Faircloth Feingold Feinstein Ford Frahm Frist Gorton Graham Gramm Grams Grassley Harkin Hatch Hatfield Heflin Helms Hollings Hutchison Inhofe Inouye Jeffords Johnston Kassebaum Kempthorne Kennedy Kerrey Kerry Kohl Kyl Lautenberg Leahy Levin Lott Lugar Mack McCain McConnell Mikulski Moseley-Braun Murkowski Murray Nickles Nunn Pressler Robb Roth Santorum Sarbanes Shelby Simon Simpson Smith Snowe Specter Stevens Thomas Thompson Thurmond Warner Wellstone Wyden NAYS\u201412 Baucus Biden Boxer Bryan Conrad Daschle Lieberman Moynihan Pell Pryor Reid Rockefeller NOT VOTING\u20142 Glenn Gregg The amendment (No. 5055) was agreed to. Mr. MURKOWSKI. Mr. President, I move to reconsider the vote. Mr. CRAIG. I move to lay that mo- tion on the table. The motion to lay on the table was agreed to. Mr. REID addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Nevada. Mr. REID. Mr. President, I ask unan- imous consent that there be a quorum call, which I am going to suggest, and that the time not run against either the proponents or the opponents of this legislation. The PRESIDING OFFICER. Is there objection? Mr. MURKOWSKI. Mr. President, I object. I ask that the time run equally. Mr. REID. Mr. President, I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. LOTT. Mr. President, I ask unan- imous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. LOTT. Mr. President, I commend the Senators who are working on this very important legislation. They have been doing an excellent job. I have the impression they are going to make good progress today. I thank, again, the Nevada Senators for their reason- ableness in a very difficult situation. The sooner we can finish this legisla- tion, the better, so that we can move on to very important issues that are pending, such as the transportation ap- propriations and the VA\/HUD appro- priations bill. Conference reports are beginning to come back now. I thank the Democratic leader for his cooperation in bringing this issue to this point. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00007 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9216 July 31, 1996 PROVIDING FOR THE ADJOURNMENT OF BOTH HOUSES Mr. LOTT. Mr. President, I ask unan- imous consent that the Senate proceed to the immediate consideration of House Congressional Resolution 203, the adjournment resolution, which was received from the House; further, that the resolution be considered and agreed to, and the motion to reconsider be laid upon the table. The PRESIDING OFFICER. Without objection, it is so ordered. The concurrent resolution (H. Con. Res. 203) was considered and agreed to, as follows: H. CON. RES. 203 Resolved by the House of Representatives (the Senate concurring), That, in consonance with section 132(a) of the Legislative Reorganiza- tion Act of 1946, when the House adjourns on the legislative day of Thursday, August 1, 1996, Friday, August 2, 1996, or Saturday, Au- gust 3, 1996, pursuant to a motion made by the Majority Leader or his designee, it stand adjourned until noon on Wednesday, Sep- tember 4, 1996, or until noon on the second day after Members are notified to reassemble pursuant to section 2 of this concurrent reso- lution, whichever occurs first; and that when the Senate recesses or adjourns at the close of business on Thursday, August 1, 1996, Fri- day, August 2, 1996, Saturday, August 3, 1996, or Sunday, August 4, 1996, pursuant to a mo- tion made by the Majority Leader or his des- ignee in accordance with this resolution, it stand recessed or adjourned until noon on Tuesday, September 3, 1996, or until such time on that day as may be specified by the Majority Leader or his designee in the mo- tion to recess or adjourn, or until noon on the second day after Members are notified to reassemble pursuant to section 2 of this con- current resolution, whichever occurs first. SEC. 2. The Speaker of the House and the Majority Leader of the Senate, acting jointly after consultation with the Minority Leader of the House and the Minority Leader of the Senate, shall notify the Members of the House and Senate, respectively, to reassem- ble whenever, in their opinion, the public in- terest shall warrant it. Mr. LOTT. Mr. President, I suggest the absence of a quorum and ask unani- mous consent that the time be equally divided. The PRESIDING OFFICER. Without objection, it is so ordered. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. REID. Mr. President, I ask unan- imous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. f NUCLEAR WASTE POLICY ACT OF 1996 The Senate continued with the con- sideration of the bill. Mr. REID. Mr. President, I yield such time as the Senator from Minnesota, Senator WELLSTONE, may use up to one-half hour. The PRESIDING OFFICER. The Sen- ator from Minnesota is recognized for up to one-half hour. AMENDMENT NO. 5037 (Purpose: To protect the taxpayer by ensur- ing that the Secretary of Energy does not accept title to high-level nuclear waste and spent nuclear fuel unless protection of pub- lic safety or health or the environment so require) Mr. WELLSTONE. Mr. President, I call up amendment 5037. The PRESIDING OFFICER. The clerk will report. The legislative clerk read as follows: The Senator from Minnesota (Mr. WELLSTONE) proposes an amendment num- bered 5037. Mr. WELLSTONE. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: On page 85 of the bill, strike lines 13 through 15 and insert in lieu thereof the fol- lowing: ”(a) Notwithstanding any other provision of this Act (except subsection (b) of this sec- tion) or contract as defined in section 2 of this Act, the Secretary shall not accept title to spent nuclear fuel or high-level nuclear waste generated by a commercial nuclear power reactor unless the Secretary deter- mines that accepting title to the fuel or waste is necessary to enable the Secretary to protect adequately the public health or safe- ty, or the environment. To the extent that the federal government is responsible for personal or property damages arising from such fuel or waste while in the federal gov- ernment’s possession, such liability shall be borne by the federal government.” Mr. WELLSTONE. Mr. President, most of the time that I am on the floor I do not really use notes, or at least I do not use notes extensively. I think today what I want to try to do is read what I think is a kind of brief that I want to argue for this amendment. Most of the debate on S. 1936 will be about the environmental policy rami- fications of the bill. I know we will learn a great deal about that today. While these are important points\u2014I view them as very important points\u2014 there is another very significant part of this debate. I am referring to the im- plications of this bill for the taxpayers, particularly future taxpayers. I hope that if my colleagues are not able to listen to the statement, that their staffs will and that these words will be given serious consideration. As you will soon see, this bill would perpetuate a flawed policy that has set up the future taxpayers of America, I fear, for a potentially infinite liability. Mr. President, section 302 of the Nu- clear Waste Policy Act of 1982, sub- section (a), paragraph 4, states what has long been accepted as nuclear waste policy, that nuclear utilities shall pay a fee into a fund to ”ensure full cost recovery” for costs associated with the nuclear waste program. In- deed, an earlier version of this very bill, introduced as S. 1271, recited in its findings section the same basic premise: ”While the Federal Govern- ment has the responsibility to provide for the centralized interim storage and permanent disposal of spent nuclear fuel and high-level radioactive waste to protect the public health and safety and the environment”\u2014I agree with that\u2014”the cost of such storage and dis- posal should be the responsibility of the generators and owners of such waste and spent fuels.” Mr. President, once you understand that simple basic and longstanding premise, you cannot help but be con- fused by the policy we have been pur- suing for years and which is strength- ened in the bill before us. That policy is to provide for the transfer of title to high-level nuclear waste from the util- ity to the taxpayer. Mr. President, could I have order in the Chamber? I would appreciate it if you would ask the discussion to be off the floor. The PRESIDING OFFICER. All dis- cussions will be taken into the cloak- room. Mr. WELLSTONE. Mr. President, let me explain. As I have already de- scribed, the full cost of the waste dis- posal program is to be borne by the generators of that waste. To imple- ment this idea, Congress created the nuclear waste fund in the Treasury. The nuclear waste fund is supplied by a fee paid by the nuclear utilities, which is really the ratepayer. That fee is specified in the 1982 act to be equal to ”one mill,” which is one-tenth of one cent per kilowatt-hour of electricity generated. The 1982 act further gave the Sec- retary of Energy the authority to ad- just the fee if she or he found it nec- essary to ”ensure full cost recovery.” As you can readily see, when a com- mercial nuclear powerplant ceases to generate electricity, it ceases to pay into the nuclear waste fund. In the next 15 to 20 years, as our current nu- clear plants age, more and more of these plants will stop generating power, and the flow of money into the nuclear waste fund will begin to dry up. When no more money is flowing into the fund in the form of fees, we will know how much money we will have to pay for the full cost of the dis- posal program. Now, we must ask the question: Will we have enough money? Will all those fees aggregated in the nuclear waste fund, plus interest paid out as nec- essary to meet the actual progress of the program, be sufficient to cover all the actual costs of storing high-level nuclear waste until it is no longer a threat to public health and safety and the environment, perhaps as long as 10,000 years? Are we going to be able to cover the cost? I will share with you the opinions of the experts on that question in a mo- ment, but first let me tell you who is stuck with the tab if the nuclear waste fund is not sufficient. Because our nu- clear waste policy provides for title to the waste to transfer from the utility to the Federal Government, which translates into taxpayers\u2014it is you and me, or at least our families in the future\u2014who are going to be stuck with VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00008 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9217 July 31, 1996 the bill. You see, it is the transfer of the tab which the nuclear utilities are really working for. Moving the waste in Nevada is impor- tant to them, but I am not sure that is the real prize. What they really want is to be free and clear of the stuff because they know that there is a fair chance that disposal costs will be greater than what they are currently saying it will be. When their plants are shut down and they no longer pay the fee into the fund, they want to make sure that the taxpayer cannot come back to them to pony up some more. If the Department of Energy holds title, the waste is no longer the utility’s problem, but it is the taxpayers’ problem, and it is a po- tentially huge one. Let us see if this is a real problem. After all, Mr. President, if everybody agrees that the fund will be adequate, then there will not be any taxpayer li- ability to worry about. Mr. President, could I have order, please, on the floor, and could I ask my colleagues to please cease discussion? The PRESIDING OFFICER. The Sen- ate will be in order. Mr. WELLSTONE. Mr. President, the question then becomes whether there will be a real problem. After all, if ev- erybody agrees that the fund will be adequate, the question is whether there is going to be any taxpayer liability to worry about. The Nuclear Waste Tech- nical Review Board in its March 1996 report to the Congress states: In a discussion of costs, however, the board believes a more important question is wheth- er the nuclear waste fund is adequate to pay the cost of disposal as well as previously un- anticipated long-term storage. Although the Department of Energy has not yet made a new formal determination of the fund’s ade- quacy, in a presentation before this board, analysts who conducted an independent func- tion and management review of the Yucca Mountain project suggested that the nuclear waste fund as currently projected would be deficient by $3 to $5 billion. In a June 1990 report, the General Ac- counting Office estimated, depending on varying inflation rates and numbers of repositories needed, a potentially huge shortfall\u2014up to $77 billion. The report states: Unless careful attention is given to its fi- nancial condition, the nuclear waste pro- gram is susceptible to future budget short- falls. Without a fee increase, the civilian waste part of the program may already be underfunded by at least $2.4 billion in dis- counted 1998 dollars. That is the GAO report of 1990. Now, Mr. President, in fairness\u2014and I am trying to present a rigorous anal- ysis for my colleagues\u2014there is no con- sensus on whether the fund will be ade- quate. The Department of Energy be- lieves that it will be. The nuclear in- dustry likewise is quite adamant that the fund will be sufficient. But, of course, estimating fund adequacy is a very complicated matter, and reason- able people can have different views. There are two basic elements to de- termine if the fund will be adequate. First, there is a total lifetime cost esti- mate for the disposal program. Depend- ing on how far out you wish to run it, this could require making estimates for thousands of years. DOE’s latest life cycle cost estimate\u2014this is Sep- tember 1995 \u2014estimates costs for only 88 years, from the beginning of the pro- gram in 1983 through the expected end year of the program, which is 2071, when the repository is decommis- sioned. This, of course, assumes that the repository is built, loaded, and closed on schedule, I might add, a very questionable assumption. Cost estimates also depend on the elements of the program, including whether there will be both an interim facility and a permanent repository. In the Department of Energy’s 1995 esti- mate, it is assumed that the program will only include a permanent reposi- tory. They were not even talking about the interim storage facility. The second element to determine fund sufficiency has to do with the sup- ply side of the question: how much money will be put into the fund through fees. Because the fees are based on generation of electricity, this estimate is inextricably tied up with the life expectancies of existent nu- clear powerplants and their level of electricity generation. What if the plants do not get relicensed? What if they shut down prematurely because of economic considerations or safety issues associated with aging reactors? So far, no plant has lasted to the end of its license. That is a point worth em- phasizing. What if the plants have long outages and thus generate less power? The Department of Energy assumes all plants operate for their full 40-year li- cense with no renewal and that their generating efficiency improves over time. In the end, Mr. President, I think we all have to realize that any estimate of fund adequacy is tentative at best. As Daniel Dreyfus, Director of the Office of Civilian Radioactive Waste Manage- ment of DOE, put it last April, address- ing the adequacy of the fee to ensure a sufficient fund: Any such fee adequacy analysis must, of course, be based upon a number of assump- tions about the near and long term future. Some of the most important are the pro- jected rate of expenditure from the fund which in turn impacts the interest credits accruing from the unspent balance, the as- sumed future rates of interest and inflation, and the assumed number of kilowatts of nu- clear power still to be generated and sold. Significant deviations from these could re- sult in errors in either direction that would warrant changes in the fee. Mr. President, what my amendment would do\u2014we now have established that the fund, which is the utility com- panies’ fund, may not be sufficient, and some believe we are headed for a sig- nificant shortfall. The evidence is irref- utable on that point. Here is where we get to the crux of my amendment. If there is a shortfall, who is going to pay for it? The answer is that the owner of the waste, the title holder, will pay for the shortfall. If title transfers to the Department of Energy, the taxpayers in this country are going to be on the hook. It is the taxpayers who are going to end up hav- ing to pay the costs. The amendment I offer today would protect the taxpayer from such an un- certain fate. My amendment would simply prevent the Department of En- ergy from accepting title to the waste unless accepting title was necessary to protect the public health and safety and the environment. For people con- cerned about liability for damage from an accident caused by DOE once the waste is in the Government’s posses- sion, my amendment would ensure that the DOE is, indeed, liable for such dam- ages. All this amendment does is protect taxpayers from shouldering the burden of waste disposal costs after the fund runs out. That burden should remain with the utilities. That was the inten- tion and that is the way it ought to be. We do not know the cost over 10,000 years, and this transfer of title through the sleight of hand transfers a huge po- tential unfunded liability to taxpayers in this country. I have heard my colleagues argue that ratepayers and taxpayers are in- distinguishable. That is not true. In other words, some folks seem to be- lieve that changing the law to make sure that the utilities pay for the out- year liability is pretty much the same as if the taxpayer is directly on the hook for it as current law and this bill would have it. That is simply not so. Ratepayers are people who currently use nuclear-gen- erated power. Taxpayers are every- body. All ratepayers are taxpayers but not all taxpayers currently use nu- clear-generated power. Ratepayers are a subset of taxpayers. Ask people in northern Minnesota whether they ought to be held as liable for a fund shortfall as, for example, somebody in the Twin Cities. Ask somebody in Mon- tana if they feel they should pay as much for waste disposal as somebody in a more heavily nuclear State. Mr. President, this bill, as I have stated already, would provide for title to transfer to the taxpayer. That is what this bill is about. I think that is a very flawed premise in this bill. While that is also part of the current law, the bill throws in a new twist. Under S. 1936, title transfers even soon- er than under current law. Current law has title transferring when DOE ac- cepts the waste for permanent disposal. In other words, title does not transfer until we actually have a permanent place to put it. S. 1936, however, does not wait. This bill puts the taxpayer on the hook as soon as the Department of Energy takes it off the utility’s hands for interim storage. That is what this is about. As I have already indicated, the level of the fee is integral to any estimate of fund suffi- ciency. Current law allows the Sec- retary of Energy to adjust that fee, if necessary, to ensure fund sufficiency. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00009 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9218 July 31, 1996 Despite the General Accounting Office and other estimates, this bill would re- move that authority, effectively freez- ing the one-mill fee, which has never been changed or pegged to inflation in statutory language. Thus, even if the Department of Energy does ultimately estimate that the fund will experience a shortfall, the Secretary cannot even act to prevent it to protect taxpayers from accepting the liability. Finally, Mr. President, this bill would require a significant up-front ex- penditure from the fund to pay for con- struction of an interim storage facil- ity, something that was not considered by the DOE in its latest assessments of fund sufficiency. As has already been explained, interest buildup from the unspent fund balances is a key compo- nent ensuring fund sufficiency. With large early expenditures, there will ob- viously be less interest accumulated and the fund will be less able to cover long-term costs. This amendment is all about respon- sibility. It is all about making sure that costs are allocated to those who should bear them. It is all about decid- ing who should be on the hook when shaky estimates of costs well into the next century and beyond prove, as they invariably do, to be off the mark. We do not know what the costs are going to be. The estimates are very shaky. Yet what we are doing through this bill is essentially transferring all of the li- ability to taxpayers in this country. Less than a month ago, in discussing this issue on the floor of the Senate, one of the chief sponsors of the bill, the Senator from Idaho, said, ”It is irre- sponsible to shirk our responsibility to protect the environment and the future for our children and grandchildren.” I could not agree with him more. But protecting our children and grand- children also means protecting their wallets, as I am sure he would agree. We have spent an enormous amount of time and effort in the past few years cutting the deficit and moving toward a balanced budget, in large part to pro- tect future generations. Let us have some consistency. Let us keep that goal in mind. Let us not stick future generations of taxpayers with a poten- tially enormous liability. Let the title to nuclear waste stay with those who generate it. That is what this amend- ment says. It is simple. It is straightforward. Mr. President, how much time do I have left? The PRESIDING OFFICER. The Sen- ator has 12 minutes and 11 seconds. AMENDMENT NO. 5037, AS MODIFIED Mr. WELLSTONE. Mr. President, I may reserve the remainder of my time but, before I do, if I could, I ask my amendment be modified to effect the changes in page and line at the desk, necessary because of the adoption of the amendment of Senator MURKOWSKI. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment (No. 5037), as modi- fied, as follows: On page 52 of the bill, as amended by Mur- kowski amendment No. 5055, strike lines 15 through 16 and insert in lieu thereof the fol- lowing: ”(a) Notwithstanding any other provision of this Act (except subsection (b) of this sec- tion) or contract as defined in section 2 of this Act, the Secretary shall not accept title to spent nuclear fuel or high-level nuclear waste generated by a commercial nuclear power reactor unless the Secretary deter- mines that accepting title to the fuel or waste is necessary to enable the Secretary to protect adequately the public health or safe- ty, or the environment. To the extent that the Federal Government is responsible for personal or property damages arising from such fuel or waste while in the Federal Gov- ernment’s possession, such liability shall be borne by the Federal Government.” Mr. MURKOWSKI. I believe we have a half hour on our side, Mr. President? The PRESIDING OFFICER. That is correct. Mr. MURKOWSKI. It is my intention to yield to the distinguished Senator from Louisiana 15 minutes and the Senator from Minnesota 5, the Senator from Idaho 5, and I will use the other 5 at the conclusion. And that takes care of our side. The PRESIDING OFFICER. The Sen- ator from Louisiana. Mr. JOHNSTON. Mr. President, the amendment of the Senator from Min- nesota is based upon two profoundly wrong assumptions. The first assump- tion is that the Federal Government, acting through this Congress, has the right to take away vested rights of American citizens or American cor- porations. It is such an item of Hornbook law\u2014and I might add funda- mental fairness\u2014that vested rights are enforceable in the courts, that it hard- ly seems worthwhile to argue that. Nevertheless, having said it is not worthwhile to argue it, let me just quote from the Winstar decision of the U.S. Supreme Court, decided July 1, 1996, in which it says: The Federal Government, as sovereign, has the power to enter contracts that confer vested rights, and the concomitant duty to honor those rights. . .. If we allowed the government to break its contractual promises without having to pay compensation, such a policy would come at a high cost in terms of increased default pre- miums in future government contracts and increased disenchantment with the govern- ment generally. I could quote other equally persua- sive language from this decision. Mr. WELLSTONE. Will the Senator yield just for a moment? Mr. JOHNSTON. Yes. Mr. WELLSTONE. First of all, if the industry and DOE are correct, and the fund is sufficient, there would be no shortfall and there would be no dam- ages; is that correct? The estimates of the industry is that the fund is suffi- cient, and if that is the case, there would be no shortfall and therefore there would be no damages. If, in fact, there were damages\u2014let me just ask the Senator to respond to the first question. Mr. JOHNSTON. No, the Senator is wrong. First of all, damages would not be paid from the nuclear waste fund. Damages would have to be paid from the judgment fund, provided elsewhere. Mr. WELLSTONE. But Senator, by the very estimates you have made, by the very estimates that the utility companies have made, there would be no damages because you have said that the fund is sufficient. So there would be no damages. Mr. JOHNSTON. I have not said the fund is sufficient. DOE has said the fund is sufficient. And many nuclear utilities do not believe it is sufficient. But the sufficiency of the fund has nothing to do with the damages to which a utility would be entitled. The fund could be more than sufficient and a utility would be entitled to damages based upon whether the Government had violated a vested right. Mr. WELLSTONE. I thank the Sen- ator. Mr. JOHNSTON. Would the Senator agree with me, first of all, the Govern- ment has no right to violate a vested right of the utilities? Mr. WELLSTONE. My response would be, if it was decided by the courts that this amendment improp- erly breaches preexisting contracts, then presumably the utilities would be able to recover damages from the Gov- ernment. However, I want to point out one more time that if the industry and the DOE are correct, that the fund is sufficient, there would be no shortfall and therefore there would be no dam- ages. That would be up to the courts to decide. Mr. JOHNSTON. Let us take this one at a time. You agree with me the Gov- ernment has no right to take away vested rights, and would be liable for the violation? Mr. WELLSTONE. I have said, unless they pay damages. But I have also made it clear the courts would decide that and I have also made it clear that by the very estimates of the utility in- dustry, this is the very question that is in doubt, that there would be no dam- ages because there would be no short- fall. Mr. JOHNSTON. Mr. President, the Senator has answered my first ques- tion, which I think there is only one answer to, and that is the Government cannot violate contractual rights. The second question is what is the duty of the Federal Government with respect to nuclear waste? It so happens that the Court of Appeals for the Dis- trict of Columbia has decided that very question definitively and clearly on July 23, 1996. Here is what they have said. I hope the Senator from Min- nesota will not leave. What the deci- sion said, and it is very clear: Thus we hold that section 302(a)(5)(B) cre- ates an obligation in DOE, reciprocal to the utilities’ obligation to pay, to start dis- posing of spent nuclear fuel no later than January 31, 1998. Let me repeat that: . . . we hold that the Nuclear Waste Policy Act creates an obligation in DOE . . . to start disposing of the spent nuclear fuel no later than January 31, 1998. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00010 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9219 July 31, 1996 What the decision does is delineates between the duty of the Federal Gov- ernment to accept title, which the court clearly says is dependent upon the completion of a nuclear repository, and the duty to dispose of the spent nu- clear fuel on January 31, 1998, which is an absolute duty. So, come January 31, 1998, the Fed- eral Government must dispose of this nuclear waste, whether or not the facil- ity is complete. And, if the amendment of the Senator from Minnesota were agreed to, it would have nothing to do with the obligation of the Federal Gov- ernment to pay damages. The obliga- tion of the Federal Government to pay damages and the sufficiency of the nu- clear waste fund are two separate things. If, on January 31, 1998, the re- pository is not complete, and it will not be complete, and there are utilities which must build their own dry cask storage at their own expense, I believe it is clear, based on this decision of the court of appeals, that the Federal Gov- ernment would have to pay damages. Where they would pay the damages from\u2014I believe it would have to come from the damage fund and not from this, the nuclear waste fund, but that would be a separate item for the court to decide. But the point is, it is very clear that this amendment cannot succeed in doing what the Senator from Min- nesota says. The Senator from Min- nesota says that this amendment takes the burden off the taxpayers\u2014off the ratepayers, and puts it on the utilities. Mr. President, that cannot be. The utilities have vested rights, recognized by the Supreme Court as late as July of this year. This very month, the Su- preme Court has reiterated a very long- standing principle of law, which is that vested rights cannot be taken away by this Congress or by the courts. The utilities have a vested right to have the Federal Government dispose of their waste by January 31, 1998. You simply cannot take away that duty. I ask the distinguished Senator from Minnesota if he agrees with my inter- pretation of the court of appeals’ deci- sion rendered last week in that the Federal Government has an unqualified duty ”to start disposing of the spent nuclear fuel no later than January 31, 1998\u2033? Does the Senator agree with that? Mr. WELLSTONE. The court decision only deals with the statute, and we are changing law. I was out during part of the Senator’s presentation, and I think the part of the finding of the court that you did not read I will read when I have time. So I will come back to it. Mr. JOHNSTON. I am reading right here: Thus, we hold that the Nuclear Waste Pol- icy Act creates an obligation in DOE to start disposing of the spent nuclear fuel no later than January 31, 1998. Is there any disagreement with what I read in the decision? Mr. WELLSTONE. I don’t disagree with that. Mr. JOHNSTON. And the Senator would not disagree you can’t take away that right legislatively, can you? Mr. WELLSTONE. This doesn’t take away this right legislatively. Mr. JOHNSTON. Then how in the world can the Senator say they are transferring the duty of disposing of nuclear waste from the Federal Gov- ernment or the taxpayers and giving that to the utilities? Mr. WELLSTONE. There is a basic distinction. You are talking about pos- session, and I am talking about title. I did not say there wasn’t a commitment to change this in terms of possession. I read the findings of the original legis- lation, and I am telling you that when we had the original findings, the origi- nal bill, it was made very clear that, in fact, when it comes to title and when it comes to the actual liability of paying for this, this should be paid for by peo- ple who benefit from nuclear power, not by taxpayers across the country. Period. Mr. JOHNSTON. The decision of the court of appeals makes clear that they have a vested right to the title passing as of the time that the nuclear reposi- tory is built and not until that time, but they have the duty to dispose of the waste January 31, 1998. Is the Senator saying that their duty to dispose of the waste does not involve any responsibility, any duty to pay damages? Mr. WELLSTONE. Let me just read from the decision to put this to rest and the part you did not read: In addition, contrary to DOE’s assertions, it is not illogical for DOE to begin to dispose of SNF by the 1998 deadline and, yet, not take title to the SNF until a later date. Mr. JOHNSTON. What is the dif- ference in liability between having the duty to dispose of and in taking title? Mr. WELLSTONE. Dispose of has to do with possession, and title has to do with who pays for it. As a matter of fact, let me read for you, as long as this is on your time and not on my time, let me read for you\u2014 Mr. JOHNSTON. Well, I don’t want\u2014 Mr. WELLSTONE. The original find- ings of the bill that you wrote. Mr. JOHNSTON. I have limited time remaining. Mr. President, what the Senator is saying is so illogical. We have established that the Federal Gov- ernment has the duty to dispose of spent nuclear fuel, and the Senator is saying that that duty carries with it no responsibility to pay damages, no fi- nancial responsibility; that that some- how stays with the title. Mr. President, that is just not so. What the court said in the court of ap- peals’ decision is that they are with- holding the remedy until January 31, 1998, because the Federal Government would not have defaulted until that time. That is when the duty of the Fed- eral Government to dispose of the waste ripens, January 31, 1998. We cannot come in here and say, ”Well, we’re going to pass that duty on to the utilities because they are some- how at fault.” Mr. President, that is just so clearly not the law. I believe that it is simply not an argument that bears any weight at all. Mr. WELLSTONE. Will the Senator yield 1 minute? Mr. JOHNSTON. I will yield on your time. Mr. WELLSTONE. I appreciate it. Mr. JOHNSTON. On your time? Mr. WELLSTONE. That is right, for 1 minute. This does not say the Federal Government does not have the respon- sibility to take the waste. That is not this amendment. The Senator mischaracterizes this amendment. That is a straw-man or straw-person argument. This amendment deals with the whole question of liability. Mr. JOHNSTON. No; it does not\u2014\u2014 Mr. WELLSTONE. In the very court decision the Senator cited, the court did not find this to be illogical; they made that distinction. I am not argu- ing the Federal Government should not take responsibility. I believe we should live up to that responsibility. This is a question of whether or not taxpayers should have to pay for the liability of it. Mr. JOHNSTON. First of all, the Sen- ator’s amendment does not mention li- ability. Mr. WELLSTONE. This is not on my time. Mr. JOHNSTON. Or the taxpayers. It simply says who has title and the fact that title and responsibility are not the same thing. I reserve the remainder of my time. Mr. MURKOWSKI addressed the Chair. The PRESIDING OFFICER (Mr. THOMAS). The Senator from Alaska. Mr. MURKOWSKI. I yield 5 minutes to Senator GRAMS from Minnesota. Mr. GRAMS. Mr. President, I want to follow up on what the Senator from Louisiana was saying. Just last week, the courts reaffirmed what the Congress and also the Na- tion’s taxpayers have known since 1982 when this contract, this agreement was worked out, and that is, the Depart- ment of Energy has the legal obliga- tion to begin accepting nuclear waste by January 31, 1998. This ruling by the D.C. Circuit Court of Appeals, the second highest court in the land, marked a historic trans- formation in the nuclear waste debate. We are no longer discussing whether or not DOE has a responsibility to accept the waste, but how quickly we can move toward the final disposal solu- tion. As my colleagues know, the road- blocks have not been environmental or technological, only political. After nearly 15 years, and at a cost to the Nation’s electric consumers of $12 bil- lion, the courts appear to have finally cleared that path. So why are some of our colleagues still trying to raise new obstacles? Is it because they are opposed to finding a real resolution to this environmental crisis? VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00011 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9220 July 31, 1996 I cannot believe anyone would want to see nuclear waste continue to pile up in some 35 States, 41 if you include waste produced by the Government. Many of those States’ utility commis- sioners argue that the ratepayer had paid for the waste to be removed and stored at a single permanent site. It was the DOE’s failure to live up to its end of the bargain that led to the high- ly publicized lawsuit against DOE. The three circuit court judges con- curred with the States’ opinion and re- jected the DOE’s attempt to ”rewrite the law.” Even so, some of our col- leagues want to rewrite that law today. Such amendments reject the manda- tory obligation of the DOE to take title to the spent fuel in 1998. They are merely an attempt to rewrite the law under the guise that somehow rate- payers are different than taxpayers. By vilifying those customers who are served by nuclear power facilities, the opponents of nuclear power hope to refocus the debate. Hiding behind the cloak of so-called taxpayer protection, they refuse to acknowledge the fact that moving forward with a permanent disposable program is the best way to avoid a taxpayer bailout. In fact, entities as diverse as the Na- tional Association of Regulatory Util- ity Commissioners and the utilities themselves have calculated that enact- ment of S. 1936 would save $5 billion to $10 billion to the U.S. taxpayers\/rate- payers. What I find most disturbing is this false differentiation of electric cus- tomers served by nuclear utilities from the rest of the public. The idea that somehow these Americans reaped the benefit of low-cost power for years and are now somehow trying to get out of their obligation to pay for the waste is an affront to the citizens of this coun- try. Over the last decade and a half, Min- nesotans have paid nearly $250 million in exchange for the unmet promises that the DOE would permanently store our State’s nuclear waste. Again, the Nation has paid $12 billion, nationwide, into the nuclear waste trust fund. I be- lieve the ratepayers have now lived up to their end of the bargain and met their financial obligation. It is the DOE that has not. But what about those who have bene- fited indirectly from nuclear power? I am referring to the customers served by utilities that themselves do not own nuclear generating stations but that from time to time do purchase the low- cost nuclear power. Aren’t these the same taxpayers that opponents of this bill are seeking to protect? Yet don’t these individuals share some of the re- sponsibility? This issue is clearly ex- plained in the letter that I received from Minnesota Department of Public Service Commissioner Kris Sanda. Commissioner Sanda wrote: For reliability reasons, our Nation’s elec- trical grid is divided into several regional power pools. The Mid-Continent Power Pool serves our home state [of Minnesota, as well as] North and South Dakota, Nebraska, Iowa, portions of Montana and Wisconsin . . . In addition to ensuring the reliable deliv- ery of electrical energy, MAPP [as it is called] serves as a clearinghouse for spot and intermediate term market for energy and ca- pacity transactions . . . There are certain times of day and seasons of the year when energy from those plants is sold by [a nuclear generating facility] to other utilities in MAPP . . . So in other words, other areas of the country receive this power. It is without question . . . that all Min- nesotans benefit from [NSP’s] nuclear facili- ties, regardless of which utility provides their power . . . The same is true for virtually all con- sumers across the country, even those whose primary utility does not use nuclear fuel to generate electricity. Therefore, responsibility for funding a permanent storage site is clearly shared by all of the Nation’s power consumers. And Congress has the re- sponsibility for ensuring that DOE builds an environmentally sound facil- ity. Finally, Mr. President, I think it is important that our vote to reject this amendment will send a clear message that we reject these attempts by the antinuclear forces to portray as vil- lains the electric consumers served by nuclear generating stations. I urge my colleagues to support final passage of S. 1936. Mr. MURKOWSKI. How much time do we have? The PRESIDING OFFICER. The Sen- ator has 11 minutes. Mr. MURKOWSKI. Does the Senator from Minnesota wish to\u2014\u2014 Mr. WELLSTONE. A quick response to the Senator from Minnesota. Mr. MURKOWSKI. This is on the time of the Senator from Minnesota. Mr. WELLSTONE. That is correct. I will take my 11 minutes now, if it is all right. First, a quick response. This amend- ment has nothing to do with the Fed- eral Government living up to its com- mitment to take the waste. I am in favor of that. This amendment has to do with who pays the cost over 10,000 years; it has to do with tax liability. You cannot mix apples and oranges. Let me just yield to the Senator from Nevada for 1 minute, please. Mr. BRYAN. I thank the Senator. I call my colleagues’ attention to this. Under the Nuclear Waste Policy Act, the Department of Energy and the utilities entered into a contract. It is the contractual liability that becomes the issue as a result of the court’s deci- sion that the senior Senator from Lou- isiana referenced. Under the contract provision, the remedy is spelled out. If the delays are unavoidable, there is no liability in a financial sense. The schedule for re- ceiving shipment is adjusted accord- ingly. If it is determined that the De- partment of Energy has been respon- sible for the delay, an adjustment is made with respect to the fees that are paid into the nuclear waste trust fund. So those are the remedies that are pro- vided. I thank the Senator from Min- nesota for yielding me time. Mr. WELLSTONE. How much time is remaining for this Senator? The PRESIDING OFFICER. The Sen- ator has 2 minutes. Mr. MURKOWSKI. I yield 5 minutes to the Senator from Idaho, Senator CRAIG. Mr. CRAIG. Mr. President, I thank my chairman for yielding, and let me thank him for the work he has done on this legislation and the effort that has been put forth by the senior Senator from the State of Louisiana, to bring us to where we are at this moment. I do not oftentimes do this, but I think it is time to speak to the citizens of Minnesota, because their Senator has produced an amendment that in my opinion reverses a longstanding Government policy. This amendment purports to release the Government from its obligation to take the waste. The Senator from Minnesota calls this a taxpayers’ protection amend- ment. What he does not tell us is that it would nail the ratepayer, the rate- payers of his State. For instance, it would force the people of Minnesota who have already paid over $229 million into the waste fund to pay millions more to build more storage sites at their reactors. Minnesotans have al- ready paid twice. I believe the Wellstone amendment, if the courts upheld it, would force Minnesotans, who get 31 percent of their electricity from nuclear power, to pay again and again and again. Last week, the U.S. Court of Appeals ruled that DOE has an obligation, and that has been thoroughly debated by the Senator from Minnesota and the Senator from Louisiana. It is very clear what the court said. The obliga- tion exists. We will decide when the time comes that you have the responsi- bility to take it how you will take it. This amendment, in my opinion, is unfair and it changes the rules in the middle of the game. It damages tre- mendously the citizens of the State of Minnesota who have already invested heavily in what they believed was the Government’s role in taking care of this waste issue. In fact, the courts held that the Congress cannot change the contractual obligations of the Gov- ernment, precisely because it would not be fair. If we were to be able to do something like this, no one would ever sign a contract with the Federal Gov- ernment. Let me repeat: No one would ever sign a contract with the Federal Government if the Congress could come along, willy-nilly after the fact, and change the rules. This amendment is little more than an effort to kill the bill\u2014I do not think there is any doubt about it\u2014that is the source of 22 percent of our Nation’s electrical power and 31 percent of the electrical power for the State of Min- nesota. That would be, in my opinion, one of the worst environmental votes we could make. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00012 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9221 July 31, 1996 Minnesota nuclear power plants have reduced Minnesota’s carbon dioxide emissions by 3 million metric tons in 1995, and by 55 million metric tons from 1973 to today. Last year, nuclear power in Minnesota displaced 118,000 tons of sulfur dioxide and 53,000 tons of nitrogen oxide. Following Senator WELLSTONE’s pre- scription, if that is what the Congress chooses to do and what becomes law, could result in more emissions of acid rain and more carbon emissions than the climate could tolerate. Somehow we have to also talk about the tremendous advantage the citizens of Minnesota have received from the clean source of power, 31 percent of their power, the electrical power. Now, today, we are insisting by this legisla- tion, a process that allows us to adhere to what the courts have said is our con- tractual relationship with the rate- payers of our country who receive the benefits of nuclear power, and to do something positive for the environ- ment, to do something that will say this country is going to be responsible in the management of high-level nu- clear waste in a way that is optimum science, in a way that maximizes our pledge and our responsibility to the citizens of this country. I hope my colleagues will vote with me in tabling the Wellstone amend- ment. We need not kill the process. We need not stick the citizens of Min- nesota with additional millions and millions of dollars where they are going to be forced to either build addi- tional storage facilities or turn their lights out. I yield back the balance of my time. Mr. WELLSTONE. Mr. President, I speak, too, to the people of Minnesota, but will speak first of all to the Sen- ator from Idaho. Mr. MURKOWSKI. How much time is left on the other side? The PRESIDING OFFICER. The Sen- ator from Minnesota has 2 minutes, the Senator from Alaska has 61\u20442 minutes. Mr. WELLSTONE. I will take 1 minute to respond. The Senator wants it both ways. First he says the utility companies are absolutely right, the fund is sufficient to cover the costs. Now he is saying the ratepayers of Minnesota will have to pay all this additional money with his scare stories. First the utility companies say this fund is sufficient to pay the cost. So, if that is the case, Senator, there will be no additional cost. But if the fund is not sufficient, over 10,000 years, then, Mr. President, the question is, who pays the costs? People in Minnesota be- lieve that, as a matter of fact, the peo- ple who benefit pay the cost. I come from a State with a standard of fairness. Nobody wants to see an un- funded liability transferred by sleight of hand to taxpayers everywhere all across this country, period. As far as the environment is con- cerned, Senator, since you were a bit personal and I will not be too personal, I would be pleased to match my envi- ronmental record with your environ- mental record for the citizens of Min- nesota to look at any day. I reserve the balance of my time. Mr. JOHNSTON. Will the Senator yield 1 minute? Mr. MURKOWSKI. I yield 1 minute to the Senator from Louisiana and 1 minute to the Senator from Idaho. Mr. JOHNSTON. Mr. President, I think the Senator from Minnesota has another fundamental misconception and that is the question of the suffi- ciency of the fund. DOE has said they believe the fund is sufficient to build the repository. To quote them, ”The preliminary assess- ment which is still under management review, indicates the fee is adequate to ensure total cost recovery.” That means for building the repository. That is what DOE says. I, frankly, think it is probably not going to be sufficient, in my own view, but that is what they say. No one has said that the fund is suffi- cient to cover both the cost of damages to Northern States of power and other utilities all around the country and to also build the repository. That is pay- ing twice\u2014paying to the utilities for their own, what we call dry cask stor- age, and also building the repository at Yucca Mountain or wherever in the country they decide to build it. That is the fundamental misconcep- tion, Mr. President. If you have these damages caused by the delay that Con- gress puts in, then clearly the fund will not be sufficient to pay for that. Mr. MURKOWSKI. I yield to the Sen- ator from Idaho. How much time is remaining? The PRESIDING OFFICER. Five minutes remains. Mr. MURKOWSKI. I yield 2 minutes. Mr. CRAIG. I thank my chairman for yielding. This is not a question of whether the fund is sufficient. I agree with the Sen- ator from Louisiana. I have spent an awful lot of time studying, and when push comes to shove, obviously the amendment that the Senator from Minnesota would inject into it, the question becomes, is it sufficient or not? What I am talking about are utilities in Minnesota who no longer have stor- age facilities and had relied on the Government to take the high-level waste that they were paying for. My guess is that if this Senator’s amend- ment passes, that comes into question. Do you turn the power off or do you build additional storage facility? Mr. WELLSTONE. Will the Senator yield? Mr. CRAIG. No, I will not yield. The Senator has his own time. My point is simply this: If you have changed the contractual relationship, then you have changed the obligations. If you do that, somebody else has to pay. Who has been paying in Min- nesota? The ratepayers. Who would pay under the amendment of the Senator from Minnesota? The ratepayers. That is what I believe thorough study of this amendment would cause if it were to become law. Mr. MURKOWSKI. Mr. President, I think it is important to recognize we had a very clear understanding. A deal was made, the ratepayers would pay a fee and the Government would take title of the waste, period. That was the arrangement. We cannot and we should not at this time revisit this decision in an attempt to retroactively change the deal. That is basically the basis for the amend- ment from my friend from Minnesota. Mr. President, the decision that the Government would undertake the obli- gation to take title was made in a pre- vious Nuclear Waste Policy Act and is part of the contract. The utility rate- payers have paid the fees under the contract, and again the Government simply has to live up to its end of the bargain. The Government already has title to large amounts, large amounts of spent fuel and waste that will be stored in these facilities. As a practical matter, the Government will be the deep pock- et for liability for these facilities, even if did not take title to civilian fuel. We have competition and the realiza- tion that competition brings increased uncertainty to the electrical industry. That is just a fact of business. The util- ities are the corporate entities and they cease to exist. That is the reason why the Government agreed, wanted and felt compelled to take title to spent fuel in the first place. The Gov- ernment will own and operate these fa- cilities. It is unfair now for the utility ratepayers to be on the hook for a li- ability for facilities that they have simply no control over. So I, again, suggest to the Senator from Minnesota that the Minnesota ratepayers have already paid twice. The Wellstone amendment, if the Court upheld it, would force Minnesotans who get, I might add, 31 percent of their electric energy from nuclear power, to pay again and again and again. If Minnesota were to lose its depend- ence on nuclear energy, what would be the alternative? I think the Senator from Idaho indicated that, last year, nuclear power in Minnesota displaced 118,000 tons of sulfur dioxide, 53,000 tons of nitrogen oxide, and there is simply no other alternative, if Minnesota were to lose its dependence on nuclear en- ergy, other than to generate power from fossil fuel. It is fair to say that, again, Min- nesota nuclear power plants have re- duced Minnesota’s carbon dioxide emis- sions by 3 million metric tons by 1995 and, I think, 55 million metric tons since 1973. What is the alternative to this if we don’t have the nuclear capa- bility that so many\u2014roughly a third\u2014 Minnesota residents depend on? Mr. President, has all time expired on the amendment? The PRESIDING OFFICER. The Sen- ator’s time has expired. The Senator VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00013 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9222 July 31, 1996 from Minnesota has 1 minute remain- ing. Mr. WELLSTONE. Has the Senator completed his remarks? The PRESIDING OFFICER. Yes. Mr. WELLSTONE. Mr. President, this amendment has nothing to do with the Government’s obligation to take possession of the waste. I think the Government should. But if the fund is insufficient, somebody will have to pay for that shortfall, and that somebody is the person who holds title to the waste. DOE will have possession under my amendment, but the utilities will re- tain the title. My colleagues have confused this. Of course, DOE will have possession. But the utilities will pay the title. This is not, Minnesotans and all the people across the country, about turning the lights off. That is not what this amend- ment is about, and my colleagues know it. It is about making sure that tax- payers don’t get stuck with this un- funded liability. The PRESIDING OFFICER. All time has expired. Mr. DOMENICI. Mr. President, I move to table the pending amendment and ask for the yeas and nays. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. The PRESIDING OFFICER. The question is on agreeing to the motion to table the amendment of the Senator from Minnesota [Mr. WELLSTONE]. The clerk will call the roll. The assistant legislative clerk called the roll. The PRESIDING OFFICER (Mr. ASHCROFT). Are there any other Sen- ators in the Chamber desiring to vote? The result was announced\u2014yeas 83, nays 17, as follows: [Rollcall Vote No. 257 Leg.] YEAS\u201483 Abraham Ashcroft Bennett Biden Bingaman Bond Bradley Breaux Brown Bumpers Burns Campbell Chafee Coats Cochran Cohen Conrad Coverdell Craig D’Amato DeWine Dodd Domenici Dorgan Faircloth Feinstein Ford Frahm Frist Glenn Gorton Graham Gramm Grams Grassley Gregg Hatch Hatfield Heflin Helms Hollings Hutchison Inhofe Inouye Jeffords Johnston Kassebaum Kempthorne Kennedy Kerrey Kerry Kohl Kyl Lautenberg Levin Lieberman Lott Lugar Mack McCain McConnell Mikulski Moseley-Braun Murkowski Nickles Nunn Pressler Pryor Robb Roth Santorum Sarbanes Shelby Simon Simpson Smith Snowe Specter Stevens Thomas Thompson Thurmond Warner NAYS\u201417 Akaka Baucus Boxer Bryan Byrd Daschle Exon Feingold Harkin Leahy Moynihan Murray Pell Reid Rockefeller Wellstone Wyden The motion to lay on the table the amendment (No. 5037) was agreed to. The PRESIDING OFFICER. The Sen- ator from Alaska is recognized. Mr. MURKOWSKI. Mr. President, I move to reconsider the vote. Mr. THURMOND. I move to lay that motion on the table. The motion to lay on the table was agreed to. AMENDMENT NO. 5051 Mr. MURKOWSKI. Mr. President, I call up an amendment, No. 5051, which is at the desk. I ask it be stated. The PRESIDING OFFICER. The clerk will report. The legislative clerk read as follows: The Senator from Alaska [Mr. MURKOWSKI] proposes an amendment numbered 5051. Mr. MURKOWSKI. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: Strike section 501 and insert in lieu thereof the following: ”SEC. 501. COMPLIANCE WITH OTHER LAWS. ”If the requirements of any Federal, State, or local law (including a requirement im- posed by regulation or by any other means under such a law) are inconsistent with or duplicative of the requirements of the Atom- ic Energy Act of 1954 (42 U.S.C. 2011 et seq.) or of this Act, the Secretary shall comply only with the requirements of the Atomic Energy Act of 1954 and of this Act in imple- menting the integrated management sys- tem.”. Mr. MURKOWSKI. Mr. President, this amendment contains the language previously filed by Senator CHAFEE as amendment No. 4834. This amendment originally suggested by Senator CHAFEE would soften the existing pre- emption language in the bill to clarify that only when another Federal, State, or local law is inconsistent, that is, when another Federal, State, or local law is inconsistent or duplicative with this act, then this act will govern. Oth- erwise, all previous applications of both State and Federal environmental or safety statutes continue to apply. What we have attempted to do here is craft an amendment to ensure that there will be adequate oversight of all Federal and State and local laws, un- less they are an obstacle to carrying out the act, because the act itself stip- ulates that there shall be an interim storage site at Yucca Mountain under specific conditions. Some have ex- pressed concern that this language could be interpreted to provide preemp- tion of other laws in cases where com- plying with those laws were simply in- convenient or impractical. That is not the case, and it does, I think, strain the interpretation of the bill. However, in order to address these questions, we are offering this amend- ment that was suggested by Senator CHAFEE. This language provides the De- partment of Energy must comply\u2014 they must comply\u2014again, with all Fed- eral, State, and local laws unless those laws are inconsistent with or duplica- tive of the requirements of S. 1936. There is an effort to, if you will, dis- guise by generalities the intent of this bill. But it mandates compliance, again, with all Federal, State, and local laws unless they are inconsistent or duplicative, duplicate the require- ments. The Nuclear Waste Policy Act of 1996 contains a carefully crafted regulatory scheme that applies to this one unique nuclear waste storage facility. Think about that: This is consistent because there is no other such facility in the country. So the policy act contains words crafted relative to the regu- latory proposal that applies to only this one, unique, nuclear waste storage facility. Since we have no other, this is designed specifically for this facility. So there is no applicability to any other facility. Our general Federal, State and local laws are intended to apply to every sit- uation generically. So it is only appro- priate that we clarify that where those general laws conflict with this very specific law that we are designing for this interim storage site, that we have carefully drafted, with the input of many concerned people, the provisions of this law, of this act, will control the process. The vast majority of other laws will certainly not be subject to being super- seded and will be complied with. A sug- gestion that the Department of Energy should be forced to attempt to comply with laws that conflict with this act will simply open it up to spending years of litigation on which provisions apply and is simply a recipe, Mr. Presi- dent, for unnecessary delays at the ratepayers’ and taxpayers’ expense and I think would provide full employment for a significant number of lawyers in this country. So I think as we attempt to address the merits of this amendment, we rec- ognize that this is designed to address concerns that somehow this legisla- tion, as crafted, will not cover ade- quately all Federal, State and local laws of an environmental nature that are, obviously, designed for the protec- tion of the public. Mr. President, I retain the remainder of my time and ask if my good friends from Nevada would like to have some time running. If there is any other Sen- ator here who would like to be heard on this amendment, I would appreciate it if they will advise the staff, and we will attempt to accommodate them on time. Mr. BRYAN addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Nevada. Mr. BRYAN. Mr. President, I yield myself 15 minutes. Mr. President, I believe it will be helpful for our colleagues and staffs lis- tening in, because these two amend- ments have been described in the ab- stract. I acknowledge and confess that it has been a number of years since I attended law school, but I must say, VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00014 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9223 July 31, 1996 not even a flyspeck lawyer could make a meaningful distinction between these two provisions. Let me read them, because they are quite simple. Under the language of the amendment that was offered earlier today and was approved by the body, section 501 deals with compliance with other laws. So here is the present state of the legislation as we debate it. It is only a couple of paragraphs, so I think it important it be understood: If the requirements of any law are incon- sistent with or duplicative of the require- ments of the Atomic Energy Act and this Act, the Secretary shall comply only with the requirements of the Atomic Energy Act and this Act in implementing the integrated management system. Any requirement of a State or political subdivision of a State is preempted (1) if complying with such requirement and a re- quirement of this Act is impossible; (2) that such requirement, as applied or enforced, is an obstacle to accomplishing or carrying out this Act or regulation under this Act. So, in effect, what the bill currently does is it bifurcates, it makes reference to Federal laws and then it talks about State preemption. But the operative language with respect to Federal law under the current state of the bill is that if any requirement of any law is inconsistent with the provisions of this act, it shall not apply. By any plain reading of the language that is contained, any reasonable inter- pretation, that is, in point of fact, a Federal preemption. The second part of the existing bill deals specifically with State preemp- tion and has those two provisions. If it is impossible, then you don’t have to comply with it and, second, if it is an obstacle to accomplishing or carrying out the act, you don’t have to comply with it. Here is the so-called amendment that changes all of that, that solves it that deals with the issue. Section 501, which is the amendment offered by our friend from Alaska, says as follows: If the requirement of any Federal, State or local law, including a requirement imposed by regulation or by any other means under such law, are inconsistent with or duplica- tive to the requirements of the Atomic En- ergy Act or of this Act, the Secretary shall comply only with the requirements of the Atomic Energy Act of 1954 and this Act in implementing the integrated management system. Mr. President, I say to my col- leagues, it could not be clearer. One does not have to go to law school to understand that if any other provision of the law is inconsistent with this bill, it does not apply. What provisions are we talking about? We are talking about the entire framework of the environmental laws in America that have been enacted since the early 1970’s. And lest this de- bate be deemed to be of a partisan na- ture\u2014and I assure my colleagues it is not\u2014many of those provisions were en- acted under the Presidency of Richard Nixon. Here is what we wipe out: If, for ex- ample, the Clean Air Act is incon- sistent with the bill that we are going to be asked to vote on for final passage later on today, the entire Clean Air Act does not apply. If the Clean Water Act has any provi- sion that is inconsistent with the pro- visions of this act, it does not apply. If the Superfund law has any provi- sion inconsistent with the provisions of the bill that we are being asked to vote on, it does not apply. If the National Environmental Policy Act contains any provision that is in- consistent with the provisions of the bill that we are going to be asked to vote on, it does not apply. If FLPMA, the Federal Land Policy and Management Act, has any provi- sion inconsistent with this bill, it does not apply. Think about that for a moment. This is truly a nuclear utility’s dream. In ef- fect, these provisions that are the framework of our environmental policy in America, most of which have been enacted over the past two decades, that none of these, not a one, not one has any force of law whatsoever if it is deemed to be in conflict with the provi- sions of this act. I know that a number of my col- leagues have been persuaded, and I re- gret that fact, that there is a great ur- gency and imperative to move nuclear waste. This is all, in my opinion, part of a fabricated, as the Washington Post concluded, contrived argument. They have been at this now for 16 years. If we were looking at the CONGRES- SIONAL RECORD of this very week in 1980, my colleagues, I think, would be surprised, because the thrust of the ar- gument is identical: ”Hey, we’ve got to have this, we’ve got to have it right away. Waive the acts, waive the laws, we have to get this going.” In point of fact, I call this to my col- leagues’ attention. CONGRESSIONAL RECORD, July 28, 1980, 16 years ago: Mr. President, this bill deals comprehen- sively with the problem of civilian nuclear waste. That sounds familiar. It is an urgent problem\u2014 That kind of sounds familiar, too, doesn’t it? Mr. President, for this Nation. It is urgent, first, because we are running out of reactor space at reactors for storage of the fuel, and if we do not build what we call away-from-re- actor storage\u2014 That is a little different. We call it interim storage now, but away-from-re- actor storage is the same basic con- cept\u2014 and begin that soon, we could begin shutting down civilian nuclear reactors in this coun- try as soon as 1983, those predictions coming from the Nuclear Regulatory Commission and the Department of Energy. That is 1980. As of 1983, 13 years ago, not a single nuclear utility in America has shut down because it has run out of space. So when we use ”contrived” and ”fab- ricated,” that is precisely the language to describe it. That is why every environmental or- ganization in America that I am aware of has examined the preemption sec- tions and have concluded that it would be bad, bad public policy. From the Si- erra Club to public-interest groups to Citizen Awareness to the League of Conservation Voters, and many, many more. So I hear my colleagues often talk about this, the proponents of this bill, that this is an important piece of envi- ronmental legislation. Let me be clear. This is an important piece of environ- mental legislation, yes, because it would be a disaster repealing, by impli- cation and by expressed language, all of the provisions that have been en- acted for more than a quarter of a cen- tury as it relates to this process. So that is why in a letter that has been sent to the Democratic leader, the administrator of the Environmental Protection Agency, Ms. Browner, has specifically referenced the fact that this would be a preemption. I quote her letter when she indicates: EPA is also concerned with provisions of S. 1936 and the substitute amendments\u2014 The one that we are addressing right now\u2014 which preempt the environmental protec- tions provided by other environmental stat- utes. Section 501 in the bill and amendment preempts all Federal, state, and local envi- ronmental laws applicable to the Yucca Mountain facility if they are inconsistent with or duplicative of the [specific piece of legislation we are talking about]. So I think that the colleagues who want to say to themselves, well, in this debate who has more credibility with respect to whether or not this is pre- emption? The agency under the law, the Environmental Protection Agen- cy’s Administrator has been very clear. It is clearly a preemption. The environ- mental organizations in America who have looked at this all have concluded that it is a preemption and, for that reason, would be an environmental dis- aster. But may I say, just plain ordinary English, just read it. It could not be clearer. ”If the requirements of any Federal, State, or local law (including a requirement imposed by regulation or by any other means under such a law) are inconsistent with or duplica- tive of the requirements of the Atomic Energy Act * * * or of this Act, the Secretary shall comply only”\u2014only\u2014 ”with the requirements of the Atomic Energy Act * * * and of this Act * * *.” So, Mr. President, I think it is be- yond refutation, beyond argument. Why is that important? My colleague from Nevada, in a moment, will expand upon one aspect of that, and that is the transportation issue. Let me just say, to give a little fla- vor of this, that it is contemplated, under this piece of legislation that would create an interim storage facil- ity, that 85,000 metric tons of fuel would be shipped from existing com- mercial reactors and transported to the Nevada test site in Nevada. That is about 6,200 shipments by truck, about 9,400 by rail. Some have indicated those numbers understate the amount. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00015 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9224 July 31, 1996 Each truck cask weighs 25 tons, each rail cask up to 125 tons. Each rail cask\u2014that is the one that is 125 tons\u2014 contains the radiological equivalent, in terms of long-life radiation, of 200 Hiro- shima bombs. So when we refer to this as a ”mobile Chernobyl,” this nuclear waste is rolling through your commu- nity. My colleague will address that in more detail. Fifty-one million Ameri- cans live within 1 mile of one of the rail or highway transportation routes that would be involved in the trans- shipment of these 85,000 metric tons. I may say that my friend from a pre- vious life\u2014the distinguished occupant of the chair\u2014his State knows well the circumstance because his predecessors, in the aftermath of Three Mile Island, were very much involved in a debate because much of that waste would have gone through the St. Louis metropoli- tan area. I just say that the transportation route which I know my friend fully un- derstands contemplates 6,000 shipments that will move through St. Louis, just to cite one particular State and a large metropolitan area that would be ex- posed to this risk. Let me just repeat, before yielding to my colleague, that each one of those rail casks, 125 tons, with the radioactive equivalent of 200 Hiroshima-sized bombs\u2014now, admit- tedly, the truck casks are slightly dif- ferent; they are 25 tons\u2014so let us say that each one of those shipments roughly would contain the equivalent of 40 Hiroshima-sized bombs in terms of the amount of long-lived nuclear radi- ation that would be involved. So when we are talking about pre- empting all of these laws, this is not just a law school or academic or eso- teric issue. This is something that has been designed by Democrats and Re- publicans alike over a quarter of a cen- tury and is designed to protect Ameri- cans everywhere\u2014everywhere. We are talking about 43 States that would be involved in this transportation route. So I know that many of our colleagues have heard our arguments and are per- haps weary of them. But let me urge them to look at these preemption provisions. They are antienvironment. They are opposed by every environmental organization in America. We are not just talking about some technical, abstract proposition. We are talking about the full panoply of environmental laws designed to pro- tect all Americans. Very clearly, what the amendment offered by the Senator from Alaska would do, it would do the same, in my view, as the language in the present bill and simply say that, if any of these provisions conflict in any way with the provisions of this act, they simply are to be ignored and set aside. I reserve the remainder of my time, and yield the floor. Mr. MURKOWSKI. We have one-half hour remaining. Senator JOHNSTON has indicated that he would like to respond very briefly for 2 minutes, and then I intend to recognize the Senator from North Carolina for approximately 5 minutes. The PRESIDING OFFICER. The Sen- ator has 24 minutes remaining. Mr. JOHNSTON. I thank my col- league for yielding. I want to briefly reply to a statement that was made a little earlier by the Senator from Nevada, quoting me a few years back saying that nuclear power- plants were running out of space. The fact of the matter is, that statement was true. What has happened since that time is two things. First, there has been a reg- ulatory and technological change in al- lowing what is called reracking or a greater density of nuclear rods in the swimming pools, using more boron and a change in licensing. The change in licensing, obviously, was not under the control of the utili- ties, and they have allowed that. I might say that is now at its maximum. Some would say that the NRC is flirt- ing with the safety question by allow- ing such density of reracking. But, in addition to that, Mr. Presi- dent, some utilities have been forced to buy their own dry cask storage at great expense. The Surry VA nuclear plant has been required to do so, the Calvert Cliffs plant in Maryland has been re- quired to do so, and Northern States Power in Minnesota has been required to do so. As mentioned earlier, according to the decision just rendered by the D.C. Court of Appeals, that will become, on January 31, 1998, the responsibility of the Federal Government to pay for. That is really what is at issue here in the interim storage. That is, if we do not build interim storage, then the Federal Government is going to have to pay for the dry cask storage on site for a host of utilities, not just the three which have it now, but for a host of utilities all around the country. So, ratepayers and taxpayers will be paying twice, first, with the nuclear waste fee, and, second, with the dam- ages which will be assessed to the Fed- eral Government to pay for the dry cask storage. That $5 billion additional fee for damages to the Federal Govern- ment can and should be avoided. That is what we seek to do in this legisla- tion. I thank my colleague. The PRESIDING OFFICER. The Sen- ator from North Carolina is recognized. Mr. FAIRCLOTH. Mr. President, if ever we have had a commonsense solu- tion to a complex problem come through the Senate, it is S. 1936. It is a sensible way to deal with the high-level radioactive waste that has been accu- mulating in 110 commercial nuclear units throughout the country. Regrettably, Mr. President, this bill has been met with wave after wave of opposition based on emotion and ulte- rior motives rather than the true sci- entific facts of what we are dealing with. It is now time for this Senate to stand up and make workable decisions using the facts, those facts that we know and have been proven, and ignor- ing the conflicting rhetoric, no matter how loudly it is expressed. As chairman of the Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety, I am fully con- fident S. 1936 is a proper approach that will ensure the storage, disposal, and transportation of spent nuclear fuel and will be accomplished under all nec- essary safety requirements. Mr. President, it has been brought up that safety is not really the issue here. Opponents wish to use safety as a stalking horse, because by keeping spent fuel in a state of uncertainty, they can argue that no more nuclear plants should be built and current plants should be closed. The strategy is very simple: Confuse the debate when you do not have a le- gitimate argument. This is really not about disposal of spent fuel. What we are really talking about here is the fu- ture of nuclear energy as a generator of power in this Nation. The Federal Gov- ernment has a legal responsibility to take the utilities’ spent fuel. This is a legal responsibility. Last week, the U.S. Court of Appeals for the District of Columbia cited the Department of Energy must begin ac- cepting this waste by January 1, 1998, an obvious ruling considering the clear requirements of the Nuclear Waste Pol- icy Act of 1982. It seems that just about everybody understands this except the Department of Energy. Taxpayers are not paying for spent fuel disposal. Fulfilling their part of the bargain, electric utility customers have contributed $12 billion into the nuclear waste fund, $344 million from North Carolina alone. Now, it is time for the Federal Government to live up to its part of the bargain. Utilities do not have enough onsite spent fuel storage space to permit elec- trical production to continue for the entire life of their plants, which is 40 years, and possibly many, many more. The Federal Government has to fulfill its responsibility and start taking the spent fuel. If we continue to accept delays, inex- cusable delays that have plagued this program, the same utility customers will be forced to pay twice and finance the expansion of new construction at existing plants to store spent fuel. Those who advocate delaying central- ized storage believe it is better, in- stead, to store spent fuel at 110 nuclear units around the country than in one area. If ever there was a false idea as to the safety of storing it, it is to have it in 110 different locations. Mr. President, let me address the concern that has been raised about the transportation of nuclear fuel. The Federal Government currently trans- ports spent fuel from foreign research reactors in the name of reducing the risk of proliferation. We do it very well. The Navy moves spent fuel for temporary storage in Idaho, and utili- ties transport fuel between stations. Transporting and storing fuel is one of the few things we do very well. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00016 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9225 July 31, 1996 There is absolutely no reason for any further delay, and there are many com- pelling reasons to move forward. There is absolutely no reason to delay any further. There are many compelling reasons we need to move forward. We must pass S. 1936 to demonstrate fiscal responsibility and to fulfill the prom- ises made by the U.S. Government on which, in good faith, the Nation’s elec- trical utility customers have relied. Once again, let me repeat, this is not about the waste. It is not about the dis- posal of nuclear waste. It is about the future of nuclear energy in this coun- try. That is what the opposition is fighting. The PRESIDING OFFICER. The Sen- ator from Idaho controls 15 minutes and 45 seconds, and the other side has 15 minutes. Mr. REID. Mr. President, if anyone has any question about where the money is on this issue, where the big lobbyists stand, all we need to do is walk out this set of doors to my right prior to the next vote being called and you will find a sea of lobbyists. This is one of the heaviest lobbying jobs we have ever seen. There are always promises about this bill, through the various incarnations of the legislation, that it is going to get better. Mr. President, 1271 was in- troduced. They said it was not quite good enough and tried to make it bet- ter. Thereafter, 1936 was introduced and they said it was a better bill. Now we have a number of substitutes that allegedly will make it better. None of them make it better. I have been a member of the Environ- ment and Public Works Committee my entire time in the Senate. I love work- ing on that committee. I have served as chairman of the subcommittee that dealt with chemicals and pesticides. We held significant hearings on a drug called Alar, put on apples, grapes, cher- ries, to prolong their lifetime. It was poisonous. It made people sick, we be- lieved, and is no longer used. We had hearings on lawn chemicals, fungicides. Mr. President, I am, almost for lack of a better word, offended by someone saying that this amendment will ease the environmental laws. The environ- mental laws are preempted. They take away all the Federal laws, laws we have worked on. I cannot imagine, for example, the chairman of the full com- mittee thinking that legislation like this is good, legislation that I know he has fought for on a bipartisan basis, in- cluding the Clean Water Act, Clean Air Act, Safe Drinking Water Act, Super- fund\u2014these laws are all preempted by S.1936. My colleague, the Senator from Ne- vada, did a good job of explaining why this does not answer the problems. It is as bad with this amendment as without the amendment. We have talked about this legislation being unnecessary, and it is unneces- sary. The Nuclear Waste Technical Re- view Board is not biased toward either side. A group of 12 scientists, eminent scientists, said that transportation of nuclear waste at this time is unneces- sary and wrong. Their conclusions were driven by careful and objective exami- nations of all the issues. They con- cluded that centralization of spent nu- clear fuel, high-level nuclear waste, makes no technical sense, no safety sense, or financial sense. They found that there is no need for off-site interim storage. They also de- cided that transportation under this bill is extremely risky. Why do they say that? They say it because it doesn’t permit what is absolutely necessary\u2014 that is, planning and preparation to make sure that the public health and safety is protected during this massive undertaking. Mr. President, we are not talking only about the people of Nevada, we are talking about the residents of 43 States. Nobody ever responds to the transportation issue. People are con- cerned in this Chamber about garbage being hauled across State lines. I don’t know how many sponsors there are on the legislation, but I am one of those that think there should be some rules about transporting garbage. Well, this is real garbage. This is real garbage. This is worse than any plastics, or paper, or hazardous waste that you might throw in the garbage. This is real garbage. In the past, we have had roughly 100 shipments per year of nuclear waste, but they have gone short distances, and most of these were between various places in the eastern part of the United States in reprocessing facilities. Mr. President, this legislation is a concern to people all over the country. I received in my office a letter from someone in St. Louis, MO. I did not ask for the letter. I got it in the mail. A resident of St. Louis, MO, sent to me in the mail a newspaper from St. Louis. It is dated the middle of June. This news- paper is the Riverfront Times. One of the lead stories in this publication is ”Gateway to the Waste, Not to the West.” This article says a number of things. One of the things it says is this: No matter how slim the odds of an acci- dent, the potential consequences of such a move are cataclysmic. Under the plan, tons of radioactive materials would likely pass through the St. Louis area by either truck or rail a few times a week for the next 30 years. We guess about 6,000 truck and train loads would pass through this site. The article goes on to say: Each cask would contain the radiological equivalent of 200 Hiroshima bombs. Alto- gether, the nuclear dunnage would be enough to kill everybody on earth. That is why people all over the coun- try are concerned about this nuclear poison. ”Safety last” is the hallmark of this legislation. This is not a Nevada issue; it is a national issue. Why? It is a national issue because we have train wrecks that have occurred all over the United States. Look at these pictures. Here is one in Ledger, MT. If you want to talk about a wreck, this is a real wreck. This is a mutilated train outside Ledger, MT. We also had one thousands of miles away, a recent train wreck that oc- curred in Corona, CA. This closed down I 15 for about 4 days, off and on, which is the main road between Los Angeles, CA, and Las Vegas, NV. Fire burned for a long period of time. Also, Mr. President, we had a train wreck that occurred in Alabama a lit- tle over a year ago. Some of the people watching this will remember. A barge, in effect, nicked this train trestle, and the next time the train went through, it did not go all the way through. It dumped people in the river, killed peo- ple. People are concerned about transpor- tation, and they should be concerned about transportation, because we have been told by those who know that we should not be transporting nuclear waste. There is no need to do it. The Nuclear Technical Review Board said there is no reason to do it. They are 12 nonpartisan scientists who are trying to do the best thing for the country. Mr. President, this spent nuclear fuel\u2014we talk about Nevada, but it originates someplace. We have here a chart that we will talk about later. It shows the funnel effect of transpor- tation. Thousands, tens of thousands of loads of spent nuclear fuel will be shipped and eventually wind up in a tiny spot in Nevada. But in the process of getting there, these thousands of shipments will go into 43 different States. Mr. President, these shipments start somewhere. They don’t start in Ne- vada. We don’t have nuclear fuel. This is a risk to all States of the United States, not just Nevada. The industry and the sponsors of this bill would like you to believe that transportation is risk free. Well, it isn’t. There have been truck and train accidents involv- ing all kinds of things, including nu- clear waste. We have been fortunate that there has not been a great disper- sion of this nuclear poison. There will be more accidents because there will be tens of thousands of more loads of this. The industry will tell you that the probability of an accident is not great. Well, probabilities have an inevitable result, and if you push them long enough, the adverse will occur. The day before Chernobyl, the probability of such an accident was extremely low. The accident happened and the con- sequences were enormous. Now, the probability of another one is much more significant than it was. The same potential exists here. Mr. President, under this legislation, as the Nuclear Technical Review Board said, we have not made the necessary investments to assure capable re- sponses to accidents. I talked about a few of these train wrecks. We know that if they are moved, they are sub- ject to terrible violation. We know that the casks have been developed to be protective of fire. Yes, fire for 30 min- utes. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00017 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9226 July 31, 1996 We know that recently\u2014in fact, last year\u2014we had a train that burned for 4 days. What will a cask do that is safe for 30 minutes of exposure to fire at temperatures of 1475 degrees? Well, it is pretty tough to understand that when we know that diesel fuel burns at an average temperature of 1800 degrees. Most of the trucks and trains use die- sel fuel. Diesel fuel has had occurrences where the heat was 3200 degrees Fahr- enheit. So why only 30 minutes? Why 1475 degrees? It simply will not protect us, Mr. President. They also say, well, you can get in a wreck\u2014they have a little film in the industry, which they will show you. You will see this truck firing down and the cask shoots off of it. Well, the casks are safe if the acci- dent occurs if you are only going 30 miles an hour. If you are going faster, you have big problems. The cask will break, and you are in trouble. I don’t know how many would think that this train accident here occurred when the train was going 30 miles an hour. The damage to this vehicle had to have occurred at more than 30 miles an hour. We all know\u2014because we have watched trains go by\u2014that trains do go 30 miles an hour once in a while, but not very often. So having protection at 30 miles an hour simply doesn’t do the trick. We have residents, Mr. President, along this route\u2014over 50 million of them\u2014within a mile of where this poi- son is going to be carried. The term ”mobile Chernobyl” has been coined for this legislation, and rightfully so. A trainload of waste may not contain the potential that Chernobyl provided\u2014 with death and destruction in its wake, and people are still dying from that \u2014but the risk is still there. People know the risk of this poison. This is something that we have talked about early on, about people waiting after one of these accidents to find out what dreaded disease they are going to get. The odds are that they will get something. We have had that experi- ence in Nevada. We know that the above-ground nuclear tests made a lot of people sick, Mr. President. Most of the downwinders were in east-central Nevada and southern Utah. They got real sick. So transportation is some- thing that has not been answered, it has not been responded to, and it should, because transportation of nu- clear waste is something that we sim- ply do not know how to do yet. Mr. CRAIG addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Idaho, [Mr. CRAIG] is recog- nized. The Senator from Idaho has 15 minutes 16 seconds. Mr. CRAIG. What remains on the other side? The PRESIDING OFFICER. The Sen- ator from Nevada has 2 minutes 11 sec- onds remaining. Mr. CRAIG. Mr. President, will you signal me when I have spoken for 10 minutes? Mr. President, we have heard a series of statements by my colleague from Nevada that I think the least you could say about is that they were subtly in- flammatory. The worst you can say about them is that they are shocking; alarming. The only problem is, if they were true, they might be that. But they are not true. Science argues it, the law argues it, and the facts argue it. There is nothing worse than a pic- ture of a train wreck which my col- league from Nevada has put forth; very dramatic. If there had been a cask of spent nu- clear fuel in the middle of that train wreck, it would still be there and it would be whole and it would be unbreached. That is the evidence. While my colleague from Nevada would argue that these tests are at 30 miles an hour, what it shows is that, in speeds in excess of 150 miles an hour, there might be a potential of breach. My colleague from Nevada is right. You rarely see a train that moves less than 30, although I have never seen one moving at 150. Mr. REID. Mr. President, will the Senator yield for a question? Mr. CRAIG. I am happy to yield for a question; a question, not a statement, or I will take my time back. Thank you. Mr. REID. Will the Senator inform me and the rest of the Senate where the 150 miles an hour information comes from? Mr. CRAIG. The 150 miles an hour we talk about in relation to the science that was developed to an ”unyielding surface.” I believe that is the term that is used in the test. That was the result of the calculation which was a product of Sandia National Labora- tory, so, I guess I could say, from the best engineers in the country who know how to look at the science and the engineering involved and come up with those calculations. The most I can say\u2014and I think my colleagues deserve to hear this\u2014is that the language that has been offered and the statements that have been offered this afternoon by my colleague from Nevada as it relates to transportation are simply misleading. By the way, when you talk of Chernobyl or you talk of Hiroshima and you talk of explosions, casks do not explode, period. There is no one in the scientific field today who would make that argument. If they were breached, they would release radioac- tivity, but they do not explode, and it is unfair to in any way paint the verbal picture that that kind of risk would be involved. What the paper from Missouri did not say was that waste now traffics through St. Louis, MO, and it has for a good number of years in its route across the country to the State of Idaho, or to other States where the waste ultimately finds a temporary storage destination. So for this to be something new in the city of St. Louis is not true. What is important to say about it is that in all the years that it has been trafficked by our Federal Government, there have been no accidents that resulted in any radioactive spill. That is what is im- portant to understand here. I think that is the issue that is so critical as we debate this. The amendment we have before us is very clear. It says that DOE must com- ply with all Federal, State, and local laws unless they are inconsistent, or duplicative with the requirements of S. 1936. My colleagues from Nevada could list all of the Federal laws in the country; every one of them. You can just pick and pull. The point is that, if they are duplicative, then we have already met the test. Why ask somebody to repeat and repeat again only for the exercise, the futility, if you have already made the determination? Would we list all of the defense laws in the country? Pick any law you want. That is not the issue. The issue is the question of compli- ance being responsible, being environ- mentally safe, and humanly safe. I must say that, based on the record that we have already demonstrated in this country by the transporting of the high-level waste of the Defense Depart- ment, we have a spotless record. So it is impossible to argue unless you really wish to only characterize this for the purposes of a motion. Mr. BRYAN. Will the Senator yield? Mr. CRAIG. I have no more time to yield. Thank you. In this issue, emotion sometimes works and scare sometimes works, and I understand that. I have no concern about that. The citizens of my State are very frustrated, as I know the citi- zens of the State of Nevada are. But what the citizens of Idaho have to admit is that in the years that nuclear waste has been transported to Idaho or through Idaho there has never been a spill. It has been transported safely. Idaho has been concerned about it and has repeatedly checked on it, and as a result of all of that, it has been done in a very safe way. The Hazardous Materials Transpor- tation Act that S. 1936 complies to, the responsibility that States and authori- ties have under that act and that the local communities have under that act to assure the safest of transportation, is exactly what we are achieving here. It is my intent, and it is the intent of the Senator from Alaska and the Sen- ator from Louisiana, to assure this Senate that within the capacity of the law and in the capacity of science and engineering today, this is safe. History proves it to be safe. There is no way to argue an example where it has failed or has been unsafe. At this time, I would like to yield 1 minute to my colleague from Lou- isiana. The PRESIDING OFFICER. The Sen- ator from Louisiana. Mr. JOHNSTON. I thank my col- league for yielding, Mr. President. I simply wanted to quote from the Nuclear Waste Technical Review Board VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00018 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9227 July 31, 1996 of March 1996 on the question of trans- portation risk. The Technical Review Board has been quoted by both sides here today, but this bears directly on the question. It says: The Nation has more than three decades of experience transporting both civilian and DOE-owned spent fuel. In 1997, 471 shipments were made, 444 of which were by truck. In the 1980’s, 100 to 200 such shipments were typically made each year. Numerous anal- yses have been performed in recent years concerning the transportation risks associ- ated with shipping spent fuel. The result of these analyses all show very low levels of risk under both normal and accident condi- tions. The safety record has been very good and corroborates the low risks estimated analytically. In fact, during the decades that spent fuel has been shipped, no accident has caused a radioactive release. Again, from the Nuclear Waste Tech- nical Review Board of March 1996. Mr. MURKOWSKI. How much time is remaining? The PRESIDING OFFICER. The Sen- ator from Alaska has 6 minutes, and the other side has 1 minute left. Mr. MURKOWSKI. I will make a rel- atively short statement. Mr. President, again I would like to refer specifically to what this amend- ment does and what it does not do. The amendment simply states that if there are provisions of law that are in- consistent with specific terms of this bill, then this bill is applicable. This bill will govern. Now, the Senators from Nevada would ask that the Department of En- ergy attempt to comply with incon- sistent laws. I can only assume that they ask this because they know it is impossible to do. That is a catch-22. That is simply a recipe for delay, a recipe for additional expense, a recipe for additional litiga- tion and full employment for a lot of lawyers. Instead, we offer a responsible provision which clarifies that while the Department of Energy will comply with this act, if any Federal, State, or local law is not in conflict with this act, those laws will be complied with. I reiterate\u2014this is a unique, one-of-a- kind facility. That is why we are here today. We are designing laws to fit this facility. That is why we are debating this legislation. It is not designed to do anything more than address this facil- ity. Other laws are designed for a broad breadth of activities. This is unique. It contains a carefully crafted regulatory program, as I have said, governing this facility only. The position of the Sen- ators from Nevada, I think, results in confusion and attempts to thwart the will of Congress as expressed in this very unique piece of legislation de- signed for one thing. Let me just mention the transpor- tation aspect because I have had an op- portunity to observe transportation of high-level nuclear waste in Great Brit- ain, in France, and Sweden. To suggest that American technology cannot safe- ly develop a system and casks nec- essary to transport this waste is simply unrealistic. It is moving by rail in France. One can go into a nuclear plant and see cars on the sidings that were designed to carry the casks. It is moved in Scandinavia by special ships that have been built that traverse the shores of Sweden unescorted. They are in casks. They are specially crewed from the standpoint of the training, but it is not Government employees, it is a shipping line, and they have a proven record of safety. We have seen this high-level nuclear waste moved in Europe by highway in casks with appropriate measures. If Members will recall, there was a thought given a few years ago to the utilization of a Boeing 747 400 to move high-level waste from the Orient to Eu- rope, primarily because the Japanese were interested in bringing their waste back to France for reprocessing. So you would be basically moving waste that contains plutonium. The question quite legitimately came up, can you design a cask to withstand a free fall at 30,000 feet? And the answer was, yes, it can be done. It will cost a good deal of money. What we are talking about here is a realization that we have moved this material for an extended period of time throughout Europe. We have moved it in the United States to a lesser degree. But if we adopt this legislation and if Yucca is the interim site for a reposi- tory, to suggest that we cannot move it safely defies realism, defies the experi- ence that other countries have had, and I think it sells American tech- nology short. I see no other Senator at this time who desires to speak, and I reserve the remainder of my time pending the dis- position of the pending amendment. Mr. BRYAN addressed the Chair. The PRESIDING OFFICER (Mr. CAMPBELL). The Senator from Nevada [Mr. BRYAN] is recognized. Mr. BRYAN. I thank the Senator. Let me respond briefly. The Senator from Idaho was unable to respond to my question because of time limita- tions, but he was going on at some length as to why the Senators from Ne- vada would insist that there, in effect, be a duplicative experience when the law already covered it. A point I want to make very em- phatically is the Senator from Idaho is quoting from only a part of the pre- emption language. The preemption lan- guage, in effect, says that if the re- quirements of any Federal, State, or local law are inconsistent with\u2014incon- sistent with\u2014or duplicative. So the point I made, I think, is a telling one and one that is irrefutable, in my opin- ion, namely that all of these environ- mental laws that we talked about, if there is a conflict, do not apply. I must say that in terms of public policy, putting aside one’s view for the moment of how you feel about nuclear waste and any urgency that may or may not be present, what a disastrous public policy it is to wipe out the envi- ronmental laws, and that is why every environmental organization has op- posed this language and that is why the Environmental Protection Agency has strongly resisted it. Let me talk a moment about the casks, and we will talk a lot more about transportation later on in this debate. The senior Senator from Lou- isiana cites the numbers that have been shipped around the country. I am sure he is absolutely accurate. But we are talking about something of a scale and dimension unprecedented any- where in the world\u201485,000 metric tons, 16,000 shipments. We are not talking about 100. We are talking about 16,000 shipments. The Nuclear Regulatory Commission claims that the cask de- sign will fail in 6 of every 1,000 rail ac- cidents. Built into this, the laws of probability tell us that with the heightened and elevated volume, you are going to have an accident and a failure. Finally, I would just like to say with respect to the casks, what has driven this entire debate about nuclear waste over the years is how to do it cheaper, how to do it faster. That is where the nuclear utilities are coming from. And so the new casks that are going to be used to store this have not yet been de- signed and they will be less expensive and subject to less rigorous standards. The PRESIDING OFFICER. The Sen- ators’ time has expired. The Senator from Alaska has 1 minute and 6 seconds. Mr. MURKOWSKI. Has all time ex- pired? The PRESIDING OFFICER. All time of the Senators from Nevada has ex- pired. Mr. MURKOWSKI. I say to my friend relative to his reference to an unprece- dented scale which he suggests will occur, that factually is just not so. As a matter of fact, the French alone have moved 30,000 metric tons of spent fuel\u2014 that is spent nuclear fuel. This is the same amount we currently have, or ap- proximately the same amount we have in the United States today. I remind my colleagues of one other thing. While it is true we do not have support from the environmental move- ment in this country, the reality is that most of those groups are opposed to the generation of power by nuclear energy. What they do not do is recog- nize the obligation that since we are nearly 22 percent dependent on nuclear energy, we are going to have to meet the demand with something else. Nu- clear power opponents want to termi- nate the industry, by not allowing the States to have the availability of stor- age under State licenses. So when one looks at the environmental concern, you have to recognize the environ- mentalists are not really meeting their obligation, and that is to come up with an alternative. The PRESIDING OFFICER. The Sen- ator’s time has expired. All time has expired. Mr. MURKOWSKI. Mr. President, it would be my intention to ask for a voice vote on this amendment unless there is an objection. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00019 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9228 July 31, 1996 The PRESIDING OFFICER. Is there an objection? If not, the question oc- curs on agreeing to Murkowski amend- ment No. 5051. The amendment (No. 5051) was agreed to. Mr. MURKOWSKI. Mr. President, I move to reconsider the vote. Mr. JOHNSTON. I move to lay that motion on the table. The motion to lay on the table was agreed to. AMENDMENT NO. 5048 Mr. MURKOWSKI. Mr. President, I call up amendment numbered 5048 which is at the desk and ask that it be stated. The PRESIDING OFFICER. The clerk will report the amendment. The bill clerk read as follows: The Senator from Alaska [Mr.MURKOWSKI] proposes an amendment numbered 5048. Mr. MURKOWSKI. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: Strike subsections (h) through (i) of sec- tion 201 and insert in lieu thereof the fol- lowing\u2014 ”(h) BENEFITS AGREEMENT.\u2014 ”(1) IN GENERAL.\u2014The Secretary shall offer to enter into an agreement with the City of Caliente and Lincoln County, Nevada con- cerning the integrated management system. ”(2) AGREEMENT CONTENT.\u2014Any agreement shall contain such terms and conditions, in- cluding such financial and institutional ar- rangements, as the Secretary and agreement entity determine to be reasonable and appro- priate and shall contain such provisions as are necessary to preserve any right to par- ticipation or compensation of the City of Caliente and Lincoln County, Nevada. ”(3) AMENDMENT.\u2014An agreement entered into under this subsection may be amended only with the mutual consent of the parties to the amendment and terminated only in accordance with paragraph (4). ”(4) TERMINATION.\u2014The Secretary shall terminate the agreement under this sub- section if any major element of the inte- grated management system may not be com- pleted. ”(5) LIMITATION.\u2014Only 1 agreement may be in effect at any one time. ”(6) JUDICIAL REVIEW.\u2014Decisions of the Secretary under this section are not subject to judicial review. ”(i) CONTENT OF AGREEMENT.\u2014 ”(1) SCHEDULE.\u2014In addition to the benefits to which the City of Caliente and Lincoln County is entitled to under this title, the Secretary shall make payments under the benefits agreement in accordance with the following schedule: BENEFITS SCHEDULE [Amounts in millions] Event Payment (A) Annual payments prior to first receipt of spent fuel …………. $2.5 (B) Annual payments beginning upon first spent fuel receipt …. 5 (C) Payment upon closure of the intermodal transfer facility ….. 5 ”(2) DEFINITIONS.\u2014For purposes of this sec- tion, the term\u2014 ”(A) ‘spent fuel’ means high-level radio- active waste or spent nuclear fuel; and ”(B) ‘first spent fuel receipt’ does not in- clude receipt of spent fuel or high-level ra- dioactive waste for purposes of testing or operational demonstration. ”(3) ANNUAL PAYMENTS.\u2014Annual payments prior to first spent fuel receipt under para- graph (1)(A) shall be made on the date of exe- cution of the benefits agreement and there- after on the anniversary date of such execu- tion. Annual payments after the first spent fuel receipt until closure of the facility under paragraph (1)(C) shall be made on the anniversary date of such first spent fuel re- ceipt. ”(4) REDUCTION.\u2014If the first spent fuel pay- ment under paragraph (1)(B) is made within 6 months after the last annual payment prior to the receipt of spent fuel under paragraph (1)(A), such first spent fuel payment under paragraph (1)(B) shall be reduced by an amount equal to 1\u204412 of such annual payment under paragraph (1)(A) for each full month less than 6 that has not elapsed since the last annual payment under paragraph (1)(A). ”(5) RESTRICTIONS.\u2014The Secretary may not restrict the purposes for which the pay- ments under this section may be used. ”(6) DISPUTE.\u2014In the event of a dispute concerning such agreement, the Secretary shall resolve such dispute, consistent with this Act and applicable State law. ”(7) CONSTRUCTION.\u2014The signature of the Secretary on a valid benefits agreement under this section shall constitute a commit- ment by the United States to make pay- ments in accordance with such agreement under section 401(c)(2).”. Mr. MURKOWSKI. Mr. President, this amendment is an effort to clarify the issue of consideration to be pro- vided to Lincoln County, NV. Specifi- cally, it clarifies that assistance money provided to Lincoln County, NV, may be provided to the city of Caliente, NV. Caliente is within Lin- coln County and is the actual site of the intermodal transfer facility au- thorized by the bill. The intermodal transfer facility is where the cask con- taining spent nuclear fuel would be offloaded from the trains and placed upon the heavy-haul trucks for the final leg of transport to the interim storage facility at the Nevada site. These can be the off highway type, heavy rigs that operate on very, very large tires and make virtually no foot- print. That technology is well known. That equipment, off highway, is used in large mineral excavations and various other large commercial earth moving activities that are of an off-highway nature. Caliente is northeast of the Nevada test site. The reason for it being se- lected as the intermodal transfer is that point avoids the transportation of casks through the Las Vegas area. The elected officials of the city of Caliente, in Lincoln County, have taken what I consider to be a very rea- sonable, very practical approach, a conservative approach to the storage of this nuclear waste in Nevada. I think they recognize the inevitability. In spite of the difficulty with our con- cerns of our friends from Nevada, this waste has to go somewhere. You just cannot throw it up in the air and ex- pect it to stay there. Nevada is the pre- ferred site, it is a site where we have had over 50 years of nuclear testing of various types, where it has been ex- pressed on this floor we have had test nuclear explosions that have taken place actually below the water table. So clearly, as we look at the alter- native, the Nevada test site is the log- ical site for the interim repository. So I think what we see here is that Lincoln County, the city of Caliente, has recognized the inevitability of this and they have simply attempted to en- sure that the interests of their citizens are protected, and I think that is an obligation that we have. They have maintained, throughout the process, that disposition, despite a series of legal attacks, some rather harsh, on their right to represent their citizens and their freedom of speech by the State of Nevada. I ask unanimous consent the text of a petition, signed by 286 citizens of the city of Caliente, Lincoln County, sup- porting this position be printed in the RECORD. There being no objection, the text of the petition was ordered to be printed in the RECORD, as follows: We the undersigned, support recommenda- tions for maximizing benefits and mini- mizing risks as outlined in the City of Caliente\/Lincoln County Nevada Joint Reso- lution 1 95. As residents of the State of Ne- vada, the United States Constitution pro- vides that if the Nuclear Waste Policy Act is going to be amended to allow transportation of spent fuel rods through Lincoln County and the City of Caliente, we are entitled to provide input to any such proposals. Such input would request oversight of safety issues and receipt of benefits that may be as- sociated to any transportation and\/or stor- age facilities located within Lincoln County. Mr. MURKOWSKI. I was going to read, ”We the undersigned support rec- ommendations” and the rest of the statement, but it is cut off by the Xerox machine, so we will try to get that and enter it into the RECORD. I ap- preciate the President’s willingness to have that printed in the RECORD. In conclusion, I certainly commend the citizens of Caliente and Lincoln County as a whole. I urge the pending amendment be adopted. I reserve the remainder of my time. The PRESIDING OFFICER. Who yields time? The Senator from Nevada [Mr. BRYAN] is recognized. Mr. BRYAN. Mr. President, I yield myself 2 minutes. Mr. President, let me respond. It is true some citizens of Caliente em- braced this. From the time of the Old Testament, there are some who are prepared to forfeit their birthright for a pottage of lentils. I must say, I be- lieve my friends and neighbors in Caliente, those who have advocated this project, are misled and misadvised. I simply point out if 286 becomes the standard, I am sure we could get 286 Alaskans or Louisianians or others to embrace this. It is part of the nuclear energy industry’s attempt to, in effect, buy it. Caliente is a wonderful commu- nity. It has endured tremendous hard- ship in recent years. When I was Gov- ernor they wanted to have an inciner- ator and import hazardous wastes to be incinerated. These are folks who are VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00020 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9229 July 31, 1996 absolutely desperate. I vetoed that leg- islation. The present Governor has done similarly. I understand and sympathize with the economic plight of my fellow Ne- vadans who live in Caliente, but I must say they have been used and badly used by the nuclear industry with this promise about putting a little money out. For my senior colleague and I, this is not about money, this is about pub- lic health and safety of 1.8 million peo- ple, and there can be no compromise on that issue. That represents the broad public view in Nevada. I yield the floor. The PRESIDING OFFICER. The Sen- ator from Nevada [Mr. REID] is recog- nized. Mr. REID. Mr. President, the Nuclear Waste Technical Review Board, in March 1996, recognized the problems with transportation. They recognized, as the senior Senator from Louisiana indicated, that there have been small loads of nuclear waste that traveled very short distances. But they go on to say\u2014and that is the whole point, that they are in effect legislated out of busi- ness, because they said, ”the Board sees no technical or safety reason to move spent fuel to a centralized stor- age facility.” Caliente of course means hot. It is not because it is hot weather. It is be- cause they have hot water in the ground there. That is how this town got its name. The city of Caliente rep- resents 0.05 percent of the people of the State of Nevada, 0.05 percent. They are desperate. We have 17 counties in Ne- vada. There is no county that is in more desperate economic condition. Their mineral abilities are gone. Their agricultural interests are very sparse. A lot of land is owned by the Federal Government. And they have really struggled. Caliente was a rail- road town. The railroad, in effect, has moved out on them. It does not stop there anymore. People who used to work for the railroads do not work there anymore. It is in deep, deep eco- nomic depression. Senator BRYAN talked about one thing they wanted. They also wanted to start a cyanide plant there. They will take anything, I am sorry to say, they are so desperate for money. Caliente represents, I think, a sub- ject we want to talk about here. Caliente is remote. It is about 150 miles from Las Vegas. Nevada is, surpris- ingly, the most urban State in Amer- ica. Mr. President, 90 percent of the people, approximately, live in urban areas, the Reno-Las Vegas areas. Only about 10 percent of the people live in rural Nevada, as we remember it. We have a lot of areas in Nevada that are lonely. We have the loneliest road in Amer- ica in Nevada. But Nevada is not the only place that has remote areas. Utah, eastern Utah is extremely remote. I have driven through parts of Colorado that are as remote as any place in Ne- vada ever was, as are parts of Arizona and New Mexico. The reason I mention that is we need to understand that not only is transportation a problem for the safety of carrying these canisters\u2014 and I say to my friend from Idaho, the 150 mile an hour\u2014they may have run a test at 150 miles an hour, I do not know about that. But I do know the canisters have been certified by the Nuclear Reg- ulatory Commission to this point for 30 miles an hour and for burning for 30 minutes. That is fact. So the 150 miles an hour, I do not know where that came from. They may have run some tests. But certification is for burning at 1,475 degrees for 30 minutes and speeds of 30 miles an hour. We are concerned about unforesee- able accidents. We have pictures of train wrecks, Ledger, MT, Vernon, CA, Alabama. All over the country they have about 600 train wrecks a year. Most of them, thank Heavens, are not bad, but some are disastrous, like the one that burned for 4 days last year, like the one that closed the freeway be- tween Las Vegas and Los Angeles for 4 days. So we have bad train wrecks. I am not talking about what I am going to say in just a few minutes, be- cause of what took place with TWA, and what took place in Atlanta with the bomb. I talked about this 3 weeks ago prior to these horrible incidents. I want the RECORD to show I spoke earlier about these and other threats before these tragic event at the Olympics and TWA incident off the coast of New York. No one wants to exploit the pain, the suffering, and the anguish of those peo- ple. Those of us who serve in the Con- gress, especially serve the western part of the United States, we seemingly live on airplanes. So, when these accidents happen, we all look inward. But I must speak to the threat of ter- rorism, because the nationwide trans- port of spent nuclear fuel will provide targets of inconceivable attraction to terrorists, both foreign and, I am sorry to say, domestic; we have people who are terrorists within our own country, as indicated in the Oklahoma City bombing and probably in the Atlanta Olympic bombing. We have enemies and they are not all outside the boundaries of this country. For whatever reason, though, these en- emies detest parts of our country, and the foreign operations detest what our country stands for and its values. Our very freedoms are threatened. They dwell on hitting points of interest to the American public. That is why the White House is such a target. That is why this building is such a target. That is why we have a police force of almost 2,000 men and women who protect the people who work in these buildings and the tourists who come to this Capitol complex. That is why the Capitol Po- lice have animals that sniff out explo- sives, animals that are around at all times looking at cars that come in and out, sniffing to find out if there are ex- plosives. We have bomb detection units. We have bomb disassembly units. All over this Capitol complex, there are plainclothes officers pro- tecting the people who come into this building. There are people who would do any- thing to cause terror to this country. So, Mr. President, we have to eliminate whatever we can that allows them tar- gets. There are many clandestine foreign interests. We know that. Some are led by leaders of countries. They want to publicize their existence and promote their goals through outrageous acts of blatant terror and destruction. What better stage could be set for any of these enemies of our country than a trainload or a truckload of the most hazardous substance known to man, clearly and predictably moving through our free and open society? You cannot move a 125-ton object on a train that is full of nuclear waste without having it marked and without notifying people it is coming through. These shipments, of necessity, must pass through our most populated cen- ters, which provides opportunity for a successful attack for a terrorist to strike terror and public confidence in our form of Government. Earlier today, I talked about some- thing I received in the mail from St. Louis. It is a newspaper called Gateway to the Waste. It talks about how in St. Louis they are afraid of nuclear ship- ments there. Each cask would contain a radio- logical equivalent of 200 Hiroshima bombs. All together the nuclear ton- nage would be enough to kill everybody on Earth. These shipments would not only pass through populated centers but through remote and inaccessible territory. Remember, I say to my col- leagues of the Senate, that the acci- dent that occurred in Arizona occurred in a very remote area. A person went out there undetected and simply took some tools and took the track apart. When the train came over, the tracks spread and death and destruction was in its wake. The opportunity to inflict widespread contamination to engender real health risk to millions of Americans is appar- ent. And people say, ”Oh, no one would do that.” What happened in Japan? Sarin gas was collected and dispersed. They did not do a very good job. They only wound up killing dozens of people and causing respiratory problems and other forms of illness to hundreds and hun- dreds of people. That was a failure, even though they caused death and de- struction to that many people. If they had done it right, it would have killed thousands. We must prepare for the realities ac- companying a massive transportation campaign that would be required to consolidate nuclear waste at a reposi- tory site. We must deter our enemies through readiness and competent re- sponse before we undertake this dan- gerous program. One of the things the Nuclear Waste Technical Review Board said is we are VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00021 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9230 July 31, 1996 not ready for this. The Governors’ As- sociation hired some people to conduct a test to see how the State of Nevada\u2014 this was not done by the State of Ne- vada, but the Governors’ Association did it to find out how Nevada is pre- pared\u2014now remember, Nevada has dealt with things nuclear before with aboveground and underground nuclear testing\u2014how we would deal with nu- clear waste transportation through Ne- vada if something went wrong. We are not ready, not even close. If we are not ready, you can imagine how other States are. We must assure our citizens we only have to undertake this dan- gerous venture once. It is paramount we do it right the first time. There is a growing danger in this country from both domestic and inter- national terrorism. Exposure of this substance can lead to immediate sick- ness. It is much worse than sarin gas. Early death, and for less acute expo- sure, to years of anxiety and uncer- tainty as the exposed populations wait helplessly for the first onset of thyroid cancer, bone cancer, leukemia, liver and kidney cancer, and on and on. We know that we must be prepared, and we are not prepared. The com- prehensive assessment of its capacity to respond and manage a radiological incident in Nevada did not work out well. That is the way it is all over the country. Mr. President, why are we concerned about terrorist incidents? We have weapons that are almost unbelievable. Most of us in this Chamber have gone shooting with a shotgun. We know how big a shotgun shell is. Here we have a shell not even double the size of a shotgun shell, and this is a shaped charge warhead terrorist tool. it is 11\u20442 inches in diameter and 4 inches long and, as described by scientists, it kind of works like a watermelon. When you squeeze the seed of a watermelon it squeezes the liner material and squirts out. This will pierce 5 inches of steel. That is what this chart shows. Mr. President, if the Presiding Offi- cer wanted to buy a weapon to spread terrorism around the United States, he could do it. It might take you a week, 2 weeks, but if you have money, you can buy from an arms dealer. I have pictured one weapon. We have lots of other weapons we can show, but this one weapon is a Russian version of a portable antitank weapon. This weapon is pretty accurate. At 330 yards, you can hit a target the size of my fingers here. It weighs 15 pounds. That is all it weighs. This weapon is a little more powerful than the one I just showed you, because this will fire 330 yards. It will go through 16 inches of steel. The typical rail canister of nuclear waste is about 4 inches of steel plus some lead and some water. A piece of cake for this weapon that I just showed you. But, Mr. President, weapons are all over, easy to pick up and purchase, weapons weighing 16 pounds, 22 pounds, penetrating up to 3 feet of steel. You might say, no one could afford this. These weapons you can buy for $5,000, $10,000. That is all they cost. Buy a few shells with them. These are antiarmor weapons. The reason, Mr. President, we should be concerned about this is that all nu- clear waste is funneled into one small part of our country. It starts out this big with tens of thousands of ship- ments, but the more it goes, by the time it gets to Colorado, the circle is that big, and all through these parts of the country, Mr. President, you keep narrowing the scope. It is becoming easier and easier the farther west you go, the more remote it becomes, and the more concentrated volume of nu- clear waste will be shipped there. If I were a terrorist organization, this would be a piece of cake. These weapons will fire up to 300 to 400 yards. They are in very remote areas. You can go places in Nevada, Arizona, and Colo- rado where people do not go for days. Along those railroad tracks, you can be out there, camp, and all you are going to be interrupted by are the trains coming by. That is why they have been unable to catch the person in Arizona because he could have been gone for a day before the tracks separated, or longer. So what are we going to do? I think what we should do is do what the Nu- clear Waste Technical Review Board did and say, let us not subject the world and the country to the spread of this nuclear poison. We have not in- vested in the transportation planning. And the preparations are absolutely necessary for the safe transportation of this dangerous material through our heartland. We have not addressed the spectrum of threats to safe transportation and not developed a transportation process that guards against these threats and are not ready to meet the emergencies that could develop because of a nuclear accident or a terrorist act. The Nuclear Waste Technical Review Board recog- nizes our lack of readiness. That is one of the reasons they argued against the transportation program proposed by this legislation. The lack of readiness, preparedness and careful planning is one of the main reasons I urge my col- leagues to vote against this ill-con- ceived, unnecessary and premature ap- proach to managing nuclear waste for our country. Mr. President, we are talking about a substance that is the most poisonous substance known to man. We have been told by preeminent scientists, Dr. John E. Cantlon, Michigan State University; Dr. Clarence R. Allen, California Insti- tute of Technology; John Arendt, of Arendt Associates; Dr. Gary Brewer, University of Michigan; Dr. Jared Cohon, Yale University; Dr. Edward Cording, University of Illinois, and on and on. These people, 12 in number, are emi- nent scientists with no political agen- da, scientists saying we are not ready to move this stuff. It is safe to leave it where it is. Leave it where it is. So we should leave it where it is. This legislation is unnecessary. It is being pushed by the nuclear lobby. That is why it is being done, to save the nuclear industry money and pass the expense off to American taxpayers. They are always in a rush\u2014always in a rush. It took us many years before the permanent repository. We got it where science would control what went on. Lawsuits had to be filed. Legisla- tion had to be passed. But that is not fast enough for them. Now they do not want to wait for science, which will come back and tell us in 1998 how the Yucca site is going to be. They are un- willing to wait for that because they want to save a buck. They want to save a buck by passing the responsibility off to the Federal Government way ahead of time and, in the process, making this country vul- nerable to accident by rail or car, and opening our country to more terrorist acts. The terror we have known in the past pales any time we think about what could happen if a terrorist was able to penetrate one of these nuclear shipments. The PRESIDING OFFICER. Who yields time? Mr. MURKOWSKI addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Alaska is recognized. Mr. MURKOWSKI. I thank the Chair. I would like to comment about the remarks made by my good friend from Nevada relative to the concern we all have, the legitimate concern we have over terrorism. He makes the case that, you know, there is a terrorist threat and therefore we ought to leave it where it is. Let us look at where it is, Mr. Presi- dent. The chart behind me shows it is in 41 States. There are 81 sites out there. Is it logical to assume that we are better off to leave it there where it is exposed in 41 States at 81 sites or put it in one place\u2014one place\u2014out in the Nevada desert, where we have had over a period of some 50 years extensive nu- clear tests, time and time again, an area where it is concentrated and can be supervised and guarded, namely, the one site in Nevada? It just does not make sense if you are going to argue the merits of terrorism to have it all over the country, as I have indicated on this chart\u201441 States, 81 sites\u2014or put it in one place where you can monitor, you can control it, you can guard it. You can take the nec- essary steps to ensure that the threat from terrorism is at a minimum. I do not know an awful lot about bal- listics, Mr. President, but I know some- thing about a shotgun because I hunt ducks. I cannot comprehend a type of a shotgun that can go 300 yards and pierce through 5 inches of steel. What I do know is what the Department of En- ergy has supplied us with. They have done eight sabotage studies. One of those included a 4,000-pound ammonium nitrate bomb that was VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00022 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9231 July 31, 1996 similar in size, same makeup of what was used in the Oklahoma Federal building. They placed it in a container to see if they could pierce the cask. It was not breached, Mr. President. Another test\u2014unfortunately, they are not able to disclose this type of technology because it is a black pro- gram, but they stated that this device was 30 times larger than an antitank weapon. Although this weapon made a small hole in the container, there was no significant release of radioactivity. Make no mistake about it, if there is a puncture, it is not going to blow up. The suggestion was made, you are going to have the equivalent of so many times of Hiroshima; if you are going to penetrate that cask, the radio- active material can come out. But it is very, very heavy. As a consequence, its tendency is to remain in the imme- diate area. But the point is, these casks are designed to withstand, if you will, the exposures associated with an accident, whether it be a railroad, whether it be a ship, or whether it be a highway. I would like to turn a little bit to at- titudes prevailing in Nevada. As I indi- cated earlier, we have some 268 signa- tures from Caliente. I have been able to obtain the completed Xerox of the one that I started on earlier, Mr. President, and was cut off. I think it is important to read what these people said, and that has been inserted in the RECORD. We the undersigned, support recommenda- tions for maximizing benefits and mini- mizing risks as outlined in the city of Caliente\/Lincoln County Nevada joint reso- lution 1 95. As residents of the State of Ne- vada, the United States Constitution pro- vides that, if the Nuclear Waste Policy Act is going to be amended to allow transportation of spent fuel rods through Lincoln County and the city of Caliente, we are entitled to provide input to any such proposals. Such input would request oversight of safety issues and receipt of benefits that may be as- sociated to any transportation and\/or stor- age facility located within Lincoln County. That is the point of this amendment, Mr. President, to provide that assist- ance. Mr. President, I ask unanimous con- sent that a letter from the Inter- national Association of Fire Chiefs, dated July 26, be printed in the RECORD. There being no objection, the letter was ordered to be printed in the RECORD, as follows: INTERNATIONAL ASSOCIATION OF FIRE CHIEFS, Fairfax, VA, July 26, 1996. Hon. FRANK H. MURKOWSKI, Chairman, Energy and Natural Resources Com- mittee, U.S. Senate, Washington, DC. DEAR CHAIRMAN MURKOWSKI: The Inter- national Association of Fire Chiefs (IAFC) fully supports S. 1936 and urges its prompt passage. Nuclear fuel has been accumulating and temporarily stockpiled since 1982 at numer- ous staging locations throughout the United States. The stockpiling of nuclear waste in so many removed locales renders them most vulnerable to potential sabotage and ter- rorist attacks. A plan to remove this nuclear fuel and coordinate its transport to a single secure designated interim storage facility at Yucca Flat, NV, in accordance with prudent planning, training, and preparation can be a safe, logical and acceptable alternative. S. 1936 offers a plan to remove this spent fuel and coordinate its transport to a single secure interim storage facility. With proper planning, training and preparation, this spent fuel can be transported safely and effi- ciently over the nation’s railways and high- ways. We appreciate your leadership on this dif- ficult but important issue. Very truly yours, ALAN CALDWELL, Director, Government Relations. Mr. MURKOWSKI. It states:. DEAR CHAIRMAN MURKOWSKI: The Inter- national Association of Fire Chiefs (IAFC) fully supports S. 1936 and urges its prompt passage. Nuclear fuel has been accumulating and temporarily stockpiled since 1982 at numer- ous staging locations throughout the United States. The stockpiling of nuclear waste in so many removed locales renders them most vulnerable to potential sabotage and ter- rorist attacks. That is what I said before. Do you want it over here in the 41 States in over 80 sites? The fire chiefs say, no, put it in one site. A plan [they further say] to remove this nuclear fuel and coordinate its transport to a single secure designated interim storage facility at Yucca Flat, NV, in accordance with prudent planning, training, and prepa- ration can be a safe, logical and acceptable alternative. Senate bill 1936 offers a plan to remove this spent fuel, coordinate its trans- port to a single secure interim storage facil- ity. With proper planning, training and prep- aration, this spent fuel can be transported safely and efficiently over the Nation’s rail- ways and highways. It is signed by Alan Caldwell, direc- tor, government relations, from the International Association of Fire Chiefs. Here is a petition, Mr. President, to the President of the United States, signed by 600 workers associated with the Nevada test site. I previously en- tered the specific petition and nar- rative in the RECORD, but let me read what it says. This is signed by over 600 workers at the Nevada test site. We who have signed this petition live in the State of Nevada. Many of us work at the Nevada Test Site. Some of us work on the Yucca Mountain project. The [Nevada Test Site], an area larger than the State of Rhode Island, was chosen as a nuclear weapons testing site by Presi- dent Truman. Its dry climate and remote lo- cation made it ideal for weapons testing 45 years ago. Those same factors make the NTS ideal for storing high level nuclear waste and spent nuclear fuel. There is now, in southern Nevada, a resident work force that is well trained and experienced in dealing with nu- clear materials. We, who are part of that work force, believe the NTS presents a solu- tion for the United States for the temporary and permanent storage of high level nuclear waste and spent nuclear fuel. It is a well se- cured site, it is remote, it has already been utilized for nuclear purposes, it has an expe- rienced and well-trained work force and we as Nevada workers, want it. We urge you to work with Congress to make the NTS the solution to this Nation’s nuclear waste dilemma. There you have it, Mr. President. How much time is remaining? The PRESIDING OFFICER. The Sen- ator from Alaska has 17 minutes 8 sec- onds. Mr. MURKOWSKI. I read the fol- lowing letter from the Southern Ne- vada Building & Construction Trade Council, dated July 23, a letter to Sen- ator CARL LEVIN. DEAR SENATOR LEVIN: I am writing to thank you for your support of Senate Bill 1936 and I urge you to continue that support. I am a representative of the many working men and women of Nevada who strongly sup- port the passage of S. 1936. Although we more often than not support the positions of Senator Harry Reid and Sen- ator Richard Bryan, our views on this par- ticular issue differ significantly from theirs. On behalf of my members I urge you to con- tinue your support of S. 1936, as reflected by your recent vote in favor of cloture. We sin- cerely thank you for your position. As way of introduction, I am President of the Southern Nevada Building and Construc- tion Trades Council, Vice President of the Nevada AFL CIO, and serve as an appointee of Nevada Governor Bob Miller to the Ne- vada Commission on Nuclear Projects. I have followed the nuclear waste issue in Nevada for many years. My years of experience at the Nevada Test Site goes back to a time when Nevada elected officials actually sought the opportunity to store high-level waste at the Test Site. The 18,000 craftsmen that I represent, as well as over 100,000 members of the Nevada AFL CIO, feel strongly that the Yucca Mountain Project is safe and can be good for Nevada. We recognize, perhaps better than most, the importance of health and safety in dealing with high-level waste and nuclear materials. We have dealt with it for many years and as the workers handling this mate- rial we have the most to lose if this program is not safely run. Based upon our past experi- ence in Nevada, we have a great deal of con- fidence that this facility will be safe. Nevadans are pragmatic people and I be- lieve that, contrary to statements made by some Nevada officials, many if not most Ne- vadans would not contest the location of this facility in Nevada. Remember that we have tested over 900 nuclear devices in the Nevada desert with little local opposition. Like the nuclear weapons testing program the nuclear waste program is essentially a non-issue among rank and file Nevadans. We find it ex- tremely difficult to imagine that you could possibly find a more willing political climate anywhere else in the United States for this type of facility. We understand that you may have been asked, by members of the Nevada delegation, to oppose legislative efforts to move the nu- clear material storage program forward. An immense amount of scientific study has been conducted at Yucca Mountain and it has con- clusively found the location to be a superior one for this type of facility. Some officials from Nevada have made a concerted effort, using every conceivable means, to thwart this scientific and environmental program. Enclosed you will find petitions signed by many Nevadans who support passage of this legislation. We intend to meet with the White House shortly to express our position and to transmit the petitions. Our message to the President will be: Move this program forward\u2014do not allow partisan politics to stand in the way of a solution to this prob- lem. Any other approach would be both bad politics and bad public policy. As a fellow American, a fellow Democrat, and as a representative of the working men and women of Nevada, I urge your continued support of S. 1936. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00023 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9232 July 31, 1996 It is signed by Frank Caine, president of the Southern Nevada Building Con- struction & Trade Council. Mr. CONRAD. Will the Senator yield? Mr. MURKOWSKI. I do not attempt to speak, obviously, for the people in Nevada. That is the job of the Senators from Nevada. I do think it represents a significant voice to be heard and to be brought to the floor. I yield on the Senator’s time. The PRESIDING OFFICER. The Sen- ator from North Dakota has no time. Mr. MURKOWSKI. I yield very brief- ly for a question if it is on my time be- cause we are running short. Mr. CONRAD. I have been increas- ingly concerned about the notion of the terrorist threat, and I am very inter- ested in the answer of the Senator from Alaska. It strikes this Senator, when you are talking about 100 different locations in the shipment of nuclear fuel from around the country to a single spot, that the risk of a terrorist threat in- creases dramatically; I just ask the Senator from Alaska, in talking to se- curity people\u2014in fact, I talked to Se- cret Service people about when the President is most vulnerable, and they told me they believe the President or anybody that they are guarding is most vulnerable when they are in tran- sit. In fact, they feel they are most vul- nerable when they are getting in or out of the vehicle. I was thinking how that relates to the circumstances we face here. We saw that with President Reagan and the as- sassination attempt when he was get- ting into a vehicle. Rabin was assas- sinated when he was getting into a lim- ousine, because you know where a per- son is, you know where they will be, that is when they are most vulnerable. It strikes me that the same thing may be the case with respect to the transporting of these materials, and I am interested in the reaction of the Senator from Alaska to that. Mr. MURKOWSKI. If I may respond to the Senator from North Dakota, that is the very point we are talking about. Terrorism is a threat, but we have this currently in 41 States at 81 sites, and the ability to secure those sites from terrorism in its current form is much more difficult than having it in one central spot, because that is where it will be permanently stored, ei- ther until Yucca Mountain has a per- manent repository or, during the in- terim, until the permanent repository is set. What we are looking at here is one site, one storage capability, one set of experienced personnel to guard against terrorist activity, as opposed to the chart, which I will again leave for the Senator to view, 41 States and 81 sites. It just simply makes sense. The Sen- ator from North Dakota was not here when I entered into the RECORD a letter from the International Association of Fire Chiefs which simply says: . . . so many removed locales renders them most vulnerable to potential sabotage and terrorists attacks. A plan to remove this nu- clear fuel and coordinate its transport to a single secure designated interim storage fa- cility at Yucca Flat, NV, in accordance with prudent planning, training, and preparation can be a safe, logical and acceptable alter- native. So this is the very concern we are talking about. Obviously, you are not going to store in these sites forever. That is a given. You have to take it out of these sites at some point in time. The Federal Government has collected almost $12 billion from the ratepayers. It has entered into a contractual agree- ment. We are talking about reneging on the agreement, basically, if we don’t go ahead with it, and leaving it where it is for an undetermined period of time until then you decide to move it. It is inevitable that you are going to move it. We are talking about here\u2014once you move it, the threat of terrorist ac- tivities associated with it are much re- duced because you don’t have that number of sites in that exposure in the 41 States. So the logic, I think, speaks for itself. I think, from the standpoint of terrorism, exposure is less dramatic if you have it at one site where it is easi- er to secure. I think my time has about expired. The PRESIDING OFFICER (Ms. SNOWE). The Senator has 8 minutes re- maining. Mr. CONRAD. Might I ask my col- league to yield me some time so I might pursue this? Mr. BRYAN. How much time does my friend require? Mr. CONRAD. A couple of minutes. Mr. MURKOWSKI. How much time remains on the other side? The PRESIDING OFFICER. There are 9 minutes 50 seconds remaining. Mr. BRYAN. I yield 3 minutes to the Senator from North Dakota. Mr. CONRAD. Madam President, I can understand, with respect to a ter- rorist threat, that if you had it at one site, it is easier to guard and secure than at 81 sites. What really raises questions, at least in my mind, is when this material is in transit, because now you are not talking about 81 sites, you are talking about an infinite number of places where you are vulnerable to some kind of terrorist threat. So, to me, it is not a question of 81 sites versus 1 site, it is a question of being in transit from 81 sites to 1 known place. If I were trying to put myself in the po- sition of a terrorist, and I knew that all this material has to go through a series of locations to arrive at one des- tination, that makes it very vulnerable to a terrorist attack. So the question I really have is, aren’t you most vulner- able when this material is in transit? Mr. MURKOWSKI. I respond by ask- ing my friend from North Dakota, is it not inevitable that at some point in time, in order to meet the contractual commitment, you are going to have to move this anyway? Mr. CONRAD. Yes. Mr. MURKOWSKI. So it is still going to be vulnerable to terrorist attacks. Mr. CONRAD. I think, without ques- tion, my own view is that, obviously, this material is going to have to be moved at some point. But, on the other hand, perhaps the technology will be developed that would allow you to deal with this material at those locations and not have to be transporting it to a single site in one place in the country, where you are vulnerable. It would seem that it would be easy for a ter- rorist to look at the map and say, ”Here are the sites it is coming from, and here is the one place on the map it is going to.” You could draw a series of sequential rings and, with a high de- gree of confidence, know this material is going to pass through there, and you are, in that way, highly vulnerable to a terrorist threat. Mr. MURKOWSKI. Madam President, the Senator from\u2014\u2014 Mr. BRYAN. On whose time is the Senator from Alaska responding? Mr. MURKOWSKI. On my own time. First of all, the Senator from North Dakota is suggesting that we dispose of it on-site somehow through advanced technology. That suggests reprocess- ing, which we don’t allow. So that is basically a nonalternative. Some peo- ple suggest that is somewhat unfortu- nate because, in France, they do re- process, reinject. They don’t bury the plutonium like we do. They put it back in the reactors and burn it. Now, the inevitability of the question of whether or not you leave it where it is and subject yourself to the potential terrorist exposure in 41 States and 81 sites\u2014that suggests that you are not going to have the same degree of secu- rity and experience in all these sites because you cannot possibly cover that many sites. So you put it at the one site in Nevada where you can provide the security. So the terrorism exposure in Nevada is, for all practical purposes, eliminated. Your exposure is shipping them, granted. That is why the casks are designed as they are designed. As I said in an earlier statement, the Army has tested a device 30 times larg- er than an antitank weapon, and al- though it made a small hole in the cask, there was no release of radioac- tivity. So you can’t eliminate the en- tire risk, but you can eliminate, to a large degree, the technical design\u2014this is a heavy thing; the terrorists are not going to run off with it. They have to do something very significant. Obvi- ously, there is going to be security as- sociated with the movement. I think we are talking about 10,000 casks. I defer to the Senator from Louisiana who, I think, wants to address the Sen- ate. Mr. JOHNSTON. Madam President, I appreciate my colleague yielding to me. They have done studies on these shippings, and what they have found is that upward of 10,000 to 20,000 ship- ments have already been made. They say numerous analyses have been per- formed in recent years concerning transportation risks associated with shipping spent fuel. The results of VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00024 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9233 July 31, 1996 these analyses all show very little risk under both normal and accident condi- tions. The safety record has been very good in corroboration of the low-risk estimate analytically. In fact, during the decades that spent fuel has been shipped, no accident has caused a ra- dioactive release. What they have done is they have made models both on the computer and they have done actual tests. For example, there was a chart up there that showed that they hit a cask at 80 miles an hour with a train, and they dropped them from buildings and all that. In none of these was there a risk. I might add that we ship nuclear war- heads all the time. We don’t ship those actually in these kind of casks. Frank- ly, I don’t know how they ship them, but they are not sealed off as these casks are. They have gone to the ex- tent\u2014in one instance, they said a ship- ping cask has been subjected to attack by explosives to evaluate the cask and spent fuel response to a device 30 times larger than an antitank weapon. They attacked one of these with a weapon 30 times larger than an antitank weapon. The device would carve approximately a 3-inch diameter hole through the cask wall that contained spent fuel, and it was estimated to cause a release of about one-third of an ounce. ”No transportation”\u2014this is a quote\u2014”can be identified that would impose any- where near the energy per unit volume caused by this explosive attack.” So even if you get a weapon 30 times larger than an antitank weapon and at- tack the cask with it, all it does is have a release of about one-third of an ounce. So I submit to my colleague that, I guess you can postulate some accident where some meteorite might come down and happen to hit a railroad train in just the right way and some- how that could harm somebody. But they have postulated about every con- ceivable risk, including a weapon 30 times larger than an antitank weapon, and they postulate only one-third of an ounce of release\u2014that, plus the fact that there has never been a release of radioactivity in 4 decades of these transportations, from 10,000 to 20,000 shipments in this country alone, not to mention those around the world. I would say there are things to worry about. But I honestly do not believe that transportation is one of them. Mr. CONRAD. Let me ask my col- league. Mr. REID. Madam President, I would be happy to yield to my friend, but I want to respond directly to the state- ments made by the Senator from Lou- isiana. This is pure doubletalk. The fact of the matter is that the weapon that they used to test was a device designed to destroy reinforced concrete pillars and piers. The weapon was not designed to destroy a structure like a nuclear waste canister. In fact, the weapon used for testing performed its military mission so poorly that our military forces abandoned this device for a bet- ter design. The weapon used, even though it was not much good, did per- forate the canister. The hole is small, and there was leakage, but it was not a great deal of leakage. But everyone looking at this knows that the weapon that has been used\u2014 any of the weapons that I have on this chart are manufactured all over the world\u2014would perforate this thing like that\u201416 inches of steel, 36 inches of steel, 28 inches of steel. This is, in all due respect to the Sen- ator from Louisiana, who is a tremen- dous advocate for the nuclear industry, part of their doubletalk. They have not been willing to test these canisters the way they should be tested, and the Nu- clear Regulatory Commission has said to this point that all they have to do is to be able to withstand a maximum of 30 miles an hour and a fire for 30 min- utes. That is totally inadequate not only for accidents, but for terrorist ac- tivities. I yield now to my friend from North Dakota. Mr. CONRAD. Madam President, I thank my friend from Nevada. I just go back to this question. It does strike me, given the rise of ter- rorist activity not only in this country but around the world, that when you put in motion from 80 different sites around the country, from 41 States, thousands of these casks headed for one location, that if you were a ter- rorist organization\u2014it would take very little calculation to figure out where this is most vulnerable\u2014you would have the potential here for a terrorist organization when this stuff is most vulnerable, when it is in motion, when it is in transit, to attack either a train or a truck and get possession of this material and thereby be able to threat- en dozens of cities in America. I must say, when I have talked to se- curity people\u2014again, I talked to a per- son who was in the Secret Service\u2014 with respect to when they think some- thing that they are guarding is most vulnerable, they said without question it is when it is in transit, when it is on the move. That is when it is the most vulnerable. Mr. JOHNSTON. Madam President, will the Senator yield? Mr. CONRAD. Yes. Mr. JOHNSTON. Is the Senator sug- gesting that we leave it permanently at the 70-plus sites around the country? Mr. CONRAD. No. This Senator is suggesting that maybe we ought to re- visit the question of reprocessing in this country. That is an alternative. Maybe we ought to consider various other technological alternatives that may present themselves. I am just rais- ing the question. With what is going on in terms of terrorist threats abroad and in this country, are we doing a wise thing by setting up a cir- cumstance in which this material starts to move from 80 sites around the country to one defined location in America? That troubles me. I really am struggling myself with the question of how to respond to that. I must say it has made me rethink the whole question of reprocessing. I won- der sometimes if we have made wise choices in this country. Mr. JOHNSTON. If I may answer that, because the Senator is a very thoughtful Senator and it is a fair question. First of all, let me say, on the issue of reprocessing, you would need a cen- tral facility for reprocessing anyway. So that does not solve the transpor- tation problem. Second, I would say to my friend that the studies that have been done\u2014and you have four decades of experience with transportation of this fuel with never a radioactive release, plus you have a lot of postulated accidents. For example, they have taken actual acci- dents and made the studies of what that would have done to nuclear waste had it been involved. In one, in April 1982, there was a three-vehicle collision involving a gasoline truck trailer, a bus, and an automobile which occurred in a tunnel in which 88,000 gallons of gasoline caught fire and burned for 2 hours and 42 minutes. For 40 minutes the fire was at 1,900 degrees Fahr- enheit. If a nuclear waste canister had been involved in this accident, it would have suffered no significant impact damage, and the fire would not have breached the canister. There would have been no radiological hazard. The spent fuel in the canister would not have reached temperatures high enough to cause fuel cladding to fail. We go on here to other postulated ac- cidents. A train containing both vinyl chloride and petroleum\u2014the tanker cars derailed and caught fire. The fire burned for several days and moved over a large area. There were two explo- sions. Had nuclear waste canisters been on the train, they would not have sus- tained any damage from the explosion. They might have been exposed to the petroleum fire for a period ranging from 82 hours to 4 days. Even so, the canisters themselves would not have been breached. Mr. CONRAD. Will the Senator yield? Mr. BRYAN. Madam President, we have just a little time left. Mr. CONRAD. I would like to con- clude with this question. My understanding is that those are accident scenarios. What concerns this Senator is a terrorist scenario when terrorists launch an attack on these materials when they are in transit and most vulnerable. I must say that I think it is something that we have to be concerned about. Mr. JOHNSTON. The point is this, though: They have tested it with weap- ons 30 times bigger than antitank weapons with direct hits. That caused a breach. Only a third of an ounce comes out. There are many, many much more lucrative targets, by orders of magnitude more lucrative for terror- ists, everything from chemicals that travel throughout the country every day, from LP gas to others which are many, many times easier to breach and VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00025 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9234 July 31, 1996 would cause a much bigger problem. The essential thing is that nuclear waste is not a volatile matter. Mr. BRYAN. Madam President, I say to my colleague that this is on my time. How much time is left? The PRESIDING OFFICER. Approxi- mately 2 minutes. Mr. BRYAN. If the Senator uses his own time, I have no problem with it. But I am not prepared to yield any more time. Mr. JOHNSTON. I would be finished in just a moment. Mr. MURKOWSKI. Madam President, I ask unanimous consent that the other side have 2 more minutes total and that we may have 1 minute on this side. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. JOHNSTON. Madam President, nuclear waste traveling the country is, first of all, solid in form. It is sealed in a cask that, as I say, if you get a direct hit by something 30 times more power- ful than an antitank weapon, what do you get? You get a third of an ounce of release. What does that do? It does not explode. It is not gaseous. It does not get down to the water supply. It is, as these matters go, relatively benign. And, even so, you cannot imagine a sit- uation other than a terrorist attack where there is any release at all. So I submit that there are a lot of things to worry about, but transpor- tation is not one of them. Mr. MURKOWSKI. If I may, Madam President, take the last 30 seconds in response to the Senator from North Dakota, we have seen in Europe the movement of over 30,000 tons of high- level nuclear waste in countries that are exposed to terrorism at a far great- er theoretical sense than the United States. There has never been one in- stance of a terrorist activity associated with movement by rail, highway, or ship. Terrorists are not going to nec- essarily look at terrorizing a shipment when they can move into nerve gas and weapons disposals that are moving across this country\u2014all types of mate- rial that are associated with weapons \u2014where they can create an incident of tremendous annihilation on a popu- lation. This is very difficult because it is se- cure, in a cask; it is guarded; and it has been proven it has moved through other countries, particularly Great Britain, France, in Scandinavia, and to some extent starting in Japan. So there is a risk associated with every- thing. But we have not had terrorist activity in this area because there are other more suitable sites. The PRESIDING OFFICER. The Sen- ator’s time has expired. Mr. BRYAN addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Nevada. Mr. BRYAN. I thank the Chair. Mr. President, I appreciate the state- ment of the senior Senator from North Dakota, his expression of concern about the vulnerability that we have to terrorism. It is a fact of life in 20th century America. All of us apprehend, lament, and regret it, but it is a very real fact. I must say, just as the bad guys in the Old West always knew where the stagecoach was most vulner- able\u2014it was not when it was at the of- fice; it was not when it was being un- loaded at the bank\u2014it was out on the road, so too when we are talking about thousands and thousands of miles of rail and highway shipments. There are so many places that a terrorist could find a point of vulnerability. The con- cerns that my colleague from North Dakota mentioned I believe are very real and very genuine, so I thank him very much for his explanation. Let me just make one other point here. It is something we constantly hear about, that this bill will result automatically in not 109 sites but 1 site. Mr. President, that is just abso- lutely false, absolutely false. Each of the nuclear reactors that are currently generating power have spent fuel rods contained in the pools. They remain there at least for 5 years. If we assume that every reactor in the country is going to close, which is certainly not the predicate of the Nuclear Regu- latory Commission, under the current existing licenses some nuclear utilities would remain open at least until the year 2033. So all this bill would do in terms of concentrating storage would add not 109 but you would have 110 sites, namely the new facility that they have proposed to construct at the Nevada test site for interim storage. So this ad, I know, the nuclear utili- ties love. They spend millions of dol- lars in advertisements in magazines and publications that give one the im- pression, wow, if we just opened up this facility at the Nevada test site there will not be nuclear waste stored any place in the country. That is wrong. May I inquire as to how much more time the Senator from Nevada has? The PRESIDING OFFICER (Mr. HELMS). All time has expired. Mr. MURKOWSKI addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Alaska. Mr. MURKOWSKI. Mr. President, I ask for a voice vote on the amendment. The PRESIDING OFFICER. The question occurs on agreeing to amend- ment No. 5048 offered by the Senator from Alaska. The amendment (No. 5048) was agreed to. Mr. MURKOWSKI. Mr. President, I move to reconsider the vote. Mr. JOHNSTON. I move to lay that motion on the table. The motion to lay on the table was agreed to. The PRESIDING OFFICER. Are there further amendments to the bill? Mr. REID. Mr. President, if I could just confer for a few minutes with my friend from Alaska and inform the rest of the Senate, what we are trying to work out now\u2014and we do not know we can do it, but we are trying to\u2014on this side we have three amendments. We want to vote on one of those amend- ments, a recorded vote. We would like that, if it is OK\u2014we have a Democratic conference that is starting at 4. We would like to do that at 3:30 and then have final passage at approximately 5 o’clock and dispose of the other amend- ments in the interim by voice vote. I have spoken to the Senator from Alaska. I know he has to confer with others to see if that can be worked out. Otherwise, we can do something else. In the meantime, we will go ahead and offer an amendment. Mr. MURKOWSKI. Mr. President, I conferred with the Senator from Ne- vada and my colleague, Senator JOHN- STON, and I want to check with our leadership. It is my understanding the next amendment will be offered by the Sen- ators from Nevada, and they would want a rollcall vote on that amend- ment? Mr. REID. No, the next amendment, we will offer and talk about it a little bit and have a voice vote. Mr. MURKOWSKI. Voice vote. The one after that you would like\u2014 Mr. REID. The one after that we would\u2014 Mr. MURKOWSKI. Might I ask whether the Senators intend to use their full 30 minutes? Mr. REID. We would be willing to work out something after this so the time is equally balanced. Mr. MURKOWSKI. I will entertain then the amendment that is about to be offered that would require simply a voice vote, and that will give me an op- portunity to check with the leadership on this side and then respond to the Senators concerning their proposal. I thank the Chair and yield to my colleague from Nevada. The PRESIDING OFFICER. The Sen- ator is recognized. Mr. BRYAN. I thank the Chair. AMENDMENT NO. 5075 (Purpose: To specify contractual obligations between DOE and waste generators) Mr. BRYAN. I send an amendment numbered 5075 to the desk and ask for its immediate consideration. The PRESIDING OFFICER. The clerk will report. Mr. MURKOWSKI. If I may interrupt, I assume there is acknowledgement that the Senators contemplate a voice vote prevailing on our side? Mr. BRYAN. That is correct. We are not requesting that a rollcall vote occur with respect to amendment 5075. Mr. MURKOWSKI. The voice vote that the Senators are proposing, they are assuming we would prevail? Mr. REID. I would say to my friend from Alaska, he has not heard the ar- gument yet. He may be persuaded. Mr. MURKOWSKI. I will take my chances. The PRESIDING OFFICER. The clerk will report. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00026 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9235 July 31, 1996 The legislative clerk read as follows: The Senator from Nevada [Mr. BRYAN] pro- poses an amendment numbered 5075. Mr. BRYAN. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: At the appropriate place in the bill, insert the following new section: ”SEC. . CONTRACT DELAYS. ”(a) UNAVOIDABLE DELAYS BY CONTRACT HOLDER OR DEPARTMENT.\u2014Notwithstanding any other provision of this Act, neither the Department nor the contract holder shall be liable under a contract executed under Sec- tion 302(a) of the Nuclear Waste Policy Act of 1982 for damages caused by failure to per- form its obligations thereunder, if such fail- ure arises out of causes beyond the control and without the fault or negligence of the party failing to perform. In the event cir- cumstances beyond the reasonable control of the contract holder or the Department\u2014such as acts of God, or of the public enemy, acts of Government in either its sovereign or con- tractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight em- bargoes and unusually severe weather\u2014cause delay in scheduled delivery, acceptance or transport of spent nuclear fuel and\/or high- level radioactive waste, the party experi- encing the delay will notify the other party as soon as possible after such delay is ascertained and the parties will readjust their schedules, as appropriate, to accommo- date such delay. ”(b) AVOIDABLE DELAYS BY CONTRACT HOLDER OR DEPARTMENT.\u2014Notwithstanding any other provision of this Act, in the event of any delay in the delivery, acceptance or transport of spent nuclear fuel and\/or high- level nuclear waste to or by the Department under contracts executed under Section 302(a) of the Nuclear Waste Policy Act of 1982 caused by circumstances within the reason- able control of either the contract holder or the Department or their respective contrac- tors or suppliers, the charges and schedules specified by this contract will be equitably adjusted to reflect any estimated additional costs incurred by the party not responsible for or contributing to the delay. ”(c) REMEDY.\u2014Notwithstanding any other provision of this Act, the provisions of sub- sections (a) and (b) of this Section shall con- stitute the only remedy available to con- tract holders or the Department for failure to perform under a contract executed under Section 302(a) of the Nuclear Waste Policy Act of 1982. The PRESIDING OFFICER. The Sen- ator from Nevada. Mr. BRYAN. I thank the Chair. Mr. President, let me just take a mo- ment because this deals with a provi- sion that we believe clarifies the situa- tion in light of the court decision over which most comment has been had. What this amendment does is simply incorporate into the bill provisions that exist in the contract. My col- leagues will recall that under the Nu- clear Waste Policy Act of 1982, the De- partment of Energy was directed to enter into contracts with the various utilities that were involved in gener- ating high-level nuclear waste, and so what we have done, my colleague and I from Nevada, is to have incorporated verbatim other than perhaps in the context there may be some grammat- ical changes, but verbatim the rem- edies that are provided in those con- tracts. They are found in article 9 of the contract, and the contract provides what occurs if a delay, referring to the delay of the opening of the repository, is unavoidable delay, and subparagraph (b) deals with avoidable delays. So there has been talk that somehow this court case now casts a different light on everything, and as the Sec- retary of Energy indicated in her letter to each of us, that case absolutely has no impact on the debate. It is true that the court indicated there was an obli- gation on the Department of Energy but refrained from determining what the remedy was, and it is our view that the remedy is contained in the con- tract that the parties entered into. So we offer the amendment in that spirit. I must say that I believe one of the biggest scams being perpetrated upon us in this bill is the provision which deals with the shifting of liability from the utilities to the general taxpayer. Mr. President, 1982 is the genesis of our current nuclear waste policy. It was absolutely clear at the time that law was enacted that the financial respon- sibility for the disposal of nuclear waste rested upon the utilities, those that generated it. ”Generators, owners of high-level radioactive waste and spent nuclear fuel have the primary re- sponsibility to provide for and the re- sponsibility to pay the costs of interim storage of such waste and spent fuel until such time as the fuel is accepted by the Secretary of Energy.” And then it goes on to talk about a number of in- stances throughout this particular act that it is the primary responsibility of the industry, the utilities. Mr. President, this bill that has been introduced turns that concept upside down, totally upside down. Here is what is done under section 501 of the amendment that we are debating cur- rently. It says that until the year 2002\u2014I beg your pardon. I misquoted. I cited 501. It is section 401. It says until the year 2002, the maximum that can be assessed against the utilities, which is done on the basis of kilowatt-hours generated \u2014one mill currently is the assessment for each kilowatt-hour. It says under this bill by statute now the maximum that can be levied against utilities is one mill. The General Ac- counting Office and others have con- cluded that even if no interim storage is added to the agenda or the responsi- bility of the Department of Energy, we are currently underfunded to the ex- tent of about $4 billion a year. In plain and simple terms, that means the American taxpayer is going to pick up that liability, that responsi- bility, and that is fundamentally wrong. However you feel about nuclear energy, however you feel about how nu- clear waste ought to be disposed of, it ought not to be cast upon the Amer- ican taxpayer. These utilities are pri- vate sector utilities. They make a sub- stantial amount of money. That is their right. But it ought not to be shifted on us. So I think that needs to be pointed out, No. 1. No. 2, it gets even more clever. After the year 2002, the only amount that can be assessed against each utility is whatever their proportionate cost is, to the total amount of money that is ap- propriated by the Congress for nuclear waste. If we use the current year, for example, we would be talking about a third of a mill. That is something that is just, in my view, unconscionable. Not only has the General Accounting Office concluded there is a shortfall, but in a recent study that was commis- sioned by the Department called A Spe- cial Management and Financial Re- view, a report that came out in 1995, they point out that there is a shortfall, depending on whether you take a con- servative or more expansive view, of anywhere from $4 to $15 billion. So what is being done here is chang- ing fundamentally who pays for this disposal of nuclear waste. Is it the util- ities? That was the original premise of the law in 1982. These are private utili- ties, generating profits for their inves- tors and shareholders. Or is that liabil- ity now to be shifted to the general taxpayer? That is what this bill does, it shifts that liability because it is clear, even if you take the length of time without renewal at all, these utilities will ultimately, by the year 2033, if the licenses are not extended, those utili- ties will cease generating electrical power. Therefore they will cease con- tributing into the fund. But the prob- lem of the storage of high-level nuclear waste continues. It is, to some extent, a crude analogy to the situation we have with our So- cial Security fund. Currently, more money is coming into that fund than is necessary to pay the recipients of So- cial Security. We all know sometime after the turn of the century, because of changing demographics, that changes rather dramatically. So, too, with this nuclear waste fund because, as these utilities go off line, some of them are scheduled, if they do not get an extension of their license, to cease operation in the year 2000, others in the year 2006 and, intermediately to the year 2033\u2014but the waste just does not disappear. It becomes a financial responsibility for someone and that is why it is necessary to generate sur- pluses in the nuclear waste fund in order to deal with the storage problem later on. So I think my colleagues need to look at the budget implications of this. Because, in effect, we create an unfunded liability for the Federal tax- payers the way this bill is currently drafted. Let me return to the specifics of the amendment just one more time before reserving my time and yielding what- ever time my colleague may take to comment on this issue. That is to say, what we are saying amplifies the deci- sion of the court, simply specifying what the remedy is. The remedy is that the delay is unavoidable. They simply have to reschedule the shipments. If VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00027 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9236 July 31, 1996 the delay is deemed avoidable, that is if there is some culpability, then there is readjustment on the amount of fees the nuclear utilities pay into the trust fund. I must say I believe that is fair. My colleague and I, from Nevada, have long recognized that, indeed, if the high-level nuclear waste repository is not available by the year 1998, if ad- ditional on-site storage is necessitated, then, indeed, the utilities would be en- titled to a credit against any addi- tional costs for interim storage that they would incur, and that is the thrust of this amendment. I reserve the remainder of my time. The PRESIDING OFFICER (Mr. GRAMS). The Senator from Louisiana. Mr. JOHNSTON. Mr. President, on behalf of Senator MURKOWSKI I yield myself 5 minutes. This is sort of a version 2 of the Wellstone amendment, in that it seeks to take the rights of utilities and, sec- ondarily, the rights of ratepayers of utilities, and abolish those by legisla- tive fiat\u2014which simply cannot be done. The rights of utilities and, indeed, the rights of the ratepayers of those utili- ties, have been fixed by the Nuclear Waste Policy Act of 1982 as amended by amendments in 1987 and by contracts between the utilities and the Depart- ment of Energy. The contracts between the utilities and the Department of En- ergy contain two provisions in article IX which relate to delays: A, involve unavoidable delay by purchaser or DOE, and, B, involve avoidable delays by purchaser or DOE. And those sec- tions, A, and B, are part of the con- tracts between the utilities and DOE, set out, in part, the relative rights in the event of those delays. What the Senator from Nevada would attempt to do is take those two exist- ing provisions of contracts and state that those are the exclusive remedies, thereby leaving out another provision of those same contracts. Another pro- vision of those same contracts in arti- cle XI says: Nothing in this contract shall be construed to preclude either party from asserting its rights and remedies under the contract or at law. In other words, the present contracts in article XI state that nothing pre- cludes the assertion of the rights both under the contract and at law. What they would do is take that provision out and say that those sections, A and B, that I just read, are the exclusive remedies. Mr. President, that is clever, but what the court has said last week is that ”We hold that the Nuclear Waste Policy Act creates an obligation in DOE to start disposing of the spent nu- clear fuel no later than January 31, 1998.” That is the law, decided only last week. And what the Senator from Ne- vada would say, that notwithstanding what the court has said we are going to write that out of this, and the exclu- sive remedy is that which he has just stated in his amendment, which is only part of what the contract says, I re- peat\u2014it is absolutely settled law that this Congress, under our Constitution, may not take away vested rights. When someone has a right under the law, the Congress cannot come in and take it away without subjecting themselves to damages. Again, quoting from the Winstar case, and this is from July 1996, this very month, the Supreme Court says: Congress may not simply abrogate a statu- tory provision obligating performance with- out breaching the contract and rendering itself liable for damages. Damages are al- ways the default remedy for breach of con- tract. They go on to quote in a footnote: Every breach of contract gives the injured party a right to damages against the party in breach unless the parties by agreement vary the rules. The award of damages is the common form of relief for breach of con- tract. Virtually any breach gives the injured party a claim for damages. Mr. President, this is not a surprising new precedent of the Court. It is a prin- ciple of law as old as John Marshall and the Supreme Court and the Con- stitution. So for my friends from Ne- vada to come along and say the exclu- sive remedy is subsections (A) and (B) of his amendment, I will not say it is ludicrous, Mr. President, out of respect for my colleagues, but let’s say that the argument does not have any weight and is totally contrary to that which is settled law of the U.S. Supreme Court. Mr. President, at this time, I yield 5 minutes, or such time as the Senator from Washington requires. The PRESIDING OFFICER. The Sen- ator from Washington. Mr. GORTON. Mr. President, there are some occasions in this body in which a bit of institutional memory is truly of value. And, in my case, I have a memory which has been reinforced by reading the CONGRESSIONAL RECORD of the creation of the Nuclear Waste Pol- icy Act of 1982. Interestingly enough, the managers on both sides of the party aisle here were Members of that Congress. But the distinguished Senator from Lou- isiana, I believe, was perhaps the most knowledgeable Member of the body at that time, as he is today, on this par- ticular subject. More than 14 years ago, in April 1982 when this bill was being debated, this is what the Senator from Louisiana said: The bill before the Senate today requires the Federal Government to undertake defini- tive and specific actions to assume the re- sponsibility for nuclear waste disposal which existing law reserves to it. We can attempt to avoid this responsibility in the context of this particular Congress, but we will never finally escape the necessity of enacting leg- islation very similar to this bill. It is a task that no one but Congress can perform. The Senator from Louisiana went on to say: The aim of this bill is to provide congres- sional support which will force the executive branch to place before Congress and the pub- lic real solutions to our nuclear waste man- agement problems. A schedule for Federal actions which could lead to a site specific ap- plication for a license for the disposition of nuclear waste in deep geologic formations is established in title IV. The Senator from Louisiana was, ob- viously, an optimist at that point, as were all of those who overwhelmingly supported him in passing that bill, this Senator included. I cannot imagine that the Senator from Louisiana, whose bill included this deadline referred to by the District of Columbia Circuit Court of Appeals last week ”beginning not later than January 31, 1998, the Federal Govern- ment will dispose of the high-level ra- dioactive waste or spent nuclear fuel involved,” I cannot imagine the Sen- ator from Louisiana anticipated that we would have made so little progress by the date upon which we are debating this bill. He was convinced, and we were convinced, that by this year, we would certainly know what we were going to do with this nuclear waste on a temporary basis and be much further along the road to finding a long-term solution for the problem. As a consequence of an overopti- mistic view of what might happen then, we have collected from utilities of the United States some $12 billion. We have spent close to $6 billion of that attempting to characterize a per- manent nuclear waste repository in Ne- vada, but we are certainly nowhere near as close to reaching a conclusion to this challenge as we expected to be in 1982 when we passed this bill, and we spent more money on it, money that comes out of the pockets of American citizens in their utility bills. Given that degree of frustration, given the almost infinite ability of those who oppose any major decision of this nature to delay that decision through bureaucratic requirements, through court tests and the like, we now have been faced with the necessity of finding at least a temporary reposi- tory for this nuclear waste to meet the very requirements that we laid down in 1982. That, obviously, is what this bill is designed to do. In fact, by saying that we ought to begin by December 31 of 1998, even the sponsors of the bill already have let some time slip by. But, Mr. President, at this point, with the failure to meet the schedule that we wanted to meet in 1982, with the expenditure of literally billions of dollars, with this nuclear waste piling up in various plants in 34 States, with the real challenge of what to do with our defense nuclear waste, it is simply time to reach at least an in- terim decision. I expect that the Senators from Ne- vada, and many other Senators as well, are firm in the belief that wherever the temporary storage site is located will end up being the permanent storage site. I suspect that may very well be true, but I do believe that we are far enough along this road that it is appro- priate for the Congress to make that decision and to make that decision now. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00028 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9237 July 31, 1996 The waste is there, the environ- mental threat is there, the physical dangers are there, the necessity to gather it together in one place is there. We know enough now about the policy to be able to make that decision to be there. We are simply carrying out under the leadership of the Senator from Alaska and the Senator from Lou- isiana the very policies that this Con- gress and a former President of the United States felt to be appropriate policies in 1982, and in doing so, we will save the taxpayers money, we will help the environment, we will help our over- all safety, and we will, one hopes, allow the Senator from Louisiana to retire, as he has regrettably chosen to do, from the Senate knowing that he has completed the job that he started in 1982 or earlier. Mr. MURKOWSKI addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Alaska. Mr. MURKOWSKI. How much time remains on both sides? The PRESIDING OFFICER. The Sen- ator from Alaska has control of 17 min- utes; the Senators from Nevada have control of 20 minutes, 39 seconds. Mr. REID. I am wondering if we could have a vote on this amendment and go to something else? Mr. MURKOWSKI. I would be very pleased to. Is that the wish of the Sen- ator from Nevada? Mr. REID. Yes. Mr. MURKOWSKI. I yield back the remainder of our time. Mr. REID. That is, on this amend- ment that is true. Mr. MURKOWSKI. Both sides are willing to yield back the remainder of their time and ask for a voice vote. The PRESIDING OFFICER. With all time being yielded back on the amend- ment, the question now is on agreeing to the amendment. The amendment (No. 5075) was re- jected. Mr. JOHNSTON. I move to reconsider the vote. Mr. MURKOWSKI. I move to lay that motion on the table. The motion to lay on the table was agreed to. Mr. REID. Mr. President, I wonder if the Senator from Alaska has the unan- imous consent agreement that was being typed up for our submission? I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The bill clerk proceeded to call the roll. Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. The Senator from Alaska. Mr. MURKOWSKI. On behalf of the leader, I ask unanimous consent that the vote occur on or in relation to the amendment number 5073 at 3:30 p.m. today, and notwithstanding the agree- ment of July 24, the vote occur on final passage of S. 1936 at 4:55, and that para- graph 4 of rule XII be waived. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. MURKOWSKI. I thank my col- leagues from Nevada for expediting the process. Mr. REID. I say to my friend from Alaska, I think it would be appropriate the time would be equally divided be- tween now and 3:30 on the amendment offered by the Senators from Nevada. I ask unanimous consent that that be the case. Mr. MURKOWSKI. That is agreeable. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BRYAN addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Nevada. Mr. BRYAN. I thank the Chair. AMENDMENT NO. 5073 (Purpose: To specify contractual obligations between DOE and waste generators) Mr. BRYAN. Mr. President, I send amendment No. 5073 to the desk and ask for its consideration. The PRESIDING OFFICER. The clerk will report. The bill clerk read as follows: The Senator from Nevada [Mr. BRYAN] pro- poses amendment numbered 5073. Mr. BRYAN. Mr. President, I ask unanimous consent that further read- ing of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: At the appropriate place in the bill, insert the following new provisions: ”SEC. . COMPLIANCE WITH OTHER LAWS. ”Notwithstanding any other provision of this Act, the Secretary shall comply with all Federal laws and regulations in developing and implementing the integrated manage- ment system. ”SEC. . COMPLIANCE WITH NATIONAL ENVIRON- MENTAL POLICY ACT. ”(a) NATIONAL ENVIRONMENTAL POLICY ACT OF 1969.\u2014Notwithstanding any other provi- sion of this Act, the Secretary shall comply with all requirements of the National Envi- ronmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) in developing and implementing the integrated management system. ”(b) JUDICIAL REVIEW.\u2014Notwithstanding any other provision of this Act, any agency action relating to the development or imple- mentation of the integrated management system shall be subject to judicial review.” Mr. BRYAN. Mr. President, much has been said over the past few hours today and earlier during the course of our discussion of S. 1936 about what I con- sider one of the most serious defects of this piece of legislation in that it emasculates the environmental protec- tions that have been drafted for more than a quarter of a century, most of which with bipartisan support and in effect says with respect to this par- ticular issue they shall not apply. So what we are doing is we are giving people an opportunity, our colleagues an opportunity, to express themselves on the environmental issue, very, very simple. The first part of this amendment says: Notwithstanding any other provision of this Act, the Secretary shall comply with all Federal laws and regulations in developing and implementing the integrated manage- ment system. My colleagues will recall the section 501 under the current provisions, as amended, is very convoluted and says: If the requirements of any Federal, State, or local law (including a requirement im- posed by regulation or by any other means under such a law) are inconsistent with or duplicative of the requirements of the Atom- ic Energy Act . . . or of this Act, the Sec- retary shall comply only with the require- ments of the Atomic Energy Act of 1954 and of this Act. . . . This Mr. President, makes it very, very clear. If you do not want all of these environmental laws preempted, this is the way to correct it. Straight- forward, no ifs, ands, or buts: Notwith- standing any other provision of this act, the Secretary shall comply with all Federal laws and regulations in de- veloping and implementing the inte- grated management system. I note for my colleagues, because the two Senators from Nevada have been involved in this issue now for the last 14 years, we made a policy judgment not to include State law so it could not be asserted that this was an indirect ef- fort to allow the Nevada legislature to implement some type of barrier that would make this impossible. So this is straightforward. It does not get any cleaner, it does not get any clearer, and does not get any easier to understand. If you are truly opposed to preempting all of these laws, this is the amendment that does it. If you also believe that there is a purpose in America for the National Environmental Policy Act, this amend- ment provides for the full application and judicial review. Under the current bill the provisions say on the one hand that the Environmental Policy Act will apply, and then go on to say at some considerable length, but it shall not apply to the various citing alter- natives. I will provide that. Section 204, subsection (f) says the National Environmental Policy Act shall apply. Then you get down into subsection (B). Such Environmental Impact Statement shall not consider \u2014 (i) the need for interim storage. . . (ii) the time of the initial availability of the interim storage. . . (iii) any alternatives to the storage of [nu- clear waste]. * * * * * (v) any alternatives to the design cri- teria. . . (vi) the environmental impacts of the stor- age [beyond the period of initial licensure]. You will recall the National Acad- emy of Sciences said those should con- sider 10,000 years and beyond. This bill would limit it to just the pe- riod of time of the initial licensure. And so, Mr. President, this is a clean, straightforward attempt to say that the full array of provisions under the National Environmental Policy Act shall apply. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00029 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9238 July 31, 1996 Let me just say that the Council on Environmental Quality\u2014that is the council that was established when Con- gress passed the National Environ- mental Policy Act in 1969\u2014 went on to say\u2014and I quote from the letter. ”S. 1936”\u2014that is essentially what we are dealing with: S. 1936 renders the NEPA process meaning- less by precluding the incorporation of NEPA’s core values which are necessary for making informed and timely decisions essen- tial for protecting public health, safety and environmental quality. Consequently, the bill all but locks into place both interim and permanent storage sites by giving decision- makers no reasonable options * * * It is that same rationale that has caused the Administrator of the Envi- ronmental Protection Agency, to point out that in effect we do not have the provisions of the National Environ- mental Policy Act under the provisions of the bill as now constituted. So, Mr. President, I think we can make this very clear and very simple. If Senators want these environmental laws to apply, if they believe that the Environmental Policy Act ought to be applicable to this very critical deci- sion, in which we all agree that we are dealing with material that is not just kind of messy, kind of unpleasant, to be a little bit difficult and inconven- ient to clean up, we are talking about stuff that is deadly for tens of thou- sands of years, the highest kind of risk to public health and safety. Yet, the nuclear industry, and its supporters, have the audacity to emasculate the application of the environmental laws and in effect try to reduce the impact of the National Environmental Policy Act to a hollow and pale facsimile of what the law provides in terms of pro- tections for various policy initiatives, et cetera. Mr. President, I reserve the remainder of my time and yield the floor. Mr. MURKOWSKI. Mr. President, we now have how much time? The PRESIDING OFFICER. The Sen- ator has 161\u20442 minutes. Mr. MURKOWSKI. It is my intention to speak for about 4 minutes and give the Senator from Louisiana about 8 minutes, and then reserve the balance of my time. Mr. President, this is another innoc- uous-sounding amendment which, in reality, is a bonanza for lawyers, and there are a lot of lawyers in this coun- try. We have general laws in this coun- try to cover situations that Congress did not specifically consider. The courts understand that. So when there is a conflict between a general law and a specific law enacted with a particular facility or purpose in mind, the court follows the specific law. With this act we are considering, the specific conditions to apply to specific nuclear waste repositories\u2014an interim repository and a permanent repository. What the amendment of the Senator from Nevada attempts to do is to pro- vide broadly written, general laws with the same standing as the specific direc- tions we are providing in this bill. Theirs is an amendment, Mr. Presi- dent, carefully crafted to confuse the courts, confound the legal process, and enrich the lawyers. This amendment is going to delay the process leading to a responsible so- lution to the nuclear waste problem. I implore my colleagues to avoid this trap. That is what it is. This is an antienvironmental amendment. Let me repeat that, Mr. President. This is an antienvironmental amend- ment. It does not address, obviously, the problem we have with the nuclear waste. If you want to solve a huge envi- ronmental problem in this country, you want to oppose this amendment. If this amendment prevails, Mr. President, the Department of Energy is going to be mired in litigation. It will be mired in red tape. It will be mired in delay. We are simply not going to be able to get there from here with a re- sponsible answer to this problem. Tax- payer dollars are going to be squan- dered in litigation if this amendment is adopted. The problem of nuclear waste will continue to persist, and, as a con- sequence, we will be right back to zero. I retain the balance of my time and yield 7 or 8 minutes to the Senator from Louisiana. Mr. JOHNSTON. Mr. President, I thank my colleague for yielding. Mr. President, if you want to frustrate any ability to have a nuclear waste reposi- tory, vote for this amendment, be- cause, to be sure, this would make it impossible to build. Now, Mr. President, this has been ad- vertised as an attempt only to make this subject to the same environmental laws that every other process has. Not so, Mr. President. Under the present Administrative Procedures Act, there is an appeal to the courts only for a final agency action. That is section 704 of the Administrative Procedures Act. What this amendment would do is to say that any agency action related to the development or implementation of the management system shall be sub- ject to judicial review\u2014any agency ac- tion. So, Mr. President, I guess anything that the agency does, whether it is a major Federal action or not, whether it is a final agency action, would be sub- ject to judicial review. They would be able to go to court. If you wake up in the morning and purchase a cup of cof- fee, I guess that is some kind of agency action, not final, but subject to judicial review. It would mean it would be im- possible to do anything under this sys- tem. Mr. President, much has been made of the fact that environmental impact statements have been waived here. The fact of the matter is, Mr. President, ex- isting legislation presently calls for a waiver of virtually every provision al- ready contained herein. For example, Mr. President, we state that such envi- ronmental impact statement shall not consider any alternatives to the stor- age of spent nuclear fuel at the interim storage facility. Now, why did we put that in the ini- tial legislation back in 1982? Why did we bring it forward in 1987? And why do we have it here? Because, Mr. Presi- dent, there are endless alternatives to storage of spent nuclear fuel. You can shoot it into space and into the sun. That has been seriously sug- gested. You can send it down to the ocean bottom and bury it in the deep mud down there. You can have detona- tion underground in caverns. You can reprocess in light-water reactors, you can reprocess in liquid light-water re- actors, you can have other space launches, deep bore holes in the Earth. Mr. President, all of these alternatives. But this language would have to be evaluated under the National Environ- mental Policy Act, notwithstanding the fact that Congress has spoken very clearly on the need for a nuclear waste repository. Mr. President, this would endlessly delay this matter by having to do very expensive studies on matters which have already been rejected by the Con- gress. Another provision on which the law already provides no need for a NEPA statement is an alternative to the site of the facility as designated by the Secretary. The site here is Yucca Mountain. Now, the Congress has clearly spoken in naming Yucca Mountain. That is why we have said in previous legisla- tion that you did not need to do an al- ternative NEPA statement to examine, for example, the granite in Maine or the different kind of geologic forma- tions in Washington, for example, or the salt domes in Mississippi. There are potential sites all over this country and, but for the waiver of a NEPA statement, you would have to go and revisit each of these facilities all over the country, each of these locations. That is, in each of these cases, the law already provides for a waiver of the NEPA statement to consider these var- ious alternatives. The same is true for the alternatives to the design. The same is true for the need for the interim storage facility. Mr. President, rather than bring for- ward some new series of waivers, we are really bringing forward what exist- ing law provides and has already been waived as part of the Nuclear Waste Policy Act. Mr. President, it is not too much to say that if we adopted this amendment you would never be able to build a re- pository in the United States or an in- terim facility because you would put on endless requirements for NEPA statements on matters to examine sites all over the United States, to ex- amine alternatives to repository dis- posal and interim disposal, on matters that would be very expensive to inves- tigate and very difficult to prove, and would take many, many years to deter- mine. Most especially, Mr. President, by providing that there would be appeal from any agency action as opposed to VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00030 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9239 July 31, 1996 final agency action, final agency ac- tion appeals are provided in this legis- lation, but interim agency actions are not. If you made all agency actions ap- pealable, it would simply be impossible to have a repository. The PRESIDING OFFICER (Mr. COVERDELL). The time of the Senator has expired. Mr. REID. Would the Chair advise the Senator from Nevada how much time we have. The PRESIDING OFFICER. The Sen- ator’s side has 12 minutes, and the other side has 8 minutes. Mr. REID. I want to yield to my friend from California, but prior to that, I want to discuss a number of things. First, this is a good deal for the pro- ponents of this bill. They want to waive all the environmental laws, and they are saying the reason is because people might want to appeal, they might be protecting their rights, which is what you can do in this country. That is why we have NEPA. That is why we have all the laws set forth in the chart behind us. I also want to drop back a few min- utes, Mr. President. The senior Senator from North Dakota was here. He was concerned about terrorism, but because we were running out of time on an amendment, we could not respond to his concern. I want to take a few min- utes to respond to him. I hope if the Senator is not listening, his staff is, be- cause this is, I think, extremely impor- tant to the question he asked. We have here a letter from the Blue Ridge Environmental Defense League. Among other things, they say in this letter, dated July 29, 1996\u2014what they are basically explaining is that nuclear waste is dangerous and terrorists will get to the nuclear shipments, and they proved it. Two shipments arrived at the Military Ocean Terminal at Sunny Point in North Carolina, were loaded onto rail cars, and then transported overland to SRS. We were able to track both of these shipments from their ports of origin in Denmark, Greece, France, and Sweden across the Atlantic to North Carolina to SRS. These shipments cannot be kept se- cret so long as we live in a free society. Our actions were peaceful, but we proved that determined individuals, on a shoestring budget, can precisely track international and domestic shipments of strategic mate- rials. In the wake of Oklahoma City and At- lanta, the dangers posed by domestic or international terrorists armed with explo- sives makes the transport of highly radio- active spent nuclear fuel too dangerous to contemplate for the foreseeable future. I ask unanimous consent that the letter dated July 29 from the Blue Ridge Environmental Defense League be printed in the RECORD. There being no objection, the letter was ordered to be printed in the RECORD, as follows: BLUE RIDGE ENVIRONMENTAL DEFENSE LEAGUE, Marshall, NC, July 29, 1996. U.S. SENATE, Washington, DC. DEAR SENATOR: The Nuclear Waste Policy Act of 1996 (S. 1936) would place in jeopardy the lives of millions of American citizens by transporting 15,638 casks of highly radio- active material over railways and highways of this nation. This attempt at a quick-fix for the nuclear waste dilemma would cause more problems than it attempts to solve. The people who would bear the greatest bur- den would be the 172 million Americans who live nearest the transportation corridors. S. 1936 is a legislative short-circuit that will make us less secure as a nation and which will dump the costs of emergency response on the states and local governments. The Blue Ridge Environmental Defense League began in 1984: our work takes us throughout the southeast. Since 1994 we have observed the international shipments of spent nuclear fuel (SNF) from foreign re- search reactors (FRR) to a disposal site at the Savannah River Site (SRS) in South Carolina. Two shipments arrived at the Mili- tary Ocean Terminal at Sunny Point (MOTSU) in North Carolina, were loaded onto rail cars, and then transported overland to SRS. We were able to track both of these shipments from their ports of origin in Den- mark, Greece, France, and Sweden across the Atlantic to North Carolina to SRS. We ob- served the fuel shipment when they arrived at MOTSU. We watched the SNF transfer from ship to train and followed it through the countryside of coastal North and South Carolina. Our reason for doing this was to alert people along the transport route about the shipments through their communities. We rented a light plane and flew out over the SNF ships when they reached the three-mile limit. Television news cameras accompanied us and transmitted pictures for broadcast on the evening news. If we can track such ship- ments, anyone can. These shipments cannot be kept secret so long as we live in a free so- ciety. Our actions were peaceful but we proved that determined individuals on a shoestring budget can precisely track inter- national and domestic shipments of strategic materials. In the wake of Oklahoma City and Atlanta the dangers posed by domestic or international terrorists armed with explo- sives make the transport of highly radio- active spent nuclear fuel too dangerous to contemplate for the foreseeable future. Our work in North Carolina, Tennessee, and Virginia takes us to many rural commu- nities. Emergency management personnel in these areas are dedicated volunteers, but they are unprepared for nuclear waste. Vol- unteer fire departments in rural counties are very good at putting out house fires and brush fires. While serving as a volunteer fire fighter in Madison County, NC, I had the privilege of working with these men and women. We took special training to handle propane tank emergencies utilizing locally- built water pumper trucks. More sophisti- cated training or equipment was prohibi- tively expensive and beyond our financial means. Traffic control is a consideration at an emergency scene. Any fire or accident tends to draw a crowd. Onlookers arrive as soon as the fire department\u2014sometimes sooner in remote areas. There are always traffic jams reducing traffic flow to a one- lane crawl day or night, fair weather or foul. The remote river valleys and steep grades of Appalachia are legendary. At Saluda, NC the steepest standard gauge mainline railroad grade in the United States drops 253 feet\/mile (4.8% grade). The CSX and Norfolk Southern lines trace the French Broad River Valley and the Nolichucky Gorge west through the Appalachian Mountains along remote stretches of rivers famous among whitewater rafters for their steep drops and their dis- tance from civilization. The Norfolk South- ern RR crosses the French Broad River at Deep Water Bridge where the mountains rise 2,200 feet above the river. These are the transport routes through western North Carolina that will be used for high level nu- clear waste transport as soon as 1998 accord- ing to S. 1936. County emergency management personnel are entrusted with early response to hazards to the public in western North Carolina com- munities. When we asked about their readi- ness to respond to a nuclear transport acci- dent, they answered professionally saying, ”We’ll just go out there and keep people away until state or federal officials arrive.” This may be the best that can be done while a fire burns or radiation leaks from a dam- aged cask. In a recent interview, one western NC emergency coordinator said, ”There is no response team anywhere in this part of the state and, for the foreseeable future, there is no money in local budgets to equip us with any first response to radioactive spills.” The concerns of local officials reflect their on-the-scene responsibility while state offi- cials, faced with limited budgets and staff, make plans based on current bureaucratic realities. The Nuclear Waste Policy Act and Amendments of 1982 and 1987 place large- scale nuclear transportation scenarios dec- ades in the future. This fact and the limited resources of existing emergency planning de- partments make the timeline for preparation for nuclear accident response completely in- adequate for shipments beginning as soon as 1998. In North Carolina’s Division of Emer- gency Management, the lead REP planner has four staffers and a whole state to cover. It is not possible under these circumstances, to be ready with credible emergency re- sponse plans, training, and equipment in two years. I am asking you to oppose this expensive and dangerous legislation which would place an unfair and unnecessary financial burden on communities and which would place at risk the health and safety of millions of American citizens. Respectfully, LOUIS ZELLER. Mr. REID. Mr. President, we also know that they are running roughshod over environmental laws in this coun- try\u2014”they” being the proponents of this legislation. We have here a state- ment from Public Citizen, which says, ”If you believe in environmental stand- ards, don’t vote for S. 1936. S. 1936 se- verely weakens environmental stand- ards by carving loopholes in the Na- tional Environmental Policy Act”\u2014 that is what we call NEPA\u2014”elimi- nating licensing standards, forbidding the EPA from raising radiation release standards.” Mr. President, we received from the President of the United States office late last night a reiteration of why he believes this legislation is bad and why it should be voted down. Among other things said in this letter from John Hilly, assistant to the President of the United States, it says: The bill undermines environmental laws and processes. Americans deserve full public health protection. Yet, this bill renders the National Environmental Policy Act mean- ingless, undermines EPA and the Nuclear Regulatory Commission regulatory process for public protection from radiation expo- sure. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00031 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9240 July 31, 1996 It is a good deal the proponents have\u2014just wipe out the environmental laws and say we have to get rid of nu- clear waste. The powerful nuclear lobby has been willing to run rough- shod over the lives of Americans for too many years. It is time we stopped it. There is a permanent repository being characterized in Nevada. The only reason they want to go with the interim storage is to save money. It is not going fast enough for them. They don’t care about environmental laws. They care about the bottom line, the dollar amount. They are making tons of money. Mr. President, on this chart are the companies pushing this. Look, Mr. President, at the percent of net income relative to revenue: 20 percent of their revenues come from nuclear power. Here is 17.25 percent, 17.7 percent, 20.5 percent, 22.75 percent, and 25 percent. They are raking in the money. But it is not enough. They want to make more. They don’t care about the rights and liberties of Americans that are pro- tected with the laws called Clean Air, Clean Water, Superfund, and other such laws. I understand my friend from Cali- fornia has a question. Mrs. BOXER. I do. I would like to ad- dress a couple of questions. First, I want to thank both of you for your courage. I think Senator REID has shown us that there is a lot of power behind this particular bill\u2014economic power\u2014and it is always difficult to stand up against that. So my thanks to you for doing that. That is why we need people like you in the U.S. Sen- ate. Your team leadership has been no- ticed by many throughout this great country. I want to also thank Senator CONRAD and Senator REID for talking about the issue of terrorism, because having to close our eyes to the terrorist threat after what we have been through is\u2014I can’t even fathom it. I think Senator CONRAD was correct to bring this up. The answer from Senator REID, I found, to be very illuminating. This is my basic question: Did we not have in this Senate, over many years, a lot of struggles and fights to win pas- sage of the very legislation that would be waived in this act, and wasn’t that struggle and that fight a bipartisan one, where we came together, from dif- ferent parties sometimes, and some- times with different viewpoints, to pass the Clean Air Act and the Clean Water Act? Mr. REID. I respond to my friend from California that most of this legis- lation began during the period of Rich- ard Nixon. Mrs. BOXER. That is correct. Mr. REID. Take clean water. The rea- son the Clean Water Act was initiated is because the Cuyahoga River in Ohio caught fire, not once, but three times. After the third fire, people around the country started saying, ”Maybe we should do something about this.” I re- spond to my friend from California that when the Clean Water Act was ini- tiated, 80 percent of the rivers and streams in America were polluted. Now, some 25 years later, those num- bers have almost reversed. Approxi- mately 80 percent of the streams and rivers in America\u2014you can swim in them and drink out of them. They are in pretty good shape. It is not perfect. We have a long way to go, but we have done pretty well. Mrs. BOXER. Let me say that I have the honor and privilege of serving with my friend, Senator REID, on the Envi- ronment Committee, and that is what brought me to the floor today. I ask Senator BRYAN this question: Is it not true that the waste that will be moved throughout this country and placed in this repository is dangerous waste that could last between thou- sands of years to even a million years or millions of years? Mr. BRYAN. The Senator from Cali- fornia is correct. This is among the most dangerous material on the face of the Earth. We are talking not about something that would be a problem for 5, 10, 15, 20 years, even 2 or 3 lifetimes. The whole thrust of the bill that is be- fore us is to cut corners, try to save a few bucks here, to impose artificial deadlines that can never be met, all to the disadvantage of public health and safety. Very seldom do you hear the nuclear utilities talk about doing something to protect public health and safety. It is always, ”This costs too much,” ”Delay this a little bit,” ”It would be incon- venient or difficult.” The whole thrust of these laws is a balancing of public health and safety, and the fact that it may take a little longer, it may be a little more difficult, was a bipartisan consensus, as my senior colleague pointed out, during the term of Rich- ard Nixon. NEPA was enacted in 1969, the first year he served as President. It was a bipartisan consensus in America. This legislation would shatter that and subject those who would be affected by this decision\u2014at least 51 million people along the transportation routes\u2014to a lower standard of protection for public health and safety. Mrs. BOXER. The point of my ques- tion is that here we have the most dan- gerous elements known to humankind. And of all the things we should be doing, it seems to me, when we decide on a repository, is to make sure that every one of those acts is complied with\u2014Clean Air, Clean Water, National Environmental Policy Act, Community Right to Know, Safe Drinking Water Act\u2014and that is why I am so strongly supportive of the Senators’ amend- ment. All of the response about being dupli- cative and inconsistent\u2014I respect my friends on the other side of the debate, but we have a difference in the way we view the public interest. I have nothing but respect for those who hold a dif- ferent view. But I say this: If it is du- plicative and there is even one question about it, why not vote for this amend- ment and be doubly sure, if you will, that our people are protected from the most harmful elements known to hu- mankind? I thank my colleague for yielding, and I yield back my time to him. The PRESIDING OFFICER. The Chair advises that all the time of the Senator from Nevada has expired. There are 8 minutes remaining on the other side. The Chair recognizes the Senator from Alaska. Mr. MURKOWSKI. I thank the Chair. I observe, for the benefit of my friend from California, for whom I have the utmost and fondest regard, that ac- cepting this amendment means her State gets considered as a possible al- ternative for interim storage. The State of California currently has ap- proximately 1,319 metric tons of high- level nuclear waste that is stored in California. It is estimated that, by the year 2010, there will be 2,639 metric tons. So the point is, if we leave it where it is, which is what we will do with the amendment offered by my friends from Nevada, waste is simply going to stay where it is. As a consequence, at some point in time somebody will have to do something with it. To do something with it implies you have to move it. We have heard fear, fear, fear. We move money in armored cars. We used to move it in stagecoaches. We protected it. We protect it in armored cars. We will protect waste, if you will, in casks. This movement is not just helter-skel- ter. They have moved, in Europe, 30,000 metric tons of high-level nuclear waste. They moved it safely. That does not mean an accident could not happen or that a terrorist activity could not happen. But they have moved it. It has not been designed, if you will, to be easily lifted. It is very, very heavy and very difficult. The containers are built to maintain a degree of security un- known in any other type of engineering device. So while there is a risk associated with all aspects of this, there is also a reality of inconsistency in this amend- ment because the Senator from Nevada indicated that by permitting one repos- itory in Nevada as a permanent reposi- tory, he has acknowledged that the material has to get there somehow. So you have the potential risk, if you will, if you simply say we are going for a permanent repository and we are not going to consider an interim reposi- tory. The stuff has to move anyhow. There is a risk associated with move- ment. Mrs. BOXER. Will the Senator yield? Mr. MURKOWSKI. I am sorry. I have a limited time, in all due respect to my friend from California. Adopting a NEPA process open to al- ternatives opens up new areas for con- sideration. There is behind us the map showing all of the places other than a Nevada test site that could be used for an in- terim central storage facility. You can VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00032 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9241 July 31, 1996 see them. They are all over the coun- try. If you say yes to this amendment, you may be saying yes to nuclear waste storage in your State or near your State. The possibilities include New York, Hawaii, Connecticut, Wash- ington, Maine, Iowa, California, Mon- tana, North Dakota, South Dakota, Ar- kansas, Wisconsin, Oregon, and others. There are potential locations in 40 other States of about 605,000 square miles; 20 percent of the continental United States. You have to put it somewhere. So what we have here is an effort by the Senators from Nevada that may sound reasonable at first glance but it sets this whole process back 15 or 20 years. It allows all the decisions we are making today to be reconsidered. It al- lows them all to be challenged in the courts. It guarantees further delay, further gridlock, further stalemate, and it will, therefore, force the rate- payers in all of these States not to pay once but to pay twice, to continue to pay into the nuclear waste fund and to build new interim reactor storage sites because some of them are full at this time. This is a giant loophole for the Gov- ernment to use in avoiding its promise to store and handle waste. It is an ef- fort to derail the process. Senate bill 1936 does not\u2014and I em- phasize ”does not”\u2014exempt the estab- lishment of an interim or final reposi- tory for NEPA. Instead, it requires an EIS for both the interim and perma- nent repository. We require it. Furthermore, S. 1936 is consistent with NEPA and the Executive Order 12114 which implements NEPA. NEPA and the Executive order clearly antici- pates the situation we have here. There are some decisions of policy that are within the agency’s power to affect. There are others that are not. Congress may properly reserve some decisions for itself and allow other decisions to be considered in the NEPA process. Otherwise, we would never get any- thing done around here. Senate bill 1936 identifies six deci- sions that are appropriate for congres- sional consideration only. These six de- cisions involve whether we need a re- pository, when we need a repository, and where the repository should be built. So it is whether, when, and where. These are fundamental deci- sions of policy. I say to my colleagues that there are some things that we have the responsi- bility to decide and decisions that we are paid to make. These are some poli- cies that we alone must determine, and that is our job. If we adopt this amendment, we are being irresponsible because it will sim- ply put off the process, put into the courts and delay beyond this adminis- tration to sometime in the future, and we will never address it. What this amendment would do is to throw all of the cards back up in the air again as if to say Congress has made the tough decisions and cast the tough votes, but we are going to ignore all of that and revisit all of these deci- sions that we have already made. Mr. President, if we are going to allow the agencies to revisit all of the decisions of Congress, either through NEPA or some other means, then there is no need for us to be here. We might as well go home because there is noth- ing for us to do. So do not be fooled by this amend- ment. This is an amendment designed to derail responsible action to address nuclear waste in a repository. It looks reasonable at first glance, but it mere- ly is a means to upset the applecart and put us back to where we were in 1980. Mr. President, I yield all of my re- maining time. I move to table the pending amend- ment and ask for the yeas and nays. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. The PRESIDING OFFICER. The question is on agreeing to the motion of the Senator from Alaska to lay on the table the amendment of the Sen- ator from Nevada. On this question, the yeas and nays have been ordered, and the clerk will call the roll. The assistant legislative clerk called the roll. The result was announced\u2014yeas 73, nays 27, as follows: [Rollcall Vote No. 258 Leg.] YEAS\u201473 Abraham Ashcroft Bennett Biden Bingaman Bond Brown Burns Byrd Campbell Coats Cochran Cohen Conrad Coverdell Craig D’Amato DeWine Dodd Domenici Dorgan Exon Faircloth Frahm Frist Gorton Graham Gramm Grams Grassley Gregg Hatch Hatfield Heflin Helms Hollings Hutchison Inhofe Inouye Jeffords Johnston Kassebaum Kempthorne Kerrey Kerry Kyl Leahy Levin Lott Lugar Mack McCain McConnell Mikulski Moseley-Braun Murkowski Nickles Nunn Pressler Robb Roth Santorum Shelby Simon Simpson Smith Snowe Specter Stevens Thomas Thompson Thurmond Warner NAYS\u201427 Akaka Baucus Boxer Bradley Breaux Bryan Bumpers Chafee Daschle Feingold Feinstein Ford Glenn Harkin Kennedy Kohl Lautenberg Lieberman Moynihan Murray Pell Pryor Reid Rockefeller Sarbanes Wellstone Wyden The motion to lay on the table the amendment (No. 5073) was agreed to. Mr. MURKOWSKI. Mr. President, I move to reconsider the vote by which the motion was agreed to. Mr. JOHNSTON. I move to lay that motion on the table. The motion to lay on the table was agreed to. Mr. KERRY. Mr. President, I sup- ported the motion to table the Bryan amendment to S. 1936 not because it in- cluded a requirement that the Depart- ment of Energy comply with the Na- tional Environmental Policy Act [NEPA] in the establishment of an in- terim storage facility at the Nevada nuclear test site\u2014language which I support\u2014but because it also included unjustifiably sweeping judicial review language. While I support judicial re- view of all final agency actions, this provision goes well beyond final rulemakings and would be unneces- sarily burdensome and costly to both the Federal Government and the pri- vate sector. In my judgment, should this bill become law over my objec- tions, this judicial review could cause the entire process of establishing the repository to grind to a halt. Congress passed NEPA in 1969 to en- sure that Federal agencies integrate environmental values\u2014as well as so- cial, economic, and technical factors\u2014 in the decisionmaking process. Section 102 of NEPA requires environmental impact statements [EIS] for proposed major Federal actions which would sig- nificantly affect the quality of the human environment. The EIS process includes alternatives analysis in which reasonable alternatives to the proposed action are explored in an effort to present clear choices to decision- makers and the public, and to ensure that the most environmentally sound course of action is taken. S. 1936 limits or eliminates the appli- cation of a number of NEPA’s health and environmental standards with re- spect to the establishment of a tem- porary waste repository. For example, in order to expedite the interim reposi- tory’s opening it waives any regula- tions for the protection of public health and the environment if the reg- ulations would delay or affect the de- velopment, licensing, construction or operation of the interim storage facil- ity. I strongly believe that any facility in the United States designed to store spent nuclear fuel should be required to comply with NEPA. Therefore, I whole- heartedly support the first half of the Bryan amendment which instructs the Secretary of Energy to comply with all NEPA requirements. My concern with the Bryan amend- ment stems from its language which would add sweeping judicial review provisions to this bill. It would subject to judicial review any agency action relating to the development or imple- mentation of the integrated manage- ment system. I firmly support judicial review for all final agency actions. However, I am concerned that includ- ing any and all agency actions, not just final actions, may produce innumer- able interlocutory judgments. The cost to taxpayers likely would be very high, and the repository to be es- tablished under the terms of this bill likely would be drowned in a sea of red- tape. That is not in our Nation’s best interests despite the capable efforts of the Senators from Nevada to do every- thing in their power to prevent or VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00033 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9242 July 31, 1996 delay the establishment and operation of a repository in their State. Once our Government makes a decision to estab- lish a repository for nuclear wastes which is badly needed\u2014although I do not believe we are ready to make that decision with the confidence we should have for a step of this consequence\u2014we should not deliberately set up the ef- fort to fail by tying it in legal and pro- cedural knots. It appears unlikely that any addi- tional amendments to this bill will be offered or approved that would restore the applicability of NEPA provisions. Therefore, because the legislation ex- empts the repository establishment process from the application of NEPA and other environmental statutes, I will oppose final passage of S. 1936. I am hopeful this bill in its current form will not be enacted. The President has said he will veto it in this form, and I would urge him to do so. But, Mr. President, I wish to empha- size that I do not take this stance with enthusiasm. Our Nation needs a reposi- tory for nuclear waste. We should not continue ad infinitum to store it tem- porarily at the sites where it has been produced. That is neither safe nor pru- dent. Our Government needs to redou- ble its efforts to reach a conclusion about the establishment of a perma- nent repository, and it needs to do that with alacrity. Unfortunately, this legislation to create a temporary repository is not the answer. Establishing a temporary facility necessarily brings difficult problems that would not be present with a permanent facility. Exempting the facility and the process of estab- lishing it from environmental laws and safeguards is unacceptable. It is not inconceivable, even if quite unlikely, that these problems can be remedied this year in a way that would permit me to support this legislation. The first requirement is that the proc- ess be subjected to compliance with en- vironmental laws and regulations. This could be accomplished in a conference committee. If it is not, I will continue to oppose it. But if its flaws are not adequately re- paired, and the bill either is not finally passed by the Congress or is vetoed by the President, the 105th Congress needs to begin grappling early and seriously with this matter. I hope when it does so, Mr. President, that it will take a different and more responsible course than has been taken in the current Congress. SECTION 101(g) Mr. LEVIN. Mr. President, at page 9, lines 20 23 of the manager’s substitute amendment, section 101(g) provides that ”subject to subsection (f), nothing in this Act shall be construed to sub- ject the United States to financial li- ability for the Secretary’s failure to meet any deadline for the acceptance or emplacement of spent nuclear fuel or high-level radioactive waste. * * *” Is it the manager’s intention that this language prevent contract holders from recovering damages or other financial relief from the Government on account of DOE’s failure to comply with the 1998 deadline established in section 302(a) of the Nuclear Waste Policy Act of 1982? Mr. MURKOWSKI. It is not the man- ager’s intention that section 101(g) limit in any way the rights of contract holders, their ratepayers, or those agencies of the State governments that represent ratepayers, from enforcing any right they might have, including the right to hold the Federal Govern- ment liable financially, under the 1982 act and the contracts executed pursu- ant thereto. Section 101(g) is expressly subject to section 101(f), which makes clear that rights conferred by section 302(a) of the Nuclear Waste Policy Act of 1982 or by the contracts executed thereunder are not affected by this bill, including section 101(g). To the extent that act or the contracts established a 1998 deadline and the DOE fails to meet that deadline, it is not the manager’s intent that the substitute amendment in any way restrict the relief available to those damaged by the failure to meet the deadline. Mr. LEVIN. Is it correct then that the manager does not intend that the amendment would restrict the scope of remedies available to the plaintiffs in the litigation in which the Court of Ap- peals of the District of Columbia has recently held that the 1998 deadline is a binding obligation of the Federal Gov- ernment? Mr. MURKOWSKI. That is correct. It is not the manager’s intent that the language of section 101(g) proscribe the court of appeals or any other court from awarding monetary relief or other financial remedies to those who have paid fees to the Government under the 1982 act and the contracts, or those who will incur additional expense on account of the DOE’s failure to comply with any right conferred by 1982 act or the contracts. Mr. LEVIN. If a deadline were im- posed by the Nuclear Waste Policy Act of 1996, as reflected by the substitute amendment, as well as by the Nuclear Waste Policy of 1982 or the contracts executed thereunder, is it the man- ager’s intention that section 101(g) would proscribe financial liability for failure to meet the deadline to the ex- tent it is imposed by the 1982 act? For instance, if DOE were to fail to com- mence the acceptance and emplace- ment of spent nuclear fuel and high level radioactive waste by November 30, 1999 or thereafter, would the amend- ment proscribe a court from imposing financial liability on DOE if a court ruled that DOE’s inaction constituted a failure to comply with the deadline established in section 302(a) of the Nu- clear Waste Policy Act of 1982 and the contracts? Mr. MURKOWSKI. It is not the man- ager’s intention that section 101(g) limit the rights or remedies available under the Nuclear Waste Policy Act of 1982 or the contracts executed there- under. If a failure by DOE to comply with any deadline established in the amendment also constituted a failure to comply with a deadline established by the 1982 act or a contract under that act, it is not the manager’s intent that section 101(g) modify the right of any contract holder to seek any and all remedies otherwise available for the violation of the 1982 act or for breach of the contract. It is the manager’s in- tention that section 101(f) preserve all of those rights, regardless of whether the same or a similar obligation is ex- pressed in the Nuclear Waste Policy Act of 1996. Mr. LEVIN. With respect to a dead- line imposed for the first time in the Nuclear Waste Policy Act of 1996, is it the manager’s intention that section 101(g) proscribe a court order that the Secretary of Energy comply with such deadline, or granting relief other than money damages to contract holders? Mr. MURKOWSKI. It is not the man- ager’s intent that section 101(g) pro- scribe anything other than financial li- ability for failure to meet a deadline imposed by the Nuclear Waste Policy Act of 1996. To the extent other forms of relief are available for the govern- ment’s failure to comply with a dead- line imposed by the amendment, the manager does not intend that such a remedy be prohibited. Mr. LEVIN. Is it the manager’s in- tention that section 101(g) limit the li- ability of the United States for any- thing other than a failure to meet a deadline? For instance, if the Nuclear Waste Policy Act of 1996 imposes an ob- ligation which is not a deadline, such as the requirement to reimburse con- tract holders for transportable storage systems if DOE uses such systems as part of the integrated management system, is it the manager’s intention that that obligation not constitute a financial liability of the United States? Mr. MURKOWSKI. It is not the man- ager’s intention that section 101(g) limit the liability of the Federal Gov- ernment for anything other than a deadline. The manager does not intend that any other obligation imposed by the Nuclear Waste Policy Act of 1996 be affected by section 101(g). Mr. GLENN. Mr. President, when I first saw the Nuclear Waste Policy Act, S. 1271, I was very surprised at its ap- parent disregard to the rights of citi- zens and the protection of the environ- ment. It appeared to me that pro- ponents of that bill wanted to ignore those issues, all in the name of remov- ing a burden from the nuclear industry. I can understand the desire to make the Federal Government live up to its promises, but not at the expense of the environment or citizen’s rights. The bill, as originally written, con- tained provisions for prohibiting the Environmental Protection Agency from performing its legislatively man- dated function of defining standards for radiation releases from the permanent or interim radioactive waste reposi- tory. Congress established what ap- peared to be a limit which disregarded VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00034 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9243 July 31, 1996 scientific and public input on appro- priate limits. Particularly galling was the prohibition of public input and EPA involvement in standard setting. Other issues of concern included: First, opening the door to reprocessing, called conditioning in the original bill; second, running rough-shod over the citizens of States through which the radioactive waste would be trans- ported; and third, gutting Civil Service laws for a particular DOE office. I filed several amendments, in an at- tempt to correct provisions of the bill that in my view would result in unfair treatment or inadequate protection of citizens and the environment. Several of those provisions have been cor- rected, or at least modified. I am pleased to see that, in the latest version of the bill, the EPA and the NRC have been brought back into the process, albeit somewhat awkwardly. These two agencies are charged with responsibilities for setting standards for protection of the public, workers, and the environment from produced ra- dioactive materials, which includes those found in nuclear reactors or ra- dioactive waste repositories. I am very disturbed, however, with the legislatively imposed standard of 100 mrem per year to the average per- son in the vicinity of Yucca Mountain. I understood that EPA and NRC have the responsibility and authority to es- tablish radiation dose limits and stand- ards. I certainly would not substitute my limited knowledge on the effects of exposure to radioactive materials, for that of the EPA and NRC. I doubt if there are any others in this Chamber who would be qualified to do that, ei- ther. We should leave it to the experts, at EPA and NRC, as well as to the pub- lic, instead of imposing an arbitrary standard of our own. It is claimed that EPA and NRC have veto rights in this bill. However, the bill’s wording is such, that instead of giving the agen- cies the responsibility for establishing a standard, they are required to adhere to our standard, unless they determine that our standard constitutes an ”un- reasonable risk to health and safety.” What constitutes ”unreasonable risk”? How will EPA or NRC determine what is ”reasonable” and what isn’t in terms of risk? That is a subjective judgment, and it is an invitation to extensive liti- gation on that judgment. At the same time, the bill limits judicial review of rulemaking based on the 100 mrem standard. I am also concerned that our limit is significantly higher than limits im- posed for other nuclear activities. Why is this so? Is it because someone has been told that we can’t design a reposi- tory to tougher standards? Is this what health and safety regulation has come to? Don’t set a standard that the Na- tional Academy of Sciences suggests you should set\u2014their report suggests a much lower number than 100 mrem\/yr. for exposure\u2014instead let’s pick one that the engineers say they can easily meet today\u2014despite the fact that the repository will be around, maybe, for thousands of years. I understand that there is disagree- ment among scientists about the ef- fects of low-level radiation. The EPA sets a limit of 25 mrem, and the NRC has historically set 25 mrem around nuclear power plants. International standards setting bodies have also al- lowed dose limits for waste storage of 15 to 25 percent of the 100 mrem total limit. The EPA has also opposed the legis- latively mandated limit, in letters to Senate Committees and individual Sen- ators. I have also been informed that EPA is going to issue their dose limits in the very near future. [Draft within a month.] I want to know what they say in this regard before I set a congres- sionally imposed limit, which may or may not meet our best scientific judg- ment. Beyond this, Mr. President, the phi- losophy behind this bill is one that is seriously questionable. The bill pre- sumes that a permanent deep geologic burial site of nuclear waste is the most suitable solution to the waste problem and then sets up a structure that will inevitably lead to pressures to make the interim site the site of the perma- nent facility, and with legislated safety standards for the permanent reposi- tory. I simply do not believe that we now have the technology or engineering knowledge to credibly design and con- struct a permanent repository that can meet acceptable safety standards for tens of thousands of years. If we did have this ability and understanding, then it would not be necessary to con- tort our environmental laws and regu- latory oversight as this bill does. Until we get closer to being able to design and construct a repository with appro- priate safety standards, there is no rea- son why we cannot continue to have monitored retrievable surface storage of these dangerous materials. The level of risk is not greater than that posed by the construction of a central in- terim facility requiring continuing transportation of radioactive materials from all over the country. Accordingly, Mr. President, I am opposed to the pas- sage of this bill. Mr. KERREY. Mr. President, I would like to take this opportunity to explain my opposition to S. 1936. We can, and we must, seek a responsible and perma- nent solution to the important problem of high-level nuclear waste storage. In that light, I have supported, and will continue to support, a permanent geo- logic repository. What I do not support is designating the location of an in- terim storage site before we have de- termined the viability of the Yucca Mountain permanent repository. I have three major objections to that policy. First, it exerts a growing pressure to name Yucca Mountain as a permanent repository. The pressure to move nu- clear waste to Yucca Mountain con- tinues to increase. The premature deci- sion to authorize the storage of tens of thousands of metric tons of nuclear waste at the site only adds to the pres- sure to push blindly down this course. The American people need to be con- fident that the final decisions regard- ing the permanent repository are based on sound science and not political ex- pediency. The American people deserve a credible, deliberative policymaking process. They must have faith that the location of the permanent repository is based on a fair and balanced consider- ation of environmental, health and safety issues. Mandating the location of a interim site at this time under- mines the public confidence in this process. My second concern is that the in- terim site may become the de facto permanent site. If for either scientific or political reasons, the work on the construction of the permanent reposi- tory stops, who will be motivated to move the waste from temporary stor- age in Nevada to a permanent reposi- tory in another State? The nuclear waste at the interim site will, at that point, be of concern to very few. Those who were responsible for generating that waste will have no moral, legal, or financial responsibility for that waste. I submit that the policy options avail- able at that time will be rather lim- ited. This brings me to my third, and most important, concern. If, despite the in- ertia at work, another site for a perma- nent repository were named, it would set up an unacceptable situation. We would have moved the waste from Yucca Mountain to another, yet to be named, location. Nebraska is a major corridor to Yucca Mountain. Under no circumstances will I vote for a bill that sets up the possibility of the Nation’s nuclear waste passing though my State twice. Simply stated, it is unnecessary to subject the public to the risk and ex- pense of transporting this waste twice. That summarizes the irony of S. 1936, regardless of what the final deposition of the permanent repository at Yucca Mountain, we have errored. If Yucca Mountain is found to be a viable loca- tion, we have unnecessarily under- mined the credibility of the scientific studies. If Yucca Mountain is not a via- ble site, we are given a no-win situa- tion. We either allow the interim site to become the de facto permanent site or we once again move high-level nu- clear waste to another location. Why does the Senate chose this road with no winning outcomes? Are we re- acting to a crisis that does not exist? For years the operators of commercial nuclear power plants have stated that on-site storage was safe. All evidence supports this position, and I believe them. Current on-site storage is not a permanent solution, but by the same token, it does not present a crisis. The alternative to the no-win course outlined in S. 1936 is quite simple. We wait until the completion of the viabil- ity study at Yucca Mountain in 1998. At that time we can consider the pol- icy options available based on sound VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00035 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9244 July 31, 1996 science and hard evidence. We will not have locked ourselves into narrow pol- icy options or have undermined the credibility of the process through pre- mature decision making. The geologic repository will be designed to store high-level nuclear waste for 10,000 years. Yet, this body can not wait 2 years to base public policy decisions on sound science and a credible process. Mrs. MURRAY. Mr. President, I in- tend to support S. 1936, as amended. However, I would also like to express my reservations about portions of this bill. I supported cloture and I appreciate my colleagues from Nevada agreeing to allow this bill to move forward. It is critical that we proceed with the busi- ness we have to complete prior to ad- journment; namely, 13 appropriations bills. I hold no grudges against my sin- cere colleagues from Nevada for their use of Senate rules to delay this bill. Were I in their shoes, I too would like- ly use every parliamentary device available to me to prevent enactment of this bill. It is because I do not want to be in their shoes that I support this bill. I, and many of my constituents, are con- cerned that there may be a renewed ef- fort to place either an interim or a per- manent nuclear waste repository in Washington, at Hanford, adjacent to the Columbia River. As many who have dealt with this issue over the years know, Hanford, a Texas site, and Yucca Mountain were the winners in the per- manent repository selection process. So, for the health of my constituents, I support development of Yucca Moun- tain. Conversely, it is also that fear for my constituents that makes me most nerv- ous about S. 1936. While I appreciate the improvements made about Envi- ronmental Protection Agency author- ity regarding radiation release and ex- posure standards, I am worried about the bill’s easing of some environmental and health standards. It is not unlikely that someday we in Washington may have the rest of the Nation decide that Hanford radiation standards could be lessened in order to foist some new batch of nuclear waste upon us. So, I am leery of such provisions in this bill and am pleased that the authors con- tinue to make improvements. I also am frustrated that the U.S. Government has made a commitment to some of its citizens, to ratepayers, to the nuclear industry, to store nu- clear waste by 1998. Maybe we should not have made such a commitment or collected fees to follow through on that commitment. But we did. It is time to act on that commitment\u2014even if it means so doing with this imperfect ve- hicle. Mr. President, this is a very difficult issue for me. I care about my State, I care about the ratepayers’ money being spent on this never-ending project to get nuclear waste in a permanent geo- logic repository, I care about the health of all people, including Nevad- ans, and I care about fairness. I agree with many of the arguments made by my colleagues, Senators BRYAN and REID. Therefore, I will support any amendments that address my concerns. In the end though, I will support S. 1936 in its final form. Ms. MOSELEY-BRAUN. Mr. Presi- dent, on balance, I support S. 1936. It is not a perfect bill, but it is a reasonable bill, and I do not believe that the United States can afford further, in- definite delays. The decision before the Senate is, in part, about the suitability of Yucca Mountain, the risks associated with the transportation of spent nuclear fuel, and the legacy of spent nuclear fuel created by our nuclear industry. The issues that flow from a decision to open an interim facility near Yucca Mountain, however, are as important as the site decision itself. My own State of Illinois, with 13 reactors, has more nuclear plants than any other State. For 36 years, waste has been building up, and the volume continues to grow. With our excellent network of highways and railways, Illinois also faces issues associated with interstate shipments of spent fuel destined for a permanent repository. There will never be a perfect disposal site for spent nuclear fuel. The fuel is dangerously radioactive, and remains so for hundreds of thousands of years. Whether it is placed in deep geologic storage, sunk beneath the ocean, drilled far into the earth, or shot it into space, every approach poses risks to humans and the environment, and none will ever completely eliminate the dangers of this substance. Without a perfect solution, however, we are forced to choose the next best option: A location where the waste will have the least potential adverse impact on human health. Ideally, such a site is in an unpopulated area, away from threats to underground water, away from animal habitats, and in a place where it poses the least environmental risk and where we are assured of max- imum security protection. Illinois, home to over 11 million peo- ple, is not such a site. Yet, over 5,000 tons of spent fuel are housed at tem- porary locations scattered throughout my State. Most of these locations are in northern Illinois, near great con- centrations of people. The fuel rods are stored in underwater pools, a method never meant to be permanent. While the pools pose no imminent risk, and will likely remain safe for the foresee- able future, they do not ensure com- plete safety, maximum security, or long-term protection of the environ- ment. And the volume of waste at these sites will continue to accumulate as spent fuel is removed from nuclear plants. For Illinois, there are no perfect an- swers, there are only options, and each option has its problems. If a Western waste disposal site is opened, Illinois, because of its key role in our national transportation system, faces a future of literally thousands of shipments of nuclear waste across the State. The other alternative is even less palat- able\u2014keeping large amounts of deadly waste at Illinois nuclear power plans for perhaps 100 years and beyond, in fa- cilities never designed for long-term safety and security, located too close to people, too close to groundwater, and quite frankly, too close for com- fort. My conclusion is that spent nuclear fuel cannot remain in Illinois. Illinois is not suitable for the medium and long-term storage of nuclear waste, and should not have to risk inadvert- ently becoming a de facto permanent site because Congress fails to act. Congress has debated this issue for 14 years. Illinois ratepayers have paid more than $1.5 billion to help finance the construction of a permanent dis- posal site in Yucca Mountain. Despite the billions received, the Federal Gov- ernment has made little progress, and Yucca Mountain is not expected to open until 2010 or later. Meanwhile, space runs out in Illinois beginning in 2001. If Congress fails to act, utilities will be required to build additional storage space at reactor sites, and rate- payers will foot the bill, essentially paying twice for the storage of this waste. I am concerned about transportation. While I have been assured by the city of Chicago and the Illinois Department of Nuclear Safety, both of which have excellent hazardous waste transpor- tation programs, that spent fuel ship- ments pose no risk to the general pub- lic, we must remain as vigilant as pos- sible on this issue. These fuel shipments must be han- dled in a manner that meets the high- est safety standards and does not put Illinoisans or other Americans at risk. That’s why I offered an amendment to this bill that would hold the Depart- ment of Energy and the Department of Transportation accountable for these shipments, and directs the Department of Energy to select routes that avoid heavily populated areas and environ- mentally sensitive areas. I thank the chairman and ranking member of the committee for accepting these amend- ments. I do believe, however, that more should be done to further improve transportation safety, and I hope Con- gress will revisit this issue in the very near future. It is worth remembering that if this bill is enacted this year, there will be no immediate cross-country exodus of spent fuel. The Nuclear Waste Tech- nical Review Board recognizes that ”even if passed into law now, none of the proposals before Congress would enable the operations of a centralized facility before 2002.” Additionally, the process of licensing and developing a large interim facility, and the trans- portation infrastrucutre that goes with it, has been estimated to take 5 to 7 years. Furthermore, it is not expected that the Department of Energy will meet several deadlines in this bill. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00036 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9245 July 31, 1996 Even if S. 1936 is promptly enacted, spent fuel will remain where it is for quite some time. Each decade of delay, however, adds 20,000 metric tons to storage capacity. Beyond 2020, nearly 85,000 metric tons of spent fuel will have been generated. And that is ex- actly why the Nuclear Waste Techical Review Board recommends that action must begin now on a Federal facility, so that full scale operations can begin by 2010 when reactors begin shutting down in large numbers. Mr. President, this debate is not about whether nuclear power should ever have been pursued as an energy option. That has long since been de- cided. We cannot wave the magic wand, nor turn back the clock. Nuclear power is here, and nuclear waste must be dealt with. Our decision on dealing with nuclear waste will never be perfect, because it cannot be perfect. But, it is a decision that must be made. If we fail to act, Congress will send a message to the American people that the nuclear waste problems created by our genera- tion are best resolved, and best fi- nanced, by our children and our grand- children. That is neither right, nor fair, and that is why I am voting in favor of S 1936. I urge my colleagues to do likewise. NUCLEAR WASTE AND THE BUDGET Mr. DOMENICI. Mr. President, I want to take a moment to congratu- late the senior senator from Idaho, the chairman and ranking minority mem- ber of the Senate Energy and Natural Resources Committee and the majority leader on this bill. All of these Sen- ators deserve a great deal of credit for getting this controversial bill pulled together and scheduled for Senate ac- tion in a year when the calendar is working against us. I also want to con- gratulate the Senators from Nevada. This is a difficult issue. I may disagree with them, but I respect the effort and vigor they have put into their opposi- tion to this bill. The Nuclear Waste Policy Act re- quired electric utilities to contract with the Department of Energy to take title and ultimately dispose of nuclear waste generated by these utilities in exchange for a fee on nuclear-gen- erated electricity. The Department of Energy’s view is that they do not have obligation to take this waste until the development of an operational interim storage facility or a permanent reposi- tory. The Clinton administration has shown incredible bad faith on its part to honor these contracts. While the ad- ministration has argued that there is no obligation to take the waste in 1998, it continues to collect fees from elec- tric utilities pursuant to its contracts with these utilities. The Clinton ad- ministration has threatened to veto legislation, last year during consider- ation of the Energy and Water Develop- ment Appropriations bill and this year during consideration of this legisla- tion, providing an interim storage fa- cility that would provide DOE with the means to meets its contractual respon- sibilities while a permanent repository is being developed. Although the ad- ministration has professed support for development of a permanent reposi- tory, the President has not provided the leadership necessary to gain the funding or the changes in the law that will be necessary to ensure an oper- ational disposal facility will be devel- oped. For example, in his most recent budget request, the President proposed to reduce spending for the nuclear waste program over the next 6 years. When DOE indicated it would not ac- cept responsibility for the utilities’ nu- clear waste in 1998, the electric utility industry took them to court. The United States Federal Court of Appeals for the D.C. Circuit recently sided with the utilities on the question of the Fed- eral Government’s obligation and con- cluded that the Federal Government has an obligation to accept title for this waste in 1998 that is reciprocal to the utilities’ obligation to pay. The court clearly rejected DOE’s argument that its obligation was contingent on the development of an interim or per- manent repository. S. 1936 will allow the Federal Govern- ment to honor that commitment. It provides for an interim storage facility to meet the Federal Government’s commitment to take this waste and sets forth a process that will allow the Federal Government to study, evalu- ate, and develop a safe and environ- mentally-sound permanent repository for nuclear waste. Earlier versions of this legislation in- cluded provisions that would have vio- lated the Budget Act. Senators CRAIG, MURKOWSKI, and JOHNSTON have writ- ten a bill that does not violate the Budget Act. It is fully paid for over the 10-year period as required by the Act. The bill, however, will result in a $600 million annual increase in direct spending and the deficit beginning in 2003. This direct spending would be available to fund program manage- ment, interim storage, transportation, and development of a permanent repos- itory. It pays for this increased spend- ing over the 10-year period by accel- erating the payment of fees by electric utilities. Although the bill does not technically violate the pay-as-you-go rule over the 10-year period, it meets this requirement by shifting future payments by utilities into the 10-year budget window. This bill provides direct spending au- thority that will be available to fund all aspects of the nuclear waste dis- posal program. I understand the very strong arguments for this spending au- thority, but as Budget Committee chairman I am constantly confronted with very compelling arguments on why we should increase spending for numerous programs. In this instance, particularly consid- ering the Appeals Court’s decision, clearly the Federal Government has an obligation to take title to this waste in 1998. DOE’s argument was that it had no obligation because no disposal facil- ity was available. The Court discarded this view and interpreted disposal to be a very broad term that included tem- porary storage of nuclear waste. Viewing the tremendous effort that went into getting an agreement for consideration of this bill, I decided not to pursue an amendment that would have limited the increase in direct spending to what is needed to develop an interim storage facility. If this leg- islation is not enacted, I intend to pur- sue modifications to this legislation to limit the increase in direct spending to what is necessary to provide for the in- terim storage of this waste. I think a very strong case can be made that the Government has a binding contractual obligation to provide for the interim storage of this waste and that is clear- ly supported by the court’s opinion. Mr. ROCKEFELLER. Mr. President, I oppose the Nuclear Waste Policy Act, and I would like to share some of my reasons with my colleagues. First, the Senate should not be ram- ming through a bill to designate an in- terim storage site just when a com- prehensive, sophisticated process is well underway to come up with a per- manent site or solution. This legisla- tion basically says the Senate knows better\u2014it says the Senate should take the place of scientists and experts, choosing Nevada as the so-called in- terim site and presumably paving the way for the same location to be used forever. I do not think this is the time what- soever for the Senate to make this de- cision\u2014it’s a misuse of power, it con- tradicts other policies that Congress has put on the books, and it could trig- ger all kinds of unfortunate con- sequences, including the possibility of a very serious accident. This bill, S. 1936, violates current law, the 1987 Nuclear Waste Policy Act amendments. Under the 1987 law, DOE is not allowed to begin construction of an interim storage facility until the NRC has granted a construction license for the permanent site. Also, that law stated that no more than 10,000 metric tons of waste could be stored at the in- terim site before the permanent site began operating, and no more than 15,000 metric tons after that. But S. 1936 authorizes an interim site storage capacity far greater than either of these levels\u201440,000 metric tons after phase two, which will be increased to 60,000 metric tons if Yucca Mountain falls behind schedule. In 1987, Congress was saying that it would be unwise to ship nuclear waste across the country to a temporary above-ground storage site until a per- manent site gets built. The same is true now. It still isn’t smart. But, under this bill, the waste would be shipped to the Nevada interim storage site anyway, before the studies have been completed to certify whether or not Yucca Mountain is the place to be a permanent repository of nuclear waste. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00037 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9246 July 31, 1996 Some say this isn’t true, that there is a safeguard in the bill. But, while the bill requires DOE to stop construction on the interim site if the President de- termines that Yucca Mountain is un- suitable as the permanent repository, there’s a catch. If Yucca Mountain isn’t found suitable, the bill will re- quire that the interim site be built in Nevada anyway unless the President picks an alternative site within 18 months. This alternate site must then also be approved by Congress within 2 years after that. Leaving aside the idea that we should designate nuclear waste sites on objective criteria rather than strict timetables, does anybody believe another site will be found in 18 months? Or that Congress will approve another site 2 years after that? I’m not betting on it. Why all this pressure to act on the bill before us, S. 1936? From everything I have seen, there is no overwhelming case, for safety or related reasons, to force the transportation and placement of this waste into an interim site. The nonpartisan Nuclear Waste Technical Review Board issued a report saying that there is no compelling technical or safety reason to move spent fuel to a centralized facility for the next few years. And the Nuclear Regulatory Commission has said that the waste could safely remain at the current sites for far longer than that in dry cask storage facilities. In short, this waste doesn’t have to be moved now. In fact, it is even conceivable that science may ultimately lead to the re- jection of a single repository, because of the dangers of transporting waste and progress being made in developing alternatives. The Senate should not be intervening, singling out Nevada, and short-circuiting what could be a safer, sounder, and less costly solution. And there are a number of safety concerns that argue against this bill. Experts have raised concerns about the radiation exposure standard in this bill, and I think we should question the preemption of several key environ- mental laws, such as the Clean Water Act and the National Environmental Policy Act. Transportation of this waste also is a major concern, and reason enough to reject this legislation. If the plan in this bill goes forward, we will see the transport of up to 60,000 tons of nuclear waste by road and rail from nuclear fa- cilities around the Nation to this in- terim storage site. These mobile nu- clear waste sites will travel through West Virginia and 42 other States. I have been told that 50 million people live within 1 mile of the proposed transportation routes that would be used. In West Virginia, we have no nuclear facilities. We have no spent fuel. We have no nuclear waste. And we have no storage problem. But, under this bill, West Virginians will have nuclear waste being shipped through the State. I do not want to be alarmist, but I do have concerns that West Virginia and the other 42 States have not had ade- quate time to develop the necessary transportation safety plans, and are not ready to handle the possible acci- dents that may occur. I don’t know how many of my colleagues have spent time in southern West Virginia, but the mountains and roads there will not be friendly to rescue efforts if one of these trains goes off the tracks. Under this bill, the zeal of some to force this premature interim storage facility into Nevada may raise risks for protecting the people and the environment in places like West Virginia. Mr. President, this is an unnecessary bill that forces Nevada to prematurely take the Nation’s nuclear waste and become America’s so-called interim storage site. It looks like a set-up to becoming the permanent storage facil- ity, not as a result of the promised ob- jective and scientific process, but as a result of political pressure and an ea- gerness to dump a problem onto a lone State. It uses a radiation exposure standard that looks questionable and undermines environmental laws in ways that could be dangerous. It threatens to expose millions of Ameri- cans to the risks of transporting and storing this waste. The Senate has no business passing this bill. The President has made it clear he will veto the bill, wisely in- sisting on the completion of the kind of process that should be used to make decisions as monumental as where, when, and how to transport and locate nuclear waste. The Senate should defer to that process as well, and resist this idea of singling out one State in such an insensitive and heavy-handed man- ner. The PRESIDING OFFICER. The Sen- ator from Louisiana. Mr. JOHNSTON. Mr. President, I wonder if my colleague from Alaska and my colleagues from Nevada will listen to a question, which is, as I un- derstand it, the plan now is to go to third reading immediately and vote on final passage at 4:55? Mr. MURKOWSKI. Mr. President, in response to my colleague from Lou- isiana, that is the plan that has been agreed to. Mr. REID. It is my understanding there will be general debate until that time, that we each have an amendment left, and it is my understanding neither the proponents of the legislation nor the opponents of the legislation are going to offer the last amendments they have in order, and that the time will be evenly divided between now and 4:55 for general debate on the legisla- tion. Mr. MURKOWSKI. That is my under- standing, Mr. President. Mr. JOHNSTON. I wonder if we can advance that by unanimous consent. Mr. President, if it is in order and agreeable with my colleague from Alaska, I ask unanimous consent that we move immediately to third reading, and that the time between now and 4:55 for final passage be equally divided be- tween the Senator from Alaska and the senior Senator from Nevada. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. MURKOWSKI. I thank the Chair. The PRESIDING OFFICER. The question is on the engrossment and third reading of the bill. The bill was ordered to be engrossed for a third reading and was read the third time. The PRESIDING OFFICER. Who yields time? Mr. MURKOWSKI addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Alaska. Mr. MURKOWSKI. Mr. President, I wonder if I may have the Chair identify the time that will be divided on either side. The PRESIDING OFFICER. The Sen- ator from Alaska has 30 minutes; the Senator from Nevada 31 minutes. Mr. BRYAN. Mr. President, the Sen- ate is not in order. I did not hear the inquiry of the Senator from Alaska. The PRESIDING OFFICER. The Sen- ator is correct. The Senate will come to order. I ask that all audible con- versations be removed to the Cloak- room. The Chair recognizes the Senator from Alaska. Mr. MURKOWSKI. Mr. President, as I understand it\u2014I was distracted as well\u2014we have about 30 minutes. The PRESIDING OFFICER. The Sen- ator from Alaska has just over 30 min- utes. Mr. MURKOWSKI. I thank the Chair. I inquire among Senators on this side as to how much time they need. I think the Senator from Wyoming requests time. How much time does he need? Mr. SIMPSON. Mr. President, I think 5 to 7 minutes will be quite adequate. Mr. MURKOWSKI. The Senator from Idaho, I know, is going to request time, 10 or 15. The Senator from Louisiana. I am going to yield myself 5 minutes at this time, and I will attempt to accom- modate\u2014why don’t I just go ahead with the Senator from Wyoming now and allot him 5 minutes. I yield 5 min- utes to my good friend, the Senator from Wyoming, who, unfortunately, will be departing this body at some point in time. The PRESIDING OFFICER. The Sen- ator from Wyoming. Mr. SIMPSON. Mr. President, I do richly commend my friend, Senator MURKOWSKI. I have watched him dog- gedly work in this area. There are many who have done so much in this area over the years: Senator JOHNSTON from Louisiana; I was involved with it as chairman of the Subcommittee on Nuclear Regulations; Senator Gary Hart, and back through the years. The problem with nuclear waste stor- age is a most serious and complex one. I cannot tell you how tired I am of the people on both sides who are extrem- ists in the area; those who are the ”Hell, no, we won’t glow” group and the ”nobody’s ever been killed” group. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00038 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9247 July 31, 1996 Somewhere between those two groups is sanity. I think we are finally on the track of doing something sensible. The mere mention of nuclear waste sends shivers up the spine of many people. I discov- ered that when I came to the Senate and joined the Nuclear Regulatory Subcommittee. That is what happens when one utters, ”All right, I’ll take an assignment no one else wants.” I did that a couple of times, and I got Immi- gration and Nuclear Regulations and Veterans Affairs, so cursed with busi- ness three times in some ways. I have enjoyed those issues, but they are filled with emotion, fear, guilt and racism, all three of them. So here we have this entire issue that has been a continuing victim of gross misinformation, reprehensible scare tactics, particularly in the 17 years since Three Mile Island, and certainly people deserve to know more of exactly what we are dealing with. The waste products resulting from many good and beneficial uses of nu- clear elements are not just going to go away. It is a little late for protesters just to run around the streets with signs saying, ”Don’t put it here, don’t put it there.” Wastes of varying levels of activities are piling up at thousands of sites across this country from sources like universities, nuclear powerplants, vital medical procedures conducted at hos- pitals and even dismantled Soviet mis- siles. Much of this waste is sitting\u2014sit- ting\u2014in or near highly populated areas which face potential threats with re- gard to earthquake, tornado, and hurri- canes. The specific problem the bill address- es is the disposal of high-level nuclear waste from powerplants, the spent-fuel rods that are left over after years of generating electricity. Back in 1982\u2014 incidentally, the same year Cal Ripken’s playing streak started\u2014Con- gress passed the law. I was involved in that. In essence, it said we will make a deal with the nuclear power consumers in this country. We said the Federal Government would provide a place for storing the spent-fuel rods, but the consumers had to pay for it. Since that law has passed, those fees, plus interest, have provided $11 billion; $6 billion has already been spent, some of it for unrelated purposes, and still construction of the disposal site has not even started. We are running out of time. No more time for placards, no more time for running through the streets, no more time for standing out on the highway, because here is where we are: There are 109 active commercial powerplants in 35 States providing 20 percent of the country’s electricity. For the most part, the spent-fuel rods produced in those facilities are there on site in pools under 30 feet of demineralized water. If the water were to drain away for any reason because of some struc- tural defect from natural disaster, the rods would reheat and eventually melt down. These pools were never designed for long-term storage. Yet, because of the strength of the political opposition to a permanent site\u2014I can understand all the reasons\u2014we run the risk of jeopardizing the health of millions of Americans. A typical nuclear power- plant produces 30 tons of spent fuel. The PRESIDING OFFICER. The Chair advises the Senator that his 5 minutes have expired. Mr. SIMPSON. I ask for an additional 2 minutes. The PRESIDING OFFICER. The Sen- ator will proceed. Mr. SIMPSON. A typical nuclear powerplant produces 30 tons of spent fuel every year. Right now more than 30,000 metric tons of spent fuel are being stored at 75 sites across this country. And 23 reactors will run out of room in their storage pools by 1998. By 2010, a total of 78 reactors will be out of storage space for their spent fuel and have about 45,000 tons of metric tons of spent fuel. It is very important we get the waste out of these inappropriate and unsafe locations into a technologically sound, permanent storage site. It is also very important for every person in this country to realize that it is perfectly possible and technically feasible to transport and store this waste with very little risk to human health or the environment. I point out the Department of Energy has been transporting nuclear waste from the weapons facilities under its jurisdictions for 30 years without a sin- gle incident of environmental or human harm. It is crucial to get on with the busi- ness and get on with the work of an ef- ficient and safe system for civilian nu- clear waste before the risks we have been dodging with our current hap- hazard setups catch up with us. I applaud the work of Senators MUR- KOWSKI and CRAIG and JOHNSTON, their bipartisan effort through the years. They have a realistic piece of legisla- tion which finally allows the Federal Government to live up to its commit- ment to provide a safe, secure, and cen- tralized location for the storage of the most radioactive of the nuclear waste. It also provides the money and Federal assistance for training State and local personnel in safety and emergency pro- cedures. It is a very important bill and a good compromise, and good work all around. I am very pleased to support it and encourage my colleagues to do the same. I thank very much the Senator from Alaska. Mr. MURKOWSKI. Madam President, I believe the other side wants to speak. I retain the remainder of our time. Mr. BRYAN addressed the Chair. The PRESIDING OFFICER (Mrs. FRAHM). The Senator from Nevada. Mr. BRYAN. Madam President, how much time remains under the control of the Senator from Nevada? The PRESIDING OFFICER. The Sen- ator from Nevada has 30 minutes. Mr. BRYAN. I thank the Chair. I, at this point, will allocate myself 10 min- utes of that time and ask the Chair to inform me when I have used that. Madam President, it has been a num- ber of weeks we have been discussing the high-level nuclear waste issue. And I think it is time to put this into some perspective. In 1980, some 16 years ago, debate on the floor of the Senate indicated that there was a great urgency and imme- diacy to take action, that there was a crisis, that indeed, if nothing were done, if we did not get the interim stor- age, what was called MRS storage, nu- clear reactors around the country would have to shut down by 1983. I offer that interesting piece of his- tory as a footnote because the debate today is in almost identical respect the same debate that occurred this very week on July 28, 1980. This is a con- trived and fabricated crisis. Let me begin by pointing out what the Nuclear Waste Technical Review Board\u2014this is a board that was created by act of Congress in 1987. And the Nu- clear Waste Technical Review Board has concluded that there is no need for interim storage at this time. And that is a conclusion which they have en- dorsed. Anyone who has any question about it, this is the document. So all of this debate is at best premature and in our view totally unnecessary. When you look at the substance of the legislation, what is occurring is an absolute travesty. The major environ- mental provisions that protected Americans with bipartisan support for more than 2 decades are simply wiped out, simply wiped out. We have just had a debate. The National Environ- mental Policy Act, designed to apply to circumstances such as this, for all intents and purposes, has been evis- cerated by the nuclear utilities in their zeal to get interim storage. Let me just cite two specific ref- erences. Among the things that the En- vironmental Policy Act would ordi- narily consider would be the environ- mental impacts of the storage of spent fuel and high-level radioactive waste for the period of foreseeable danger \u2014thousands of years. This piece of leg- islation would restrict the application of NEPA, the Environmental Policy Act, to the initial term of licensure of about 30 years. Nothing has occurred to date that would establish a design criteria for such facility. Ordinarily the Environ- mental Policy Act would consider the alternatives to the design criteria. That is now wiped out. NEPA cannot consider design criteria, cannot con- sider the application for longer periods of time of health hazards. So we have a major piece of environmental legisla- tion wiped out. Preemption. The amendment offered by our friends from the other side has put us in the situation in which all Federal laws that are inconsistent with this act are wiped out. And we have gone through a whole litany of them. We have the National Environmental Policy Act, FLPMA, clean air, clean VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00039 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9248 July 31, 1996 water, all of those, if they are incon- sistent, they do not apply. So forget environmental laws when it comes to siting an interim storage. That is sim- ply an outrage, Madam President, no matter how one feels about nuclear en- ergy or whether one believes there ought to be some type of interim stor- age. With respect to standards, nowhere in the world\u2014nowhere \u2014is a radio- active standard of 100 millirems estab- lished by statute\u2014nowhere. And 100 millirems would be at least 24 times the standard for the safe drinking water, would be at least six times-plus the standard set for the WIPP facility. I must say, this is all laid out right here. So, 100 millirems. Why in God’s name, for the most dan- gerous stuff on the face of the Earth, would we mandate by statute a 100- millirem standard, and then say to the EPA, well, you know, if you can prove that that is unsafe, then you can change it. We do not do that. I mean, if this were a straight-up deal, if this were not some contrived wish list by the nuclear utilities, the EPA would be designated as finding a standard and establishing it. No other place in the world. The National Academy of Sciences was asked in a piece of legislation ap- proved in 1992\u2014the energy bill\u2014was asked to come back and make a report with respect to a standard. And what they said is that the safety standard, in terms of radioactive exposure\u2014this is the ”Technical Bases For Yucca Moun- tain Standards.” This is the product of the National Academy of Sciences. And what they said is, it should be some- where between 10 and 30 millirems. How can you justify it? How can you justify that? And indeed when you look at the Environmental Protection Agen- cy, here is what our Administrator tells us. S. 1936 and the substitute amendments es- tablish a Congressionally set overall per- formance standard of 100 millirems a year to the average person in the general vicinity of Yucca Mountain nuclear waste repository for 1000 years. Although the substitute amend- ments allow EPA to challenge the 100 millirem a year standard, EPA believes the standard is inappropriate because it is less protective than other U.S. standards and international advisory board recommenda- tions for a single source. Furthermore . . . the actual risk to public health and the envi- ronment will occur well after 1,000 years. . . . And the limitation that is imposed in this legislation applies only to 1,000 years. So again, public health and safety be dammed. Anything that helps the nu- clear utilities, that is what we are going to buy into. Madam President, that is just an ab- solutely indefensible matter of public policy. I must say that no other place in the world establishes such a stand- ard. We are frequently cited to the international sanctioning bodies. And although 100 millirems is referenced in those standards, never is it referenced for single source. It indicates here that most other countries have endorsed the principle of apportionment of the total allowed radiation dose. So no\u2014no\u2014standards that exist in the world, to the best of our knowledge, would propose 100 millirems from a single source. Finally, on the standards issue, I must say, clearly what drives that de- cision, as well as every provision in this bill, is to make it easier to lower public health and safety standards, to make it less costly. And the public health, and the consequences of those persons, would be effectively by and large ignored. My colleague is going to talk a good bit about transportation, but we are talking about 85,000 metric tons. We are talking about 16,000 shipments or more, traveling across the rail cor- ridors in America, as well as our high- way system, and 51 million Americans live within 1 mile of that. Each of those railroad casks weigh 125 tons, and the consequence of the hazardous cargo in terms of radioactivity would be the equivalent of 200 bombs dropped at Hiroshima. We are not just talking about Nevadans at risk. If you ship it by way of cask and highway cargo, you are talking about the equivalent of 40 bombs. Finally, and we have tried to make this point albeit it is a difficult thing to explain, in effect this is a financial bailout of the nuclear power industry. Since the very enactment of the Nu- clear Waste Policy Act of 1982, its fun- damental premise has been that the utilities are the ones that get the prof- it, they are the ones that generate the waste, they have the financial respon- sibility. Through a series of significant changes, albeit somewhat subtle, a cap or a ceiling or a limitation is placed on the amount that the utilities will be required to contribute. Now, to the year 2002, it is 1 mill based upon each kilowatt of power gen- erated. After the year 2002, it will be- come no more than the amount of the appropriation each year. In 2003, we would be talking one-third of a mill, the balance all left to the taxpayer to pick up. Madam President, I simply say, No. 1, this debate is unnecessary, this bill is unnecessary, and that comes from a body of eminent scientists impaneled as a result of legislation enacted by this body. The National Environmental Policy Act is, in effect, gutted as a con- sequence of the restrictions placed upon it. All other Federal environ- mental laws are preempted. The stand- ards that are set are so high as to con- stitute a clear and present danger to public health and safety. The Environ- mental Protection Agency agrees, as do others. Ultimately the taxpayer, not the utility, will pick up the bill if this bill becomes law. I reserve the remainder of my time. Mr. MURKOWSKI. I yield 6 minutes to my friend from Louisiana. Mr. JOHNSTON. Mr. President, in the original form of our bill, we pro- vided for 100 millirem radioactivity limit from the repository. However, be- cause our friends from Nevada stated the EPA should have a role here, we amended that. The present bill now on third reading provides, if EPA finds that the 100 millirem would not be con- sistent with health or safety, they may set it at another level and, indeed, whatever they would set under the Ad- ministrative Procedure Act would be final unless that level is arbitrary and capricious. Madam President, we have provided here for the role of EPA to make the health and safety determination. Why did we set it at 100 millirems to begin with? Because that is the level set by the International Commission on Radi- ological Protection, the National Coun- cil on Radiation Protection and Meas- urements, the U.S. Nuclear Regulatory Commission, and indeed the EPA in its radiation protection guidance for expo- sure of the general public, 1994, as well as the International Atomic Agency. Beyond that, the 100 millirems is a commonsense level because there is more than 100 millirems difference in the natural exposure of someone in Washington, DC, which is about 345 millirems, and Montana, Wyoming, or Colorado, where the average exposure exceeds 450 millirems, so that if you live in an average place in the United States or if you live in Washington, DC, you would get a higher exposure by flying to Denver, CO, or Butte, MT, Cody, WY, or you name it, and living there than living here. I remind my colleagues, Madam President, there has never been the slightest warning of EPA or of any nu- clear radiation body to say it is dan- gerous to live in one of those mountain States where the millirem activity per year exceeds what we provide in this bill. If EPA should so decide, they may set the standard elsewhere. Madam President, Nevada is the right choice. Nevada is one of the most remote places on Earth, Yucca Moun- tain. It is one of the driest places on Earth, and, Madam President, that area has been polluted by over 500 nu- clear tests which have been not sealed off from the environment. Those nu- clear tests have provided all of the ra- diation byproducts that are contained in nuclear waste, including cesium 137, iodine 131, strontium 90, americium 243, technicium 99, plutonium 241. You name it, if it is in nuclear waste, it is contained already in the Nevada test site. Need I remind my colleagues that our two colleagues from Nevada have been steadfast in wanting not less tests but more tests at the Nevada test site. Those tests have not been sealed off from the environment. Indeed, some of those tests have been right in the water table. What is the defense of my colleague from Nevada when we say, how could you on the one hand want nuclear bomb tests and on the other hand not want these rods which are in canisters, VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00040 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9249 July 31, 1996 and those canisters are nonleak can- isters that I believe would be valid and provide protection for 10,000 years? The answer is, well, they are only 1 ton. I guess that is somewhere between 2,000 and, if you use a long ton, 2,200 pounds of nuclear material. Now, Madam President, a ton of ra- dioactive material not sealed off from the environment is many thousands of times what you would expect in any leakage which might occur thousands of years from now from one of these containers. The containers designed to hold these nuclear waste rods are de- signed to last hundreds and thousands of years. We would imagine they would last, frankly, 10,000 years. That has not been proved. I do not state that as a fact. That is what we speculate. But, certainly, hundreds of years without any leakage whatever. Yet the Nevada test site now already has 1 ton of all these radioactive products which are not sealed off from the water supply, not sealed off from the ground around it, but where unprotected blasts took place in the ground. Madam President, if there is ever a place in the country to store the nu- clear waste, it is adjacent to that Ne- vada test site. That is why, Madam President, the Congress chose in 1987 Yucca Mountain. That is why it is the right place to store this waste today. Mr. MURKOWSKI. Madam President, how much time is remaining on this side? The PRESIDING OFFICER. The Sen- ator has 16 minutes, and the other side has 19 minutes. Mr. REID. Madam President, the Senator from Louisiana is a brilliant man. He knows all the procedures here. He certainly knows basic mathematics. Basic mathematics indicates that 1 ton in the ground, spread out over a signifi- cant distance under the ground, is cer- tainly much different than 70,000 tons stacked on top of the ground\u2014signifi- cantly different. So we need to hear no more, I believe, about the Nevada test site. Madam President, S. 1936 guts the ex- isting law of its environmental safety provisions and forces the Federal Gov- ernment to take responsibility for the waste and liabilities of the nuclear power industry. The nuclear power in- dustry has been extremely clever in spending their money to generate this argument, because they recognize that the nuclear power facilities don’t last forever. In fact, most are being phased out right now. They want no responsi- bility for the garbage they have gen- erated. They want to shift the ball to the Federal Government. That is what this legislation is about. It is also about corporate welfare at its very, very worst. It will needlessly expose people across America to the risk of nuclear accidents. S. 1936 is proposed because the nu- clear industry wants to transfer the risk and responsibilities and their le- gitimate business expenses to the American taxpayer. The interim stor- age facility is not needed. In accord- ance with the charter of the Nuclear Waste Technical Review Board, in March of this year, I repeat, it found no compelling safety or technical rea- son to accelerate the centralization of spent nuclear fuel. Implementation of dry cask storage at generator sites is feasible, cheap, and relatively safe. We have talked at great length, and will talk some more, about how unsafe it is to transport this product around the country. There is no need to do that; it is safe where it is. It will be even safer with dry cask storage. If it is properly implemented\u2014and that is fairly easy to do\u2014the investment will double its return by storing the mate- rial in certified multipurpose canisters so the material is ready for shipment at some later time. Operating costs for onsite dry cask storage, according to Mr. Dreyfuss’ of- fice, amounts to only about $1 million per year per site. Capital costs for on- site storage include preparation of placement site and canisterization of spent fuel. Storing spent fuel in multi- purpose canisters means that the mar- ginal onsite capitalization costs are only a few million dollars. Imple- menting onsite storage at all sites needing some additional storage space, would require less than $60 million for capitalization and less than $30 million per year for their operation. This is compared to the multibillions of dol- lars they are talking about for interim storage. So onsite storage could be maintained for about 40 years before equalling the construction cost of in- terim storage at the test site, as esti- mated by the sponsors of this bill. There is simply no compelling need to rush into centralized interim storage. It is simply wrong. Madam President, we have talked about terrorism. We talked about it be- cause it is something we should talk about. I referred, briefly, at the end of the last amendment that was offered, to a statement that we received, with- out solicitation, from the Blue Ridge Environmental Defense League, lo- cated in North Carolina. The letter says a number of things. We have ad- mitted it into the RECORD. Let me refer specifically to some of the things con- tained in this extremely important communication. These shipments of nuclear waste cannot be kept secret so long as we live in a free society. And we do. Our actions were peaceful\u2014 Peaceful following around these nu- clear waste shipments. \u2014but we proved that determined individ- uals on a shoestring budget\u2014 Not paid for by terrorists with huge amounts of money, because some ter- rorist groups are supported by foreign governments. \u2014can precisely track international and do- mestic shipments of strategic materials. In the wake of Oklahoma City and Atlanta, the dangers posed by domestic or international terrorists armed with explosives make the transport of highly radioactive spent nuclear fuel too dangerous to contemplate for the foreseeable future. They go on to say that their work is in North Carolina, Tennessee, and Vir- ginia. They have determined that the emergency management personnel in these areas are dedicated volunteers, but they are unprepared for nuclear waste. Volunteer fire departments in rural coun- ties are very good at putting out house fires and brush fires\u2014 And the person writing this letter knows that because he has worked in these volunteer fire departments. They say, among other things: The remote river valleys and steep grades of Appalachia are legendary. In Saluda, North Carolina, the steepest standard gauge mainline railroad grade in the United States drops 253 feet per mile, 4.8 percent grade. The CSX and Norfolk Southern Lines trace the French Broad River Valley and the Nolchucky Gorge west through the Appa- lachian Mountains along remote stretches of rivers famous among whitewater rafters for their steep drops and their distance from civ- ilization. The Norfolk Southern Railroad crosses the French Broad River at Deep Water Bridge where the mountains rise 2,200 feet above the river. These are the transport routes through western North Carolina that will be used for high-level nuclear waste as soon as 1998 according to S. 1936. They say: When we asked [the emergency response teams in North Carolina about their readi- ness to respond to a nuclear transport acci- dent, they answered professionally, saying, ”We’ll just go out there and keep people away until State or Federal officials arrive.” Well, another western North Carolina coordinator said: There is no response team anywhere in this part of the State, and, for the foreseeable fu- ture, there is no money in local budgets to equip us with any first response to radio- active spills. In closing, Louis Zeller tells us: I am asking you to oppose this expensive and dangerous legislation which would place an unfair and unnecessary financial burden on communities and which would place at risk the health and safety of millions of American citizens. Madam President, this legislation is unnecessary. It opens the doors to added terrorism, and it only further frightens our communities. Madam President, the President of the United States and others in the Federal Gov- ernment have stated they oppose this legislation. We have a letter from the Director of the Department of Energy, a Cabinet-level officer. She should know about nuclear waste; she worked in the nuclear industry previously. She says, without equivocation, that this is bad legislation. ”The bill does not solve,” she says, ”a fundamental prob- lem posed by the Indiana-Michigan Power Company case, namely, that the Department must begin to dispose of nuclear waste. Instead, the bill threat- ens to repeat the same mistakes made in the past.” She goes on to say other things, but basically that this is bad legislation. Hazel O’Leary and I have not always been on the same side of the debates. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00041 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9250 July 31, 1996 She is someone who is head of the De- partment of Energy, a Cabinet-level of- ficer, formerly in the nuclear industry, and she says this is bad legislation. Also, our head of the department that oversees environmental laws, Carol BROWNer, has written a letter dated last night saying, ”I am writing to in- form you that the Environmental Pro- tection Agency opposes this legisla- tion, S. 1936, and all the amendments. S. 1936 and the substitute amendment are a concern to the EPA because they limit consideration of public health and environmental standards in order to expedite the repository’s opening. EPA is also concerned about the pre- emption. It takes away Federal laws.” Madam President, this legislation is a travesty. It has big bucks behind it. We have not had the opportunity to have people in chauffeur-driven lim- ousines come and lobby Members of the Senate. We have not had the oppor- tunity to have people stand in the halls and lobby against this legislation. We have a grassroots organization, like the people from the Blue Ridge Envi- ronmental Defense League, who stand up for what is right in this country. What is right in this country is to op- pose this legislation. It would curtail a broad range of health and safety laws, it would quadruple the allowable radi- ation standards for waste storage, and it would exacerbate the risk of trans- porting nuclear waste throughout the country. For these and many other rea- sons, I call upon my colleagues\u2014I beg my colleagues\u2014to vote against this legislation. It is the most antienvironmental legislation in this Congress, and to say that, you say it all. I reserve the remainder of our time. Mr. MURKOWSKI. It is our under- standing that we have 16 minutes. Mr. PRESSLER. Mr. President, I rise today to express my support for S. 1936, the Nuclear Waste Policy Act, and to congratulate my colleagues Senator FRANK MURKOWSKI, chairman of the Committee on Energy and Natural Re- sources, and Senator LARRY CRAIG, vice-chairman of the Subcommittee on Energy Research and Development, for all their hard work on this bill. I am proud to be a cosponsor of this legisla- tion. As chairman of the Committee on Commerce, Science, and Transpor- tation, I have a particular interest in the transportation aspect of this legis- lation. Clearly, we will need a special transportation system to safely trans- fer nuclear waste to a centralized stor- age facility as mandated by S. 1936. Already, there are some tough laws in place. Shipments of spent nuclear fuel and other commercial or defense- related high level radioactive waste must adhere to very strict standards before the waste can move on Amer- ica’s highways or railroads. S. 1936 will strengthen these standards. It’s important to point out that under the current regulation moni- toring process, the Federal Govern- ment and the nuclear industry have transported thousands of shipments of nuclear waste without any release of radioactive material. That’s an impec- cable safety record. This legislation takes additional steps to maintain an already safe environment for the trans- portation and storage of spent nuclear fuel. Let me set the record straight even further. As part of the Nuclear Waste Policy Act, the Department of Energy promised to begin transporting com- mercial spent fuel to a Federal man- agement facility in 1998. To solidify this promise, contracts were signed be- tween the Federal Government and utilities that own the Nation’s nuclear power plants. S. 1936 reaffirms that commitment. S. 1936 would not weaken current law\u2014it improves it. Spent fuel ship- ments would still be regulated by the Hazardous Materials Transportation Act and other transportation regula- tions that have protected us for the past 30 years. To ensure safety in every step of the transportation network, the Nuclear Regulatory Commission [NRC] already has established demanding regulations on the packaging and transportation of radioactive materials. Spent nuclear fuel rods are trans- ported in heavy steel containers. Be- fore these can be approved by the NRC, manufacturers must demonstrate that each container design can withstand a number of hypothetical accident condi- tions, including being dropped from 30 feet onto a flat, unyielding surface; falling onto a vertical steel spike; being engulfed in a 1,475 degree Fahr- enheit fire for 30 minutes; and being submerged under 3 feet of water for 8 hours. The same container also must withstand a separate immersion test in 50 feet of water for 8 hours. Mr. President, I challenge any other transportation container to measure up to these rigorous tests. Again, these are the tests required under existing law. The containers that meet these tests are some of the most rugged on Earth, and rightfully so. The Department of Transportation also has responsibility for regulating many aspects of radioactive waste shipments. Shippers are required to file a written route plan that includes the origin and destination of each ship- ment, preapproved routes to be used, estimated arrival times and emergency telephone numbers in each State a shipment will enter. The principal in- tent of DOT routing guidelines is to re- duce the time in transit. The agency requires tractor-trailer shipments to use preferred highway routes, such as interstate highways and bypasses that divert them away from highly populated areas. States also may propose alternate routes to the interstate highway system. In fact, at least 10 States already have established alternate routes. Potentially affected States and localities must be consulted in the process of designating alternate routes. The Transportation Department also requires that shippers notify the Gov- ernor 7 days in advance of material being transported through the State. To ensure the safety of these ship- ments, the Department of Energy has developed a satellite-based system that allows continuous tracking and com- munications with all DOE shipments. Mr. President, recent shipments of foreign research reactor fuel from Sunny Point, NC to the Savannah River site in South Carolina provide a perfect example of the safeguards which are in place for spent fuel trans- portation. In moving this fuel, the En- ergy Department worked closely with State and local officials on training and planning. They practiced every- thing\u2014from preparing routine shipping procedures to testing emergency re- sponse systems. The Nuclear Waste Policy Act would require DOE to pro- vide similar funding and technical as- sistance for State, tribal and local training and planning activities in ad- vance of any actual commercial spent fuel shipments. Mr. President, there is no disputing that transportation is one of the most important issues in our consideration of S. 1936. It is an essential component of an integrated nuclear waste manage- ment program. Clearly, as I have outlined today, nu- clear waste can be transported safely and efficiently. A comprehensive plan already is in place to ensure this. To maximize safety, the plan directs ship- ments away from metropolitan areas whenever possible. It allows for the se- lection of the most direct and safest routes. It provides training to national, State and local officials so that they are ready to respond in the event of an emergency. We know that accidents happen, Mr. President. That is why S. 1936 builds on the existing regulatory framework that, to date, has protected this Nation during more than 2,400 shipments of commercial spent nuclear fuel. I urge my colleagues to take a close look at this program. Many of my con- stituents have expressed their interest in nuclear waste transportation. Fortu- nately, there is good news to report to them. We have a safe, well-coordinated system. It ensures the safety of nuclear waste transportation by relying on the expertise of the Nuclear Regulatory Commission, the Department of Trans- portation and the Department of En- ergy, as well as the State and local governments. S. 1936 builds on the sys- tem to enhance protection of our citi- zens and our environment. I urge my colleagues to support this legislation. By passing S. 1936, we can take the final steps towards ensuring that nuclear waste is managed in the safest possible manner. SECTION 203 Mr. President, I see the distinguished chairman of the Energy and Natural Resources Committee on the floor. My colleague has been very helpful in ad- dressing a concern I had with certain VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00042 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9251 July 31, 1996 provisions in Section 203 of S. 1936. I appreciate Chairman MURKOWSKI’s at- tention to this matter. Mr. MURKOWSKI. I thank the Sen- ator from South Dakota. The Senator has raised some understandable con- cerns regarding requirements for the transportation of spent nuclear fuel. Mr. PRESSLER. I would like to fur- ther question my colleague regarding the transportation training standards addressed in this bill. In particular, section 203 (g) would require the Sec- retary of Transportation to issue regu- lations establishing training standards applicable to workers directly involved in the removal and transportation of spent nuclear fuel and high-level radio- active waste. New language, as pro- posed by the chairman on my behalf, would also require that an employer possess evidence of satisfaction of these training standards before an indi- vidual could be employed in such activ- ity. As chairman of the Senate Com- mittee on Commerce, Science, and Transportation, I believe this provision is consistent with existing law, as set forth in Section 5107 of title 49 of the United States Code (49 U.S.C. 5107), which details requirements for the training of employees engaged in haz- ardous materials transportation. I would ask the chairman if this inter- pretation is correct? Mr. MURKOWSKI. The Senator from South Dakota is correct. I defer to my colleague’s judgement and expertise, as chairman of the committee with juris- diction over the transportation of haz- ardous materials. I might also add that this provision is not meant to prejudice in any way the means by which the training requirements are satisfied. Mr. PRESSLER. I thank the Senator from Alaska for clarifying this matter for me. Again, I greatly appreciate his willingness to work with me to resolve this matter. I urge my colleagues to support final passage of S. 1936. Mr. MURKOWSKI. Mr. President, when the Senate debated the motion to proceed. I suggested that S. 1936 was the answer to nuclear waste and that the editorial page of the Washington Post was the answer to parakeet waste. I would not insult parakeets by sug- gesting that would be a good use of the letter from the Administrator of the EPA or the Chair of the CEQ. The statements made in these letters are inaccurate and simply the shrill hysteria of those who believe that if you repeat a lie often enough, someone might believe you. The administration, sadly, has dem- onstrated that they are incapable or unwilling to address this issue, and have now resorted to misstatement, mischaracterization, and distortion to prevent Congress from exercising the leadership the administration has abandoned. Far from being an assault on our en- vironmental laws, this legislation reaf- firms our commitment to the environ- ment, and the health and safety of the American people. Now, turning specifically to the let- ters\u2014EPA says we preempt laws in S. 1936: The substitute the Senate just overwhelm- ingly adopted does not preempt environ- mental statutes. EIS requirements are con- solidated, but a full EIS is required. EPA says section 204(i) of our bill prevents the NRC from issuing regula- tions to protect public health under certain circumstances. This is inflam- matory and misleading: Section 204(i) simply says that the storage of commercial spent fuel, that the NRC will regulate under our bill, does not need to wait while the NRC writes regulations for other forms of nuclear wastes including naval reac- tor and defense wastes. EPA says section 205(d)(3)(C) pre- vents NRC from making important de- terminations: All our bill says is that the NRC is not re- quired to assume that the records of waste disposal, security measures, and the natural and engineered barriers will be insufficient to prevent future human intrusion. Without this provision, DOE would have to prove a negative. Turning now to the letter from CEQ: The CEQ’s letter asserts S. 1936 ”Dis- mantles the EIS process under NEPA,” by removing the requirement that DOE conduct an ”alternatives analysis” on the selection of an interim storage site. The CEQ’s letter entirely misses the point: This legislation requires an EIS to be pre- pared by the NRC as part of its licensing process because Congress is today rendering its judgment about the need for interim stor- age and the location of the site, we say that these decisions need not be duplicated in the NRO process. I would add that our legislation does not preclude the President from performing an alternatives analysis in selecting an interim storage site other than Nevada, if he deter- mines that the permanent repository at Yucca Mountain is not viable. There is an EIS. It can be challenged in court, and public safety and the environment is protected. The EPA letter says the 100 millirem standard is inappropriate: EPA is given the authority to change the 100 millirem standard if it determines it con- stitutes an unreasonable risk to public health\/saftey. What are they complaining about? There are no valid scientific studies which suggest a release of 100 millirem per year poses any health risk. The probability of ad- verse health consequences has not been shown to be any less from a zero dose than from a 100 millirem dose. There is at least a 100 millirem difference between a person living on the east coast and Western States. If you move from Wash- ington to Denver, you would receive 100 or more additional millirem from natural sources. EPA doesn’t have a problem with that. You get 100 extra millirem by living in the White House, a stone building with natural radiation. Is EPA saying the White House is unsafe for the President? Madam President, I think it is appro- priate to note that these letters simply represent an action by the administra- tion to delay what has been delayed for 15 years. There are no positive rec- ommendations in spite of the fact that the committee and myself personally have requested in three letters to the President that if he opposes specific portions of this legislation, he come up with alternatives. Those letters, for all practical purposes, have been ignored. Clearly, this administration simply wishes to put this off to somebody else’s watch, and that is irresponsible for the administration. It is irrespon- sible to duck the issue at this time. I yield 5 minutes to my friend from Idaho and retain the remainder of my time. The PRESIDING OFFICER. The Sen- ator from Idaho. Mr. CRAIG. Madam President, let me thank the chairman for the time and thank my colleague, the senior Senator from Louisiana, who has worked so closely with us in the last year to produce and bring to the floor this leg- islation. I first introduced this legislation in September of 1995 as S. 1271. We worked our way through the process with hear- ings held, of course, before the Energy and Natural Resources Committee in December with additional hearings in March and in May. Finally, we have been able to craft and bring to the floor what I believe and what I call\u2014because I think it is fair to call it that\u2014probably one of the most comprehensive environmental bills that has come before the Congress this year. Our Nation’s high-level nuclear waste has an answer now that is responsible, fair, and environmentally friendly and is supported by a very large majority of this body and the U.S. House of Rep- resentatives. Today, high-level nuclear waste and highly radioactive used nuclear fuel is accumulating in over 80 sites in 41 States. You have heard our colleagues come to the floor and talk about their concern and the seriousness that this accumulation brings to these indi- vidual States. Today, we stand before you respon- sible to our country and to our Govern- ment in assuring that we will be able to comply with the Nuclear Waste Pol- icy Act of 1982 to meet the court ex- aminations and to be able to do what our country expected us to do to facili- tate this legislation. We have all worked closely together in a strong bi- partisan way to assure that we could produce the ultimate legislation that would pass. However, in doing all of this, S. 1936 contains many important clarifications and changes that deal with concerns raised regarding the de- tails of the legislation amongst most of our Members. As a result of that, I think we can hopefully today produce a vote and a work product that the U.S. House of Representatives will take as we reconvene in September. The issue is clear, and the proposal we have before you is direct. It does not violate any environmental laws, and yet directs our country to move re- sponsibly and decisively to resolve an issue that has plagued our country for well over two decades. I hope that VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00043 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9252 July 31, 1996 today our colleagues in a final vote on this issue will vote in very large num- bers to assure that we move forward on this issue. Let me cover one other detailed topic. It is frustrating to me as the two Senators from Nevada have come to the floor on several occasions over the last week and a half to talk about the reality of a 100-millirem test and how, for some reason, this in some way ques- tioned the integrity of a site and the development of a deep geological repos- itory at Yucca Mountain. Let me quote from the Nevada Administrative Code, section 459.335. This is the code that governs 153 facilities in the State of Nevada. It says this: ”The total effec- tive dose equivalent to any member of the public from its licensed and reg- istered operation does not exceed 100 millirems per year, not including con- tribution from the disposal by the li- censee of radioactive material in sani- tary sewage,” and so on and so forth. The point I am making here\u2014and this chart clearly spells it out\u2014is that the standards that we have established, the standards that come from the GAO audit, the standards that the State of Nevada, the very State the two Sen- ators are from and arguing today, ar- gues this. It argues right here that 153 facilities in the State of Nevada that use radioactive material cannot exceed the very standard that we are saying Yucca Mountain cannot exceed. I hope, once and for all, that we do not shake the scare tree, that we look at the facts and we look at the statis- tics, and they are very clear. Whether it is proposed EPA guidance of 1995, whether it is the Nuclear Regulatory Commission limit, whether it is the proposed DOE limit, whether it is the State of Nevada, or whether it is Yucca Mountain, what we are talking about here is an international standard well accepted by all of the professionals in the field and accepted by the State of Nevada, by the State government of Nevada and, obviously, by State politi- cians in Nevada. Why do they arrive at that standard? Because that is the national standard. That is the international standard that clearly says this is an acceptable level. Madam President, I recognize my time is up. Mr. MURKOWSKI. Let me yield time to the Senator from Idaho to conclude his remarks. Mr. CRAIG. I thank my chairman for yielding to me. Let me close with this thought. It has been a long, hard effort. It took an awful lot of very talented people in- volved. Let me thank Karen Hunsicker, David Garman, Gary Ellsworth, and Jim Beirne of the Energy and Natural Resources staff for the tremendous work that they have done and for the expertise they themselves have devel- oped, the cooperative effort they have had in working with all of the staffs in a bipartisan manner. Let me thank once again our chair- man, FRANK MURKOWSKI, and also the senior Senator from the State of Lou- isiana, BENNETT JOHNSTON, for his dedi- cated effort over several decades to as- sure that there would be a safe and re- sponsible solution to the management of high-level nuclear waste, and we are clearly on the threshold of allowing that to happen. I hope in the end once this makes it to our President’s desk that he will read the bill\u2014read the bill\u2014and look at the changes we have made. I think in doing so this President will say that we have been responsible to our country and to the State of Nevada in promul- gating legislation that can deal with a very important national issue. Mr. JOHNSTON. Madam President, will the Senator yield to me for a quick comment to endorse what he has said about the good staff work. Let me add to that great staff work SAM FOWLER, BOB SIMON, and BEN COO- PER on our side, who have really done an outstanding job as well. Mr. MURKOWSKI. Madam President, how much time is remaining on our side? The PRESIDING OFFICER. Eight minutes. Mr. MURKOWSKI. I yield to the Sen- ator from Wyoming 3 minutes that he requested. The PRESIDING OFFICER. The Sen- ator from Wyoming. Mr. THOMAS. Thank you very much. Madam President, I wanted to rise in support of this bill before it is voted on. I have been involved in it for some time not only here but in Wyoming, and I just wanted to kind of generally share some thoughts that I have. We have talked about it a great deal. We probably have talked about it more than we really needed to. Nevertheless, there has been a great deal of detail naturally, as there should be. But it seems to me that there are some basic things that most of us do understand and most of us accept, and I think that is where we are. First, we have nuclear waste. We have to do something about it. It is there. It is stored all over the country in a number of sites\u2014I think 80. Clear- ly, it is more difficult to ensure safety that way than it is if we put it in a place that we can ensure safety. We are going to have more. We need to be pre- pared for that. The ratepayers have paid to do some- thing about it. They have paid, I think, somewhere near $12 billion. We spent $5 billion already in preparing this spot. There is not much to show for that. Yet, we need to make sure that there is. It makes sense, it seems to me, to move to the permanent site with an in- termediate site that we have for stor- age. We have been through that inter- mediate storage thing for several years. We have been unsuccessful in doing it. Transportation is, in fact, something that is the highest of scientific study and I think as safe as anything can be. There are always risks. I have been disappointed this whole time of dealing with the storage of nu- clear waste. Opponents in the press talk about nuclear waste dumps. They are not dumps. They are high-tech storage, as high tech as we can be. It is also true that the Government has agreed to storage in 1998. Let us do it. So even though that is very nontech- nical, Madam President, I think those are about the basic ideas we have to understand. Most of us know we have to do something about it. This bill gives us the opportunity to live up to the challenges we have and to do the things we have to do. I thank the Senator for the time. Mr. MURKOWSKI. Madam President, how much time is remaining on our side? The PRESIDING OFFICER. The Sen- ator has 5 minutes. Mr. MURKOWSKI. I thank the Chair. Mr. BRYAN. May I inquire of the Chair how much time we have on our side? The PRESIDING OFFICER. The Sen- ator from Nevada has 9 minutes. Mr. BRYAN. Madam President, I yield myself 4 minutes. I have tried purposely to keep the focus on the issues, but I must say that my friend from Idaho has spoken and my friend from Wyoming has just spo- ken, and they obviously reach a dif- ferent conclusion as to the urgency of the need than does the scientific com- munity, which has specifically rejected the need. Let me say with great respect to them, if they disagree, they have the right under the law to volunteer their States as sites for interim storage. That is permissible. I find some irony in the fact they are eager to have it come to us in Nevada and yet suggest that their own State would not be available. There is another irony. Late last week, another letter was circulated that raised some concerns about the interstate shipment of trash, and this letter goes on to say, in part: It is important that Congress pass inter- state legislation this year. Cities and towns all across the Nation are being forced to take trash from other States. Many States have tried to restrict the shipments. The letter goes on to say: But every time they do, they have been challenged in court and their laws have been overturned as a violation of the commerce clause of the Constitution. It is clear that States cannot protect themselves, their resi- dents or their land from being spoiled by out-of-State waste. We need Federal legisla- tion to empower States and communities with the authority to manage solid waste within their borders. Without legislation, they will have to continue to accept un- wanted trash. Does anybody see a disconnect or an inconsistency? Here they are talking about trash, and many of my col- leagues who have ventured forth in the Chamber and who have expressed sup- port for this legislation have gotten greatly exercised about the trash issue. You cannot have it both ways. My col- league and I have signed on to this let- ter because we understand the con- cerns. You can be concerned about VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00044 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9253 July 31, 1996 trash but not the most dangerous, le- thal trash known to mankind, high- level nuclear waste. Finally, let me just say that we have talked about the standards ad nau- seam. I think it just one more time needs to be pointed out that the Na- tional Academy of Sciences\u2014these are the scientists which this body asked to make recommendations about stand- ards\u2014reported and concluded that the standards in terms of radioactive expo- sure should be from 10 to 30 millirems. That is their view. They are sci- entists. Nobody\u2014I repeat, nobody\u2014in the world has set a 100-millirem stand- ard, and to point out that those who are charged under our law with the re- sponsibility of enforcing and admin- istering the environmental laws, the Environmental Protection Agency, through Carol Browner, the Council on Environmental Quality, the President of the United States, the Department of Energy, all have urged a no vote on this piece of legislation. Now, I guess what they do not have in common with some of the advocates is that they are not supporting the view of the nuclear industry. This is special interest legislation at its worst. There is no groundswell for this legis- lation. The nuclear industry and its phalanx of lobbyists who ply these halls every day with enormous amounts of money and power and influ- ence, they are the ones who are driving this debate by creating a contrived and fabricated crisis that purports to call out for a legislative response. That is simply not the case. There is no need. The damage that we do to our Nation’s environmental laws and to people across America that can be af- fected by this is unconscionable\u2014un- conscionable. No environmental orga- nization in America\u2014none\u2014supports this legislation. All oppose the irrep- arable damage it would do to our envi- ronmental laws. And no agency charged by law at the Federal level to enforce the environmental standards supports this legislation. All have con- cluded that to do so would be irrep- arable, do irreversible damage to our environment. I reserve the remainder of my time. The PRESIDING OFFICER. Who yields time? The Senator from Alaska. Mr. CRAIG addressed the Chair. Mr. MURKOWSKI. I would ask at the conclusion of the debate time for the yeas and nays on final passage. Mr. CRAIG. Will the Senator yield to me one moment? Mr. MURKOWSKI. I yield to my friend from Idaho. The PRESIDING OFFICER. The Sen- ator from Idaho. Mr. CRAIG. I thank my chairman for yielding. I apologize. Some of the people who work the most closely with us we often forget. I want the RECORD to show that Nils Johnson on my staff, who has worked on this issue for a good number of years with me and the staff of the committee, was a tremendous asset through all of this debate. I thank the Senator very much. Mr. MURKOWSKI. Again, Madam President, may I ask for the yeas and nays on final passage. The PRESIDING OFFICER. Is there a sufficient second? There appears to be. The yeas and nays were ordered. Mr. MURKOWSKI. I thank the Chair. Madam President, as we approach the final minutes prior to voting, I would like to very briefly refute some of the specific claims that have been made in the Chamber in the debate. These claims, of course, have had to do with transportation, safety, cask integrity, radiation, the application of environ- mental laws, and, of course, finally, the issue of just who benefits from this leg- islation. The issue of transportation and safe- ty and cask integrity is important, and there has been every effort to describe that the transportation of used fuel is something that has a risk. But the op- ponents of this legislation talk about it as if it represents some novel and un- tested approach, and these statements are not true. We have been moving spent fuel both in the United States and around the world for decades. There have been over 20,000 movements of spent fuel around the world over the last 40 years; 30,000 tons have been moved in France alone. That is equal to what we have in storage. So it can be moved, and it can be moved safely because it is designed to be moved safely. This bill, S. 1936, includes new meas- ures, new training and new assistance to make the movement even safer. The fact is nuclear materials will be trans- ported with or without the passage of this bill. Spent fuel, foreign research reactor fuel, naval fuel, and other ra- dioactive materials are being trans- ported every day in the United States. Another example is we build sub- marines on the east coast in Con- necticut, but when the sub has served its useful life, the fuel is removed and taken to Idaho. The sub is cut up. The reactor compartment is buried in Han- ford, WA. So we all have an interest in this, and we must address responsibly a solution. Another claim I want to refute has to do with the generalization that has been made on the floor of the Senate that somehow we are waiving the ap- plication of environmental laws that are needed to protect the public health and safety. S. 1936 requires the NRC to prepare environmental impact state- ments, or EIS’s, as part of a decision to license a central interim storage facil- ity, and the EIS’s must include the im- pact of transporting the used fuel to the interim storage facility. There is also judicial review. S. 1936 requires the DOE to submit an EIS on construction and operation of the re- pository. It is clear, Madam President, S. 1936 does not trample environmental laws as has been charged on this floor. This is a unique facility. None like it has ever been developed anywhere in the world. So the regulatory licensing program for a permanent facility contained in S. 1936 is designed to protect public health and safety without reliance upon other laws. With respect to NEPA, we recognize Congress has decided that we will build an interim site in Nevada, and we do not let the NEPA process revisit the decision that Congress has already made. That is what we are saying. NEPA applies. We are simply saying NEPA does not have to revisit the deci- sion of policy that we are making here today. The last claim I am compelled to re- fute is on the issue of timing. Oppo- nents say S. 1936 claims that there is no need to tackle the issue now, that it is a waste of time. That does not sound like anything other than Washington bureaucracy: Let’s defer the decision. Let’s not take action. Let’s keep spending money without results. Let’s maintain the status quo. Let’s promote the stale- mate. Let’s maintain the gridlock.” For 15 years we have collected bil- lions of dollars. We have expended $6 billion and we go nowhere. We have a chance to go somewhere today. But the Washington bureaucracy wants to say: ”Let’s keep taking the consumers’ money, but not provide them with nuclear waste removal serv- ices we promised them in return. Let’s ignore the recent court cases and let us stick it to the taxpayers who will have to pay the damages.” Our opponents would have you be- lieve the Government has no responsi- bility. But the recent court decision has blown our opponents’ arguments out of the water. The Federal Govern- ment has a responsibility. Failure to live up to that responsibility will have significant consequences, so said the court. And it said so unanimously. Finally, the fifth issue I must refute is the issue of just who benefits from the legislation. The other side has tried to paint this bill as one of exclusively benefiting the nuclear power lobby. But I have letters from 23 States, writ- ten by Governors and attorneys gen- eral, urging the Congress to pass and the President to sign the bill. We have letters from Governors, Governor Lawton Chiles of Florida and others, relative to that matter. We have broad support for this bill across the political spectrum. Ours is a bipartisan effort, Democrats, Repub- licans, liberals, conservatives. We are supported by unions as well, the Elec- trical Workers Union, Utility Workers, AFL CIO, Joiners and Carpenters. The fire chiefs in Nevada have indicated support of this. As have many Nevad- ans\u2014I have already entered that in the RECORD. Our constituents should not have to pay twice for nuclear waste services. We do not have to create 80 waste VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00045 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9254 July 31, 1996 dumps, including some in populated areas or sitting just outside national parks, when one will do. We do not have to settle for further delay, further stalemate and further gridlock. We can avoid multibillion-dollar damages against the taxpayer for the Govern- ment’s failure to address a problem that a recent court case says is Gov- ernment’s responsibility. We can do that. It is the right thing to do for the consumers and electric ratepayers, for the environment, for public health and safety, and I urge we pass Senate bill 1936. Madam President, at this time I would like to thank my dear friend and colleague, Senator JOHNSTON, who has been involved in this much longer than I, for his steadfast commitment to what is responsible and what is right for the country, to finally address our responsibility. I thank my friend, LARRY CRAIG, who introduced this leg- islation initially, and Senator DOMEN- ICI, Senator GRAMM, Senator THUR- MOND, Senator SIMPSON, Senator FAIR- CLOTH, Senator GORTON. I recognize Senator THOMAS, as well as my two col- leagues, Senator BRYAN and Senator REID. I know what a tough thing this is for your State. Mr. REID addressed the Chair. The PRESIDING OFFICER. The time of the Senator has expired. Mr. MURKOWSKI. Let me thank the staff as well. I would like to thank the Energy Committee staff, including Gregg Renkes, Gary Ellsworth, Jim Beirne, Karen Hunsicker, David Garman, David Fish and Betty Nevitt, as well as Nils Johnson from Senator CRAIG’s office, and the minority staff, Ben Cooper, Sam Fowler and Bob Simon. I yield the floor. Mr. REID. Madam President, I apolo- gize for being rude but we have a Mem- ber who needs to vote and that is why we need to stick with the program. If anyone believes in environmental standards, you must vote against this bill. This bill will ultimately open the door for the greatest nuclear waste transportation project in human his- tory, sending thousands and thousands of tons of the Nation’s radioactive waste onto the roads and rails. Last year we had 2,500 accidents on rail that only involved trains, and 6,000 acci- dents at railroad crossings over the last year. Madam President, in the last 10 years, 26,354 accidents occurred with damage to track, structure or equip- ment in excess of $6,300 dollars. There were 60,553 accidents at railroad cross- ings. This bill is bad, bad, bad, if you sup- port environmental standards. If you oppose corporate welfare, vote against this. The court decision helps our cause. That is why we offered an amendment to that effect. They keep coming back saying it was a unani- mous opinion. We agree. Three judges said they have to follow the contract they entered into. We agree with that. Hazel O’Leary is not only the Sec- retary of the Department of Energy, she is also a corporate lawyer. She said that decision does not affect what the DOE is going to do. In fact, she says, if this bill passes it will, again, harm what the decision did. So, Madam President, if you believe in returning authority to the States, vote against this bill. If you oppose Government taking private property, vote against this bill. Homeowners along transportation routes may well find their property values reduced as a result of nuclear waste trains and trucks passing by, and that is an un- derstatement. No mechanism exists in S. 1936 to compensate homeowners in such a circumstance. If you believe in public participation in regulatory pro- ceedings, vote against this bill. If you believe in a rational nuclear waste pol- icy, vote against this bill. If you believe that the nuclear indus- try is entitled to lavish taxpayer-fi- nanced benefits from the Federal Gov- ernment at the expense of public health and safety, then you should vote for this legislation. We ask Senators to vote against this legislation. This is the most anti-envi- ronmental legislation of this Congress and that says a great deal because this is known as the most anti-environ- mental Congress in the history of this country. Mr. MURKOWSKI. Madam President, I suggest the absence of a quorum. The PRESIDING OFFICER. Without objection, the clerk will call the roll. The bill clerk proceeded to call the roll. Mr. MURKOWSKI. Madam President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. MURKOWSKI. I ask we proceed with the vote. The yeas and nays have been ordered. I ask for the regular order. The PRESIDING OFFICER. The Sen- ators from Nevada yield back their time? Mr. REID. We will. We have. We do. The PRESIDING OFFICER. All time having been yielded back, the question is, Shall the bill pass? The yeas and nays have been ordered. The clerk will call the roll. The bill clerk called the roll. The PRESIDING OFFICER (Mr. ABRAHAM). Are there any other Sen- ators in the Chamber who desire to vote? The result was announced\u2014yeas 63, nays 37, as follows: [Rollcall Vote No. 259 Leg.] YEAS\u201463 Abraham Ashcroft Bennett Bond Brown Burns Cochran Cohen Coverdell Craig D’Amato DeWine Domenici Faircloth Frahm Frist Gorton Graham Gramm Grams Grassley Gregg Harkin Hatch Hatfield Heflin Helms Hollings Hutchison Inhofe Jeffords Johnston Kassebaum Kempthorne Kohl Kyl Leahy Levin Lott Lugar Mack McCain McConnell Moseley-Braun Murkowski Murray Nickles Nunn Pressler Robb Roth Santorum Shelby Simon Simpson Smith Snowe Specter Stevens Thomas Thompson Thurmond Warner NAYS\u201437 Akaka Baucus Biden Bingaman Boxer Bradley Breaux Bryan Bumpers Byrd Campbell Chafee Coats Conrad Daschle Dodd Dorgan Exon Feingold Feinstein Ford Glenn Inouye Kennedy Kerrey Kerry Lautenberg Lieberman Mikulski Moynihan Pell Pryor Reid Rockefeller Sarbanes Wellstone Wyden The bill (S. 1936), as amended, was passed, as follows: S. 1936 Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, That the Nuclear Waste Policy Act of 1982 is amended to read as fol- lows: ”SECTION 1. SHORT TITLE AND TABLE OF CON- TENTS. ”(a) SHORT TITLE.\u2014This Act may be cited as the ‘Nuclear Waste Policy Act of 1996’. ”(b) TABLE OF CONTENTS.\u2014 ”Sec. 1. Short title and table of contents. ”Sec. 2. Definitions. ”TITLE I\u2014OBLIGATIONS ”Sec. 101. Obligations of the Secretary of Energy. ”TITLE II\u2014INTEGRATED MANAGEMENT SYSTEM ”Sec. 201. Intermodal transfer. ”Sec. 202. Transportation planning. ”Sec. 203. Transportation requirements. ”Sec. 204. Interim storage. ”Sec. 205. Permanent repository. ”Sec. 206. Land withdrawal. ”TITLE III\u2014LOCAL RELATIONS ”Sec. 301. Financial assistance. ”Sec. 302. On-site representative. ”Sec. 303. Acceptance of benefits. ”Sec. 304. Restrictions on use of funds. ”Sec. 305. Land conveyances. ”TITLE IV\u2014FUNDING AND ORGANIZATION ”Sec. 401. Program funding. ”Sec. 402. Office of Civilian Radioactive Waste Management. ”Sec. 403. Federal contribution. ”TITLE V\u2014GENERAL AND MISCELLANEOUS PROVISIONS ”Sec. 501. Compliance with other laws. ”Sec. 502. Judicial review of agency actions. ”Sec. 503. Licensing of facility expansions and transshipments. ”Sec. 504. Siting a second repository. ”Sec. 505. Financial arrangements for low- level radioactive waste site clo- sure. ”Sec. 506. Nuclear Regulatory Commission training authorization. ”Sec. 507. Emplacement schedule. ”Sec. 508. Transfer of title. ”Sec. 509. Decommissioning pilot program. ”Sec. 510. Water rights. ”TITLE VI\u2014NUCLEAR WASTE TECHNICAL REVIEW BOARD ”Sec. 601. Definitions. ”Sec. 602. Nuclear Waste Technical Review Board. ”Sec. 603. Functions. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00046 Fmt 4624 Sfmt 0655 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9255 July 31, 1996 ”Sec. 604. Investigatory powers. ”Sec. 605. Compensation of members. ”Sec. 606. Staff. ”Sec. 607. Support services. ”Sec. 608. Report. ”Sec. 609. Authorization of appropriations. ”Sec. 610. Termination of the board. ”TITLE VII\u2014MANAGEMENT REFORM ”Sec. 701. Management reform initiatives. ”Sec. 702. Reporting. ”Sec. 703. Effective date. ”SEC. 2. DEFINITIONS. ”For purposes of this Act: ”(1) ACCEPT, ACCEPTANCE.\u2014The terms ‘ac- cept’ and ‘acceptance’ mean the Secretary’s act of taking possession of spent nuclear fuel or high-level radioactive waste. ”(2) AFFECTED INDIAN TRIBE.\u2014The term ‘af- fected Indian tribe’ means any Indian tribe\u2014 ”(A) whose reservation is surrounded by or borders an affected unit of local government, or ”(B) whose federally defined possessory or usage rights to other lands outside of the reservation’s boundaries arising out of con- gressionally ratified treaties may be sub- stantially and adversely affected by the lo- cating of an interim storage facility or a re- pository if the Secretary of the Interior finds, upon the petition of the appropriate governmental officials of the tribe, that such effects are both substantial and adverse to the tribe. ”(3) AFFECTED UNIT OF LOCAL GOVERN- MENT.\u2014The term ‘affected unit of local gov- ernment’ means the unit of local government with jurisdiction over the site of a repository or interim storage facility. Such term may, at the discretion of the Secretary, include other units of local government that are con- tiguous with such unit. ”(4) ATOMIC ENERGY DEFENSE ACTIVITY.\u2014 The term ‘atomic energy defense activity’ means any activity of the Secretary per- formed in whole or in part in carrying out any of the following functions: ”(A) Naval reactors development. ”(B) Weapons activities including defense inertial confinement fusion. ”(C) Verification and control technology. ”(D) Defense nuclear materials production. ”(E) Defense nuclear waste and materials byproducts management. ”(F) Defense nuclear materials security and safeguards and security investigations. ”(G) Defense research and development. ”(5) CIVILIAN NUCLEAR POWER REACTOR.\u2014 The term ‘civilian nuclear power reactor’ means a civilian nuclear power plant re- quired to be licensed under section 103 or 104 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2133, 2134(b)). ”(6) COMMISSION.\u2014The term ‘Commission’ means the Nuclear Regulatory Commission. ”(7) CONTRACTS.\u2014The term ‘contracts’ means the contracts, executed prior to the date of enactment of the Nuclear Waste Pol- icy Act of 1996, under section 302(a) of the Nuclear Waste Policy Act of 1982, by the Sec- retary and any person who generates or holds title to spent nuclear fuel or high-level radioactive waste of domestic origin for ac- ceptance of such waste or fuel by the Sec- retary and the payment of fees to offset the Secretary’s expenditures, and any subse- quent contracts executed by the Secretary pursuant to section 401(a) of this Act. ”(8) CONTRACT HOLDERS.\u2014The term ‘con- tract holders’ means parties (other than the Secretary) to contracts. ”(9) DEPARTMENT.\u2014The term ‘Department’ means the Department of Energy. ”(10) DISPOSAL.\u2014The term ‘disposal’ means the emplacement in a repository of spent nu- clear fuel, high-level radioactive waste, or other highly radioactive material with no foreseeable intent of recovery, whether or not such emplacement permits recovery of such material for any future purpose. ”(11) DISPOSAL SYSTEM.\u2014The term ‘dis- posal system’ means all natural barriers and engineered barriers, and engineered systems and components, that prevent the release of radionuclides from the repository. ”(12) EMPLACEMENT SCHEDULE.\u2014The term ’emplacement schedule’ means the schedule established by the Secretary in accordance with section 507(a) for emplacement of spent nuclear fuel and high-level radioactive waste at the interim storage facility. ”(13) ENGINEERED BARRIERS AND ENGI- NEERED SYSTEMS AND COMPONENTS.\u2014The terms ‘engineered barriers’ and ‘engineered systems and components’, mean man-made components of a disposal system. These terms include the spent nuclear fuel or high- level radioactive waste form, spent nuclear fuel package or high-level radioactive waste package, and other materials placed over and around such packages. ”(14) HIGH-LEVEL RADIOACTIVE WASTE.\u2014The term ‘high-level radioactive waste’ means\u2014 ”(A) the highly radioactive material re- sulting from the reprocessing of spent nu- clear fuel, including liquid waste produced directly in reprocessing and any solid mate- rial derived from such liquid waste that con- tains fission products in sufficient con- centrations; and ”(B) other highly radioactive material that the Commission, consistent with existing law, determines by rule requires permanent isolation, which includes any low-level ra- dioactive waste with concentrations of radio- nuclides that exceed the limits established by the Commission for class C radioactive waste, as defined by section 61.55 of title 10, Code of Federal Regulations, as in effect on January 26, 1983. ”(15) FEDERAL AGENCY.\u2014The term ‘Federal agency’ means any Executive agency, as de- fined in section 105 of title 5, United States Code. ”(16) INDIAN TRIBE.\u2014The term ‘Indian tribe’ means any Indian tribe, band, nation, or other organized group or community of Indians recognized as eligible for the services provided to Indians by the Secretary of the Interior because of their status as Indians in- cluding any Alaska Native village, as defined in section 3(c) of the Alaska Native Claims Settlement Act (43 U.S.C. 1602(c)). ”(17) INTEGRATED MANAGEMENT SYSTEM.\u2014 The term ‘integrated management system’ means the system developed by the Sec- retary for the acceptance, transportation, storage, and disposal of spent nuclear fuel and high-level radioactive waste under title II of this Act. ”(18) INTERIM STORAGE FACILITY.\u2014The term ‘interim storage facility’ means a facility de- signed and constructed for the receipt, han- dling, possession, safeguarding, and storage of spent nuclear fuel and high-level radio- active waste in accordance with title II of this Act. ”(19) INTERIM STORAGE FACILITY SITE.\u2014The term ‘interim storage facility site’ means the specific site within area 25 of the Nevada test site that is designated by the Secretary and withdrawn and reserved in accordance with this Act for the location of the interim storage facility. ”(20) LOW-LEVEL RADIOACTIVE WASTE.\u2014The term ‘low-level radioactive waste’ means ra- dioactive material that\u2014 ”(A) is not spent nuclear fuel, high-level radioactive waste, transuranic waste, or by- product material as defined in section 11 e.(2) of the Atomic Energy Act of 1954 (42 U.S.C. 2014(e)(2)); and ”(B) the Commission, consistent with ex- isting law, classifies as low-level radioactive waste. ”(21) METRIC TONS URANIUM.\u2014The terms ‘metric tons uranium’ and ‘MTU’ mean the amount of uranium in the original unirradiated fuel element whether or not the spent nuclear fuel has been reprocessed. ”(22) NUCLEAR WASTE FUND.\u2014The terms ‘Nuclear Waste Fund’ and ‘waste fund’ mean the nuclear waste fund established in the United States Treasury prior to the date of enactment of this Act under section 302(c) of the Nuclear Waste Policy Act of 1982. ”(23) OFFICE.\u2014The term ‘Office’ means the Office of Civilian Radioactive Waste Manage- ment established within the Department prior to the date of enactment of this Act under the provisions of the Nuclear Waste Policy Act of 1982. ”(24) PROGRAM APPROACH.\u2014The term ‘pro- gram approach’ means the Civilian Radio- active Waste Management Program Plan, dated May 6, 1996, as modified by this Act, and as amended from time to time by the Secretary in accordance with this Act. ”(25) REPOSITORY.\u2014The term ‘repository’ means a system designed and constructed under title II of this Act for the geologic dis- posal of spent nuclear fuel and high-level ra- dioactive waste, including both surface and subsurface areas at which spent nuclear fuel and high-level radioactive waste receipt, handling, possession, safeguarding, and stor- age are conducted. ”(26) SECRETARY.\u2014The term ‘Secretary’ means the Secretary of Energy. ”(27) SITE CHARACTERIZATION.\u2014The term ‘site characterization’ means activities, whether in a laboratory or in the field, un- dertaken to establish the geologic condition and the ranges of the parameters of a can- didate site relevant to the location of a re- pository, including borings, surface exca- vations, excavations of exploratory facili- ties, limited subsurface lateral excavations and borings, and in situ testing needed to evaluate the licensability of a candidate site for the location of a repository, but not in- cluding preliminary borings and geophysical testing needed to assess whether site charac- terization should be undertaken. ”(28) SPENT NUCLEAR FUEL.\u2014The term ‘spent nuclear fuel’ means fuel that has been withdrawn from a nuclear reactor following irradiation, the constituent elements of which have not been separated by reprocess- ing. ”(29) STORAGE.\u2014The term ‘storage’ means retention of spent nuclear fuel or high-level radioactive waste with the intent to recover such waste or fuel for subsequent use, proc- essing, or disposal. ”(30) WITHDRAWAL.\u2014The term ‘withdrawal’ has the same definition as that set forth in section 103(j) of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702(j)). ”(31) YUCCA MOUNTAIN SITE.\u2014The term ‘Yucca Mountain site’ means the area in the State of Nevada that is withdrawn and re- served in accordance with this Act for the lo- cation of a respository. ”TITLE I\u2014OBLIGATIONS ”SEC. 101. OBLIGATIONS OF THE SECRETARY OF ENERGY. ”(a) DISPOSAL.\u2014The Secretary shall de- velop and operate an integrated management system for the storage and permanent dis- posal of spent nuclear fuel and high-level ra- dioactive waste. ”(b) INTERIM STORAGE.\u2014The Secretary shall store spent nuclear fuel and high-level radioactive waste from facilities designated by contract holders at an interim storage fa- cility pursuant to section 204 in accordance with the emplacement schedule, beginning not later than November 30, 1999. ”(c) TRANSPORTATION.\u2014The Secretary shall provide for the transportation of spent nu- clear fuel and high-level radioactive waste VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00047 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9256 July 31, 1996 accepted by the Secretary. The Secretary shall procure all systems and components necessary to transport spent nuclear fuel and high-level radioactive waste from facilities designated by contract holders to and among facilities comprising the Integrated Manage- ment System. Consistent with the Buy American Act (41 U.S.C. 10a 10c), unless the Secretary shall determine it to be incon- sistent with the public interest, or the cost to be unreasonable, all such systems and components procured by the Secretary shall be manufactured in the United States, with the exception of any transportable storage systems purchased by contract holders prior to the effective date of the Nuclear Waste Policy Act of 1996 and procured by the Sec- retary from such contract holders for use in the integrated management system. ”(d) INTEGRATED MANAGEMENT SYSTEM.\u2014 The Secretary shall expeditiously pursue the development of each component of the inte- grated management system, and in so doing shall seek to utilize effective private sector management and contracting practices. ”(e) PRIVATE SECTOR PARTICIPATION.\u2014In administering the Integrated Management System, the Secretary shall, to the max- imum extent possible, utilize, employ, pro- cure and contract with, the private sector to fulfill the Secretary’s obligations and re- quirements under this Act. ”(f) PRE-EXISTING RIGHTS.\u2014Nothing in this Act is intended to or shall be construed to modify\u2014 ”(1) any right of a contract holder under section 302(a) of the Nuclear Waste Policy Act of 1982, or under a contract executed prior to the date of enactment of this Act under that section; or ”(2) obligations imposed upon the Federal Government by the United States District Court of Idaho in an order entered on Octo- ber 17, 1995 in United States v. Batt (No. 91 0054 S EJL). ”(g) LIABILITY.\u2014Subject to subsection (f), nothing in this Act shall be construed to subject the United States to financial liabil- ity for the Secretary’s failure to meet any deadline for the acceptance or emplacement of spent nuclear fuel or high-level radio- active waste for storage or disposal under this Act. ”TITLE II\u2014INTEGRATED MANAGEMENT SYSTEM ”SEC. 201. INTERMODAL TRANSFER. ”(a) ACCESS.\u2014The Secretary shall utilize heavy-haul truck transport to move spent nuclear fuel and high-level radioactive waste from the mainline rail line at Caliente, Ne- vada, to the interim storage facility site. ”(b) CAPABILITY DATE.\u2014The Secretary shall develop the capability to commence rail to truck intermodal transfer at Caliente, Nevada, no later than November 30, 1999. Intermodal transfer and related activities are incidental to the interstate transpor- tation of spent nuclear fuel and high-level radioactive waste. ”(c) ACQUISITIONS.\u2014The Secretary shall ac- quire lands and rights-of-way necessary to commence intermodal transfer at Caliente, Nevada. ”(d) REPLACEMENTS.\u2014The Secretary shall acquire and develop on behalf of, and dedi- cate to, the City of Caliente, Nevada, parcels of land and right-of-way within Lincoln County, Nevada, as required to facilitate re- placement of land and city wastewater dis- posal facilities necessary to commence inter- modal transfer pursuant to this Act. Re- placement of land and city wastewater dis- posal activities shall occur no later than No- vember 30, 1999. ”(e) NOTICE AND MAP.\u2014Within 6 months of the date of enactment of the Nuclear Waste Policy Act of 1996, the Secretary shall\u2014 ”(1) publish in the Federal Register a no- tice containing a legal description of the sites and rights-of-way to be acquired under this subsection; and ”(2) file copies of a map of such sites and rights-of-way with the Congress, the Sec- retary of the Interior, the State of Nevada, the Archivist of the United States, the Board of Lincoln County Commissioners, the Board of Nye County Commissioners, and the Caliente City Council. Such map and legal description shall have the same force and effect as if they were in- cluded in this Act. The Secretary may cor- rect clerical and typographical errors and legal descriptions and make minor adjust- ments in the boundaries. ”(f) IMPROVEMENTS.\u2014The Secretary shall make improvements to existing roadways se- lected for heavy-haul truck transport be- tween Caliente, Nevada, and the interim storage facility site as necessary to facili- tate year-round safe transport of spent nu- clear fuel and high-level radioactive waste. ”(g) LOCAL GOVERNMENT INVOLVEMENT.\u2014 The Commission shall enter into a Memo- randum of Understanding with the City of Caliente and Lincoln County, Nevada, to pro- vide advice to the Commission regarding intermodal transfer and to facilitate on-site representation. Reasonable expenses of such representation shall be paid by the Sec- retary. ”(h) BENEFITS AGREEMENT.\u2014 ”(1) IN GENERAL.\u2014The Secretary shall offer to enter into an agreement with the City of Caliente and Lincoln County, Nevada con- cerning the integrated management system. ”(2) AGREEMENT CONTENT.\u2014Any agreement shall contain such terms and conditions, in- cluding such financial and institutional ar- rangements, as the Secretary and agreement entity determine to be reasonable and appro- priate and shall contain such provisions as are necessary to preserve any right to par- ticipation or compensation of the City of Caliente and Lincoln County, Nevada. ”(3) AMENDMENT.\u2014An agreement entered into under this subsection may be amended only with the mutual consent of the parties to the amendment and terminated only in accordance with paragraph (4). ”(4) TERMINATION.\u2014The Secretary shall terminate the agreement under this sub- section if any major element of the inte- grated management system may not be com- pleted. ”(5) LIMITATION.\u2014Only one agreement may be in effect at any one time. ”(6) JUDICIAL REVIEW.\u2014Decisions of the Secretary under this section are not subject to judicial review. ”(i) CONTENT OF AGREEMENT.\u2014 ”(1) SCHEDULE.\u2014In addition to the benefits to which the City of Caliente and Lincoln County is entitled to under this title, the Secretary shall make payments under the benefits agreement in accordance with the following schedule: ”BENEFITS SCHEDULE ”(Amounts in millions) ”Event Payment ”(A) Annual payments prior to first receipt of spent fuel ………………… $2.5 ”(B) Annual payments beginning upon first spent fuel receipt …….. 5 ”(C) Payment upon closure of the intermodal transfer facility …….. 5 ”(2) DEFINITIONS.\u2014For purposes of this sec- tion, the term\u2014 ”(A) ‘spent fuel’ means high-level radio- active waste or spent nuclear fuel; and ”(B) ‘first spent fuel receipt’ does not in- clude receipt of spent fuel or high-level ra- dioactive waste for purposes of testing or operational demonstration. ”(3) ANNUAL PAYMENTS.\u2014Annual payments prior to first spent fuel receipt under para- graph (1)(A) shall be made on the date of exe- cution of the benefits agreement and there- after on the anniversary date of such execu- tion. Annual payments after the first spent fuel receipt until closure of the facility under paragraph (1)(C) shall be made on the anniversary date of such first spent fuel re- ceipt. ”(4) REDUCTION.\u2014If the first spent fuel pay- ment under paragraph (1)(B) is made within 6 months after the last annual payment prior to the receipt of spent fuel under paragraph (1)(A), such first spent fuel payment under paragraph (1)(B) shall be reduced by an amount equal to 1\u204412 of such annual payment under paragraph (1)(A) for each full month less than six that has not elapsed since the last annual payment under paragraph (1)(A). ”(5) RESTRICTIONS.\u2014The Secretary may not restrict the purposes for which the pay- ments under this section may be used. ”(6) DISPUTE.\u2014In the event of a dispute concerning such agreement, the Secretary shall resolve such dispute, consistent with this Act and applicable State law. ”(7) CONSTRUCTION.\u2014The signature of the Secretary on a valid benefits agreement under this section shall constitute a commit- ment by the United States to make pay- ments in accordance with such agreement under section 401(c)(2). ”(j) INITIAL LAND CONVEYANCES.\u2014 ”(1) CONVEYANCES OF PUBLIC LANDS.\u2014One hundred and twenty days after enactment of this Act, all right, title and interest of the United States in the property described in paragraph (2), and improvements thereon, to- gether with all necessary easements for util- ities and ingress and egress to such property, including, but not limited to, the right to improve those easements, are conveyed by operation of law to the County of Lincoln, Nevada, unless the county notifies the Sec- retary of the Interior or the head of such other appropriate agency in writing within 60 days of such date of enactment that it elects not to take title to all or any part of the property, except that any lands conveyed to the County of Lincoln under this sub- section that are subject to a Federal grazing permit or lease or a similar federally granted permit or lease shall be conveyed between 60 and 120 days of the earliest time the Federal agency administering or granting the permit or lease would be able to legally terminate such right under the statutes and regula- tions existing at the date of enactment of this Act, unless Lincoln County and the af- fected holder of the permit or lease negotiate an agreement that allows for an earlier con- veyance. ”(2) SPECIAL CONVEYANCES.\u2014Notwith- standing any other law, the following public lands depicted on the maps and legal descrip- tions dated October 11, 1995, shall be con- veyed under paragraph (1) to the County of Lincoln, Nevada: Map 10; Lincoln County, parcel M, indus- trial park site. Map 11; Lincoln County, parcel F, mixed use industrial site. Map 13; Lincoln County, parcel J, mixed use, Alamo Community Expansion Area. Map 14; Lincoln County, parcel E, mixed use, Pioche Community Expansion Area. Map 15; Lincoln County, parcel B, landfill expansion site. ”(3) CONSTRUCTION.\u2014The maps and legal descriptions special conveyances referred to in paragraph (2) shall have the same force and effect as if they were included in this Act. The Secretary may correct clerical and typographical errors in the maps and legal descriptions and make minor adjustments in the boundaries of the sites. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00048 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9257 July 31, 1996 ”(4) EVIDENCE OF TITLE TRANSFER.\u2014Upon the request of the County of Lincoln, Ne- vada, the Secretary of the Interior shall pro- vide evidence of title transfer. ”SEC. 202. TRANSPORTATION PLANNING. ”(a) TRANSPORTATION READINESS.\u2014The Secretary shall take those actions that are necessary and appropriate to ensure that the Secretary is able to transport safely spent nuclear fuel and high-level radioactive waste from sites designated by the contract holders to mainline transportation facilities, using routes that minimize, to the maximum prac- ticable extent consistent with Federal re- quirements governing transportation of haz- ardous materials, transportation of spent nu- clear fuel and high-level radioactive waste through populated areas, beginning not later than November 30, 1999, and, by that date, shall, in consultation with the Secretary of Transportation, develop and implement a comprehensive management plan that en- sures that safe transportation of spent nu- clear fuel and high-level radioactive waste from the sites designated by the contract holders to the interim storage facility site beginning not later than November 30, 1999. ”(b) TRANSPORTATION PLANNING.\u2014In con- junction with the development of the logistical plan in accordance with subsection (a), the Secretary shall update and modify, as necessary, the Secretary’s transportation institutional plans to ensure that institu- tional issues are addressed and resolved on a schedule to support the commencement of transportation of spent nuclear fuel and high-level radioactive waste to the interim storage facility no later than November 30, 1999. Among other things, such planning shall provide a schedule and process for ad- dressing and implementing as necessary, transportation routing plans, transportation contracting plans, transportation training in accordance with section 203, and public edu- cation regarding transportation of spent nu- clear fuel and high-level radioactive waste, and transportation tracking programs. ”SEC. 203. TRANSPORTATION REQUIREMENTS. ”(a) PACKAGE CERTIFICATION.\u2014No spent nu- clear fuel or high-level radioactive waste may be transported by or for the Secretary under this Act except in packages that have been certified for such purposes by the Com- mission. ”(b) STATE NOTIFICATION.\u2014The Secretary shall abide by regulations of the Commission regarding advance notification of State and local governments prior to transportation of spent nuclear fuel or high-level radioactive waste under this Act. ”(c) TECHNICAL ASSISTANCE.\u2014The Sec- retary shall provide technical assistance and funds to States, units of local government, and Indian tribes through whose jurisdiction the Secretary plans to transport substantial amounts of spent nuclear fuel or high-level radioactive waste for training for public safety officials of appropriate units of local government. The Secretary shall also pro- vide technical assistance and funds for train- ing directly to national nonprofit employee organizations which demonstrate experience in implementing and operating worker health and safety training and education programs and demonstrate the ability to reach and involve in training programs tar- get populations of workers who are or will be directly engaged in the transportation of spent nuclear fuel and high-level radioactive waste, or emergency response or post-emer- gency response with respect to such trans- portation. Training shall cover procedures required for safe routine transportation of these materials, as well as procedures for dealing with emergency response situations, and shall be consistent with any training standards established by the Secretary of Transportation in accordance with sub- section (g). The Secretary’s duty to provide technical and financial assistance under this subsection shall be limited to amounts speci- fied in annual appropriations. ”(d) PUBLIC EDUCATION.\u2014The Secretary shall conduct a program to educate the pub- lic regarding the transportation of spent nu- clear fuel and high-level radioactive waste, with an emphasis upon those States, units of local government, and Indian tribes through whose jurisdiction the Secretary plans to transport substantial amounts of spent nu- clear fuel or high-level radioactive waste. ”(e) COMPLIANCE WITH TRANSPORTATION REGULATIONS.\u2014Any person that transports spent nuclear fuel or high-level radioactive waste under the Nuclear Waste Policy Act of 1986, pursuant to a contract with the Sec- retary, shall comply with all requirements governing such transportation issued by the Federal, State and local governments, and Indian tribes, in the same way and to the same extent that any person engaging in that transportation that is in or affects interstate commerce must comply with such requirements, as required by section 5126 of title 49, United States Code. ”(f) EMPLOYEE PROTECTION.\u2014Any person engaged in the interstate commerce of spent nuclear fuel or high-level radioactive waste under contract to the Secretary pursuant to this Act shall be subject to and comply fully with the employee protection provisions of 49 United States Code 20109 and 49 United States Code 31105. ”(g) TRAINING STANDARD.\u2014(1) No later than 12 months after the date of enactment of the Nuclear Waste Policy Act of 1996, the Sec- retary of Transportation, pursuant to au- thority under other provisions of law, in con- sultation with the Secretary of Labor and the Commission, shall promulgate a regula- tion establishing training standards applica- ble to workers directly involved in the re- moval and transportation of spent nuclear fuel and high-level radioactive waste. The regulation shall specify minimum training standards applicable to workers, including managerial personnel. The regulation shall require that the employer possess evidence of satisfaction of the applicable training standard before any individual may be em- ployed in the removal and transportation of spent nuclear fuel and high-level radioactive waste. ”(2) If the Secretary of Transportation de- termines, in promulgating the regulation re- quired by paragraph (1), that regulations promulgated by the Commission establish adequate training standards for workers, then the Secretary of Transportation can re- frain from promulgating additional regula- tions with respect to worker training in such activities. The Secretary of Transportation and the Commission shall work through their Memorandum of Understanding to en- sure coordination of worker training stand- ards and to avoid duplicative regulation. ”(3) The training standards required to be promulgated under paragraph (1) shall, among other things deemed necessary and appropriate by the Secretary of Transpor- tation, include the following provisions\u2014 ”(A) a specified minimum number of hours of initial off site instruction and actual field experience under the direct supervision of a trained, experienced supervisor; ”(B) a requirement that onsite managerial personnel receive the same training as work- ers, and a minimum number of additional hours of specialized training pertinent to their managerial responsibilities; and ”(C) a training program applicable to per- sons responsible for responding to and clean- ing up emergency situations occurring dur- ing the removal and transportation of spent nuclear fuel and high-level radioactive waste. ”(4) There is authorized to be appropriated to the Secretary of Transportation, from general revenues, such sums as may be nec- essary to perform his duties under this sub- section. ”SEC. 204. INTERIM STORAGE. ”(a) AUTHORIZATION.\u2014The Secretary shall design, construct, and operate a facility for the interim storage of spent nuclear fuel and high-level radioactive waste at the interim storage facility site. The interim storage fa- cility shall be subject to licensing pursuant to the Atomic Energy Act of 1954 in accord- ance with the Commission’s regulations gov- erning the licensing of independent spent fuel storage installations, which regulations shall be amended by the Commission as nec- essary to implement the provisions of this Act. The interim storage facility shall com- mence operation in phases in accordance with subsection (b). ”(b) SCHEDULE.\u2014(1) The Secretary shall proceed forthwith and without further delay with all activities necessary to begin storing spent nuclear fuel and high-level radioactive waste at the interim storage facility at the interim storage facility site by November 30, 1999, except that: ”(A) The Secretary shall not begin any construction activities at the interim stor- age facility site before December 31, 1998. ”(B) The Secretary shall cease all activi- ties (except necessary termination activi- ties) at the Yucca Mountain site if the Presi- dent determines, in his discretion, on or be- fore December 31, 1998, based on a preponder- ance of the information available at such time, that the Yucca Mountain site is un- suitable for development as a repository, in- cluding geologic and engineered barriers, be- cause of a substantial likelihood that a re- pository of useful size, cannot be designed, licensed, and constructed at the Yucca Mountain site. ”(C) No later than June 30, 1998, the Sec- retary shall provide to the President and to the Congress a viability assessment of the Yucca Mountain site. The viability assess- ment shall include\u2014 ”(i) the preliminary design concept for the critical elements of the repository and waste package, ”(ii) a total system performance assess- ment, based upon the design concept and the scientific data and analysis available by June 30, 1998, describing the probable behav- ior of the respository in the Yucca Mountain geologic setting relative to the overall sys- tem performance standard set forth in sec- tion 205(d) of this Act, ”(iii) a plan and cost estimate for the re- maining work required to complete a license application, and ”(iv) an estimate of the costs to construct and operate the repository in accordance with the design concept. ”(D) Within 18 months of a determination by the President that the Yucca Mountain site is unsuitable for development as a repos- itory under subparagraph (B), the President shall designate a site for the construction of an interim storage facility. If the President does not designate a site for the construction of an interim storage facility, or the con- struction of an interim storage facility at the designated site is not approved by law within 24 months of the President’s deter- mination that the Yucca Mountain site is not suitable for development as a repository, the Secretary shall begin construction of an interim storage facility at the interim stor- age facility site as defined in section 2(19) of this Act. The interim storage facility site as defined in section 2(19) of this Act shall be deemed to be approved by law for purposes of this section. ”(2) Upon the designation of an interim storage facility site by the President under VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00049 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9258 July 31, 1996 paragraph (1)(D), the Secretary shall proceed forthwith and without further delay with all activities necessary to begin storing spent nuclear fuel and high-level radioactive waste at an interim storage facility at the des- ignated site, except that the Secretary shall not begin any construction activities at the designated interim storage facility site be- fore the designated interim storage facility site is approved by law. ”(c) DESIGN.\u2014 ”(1) The interim storage facility shall be designed in two phases in order to commence operations no later than November 30, 1999. The design of the interim storage facility shall provide for the use of storage tech- nologies, licensed, approved, or certified by the Commission for use at the interim stor- age facility as necessary to ensure compat- ibility between the interim storage facility and contract holders’ spent nuclear fuel and facilities, and to facilitate the Secretary’s ability to meet the Secretary’s obligations under this Act. ”(2) The Secretary shall consent to an amendment to the contracts to provide for reimbursement to contract holders for trans- portable storage systems purchased by con- tract holders if the Secretary determines that it is cost effective to use such trans- portable storage systems as part of the inte- grated management system, provided that the Secretary shall not be required to expend any funds to modify contract holders’ stor- age or transport systems or to seek addi- tional regulatory approvals in order to use such systems. ”(d) LICENSING.\u2014 ”(1) PHASES.\u2014The interim storage facility shall be licensed by the Commission in two phases in order to commerce operations no later than November 30, 1999. ”(2) FIRST PHASE.\u2014No later than 12 months after the date of enactment of the Nuclear Waste Policy Act of 1996, the Secretary shall submit to the Commission an application for a license for the first phase of the interim storage facility. The Environmental Report and Safety Analysis Report submitted in support of such license application shall be consistent with the scope of authority re- quested in the license application. The li- cense issued for the first phase of the interim storage facility shall have a term of 20 years. The interim storage facility licensed in the first phase shall have a capacity of not more than 15,000 MTU. The Commission shall issue a final decision granting or denying the ap- plication for the first phase license no later than 16 months from the date of the sub- mittal of the application for such license. ”(3) SECOND PHASE.\u2014No later than 30 months after the date of enactment of the Nuclear Waste Policy Act of 1996, the Sec- retary shall submit to the Commission an application for a license for the second phase interim storage facility. The license for the second phase facility shall authorize a stor- age capacity of 40,000 MTU. If the Secretary does not submit the license application for construction of a respository by February 1, 2002, or does not begin full spent nuclear fuel receipt operations at a repository by Janu- ary 17, 2010, the license shall authorize a storage capacity of 60,000 MTU. The license application shall be submitted such that the license can be issued to permit the second phase facility to begin full spent nuclear fuel receipt operations no later than December 31, 2002. The license for the second phase shall have an initial term of up to 100 years, and shall be renewable for additional terms upon application of the Secretary. ”(e) ADDITIONAL AUTHORITY.\u2014 ”(1) CONSTRUCTION.\u2014For purposes of com- plying with this section, the Secretary may commence site preparation for the interim storage facility as soon as practicable after the date of enactment of the Nuclear Waste Policy Act of 1996 and shall commence con- struction of each phase of the interim stor- age facility subsequent to submittal of the license application for such phase except that the Commission shall issue an order suspending such construction at any time if the Commission determines that such con- struction poses an unreasonable risk to pub- lic health and safety or the environment. The Commission shall terminate all or part of such order upon a determination that the Secretary has taken appropriate action to eliminate such risk. ”(2) FACILITY USE.\u2014Notwithstanding any otherwise applicable licensing requirement, the Secretary may utilize any facility owned by the Federal Government on the date of enactment of the Nuclear Waste Policy Act of 1996 within the boundaries of the interim storage facility site, in connection with an imminent and substantial endangerment to public health and safety at the interim stor- age facility prior to commencement of oper- ations during the second phase. ”(3) EMPLACEMENT OF FUEL AND WASTE.\u2014 Subject to subsection (i), once the Secretary has achieved the annual acceptance rate for spent nuclear fuel from civilian nuclear power reactors established pursuant to the contracts executed prior to the date of en- actment of the Nuclear Waste Policy Act of 1996, as set forth in the Secretary’s annual capacity report dated March, 1995 (DOE\/RW 0457), the Secretary shall accept, in an amount not less than 25 percent of the dif- ference between the contractual acceptance rate and the annual emplacement rate for spent nuclear fuel from civilian nuclear power reactors established under section 507(a), the following radioactive materials\u2014 ”(A) spent nuclear fuel or high-level radio- active waste of domestic origin from civilian nuclear power reactors that have perma- nently ceased operation on or before the date of enactment of the Nuclear Waste Policy Act of 1996; ”(B) spent nuclear fuel from foreign re- search reactors, as necessary to promote non-proliferation objectives; and ”(C) spent nuclear fuel, including spent nu- clear fuel from naval reactors, and high-level radioactive waste from atomic energy de- fense activities. ”(f) NATIONAL ENVIRONMENTAL POLICY ACT OF 1969.\u2014 ”(1) PRELIMINARY DECISIONMAKING ACTIVI- TIES.\u2014The Secretary’s and President’s ac- tivities under this section, including, but not limited to, the selection of a site for the in- terim storage facility, assessments, deter- minations and designations made under sec- tion 204(b), the preparation and submittal of a license application and supporting docu- mentation, the construction of a facility under paragraph (e)(1) of this section, and fa- cility use pursuant to paragraph (e)(2) of this section shall be considered preliminary deci- sionmaking activities for purposes of judi- cial review. The Secretary shall not prepare an environmental impact statement under section 102(2)(C) of the National Environ- mental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) or any environmental review under subparagraph (E) or (F) of such Act be- fore conducting these activities. ”(2) ENVIRONMENTAL IMPACT STATEMENT.\u2014 ”(A) FINAL DECISION.\u2014A final decision by the Commission to grant or deny a license application for the first or second phase of the interim storage facility shall be accom- panied by an Environmental Impact State- ment prepared under section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). In preparing such Envi- ronmental Impact Statement, the Commis- sion\u2014 ”(i) shall ensure that the scope of the Envi- ronmental Impact Statement is consistent with the scope of the licensing action; and ”(ii) shall analyze the impacts of the trans- portation of spent nuclear fuel and high-level radioactive waste to the interim storage fa- cility in a generic manner. ”(B) CONSIDERATIONS.\u2014Such Environ- mental Impact Statement shall not con- sider\u2014 ”(i) the need for the interim storage facil- ity, including any individual component thereof; ”(ii) the time of the initial availability of the interim storage facility; ”(iii) any alternatives to the storage of spent nuclear fuel and high-level radioactive waste at the interim storage facility; ”(iv) any alternatives to the site of the fa- cility as designated by the Secretary in ac- cordance with subsection (a); ”(v) any alternatives to the design criteria for such facility or any individual compo- nent thereof, as specified by the Secretary in the license application; or ”(vi) the environmental impacts of the storage of spent nuclear fuel and high-level radioactive waste at the interim storage fa- cility beyond the initial term of the license or the term of the renewal period for which a license renewal application is made. ”(g) JUDICIAL REVIEW.\u2014Judicial review of the Commission’s environmental impact statement under the National Environ- mental Policy Act of 1969 (42 U.S.C. 4321 et seq.) shall be consolidated with judicial re- view of the Commission’s licensing decision. No court shall have jurisdiction to enjoin the construction or operation of the interim storage facility prior to its final decision on review of the Commission’s licensing action. ”(h) WASTE CONFIDENCE.\u2014The Secretary’s obligation to construct and operate the in- terim storage facility in accordance with this section and the Secretary’s obligation to develop an integrated management sys- tem in accordance with the provisions of this Act, shall provide sufficient and independent grounds for any further findings by the Com- mission of reasonable assurance that spent nuclear fuel and high-level radioactive waste will be disposed of safely and on a timely basis for purposes of the Commission’s deci- sion to grant or amend any license to oper- ate any civilian nuclear power reactor under the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.). ”(i) STORAGE OF OTHER SPENT NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE WASTE.\u2014 No later than 18 months following the date of enactment of the Nuclear Waste Policy Act of 1996, the Commission shall, by rule, establish criteria for the storage in the in- terim storage facility of fuel and waste list- ed in subparagraph (e)(3) (A) through (C), to the extent such criteria are not included in regulations issued by the Commission and existing on the date of enactment of the Nu- clear Waste Policy Act of 1996. Following es- tablishment of such criteria, the Secretary shall seek authority, as necessary, to store fuel and waste listed in subparagraph (e)(3) (A) through (C) at the interim storage facil- ity. None of the activities carried out pursu- ant to this subsection shall delay, or other- wise affect, the development, construction, licensing, or operation of the interim storage facility. ”(j) SAVINGS CLAUSE.\u2014The Commission shall, by rule, establish procedures for the li- censing of any technology for the dry stor- age of spent nuclear fuel by rule and with- out, to the maximum extent possible, the need for site-specific approvals by the Com- mission. Nothing in this Act shall affect any such procedures, or any licenses or approvals issued pursuant to such procedures in effect on the date of enactment. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00050 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9259 July 31, 1996 ”SEC. 205. PERMANENT REPOSITORY. ”(a) REPOSITORY CHARACTERIZATION.\u2014 ”(1) GUIDELINES.\u2014The guidelines promul- gated by the Secretary and published at part 960 of title 10, Code of Federal Regulations are annulled and revoked and the Secretary shall make no assumptions or conclusions about the licensability of the Yucca Moun- tain site as a repository by reference to such guidelines. ”(2) SITE CHARACTERIZATION ACTIVITIES.\u2014 The Secretary shall carry out appropriate site characterization activities at the Yucca Mountain site in accordance with the Sec- retary’s program approach to site character- ization. The Secretary shall modify or elimi- nate those site characterization activities designed only to demonstrate the suitability of the site under the guidelines referenced in paragraph (1). ”(3) SCHEDULE DATE.\u2014Consistent with the schedule set forth in the program approach, as modified to be consistent with the Nu- clear Waste Policy Act of 1996, no later than February 1, 2002, the Secretary shall apply to the Commission for authorization to con- struct a repository. If, at any time prior to the filing of such application, the Secretary determines that the Yucca Mountain site cannot satisfy the Commission’s regulations applicable to the licensing of a geologic re- pository, the Secretary shall terminate site characterization activities at the site, notify Congress and the State of Nevada of the Sec- retary’s determination and the reasons therefor, and recommend to Congress not later than 6 months after such determina- tion, further actions, including the enact- ment of legislation, that may be needed to manage the Nation’s spent nuclear fuel and high-level radioactive waste. ”(4) MAXIMIZING CAPACITY.\u2014In developing an application for authorization to construct the repository, the Secretary shall seek to maximize the capacity of the repository, in the most cost-effective manner, consistent with the need for disposal capacity. ”(b) REPOSITORY LICENSING.\u2014Upon the completion of any licensing proceeding for the first phase of the interim storage facil- ity, the Commission shall amend its regula- tions governing the disposal of spent nuclear fuel and high-level radioactive waste in geo- logic repositories to the extent necessary to comply with this Act. Subject to subsection (c), such regulations shall provide for the li- censing of the repository according to the following procedures: ”(1) CONSTRUCTION AUTHORIZATION.\u2014The Commission shall grant the Secretary a con- struction authorization for the repository upon determining that there is reasonable assurance that spent nuclear fuel and high- level radioactive waste can be disposed of in the repository\u2014 ”(A) in conformity with the Secretary’s application, the provisions of this Act, and the regulations of the Commission; ”(B) without unreasonable risk to the health and safety of the public; and ”(C) consistent with the common defense and security. ”(2) LICENSE.\u2014Following substantial com- pletion of construction and the filing of any additional information needed to complete the license application, the Commission shall issue a license to dispose of spent nu- clear fuel and high-level radioactive waste in the repository if the Commission determines that the repository has been constructed and will operate\u2014 ”(A) in conformity with the Secretary’s application, the provisions of this Act, and the regulations of the Commission; ”(B) without unreasonable risk to the health and safety of the public; and ”(C) consistent with the common defense and security. ”(3) CLOSURE.\u2014After emplacing spent nu- clear fuel and high-level radioactive waste in the repository and collecting sufficient con- firmatory data on repository performance to reasonably confirm the basis for repository closure consistent with the Commission’s regulations applicable to the licensing of a repository, as modified in accordance with this Act, the Secretary shall apply to the Commission to amend the license to permit permanent closure of the repository. The Commission shall grant such license amend- ment upon finding that there is reasonable assurance that the repository can be perma- nently closed\u2014 ”(A) in conformity with the Secretary’s application to amend the license, the provi- sions of this Act, and the regulations of the Commission; ”(B) without unreasonable risk to the health and safety of the public; and ”(C) consistent with the common defense and security. ”(4) POST-CLOSURE.\u2014The Secretary shall take those actions necessary and appropriate at the Yucca Mountain site to prevent any activity at the site subsequent to repository closure that poses an unreasonable risk of\u2014 ”(A) breaching the repository’s engineered or geologic barriers; or ”(B) increasing the exposure of individual members of the public to radiation beyond the release standard established in sub- section (d)(1). ”(c) MODIFICATION OF REPOSITORY LICENS- ING PROCEDURE.\u2014The Commission’s regula- tions shall provide for the modification of the repository licensing procedure, as appro- priate, in the event that the Secretary seeks a license to permit the emplacement in the repository, on a retrievable basis, of spent nuclear fuel or high-level radioactive waste as is necessary to provide the Secretary with sufficient confirmatory data on repository performance to reasonably confirm the basis for repository closure consistent with appli- cable regulations. ”(d) REPOSITORY LICENSING STANDARDS.\u2014 The Administrator of the Environmental Protection Agency shall, pursuant to author- ity under other provisions of law, issue gen- erally applicable standards for the protec- tion of the public from releases of radio- active materials or radioactivity from the repository. Such standards shall be con- sistent with the overall system performance standard established by this subsection un- less the Administrator determines by rule that the overall system performance stand- ard would constitute an unreasonable risk to health and safety. The Commission’s reposi- tory licensing determinations for the protec- tion of the public shall be based solely on a finding whether the repository can be oper- ated in conformance with the overall system performance standard established in para- graph (1), applied in accordance with the pro- visions of paragraph (2), and the Administra- tor’s radiation protection standards. The Commission shall amend its regulations in accordance with subsection (b) to incor- porate each of the following licensing stand- ards: ”(1) ESTABLISHMENT OF OVERALL SYSTEM PERFORMANCE STANDARD.\u2014The standard for protection of the public from release of ra- dioactive material or radioactivity from the repository shall prohibit releases that would expose an average member of the general population in the vicinity of the Yucca Mountain site to an annual dose in excess of 100 millirems unless the Commission deter- mines by rule that such standard would con- stitute an unreasonable risk to health and safety and establishes by rule another stand- ard which will protect health and safety. Such standard shall constitute an overall system performance standard. ”(2) APPLICATION OF OVERALL SYSTEM PER- FORMANCE STANDARD.\u2014The Commission shall issue the license if it finds reasonable assur- ance that for the first 1,000 years following the commencement of repository operations, the overall system performance standard will be met based on a probabilistic evalua- tion, as appropriate, of compliance with the overall system performance standard in paragraph (1). ”(3) FACTORS.\u2014For purposes of making the finding in paragraph (2)\u2014 ”(A) the Commission shall not consider catastrophic events where the health con- sequences of individual events themselves can be reasonably assumed to exceed the health consequences due to the impact of the events on repository performance; ”(B) for the purpose of this section, an av- erage member of the general population in the vicinity of the Yucca Mountain site means a person whose physiology, age, gen- eral health, agricultural practices, eating habits, and social behavior represent the av- erage for persons living in the vicinity of the site. Extremes in social behavior, eating habits, or other relevant practices or charac- teristics shall not be considered; and ”(C) the Commission shall assume that, following repository closure, the inclusion of engineered barriers and the Secretary’s post- closure actions at the Yucca Mountain site, in accordance with subsection (b)(4), shall be sufficient to\u2014 ”(i) prevent any human activity at the site that poses an unreasonable risk of breaching the repository’s engineered or geologic bar- riers; and ”(ii) prevent any increase in the exposure of individual members of the public to radi- ation beyond the allowable limits specified in paragraph (1). ”(4) ADDITIONAL ANALYSIS.\u2014The Commis- sion shall analyze the overall system per- formance through the use of probabilistic evaluations that use best estimate assump- tions, data, and methods for the period com- mencing after the first 1,000 years of oper- ation of the repository and terminating at 10,000 years after the commencement of oper- ation of the repository. ”(e) NATIONAL ENVIRONMENTAL POLICY ACT.\u2014 ”(1) SUBMISSION OF STATEMENT.\u2014Construc- tion and operation of the repository shall be considered a major Federal action signifi- cantly affecting the quality of the human en- vironment for purposes of the National Envi- ronmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). The Secretary shall submit an envi- ronmental impact statement on the con- struction and operation of the repository to the Commission with the license application and shall supplement such environmental impact statement as appropriate. ”(2) CONSIDERATIONS.\u2014For purposes of complying with the requirements of the Na- tional Environmental Policy Act of 1969 and this section, the Secretary shall not consider in the environmental impact statement the need for the repository, or alternative sites or designs for the repository. ”(3) ADOPTION BY COMMISSION.\u2014The Sec- retary’s environmental impact statement and any supplements thereto shall, to the ex- tent practicable, be adopted by the Commis- sion in connection with the issuance by the Commission of a construction authorization under subsection (b)(1), a license under sub- section (b)(2), or a license amendment under subsection (b)(3). To the extent such state- ment or supplement is adopted by the Com- mission, such adoption shall be deemed to also satisfy the responsibilities of the Com- mission under the National Environmental Policy Act of 1969, and no further consider- ation shall be required, except that nothing VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00051 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9260 July 31, 1996 in this subsection shall affect any inde- pendent responsibilities of the Commission to protect the public health and safety under the Atomic Energy Act of 1954. In any such statement or supplement prepared with re- spect to the repository, the Commission shall not consider the need for a repository, or alternate sites or designs for the reposi- tory. ”(f) JUDICIAL REVIEW.\u2014No court shall have jurisdiction to enjoin issuance of the Com- mission repository licensing regulations prior to its final decision on review of such regulations. ”SEC. 206. LAND WITHDRAWAL. ”(a) WITHDRAWAL AND RESERVATION.\u2014 ”(1) WITHDRAWAL.\u2014Subject to valid exist- ing rights, the interim storage facility site and the Yucca Mountain site, as described in subsection (b), are withdrawn from all forms of entry, appropriation, and disposal under the public land laws, including the mineral leasing laws, the geothermal leasing laws, the material sale laws, and the mining laws. ”(2) JURISDICTION.\u2014Jurisdiction of any land within the interim storage facility site and the Yucca Mountain site managed by the Secretary of the Interior or any other Fed- eral officer is transferred to the Secretary. ”(3) RESERVATION.\u2014The interim storage fa- cility site and the Yucca Mountain site are reserved for the use of the Secretary for the construction and operation, respectively, of the interim storage facility and the reposi- tory and activities associated with the pur- poses of this title. ”(b) LAND DESCRIPTION.\u2014 ”(1) BOUNDARIES.\u2014The boundaries depicted on the map entitled ‘Interim Storage Facil- ity Site Withdrawal Map’, dated March 13, 1996, and on file with the Secretary, are es- tablished as the boundaries of the Interim Storage Facility site. ”(2) BOUNDARIES.\u2014The boundaries depicted on the map entitled ‘Yucca Mountain Site Withdrawal Map’, dated July 9, 1996, and on file with the Secretary, are established as the boundaries of the Yucca Mountain site. ”(3) NOTICE AND MAPS.\u2014Within 6 months of the date of the enactment of the Nuclear Waste Policy Act of 1996, the Secretary shall\u2014 ”(A) publish in the Federal Register a no- tice containing a legal description of the in- terim storage facility site; and ”(B) file copies of the maps described in paragraph (1), and the legal description of the interim storage facility site with the Congress, the Secretary of the Interior, the Governor of Nevada, and the Archivist of the United States. ”(4) NOTICE AND MAPS.\u2014Concurrent with the Secretary’s application to the Commis- sion for authority to construct the reposi- tory, the Secretary shall\u2014 ”(A) publish in the Federal Register a no- tice containing a legal description of the Yucca Mountain site; and ”(B) file copies of the maps described in paragraph (2), and the legal description of the Yucca Mountain site with the Congress, the Secretary of the Interior, the Governor of Nevada, and the Archivist of the United States. ”(5) CONSTRUCTION.\u2014The maps and legal descriptions of the interim storage facility site and the Yucca Mountain site referred to in this subsection shall have the same force and effect as if they were included in this Act. The Secretary may correct clerical and typographical errors in the maps and legal descriptions and make minor adjustments in the boundaries of the sites. ”TITLE III\u2014LOCAL RELATIONS ”SEC. 301. FINANCIAL ASSISTANCE. ”(a) GRANTS.\u2014The Secretary is authorized to make grants to any affected Indian tribe or affected unit of local government for pur- poses of enabling the affected Indian tribe or affected unit of local government\u2014 ”(1) to review activities taken with respect to the Yucca Mountain site for purposes of determining any potential economic, social, public health and safety, and environmental impacts of the integrated management sys- tem on the affected Indian tribe or the af- fected unit of local government and its resi- dents; ”(2) to develop a request for impact assist- ance under subsection (c); ”(3) to engage in any monitoring, testing, or evaluation activities with regard to such site; ”(4) to provide information to residents re- garding any activities of the Secretary, or the Commission with respect to such site; and ”(5) to request information from, and make comments and recommendations to, the Sec- retary regarding any activities taken with respect to such site. ”(b) SALARY AND TRAVEL EXPENSES.\u2014Any salary or travel expense that would ordi- narily be incurred by any affected Indian tribe or affected unit of local government may not be considered eligible for funding under this section. ”(c) FINANCIAL AND TECHNICAL ASSIST- ANCE.\u2014 ”(1) ASSISTANCE REQUESTS.\u2014The Secretary is authorized to offer to provide financial and technical assistance to any affected In- dian tribe or affected unit of local govern- ment requesting such assistance. Such as- sistance shall be designed to mitigate the impact on the affected Indian tribe or af- fected unit of local government of the devel- opment of the integrated management sys- tem. ”(2) REPORT.\u2014Any affected Indian tribe or affected unit of local government may re- quest assistance under this section by pre- paring and submitting to the Secretary a re- port on the economic, social, public health and safety, and environmental impacts that are likely to result from activities of the in- tegrated management system. ”(d) OTHER ASSISTANCE.\u2014 ”(1) TAXABLE AMOUNTS.\u2014In addition to fi- nancial assistance provided under this sub- section, the Secretary is authorized to grant to any affected Indian tribe or affected unit of local government an amount each fiscal year equal to the amount such affected In- dian tribe or affected unit of local govern- ment, respectively, would receive if author- ized to tax integrated management system activities, as such affected Indian tribe or af- fected unit of local government taxes the non-Federal real property and industrial ac- tivities occurring within such affected unit of local government. ”(2) TERMINATION.\u2014Such grants shall con- tinue until such time as all such activities, development, and operations are terminated at such site. ”(3) ASSISTANCE TO INDIAN TRIBES AND UNITS OF LOCAL GOVERNMENT.\u2014 ”(A) PERIOD.\u2014Any affected Indian tribe or affected unit of local government may not receive any grant under paragraph (1) after the expiration of the 1-year period following the date on which the Secretary notifies the affected Indian tribe or affected unit of local government of the termination of the oper- ation of the integrated management system. ”(B) ACTIVITIES.\u2014Any affected Indian tribe or affected unit of local government may not receive any further assistance under this sec- tion if the integrated management system activities at such site are terminated by the Secretary or if such activities are perma- nently enjoined by any court. ”SEC. 302. ON-SITE REPRESENTATIVE. ”The Secretary shall offer to the unit of local government within whose jurisdiction a site for an interim storage facility or reposi- tory is located under this Act an opportunity to designate a representative to conduct on- site oversight activities at such site. The Secretary is authorized to pay the reason- able expenses of such representative. ”SEC. 303. ACCEPTANCE OF BENEFITS. ”(a) CONSENT.\u2014The acceptance or use of any of the benefits provided under this title by any affected Indian tribe or affected unit of local government shall not be deemed to be an expression of consent, express, or im- plied, either under the Constitution of the State or any law thereof, to the siting of an interim storage facility or repository in the State of Nevada, any provision of such Con- stitution or laws to the contrary notwith- standing. ”(b) ARGUMENTS.\u2014Neither the United States nor any other entity may assert any argument based on legal or equitable estop- pel, or acquiescence, or waiver, or consensual involvement, in response to any decision by the State to oppose the siting in Nevada of an interim storage facility or repository pre- mised upon or related to the acceptance or use of benefits under this title. ”(c) LIABILITY.\u2014No liability of any nature shall accrue to be asserted against any offi- cial of any governmental unit of Nevada pre- mised solely upon the acceptance or use of benefits under this title. ”SEC. 304. RESTRICTIONS ON USE OF FUNDS. ”None of the funding provided under this title may be used\u2014 ”(1) directly or indirectly to influence leg- islative action on any matter pending before Congress or a State legislature or for any lobbying activity as provided in section 1913 of title 18, United States Code; ”(2) for litigation purposes; and ”(3) to support multistate efforts or other coalition-building activities inconsistent with the purposes of this Act. ”SEC. 305. LAND CONVEYANCES. ”(a) CONVEYANCES OF PUBLIC LANDS.\u2014One hundred and twenty days after enactment of this Act, all right, title and interest of the United States in the property described in subsection (b), and improvements thereon, together with all necessary easements for utilities and ingress and egress to such prop- erty, including, but not limited to, the right to improve those easements, are conveyed by operation of law to the County of Nye, Ne- vada, unless the county notifies the Sec- retary of Interior or the head of such other appropriate agency in writing within 60 days of such date of enactment that it elects not to take title to all or any part of the prop- erty, except that any lands conveyed to the County of Nye under this subsection that are subject to a Federal grazing permit or lease or a similar federally granted permit or lease shall be conveyed between 60 and 120 days of the earliest time the Federal agency admin- istering or granting the permit or lease would be able to legally terminate such right under the statutes and regulations existing at the date of enactment of this Act, unless Nye County and the affected holder of the permit or lease negotiate an agreement that allows for an earlier conveyance. ”(b) SPECIAL CONVEYANCES.\u2014Notwith- standing any other law, the following public lands depicted on the maps and legal descrip- tions dated October 11, 1995, and on file with the Secretary shall be conveyed under sub- section (a) to the County of Nye, Nevada: Map 1: Proposed Pahrump industrial park site. Map 2: Proposed Lathrop Wells (gate 510) industrial park site. Map 3: Pahrump landfill sites. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00052 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9261 July 31, 1996 Map 4: Amargosa Valley Regional Landfill site. Map 5: Amargosa Valley Municipal Land- fill site. Map 6: Beatty Landfill\/Transfer Station site. Map 7: Round Mountain Landfill site. Map 8: Tonopah Landfill site. Map 9: Gabbs Landfill site. ”(c) CONSTRUCTION.\u2014The maps and legal descriptions of special conveyances referred to in subsection (b) shall have the same force and effect as if they were included in this Act. The Secretary may correct clerical and typographical errors in the maps and legal descriptions and make minor adjustments in the boundaries of the sites. ”(d) EVIDENCE OF TITLE TRANSFER.\u2014Upon the request of the County of Nye, Nevada, the Secretary of the Interior shall provide evidence of title transfer. ”TITLE IV\u2014FUNDING AND ORGANIZATION ”SEC. 401. PROGRAM FUNDING. ”(a) CONTRACTS.\u2014 ”(1) AUTHORITY OF SECRETARY.\u2014In the per- formance of the Secretary’s functions under this Act, the Secretary is authorized to enter into contracts with any person who gen- erates or holds title to spent nuclear fuel or high-level radioactive waste of domestic ori- gin for the acceptance of title and posses- sion, transportation, interim storage, and disposal of such waste or spent fuel. Such contracts shall provide for payment of an- nual fees to the Secretary in the amounts set by the Secretary pursuant to paragraphs (2) and (3). Except as provided in paragraph (3), fees assessed pursuant to this paragraph shall be paid to the Treasury of the United States and shall be available for use by the Secretary pursuant to this section until ex- pended. Subsequent to the date of enactment of the Nuclear Waste Policy Act of 1996, the contracts executed under section 302(a) of the Nuclear Waste Policy Act of 1982 shall continue in effect under this Act: Provided, That the Secretary shall consent to an amendment to such contracts as necessary to implement the provisions of this Act. ”(2) ANNUAL FEES.\u2014 ”(A) for electricity generated by civilian nuclear power reactors and sold between January 7, 1983, and September 30, 2002, the fee under paragraph (1) shall be equal to 1.0 mill per kilowatt-hour generated and sold. For electricity generated by civilian nuclear power reactors and sold on or after October 1, 2002, the aggregate amount of fees col- lected during each fiscal year shall be no greater than the annual level of appropria- tions for expenditures on those activities consistent with subsection (d) for that fiscal year, minus\u2014 ”(i) any unobligated balance collected pur- suant to this section during the previous fis- cal year; and ”(ii) the percentage of such appropriation required to be funded by the Federal Govern- ment pursuant to section 403, The Secretary shall determine the level of the annual fee for each civilian nuclear power reactor based on the amount of elec- tricity generated and sold, except that the annual fee collected under this subparagraph shall not exceed 1.0 mill per kilowatt-hour generated and sold. ”(B) EXPENDITURES IF SHORTFALL.\u2014If, dur- ing any fiscal year on or after October 1, 2002, the aggregate amount of fees assessed pursuant to subparagraph (A) is less than the annual level of appropriations for expendi- tures on those activities specified in sub- section (d) for that fiscal year, minus\u2014 ”(i) any unobligated balance collected pur- suant to this section during the previous fis- cal year; and ”(ii) the percentage of such appropriations required to be funded by the Federal Govern- ment pursuant to section 403, the Secretary may make expenditures from the Nuclear Waste Fund up to the level of the fees assessed. ”(C) RULES.\u2014The Secretary shall, by rule, establish procedures necessary to implement this paragraph. ”(3) ONE-TIME FEE.\u2014For spent nuclear fuel or solidified high-level radioactive waste de- rived from spent nuclear fuel, which fuel was used to generate electricity in a civilian nu- clear power reactor prior to January 7, 1983, the fee shall be in an amount equivalent to an average charge of 1.0 mill per kilowatt- hour for electricity generated by such spent nuclear fuel, or such solidified high-level waste derived therefrom. Payment of such one-time fee prior to the date of enactment of the Nuclear Waste Policy Act of 1996 shall satisfy the obligation imposed under this paragraph. Any one-time fee paid and col- lected subsequent to the date of enactment of the Nuclear Waste Policy Act of 1996 pur- suant to the contracts, including any inter- est due pursuant to such contracts, shall be paid to the Nuclear Waste Fund no later than September 30, 2002. The Commission shall suspend the license of any licensee who fails or refuses to pay the full amount of the fee referred to in this paragraph on or before September 30, 2002, and the license shall re- main suspended until the full amount of the fee referred to in this paragraph is paid. The person paying the fee under this paragraph to the Secretary shall have no further finan- cial obligation to the Federal Government for the long-term storage and permanent dis- posal of spent fuel or high-level radioactive waste derived from spent nuclear fuel used to generate electricity in a civilian power reac- tor prior to January 7, 1983. ”(4) ADJUSTMENTS TO FEE.\u2014The Secretary shall annually review the amount of the fees established by paragraphs (2) and (3), to- gether with the existing balance of the Nu- clear Waste Fund on the date of enactment of the Nuclear Waste Policy Act of 1996, to evaluate whether collection of the fee will provide sufficient revenues to offset the costs as defined in subsection (c)(2). In the event the Secretary determines that the rev- enues being collected are either insufficient or excessive to recover the costs incurred by the Federal Government that are specified in subsection (c)(2), the Secretary shall propose an adjustment to the fee in subsection (c)(2) to ensure full cost recovery. The Secretary shall immediately transmit the proposal for such an adjustment to both houses of Con- gress. ”(b) ADVANCE CONTRACTING REQUIRE- MENT.\u2014 ”(1) IN GENERAL.\u2014 ”(A) LICENSE ISSUANCE AND RENEWAL.\u2014The Commission shall not issue or renew a li- cense to any person to use a utilization or production facility under the authority of section 103 or 104 of the Atomic Energy Act of 1954 (42 U.S.C. 2133, 2134) unless\u2014 ”(i) such person has entered into a con- tract under subsection (a) with the Sec- retary; or ”(ii) the Secretary affirms in writing that such person is actively and in good faith ne- gotiating with the Secretary for a contract under this section. ”(B) PRECONDITION.\u2014The Commission, as it deems necessary or appropriate, may require as a precondition to the issuance or renewal of a license under section 103 or 104 of the Atomic Energy Act of 1954 (42 U.S.C. 2133, 2134) that the applicant for such license shall have entered into an agreement with the Secretary for the disposal of spent nuclear fuel and high-level radioactive waste that may result from the use of such license. ”(2) DISPOSAL IN REPOSITORY.\u2014Except as provided in paragraph (1), no spent nuclear fuel or high-level radioactive waste gen- erated or owned by any person (other than a department of the United States referred to in section 101 or 102 of title 5, United States Code) may be disposed of by the Secretary in the repository unless the generator or owner of such spent fuel or waste has entered into a contract under subsection (a) with the Sec- retary by not later than the date on which such generator or owner commences genera- tion of, or takes title to, such spent fuel or waste. ”(3) ASSIGNMENT.\u2014The rights and duties of contract holders are assignable. ”(c) NUCLEAR WASTE FUND.\u2014 ”(1) IN GENERAL.\u2014The Nuclear Waste Fund established in the Treasury of the United States under section 302(c) of the Nuclear Waste Policy Act of 1982 shall continue in ef- fect under this Act and shall consist of\u2014 ”(A) the existing balance in the Nuclear Waste Fund on the date of enactment of the Nuclear Waste Policy Act of 1996; and ”(B) all receipts, proceeds, and recoveries realized under subsections (a), and (c)(3) sub- sequent to the date of enactment of the Nu- clear Waste Policy Act of 1996, which shall be deposited in the Nuclear Waste Fund imme- diately upon their realization. ”(2) USE.\u2014The Secretary may make ex- penditures from the Nuclear Waste Fund, subject to subsections (d) and (e), only for purposes of the integrated management sys- tem. ”(3) ADMINISTRATION OF NUCLEAR WASTE FUND.\u2014 (A) IN GENERAL.\u2014The Secretary of the Treasury shall hold the Nuclear Waste Fund and, after consultation with the Secretary, annually report to the Congress on the finan- cial condition and operations of the Nuclear Waste Fund during the preceding fiscal year. ”(B) AMOUNTS IN EXCESS OF CURRENT NEEDS.\u2014If the Secretary determines that the Nuclear Waste Fund contains at any time amounts in excess of current needs, the Sec- retary may request the Secretary of the Treasury to invest such amounts, or any por- tion of such amounts as the Secretary deter- mines to be appropriate, in obligations of the United States\u2014 ”(i) having maturities determined by the Secretary of the Treasury to be appropriate to the needs of the Nuclear Waste Fund; and ”(ii) bearing interest at rates determined to be appropriate by the Secretary of the Treasury, taking into consideration the cur- rent average market yield on outstanding marketable obligations of the United States with remaining periods to maturity com- parable to the maturities of such invest- ments, except that the interest rate on such investments shall not exceed the average in- terest rate applicable to existing borrowings. ”(C) EXEMPTION.\u2014Receipts, proceeds, and recoveries realized by the Secretary under this section, and expenditures of amounts from the Nuclear Waste Fund, shall be ex- empt from annual apportionment under the provisions of subchapter II of chapter 15 of title 31, United States Code. ”(d) BUDGET.\u2014The Secretary shall submit the budget for implementation of the Sec- retary’s responsibilities under this Act to the Office of Management and Budget annu- ally along with the budget of the Depart- ment of Energy submitted at such time in accordance with chapter 11 of title 31, United States Code. The budget shall consist of the estimates made by the Secretary of expendi- tures under this Act and other relevant fi- nancial matters for the succeeding 3 fiscal years, and shall be included in the budget of the United States Government. ”(e) APPROPRIATIONS.\u2014The Secretary may make expenditures from the Nuclear Waste VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00053 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9262 July 31, 1996 Fund, subject to appropriations, which shall remain available until expended. ”SEC. 402. OFFICE OF CIVILIAN RADIOACTIVE WASTE MANAGEMENT. ”(a) ESTABLISHMENT.\u2014There hereby is es- tablished within the Department of Energy an Office of Civilian Radioactive Waste Man- agement. The Office shall be headed by a Di- rector, who shall be appointed by the Presi- dent, by and with the advice and consent of the Senate, and who shall be compensated at the rate payable for level IV of the Executive Schedule under section 5315 of title 5, United States Code. ”(b) FUNCTIONS OF DIRECTOR.\u2014The Director of the Office shall be responsible for carrying out the functions of the Secretary under this Act, subject to the general supervision of the Secretary. The Director of the Office shall be directly responsible to the Secretary. ”SEC. 403. FEDERAL CONTRIBUTION. ”(a) ALLOCATION.\u2014No later than one year from the date of enactment of the Nuclear Waste Policy Act of 1996, acting pursuant to section 553 of title 5, United States Code, the Secretary shall issue a final rule estab- lishing the appropriate portion of the costs of managing spent nuclear fuel and high- level radioactive waste under this Act allo- cable to the interim storage or permanent disposal of spent nuclear fuel and high-level radioactive waste from atomic energy de- fense activities and spent nuclear fuel from foreign research reactors. The share of costs allocable to the management of spent nu- clear fuel and high-level radioactive waste from atomic energy defense activities and spent nuclear fuel from foreign research re- actors shall include\u2014 ”(1) an appropriate portion of the costs as- sociated with research and development ac- tivities with respect to development of an in- terim storage facility and repository; and ”(2) as appropriate, interest on the prin- cipal amounts due calculated by reference to the appropriate Treasury bill rate as if the payments were made at a point in time con- sistent with the payment dates for spent nu- clear fuel and high-level radioactive waste under the contracts. ”(b) APPROPRIATION REQUEST.\u2014In addition to any request for an appropriation from the Nuclear Waste Fund, the Secretary shall re- quest annual appropriations from general revenues in amounts sufficient to pay the costs of the management of spent nuclear fuel and high-level radioactive waste from atomic energy defense activities and spent nuclear fuel from foreign research reactors, as established under subsection (a). ”(c) REPORT.\u2014In conjunction with the an- nual report submitted to Congress under sec- tion 702, the Secretary shall advise the Con- gress annually of the amount of spent nu- clear fuel and high-level radioactive waste from atomic energy activities and spent nu- clear fuel from foreign research reactors, re- quiring management in the integrated man- agement system. ”(d) AUTHORIZATION.\u2014There is authorized to be appropriated to the Secretary, from general revenues, for carrying out the pur- poses of this Act, such sums as may be nec- essary to pay the costs of the management of spent nuclear fuel and high-level radioactive waste from atomic energy defense activities and spent nuclear fuel from foreign research reactors, as established under subsection (a). ”TITLE V\u2014GENERAL AND MISCELLANEOUS PROVISIONS ”SEC. 501. COMPLIANCE WITH OTHER LAWS. ”If the requirements of any Federal, State, or local law (including a requirement im- posed by regulation or by any other means under such a law) are inconsistent with or duplicative of the requirements of the Atom- ic Energy Act of 1954 (42 U.S.C. 2011 et seq.) or of this Act, the Secretary shall comply only with the requirements of the Atomic Energy Act of 1954 and of this Act in imple- menting the integrated management system. ”SEC. 502. JUDICIAL REVIEW OF AGENCY AC- TIONS. ”(a) JURISDICTION OF THE UNITED STATES COURTS OF APPEALS.\u2014 ”(1) ORIGINAL AND EXCLUSIVE JURISDIC- TION.\u2014Except for review in the Supreme Court of the United States, and except as otherwise provided in this Act, the United States courts of appeals shall have original and exclusive jurisdiction over any civil ac- tion\u2014 ”(A) for review of any final decision or ac- tion of the Secretary, the President, or the Commission under this Act; ”(B) alleging the failure of the Secretary, the President, or the Commission to make any decision, or take any action, required under this Act; ”(C) challenging the constitutionality of any decision made, or action taken, under any provision of this Act; or ”(D) for review of any environmental im- pact statement prepared or environmental assessment pursuant to the National Envi- ronmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to any action under this Act or alleging a failure to prepare such statement with respect to any such action. ”(2) VENUE.\u2014The venue of any proceeding under this section shall be in the judicial cir- cuit in which the petitioner involved resides or has its principal office, or in the United States Court of Appeals for the District of Columbia Circuit. (b) DEADLINE FOR COMMENCING ACTION.\u2014A civil action for judicial review described under subsection (a)(1) may be brought no later than 180 days after the date of the deci- sion or action or failure to act involved, as the case may be, except that if a party shows that he did not know of the decision or ac- tion complained of (or of the failure to act), and that a reasonable person acting under the circumstances would not have known, such party may bring a civil action no later than 180 days after the date such party ac- quired actual or constructive knowledge or such decision, action, or failure to act. ”(c) APPLICATION OF OTHER LAW.\u2014The pro- visions of this section relating to any matter shall apply in lieu of the provisions of any other Act relating to the same matter. ”SEC. 503. LICENSING OF FACILITY EXPANSIONS AND TRANSSHIPMENTS. ”(a) ORAL ARGUMENT.\u2014In any Commission hearing under section 189 of the Atomic En- ergy Act of 1954 (42 U.S.C. 2239) on an appli- cation for a license, or for an amendment to an existing license, filed after January 7, 1983, to expand the spent nuclear fuel storage capacity at the site of a civilian nuclear power reactor, through the use of high-den- sity fuel storage racks, fuel rod compaction, the transshipment of spent nuclear fuel to another civilian nuclear power reactor with- in the same utility system, the construction of additional spent nuclear fuel pool capac- ity or dry storage capacity, or by other means, the Commission shall, at the request of any party, provide an opportunity for oral argument with respect to any matter which the Commission determines to be in con- troversy among the parties. The oral argu- ment shall be preceded by such discovery procedures as the rules of the Commission shall provide. The Commission shall require each party, including the Commission staff, to submit in written form, at the time of the oral argument, a summary of the facts, data, and arguments upon which such party pro- poses to rely that are known at such time to such party. Only facts and data in the form of sworn testimony or written submission may be relied upon by the parties during oral argument. Of the materials that may be sub- mitted by the parties during oral argument, the Commission shall only consider those facts and data that are submitted in the form of sworn testimony or written submis- sion. ”(b) ADJUDICATORY HEARING.\u2014 ”(1) DESIGNATION.\u2014At the conclusion of any oral argument under subsection (a), the Commission shall designate any disputed question of fact, together with any remain- ing questions of law, for resolution in an ad- judicatory hearing only if it determines that\u2014 ”(A) there is a genuine and substantial dis- pute of fact which can only be resolved with sufficient accuracy by the introduction of evidence in an adjudicatory hearing; and ”(B) the decision of the Commission is likely to depend in whole or in part on the resolution of such dispute. ”(2) DETERMINATION.\u2014In making a deter- mination under this subsection, the Commis- sion\u2014 ”(A) shall designate in writing the specific facts that are in genuine and substantial dis- pute, the reason why the decision of the agency is likely to depend on the resolution of such facts, and the reason why an adju- dicatory hearing is likely to resolve the dis- pute; and ”(B) shall not consider\u2014 ”(i) any issue relating to the design, con- struction, or operation of any civilian nu- clear power reactor already licensed to oper- ate at such site, or any civilian nuclear power reactor to which a construction per- mit has been granted at such site, unless the Commission determines that any such issue substantially affects the design, construc- tion, or operation of the facility or activity for which such license application, author- ization, or amendment is being considered; or ”(ii) any siting or design issue fully consid- ered and decided by the Commission in con- nection with the issuance of a construction permit or operating license for a civilian nu- clear power reactor at such site, unless\u2014 ”(I) such issue results from any revision of siting or design criteria by the Commission following such decision; and ”(II) the Commission determines that such issue substantially affects the design, con- struction, or operation of the facility or ac- tivity for which such license application, au- thorization, or amendment is being consid- ered. ”(3) APPLICATION.\u2014The provisions of para- graph (2)(B) shall apply only with respect to licenses, authorizations, or amendments to licenses or authorizations, applied for under the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.) before December 31, 2005. ”(4) CONSTRUCTION.\u2014The provisions of this section shall not apply to the first applica- tion for a license or license amendment re- ceived by the Commission to expand onsite spent fuel storage capacity by the use of a new technology not previously approved for use at any nuclear power plant by the Com- mission. ”(c) JUDICIAL REVIEW.\u2014No court shall hold unlawful or set aside a decision of the Com- mission in any proceeding described in sub- section (a) because of a failure by the Com- mission to use a particular procedure pursu- ant to this section unless\u2014 ”(1) an objection to the procedure used was presented to the Commission in a timely fashion or there are extraordinary cir- cumstances that excuse the failure to present a timely objection; and ”(2) the court finds that such failure has precluded a fair consideration and informed resolution of a significant issue of the pro- ceeding taken as a whole. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00054 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9263 July 31, 1996 ”SEC. 504. SITING A SECOND REPOSITORY. ”(a) CONGRESSIONAL ACTION REQUIRED.\u2014 The Secretary may not conduct site-specific activities with respect to a second repository unless Congress has specifically authorized and appropriated funds for such activities. ”(b) REPORT.\u2014The Secretary shall report to the President and to Congress on or after January 1, 2007, but not later than January 1, 2010, on the need for a second repository. ”SEC. 505. FINANCIAL ARRANGEMENTS FOR LOW- LEVEL RADIOACTIVE WASTE SITE CLOSURE. ”(a) FINANCIAL ARRANGEMENTS.\u2014 ”(1) STANDARDS AND INSTRUCTIONS.\u2014The Commission shall establish by rule, regula- tion, or order, after public notice, and in ac- cordance with section 181 of the Atomic En- ergy Act of 1954 (42 U.S.C. 2231), such stand- ards and instructions as the Commission may deem necessary or desirable to ensure in the case of each license for the disposal of low-level radioactive waste that an adequate bond, surety, or other financial arrangement (as determined by the Commission) will be provided by a licensee to permit completion of all requirements established by the Com- mission for the decontamination, decommis- sioning, site closure, and reclamation of sites, structures, and equipment used in con- junction with such low-level radioactive waste. Such financial arrangements shall be provided and approved by the Commission, or, in the case of sites within the boundaries of any agreement State under section 274 of the Atomic Energy Act of 1954 (42 U.S.C. 2021), by the appropriate State or State enti- ty, prior to issuance of licenses for low-level radioactive waste disposal or, in the case of licenses in effect on January 7, 1983, prior to termination of such licenses. ”(2) BONDING, SURETY OR OTHER FINANCIAL ARRANGEMENTS.\u2014If the Commission deter- mines that any long-term maintenance or monitoring, or both, will be necessary at a site described in paragraph (1), the Commis- sion shall ensure before termination of the license involved that the licensee has made available such bonding, surety, or other fi- nancial arrangements as may be necessary to ensure that any necessary long-term maintenance or monitoring needed for such site will be carried out by the person having title and custody for such site following li- cense termination. ”(b) TITLE AND CUSTODY.\u2014 ”(1) AUTHORITY OF SECRETARY.\u2014The Sec- retary shall have authority to assume title and custody of low-level radioactive waste and the land on which such waste is disposed of, upon request of the owner of such waste and land and following termination of the li- cense issued by the Commission for such dis- posal, if the Commission determines that\u2014 ”(A) the requirements of the Commission for site closure, decommissioning, and de- contamination have been met by the licensee involved and that such licensee is in compli- ance with the provisions of subsection (a); ”(B) such title and custody will be trans- ferred to the Secretary without cost to the Federal Government; and ”(C) Federal ownership and management of such site is necessary or desirable in order to protect the public health and safety, and the environment. ”(2) PROTECTION.\u2014If the Secretary assumes title and custody of any such waste and land under this subsection, the Secretary shall maintain such waste and land in a manner that will protect the public health and safe- ty, and the environment. ”(c) SPECIAL SITES.\u2014If the low-level radio- active waste involved is the result of a li- censed activity to recover zirconium, haf- nium, and rare earths from source material, the Secretary, upon request of the owner of the site involved, shall assume title and cus- tody of such waste and the land on which it is disposed when such site has been decon- taminated and stabilized in accordance with the requirements established by the Com- mission and when such owner has made ade- quate financial arrangements approved by the Commission for the long-term mainte- nance and monitoring of such site. ”SEC. 506. NUCLEAR REGULATORY COMMISSION TRAINING AUTHORIZATION. ”The Commission is authorized and di- rected to promulgate regulations, or other appropriate regulatory guidance, for the training and qualifications of civilian nu- clear power plant operators, supervisors, technicians, and other appropriate operating personnel. Such regulations or guidance shall establish simulator training require- ments for applicants for civilian nuclear power plant operator licenses and for oper- ator requalification programs; requirements governing Commission administration of re- qualification examinations; requirements for operating tests at civilian nuclear power plant simulators, and instructional require- ments for civilian nuclear power plant li- censee personnel training programs. ”SEC. 507. EMPLACEMENT SCHEDULE. ”(a) The emplacement schedule shall be implemented in accordance with the fol- lowing: ”(1) Emplacement priority ranking shall be determined by the Department’s annual ‘Acceptance Priority Ranking’ report. ”(2) The Secretary’s spent fuel emplace- ment rate shall be no less than the following: 1,200 MTU in fiscal year 2000 and 1,200 MTU in fiscal year 2001; 2,000 MTU in fiscal year 2002 and 2,000 MTU in fiscal year 2003; 2,700 MTU in fiscal year 2004; and 3,000 MTU annu- ally thereafter. ”(b) If the Secretary is unable to begin em- placement by November 30, 1999 at the rates specified in subsection (a), or if the cumu- lative amount emplaced in any year there- after is less than that which would have been accepted under the emplacement rate speci- fied in subsection (a), the Secretary shall, as a mitigation measure, adjust the emplace- ment schedule upward such that within 5 years of the start of emplacement by the Secretary, ”(1) the total quantity accepted by the Secretary is consistent with the total quan- tity that the Secretary would have accepted if the Secretary had began emplacement in fiscal year 2000, and ”(2) thereafter the emplacement rate is equivalent to the rate that would be in place pursuant to subsection (a) above if the Sec- retary had commenced emplacement in fis- cal year 2000. ”SEC. 508. TRANSFER OF TITLE. ”(a) Acceptance by the Secretary of any spent nuclear fuel or high-level radioactive waste shall constitute a transfer of title to the Secretary. ”(b) No later than 6 months following the date of enactment of the Nuclear Waste Pol- icy Act of 1996, the Secretary is authorized to accept all spent nuclear fuel withdrawn from Dairyland Power Cooperative’s La Crosse Reactor and, upon acceptance, shall provide Dairyland Power Cooperative with evidence of the title transfer. Immediately upon the Secretary’s acceptance of such spent nuclear fuel, the Secretary shall as- sume all responsibility and liability for the interim storage and permanent disposal thereof and is authorized to compensate Dairyland Power Cooperative for any costs related to operating and maintaining facili- ties necessary for such storage from the date of acceptance until the Secretary removes the spent nuclear fuel from the La Crosse Reactor site. ”SEC. 509. DECOMMISSIONING PILOT PROGRAM. ”(a) AUTHORIZATION.\u2014The Secretary is au- thorized to establish a Decommissioning Pilot Program to decommission and decon- taminate the sodium-cooled fast breeder ex- perimental test-site reactor located in northwest Arkansas. ”(b) FUNDING.\u2014No funds from the Nuclear Waste Fund may be used for the Decommis- sioning Pilot Program. ”SEC. 510. WATER RIGHTS. ”(a) NO FEDERAL RESERVATION.\u2014Nothing in this Act or any other Act of Congress shall constitute or be construed to con- stitute either an express or implied Federal reservation of water or water rights for any purpose arising under this Act. ”(b) ACQUISITION AND EXERCISE OF WATER RIGHTS UNDER NEVADA LAW.\u2014The United States may acquire and exercise such water rights as it deems necessary to carry out its responsibilities under this Act pursuant to the substantive and procedural requirements of the State of Nevada. Nothing in this Act shall be construed to authorize the use of eminent domain by the United States to ac- quire water rights for such lands. ”(c) EXERCISE OF WATER RIGHTS GEN- ERALLY UNDER NEVADA LAWS.\u2014Nothing in this Act shall be construed to limit the exer- cise of water rights as provided under Ne- vada State laws. ”TITLE VI\u2014NUCLEAR WASTE TECHNICAL REVIEW BOARD ”SEC. 601. DEFINITIONS. ”For purposes of this title\u2014 ”(1) CHAIRMAN.\u2014The term ‘Chairman’ means the Chairman of the Nuclear Waste Technical Review Board. ”(2) Board.\u2014The term ‘Board’ means the Nuclear Waste Technical Review Board con- tinued under section 602. ”SEC. 602. NUCLEAR WASTE TECHNICAL REVIEW BOARD. ”(a) CONTINUATION OF THE NUCLEAR WASTE TECHNICAL REVIEW BOARD.\u2014The Nuclear Waste Technical Review Board, established under section 502(a) of the Nuclear Waste Policy Act of 1982 as constituted prior to the date of enactment of the Nuclear Waste Pol- icy Act of 1996, shall continue in effect subse- quent to the date of enactment of the Nu- clear Waste Policy Act of 1996. ”(b) MEMBERS.\u2014 ”(1) NUMBER.\u2014The Board shall consist of 11 members who shall be appointed by the President not later than 90 days after De- cember 22, 1987, from among persons nomi- nated by the National Academy of Sciences in accordance with paragraph (3). ”(2) CHAIR.\u2014The President shall designate a member of the Board to serve as Chairman. ”(3) NATIONAL ACADEMY OF SCIENCES.\u2014 ”(A) NOMINATIONS.\u2014The National Academy of Sciences shall, not later than 90 days after December 22, 1987, nominate not less than 22 persons for appointment to the Board from among persons who meet the qualifications described in subparagraph (C). ”(B) VACANCIES.\u2014The National Academy of Sciences shall nominate not less than 2 per- sons to fill any vacancy on the Board from among persons who meet the qualifications described in subparagraph (C). ”(C) NOMINEES.\u2014 ”(i) Each person nominated for appoint- ment to the Board shall be\u2014 ”(I) eminent in a field of science or engi- neering, including environmental sciences; and ”(II) selected solely on the basis of estab- lished records of distinguished service. ”(ii) The membership of the Board shall be representatives of the broad range of sci- entific and engineering disciplines related to activities under this title. ”(iii) No person shall be nominated for ap- pointment to the Board who is an employee of\u2014 ”(I) the Department of Energy; VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00055 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9264 July 31, 1996 ”(II) a national laboratory under contract with the Department of Energy; or ”(III) an entity performing spent nuclear fuel or high-level radioactive waste activi- ties under contract with the Department of Energy. ”(4) VACANCIES.\u2014Any vacancy on the Board shall be filled by the nomination and appointment process described in paragraphs (1) and (3). ”(5) TERMS.\u2014Members of the Board shall be appointed for terms of 4 years, each such term to commence 120 days after December 22, 1987, except that of the 11 members first appointed to the Board, 5 shall serve for 2 years and 6 shall serve for 4 years, to be des- ignated by the President at the time of ap- pointment, except that a member of the Board whose term has expired may continue to serve as a member of the Board until such member’s successor has taken office. ”SEC. 603. FUNCTIONS. ”The Board shall limit its evaluations to the technical and scientific validity solely of the following activities undertaken directly by the Secretary after December 22, 1987\u2014 ”(1) site characterization activities; and ”(2) activities of the Secretary relating to the packaging or transportation of spent nu- clear fuel or high-level radioactive waste. ”SEC. 604. INVESTIGATORY POWERS. ”(a) HEARINGS.\u2014Upon request of the Chair- man or a majority of the members of the Board, the Board may hold such hearings, sit and act at such times and places, take such testimony, and receive such evidence, as the Board considers appropriate. Any member of the Board may administer oaths or affirma- tions to witnesses appearing before the Board. The Secretary or the Secretary’s des- ignee or designees shall not be required to appear before the Board or any element of the Board for more than twelve working days per calendar year. ”(b) PRODUCTION OF DOCUMENTS.\u2014 ”(1) RESPONSE TO INQUIRES.\u2014Upon the re- quest of the Chairman or a majority of the members of the Board, and subject to exist- ing law, the Secretary (or any contractor of the Secretary) shall provide the Board with such records, files, papers, data, or informa- tion that is generally available to the public as may be necessary to respond to any in- quiry of the Board under this title. ”(2) EXTENT.\u2014Subject to existing law, in- formation obtainable under paragraph (1) may include drafts of products and docu- mentation of work in progress. ”SEC. 605. COMPENSATION OF MEMBERS. ”(a) IN GENERAL.\u2014Each member of the Board shall be paid at the rate of pay pay- able for level III of the Executive Schedule for each day (including travel time) such member is engaged in the work of the Board. ”(b) TRAVEL EXPENSES.\u2014Each member of the Board may receive travel expenses, in- cluding per diem in lieu of subsistence, in the same manner as is permitted under sec- tions 5702 and 5703 of title 5, United States Code. ”SEC. 606. STAFF. ”(a) CLERICAL STAFF.\u2014 ”(1) AUTHORITY OF CHAIRMAN.\u2014Subject to paragraph (2), the Chairman may appoint and fix the compensation of such clerical staff as may be necessary to discharge the responsibilities of the Board. ”(2) PROVISIONS OF TITLE 5.\u2014Clerical staff shall be appointed subject to the provisions of title 5, United States Code, governing ap- pointments in the competitive service, and shall be paid in accordance with the provi- sions of chapter 51 and subchapter III of chapter 3 of such title relating to classifica- tion and General Schedule pay rates. ”(b) PROFESSIONAL STAFF.\u2014 ”(1) AUTHORITY OF CHAIRMAN.\u2014Subject to paragraphs (2) and (3), the Chairman may ap- point and fix the compensation of such pro- fessional staff as may be necessary to dis- charge the responsibilities of the Board. ”(2) NUMBER.\u2014Not more than 10 profes- sional staff members may be appointed under this subsection. ”(3) TITLE 5.\u2014Professional staff members may be appointed without regard to the pro- visions of title 5, United States Code, gov- erning appointments in the competitive service, and may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to clas- sification and General Schedule pay rates, except that no individual so appointed may receive pay in excess of the annual rate of basic pay payable for GS 18 of the General Schedule. ”SEC. 607. SUPPORT SERVICES. ”(a) GENERAL SERVICES.\u2014To the extent permitted by law and requested by the Chair- man, the Administrator of General Services shall provide the Board with necessary ad- ministrative services, facilities, and support on a reimbursable basis. ”(b) ACCOUNTING, RESEARCH, AND TECH- NOLOGY ASSESSMENT SERVICES.\u2014The Comp- troller General and the Librarian of Congress shall, to the extent permitted by law and subject to the availability of funds, provide the Board with such facilities, support, funds and services, including staff, as may be nec- essary for the effective performance of the functions of the Board. ”(c) ADDITIONAL SUPPORT.\u2014Upon the re- quest of the Chairman, the Board may secure directly from the head of any department or agency of the United States information nec- essary to enable it to carry out this title. ”(d) MAILS.\u2014The Board may use the United States mails in the same manner and under the same conditions as other depart- ments and agencies of the United States. ”(e) EXPERTS AND CONSULTANTS.\u2014Subject to such rules as may be prescribed by the Board, the Chairman may procure temporary and intermittent services under section 3109(b) of title 5 of the United States Code, but at rates for individuals not to exceed the daily equivalent of the maximum annual rate of basic pay payable for GS 18 of the General Schedule. ”SEC. 608. REPORT. ”The Board shall report not less than two times per year to Congress and the Secretary its findings, conclusions, and recommenda- tions. ”SEC. 609. AUTHORIZATION OF APPROPRIATIONS. ”There are authorized to be appropriated for expenditures such sums as may be nec- essary to carry out the provisions of this title. ”SEC. 610. TERMINATION OF THE BOARD. ”The Board shall cease to exist not later than one year after the date on which the Secretary begins disposal of spent nuclear fuel or high-level radioactive waste in the re- pository. ”TITLE VII\u2014MANAGEMENT REFORM ”SEC. 701. MANAGEMENT REFORM INITIATIVES. ”(a) IN GENERAL.\u2014The Secretary is di- rected to take actions as necessary to im- prove the management of the civilian radio- active waste management program to ensure that the program is operated, to the max- imum extent practicable, in like manner as a private business. ”(b) AUDITS.\u2014 ”(1) STANDARD.\u2014The Office of Civilian Ra- dioactive Waste Management, its contrac- tors, and subcontractors at all tiers, shall conduct, or have conducted, audits and ex- aminations of their operations in accordance with the usual and customary practices of private corporations engaged in large nu- clear construction projects consistent with its role in the program. ”(2) TIME.\u2014The management practices and performances of the Office of Civilian Radio- active Waste Management shall be audited every 5 years by an independent manage- ment consulting firm with significant expe- rience in similar audits of private corpora- tions, engaged in large nuclear construction projects. The first such audit shall be con- ducted 5 years after the enactment of the Nuclear Waste Policy Act of 1996. ”(3) COMPTROLLER GENERAL.\u2014The Comp- troller General of the United States shall an- nually make an audit of the Office, in ac- cordance with such regulations as the Comp- troller General may prescribe. The Comp- troller General shall have access to such books, records, accounts, and other mate- rials of the Office as the Comptroller General determines to be necessary for the prepara- tion of such audit. The Comptroller General shall submit to the Congress a report on the results of each audit conducted under this section. ”(4) TIME.\u2014No audit contemplated by this subsection shall take longer than 30 days to conduct. An audit report shall be issued in final form no longer than 60 days after the audit is commenced. ”(5) PUBLIC DOCUMENTS.\u2014All audit reports shall be public documents and available to any individual upon request. ”(c) VALUE ENGINEERING.\u2014The Secretary shall create a value engineering function within the Office of Civilian Radioactive Waste Management that reports directly to the Director, which shall carry out value en- gineering functions in accordance with the usual and customary practices of private corporations engaged in large nuclear con- struction projects. ”(d) SITE CHARACTERIZATION.\u2014The Sec- retary shall employ, on an on-going basis, in- tegrated performance modeling to identify appropriate parameters for the remaining site characterization effort and to eliminate studies of parameters that are shown not to affect long-term repository performance. ”SEC. 702. REPORTING. ”(a) INITIAL REPORT.\u2014Within 180 days of enactment of this section, the Secretary shall report to Congress on its planned ac- tions for implementing the provisions of this Act, including the development of the Inte- grated Waste Management System. Such re- port shall include\u2014 ”(1) an analysis of the Secretary’s progress in meeting its statutory and contractual ob- ligation to accept title to, possession of, and delivery of spent nuclear fuel and high-level radioactive waste beginning no later than November 30, 1999, and in accordance with the acceptance schedule; ”(2) a detailed schedule and timeline show- ing each action that the Secretary intends to take to meet the Secretary’s obligation under this Act and the contracts; ”(3) a detailed description of the Sec- retary’s contingency plans in the event that the Secretary is unable to meet the planned schedule and timeline; and ”(4) an analysis by the Secretary of its funding needs for fiscal years 1996 through 2001. ”(b) ANNUAL REPORTS.\u2014On each anniver- sary of the submittal of the report required by subsection (a), the Secretary shall make annual reports to the Congress for the pur- pose of updating the information contained in such report. The annul reports shall be brief and shall notify the Congress of\u2014 ”(1) any modifications to the Secretary’s schedule and timeline for meeting its obliga- tions under this Act; ”(2) the reasons for such modifications, and the status of the implementation of any of the Secretary’s contingency plans; and ”(3) the Secretary’s analysis of its funding needs for the ensuing 5 fiscal years. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00056 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9265 July 31, 1996 ”SEC. 703. EFFECTIVE DATE. ”This Act shall become effective one day after enactment.”. Mr. MURKOWSKI. I move to recon- sider the vote. Mr. BRYAN. I move to lay that mo- tion on the table. The motion to lay on the table was agreed to. f VISIT TO THE SENATE BY THE HONORABLE HOSNI MUBARAK, PRESIDENT OF EGYPT Mr. HELMS. Mr. President, I present to the Senate of the United States, the distinguished and honorable President of Egypt, Hosni Mubarak. [Applause.] RECESS Mr. HELMS. Mr. President, I ask unanimous consent that the Senate stand in recess in honor of President Hosni Mubarak, so Members might meet our friend from Egypt. There being no objection, the Senate, at 5:21 p.m., recessed until 5:25 p.m.; whereupon, the Senate reassembled when called to order by the Presiding Officer. Mr. WARNER. Mr. President, I sug- gest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The assistant legislative clerk pro- ceeded to call the roll. Mr. HATFIELD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. PRIVILEGE OF THE FLOOR Mr. HATFIELD. Mr. President, I ask unanimous consent that Dr. Jonelle Rowe, a fellow on Senator FRIST’s staff, be granted floor privileges today, July 31, 1996, during the consideration of the fiscal year 1997 Transportation appropriations. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. HATFIELD. I suggest the ab- sence of a quorum. The assistant legislative clerk pro- ceeded to call the roll. Mr. DORGAN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. f DEPARTMENT OF TRANSPOR- TATION AND RELATED AGEN- CIES APPROPRIATIONS ACT, 1997 The PRESIDING OFFICER. The clerk will report. The bill clerk read as follows: A bill (H.R. 3675) making appropriations for the Department of Transportation and related agencies for the fiscal year ending September 30, 1997, and for other purposes. The Senate resumed consideration of the bill. Mr. DORGAN. Mr. President, I had given notice that I would offer one ad- ditional amendment. I say to the rank- ing member and the manager that I will not offer that amendment, but I do want to speak for just a couple of min- utes while we are waiting for another Senator to come to offer an amend- ment. I think that will probably be good news to them because they want to move the bill along, and they do not want me to offer another amendment. I want to describe, as you are waiting for Senator BAUCUS and others, what I was going to offer the amendment on. I want Members of the Senate to under- stand that we are going to be dealing with this issue in a day or so. Here is the issue. It is very simple. It is something most Senators have not heard of, but it is something that went on late last night here in the Senate in a deal between the Senate and the House, I am told. There is a bill that is traveling with the minimum wage that is called the Small Business Job Pro- tection Act that gives some benefits to small business. Of course, it is not just benefits for small business. Included in that bill was a provision repealing something called section 956A of the Internal Revenue Code. What is 956A? It is a provision of the law that was passed in 1993 to close a corporate tax loophole by which cor- porations move investments and U.S. jobs overseas, and avoid paying taxes here at home. In 1993, that loophole was closed by something that was pro- posed by President Clinton and sup- ported by the Congress: 956A. It says that you cannot start a manufacturing plant overseas, earn a lot of money, and pay no taxes back home. My point is that in 1993 a tax loop- hole was closed. It had benefited some of the largest corporations in the coun- try. It said to them, if you move your investments and jobs overseas, we will give you a special tax break that is not available to small businesses operating in this country. And they moved their jobs overseas. They earn income over- seas and pay no taxes in this country on income. They invest it in passive as- sets abroad in foreign countries, and pay no income tax here. We closed that tax loophole. Guess what? There are some folks in this Chamber and the House that have been working late at night to reopen that loophole. I know it is only a few hun- dred million dollars, but it is a few hundred million dollars in favors to some of the largest corporations in this country. I have worked for couple of years try- ing to get some money to deal with In- dian child abuse\u2014a million dollars, two million dollars. I have told my col- leagues before that I have been in an office where there is a stack of papers that high on the floor of complaints of sexual abuse and violence against chil- dren that have not even been inves- tigated because there is not enough money. We do not have enough money to do things like that. We are simply short of money. But when it comes to late night in this place, in the conference, there is enough money to give a $235 million tax break to corporations and say, if you want a tax break to move your jobs overseas, we will sweeten it up; we will give you a big, juicy tax loophole. That is going to be put in the bill in conference. I am told the deal was struck last night between the chairmen of the two committees working late last night. I venture to say that there is not an- other Member of the Senate who knows about it, and it probably does not mean a lot to some. It will mean something to those people who are going to lose their jobs in this country because we make it juicier for corporations to move jobs overseas. We decide to give a huge tax break to firms which move jobs overseas. And it will mean that some people in this country are going to lose their good-paying jobs. It is going to mean that we are out several hundred million dollars because we now have a new tax break that we thought we had closed in 1993. It is going to mean that small businesses that operate in this country are going to be forced to compete with large mul- tinational firms at a greater disadvan- tage. This is coming to the Senate, and it is stuck in a bill called the Small Busi- ness Job Protection Act. It ought to be against the law to use a title like that when it includes provisions like this. You are going to hear more from me if it is true that the conference has ac- cepted this and is going to bring it to the floor of the Senate. I am told a deal was made last night. I could name some large corporations on the floor\u2014but I will not at this mo- ment\u2014that have been moving around this town saying, ”Reopen, please, for us this tax loophole. We want to ben- efit from it. We want to move our jobs overseas. We want to invest our money overseas. Reopen this loophole.” We have folks jumping for joy to see if they cannot accommodate those who want another tax loophole done in the dead of night without the knowledge of people in this Chamber and the other Chamber. Most of them do not know much about 956A\u2014and done with hun- dreds of millions of dollars at a time when we cannot get $0.5 million or $1 million to deal with critical issues of child abuse on Indian reservations. They cannot even get them inves- tigated. But there is plenty of money to do this. I will tell you, if I sound upset about this stuff, I am, because this sort of thing should not go on in this town. If you want to debate restoring a tax loophole, then let us debate it on the floor of the Senate. We repealed it 3 years ago. Now the folks want to go out and open it up again. Let us debate that on the floor of the Senate and see if you get one vote. How many want to stand up in the Senate and say, ”Yes, we would like to restore a new tax loophole. Count us in. We want to go home and brag about creating a new tax loophole which ben- efits some of the biggest corporations VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00057 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9266 July 31, 1996 in this country so they can move their jobs overseas”. I want to know one Senator who wants to go home and brag about that in August. I bet there is not one who would do it, not one who would want to vote on this, so you do not have to vote on it because it is done under cover of darkness, slipped in a bill that is called the Small Business Job Protection Act. You talk about mismanagement. There is nothing about small busi- ness job protection in any of this. This is not job protection\u2014shipping jobs overseas. It is not small business when you are talking about the biggest busi- nesses in the country. So I would say if tomorrow this con- ference report comes back to the floor of the Senate, you are going to hear a lot about this, and I am going to ask: Who is the person that said, ”Count me in, count me in at a time when we are tightening our belts wanting to lead the charge to open up a new tax loop- hole. Sign me up for that”? I want to find the Member of the Senate or the House who says, ”Yes, that is me. That is what I stand for,” because I think this is an outrage. I think that there are a lot of people who think they can do it simply be- cause if they do it in conference, we do not get a chance to vote on it sepa- rately. Do you know something? It was not put in the Senate bill. They were going to put it in the Senate bill, but they did not do it because I think they knew I was going to force a vote on it. So they put it in the House bill and packaged up a rule so they do not have to vote on it. The result is that nobody in con- ference who tries to push this sort of sweet deal\u2014so that big business move jobs overseas\u2014nobody has to vote on it. So they get the job done for their friends worth hundreds of millions of dollars and do not have to vote on it, therefore, and do not have to go home and raise their hand and say, ”It was me. I am the one who stood for spend- ing several hundred millions opening up a new tax loophole that benefits large profitable corporations.” I just urge that if this deal is not done\u2014I am told it was done last night\u2014if it is not done, rethink it, be- cause somebody is going to live with the consequences, and somebody is going to have to stand up and say, ”I am the one who believed we ought to open up new tax loopholes.” That is not what we ought to be doing. We ought to be closing tax loop- holes. We ought not be doing things to ship jobs overseas. We ought to keep jobs at home. You talk about a perversion of con- structive thought about economics. This is a perversion. So I will not offer the amendment. I was going to offer a motion to instruct conferees. I do not think at this mo- ment that is something that will ac- complish what I want. I guess what I would like to do is simply serve notice to Members of the Senate that if there is a vote in conference on this, I hope conferees will stand up and be counted. If this comes to the floor in this bill, I hope it comes to the floor in a cir- cumstance where we can have a good aggressive fight about it. I know they are going to wrap it up in conference and tie the bow and try to jam it through here so we do not have a chance to discuss this, but it is not going to go through here without some of us asking questions: For whom is this done? Who does it benefit? Who did it? Why did they do it? And how on Earth do they think this benefits this country if you are concerned about jobs and opportunity in this country? Mr. President, I yield the floor. Mr. LAUTENBERG addressed the Chair. The PRESIDING OFFICER. The Sen- ator from New Jersey. Mr. LAUTENBERG. I thank the Sen- ator from North Dakota. Despite the fact that I heartily agree with him, I hardly think that there are many in this Chamber or many across the country who would think it is a good idea to facilitate the exportation of jobs. That is about the silliest thing we can do, and, frankly, I think it has hurt America severely by providing ease of transportation, transmission, and relocation of jobs that used to be in America that we thought were rel- atively menial, low-skilled jobs that today would be very nice to have in our country. The Senator’s point is an excellent one, and I regret that we at this point cannot accommodate him, but I think the message is clear to those who are going to be on the conference com- mittee that they ought to pay atten- tion because it will be remembered for a long time to come if they ignore the opportunity to cut that flow. I thank the Senator very much. Mr. BAUCUS addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Montana. Mr. BAUCUS. Mr. President, momen- tarily I am going to be offering an amendment to correct a mistake the Treasury Department and Department of Transportation made in calculating allocation of highway funds. I see my very good friend from Vir- ginia is in the Chamber. He is a very valuable member, ranking member of the authorizing subcommittee and wishes to make a statement on this, and I should like to yield to my good friend from Virginia, Senator WARNER. Mr. WARNER addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Virginia. Mr. WARNER. Mr. President, I know full well the Senator did not mean to call me ranking member. I do believe we have had a small matter of an elec- tion, and I am now the chairman. Mr. BAUCUS. Excuse me. I am sorry. Mr. WARNER. In any event, the dis- tinguished Senator from Montana and I have worked together on many, many things over many, many years, and we will continue, in all probability, to work together. The point I wish to make is that when the Senator from Montana has the opportunity to present the amend- ment to the Senate, I wish to be re- corded in opposition for the following reasons. There is nothing that I have witnessed in my period here in the Sen- ate that is more divisive than the high- way allocation formulas. Mr. President, I do not know\u2014I think I do know, but for the moment I do not have before me the documentation\u2014 who devised this formula years ago, but I know it requires many, many bu- reaucrats and many, many pages of ref- erence material for even those in the Department of Transportation respon- sible for this allocation formula to fig- ure it out. I think it is incumbent upon the Con- gress next year as a part of the ISTEA reauthorization, in which I hope to play an active role, to revise this for- mula so: First, it is simple and can be understood and all States know the various factors that are taken into consideration to make the allocation; and: second, that it is fair. Right now there are donor States and donee States. The donor State is a State in which the receipts from sales of gasoline in that State go to the highway trust fund and then the allo- cation from the highway trust fund comes back and that State gets a sum less than the total of the receipts paid by its constituents and such others that may avail themselves of the fuel in that State. Now, donees get a great- er sum than the total of their revenues from the sale of gasoline as a Federal tax. So the time has come to reconcile this ancient formula with reality and with fairness. What is the present problem? The Senator from Montana I think quite properly brings before the Senate the fact that someone\u2014and I am not point- ing an accusing finger of malice aforethought\u2014misapplied a regulation, a rule or something. As a result, Mr. President, we have 19 States, my State being one of the 19, which received an incorrect sum of money. In the case of Virginia, it is $10,488,000, a sum of money which is greater than Virginia was entitled to under the complicated formula to which I have referred had that formula been properly administered by the un- known bureaucrat. And 18 other States are in a similar situation\u2014Arizona, Ar- kansas, California\u2014$65 million for California\u2014Colorado, Indiana, Lou- isiana, Massachusetts\u2014I will not go on. They are here. I will put them in the RECORD. I so ask unanimous consent. I will name Oregon, Mr. President, the State of the distinguished chairman of the committee. There being no objection, the mate- rial was ordered to be printed in the RECORD, as follows: VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00058 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9267 July 31, 1996 COMPARISON OF PROPOSED FY 1997 OBLIGATION LIMITA- TION BASED ON ESTIMATED FY 1997 APPROPRIATIONS States 90 percent of payments estimated @ $2.6B 90 percent of payments esti- mated @ $1.5B + $135M Difference Alabama ……………………….. 316,954 317,760 806 Alaska …………………………… 174,987 184,165 9,178 Arizona ………………………….. 238,340 233,851 (4,189 ) Arkansas ……………………….. 196,398 189,800 (6,598 ) California ………………………. 1,490,847 1,424,889 (65,958 ) Colorado ……………………….. 195,996 195,439 (557 ) Connecticut …………………… 309,047 324,870 15,823 Delaware ……………………….. 67,550 71,008 3,458 District of Columbia ……….. 72,833 76,652 3,819 Florida ………………………….. 692,919 695,436 2,517 Georgia …………………………. 511,466 528,744 17,278 Hawaii ………………………….. 106,597 112,055 5,458 Idaho ……………………………. 94,626 99,588 4,962 Illinois …………………………… 592,113 604,958 12,845 Indiana …………………………. 380,999 362,901 (18,098 ) Iowa ……………………………… 178,942 181,124 2,182 Kansas ………………………….. 178,921 188,082 9,161 Kentucky ……………………….. 282,885 293,063 10,178 Louisiana ………………………. 258,683 243,528 (15,155 ) Maine ……………………………. 79,641 83,564 3,923 Maryland ……………………….. 260,348 258,343 (2,005 ) Massachusetts ………………. 597,481 628,817 31,336 Michigan ……………………….. 488,272 463,353 (24,919 ) Minnesota ……………………… 247,475 228,404 (19,071 ) Mississippi ……………………. 194,751 193,413 (1,338 ) Missouri ………………………… 389,783 384,254 (5,529 ) Montana ……………………….. 132,763 139,726 6,963 Nebraska ………………………. 121,326 127,538 6,212 Nevada …………………………. 99,084 99,599 515 New Hampshire ……………… 74,635 78,457 3,822 New Jersey …………………….. 417,115 438,472 21,357 New Mexico ……………………. 147,746 155,494 7,748 New York ………………………. 912,361 959,076 46,715 North Carolina ……………….. 427,763 420,165 (7,598 ) North Dakota …………………. 88,859 93,409 4,550 Ohio ……………………………… 598,477 558,927 (42,550 ) Oklahoma ……………………… 246,635 245,416 (1,219 ) Oregon ………………………….. 195,536 196,960 1,424 Pennsylvania …………………. 655,910 637,515 (18,395 ) Rhode Island …………………. 74,195 78,086 3,891 South Carolina ………………. 248,779 258,338 9,559 South Dakota …………………. 97,350 102,456 5,106 Tennessee ……………………… 363,093 353,238 (9,855 ) Texas ……………………………. 1,132,043 1,105,498 (26,545 ) Utah ……………………………… 112,946 115,506 2,560 Vermont ………………………… 68,516 72,024 3,508 Virginia …………………………. 381,449 370,961 (10,488 ) Washington ……………………. 283,047 297,892 14,845 West Virginia …………………. 137,862 144,921 7,059 Wisconsin ……………………… 286,718 279,676 (7,042 ) Wyoming ……………………….. 97,018 101,986 4,968 Puerto Rico ……………………. 71,920 75,603 3,683 Subtotal ……………………. 16,072,000 16,072,000 0 Administration ……………….. 532,000 532,000 0 Federal lands ………………… 426,000 426,000 0 Allocation reserve …………… 620,000 620,000 0 Total …………………………. 17,650,000 17,650,000 0 Note: Estimated apportionments prepared by HPP 21 Mr. WARNER. Now, my position is that this correction should be done in the course of our consideration of the revision of this formula next year dur- ing ISTEA. Owing to the clear con- science of the distinguished chairman of the committee, the distinguished ranking member from New Jersey, the distinguished ranking member of the Environment Committee, our chair- man, and indeed backup from well-in- formed staff, we decided not to do this amendment last night\u2014I among others objected\u2014as a managers’ amendment\u2014 and I commend the managers of this bill for not trying to do this\u2014which re- sults in a considerable loss of money to 19 States. The Senator has every right to do it as an amendment to the pending bill. Technically, I suppose it is legislation on this bill. I intend to vote, however the vote is taken, in opposition because I think the better course of action is to deal with this correction next year. These sums of money will not affect the ability of the several States, 50 of them, to go forward with their highway programs. My State, although it has been told it is going to get the $10 mil- lion, has made certain plans to expend this $10 million, and it will require a certain perturbation in the planning to take $10 million out of the budget for this year. And 18 other States will similarly be subjected to deducting from their highway budgets this sum of money. So that, to me, is the more eq- uitable and more fair way to deal with this question. That would enable all the other Senators, many of whom are learning, presumably for the first time at this moment, knowledge of this problem. The other reason I feel it should be done this way, and with due respect to the distinguished ranking member of the committee, the Senator from Mon- tana, is we do not have before us\u2014at least I do not\u2014any letter from the De- partment of Transportation explaining to Senators exactly how this happened. Perhaps the Senator from Montana can articulate the problem in more detail. But it seems to me the Senate should have before it certain documentation from the Secretary of Transportation explaining how this happened and the need for it to be corrected by the Con- gress. It is apparent that the Secretary of Transportation has made the deci- sion he cannot do it administratively within the executive branch, but it re- quires the Congress to act. So I have concluded my remarks and, at such time as the distinguished Sen- ator from Montana wishes, he can put the amendment forward. I hope other Senators will find the opportunity to speak on it. I yield the floor. I thank my colleague. The PRESIDING OFFICER. The Sen- ator from Montana. Mr. BAUCUS. Mr. President, I appre- ciate the statement the chairman of the Subcommittee on Transportation of the Environment and Public Works Committee made. I understand the Senator’s position, namely that al- though a mistake is made, and there is not anybody who disputes that a mis- take was made, the point is the mis- take could be corrected next year when Congress takes up reauthorization of the highway bill, the so-called ISTEA. The problem with that is very sim- ple. First of all, this is a mistake. This is not a formula question. When ISTEA comes up next year, this Congress will deal with the formula under which the highway funds are disbursed. This is not a formula question\u2014not a formula question. This is correcting an admin- istrative error the Department of Transportation and, more precisely, the Department of Treasury made. It is a simple correction. I might also say the mistake that was made, and nobody disputes the mistake was made, is not a donor- donee question. The mistake distrib- utes the dollars inappropriately to some States and does not distribute dollars inappropriately to other States, irrespective of the donor-donee ques- tion. This has nothing to do with donor-donee issues. It has nothing to do with the formula. One more point which I think is even more salient is this. The States in question here would not receive this money, if the mistake is not corrected, until fiscal 1997. So they are not going to be receiving any money this year, calendar 1996. They are not going to be receiving any money next year until after the fiscal year begins on October 1, 1997. So this is the appropriate time to correct the mistake, that is, before States would otherwise receive their money. It is a lot easier to correct a mistake before a State or somebody re- ceives money than it is afterward. I know full well the States that receive their money, if they were to receive their money incorrectly next year, they are not going to be very likely to give it back. I think, therefore, for all those rea- sons, the appropriate place to correct the mistake\u2014nobody disputes the mis- take was made\u2014is right now. Just do it quickly and easily. Then, next year, this Congress will engage in a full bat- tle royal, I know, over the allocation of highway funds. For those reasons, I think this is more appropriate that the correction be made here and now, simply, rather than putting it off to next year. Mr. HATFIELD. Will the Senator yield? Mr. BAUCUS. I am glad to yield to the chairman of the Appropriations Committee. Mr. HATFIELD. I discussed this mat- ter with the Senator from Virginia, and I believe the Senator is willing to enter into a time agreement on this amendment of 1 hour, equally divided. Mr. BAUCUS. Fine. Mr. HATFIELD. I ask unanimous consent an hour limitation be given to the Baucus amendment. The PRESIDING OFFICER. Is there objection? Mr. HATFIELD. Mr. President, I withdraw the request. The PRESIDING OFFICER. The re- quest is withdrawn. Mr. BAUCUS. Mr. President, I sug- gest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. LAUTENBERG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. LAUTENBERG. Mr. President, we are going to be waiting for a few minutes for other Senators who wish to speak to arrive. I would like to take a few minutes during that wait to lend my support to the amendment that will be offered by the distinguished Senator from Montana. I think it is well-intentioned, and I think the amendment is fair. The one thing I want to be certain of is that this amendment is not going to be perceived as a formula fight, be- cause that should not be. This is a cor- rection. It corrects the fact that the Department of Treasury misinter- preted the revenue reports that were VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00059 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9268 July 31, 1996 put into a new format. The unfortunate result is that the Treasury Department grossly overstated the amount of gas tax receipts to the highway trust fund during 1994. This error is acknowledged by the Treasury Department and by the Fed- eral Highway Administration. Unfortu- nately, the FHWA is required by law to base a certain category of highway fund allocations on the Treasury’s for- mal estimates, whether or not they are correct. So, what the Baucus amendment seeks to do is correct the allocations made as a result of Treasury’s error. And the amendment, I must say to my colleagues who were in the Chamber or who might hear us, the amendment will not deny any State the full 90 per- cent of the payments they are due through the Federal aid to highways formula program. What this amend- ment will do is to set these payments at 90 percent of what the States actu- ally paid, rather than 90 percent of the Treasury’s erroneous estimates. We heard from the distinguished Sen- ator from Virginia about the interest that he and the Senator from Montana have in terms of examining the for- mula. We will have a chance to do that, I assure you, at length, I believe. But we ought not to try to do it here, and that is not what is being attempted. Unfortunately, the impact of cor- recting this mistake results in certain States getting more and others getting less than they would otherwise receive if this correction were not adopted. When reviewing this amendment, I hope that the Members will keep in mind that the bill before us provides an increase of $100 million in the overall obligation limit for the Federal Aid Highway Program, from $17.55 billion to $17.65 billion, a $100 million increase. This increase is going to help all States in meeting their transportation needs. While it is unfortunate that the legis- lation is required to correct this mis- take, the Federal Highway Administra- tion assures us that absent this bill language, the Secretary does not have the administrative authority to correct these highway allocations and bring them into conformity with what we now know to be the actual gas tax re- ceipts. I hope our Members will support this amendment. It is the right thing to do; it is the fair thing to do. The amend- ment is not an attempt to pick any- one’s pocket in the dark of night. Mr. President, I yield the floor. Mr. BAUCUS addressed the Chair. The PRESIDING OFFICER (Mr. SANTORUM). The Senator from Mon- tana. AMENDMENT NO. 5141 (Purpose: To require the calculation of Fed- eral-aid highway apportionments and allo- cations for fiscal year 1997 to be deter- mined so that States experience no net ef- fect from a credit to the Highway Trust Fund made in correction of an accounting error made in fiscal year 1994) Mr. BAUCUS. Mr. President, I have an amendment which I send to the desk and ask for its immediate consider- ation. The PRESIDING OFFICER. The clerk will report. The legislative clerk read as follows: The Senator from Montana [Mr. BAUCUS] proposes an amendment numbered 5141. Mr. BAUCUS. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: At the appropriate place in title III, insert the following: SEC. 3 . CALCULATION OF FEDERAL-AID HIGH- WAY APPORTIONMENTS AND ALLO- CATIONS. (a) IN GENERAL.\u2014Except as provided in subsection (b), for fiscal year 1997, the Sec- retary of Transportation shall determine the Federal-aid highway apportionments and al- locations to a State without regard to the approximately $1,596,000,000 credit to the Highway Trust Fund (other than the Mass Transit Account) of estimated taxes paid by States that was made by the Secretary of the Treasury for fiscal year 1995 in correc- tion of an accounting effort made in fiscal year 1994. (b) ADJUSTMENTS FOR EFFECTS IN 1996.\u2014The Secretary of Transportation shall, for each State\u2014 (1) determine whether the State would have been apportioned and allocated an in- creased or decreased amount for Federal-aid highways for fiscal year 1996 if the account- ing error referred to in subsection (a) had not been made (which determination shall take into account the effects of section 1003(c) of the Intermodal Surface Transpor- tation Efficiency Act of 1991 (Public Law 102 240; 105 Stat. 1921)); and (2) after apportionments and allocations are determined in accordance with sub- section (a)\u2014 (A) adjust the amount apportioned and al- located to the State for Federal-aid high- ways for fiscal year 1997 by the amount of in- crease or decrease; and (B) adjust accordingly the obligation limi- tation for Federal-aid highways distributed to the State under this Act. (c) NO EFFECT ON 1996 DISTRIBUTIONS.\u2014 Nothing in this section shall affect any ap- portionment, allocation, or distribution of obligation limitation, or reduction thereof, to a State for Federal-aid highways for fiscal year 1996. (d) EFFECTIVE DATE.\u2014This section shall take effect on September 30, 1996. Mr. BAUCUS. Mr. President, this is a very simple technical correction amendment. Very simply, it corrects a mistake that the Department of the Treasury made. The administration tells us, incredibly, they need legisla- tive authority to correct the mistake. This amendment simply does that leg- islatively, it corrects that mistake. Nobody disputes that a mistake was made\u2014nobody. The administration ad- mits it, and the Senators who have spo- ken on this issue also admit it was a mistake. What was the mistake? The mistake is very simple. Essentially, in 1994, the Treasury failed to credit the Highway Trust Fund with about $1.5 billion, an administrative error, a bureaucratic error. The Treasury then corrected that error in 1995, credited the High- way Trust Fund with the 1994 mistake, that is, the $1.5 billion and also contin- ued to collect revenues in 1995, as they should. The problem is the extra bump, the additional revenue in 1995, that is not only the revenue to be collected prop- erly in 1995 but also the additional $1.5 billion credit because the mistake was made in 1994, that additional bump skewed the formulas, because the for- mulas are based upon the revenue that was received in 1995; that is, the for- mula’s distribution for future years is based upon the 1995 receipts. The Department of Transportation has written us a letter saying that they cannot correct this mistake adminis- tratively and cannot, by their own ad- ministrative procedures, correct this error. They say it has to be made by legislation. It is a pure and simple error, pure and simple mistake. I think it is appropriate at this time to correct the mistake. I might say, Mr. President, this is not a donor-donee question. This has nothing to do with the claim that some States have that they are so-called donee States, that is, their citizens are contributing more dollars in gasoline taxes in the Highway Trust Fund than they are receiving in highway formula distributions. This is not that issue. In fact, the mistake that the Treasury made results in a misallocation which is totally independent of the donee- donor issue\u2014totally independent; it has nothing to do with it. I remind my colleagues who might think this is an allocation question, that this might be, ”Oh, here we go again, one of those battles where States are trying to get more money for themselves,” this is not that issue. We will have an opportunity to deal with that question next year. Why next year? Because next year the Congress is due to reauthorize the highway bill, ISTEA. The States have been dealing with the formula under ISTEA for the past several years. The last ISTEA was passed in 1991. Here we are in 1996. The next ISTEA 6 years later will be passed in 1997. That is the opportunity and the place to figure out what the proper for- mula is in distribution of highway funds. There will be a lot of good arguments made by a lot of Senators as to what that formula should be. A lot of factors go into it. Obviously, population den- sity, miles traveled, population growth\u2014a whole host of factors. And next year the Congress will dig down deep, try to figure out which factors, which indicators make the most sense, and we can deal with that issue then. That is the time, next year, to deal with the formula. It certainly is not here on the floor of the Senate at the end of July, this is not the time to deal with the highway allocation formula. This is not a formulation, this is sim- ply correcting a mistake which every- one agrees was a mistake and should be corrected. Some might ask, ”Gee, why don’t we take up this mistake and correct this VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00060 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9269 July 31, 1996 mistake next year when we take up the highway bill?” The answer to that is very simple, Mr. President. It is this: The maldistributions, the unjust-en- richment distributions that will be al- located under this mistake will not occur this year in 1996, they will occur in the next fiscal year, 1997. So those States who unjustly are enriched by a clerical bureaucratic mistake will not be receiving any funds until after Octo- ber 1 of next year, 1997. So now is the time to correct the mistake; that is, before States receive money they should not receive and be- fore States do not receive money that they should receive. Now is the time to correct the mistake. Sure as we are here tonight, Mr. President, we know next year after Oc- tober of 1997\u2014and ISTEA will certainly come up later than October of next year, that is the new highway bill as we deal with the new allocation for- mula\u2014States are not going to want to give back money they improperly re- ceive. They already will have received the dollars. So now is the time in 1996 to correct the mistake so States are in a lot better position to deal with what is proper here. I might say, too, Mr. President, that 19 States benefited by this mistake; 31 States were injured, harmed by this mistake. The amendment I am offering simply returns us to the status quo. It does not tilt the formula any way, one way or the other. It is totally a res- toration of the status quo; that is, a total correction of a mistake that was made, which means under this amend- ment 31 States will be better off, 19 States will be worse off, compared with where they would be if the mistake were not corrected. The amendment here simply again is to correct the mis- take. I would like to read the names of the States, Mr. President, which will benefit under this amendment, that is, returned to the status quo, that is, States which will then be receiving what they are supposed to be receiving under the ISTEA bill, the highway bill. Here are the States: Alabama, Alaska\u2014 so if you are one of these States, you are a State that is being unjustly, un- fairly harmed by a bureaucratic error. This amendment would add dollars back to correct that mistake so we are back to the status quo. Again: Alabama, Alaska, Con- necticut, Delaware, District of Colum- bia, Florida, Georgia, Hawaii, Idaho, Il- linois, Iowa, Kansas, Kentucky, Maine, Massachusetts, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Wash- ington, West Virginia, and Wyoming. I might also add, Puerto Rico would be in that list as well. Very simply, I will sum up, Mr. President, by saying this is an attempt to correct a mistake. Everyone admits it is a mistake. This is not a donee- donor question. Now is the proper time to correct the mistake because funds have not yet been allocated. They will not be allocated\u2014under the mistake\u2014 until 1997, fiscal 1997. That is beginning October 1 of next year. So now is the time to correct it. The issue of how we allocate disbursements should be addressed when we take up the highway bill next year. I have given the names of the States that will be benefited under this amendment. Again, they are States who are harmed by the mistake but to be returned to the status quo. Thirty-one States in that category. Mr. President, I see the chairman of the committee, my very good friend, John CHAFEE on the floor. And he also supports this amendment for the cor- rection for the States. I yield the floor. Mr. CHAFEE addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Rhode Island. Mr. CHAFEE. Mr. President, I sup- port the amendment by the ranking member of the Senate Environment and Public Works Committee, the dis- tinguished Senator from Montana. Mr. President, the amendment by the Senator from Montana corrects an ac- counting error made by the Depart- ment of the Treasury in 1994. There may be some confusion as to whether under this amendment States will receive full credit for contribu- tions made to the highway trust fund. Under the Baucus amendment the States will receive full credit for all contributions made to the highway trust fund but they will receive that credit in the year that they were actu- ally collected rather than when they were recorded on the Treasury ledger. I would like to emphasize that this is not an attempt to rewrite the highway funding formula under the so-called ISTEA, the Interstate Transportation Act. This is not a highway trust fund formula amendment. And I do think it is very, very unfortunate that the cler- ical error has resulted in confusion, and indeed understandable irritation for Members of this body. Frankly, Mr. President, I greatly wish it had never occurred so that we would not be here trying to straighten things out. I realize that some Members of this body believe that the formulas that distribute highway funds are not fair or appropriate. And that is a legiti- mate concern. Members will have their chance to make their case for changes in the formula next year when we reau- thorize the highway program. The En- vironment and Public Works Com- mittee plans to commence hearings on the reauthorization of the so-called ISTEA in September of this year. We will continue those hearings next year. We want to get on with this bill. We have to get on with it next year. At that time we definitely will have argu- ments over the formula and what should go into it. The Senator from Montana ticked off some of those items. For example, should we count the amount of inter- state highway mileage, the State’s pop- ulation, the miles driven, the amount of highway trust fund contributions, the number of deficient bridges? All of those are legitimate things to consider when we deal with the formula. That will be a very healthy debate, I can guarantee everybody here, because you have donor States who put in more than they get back and you have donee States that receive more than they put in. Legitimately, the States that put in more are distressed. And the States that put in less think that, well, this is a National Highway System so you should not get back exactly what you put in. That is OK. We will debate that vigorously. But I do believe that it is unfortu- nate and not appropriate, when we are trying to straighten out a bureaucratic error, to change the current formula that has been agreed to, was agreed to by Congress in 1991. The distribution of funds in the highway program struc- ture are issues that must be debated on the merits, as I said, when we reau- thorize the basic legislation. Some would say, ”Well, OK, if you want to straighten out this problem, wait until next spring when you deal with the highway reauthorization. Why do we take it up now?” We are taking it up now because the problem that we are talking about will be compounded if we wait. Now is the time, difficult though it might be. Some might say, ”Oh, well, in the list that the Senator from Montana read off, Rhode Island will get back some money that they should have gotten, and others will have to restore some of the extra money that they received.” As I say, we wish that all had not occurred. But if we wait, the problem, as I say, will become more difficult. I would like to raise, Mr. President, a concern regarding the public percep- tion of this issue. Failure to approve the amendment by the Senator from Montana will mean that an accounting error will generate more than $1 billion in false spending authority. This situa- tion obviously will be difficult to ex- plain to taxpayers when they are con- cerned about reining in Federal spend- ing. Moreover, unless it is corrected, this error will create the image of an irresponsible Federal Government which cannot correct an error. So I hope we will support this amendment and get on with it, difficult though it might be. I thank the Chair. Mr. GRASSLEY. Mr. President, I rise in support of the amendment being of- fered by Senator BAUCUS, and my col- leagues Senator CHAFEE and DOMENICI. Due to the error by the Treasury De- partment, my home State of Iowa stands to lose $2,182,000 from the high- way trust fund. This amendment would correct the Treasury Department’s error, restoring the money. I understand that the Treasury De- partment did not correctly credit $1.6 billion to the highway trust fund in fis- cal year 1994. The Treasury then cor- rected this error in fiscal year 1995. However, by not correctly attributing the funds to fiscal year 1994, the Treas- ury action is adversely affecting the VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00061 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9270 July 31, 1996 distribution of highway funds to 31 States in fiscal year 1997. This is un- fair. These States are being unfairly penalized through no fault of their own. They are being penalized by an error by the Treasury Department. I urge my fellow Senators to join the Senator from Montana, myself, and the other cosponsors of this amendment to correct this error. It is the right thing to do. Mr. GRAMM addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Texas. Mr. GRAMM. Mr. President, I am somewhat puzzled by this debate be- cause what has happened is that the error has been corrected. No one is say- ing that there is a problem in the allo- cation in the bill before us. What we are seeing here is an effort to use an appropriations bill to try to go back and impose a change on a formula which this year is fair to correct a problem which it is asserted existed last year. Let me remind my colleagues of how we came to this point. The apportion- ment of highway dollars to States is based in part on the actual motor fuel taxes collected in the State. And the law says that the most recent data available will be used. In fiscal year 1996, the most recent data available was an estimate of fiscal year 1994 collections. The Secretary of the Treasury certified that that was the data that was available. On the basis of that data and the law, an allo- cation was made. The Department of the Treasury was late in reporting the 1994 actual data collection to the De- partment of Transportation and there- fore they relied on the data that was available at that time. What we are being asked to do now is to go back and change a formula which has already been adjusted. In listening to our colleague from Rhode Island, one would get the view that the current appropriations bill be- fore us has an unfair allocation of funds under ISTEA or an allocation which is based on old data. But unless I am wrong\u2014and I would be happy to be corrected\u2014that is not the case. No one is asserting that this appro- priations bill in any way is in error in allocating funds. What is instead being asserted is, that since the most recent data available when this was done last year was the estimated 1994 data, which therefore under law was used, that if the actual 1994 data had been available, that the funding formulas would have generated a different re- sult. Are we, Mr. President, every year, going to go back and second-guess the formula? Or are we going to follow the law? Now we have one of these things that, from time-to-time, happens, where by going back and changing the base-year data, more States benefit than lose. The bottom line is that no one here has asserted that the Sec- retary of the Treasury or the Secretary of Transportation did not comply with the law. The law says that the alloca- tion will be based on the most recent data available. It was based on the most recent data available last year. No one asserts that the current for- mula is wrong. But what is being as- serted is that, using data that was not available last year, we could go back and reallocate these funds and take an allocation which this year no one dis- putes is a fair allocation, but we would go back and take money away from States in a formula that no one argues is unfair, to basically allocate funds, not according to the law last year, since the estimated 1994 data was the most recent year available, but accord- ing to how it would have been allocated if data had been available which was not available. Here is my point: I think you can argue endlessly on these things, but I do not think this is the place where the argument should occur. This is an ap- propriations bill. Obviously, what we have here is an attempt to change the allocation. The amendment changes an allocation, which no one disputes as being valid, to try to reallocate funds from last year. It is true that nobody here would dis- pute that if the actual 1994 data was available last year, instead of the esti- mate, the allocation might have been different. But it was not. The law says very clearly that the allocation is based on the most recent data avail- able. I believe if we are going to deal with this issue, we need to deal with it when we are reauthorizing ISTEA, and we need to deal with it not just for this year but we ought to set out a prin- ciple. I think it makes absolutely no sense to simply go back and say, if data had been available then, which was not available, the allocation might have been different, and therefore take a year where no one disputes the allo- cation and reallocate the money, be- cause 31 States will benefit and only 19 States will lose. I hope we will table this amendment because it clearly is legislating on an appropriations bill. I think if we start opening these for- mulas up to this kind of debate, it is going to make it very, very difficult for us to be able to pass these appropria- tions bills. I am not at this point ready to give a time limit on this bill. I think we should vote on tabling it, and then I think we will want to look at second- degree amendments. I yield the floor and I suggest the ab- sence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. BAUCUS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BAUCUS. Mr. President, I want to enter into the RECORD a couple of letters from the administration which document that a mistake was made. The first is a memorandum from the Department of Treasury. I would like to read several portions of it without reading it in detail. In fiscal 1994 an accounting error, de- scribed in greater detail below, resulted in a $1.590 billion misallocation of excise taxes against the Highway Trust Fund. This misallocation of excise taxes was corrected in fiscal year 1995. Another portion reads: This change led to a misinterpretation of the information provided to FMS on the IRS Quarterly Certification and resulted in a misallocation of excise taxes between the Highway Trust Fund and General Fund in Fiscal Year 1994. This misallocation of excise taxes was corrected in Fiscal Year 1995, deb- iting the General Fund and crediting the Highway Trust Fund in the amount of $1.590 billion. Procedures have been implemented to assure that future adjustments to the Highway Trust Fund occur in an accurate and timely manner. I ask unanimous consent that this document be printed in the RECORD. There being no objection, the mate- rial was ordered to be printed in the RECORD, as follows: DEPARTMENT OF THE TREASURY, Washington, DC, July 31, 1996. Memorandum to: Senator John H. Chafee, Chairman, Environment and Public Works Committee, U.S. Senate, Wash- ington, DC. From: Linda L. Robertson, Assistant Sec- retary (Legislative Affairs and Public Li- aison). Subject: Correcting the misallocation of ex- cise taxes between the highway trust fund and the general fund. In Fiscal Year 1994, an accounting error, described in greater detail below, resulted in a $1.590 billion misallocation of excise taxes, against the Highway Trust Fund (HTF). This misallocation of excise taxes was corrected in Fiscal Year 1995. The initial transfer of receipts to the High- way Trust Fund is based upon monthly esti- mates provided to Financial Management Services (FMS) by the Office of Tax Anal- ysis. Subsequently, FMS uses the IRS Quar- terly Certification of ”actual” liability to adjust the Highway Trust Fund balance for any difference between amounts initially transferred and ”actual” quarterly liability. This adjustment is referred to as the ”Cor- recting Adjustment.” At the request of OTA, the format of the IRS Quarterly Certifications used to make correcting adjustments to the Highway Trust Fund was changed. This change led to a misinterpretation of the information pro- vided to FMS on the IRS Quarterly Certifi- cation and resulted in a misallocation of ex- cise taxes between the Highway Trust Fund and the General Fund in Fiscal Year 1994. This misallocation of excise taxes was cor- rected in Fiscal Year 1995, debiting the Gen- eral Fund and crediting the Highway Trust Fund in the amount of $1.590 billion. Proce- dures have been implemented to assure that future adjustments to the Highway Trust Fund occur in an accurate and timely man- ner. Mr. BAUCUS. Mr. President, very clearly, the Department of Treasury admits the error, a $1.590 billion mis- calculation. To review this, so that Senators understand how this proce- dure works, by law, there is a 2-year time lag, which means that because a mistake was made in 1994, by defini- tion, 1996 allocations were not made in advance of what the formula would VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00062 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9271 July 31, 1996 otherwise require, because in 1994, al- most $1.6 billion was not credited to the highway trust fund. In 1996, the for- mula was based upon the amount that is in the 1994 account. Since the 1994 account was deficient by $1.6 billion, by definition, States were not overpaid in 1996. So no States were overpaid in 1996. Again, as I said, by law, the alloca- tion is made 2 years after the account is so-called certified. Well, in 1995, after the mistake was discovered, not only were normal 1995 accounts re- ceived from States and the highway trust fund credited with the usual amount it should have been, but in ad- dition to that, the mistake\u2014the $1.6 billion\u2014was added on top of the 1995 account, which overstated 1997 pay- ments. So the correction we are trying to make here today is a combination of 1994 and 1995, the underpayment in 1994, as well as the overpayment in 1995, which determine the State allocations in fiscal years 1996 and 1997. I might add, Mr. President, I have an- other letter from the Department of Transportation\u2014actually, from the Federal Highway Administration, signed by Rodney Slater, Adminis- trator. It states in part that it is unable to administratively make the correction. I can read portions of that, but Sen- ators may read the letter. It is a little bit technical and bureaucratic. But the long and short of it is that they admit the mistake and explain what would have happened had the mistake not oc- curred. They state that it has to be corrected by legislation. I listened with great curiosity to the arguments of the Senator from Texas. He, in a sense, was saying that because the 1994 allocation was determined as it was, and the mistake was made, we should close our eyes and be blind to any mistake that might have been made. He is saying, by law, the 1996 al- location should be determined by what the 1994 receipts are, and a mistake was made, but do not look at the mis- take because that is what the law said in 1994. Mr. President, we are only saying that everyone admits it was a mistake. The Department of Treasury docu- ments it was a mistake, as does the De- partment of Transportation. Senator WARNER was on the floor not long ago and also admitted the mistake. I guess the real question is, if it is a mistake, do we correct it or not? That is the issue. Very simply, if a mistake is made, should it be corrected, or should it not be corrected? I submit, Mr. President, to ask the question is to answer it. Of course, we should correct the mistake. That is what normal, civilized human beings do\u2014correct mistakes. The other argument I have heard is, well, gee, even if a mistake was made, don’t correct it now, correct it next year. Well, we all know, Mr. President, one of the greatest problems that we as human beings have is procrastinating, putting off what we can do now. Here we are tonight. Let us correct this mistake. We could, I suppose, take it up next year when ISTEA comes up. But ISTEA is the highway bill. The highway bill battle is to determine what the allocation should be. We are not arguing what the allocation should be. That is an argument that Senators will engage in next year, in 1997. I might also say\u2014repeating myself\u2014 if we don’t correct the mistake now, next year the States will receive dol- lars they should not receive, and they are not very likely to want to send the dollars back, even though they know they should. We are really put to a test here, Mr. President. The real test is: Are we going to live up to our word or not? I might say, particularly, as Senators, that is really the issue here. Sure, if a State is unjustly enriched, it is kind of fun to get the extra dollars. But if it is unjustly enriched because of a mistake, we all know we should not accept those dollars, and we should correct the mis- take, according to the formula and un- derstanding that we all had when we passed the highway bill in 1991. So that is really the deeper under- lying question here tonight. Are we Senators going to live up to our word? Or are we going to be greedy and take advantage of a mistake that was made, even though we know that is not fair, that is not the right thing to do? That is the deep underlying question here tonight that we have to ask ourselves. I say, Mr. President, that it is very clear. I am surprised that we are debat- ing this. I am surprised that this amendment was not automatically ac- cepted. It was a mistake. We are not in a highway allocation fight tonight. This is not a donor-donee issue. We all know it is better to correct something sooner than later. So let us correct it tonight. Mr. GRAMM addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Texas is recognized. Mr. GRAMM. Mr. President, let me reiterate that there is no mistake in- volved here. In fact, nobody has said there is a mistake involved here. Mr. BAUCUS. Will the Senator yield for a question? Mr. GRAMM. Let me make my point, and then I will be happy to. Here are the facts: ISTEA says that the alloca- tion of funds among States shall be based on the most recent data avail- able. That is what it says. The most re- cent data available, provided by the Treasury Department, was the data which was, in fact, provided under the law. In fact, if you will read the letter sent to Senator BAUCUS, basically that letter makes it clear that it is the De- partment of Transportation’s position that it does not have authority to use anything other than the official ac- counts of the trust fund maintained by the Department of the Treasury in cal- culating apportionments among the States. Here is the point. When the Treasury gave their estimate, they gave that es- timate based on the best data they had available and required by the law. It is true that, if you go back after the fact and take data that they did not have that they could have had, you could have allocated funds differently. But to call that an error is simply a misuse of the English language. The Department of Transportation used the best esti- mate they had based on the data they had. Now, what the Senator from Mon- tana is trying to do is to say that, be- cause they did not have data then which they now have, that we should now go back and alter allocations. No one disputes that the 1997 formula, which is in the bill before us, is based on the newest data, which no one dis- putes as being the best available data that apparently everyone is satisfied with, no one says that the allocation of funds in this bill are in any way unfair for fiscal year 1997. If they do, I have not heard it. But what the Senator is saying is that because the Treasury did not have final 1994 data in 1996 when they did the estimate, and because they gave the best data available, complied with the letter and the spirit of the law, that knowing now what that data turned out to be after the fact that we could go back last year and rewrite the for- mula. Clearly, ISTEA provides no authority whatsoever to do that, and what is being sought here is rewriting ISTEA. This is legislation on an appropriations bill. This is taking an allocation for 1997, that no one disputes as being valid, and changing it to reallocate funds to reflect an allocation that would have occurred had the Depart- ment of Transportation had data which was not available. It seems to me that this is games- manship that we can engage in end- lessly. Let me give you an example. Next year we may have the final 1995 data. Next year we might even have the 1996 data. It would be possible for this Senator or any other Senator next year to stand up and say, ”When the al- location was done for 1997, the Depart- ment of the Treasury relied on 1995 data, but actually, if they had known what the 1996 tax collections would have been, they could have had a dif- ferent allocation.” My point being, this amendment could be offered every single year be- cause there is a lag in available data that the Treasury is able to provide the Department of Transportation to do these estimates. What we have done in the past is simply each year made the fairest estimate that we could make. But I am not aware that we have ever gone back retroactively and said, if Treasury had had newer data and if they had provided it to the Department of Transportation data that we now know but was not known then, could not have been known then, that last year’s allocation could be rewritten. I hope my colleagues will understand and agree with me that next year this VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00063 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9272 July 31, 1996 same amendment could be offered be- cause next year we will have the actual data for the next year in this series\u2014 1995 1996. We could stand up and argue that the actual allocation in the bill before us\u2014not last year\u2014is wrong be- cause it is based on 1995 data which is the best data available but that next year when we get 1996 data it might produce a different allocation. The point is that while 31 States in fact do benefit, some very slightly, by this reallocation, this amendment could be offered every single year to every Department of Transportation allocation of funds under ISTEA be- cause each year we get a new data point. You could take that data point which was not available when the funds were allocated by the formula, but, if it had been available, the allocation would have been different. Do we want to do this every single year? Am I to stand up next year when the 1996 data is available and say had we known in writing in the 1997 alloca- tion what the actual 1996 data was, which we do not know today, that the allocation would have been different and Texas would have gotten more money and, therefore, I want to go back retroactively and take money in the 1998 bill away from some other State, perhaps Montana, to give to Texas? I think this is a very, very bad prece- dent, and it is something that could be done every single year. That is the point. I hope that we will not do this because we are setting a precedent that it seems to me simply leaves chaos in the allocation of these funds. I yield the floor. Mr. BAUCUS addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Montana. Mr. BAUCUS. Mr. President, the Sen- ator from Texas\u2014by the way, one of the biggest beneficiaries of this bu- reaucratic snafu, his State, gets more dollars as a result of this bureaucratic snafu than almost any other State. Mr. GRAMM. That is not correct. California loses the most dollars under your amendment. Mr. BAUCUS. I said one of the most. I did not say ”the.” He is saying that, under the law, the allocation is made according to the best data available. The fact is the data was available and is available in 1994. Do you know what happened? Some bureaucrat punched the wrong keys. So the allocation was put over to the general fund instead of the high- way trust fund. The data is always available. It is collected. Just some bu- reaucrat, somebody, made a mistake and punched the wrong buttons in the computer. So the allocations from States, gasoline receipts from States, a portion of it, was put in the wrong ac- count. It was put in the general fund, not the trust fund. The data was avail- able. More importantly, I am astounded at the argument of the Senator from Texas. The Senator from Texas who rails against bureaucracy, who rails against the Federal Government, is standing here tonight basically stand- ing up for the bureaucratic ”snafu pro- tection act.” As he says, if a bureau- crat makes a mistake, we do not cor- rect it. If the bureaucrat makes a mis- take, we do not correct it, and we do not come back here on the floor and try to correct the mistake. I am as- tounded, absolutely astounded, that the Senator from Texas would stand up and say we should let a bureaucrat who makes a snafu continue the effect of that mistake and do not correct the mistake even though the result is $1.6 billion of unfairly distributed highway trust funds. That is essentially what he is saying. Essentially that is what he is saying. Do not correct the mistake. If we come back here next year and find a mis- take, we should not correct it. I hope we do not come back here next year and correct this mistake again. The Department of Treasury has said, and I take them at that their word, in a memo they sent up to us here to- night, ”Procedures have been imple- mented to assure that future adjust- ments to the highway trust fund occur in an accurate and timely manner.” Now no one can guarantee they will not make a mistake again. I would guess tonight there are a lot of red- faced folks over there in the Depart- ment of Treasury perhaps watching this debate saying, ”Oh, my gosh, how do we make that mistake? How in the world did that happen? Boy, don’t we have egg on our face.” It is true they do. They made a booboo, a $1.6 billion mistake. So all we are saying is let us correct it. The Senator is wrong when he says this is an allocation fight tonight. It is not that. Nobody who is listening to this debate believes it is. Nobody who is listening to this debate believes the argument that this is an allocation fight. This is simply an effort to cor- rect a mistake. That is all it is, pure and simple. Now somebody can come up with some kind of sophistry, argument, turn on the tail and come back around, and so forth, to try to confuse people. This Senator is not trying to confuse any- body. This Senator is trying to very plainly ask the Senate to correct a mistake that was made\u2014and this is an- other point, Mr. President\u2014so that when we go into ISTEA next year there is a better taste in people’s mouths; that Senators will be more inclined to know that the base is fair. I tell you, Mr. President, if this mis- take is not corrected, there is going to be a lot of bitterness in that debate next year as we begin to try to figure out what the correct allocation is be- cause Senators will know that a mis- take that should have been corrected was not corrected and we are starting off basically with a base that is the re- sult of a big snafu and that snafu is compounded every cycle. I do not think we want that. I think we want to start off on a level playing field, and the level playing field will be the restoration of what the formula is supposed to be and that will be the case if this mistake is corrected. Mr. President, I ask unanimous con- sent to add Senators GRASSLEY and BINGAMAN as cosponsors to the pending amendment. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. GRAMM addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Texas. Mr. GRAMM. Mr. President, I do not know that we are gaining very much in dragging this dead cat back and forth across the table here, but let me go back to the point which I think is rel- evant. Where is this snafu? I see no docu- mentation of a snafu. Let me go back and outline exactly what the law says and how it works and make clear what the Senator is calling a bureaucratic snafu, the press- ing of a button by a mindless, nameless bureaucrat. If the Senator has data to show that, if the Senator has docu- mentation to show that a bureaucrat pushed the wrong button, this Senator would like to see it. But I do not have it. Now, here is what I understand the facts to be. Under ISTEA, the Depart- ment of Treasury, based on the newest data available to them, gives an esti- mate to the Department of Transpor- tation as to how much in highway trust funds is collected by States. When this estimate was given for last year’s appropriation, the Department of Treasury did not have the final 1994 data, as I understand it. If someone has evidence to the contrary, I would like to see it. But based on everything that I have seen, based on all the cor- respondence that is available, the Treasury Department, based on the newest data they had, gave an estimate of tax collections by State to the De- partment of Transportation, which, based on that data, which at that point, to the best of my knowledge or anyone else’s knowledge, was the best data that was available, on the basis of that data the Department of Transpor- tation allocated funds in last year’s ap- propriations bill which in fact we voted on and it became law and the funds were allocated. What is being called a snafu here is that based on the best data they had last year, the Department of the Treas- ury made an estimate, and if they had data that is now available 1 year later they would have made a different esti- mate and the allocation formula would have been different. But that is not a snafu. Basically, they were using the best data they had last year just as we are using the best data we have this year. My point is that it is distinctly pos- sible, in fact probable, likely, that next year when we have 1995 and 1996 data we will find the allocation used for 1997 would have been different had we had this data, which we did not have this year. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00064 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9273 July 31, 1996 The point being each and every year we can go back and second-guess last year’s estimate based on data that the estimators did not have. I would be able, if we set this principle, to offer an amendment to next year’s appropria- tion based on actual data that will be available next year which is not avail- able this year to say that the formula this year would have been different had we had another year of data. And it will be. Invariably it will be. There is no mistake in the current allocation based on the newest and best estimate we have, but what the Sen- ator from Montana is saying is that the estimate made last year was made on the data which was available then. I do not know that he is arguing a con- spiracy by the Treasury. I hear the word snafu, pressed the wrong button, but I do not have any data to substan- tiate that, and I would be willing to look at it if there is data. But based on everything they knew, the Treasury made an estimate last year, and on the basis of that estimate we allocated money. Based on everything they know this year, they made an estimate, and we are allocating money again. But if we are going to go back and change this year’s formula based on new data that was not available last year, why can we not do that next year and the next year and the next year? The whole purpose of this system is to take the best data available and al- locate funds on the basis of it. That is what, based on all the information that I have, the Department of the Trans- portation did. And relying on this data\u2014and the law requires the Depart- ment of Transportation to rely on this data\u2014they allocated funds. Now the Senator is saying a year later that if we had had new data that has since be- come available, the allocation would be different. He is right. But the point is the same will be true next year about this year. The same will be true year after next about next year. If we are going to get into a situation where every year we are going to look back at the last allocation based on data that was not available when the allocation was made, we are going to be able to reestimate everything. Was it a snafu that the estimate they had last year based on the best data turned out not to be right when they got the final data? I do not think it was a snafu. It was an estimate based on what they had. It is no more a snafu than the data we are using this year, when next year we have an additional year, will clearly be different. And by the same logic I could stand up here and say it was a snafu last year. Based on the data the Treasury had last year, we had an allocation of money, but now 1 year later with actual data they did not have, I want to go back and re- estimate the allocation. I think we are inviting chaos if we go down this road because we could do it every single year. Was the estimate last year more inaccurate than the es- timate this year will turn out to be? I do not know. Maybe it was. Maybe it will be less inaccurate than the esti- mate this year will turn out to be. The point is, the law requires the use of the best available data. Based on every- thing I know, that was done. The Senator talks about snafus, about pushing the wrong key on the computer. I do not know about any of those things. I see no documentation whatsoever. All I have seen documenta- tion on is that, based on the best data they had, the Treasury made an esti- mate. We allocated funds on it. Now that they have another year of data, if they were making the estimate today, it would be different. That is like saying, if I am predicting what is going to happen next year, that it is a snafu that I have imperfect knowledge relative to what I will have next year after I have lived out the year. I do not call that a snafu. I sim- ply call it having to make decisions on the best data that is available. I think this is a fundamental issue. I think many of my colleagues started this debate saying there was a mistake made in last year’s estimation because they did not have data which we now have. It just so happens, in that mis- take, 31 States gain and 19 States lose. The point is the exact same facts will exist next year and the next year and the next year and the next year, and maybe it will be other States who will gain next year and other States who will lose. But we are creating a chaotic situation if we are going to try to go back each year and redo last year’s for- mula, based on data that was not avail- able last year. That is why, while this is not be-all and end-all of the planet, this is a bad principle and it is a principle we are going to end up refighting every year. In fact, if we start down this road, we might as well have a 1-year lag of col- lecting the money to allocate it be- cause we are going to end up, every sin- gle year, rewriting this formula. Be- cause every Senator is going to check the allocation based on the new data that will be available next year, reesti- mate the allocation this year, and all those who will gain are going to stand up, as our dear colleague is saying, and say, ”There was a snafu. Somebody pushed the wrong computer key. Some- body made a mistake. They predicted the future and the future turned out to be different, and therefore we ought to go back and correct that.” The point is, that is not how the sys- tem works. If we are going to do that, we are going to create chaos, and that is why I hope we will not do it. Mr. MACK. Mr. President, I am here today to oppose the amendment being offered even though my State, Florida, would marginally benefit from its pas- sage. This amendment is said to correct a bureaucratic error\u2014a mistake which resulted in many donee States receiv- ing for 1 year less than what they thought they were entitled to under the law. Well, it is extremely hard for me to be sympathetic to this argument. I know a good number of States\u2014donor States\u2014who, for the last 5 years, feel they got far less than that amount to which they were entitled. They would call the formulas enacted in law during ISTEA a mistake. I believe the amendment now being considered appropriately highlights the problems that result from a muddled, inefficient, and overly bureaucratic Federal highway program. So, not only is it my intention to op- pose this amendment tonight, but it is my intention to be a leader in the fight next year to move our Nations’ trans- portation program away from the Fed- eral highway program that exists today. It is high time to harness the inge- nuity of State officials and local gov- ernments, the entrepreneurialism of private industry, and the strength of the financial markets to enhance the Nation’s transportation infrastructure. It is time to recognize that the na- tional interest may be best served by allowing States to assume the primary role in transportation uninhibited by Federal mandates, the redistribution of States gas tax dollars. I look forward to working with my colleagues next year to return the pri- mary role in transportation to our States. I yield the floor and suggest the ab- sence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The bill clerk proceeded to call the roll. Mr. BAUCUS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BAUCUS. Mr. President, I do not want to prolong this either, but I would much rather read facts into the RECORD than sit here in a quorum call. So I will correct the misinformation we just heard from the Senator from Texas. The Senator from Texas is trying to imply this is an error in estimating the highway trust fund, it is not a bureau- cratic error. I would like to address that by reading the memorandum to the chairman of the committee from the Department of the Treasury, dated today. There is a little bit of bureaucratese in here, but, if you listen closely, you can tell this is not an estimate prob- lem, it is a bureaucratic problem. I will read from the beginning. In fiscal year 1994, an accounting error, de- scribed in greater detail below\u2014 It did not say an error in estimating, in estimating receipts. It says ”an ac- counting error.” An accounting error was made\u2014 Resulted in a $1.590 billion misallocation of excise taxes against the Highway Trust Fund. . . . Then it says: This misallocation of excise taxes was cor- rected in Fiscal Year 1995. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00065 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9274 July 31, 1996 Then going on: The initial transfer of receipts to the High- way Trust Fund is based upon monthly esti- mates provided to Financial Management Services . . . by the Office of Tax Analysis. Subsequently, FMS uses the IRS Quarterly Certification of ”actual” liability to adjust the Highway Trust Fund balance for any dif- ference between accounts initially trans- ferred and ”actual” quarterly liability. This adjustment was referred to as the ”Cor- recting Adjustment.” More importantly: At the request of OTA, [that is the Office of Tax Analysis, in the Treasury] the format of the IRS Quarterly Certifications used to make correcting adjustments to the High- way Trust Fund was changed. I will repeat that statement. At the request of OTA, the format of the IRS Quarterly Certifications used to make correcting adjustments to the Highway Trust Fund was changed. The format was changed. This [format] change led to a misinter- pretation of the information provided to FMS on the IRS Quarterly Certification and resulted in a misallocation of excise taxes between the Highway Trust Fund and the General Fund in Fiscal Year 1994. The problem is not a miscalculation of the estimates. It was a mistake made because of a change in format. Somebody over there did not under- stand the new format and took the data, the correct data, but put it in the wrong account. This misallocation of excise taxes was cor- rected in Fiscal Year 1995, debiting the Gen- eral Fund and crediting the Highway Trust Fund in the amount of $1.590 billion. Proce- dures have been implemented to assure that future adjustments to the Highway Trust Fund occur in an accurate and timely man- ner. This has nothing to do with what the right estimate is, nothing at all. This has everything to do with just a bu- reaucratic mistake in misinterpreting a new format, that is all this is. It is very clearly a clerical, bureaucratic error. It is not an error in estimating tax receipts, not at all. It is an error made in computing the adjustments that were made between the Highway Trust Fund and the General Fund. That is all this is, stated clearly by the Department of the Treasury. That is the technical argument. The basic argument, Mr. President, is: Here we are. This is the end of July. This is 1996. What special is going on right now in America? It is the Olym- pics. In the world? It is the Olympics down in Atlanta, where people compete fairly. They compete according to the rules, and there are winners and losers, according to the rules. Certainly Sen- ators, if they want, can take advantage of a mistake, take advantage of some- thing that is unfairly given to them at the expense of somebody else. Or they can live by the rules, live by the rules and not take advantage of an ill-begot- ten gain but rather say, yes, that is not fair, let us correct this, when the real battle on highway allocation of trust funds is next year when Congress takes up the transportation bill. That is what this is all about, very simply, very plainly. Are we going to correct a mistake or are those Sen- ators who are enriched by the mistake going to take advantage of that mis- take? Or are they going to say, yes, a mistake is made, let us correct the mistake and let us go on. I made a point earlier, which I think is one worth remembering. That is, if this mistake is not corrected, it is going to sour the debate next year when Congress takes up the highway bill, because Senators are going to know the debate begins not with what it was supposed to be, not as was deter- mined by the 1991 highway bill. Rather, it would be based as a result of a bu- reaucratic snafu, and I do not think we want that. I think we want to correct the mistake. I urge my colleagues to just basically correct the mistake and get ready for the battle next year when we take up the highway bill in earnest, because that is the proper place to do all that. Mr. President, I ask unanimous con- sent the letter, dated July 31, 1996, from Linda Robertson to Senator CHAFEE, be printed in the RECORD, and I yield the floor. There being no objection, the letter was ordered to be printed in the RECORD, as follows: DEPARTMENT OF THE TREASURY, Washington, D.C., July 31, 1996. Memorandum to: Senator JOHN H. CHAFEE, Chairman, Environment and Public Works Committee, U.S. Senate, Wash- ington, DC. From: Linda L. Robertson, Assistant Sec- retary, (Legislative Affairs and Public Liaison). Subject: Correcting the misallocation of ex- cise taxes between the highway trust fund and the general fund. In Fiscal Year 1994, an accounting error, described in greater detail below, resulted in a $1.590 billion misallocation of excise taxes, against the Highway Trust Fund (HTF). This misallocation of excise taxes was corrected in Fiscal Year 1995. The initial transfer of receipts to the High- way Trust Fund is based upon monthly esti- mates provided to Financial Management Services (FMS) by the Office of Tax Anal- ysis. Subsequently, FMS uses the IRS Quar- terly Certification of ”actual” liability to adjust the Highway Trust Fund balance for any difference between amounts initially transferred and ”actual” quarterly liability. This adjustment is referred to as the ”Cor- recting Adjustment.” At the request of OTA, the format of the IRS Quarterly Certifications used to make correcting adjustments to the Highway Trust Fund was changed. This change led to a misinterpretation of the information pro- vided to FMS on the IRS Quarterly Certifi- cation and resulted in a misallocation of ex- cise taxes between the Highway Trust Fund and the General Fund in Fiscal Year 1994. This misallocation of excise taxes was cor- rected in Fiscal Year 1995, debiting the Gen- eral Fund and crediting the Highway Trust Fund in the amount of $1.590 billion. Proce- dures have been implemented to assure that future adjustments to the Highway Trust Fund occur in an accurate and timely man- ner. The PRESIDING OFFICER. The Sen- ator from Texas. Mr. GRAMM. Mr. President, one of the things I always try to tell my chil- dren is you should never debate about facts. You go look up facts, you debate about ideas, you debate about what they mean. Our dear colleague from Montana just quoted from correspondence that, so far as I can determine in talking to the majority and the minority side, no one else has. What I would like to propose is this\u2014 and I would like to have a copy of it. What I would like to propose is that we set this amendment aside to give all of us an opportunity to talk to the Treas- ury Department in the morning and as- certain exactly what the facts are so that we can debate tomorrow where we all are dealing with the same facts. We are all, obviously, entitled to our ideas. Jefferson once said good people with the same facts are going to dis- agree. But what I think is important that we do is that we be certain that we are all dealing with the same facts. What I will promise my colleague is that I will, obviously, read this memo, and I will talk tomorrow to the Treas- ury Department to ascertain exactly what happened. All of the documentation that I have that was made available to my office by the Department of Transportation shows that this simply was a best available estimate, which, obviously, is different now that we have additional data, as you would expect it to be. But I would certainly be willing to look at additional information from the Treas- ury Department. I think probably the best thing to do is to set this amend- ment aside and give us all an oppor- tunity to talk to the Treasury Depart- ment to try to ascertain what the facts are. That would be my suggestion. Mr. BENNETT. Mr. President, I sug- gest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The assistant legislative clerk pro- ceeded to call the roll. Mr. BUMPERS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BUMPERS. Mr. President, to say that it is a complex issue is an under- statement. I am not sure everybody on this floor fully understands what we are debating. But let me tell you what I do understand about it, and I wel- come the comments of either of the managers or the author of the amend- ment. We appropriate trust funds 2 years after we receive them. For instance, whatever we took in in the trust fund in 1994 is actually allocated to the States in 1996. That is my under- standing. As I say, I invite anybody to correct anything I say. I just want ev- eryone to understand what we are talk- ing about. So whatever the Treasury Depart- ment takes in in gasoline taxes, which is called the trust fund, in 1994, is allo- cated for use in 1996. So in 1994, appar- ently the Treasury Department made an error and took in $1.5 billion more VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00066 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9275 July 31, 1996 than they said they were going to have, and rather than try to correct the error at the time it was made, they said, ”Well, we will just save this until next year. We’ll put it in the 1995 alloca- tion.” Now, bear in mind that when you are allocating money in 1995, you are talk- ing about money that the States are going to get in 1996, simply because we appropriate money a year in advance. Mr. BAUCUS. Mr. President, if I might, a slight correction, 1995 is in 1997. Mr. BUMPERS. Please feel free to in- terrupt. Mr. BAUCUS. The 1995 determination affects the 1997 allocation, 2 years later. Mr. BUMPERS. Say that again, please. Mr. BAUCUS. The allocation made to States is determined by the receipts re- ceived 2 years earlier. So 1994 deter- mines 1996, and the amount in the trust fund in 1995 determines 1997. Mr. BUMPERS. You appropriate the money in 1995 for 1996, don’t you? Mr. BAUCUS. Yes. Mr. BUMPERS. That is correct? Mr. BAUCUS. That is correct. Mr. BUMPERS. That is right, you al- locate it 2 years later than the Treas- ury Department receives it. But the basic problem here is that the Treasury Department underestimated by $1.5 bil- lion 1994 receipts. So when it came time to appropriate the money from the trust fund in 1995, it was appropriated, not realizing the fact that they had $1.5 billion more than they thought they had. So this year, 1996, the States got an allocation of 1994 trust funds that was $1.5 billion short\u2014$1.6 billion, to be precise. Here is my problem. My State tells me that by the time the $1.5 billion error had been discovered, everybody knew it, and the great State of Arkan- sas got less money in 1996 than we were entitled to, and we were told that we would get it made up in 1997, which is the bill we are debating here tonight, the 1997 bill. So the 1997 money is being allocated here this evening and, lo and behold, an amendment is offered that would cause my State to be about $6.5 million short. Now, that is not a lot of money to a very many people. However, in the State of Arkansas, $6.5 million is a pretty good hunk of change. So Arkansas got less money in 1996 than we were supposed to get. We did not get our share of that $1.5 billion. And now they are taking it away from us again in 1997. So, as I say, that is my under- standing so far. And on that basis, of course, I do not have any choice but to vote against the Senator from Mon- tana’s amendment. I am hoping that a lot of other people will do likewise. I also note that the managers of this bill would like to get this thing done tonight so they can get out of here. I do not want to slow things up. But I would like, when all this conversation ends over here, to have somebody to comment on the things I have said, ei- ther refute the statement I made that we got less money in 1996 than we were supposed to get, or that we got more. But you should not penalize my State in 1997 and give us less money if we got penalized last year. That is what we call a double whammy. And it is not right and it is not fair. I yield the floor and suggest the ab- sence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The assistant legislative clerk pro- ceeded to call the roll. Mr. HATFIELD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. HATFIELD. Mr. President, at 7:45 I will make a motion to table the Baucus amendment and ask for the yeas and nays at that time. I say that at this point in order to give Members due warning and opportunity to return to the Hill. And I say this. We will make no other compensation for people being off the Hill until we finish this bill tonight. Everybody ought to be alert to the fact we may have votes at any time, and we are not going to delay a vote henceforth. But this vote will be called at 7:45. I, at that point, will make a motion to table. Mr. President, I ask unanimous consent that I be recog- nized at that time to make that mo- tion. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. HATFIELD. I thank the Chair and suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The assistant legislative clerk pro- ceeded to call the roll. Mr. HATFIELD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. f UNANIMOUS-CONSENT AGREE- MENT\u2014CONFERENCE REPORT TO ACCOMPANY H.R. 3603 Mr. HATFIELD. Mr. President, on behalf of the leader, I propound a unan- imous-consent agreement adopting the conference report accompanying H.R. 3603. This has been cleared on both sides. I ask unanimous consent that when the conference report accompanying H.R. 3603, the Agriculture, Rural Devel- opment, Food and Drug Administra- tion, and Related Agencies Appropria- tions Act for Fiscal Year 1997, is re- ceived in the Senate, that it be consid- ered as having been agreed to and the motion to reconsider be laid upon the table. The PRESIDING OFFICER. Without objection, it is so ordered. DEPARTMENT OF TRANSPOR- TATION AND RELATED AGEN- CIES APPROPRIATIONS ACT, 1997 The Senate continued with consider- ation of the bill. AMENDMENT NO. 5142 (Purpose: To transfer previously appro- priated funds among highway projects in Minnesota) Mr. LAUTENBERG. Mr. President, I ask unanimous consent to set aside the current amendment, and I send an amendment to the desk on behalf of Senator WELLSTONE and ask for its consideration. The PRESIDING OFFICER. Without objection, it is so ordered. The clerk will report. The assistant legislative clerk read as follows: The Senator from New Jersey [Mr. LAU- TENBERG], for Mr. WELLSTONE, proposes an amendment numbered 5142. Mr. LAUTENBERG. Mr. President, I ask unanimous consent the reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: At the appropriate place in title IV, insert the following: SEC. 4. TRANSFER OF FUNDS AMONG MINNESOTA HIGHWAY PROJECTS. (A) IN GENERAL.\u2014Such portions of the amounts appropriated for the Minnesota highway projects described in subsection (b) that have not been obligated as of December 31, 1996, may, at the option of the Minnesota Department of Transportation, be made available to carry out the 34th Street Cor- ridor Project in Moorhead, Minnesota, au- thorized by section 149(a)(5)(A)(iii) of the Surface Transportation and Uniform Reloca- tion Assistance Act of 1987 (Public Law 100 17; 101 Stat. 181) (as amended by section 340(a) of the National Highway System Des- ignation Act of 1995 (Public Law 104 59; 109 Stat. 607)). (b) PROJECTS.\u2014The Minnesota highway projects described in this subsection are\u2014 (1) the project for Saint Louis County au- thorized by section 149(a)(76) of the Surface Transportation and Uniform Relocation As- sistance Act of 1987 (Public Law 100 17; 101 Stat. 192); and (2) the project for Nicollet County author- ized by item 159 of section 1107(b) of the Intermodal Surface Transportation Effi- ciency Act of 1991 (Public Law 102 240; 105 Stat. 2056). Mr. LAUTENBERG. Mr. President, this amendment has been cleared by both sides. We are prepared to accept it. The PRESIDING OFFICER. The question is on agreeing to the amend- ment. The amendment (No. 5142) was agreed to. Mr. LAUTENBERG. I move to recon- sider the vote. Mr. HATFIELD. I move to table the motion. The motion to lay on the table was agreed to. AMENDMENT NO. 5143 (Purpose: To provide conditions for the im- plementation of regulations issued by the Secretary of Transportation that require the sounding of a locomotive horn at high- way-rail grade crossings) VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00067 Fmt 4624 Sfmt 8472 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9276 July 31, 1996 Mr. LAUTENBERG. Mr. President, I send an amendment to the desk on be- half of Senator WYDEN of Oregon and ask for its immediate consideration. The PRESIDING OFFICER. The clerk will report. The assistant legislative clerk read as follows: The Senator from New Jersey [Mr. LAU- TENBERG], for Mr. WYDEN, for himself and Mr. KERRY and Mrs. MOSELEY-BRAUN, pro- poses an amendment numbered 5143. Mr. LAUTENBERG. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: At the appropriate place, insert the fol- lowing new section: SEC. . TRAIN WHISTLE REQUIREMENTS. No funds shall be made available to imple- ment the regulations issued under section 20153(b) of title 49, United States Code, re- quiring audible warnings to be sounded by a locomotive horn at highway-rail grade cross- ings, unless\u2014 (1) in implementing the regulations or pro- viding an exception to the regulations under section 20153(c) of such title, the Secretary of Transportation takes into account, among other criteria\u2014 (A) the interests of the communities that have in effect restrictions on the sounding of a locomotive horn at highway-rail grade crossings as of July 30, 1996; and (B) the past safety record at each grade crossing involved; and (2) whatever the Secretary determines that supplementary safety measures (as that term is defined in section 20153(a) of title 49, United States Code) are necessary to provide an exception referred to in paragraph (1), the Secretary\u2014 (A) having considered the extent to which local communities have established public awareness initiatives and highway-rail cross- ing traffic law enforcement programs allows for a period of not to exceed 3 years, begin- ning on the date of that determination, for the installation of those measures; and (B) works in partnership with affected communities to provide technical assistance and to develop a reasonable schedule for the installation of those measures. Mr. WYDEN. Mr. President, the pur- pose of this amendment is to give local communities time to work with the Department of Transportation and the Federal Railroad Administration to find grade crossing safety mechanisms that meet their needs. Without this amendment, the Fed- eral Government, beginning in Novem- ber of this year, will impose a one-size- fits-all standard on every community in America with a railroad grade cross- ing. Many communities have banned the blowing of train whistles. But the Federal Government would preempt these local laws and impose a require- ment that trains begin blowing their whistles within one quarter mile of any crossing that does not have the most expensive grade crossing safety equip- ment. Without this amendment, every com- munity in America that doesn’t have the fancy, top-of-the-line grade cross- ing safety gates will be forced to go out and immediately spend upwards of $300,000+ to install this equipment, or face Federal preemption. This means small communities of several hundred will have to find $300,000 for this equip- ment, or see their local train whistle bans preempted by the Federal Govern- ment. Under current law, on November 2 of this year, all towns without complex and expensive grade safety require- ments will be required to lift their train whistle bans. What this means for some towns in Oregon and across the country, is that day and night the com- munities are going to be barraged with train whistles. These communities are essentially being blackmailed by cacophony into raising taxes and putting up exorbitant amounts of money to install highly so- phisticated safety measures\u2014when in many cases, much simpler measures would have the same desired results. My friends, there is a better way to do this. Safety is paramount, but under these train whistle requirements, what we are seeing is cookie-cutter solutions to safety that may not be appropriate for all communities. Many communities can make sub- stantial improvements in safety through public education, highway markings, and signage, but right now it looks like their only choice is a cost- ly four quadrant gates\u2014otherwise, they are going to be doomed to whis- tling trains. The original legislation, while plac- ing an important emphasis on train safety, left out one key issue and that is community involvement in the deci- sion making on train whistle bans. My very simple amendment would encourage the Department of Transpor- tation to work with communities to develop effective local solutions. First, the Department would be re- quired to take into account the inter- ests of affected communities and the past safety record at the grade crossing involved when determining how to im- plement safety requirements. Second, where the Department deter- mines that a grade crossing is not suf- ficiently safe, my amendment requires them to work in partnership with com- munities to develop reasonable safety requirements. In Oregon, there are two commu- nities in particular that are concerned about the train whistle ban require- ments, Pendleton and the Dalles. In these communities, trains may pass through certain neighborhoods every few minutes. Trains are required to blow their whistles one-quarter mile before reaching a grade crossing. Clear- ly this is a recipe for chaos. I think that it is important that the Department of Transportation work with these communities to develop ef- fective and timely safety measures, in- stead of mandating costly and perhaps unnecessary grade crossing equipment or threaten them with nonstop whis- tles. My amendment will do just this and I urge the Senate to support its inclu- sion in this legislation. Ms. MOSELEY-BRAUN. Mr. Presi- dent, this amendment provides impor- tant direction to the Department of Transportation with regard to the im- plementation of a provision of the Swift Rail Development Act of 1994. Under this 1994 law, the Federal Gov- ernment is required to develop regula- tions that direct trains to sound their whistles at all hours of the day and night at most at-grade railroad cross- ings around the country, unless the local communities can afford to act on a specified list of alternatives. The Swift Rail Development Act will re- quire trains to blow their whistles at approximately 168,000 railroad cross- ings in the U.S. and more than 9,900 in Illinois\u2014including about 2,000 in the Chicago area and 1,000 in Cook County alone. This provision was inserted into the 1994 law without debate or discussion. Communities had no input into the process, even though it will be commu- nities that will be most affected. I am acutely aware of the need to im- prove the safety of railroad crossings. A recent tragedy in my home State in- volving a train and a school bus in Fox River Grove, IL, killed seven children and shattered the lives of many more families. According to statistics pub- lished by the Department of Transpor- tation, someone is hit by a train every 90 minutes. In 1994, there were nearly 2,000 injuries and 615 fatalities caused by accidents at railroad crossings around the country. Clearly, ensuring the safety of our rail crossings is im- perative. The Swift Rail Development Act mandates that trains sound their whis- tles at every railroad crossing around the country that does not conform to specific safety standards. It does not take into consideration the affect of this action on communities, nor does it require the Department of Transpor- tation to take into consideration the past safety records at affected at-grade crossings. Requiring trains to blow their whis- tles at every crossing would have a considerable affect on people living near these crossings. It is unclear, how- ever, that there would be a commensu- rate improvement in safety. In Fox River Grove, for example, the engineer blew his whistle as he approached the road crossing, but the school bus did not move. At many railroad crossings in Illinois and elsewhere, accidents never or rare- ly occur, while some crossings are the sites of frequent tragedies. Just as we do not impose the same safety man- dates on every traffic intersection in the country, we should not universally require trains to blow their whistles at every railroad crossing in the country. When transportation officials decide to make safety improvements at a highway intersection, they consider a wide range of factors, including its ac- cident history, traffic patterns, and conditions in the surrounding area. Every intersection is a case study. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00068 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9277 July 31, 1996 There are guidelines, but not inflexible rules. The approach to railroad crossing safety should be no less reasoned. The train whistle should be one tool in the transportation safety official’s regu- latory repertoire; it should not be the only one. Because every community has a different history and different needs, I do not believe that a one-size- fits-all, top-down approach to railroad crossing safety is appropriate. In Dupage County, IL, for example, there are 159 public railroad crossings. In 1994, there were accidents at only 18 of these crossings, and 45 have not ex- perienced an accident in at least 40 years. On one of METRA’s commuter rail lines, 64 trains per day pass through 35 crossings. In the last 5 years, there have been a total of three accidents and one fatality along the entire length of this corridor. Every one of the crossings on this METRA commuter line has a whistle ban in place to preserve the quiet of the surrounding communities. The im- position of a Federal train whistle mandate on this line would, therefore, have a considerable negative impact on the quality of life of area residents. The safety benefits, on the other hand, would, at best, be only marginal. METRA’s Chicago to Fox Lake line has 54 crossings and is used by 86 trains per day. A whistle ban is in place on 37 of these crossings. Between 1991 and 1995, there were a total of 13 accidents on this line, with five injuries and one fatality. In Des Plaines, IL, one of my con- stituents reports that she lives near five crossings. In the last 11 years, there has been only one accident at any of these crossings. She will hear a train whistle at least 64 times per day and night. In Arlington Heights, IL, there are four crossings in the downtown area about 300 feet away from one another. 5,400 residents live within one-half mile of downtown, and 3,500 people commute to the area every day for work. Sixty- three commuter and four freight trains pass through Arlington Heights every weekday between the hours of 5:30 am and 1:15 am. Train whistles are blown at nearly 150 decibels, and depending on the weather, they can be heard for miles. According to one Burlington Northern railroad conductor, a train traveling from Downers Grove, IL to La Vergne, IL\u2014a distance of approximately 12 miles\u2014would have to blow its whistle 124 times. 144 trains travel this route every day. Mr. President, the residents of these communities, and others across Illinois and the country, are confused by the 1994 law that will require train whistles to sound at all hours of the day and night in their communities\u2014in some cases hundreds of times per day\u2014at railroad crossings that have not experi- enced accidents in decades, if ever. Under a Federal train whistle man- date, home-owners in many of these communities would experience a de- cline in their property values, or an in- crease in their local taxes in order to pay for expensive safety improvements. The 1994 law, in this respect, represents either a taking of private property value, or an unfunded mandate on local communities. The train whistle mandate places the entire burden on the community. Trains will keep rolling through quiet, densely populated towns at all hours of the night, and both the railroads and the passengers will experience no dis- ruptions. In aviation, by contrast, airline flights are routinely routed to mini- mize the disturbance to surrounding communities. Flight curfews are estab- lished, and restrictions are placed on certain types of aircraft in efforts to minimize the disruption to area resi- dents. These restrictions place burdens on airlines, passengers, and the com- munities; it is a joint effort. The pending amendment provides the Department of Transportation with im- portant direction on how to implement the train whistle law in a more ration- al and flexible manner. It directs the Secretary of Transportation to con- sider the interests of affected commu- nities, as well as the past safety records at affected railroad crossings. The concerns of local communities must be heard\u2014not just the sounds of train whistles. It also addresses safety concerns. In situations where railroad crossings are determined not to meet the supple- mentary safety requirements, commu- nities will have up to a maximum of 3 years to install additional safety meas- ures before the train whistle mandate takes affect. In these situations, the Department of Transportation will work in partnership with affected com- munities to develop a reasonable schedule for the installation of addi- tional safety measures. Mr. President, I have been concerned about the implementation of the Swift Rail Development Act since Karen Heckmann, one of my constituents, first brought it to my attention more than a year ago. Since that time, I have spoken and met with mayors, offi- cials, and constituents from Illinois communities, and visited areas that would be most severely affected. In re- sponse to their concerns, I have writ- ten several letters to, and met with Transportation Secretary Pen\u0303a and other officials numerous times, and have been working with the Depart- ment of Transportation to ensure that they implement the 1994 law in a man- ner that both works for communities and protects safety. This amendment provides important congressional direction to the Depart- ment of Transportation that is con- sistent with the ongoing discussions that I, and other members of Congress, continue to have with the Department. I urge all of my colleagues to vote for this important amendment. Mr. KERRY. Mr. President, today I was pleased to join with Senator WYDEN to cosponsor an amendment concerning an issue of great impor- tance to a number of my constituents. Many of them have contacted me about the 1994 Swift Rail Development Act [SRDA]. As you know, the SRDA al- lows for Federal preemption of local train whistle bans so that all trains would begin sounding their whistles one-quarter mile before reaching any grade crossing. My home State of Massachusetts has 88 grade crossings in some 27 commu- nities whose whistle bans would be pre- empted by this law. Many of these communities have good safety record: From January 1988 through June 1994, the Federal Railroad Administration [FRA] noted 34 accidents involving one fatality and 15 injuries at these cross- ings. Some of these communities are strongly opposed to Federal preemp- tion of their whistle bans. Their concerns were not allayed by FRA officials at a meeting that took place in Beverly on October 25, 1995 to discuss the SRDA. A member of my staff reported that many who attended desired outright repeal of the SRDA. As Christopher Smallhorn of Beverly Farms wrote: I doubt your representative will transmit to you the feeling of frustration and anger taken away by those taxpayers attending the meeting. A sampling of my correspondence from other constituents reveals that others share Mr. Smallhorn’s concerns. John J. Evans from Beverly Farms wrote: This proposed new regulation * * * will render my home uninhabitable as my house sits between two grade crossings. Fay Senner wrote: The safety at these railway crossings is a local issue and one that we have been able to manage effectively in the 150 years that rail- roads have been a part of life in Acton. Scott and Sharon Marlow of Andover wrote: My daughter was born with a cardiac mus- cle defect and I do not even want to think about the anguish loud whistle blasts would have caused my family or any other family with a heart condition. William C. Mullin, chairman of the Acton Board of Selectmen, wrote: If train whistles once again pierce the peace and quiet of our community, the anger of our residents will be quickly felt. Richard and Nancy Silva of Beverly wrote: The horn blowing will change the value of our home and add more stress in an already stressful environment. Diane M. Allen, chairman of the Wil- mington Board of Selectmen, wrote: We do not wish to have the Federal govern- ment set unjustifiable standards for our local roads nor do we want those decisions of our duly elected officials to be overridden by the Federal government. Nevertheless, the safety of railroad grade crossings is clearly a real issue, as the October 1995 school bus accident in Illinois sadly illustrates. The FRA has released a study show- ing that accidents occurred at fewer VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00069 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9278 July 31, 1996 than 6 percent of the Nation’s grade crossings where whistle bans are in ef- fect. A one-size-fits-all approach is therefore not appropriate. I am thus proud to cosponsor this amendment, which contains a more sensible strat- egy for dealing with this issue, and I compliment the Senator from Oregon and his staff for bringing it before the Senate. Knowing the impact that the SRDA is having on communities and constitu- ents in both Massachusetts and other States, I look forward to working with the FRA and my colleagues to ensure the safety of grade crossings without hurting the quality of life in our com- munities. I urge my colleagues to join in supporting the amendment. The PRESIDING OFFICER. The question is on agreeing to the amend- ment. The amendment (No. 5143) was agreed to. Mr. LAUTENBERG. I move to recon- sider the vote. Mr. HATFIELD. I move to table the motion. The motion to lay on the table was agreed to. Mr. HATFIELD. Mr. President, I in- dicate at this point, that with one ex- ception, we have completed all the Members’ amendments that we know about and were part of the unanimous- consent agreement we reached last night, which means the only amend- ments we have left, namely, two rel- evant amendments for Senator LOTT, six amendments on terrorism for Sen- ator LOTT, and the McCain amend- ment, as I understand it, and the Biden amendments, five of them on antiterrorism. We are about ready to have a completion of the Bradley amendment. We have completed all but the antiterrorism issue. Mr. President, first of all, it is not relevant to this bill in terms of it being legislative action on an appropriation. I am very hopeful that we can have an agreement reached to remove that encumbrance to com- pleting this bill and having final pas- sage. I believe that is the only other vote that we will have to have on this bill. We can do that following the vote that we are about ready to take up, on a ta- bling motion of the Baucus amend- ment. I urge any Member or any Member’s staff person who has knowledge of these amendments that we had in- cluded in our unanimous-consent agreement, if they have any different viewpoint, or if they have any ques- tion, they better address those ques- tions during the next vote and come to Senator LAUTENBERG and my desk here to go over the list to make sure they have been taken care of in our efforts to cover the remaining business. Otherwise, we will proceed to end in a couple of colloquies for the other two amendments, and hopefully by that time the leadership can give us some indication of what kind of an agree- ment may have been reached at a meeting that began at 6 o’clock to- night relating to the issue of antiterrorism. AMENDMENT NO. 5141 Mr. HATFIELD. With that, Mr. President, under the unanimous con- sent, I move to table the Baucus amendment, and I ask for the yeas and nays. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. The PRESIDING OFFICER. The question is on agreeing to the motion to lay on the table, the amendment No. 5141. The yeas and nays were ordered. The clerk will call the roll. The assistant legislative clerk called the roll. Mr. FORD. I announce that the Sen- ator from Arkansas [Mr. PRYOR] is nec- essarily absent. The PRESIDING OFFICER. Are there any other Senators in the Chamber de- siring to vote? The result was announced\u2014yeas 42, nays 57, as follows: [Rollcall Vote No. 260 Leg.] YEAS\u201442 Abraham Ashcroft Bond Boxer Breaux Brown Bumpers Campbell Coats Cochran Coverdell DeWine Faircloth Feingold Feinstein Frist Glenn Graham Gramm Grams Hatfield Helms Hutchison Inhofe Johnston Kohl Kyl Levin Lott Lugar Mack McCain Mikulski Nickles Nunn Robb Santorum Sarbanes Specter Thompson Warner Wellstone NAYS\u201457 Akaka Baucus Bennett Biden Bingaman Bradley Bryan Burns Byrd Chafee Cohen Conrad Craig D’Amato Daschle Dodd Domenici Dorgan Exon Ford Frahm Gorton Grassley Gregg Harkin Hatch Heflin Hollings Inouye Jeffords Kassebaum Kempthorne Kennedy Kerrey Kerry Lautenberg Leahy Lieberman McConnell Moseley-Braun Moynihan Murkowski Murray Pell Pressler Reid Rockefeller Roth Shelby Simon Simpson Smith Snowe Stevens Thomas Thurmond Wyden NOT VOTING\u20141 Pryor The motion to lay on the table the amendment (No. 5141) was rejected. Mr. COATS addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Indiana. Mr. COATS. I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. HATFIELD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. The Senate will be in order. The Senator from Oregon. Mr. HATFIELD. Mr. President, we have one colloquy to be delivered on the floor between Senator BRADLEY and the leader, Senator LOTT. Then we have the possibility of another per- fecting amendment, or an amendment dealing with the subject we have just failed to table; we have a Cohen amend- ment to be dispensed with, and then we are ready for third reading. AMENDMENT NO. 5141 The PRESIDING OFFICER. The pending question is the Baucus amend- ment. Is there further debate on the Baucus amendment? Mr. HATFIELD. I ask unanimous consent to temporarily lay aside the amendment at the moment to engage in a colloquy. The PRESIDING OFFICER. Is there objection? Mr. COATS. Mr. President, reserving the right to object, I will not object to proceed with business outside the scope of the Baucus amendment, but I want to preserve the right to offer or to join with others in offering an amendment on that subject. So I just want to put Members on notice that this bill is not going to go forward until we have that opportunity to do so. Mr. HATFIELD. Mr. President, I think I indicated the other part of the business was to complete that issue, so we are not cutting off anybody’s right to offer an amendment. Mr. BIDEN. Mr. President, will the Senator yield for a comment? Mr. HATFIELD. Yes. Mr. BIDEN. Mr. President, I have placed, I think, three or four spots for amendments. Mr. HATFIELD. Five. Mr. BIDEN. Five spots. I want to re- port that due to the great work of the full committee, Senator HATCH and I have elements of a bipartisan agree- ment on terrorism, and as a con- sequence of that I am not going to offer any of the amendments on this legisla- tion. Mr. HATFIELD. I thank the Senator. That will also affect five or six other amendments on both sides. Mr. BIDEN. I understand they have placed five or six slots based on that. I do not think there will be any amend- ments on terrorism on this legislation. Mr. HATFIELD. Senator BRADLEY. The PRESIDING OFFICER. Without objection, the Baucus amendment is set aside. Mr. BRADLEY addressed the Chair. The PRESIDING OFFICER. The Sen- ator from New Jersey. Mr. BRADLEY. Mr. President, I have an amendment that deals with newborns and insurance coverage for newborns, a bill that Senator KASSE- BAUM and I introduced last year. It is a bill that had been improved greatly with the help of Senator FRIST and Senator DEWINE and a bill that I care deeply about. Mr. LOTT. Mr. President, will the Senator from New Jersey yield? VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00070 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9279 July 31, 1996 Mr. BRADLEY. I am pleased to yield to the majority leader. Mr. LOTT. I would like to say I have been aware of this issue the Senator from New Jersey is discussing. There was an attempt made earlier to get it cleared for unanimous consent. We did not get that done. But I want to tell the Senator I will be glad to work with him to get this issue considered the first week in September. I think it is something that we should take up and have an opportunity to consider. In order to help expedite this legislation but also because I think he has a good point, I want to make the further statement I will work with him to get that accomplished. Mr. BRADLEY. I thank the majority leader for his statement and his com- mitment, and I will not pursue the amendment based on what he has said. I think that Senator FRIST of Ten- nessee concurs. I simply want the Senate to know that this is an enormously important issue in terms of children who are born and forced out of the hospital in the first 24 hours instead of the first 48 hours, and we hope to revisit this issue when we come back in September. I am prepared to yield to Senator FRIST if he has anything to say on this amendment. Mr. FRIST. Thank you, Mr. Presi- dent. I would just like to say that we have worked long and hard on this bill, the Newborn’s and Mother’s Health Protection Act of 1996. It is a bill we worked on in a bipartisan way and pro- vides a safe haven for mothers with young children. I am delighted the ma- jority leader\u2014\u2014 The PRESIDING OFFICER. The Sen- ator will withhold. The Senate will be in order. The Senator from Tennessee deserves to be heard. The Senate will be in order. Mr. FRIST. Thank you, Mr. Presi- dent. This bill does provide a safe haven for mothers and young children over a 48- hour period. It is a bill we have worked on in a bipartisan way, and do appre- ciate the consideration the majority leader has given to take this up after Labor Day. The PRESIDING OFFICER. The Sen- ator from Oregon. Mr. HATFIELD. Mr. President, I think we have two final technical amendments to dispose of? Mr. LAUTENBERG. That is correct. We are also reviewing a matter with the Senator from Maine and the Sen- ator from New Hampshire. I hope we will be able to have that resolved. Mr. HATFIELD. I believe the Senator from Maine said he would withdraw his? Mr. CHAFEE. No, I do not believe that is correct. Mr. HATFIELD. OK, let us do the technical amendments. AMENDMENTS NOS. 5144 AND 5145, EN BLOC Mr. LAUTENBERG. Mr. President, I have a technical correction to the bill that simply changes the wording with- out changing any sums; and one that makes reference to direct loans. We have cleared this with both sides. I send them to the desk for their consid- eration. The PRESIDING OFFICER. Is there objection to considering the amend- ments en bloc? Without objection, the clerk will report the amendments. The legislative clerk read as follows: The Senator from New Jersey [Mr. LAU- TENBERG] proposes amendments numbered 5144 and 5145, en bloc. Mr. LAUTENBERG. Mr. President, I ask unanimous consent that reading of the amendments be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendments are as follows: AMENDMENT NO. 5144 (Purpose: To make a technical correction) On page 19, strike lines 10 through 12 and insert ”For the cost of direct loans, $8,000,000, as authorized by 23 United States Code 108.” AMENDMENT NO. 5145 (Purpose: To make a technical correction to the bill) On page 60, line 20, strike ”103 311” and in- sert ”103 331”. The PRESIDING OFFICER. If there be no further debate, the question is on agreeing to the amendments, en bloc. The amendments (Nos. 5144 and 5145), en bloc, were agreed to. Mr. LAUTENBERG. Mr. President, I move to reconsider the vote. Mr. HATFIELD. I move to lay that motion on the table. The motion to lay on the table was agreed to. Mr. HATFIELD. Mr. President, I might indicate following any action to be taken on the subject of the Baucus amendment, we are ready for third reading of the bill and final passage. I thank the Senators on the antiterrorism amendments, of which we had 11, for reaching an agreement to not pursue them on this particular bill but to have them as a matter of business to be taken up at a later time. Mr. President, I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. HATFIELD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. HATFIELD. Mr. President, I move, after final passage, the Senate insist on its amendments, request a conference with the House on the dis- agreeing votes of the two Houses, and the Chair appoint conferees on the part of the Senate. The PRESIDING OFFICER. Is there objection? Mr. BYRD. Mr. President, reserving the right to object, I cannot hear what the Senator has asked for in his re- quest. Mr. HATFIELD. I will repeat. It would be to move ahead on the premise we are going to pass this bill in final passage in a few moments, and to go ahead and appoint the conferees. Mr. BYRD. Mr. President, I have to object. That is getting a little ahead of the game. The PRESIDING OFFICER. Objec- tion is heard. Mr. BYRD. The only reason I do ob- ject, I think that request should wait, I say this with apologies to my dear friend, until the final vote on the bill occurs. The PRESIDING OFFICER. Who seeks recognition? Mr. FORD. I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. DORGAN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. DORGAN. Mr. President, I sim- ply rise to inquire of the Senator from Oregon when we might expect final passage on the legislation? I have a couple of young children who go to bed at 9 o’clock, and it would be kind of nice to get home. It appears we are through the end of the amendment process. I had a couple of amendments that I referenced that I did not offer. I wanted to expedite the process of this legislation. But if we are near completion, I wonder if the Senator can inform us when he can ex- pect final passage. Mr. HATFIELD. Mr. President, I will respond that we have a piece of unfin- ished business before we can go to third reading. The Baucus amendment was not tabled, and we have not disposed of that amendment. There is a process now, I am hoping, of finding some ac- commodation in order to dispose of the Baucus amendment. The Senator from North Dakota cer- tainly made a correct point. We should have had this bill passed yesterday. If we are going to do the HUD-VA and independent agencies tomorrow, Friday and Saturday, we have to get this bill behind us. So consequently, we are waiting for that occasion to accommo- date the Senators who have an interest in that. As soon as that resolved issue is brought to us, we will do that and third reading. Mr. DORGAN. I appreciate the Sen- ator’s response. None of us enjoy wait- ing. On behalf of the Senator from Con- necticut, Mr. LIEBERMAN, who has a young daughter who expects to wait up for him as well, to the extent we can move ahead, I think all of us would ap- preciate it. Mr. HATFIELD. I might say, we have a parliamentary situation beyond an accommodation here to the Senators. We are in a parliamentary situation. We cannot go to third reading until there is a final disposition of either adopting the Baucus amendment or modifying the Baucus amendment. So that is where we are locked in. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00071 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9280 July 31, 1996 Mr. President, I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. LOTT. Mr. President, I ask unan- imous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. LOTT. Mr. President, I thank the chairman of the Subcommittee on Transportation and the ranking mem- ber for their efforts. I believe we are about ready to wrap up this very im- portant appropriations bill. There are good-faith negotiations underway right now. I am hopeful in the next few min- utes we will have an agreement on how to deal with the Baucus-Gramm mat- ter. I think we have a reasonable sug- gestion that can be agreed to. Cer- tainly we hope so. Then when that is done, we will be able to go to third reading and final passage of the transportation appro- priations bill tonight. There has been some suggestion that we carry this over until tomorrow, but as we know, things have a way of growing over- night. The chairman and the ranking mem- ber are absolutely right, as we are very close to completing this appropriations bill. So if Members will be patient a few more minutes, I think we can get it completed and go to final passage. f ORDER OF PROCEDURE Mr. LOTT. Mr. President, for the in- formation of all Senators, we will go tomorrow morning at 9:30 immediately to the reconciliation bill, which is the welfare package. Under the rules I think there are 10 hours allowed for that. Some of that time may be yielded back. So we would spend the bulk of the day tomorrow on that issue with the vote coming sometime late tomor- row afternoon. I believe the Demo- cratic leader would appreciate it com- ing later on in the afternoon. We will work with him to get a time that meets with his needs. Then we would go to some conference reports that may be available. Re- corded votes may be requested on those\u2014legislative appropriations, D.C. appropriations. Then we would hope to take up the HUD-VA appropriations bills tomorrow night, and stay with that until we have other conference re- ports that may be available. There has been an agreement reached and the conferees’ signatures acquired on the health insurance reform pack- age. Senator KASSEBAUM, Senator KEN- NEDY, many others have done a lot of good work on that. So we should be able to take up that health insurance package on Friday. I understand agreement has also been reached on the safe drinking water con- ference report, which is a very impor- tant bill. And we have sort of a dead- line on that one. If we do not act on it by Friday, there is some $725 million that would move over into another fund. So really good work is being done. Also, there has been a press con- ference this afternoon with regard to the terrorism task force efforts. We have had our colleagues on both sides of the aisle working with the Chief of Staff and the White House. And they had announced earlier this afternoon, or about 2 hours ago, that they had made substantial progress. We believe we can take up an agreed-to package on the terrorism issue hopefully tomor- row or Friday. So a lot of good work has been done today. We will have this final vote here hopefully in just a few minutes and begin with welfare reform in the morn- ing. Mr. President, I yield the floor and suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. f DEPARTMENT OF TRANSPOR- TATION AND RELATED AGEN- CIES APPROPRIATIONS ACT, 1997 The Senate continued with consider- ation of the bill. Mr. COHEN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. AMENDMENT NO. 5146 (Purpose: To prevent the Department of Transportation from penalizing Maine or New Hampshire for non-compliance with federal vehicle weight limitations) Mr. COHEN. Mr. President, on behalf of myself, Senator SNOWE, Senator SMITH, and Senator GREGG, I send an amendment to the desk and ask for its immediate consideration. The PRESIDING OFFICER. The clerk will report. The legislative clerk read as follows: The Senator from Maine [Mr. COHEN], for himself, Ms. SNOWE, Mr. SMITH, and Mr. GREGG, proposes an amendment numbered 5146. Mr. COHEN. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: Insert at the appropriate place: No funds appropriated under this act shall be used to levy penalties prior to September 1, 1997 on the States of Maine or New Hamp- shire based on non-compliance with federal vehicle weight limitations. Mr. COHEN. Mr. President, this is an amendment that pertains to the States of Maine and New Hampshire, dealing with weight limit for trucks. We have worked in close conjunction with the Senator from New Jersey, the Senator from Montana, and the Sen- ator from Rhode Island. They have agreed that the amendment should be adopted. It would defer imposition of penalties or the use of funds to impose penalties prior to September 1, 1997. That is acceptable to both sides. Mr. LAUTENBERG. Mr. President, I think this is a good solution to a dif- ficult problem. I commend the Sen- ators from New Hampshire and Maine for their cooperation here. We accept it on this side. Mr. HATFIELD. Mr. President, the amendment has been one of long stand- ing on our list. I am happy to be able to dispose of it. It has been cleared, as indicated by the Senator from Maine, by the author- izing committees, by the ranking mem- ber, as well as the chairman of the au- thorizing committee, and has been cleared by the two managers. The PRESIDING OFFICER. The question is on agreeing to the amend- ment. The amendment (No. 5146) was agreed to. Mr. LAUTENBERG. I move to recon- sider the vote. Mr. HATFIELD. I move to table the motion. The motion to lay on the table was agreed to. Mr. LAUTENBERG. Mr. President, I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The bill clerk proceeded to call the roll. Mr. GRAMM. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. AMENDMENT NO. 5147 TO AMENDMENT NO. 5141 Mr. GRAMM. Mr. President, I send a second-degree amendment to the desk and ask for its immediate consider- ation. The PRESIDING OFFICER. The clerk will report. The bill clerk read as follows: The Senator from Texas [Mr. GRAMM], for himself, Mr. BOND, Mr. COATS, Mr. ABRAHAM, Mr. FAIRCLOTH, Mrs. HUTCHISON, Mr. LEVIN, and Mr. WARNER, proposes an amendment numbered 5147 to Amendment No. 5141. Mr. GRAMM. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with. The PRESIDING OFFICER. Without objection, it is so ordered. The amendment is as follows: At the end of the amendment, add the fol- lowing: SEC. . Prior to September 30, 1996, the Secretary of the Treasury and the Secretary of Transportation shall conduct a review of the reporting of excise tax data by the De- partment of the Treasury to the Department of Transportation for fiscal year 1994 and its impact on the allocation of Federal-aid high- ways. If the President certifies that all of the fol- lowing conditions are met: 1. A significant error was made by Treas- ury in its estimate of Highway Trust Fund revenues collected in fiscal year 1994; 2. The error is fundamentally different from errors routinely made in such esti- mates in the past; 3. The error is significant enough to justify that fiscal year 1997 apportionments and al- locations of Highway Trust Funds be ad- justed; and finds that the provision in B ap- propriately corrects these deficiencies, then subsection B will be operative. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00072 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9281 July 31, 1996 (b) CALCULATION OF FEDERAL-AID HIGHWAY APPORTIONMENTS AND ALLOCATIONS.\u2014 (1) IN GENERAL.\u2014Except as provided in paragraph (2), for fiscal year 1997, the Sec- retary of Transportation shall determine the Federal-aid highway apportionments and al- locations to a State without regard to the approximately $1,596,000,000 credit to the Highway Trust Fund (other than the mass Transit Account) of estimated taxes paid by States that was made by the Secretary of the Treasury for fiscal year 1995 in correc- tion of an accounting error made in fiscal year 1994. (2) ADJUSTMENTS FOR EFFECTS IN 1996.\u2014The Secretary of Transportation shall, for each State\u2014 (A) determine whether the State would have been apportioned and allocated an in- creased or decreased amount for Federal-aid highways for fiscal year 1996 if the account- ing error referred to in paragraph (1) had not been made (which determination shall take into account the effects of section 1003(c) of the Intermodal Surface Transportation Effi- ciency Act of 1991 (Public Law 102 240; 105 Stat. 1921)); and (B) after apportionments and allocations are determined in accordance with paragraph (1)\u2014 (i) adjust the amount apportioned and allo- cated to the State for Federal-aid highways for fiscal year 1997 by the amount of the in- crease or decrease; and (ii) adjust accordingly the obligation limi- tation for Federal-aid highways distributed to the State under this Act. (3) NO EFFECT ON 1996 DISTRIBUTIONS.\u2014Noth- ing in this section shall affect any apportion- ment, allocation, or distribution of obliga- tion limitation, or reduction thereof, to a State for Federal-aid highways for fiscal year 1996. (4) EFFECTIVE DATE.\u2014This section shall take effect on September 30, 1996. Mr. GRAMM. Mr. President, I think we have put together a good com- promise here. It sets up three condi- tions that have to be met. It mandates that the Secretary of the Treasury and the Secretary of Transportation will look at the issue, which has been raised by our colleague from Montana, and if they make three findings concerning its significance\u2014if the President, based on their study, makes those three find- ings, then the provision of the Senator from Montana will be offered in the bill. The Senator from Montana has agreed to this amendment. I thank him for working with us on this. Mr. BAUCUS. Mr. President, this is an accommodation to allow us to pro- ceed with the bill. I think it meets the objective of the Senator from Texas, and as to another look at the degree to which there is an accounting clerical error, it is also significant. It is my view that it is. It is altogether appro- priate that we crafted the amendment in a way so that the Senators who were concerned about this issue are better reassured that this error was, in fact, made. Second, it accommodates our inter- ests because it is quite clear that an error was made, and I feel quite con- fident that the administration, in reex- amining this, will make the proper cer- tification. Nevertheless, it helps us get a little better record and a better sense of what actually did happen here. That suits the interests of all Senators all the way around. I thank my colleague from Texas for helping craft this amendment. I urge its adoption. Mr. COATS. Mr. President, I think it is also important to understand why some of us are so sensitive on issues like this. Coming from a donor State, a State that over the years has consist- ently contributed substantially more to the highway trust fund than it re- ceives back, we are sensitive about any changes in formulas that result in a further loss of funds to our State. Now, it appears that a technical error was made and not a formula change. The resulting formula change corrects that area rather than being a formula designed to benefit some States at the expense of others. I think a number of us who come from those donor States\u2014and 16 of the 19 States affected here that lose money are donor States\u2014felt that we needed a certification as to the validity of that particular technical error and the fact that this proposal by the Senator from Montana corrects that error in the cor- rect fashion. So the certification here will allow us to receive that informa- tion. I think it will leave us with some feeling that we are adopting the right procedures here in terms of certifying the accuracy of this. So I thank the Senator from Mon- tana for his willingness to work with us. I particularly thank the Senator from Texas for his ability to discern and take a complex issue and put it into understandable amendment form in a fairly short amount of time. I thank him for his efforts. Mr. LEVIN. Mr. President, let me also thank the Senator from Texas, the Senator from Indiana, the Senator from Montana, and others for working on the second-degree amendment. I have a question of the Senator from Texas. Does the second-degree amendment make any change in the underlying for- mula? Mr. GRAMM. No. Mr. LEVIN. Let me add one comment and one thought to what the Senator from Indiana said. All but three or four of the States which would lose money if this allocation were made according to the amendment are States which al- ready are ahead of the game. They are donee States\u2014three or four. Those of us that are donor States, so-called, there are 20 of us. When we look at this kind of amendment and see that, it ob- viously makes us somewhat skeptical. Again, most of the States by far that would be on the giving end are the same States that already are, under the formula, on the giving end. That may be a coincidence. It may be that the alleged error happened to work out that way. But I want to join the Senator from Indiana in expressing the sensitivity of the States that already give much more than they get back under the for- mula. My question to the Senator from Texas is this: Can he state for the Record what those three findings are? Mr. GRAMM. Let me get back the copy of the amendment. The three findings are\u2014let me make it clear because I want to be certain, given what the Senator from Indiana said, we are not making the judgment here of whether or not an error was made. It is my belief that probably is not the case, as the Senator from Mon- tana believes that it was the case. We are setting up objective criteria to have a judgment, so we are not pre- judging that based on anything we say here. Let me just read it. The Secretary of the Treasury and the Sec- retary of Transportation shall conduct a re- view of the reporting of excise tax data by the Department of Treasury to the Depart- ment of Transportation for FY ’94 and its impact on the allocation of Federal aid high- ways. If the President certificates that all of the following conditions are met: 1. A significant error was made by Treas- ury in its estimate of highway trust fund revenues collected in FY ’94; 2. The error is fundamentally different from errors routinely made in such esti- mates in the past; 3. The error is significant enough to justify that FY ’97 apportionments and allocations of highway trust funds be adjusted; and finds that provisions in B\u2014 That is the Baucus amendment. appropriately corrects these deficiencies, then subsection B\u2014 Which is the Baucus amendment. will be operative. Mr. LEVIN. I thank the Senator. I ask unanimous consent that I be added as a cosponsor to that second-de- gree amendment. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BOND. Mr. President, I ask on behalf of the Senator from Virginia, Senator WARNER, that he be added as a cosponsor to the amendment. The PRESIDING OFFICER. Without objection, it is so ordered. Mr. BOND. Mr. President, I join in thanking my colleague from Montana for his willingness to work with us on this amendment. Mr. COATS. Mr. President, I would also like to add my name as a cospon- sor to the Gramm amendment, if I am not already on it. The PRESIDING OFFICER. Without objection, it is so ordered. Is there further debate on the amend- ment? If not, the question is on agree- ing to the second-degree amendment of the Senator from Texas. The amendment (No. 5147) was agreed to. The PRESIDING OFFICER. The question is now on the underlying Bau- cus amendment, the first-degree amendment. The amendment (No. 5141) was agreed to. Mr. LAUTENBERG. Mr. President, I move to reconsider the vote by which the amendment was agreed to. Mr. HATFIELD. I move to lay that motion on the table. The motion to lay on the table was agreed to. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00073 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9282 July 31, 1996 SHILOH INTERCHANGE Mr. BURNS. Mr. President, I would like to discuss the importance of the Shiloh Interchange in Billings, MT. ISTEA authorized this project for $11 million. However, since that authoriza- tion the cost of the project has in- creased by an additional $3 million. The Senator from Oregon is aware of the request I have made to include an additional $3 million for this project. Mr. HATFIELD. Yes, you have re- quested additional funds for this project. However, criteria established in the One-hundred-and-fourth Con- gress by the Transportation Appropria- tions Subcommittee of the House pre- cludes me from being able to accommo- date the Senator from Montana’s re- quest. The subcommittee has an ironclad rule that no highway projects which are not authorized be included for fund- ing under the appropriations bill. In addition, no increases above the au- thorized levels will be included. Given the level of single-purpose projects in- cluded in ISTEA the ability of the Ap- propriations Committee to accomodate the Senator’s request has been severely reduced, and such adjustments need to be made in the authorizing legislation. Mr. BURNS. I appreciate the Chair- man’s clarification and consideration. Have any non-authorized levels for highway projects been included in ei- ther the FY96 law or the current bill being considered by the Senate? Mr. HATFIELD. No, there are no in- creases above the authorized level in the fiscal year 1996 act or the fiscal year 1997 bill currently under consider- ation. Mr. BURNS. I thank the Chairman, and I yield the floor. SURFACE TRANSPORTATION BOARD Mr. BURNS. Mr. President, as we focus upon the Transportation budget for the upcoming fiscal year, I would like to discuss with you a number of points regarding the Surface Transpor- tation Board [STB] in light of the ICC Termination Act. The statutorily mandated time frames have been complied with in the latest merger. The STB should assign a priority to the handling of old cases. For example, those cases pending more than 3 or 4 years before the effective date of the ICC Termination Act. In addition, the STB’s own release as to its recent pub- lic vote in the Union Pacific\/Southern Pacific merger, it was indicated that considerable weight was given to the managerial judgment of the applicants. Since that application had been pend- ing prior to the effective date of the ICC Termination Act, similar treat- ment should be given to the other long- pending cases. The STB’s policy should be based on the widest perspective as to railroad proposals, be they mergers, construc- tions, line extensions, or rates, that will benefit area-wide economies in ad- dition to the applicants themselves. Also, the Board should encourage rail proposals compatible with the require- ments of appropriate environmental laws and should continue its policy of promoting competition in rail trans- portation which I believe will benefit the consumer. Mr. HATFIELD. The Senator’s points are well-taken. Long-pending cases of this type should be decided promptly. Such action would be particularly war- ranted with rail proposals that will benefit area-wide economies, promote competition, or foster the objectives of our environmental laws. I would hope that such public interest consider- ations would merit early resolution. Mr. BURNS. I thank the Chairman. MICHIGAN TRANSIT PROJECTS IN THE TRANSPOR- TATION APPROPRIATIONS BILL, FISCAL YEAR 1997 Mr. LEVIN. Mr. President, my col- league from Michigan and I would like to join the distinguished chairman of the Senate Appropriations Committee in a brief colloquy regarding Michigan transit projects in the bill before the Senate. We are seeking to resolve the dif- ferences between the House and Senate Appropriations Committee reports on Transportation appropriations for fis- cal year 1997 that relate to section 3 bus and bus facility funding for Michi- gan. Hopefully, the proposal from the Michigan Department of Transpor- tation, as embodied in the chart below, can be useful to the conference com- mittee when it meets. I ask unanimous consent that the chart be inserted into the record following our discussion. The PRESIDING OFFICER. Without objection, it is so ordered. (See exhibit 1.) Mr. LEVIN. We have sent the chart to the Michigan House Members whose districts are affected. Because of the short time, explicit support for this ar- rangement has not been received from all of them. However, this distribution appears to be a fair compromise be- tween the House and the Senate com- mittees report language. Barring any significant objection from Michigan’s House Members, I urge the conferees to retain the total Senate funding level of $20 million provided for section 3 tran- sit projects and accommodate the dis- tribution in the chart. I would hope that the distinguished chairman of the Senate Appropriations Committee would do his utmost to pre- serve the Senate level in conference. As the Senator from Oregon is aware, his State is a donor State like Michi- gan, and as such, receives less than an even return on the gas taxes contrib- uted into the Highway Trust Fund, from which transit funds are derived. Though that return was improved by ISTEA for highways, States like Michi- gan, and I suspect Oregon, continue to be significant donor States on transit projects. This formula matter must be addressed when Congress next takes up reauthorization of ISTEA. Mr. HATFIELD. I appreciate the in- terest of the Senators and their input in helping to recommend a resolution of the differences between the House and Senate report language on transit projects in Michigan. Mr. ABRAHAM. I fully support the remarks of my fellow Michigan Sen- ator regarding the unfair distribution of transit funds, and how the Senate must insist on the higher total funding level of $20 million for the State of Michigan. However, I wish to further elaborate on the distribution of these funds within the State of Michigan. The Michigan Department of Trans- portation has provided our offices with a project by project breakdown of this distribution, which Senator LEVIN has introduced. Per the fiscal year 1996 Transportation Appropriations Con- ference report, the full $1.23 million final project funding is recommended for the Lansing Intermodal Facility. Furthermore, we, in coordination with the Michigan Department of Transpor- tation [MDOT], recommend that at least $1.8 million be appropriated for the Grand Rapids Area Transit Author- ity, and at least $900,000 to the Kala- mazoo Transit Authority for buses and an intermodal facility. Finally, MDOT believes that as a start-up project, no more than $764,000 is needed for the Dearborn Intermodal Facility. No more than the remaining $7.13 million, in our coordinated opinion with MDOT, should be appropriated to MDOT for statewide distribution. There are other projects enumerated in the MDOT pro- posal, which melds the House and Sen- ate marks, which we also believe de- serve the designated level of support. Mr. President, I would ask the chair- man of the Appropriations Committee whether he cares to comment on this proposal? Mr. HATFIELD. Considering the ex- tensive discussions I know the two Senators from Michigan have con- ducted with their State and local gov- ernments over this proposal, I wish to assure both Senators that I will make every effort to ensure their proposal is given full consideration in conference discussions with the House. EXHIBIT 1 Transit agency Description Federal funds Lansing ………………………….. Facility …………………………… $1,230,000 SMART …………………………… Buses and facility ………….. 1,800,000 GRATA ……………………………. Facility …………………………… 1,800,000 Flint ………………………………. Facility …………………………… 1,800,000 Kalkaska ………………………… Facility …………………………… 576,000 Kalamazoo ……………………… Buses and facility ………….. 900,000 DDOT ……………………………… Buses and facility ………….. 2,000,000 Dearborn ………………………… Intermodal facility ………….. 764,000 Detroit ……………………………. Intermodal facility ………….. 2,000,000 Subtotal …………….. ……………………………………… 12,870,000 Total ………………….. ……………………………………… 20,000,000 ADVANCED TECHNOLOGY BUS Mrs. BOXER. Mr. President, I would like to ask the esteemed chairman of the Senate Appropriations Committee, Senator HATFIELD, if he would yield to a question regarding the transpor- tation appropriations bill. Mr. HATFIELD. I would be pleased to yield to the Senator from California. Mrs. BOXER. Thank you. I first want to personally praise the distinguished chairman for this appropriations bill VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00074 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9283 July 31, 1996 which does so much to enhance the safety and infrastructure investment in our Nation’s transportation systems. I know the Senator is a long-time sup- porter of renewable energy tech- nologies and transportation which uses clean fuels that preserve air quality in our Nation’s cities. I am particularly pleased at the com- mittee’s decision to approve the Presi- dent’s request for funding the Ad- vanced Technology Transit Bus [ATTB]. This project, under develop- ment in Los Angeles, uses the expertise of our defense aerospace industry to build a next-generation transit bus that will run on a variety of clean fuels, will provide considerable mainte- nance savings to our transit agencies and will provide conveniences for dis- abled passengers. The committee included by request for $13.1 million in bus discretionary funding to deploy five bus prototypes for transit agencies participating in the project across the country. The President had also requested $6.5 mil- lion in his budget to complete the re- search program under the National Planning and Research budget of the Federal Transit Administration. The committee fully funded the President’s request for Transit Planning and Re- search, but did not specifically refer to the Advanced Technology Transit Bus. As the chairman knows, the prototype development will be dependent on the completion of the research phase. I ask the chairman whether the Transportation Appropriations com- mittee report excludes support for the ATTB research funding? In addition, since fuel cell technology is one of the propulsion systems proposed for the ATTB, would some funding for the Fuel Cell Transit Bus Program also be avail- able to the ATTB project? Mr. HATFIELD. I assure my col- league from California that the com- mittee report does not mean the com- mittee does not support research fund- ing for the ATTB. I point out that the report also states that the committee has not earmarked projects mentioned in the House report that are not listed in this report. This action is taken without prejudice to final decisions on project funding that will be made in conference. The fuel cell component of the ATTB is an important part of the project, and I will make every effort to ensure that it is considered for funding. Mrs. BOXER. I thank the Senator for his support for the research and de- ployment of the Advanced Technology Transit Bus. Mrs. FEINSTEIN. I would like to en- gage in a colloquy with the chairman of the committee to clarify the sub- committee’s intent with respect to the committee report language relating to the BART SFO extension. Specifically, I would like to address the stipulation contained in the com- mittee report that would prevent the Federal Transit Administration from entering into a full funding grant agreement for the BART SFO exten- sion until all litigation regarding the project has been resolved. I have very strong concerns that this requirement could result in indefinite delays in the project. Further, I understand Sec- retary Pen\u0303a, Governor Wilson, and the Federal Transit Administration [FTA] share these same concerns. I understand it is not the chairman’s intent with this report language to kill this project. Further, the chairman does not intend to impose any restric- tions on the BART SFO extension that have not previously been demanded of this and other transit projects seeking full funding grant agreements from the FTA. I have a July 30 letter from Secretary Pen\u0303a stating that the language con- tained in the committee report could encourage lawsuits and further that he would prefer not to see this language included. I understand the chairman does not intend to encourage frivolous lawsuits with this language, and fur- ther, I understand in speaking with the chairman that I can be assured this committee report language will be re- vised during the conference negotia- tions with the House to reflect the chairman’s intent to move ahead with this project. Mr. HATFIELD. That is my under- standing. Mrs. BOXER. I ask the President if the chairman would yield to another question. Mr. HATFIELD. I would be happy to yield to the senator from California. Mrs. BOXER. We appreciate the chairman’s past support for this project and knows he understands the value of providing key connections for transit with other modes of travel, such as airports. We also appreciate his concerns over local participation in the decision-making for such a project. We would like to remind the chairman that this project has been on the local ballots and approved by our voters on three previous occasions. It enjoys wide community support. We under- stand from the county counsel of San Mateo County that as of July 16, 1996, any new initiative petition would be too late to qualify for the November 1996 ballot. Is it the chairman’s understanding that the committee report language will not necessitate another vote in 1996 if the time for qualifying such ini- tiative has expired? Mr. HATFIELD. That is my under- standing. I thank the Senators for bringing their concerns to me. DIGITAL BRITE RADAR INDICATOR TOWER EQUIP- MENT (DBRITE) AT THE GAINESVILLE-ALACHUA REGIONAL AIRPORT Mr. MACK. Mr. President, I would like to engage the Chairman in a brief colloquy on critical issues affecting the Gainesville-Alachua Regional Airport and the State of Florida. Mr. HATFIELD. I would be pleased to engage in a colloquy with the Senator from Florida on this matter. Mr. MACK. I would first like to thank the Chairman for his leadership and the fine work of his subcommittee in keeping the highways, railways and airways of this Nation safe and effec- tive in meeting the transportation needs of our citizens. Mr. HATFIELD. I thank my friend and colleague. Mr. MACK. I believe you are aware, Mr. Chairman, of the situation con- fronting the Gainesville-Alachua Re- gional Airport in their effort to obtain a radar upgrade and the installation of a DBRITE system. Gainesville was one of four airports specified by Congress in the reports ac- companying the fiscal year 1988 and fis- cal year 1990 Transportation appropria- tion bills to receive radar upgrades. To date, all but Gainesville have received radar upgrades. I find it very frus- trating that the FAA has not fully im- plemented the direction in these re- ports. At the time the FAA requested the DBRITE system, they considered it a crucial safety factor for air traffic utilizing the Ocala, Gainesville, and north Florida region. Now, as a con- tract tower with 35 percent less man- power, this system appears even more essential. The DBRITE system would provide local controllers with real time pictures of all air traffic in the North Central Region, complementing the ca- pacities and coverage of Jacksonsville Airport. I noted this year’s Transportation Appropriations Committee Report con- tains language encouraging the FAA to honor prior commitments. Accord- ingly, Mr. Chairman, as it has now been almost 8 years since Congress al- located funds for Gainesville’s DBRITE system, I would expect the FAA to take heed of this language and provide this much needed system to Gaines- ville-Alachua Regional Airport. Mr. HATFIELD. Mr. President, I can sympathize with the frustration ex- pressed by the junior Senator from Florida on behalf of the Gainesville\/ Ocala communities and regional air- port. If the FAA had recognized a le- gitimate need which still exists, I cer- tainly think it appropriate for the FAA to move forward in the delivery of the DBRITE system for the Gainesville- Alachua Regional Airport. Mr. MACK. Mr. President, as an addi- tional matter, I would like to bring to the chairman’s attention another prob- lem confronting the Gainesville- Alachua Regional Airport Authority and the surrounding areas and commu- nities in finalizing their eligible FAA noise grant funding. I have been informed that as a result of judicial inverse condemnation pro- ceedings, the city was forced to acquire certain properties and relocate former owners and occupants from certain sites covered by Federal Aviation Reg- ulations, Part 150, Airport Noise Com- patibility. This action required signifi- cant financial commitments from the local authorities, the city of Gaines- ville, and the Regional Airport Author- ity which these parties were appar- ently led to believe would be eligible VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00075 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9284 July 31, 1996 for reimbursement through the AIP Noise Grant Program. Would you not concur, Mr. Chairman, that this matter warrants FAA consid- eration? Mr. HATFIELD. Mr. President, I can assure the Senator from Florida that I certainly think this is a matter which the FAA should carefully review. And, I look forward to working with him to bring both these matters to a resolu- tion before the Congress finalizes the fiscal year 1997 legislation. VTS 2000 COLLOQUY Mr. JOHNSTON. I would like to en- gage into a colloquy with the distin- guished chairman and ranking member of the Transportation Appropriations Subcommittee. Mr. President, I would like to commend the Transportation Appropriations Subcommittee on its committee report which provides fund- ing to complete the final development of the Vessel Traffic System [VTS] 2000. This is a system that is necessary to enhance the safety and environ- mental quality of our country’s vital ports and waterways. In the recent past, and quoted in the committee’s re- port, the GAO has estimated the cost of establishing these VTS Systems at the originally envisioned 17 ports at a cost of up to $310 million. Through a competitive bidding process and the widespread use of commercial off-the- shelf and non-developmental equip- ment, the estimated costs have now been dramatically reduced. In fact, re- cent estimates of the costs are well below those estimated by the GAO\u2014 now less than $200 million. And that number could be substantially reduced depending on what type of systems are implemented as part of VTS 2000. Mr. LAUTENBERG. I appreciate my colleague’s remarks. The VTS 2000 pro- gram was one that we considered very carefully during markup of the Trans- portation appropriations bill this year. I believe that the VTS 2000 system pro- vides great promise in promoting the safety and environmental protection of our Nation’s waterways. The con- ference committee will indeed consider very carefully during our deliberations these cost issues you have just raised. Mr. BREAUX. Mr. President, I would like to associate myself with the re- marks made by my colleagues regard- ing the VTS 2000 system. The study which was recently published by the Marine Board of the National Research Council concluded that ”there is a compelling national interest in pro- tecting the environment and in pro- viding safe and efficient ports and wa- terways.” and that ”VTS can be a sig- nificant factor in enhancing the safety and efficiency of ports and waterways . . .”. Establishing VTS systems at our Nation’s important ports and water- ways is absolutely vital. Also, I agree with my colleague that the estimated cost to produce and field the systems has been dramatically reduced. In addi- tion, I would like to highlight the fact that the estimated annual costs to op- erate the system once it has been de- ployed have also been greatly reduced. Whereas some have estimated the an- nual operating costs of a VTS system to be $65 million, the Coast Guard now believes that those costs will be only $42 million per year for installation at all proposed posts, which includes the $20 million currently being spent annu- ally on five operational ports. I would also note that there are a variety of creative ways to meet those annual op- erating obligations which should be fully reviewed once a final VTS system is proposed. Mr. LAUTENBERG. Mr. President, I appreciate the very knowledgeable comments of Senator BREAUX. He is correct that there are significant po- tential cost reductions in both the es- tablishment and operation of the VTS 2000 system. Both of my colleagues can rest assured that I will keep these issues clearly in focus as we deliberate the fiscal year 1997 Transportation ap- propriations bill in conference with the other body. Mr. HATFIELD. I also appreciate the very knowledgeable comments of both of my distinguished colleagues from Louisiana. Maintaining the safety and environmental quality of this Nation’s waterways remain critically important objectives of this subcommittee. The important cost issues raised by the Senators from Louisiana should be carefully considered by the conference committee as well as the completion of a final VTS system. MID-AMERICA AVIATION RESOURCE CONSORTIUM Mr. NICKLES. Senator HATFIELD, I strongly support the Senate report lan- guage which opposes the House’s ear- mark of $1,700,000 for the Mid-America Aviation Resource Consortium [MARC]. In order to fund the facility in Minnesota, the House transferred funds out of the air traffic controller train- ing program from the FAA Academy in Oklahoma City. This is an imprudent transfer of funds to a program which has not received the necessary support to continue. I refer my colleagues to the con- ference report that accompanied the fiscal year 1996 bill which stated, ”The conferees agree to provide $250,000 for continued support of the Mid-America Aviation Resource Consortium as pro- posed by the House, but intend that this be the final year of Federal sup- port for this facility unless requested in the President’s budget.” Funding for this facility was not requested in the President’s fiscal year 1997 budget. I would like to include in the RECORD a letter from Mr. Richard Sanford, di- rector of the Florida Aviation Manage- ment Development Associates, an FAA contractor, to Senator MACK which ref- erences the reallocation of $1.7 million in the House bill. Mr. Sanford writes, ”This action, taken against the wishes of the FAA, effectively reduces the [FAA Academy’s] budget and directly decrements $1.7 million from a com- petitively awarded instructional serv- ices contract held by the University of Oklahoma. I am very concerned that this action serves to penalize desired academic\/business partnerships in the interests of supporting a consortium whose members have neither competed for the business nor are the FAA’s pre- ferred instructional service pro- vider(s).” I urge Senate conferees on the fiscal year 1997 transportation appropriations bill to insist upon the Senate position. Mr. HATFIELD. Senator NICKLES, I appreciate your interest in this impor- tant issue and your strong commit- ment to safety training at the FAA. I oppose the House effort to reallocate $1,700,000 from the FAA Academy to MARC and will remind conferees of the intention of the fiscal year 1996 con- ference report to terminate funding for MARC. Finally, I will urge the fiscal year 1997 conference to maintain the position outlined in the Senate provi- sion. Mr. NICKLES. I ask unanimous con- sent the letter from Mr. Sanford be printed in the RECORD. There being no objection, the letter was ordered to be printed in the RECORD, as follows: FAMDA, A JOINT VENTURE, Palm Coast, FL, July 10, 1996. Senator CONNIE MACK, Hart Office Building, Washington, DC. DEAR SENATOR MACK: The Federal Aviation Administration has elected to model part- nerships between the Government, academia, and business by awarding both technical and non-technical instructional services con- tracts to organizations featuring such part- nerships. In the technical training area, the partnership with the FAA at the FAA Acad- emy in Oklahoma City is shared by the Uni- versity of Oklahoma with American Systems Corporation as a subcontractor. In the non- technical area, Florida Aviation Manage- ment Development Associates (FAMDA), a joint venture between the University of Cen- tral Florida and American Systems Corpora- tion (ASC) supports the Center for Manage- ment Development (CMD) in Palm Coast, Florida. A short time ago, the House Appropria- tions Subcommittee signed out their appro- priations bill which, among other things, di- rected the reallocation of $1.7M originally budgeted to support instructional activities at the FAA Academy in Oklahoma City to the Mid-America Aviation Research Consor- tium (MARC), a group of educational institu- tions which have positioned themselves to provide technical training support to the FAA. This action, taken against the wishes of the FAA, effectively reduces the Academy budget and directly decrements $1.7M from a competitively awarded instructional services contract held by the University of Okla- homa. I am very concerned that this action serves to penalize desired academic\/business partnerships in the interests of supporting a consortium whose members have neither competed for the business nor are the FAA’s preferred instructional services provider(s). I am also mindful that this same flawed strat- egy could be applied to the Center for Man- agement Development in Palm Coast to the detriment of the University of Central Flor- ida and ASC. Senator Don Nickles is leading an effort to restore the $1.7M in funding to the FAA Academy and, ultimately, the University of Oklahoma. I urge you to lend your support to his efforts and favorably resolve this issue in conference. I have attached information VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00076 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9285 July 31, 1996 which may provide additional insight on this issue. Thank you for your continued support of CMD and the FAMDA joint venture. Sincerely, RICHARD M. SANFORD, Managing Director. Mr. KERRY. This is a good bill, Mr. President, responsibly and carefully as- sembled by the distinguished chair- man, the ranking Democratic member, the subcommittee and its staff. I com- pliment them on their work and sup- port its passage. Even so, Mr. President, due to the very difficult budget environment in which we are laboring, this bill does not do complete justice to what I be- lieve are vital transportation infra- structure needs, a reality on which I believe I could find considerable agree- ment with the chairman and ranking member. For example, Massachusetts and other States need more funding for mass transit and passenger rail than the committee could provide. Federal funding for Amtrak has de- clined by approximately one-quarter since 1995. This year, the Senate bill appropriates $592 million for Amtrak for 1997 which is $130 million more than the House provided. I commend the committee for at least including this amount for Amtrak because the House’s amount is a slow-motion death penalty. The capital-intensive nature of passenger rail makes it unlikely to survive as a viable transportation mode without some kind of Govern- ment support. And I do not know why we find that surprising. We heavily subsidize scheduled air travel, general aviation, and highways. It is entirely appropriate\u2014and beneficial to our Na- tion\u2014that we subsidize passenger rail. The United States still falls short among the nations of the world in per capita spending on passenger rail\u2014be- hind such countries as Belarus, Bot- swana, and Guinea, not to mention the nations of Western Europe. It is my hope that the Senate position on fund- ing for Amtrak will be sustained in the conference committee to resolve the differences between the bills passed by the House and the Senate. And as a member of the Senate Commerce Com- mittee, which has reported legislation to restructure Amtrak in order to place it on a path toward greater fiscal stability and accountability, I am very hopeful that we can enact reauthoriza- tion legislation before the end of the 104th Congress. I strongly support the Senate actions to fund the Northeast Corridor Im- provement Project [NECIP] which is vital to reducing congestion in the cor- ridor and which, in turn, will result in important environmental, energy and employment benefits. We must move ahead with track work, upgrading maintenance facilities and completion of the electrification of the northern section as soon as possible. The $200 million in funding this legislation pro- vides for NECIP will enable this impor- tant work to move forward. Again, I urge the members of the Committee who will be conferees to insist on the Senate position on NECIP in the con- ference committee. I would like to ex- press my gratitude to Chairman HAT- FIELD and Ranking Member LAUTEN- BERG for their continuing and depend- able support of NECIP. Another area of special importance to Massachusetts is mass transit. I cannot avoid being disappointed by this bill’s funding level for mass tran- sit operating assistance. Recent cuts in funding have had a devastating effect on mass transit systems in my State. In Massachusetts, statutory caps are imposed on the amount of funding transit authorities can receive from State and local sources. Therefore, cuts in Federal assistance have a direct, im- mediate, and unavoidable impact on service to seniors, workers and stu- dents in my State. Having voiced my concern, I do want to acknowledge that I realize this problem is not attrib- utable to the will of the subcommittee, its chairman, or its ranking member. My constituents living and working in the Boston area are very appre- ciative for the funding included in the bill for the South Boston Piers Transitway, which is a critical compo- nent of the State Implementation Plan to comply with Clean Air Act require- ments, and is anticipated to serve 22,000 riders daily. The transitway will be integrated with the extensive net- work of transit, commuter rail and bus service at South Station. I also appreciate support for the res- toration of historic Union Station in Springfield, MA, which will allow for the consolidation of regional transpor- tation services in western Massachu- setts in a single intermodal facility for local bus lines, intercity bus systems, trains, taxis, and limousine service. The restoration of the facility will be accompanied by renovation of the fa- cility to accommodate commercial ten- ancy. Also welcome is the committee’s rec- ommended funding for the development of the Cape Cod Intermodal Center which will accommodate intercity buses, regional buses, local shuttles, intercity trains, Amtrak summer tour trains, and bicyclists and will provide connections to the steamship authority’s Hyannis terminal and to Barnstable Municipal Airport. Once again, I thank the chairman and ranking member, who have labored conscientiously and diligently to do as much good in the transportation arena for the Nation and its people as pos- sible under the budget restrictions im- posed on them. I also want to acknowl- edge with appreciation the work of the staff with whom I am familiar, Pat McCann, Peter Rogoff, and Anne Miano. I offer my strongest encourage- ment to the conferees the Senate will name to work out differences between the House-passed and Senate-passed bills. This is a good bill, and I fervently hope the conference agreement will contain its best features. It matters to the nation and its people in 1996, and it will matter in the future. Mrs. BOXER. Mr. President, I would like to speak today in support of the transportation appropriations bill for fiscal year 1997. I commend the leadership of the Transportation Subcommittee, Chair- man HATFIELD and ranking member, Senator LAUTENBERG, for their hard work in fashioning a program of infra- structure investment and safety en- hancement with such little resources available to the subcommittee under this budget. This bill makes considerable im- provements over the House-passed leg- islation. These improvements will pro- vide better air quality, better mobility for our citizens and safer skies. The re- cent tragedies from the air disasters from Florida and New York sadly un- derscored the fact that we have not done all that we can to make our skies safer. I represent a State with 32 commer- cial airports, including at least half a dozen international airports, that han- dle more than 123 million passengers a year. So, I have a particularly strong interest in being sure that aviation se- curity is our highest priority in air travel. As a member of the House Govern- ment Operations Committee that held extensive hearings on the Pan Am Flight 103 disaster in 1989, and later as Chair of its Subcommittee on Govern- ment Activities and Transportation, I strongly urged greater attention to aviation security. I want to also add my thanks to the chairman for the increased funding for aviation safety. Funding in the bill will add 250 more air traffic controllers and provide needed investment in our air- ways infrastructure, including $1.46 bil- lion in airport improvement program funding. The House provided only $1.3 billion, a cut of $150 million from this year’s level. I am particularly pleased that the Senate committee provided the full amount requested by the President for the northern California TRACON. This is the regional radar facility for air traffic. The Senate’s funding of the $8.7 million requested keeps this facility on track for commissioning in November 2000. The Senate bill also provides $3.1 mil- lion for the precision approach path in- dicators, a state-of-the-art naviga- tional systems for our airports. This funding will enable the Los Angeles company which manufactures this equipment to keep their production lines open. I also believe ocean traffic safety will be enhanced by a provision that would prohibit funds to prohibit the Coast Guard from implementing regulations that would permit vessels to operate with a narrower margin of safety be- tween Santa Barbara and San Fran- cisco. This is a high-traffic area, par- ticularly for oil tankers. The provision prohibits a vessel traffic safety fairway which is less than 5 miles wide. I au- thored a similar provision as a Member of the House. It makes good sense. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00077 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9286 July 31, 1996 On enhancing trade, the Senate could do no better than its support for the Alameda transportation corridor. The Senate Appropriations Committee’s support for the Alameda corridor project was our last major hurdle for moving this major trade project for- ward. Last year in the National Highway System bill, we declared the project a ”high priority corridor,” eligible for a Federal loan. We worked with the President’s top financing and transpor- tation experts to fashion a loan pack- age, and the President requested the $59 million appropriation to pay the subsidy cost for a $400 million loan for the $2 billion project. The House supported that program, and now we have the Senate on board. The House and Senate approach the loan in different ways. Although this is not the approach that I would have rec- ommended, Senator HATFIELD pre- ferred using part of the funds provided under the State infrastructure bank program to provide a direct Federal loan for the project instead of the House’s plan under the Federal Rail- road Administration’s loan guarantee program. We can work out the best approach in conference. But there is no doubt that the House and Senate, Democrat and Republican, mayors of Long Beach and Los Angeles and the Governor of Cali- fornia and the President of the United States all support $59 million in Fed- eral seed money to build this project. It will eliminate more than 200 inter- sections with the rail link to the larg- est port complex in the United States, the ports of Los Angeles and Long Beach. It will provide a modern gate- way to Pacific Rim trade for our ex- porters across the country. The Senate bill provides $234 million more for transit than the House bill, including $134 million more for local rail systems. Each weekday more than 6.8 million commuters use some form of transit, eliminating the need for more than 1,000 lanes of urban high- ways. I think that is a good investment in terms of improved air quality and economic productivity for our people. The bill provides needed transit in- vestment for California communities, including $5.5 million for a new transit center for Stockton which will anchor its major downtown redevelopment plans and $2.5 million to consolidate several, duplicative transit operations around Lake Tahoe into an efficient system using the latest in intelligent transportation technology. The bill provides $3 million for the Los Angeles Neighborhood Initiative and $600,000 for a new multimodal transit center in Thousand Oaks. I am particularly pleased at the com- mittee’s decision to approve the Presi- dent’s request for funding the advanced technology transit bus. This project, under development in Los Angeles, uses the expertise of our defense aero- space industry to build a next-genera- tion transit bus that will run on a vari- ety of clean fuels, will provide consid- erable maintenance savings to our transit agencies and will provide con- veniences for disabled passengers. The committee included my request for $13.1 million in bus discretionary funding to deploy five bus prototypes for transit agencies participating in the project across the country. Do I agree with everything in this bill? No, of course not. We do not meet the President’s request for operating money for the Federal Aviation Admin- istration. On the transit side, I am troubled by the freeze on operating as- sistance and the low funding for our major fixed rail transit projects in San Francisco and Los Angeles. I am particularly concerned over the language in the Committee Report for the Bay Area Rapid Transit project to link up with San Francisco Inter- national Airport. I appreciate the chairman’s generosity in personally meeting with me and Senator FEIN- STEIN to hear our request for funding. Although the committee provided $20 million for the Bay Area rails program, it included harsh and overly restrictive report language. I believe it is well within reason to restrict Federal funding until BART has presented a detailed financing plan and met all local funding commitment criteria. However, to hold up a full funding grant agreement ”until all liti- gation regarding this project is re- solved” is highly unrealistic. This lan- guage must send a chill down the spine of every major transit general man- ager. What project is next? Lawsuits are not uncommon on any public works project, and there are legal avenues al- ready available particularly to address the environmental impact issues. I ask unanimous consent to have printed in the RECORD a letter from Mr. Gordon Linton, administrator of the Federal Transit Administration, in this regard. There being no objection, the letter was ordered to be printed in the RECORD, as follows: U.S. DEPARTMENT OF TRANSPORTATION, FEDERAL TRANSIT ADMINISTRATION, Washington, DC, July 31, 1996. Hon. MARK O. HATFIELD, Chairman, Committee on Appropriations, U.S. Senate, Washington, DC. DEAR CHAIRMAN HATFIELD: I write to ex- press concern about language in the Senate report accompanying the fiscal year 1997 U.S. Department of Transportation and Re- lated Agencies Appropriations Act that would prohibit the Federal Transit Adminis- tration (FTA) from executing a Full Funding Grant Agreement or issuing a Letter of No Prejudice for the Bay Area Transit District’s extension to San Francisco International Airport (the ”SFO extension”) ”until all liti- gation” against the project ”has been resolved . . .” For the reasons presented below, I respectfully request that this lan- guage be deleted in conference. First, let me emphasize that, for good rea- son, no such directive has been applied to any fixed guideway project in FTA’s thirty- five year history. All large transit projects, like all large public works projects, are in- evitably the subject of some litigation. We cannot expect otherwise. Indeed, all Federal transit grantees undertaking new starts set aside contingency line items in their budgets to finance the litigation they can and should anticipate in the ordinary course of business. Resolution of such litigation often takes many years. The language in the Senate report would require than a $1.2 billion investment in eco- nomic growth, congestion mitigation, and enhanced mobility for the Bay Area some- how proceed with no grievances against the project from contractors, suppliers, property owners, competing providers of transpor- tation, or interested parties opposing the project. Whatever the intent, the language would hold the BART SFO extension hostage to any party making a claim\u2014whether meri- torious of spurious\u2014against the project for the purpose of extracting money or other concessions from BART and Federal and local taxpayers. Second, notwithstanding the persistent threats of environmental litigation against the SFO extension, both FTA and BART have every confidence in the adequacy of our environmental studies for this project and in our compliance with the National Environ- mental Policy Act (NEPA), the California Environmental Quality Act (CEQA), and all other applicable Federal and local environ- mental law and regulations. Let me assure you that there has never been a transit project that was the subject of NEPA and CEQA documents so thorough and volumi- nous as those for this project. Finally, the selection of the locally pre- ferred alternative for the SFO extension was the result of a very open, vigorous, and lengthy debate. Clearly, not everyone will be pleased with the tough decisions that must be made to pursue a project so vital and visi- ble as this one; such is the nature of the transportation industry and the legacy of the Federal transit program’s reliance on local decisionmaking to best serve a local- ity’s needs. Litigation against a project ought to stand or fall on its own merits in the courts; it ought not be allowed to skew the orderly, even-handed development of leg- islation for the Fedreal transportation pro- grams. I have sent a similar letter to Congressman Wolf. Please let me know if I can be of any assistance in this matter. Sincerely, GORDON I. LINTON. Mrs. BOXER. I look forward to con- tinued conversations with the chair- man and BART officials to bring some better understanding of their respec- tive concerns before the Senate com- pletes a conference report on the bill. I also look forward to further con- versations on how we can increase funding for the Los Angeles Red Line extension. The $55 million provided in the bill will have a serious impact on the project’s construction schedule. The amount is about a third of the President’s request. The shortfall could lead to $300 million in cost increases from delays. More than 5,000 jobs would be lost. Ultimately, this shortfall will lead to slower highway speeds and cost- ly delays that our stressed Los Angeles highway network and its commuters can hardly sustain. We still have more work to do in con- ference to improve the infrastructure investments for California. Overall, the Senate bill provides greater help for my State, and I am hopeful these last few differences can be settled so we can VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00078 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9287 July 31, 1996 send the bill to the President for his signature. Mrs. MURRAY. Mr. President, I rise today in strong support of the trans- portation appropriations bill. I want to applaud Senators HATFIELD and LAU- TENBERG for their strong leadership over an area of increased competition for fewer dollars. This legislation though, is bitter- sweet, as it marks the final transpor- tation bill for Chairman HATFIELD. My neighbor to the south has been a com- passionate champion for our Nation’s infrastructure. The loss to this body and the Pacific Northwest will be felt for a very long time. The State of Washington has wit- nessed tremendous growth over the last decade, accompanied by traffic congestion on roads that have not kept pace with this region’s large influx of residents. I am pleased that this bill seeks to accommodate much of that growth within the Puget Sound region. The committee has included funds which support a commuter rail service between the cities of Everett, Seattle, and Tacoma. This line would form the foundation for a larger regional transit service in the Puget Sound that is set for a vote this November. This com- muter service would operate trains on existing track between the most heav- ily populated centers of Washington State. The committee also included funding to aid commuters traveling from sub- urban cities to downtown Seattle. These funds will enable King County Metro to connect the cities of Ken- more, Redmond, Renton, Tukwila, and Auburn with Seattle, through smaller neighborhood buses that meet larger commuter buses heading into the city. Further, I am thrilled that the bill has included funds that support a com- prehensive transportation solution to congestion around the Kingdome and new baseball stadium. Together with King County, the city of Seattle, the Washington State Department of Transportation, the Port of Seattle, the Baseball Stadium Public Facilities District and Burlington Northern- Santa Fe Railroad, these dollars will create a transit center facilitating ac- cess for both transit and pedestrians through the area. Last, Mr. President, I wanted to com- mend the committee for allowing Wenatchee to finish construction on the Chelan-Douglas Multimodal Cen- ter. The city of Wenatchee and Link Transit Systems have been working on the Multimodal Transportation Center project for 3 years. These funds will finish construction on the project and improve pedestrian and bicycle access. All of these projects utilize several different modes of transportation to more quickly and efficiently move our growing population. I appreciate the committee’s hard work in light of dif- ficult budget choices and urge my col- leagues’ support of this critical appro- priations bill. Mr. DOMENICI. Mr. President, I rise in support of the Department of Trans- portation and Related Agencies appro- priations bill for fiscal year 1997. I commend the distinguished chair- man of the Appropriations Committee for bringing us a balanced bill consid- ering the current budget constraints. The Senate reported bill provides $12.6 billion in new budget authority [BA] and $12.3 billion in new outlays to fund the programs of the Department of Transportation, including federal aid highway, mass transit, and aviation ac- tivities. When outlays from prior-year budget authority is taken into account, the bill totals $12.6 billion in BA and $36.1 billion in new outlays. The subcommittee is essentially at its 602(b) allocation in both BA and outlays. The Senate reported bill is $184 mil- lion in outlays below the President’s 1997 request. The bill does provide for the President’s request of $250 million for state infrastructure banks. The Senate reported bill is $240 mil- lion in BA below the House version of the bill. Both House and Senate bills provide the same amount of outlays. Mr. President, I ask unanimous con- sent that a table displaying the Budget Committee scoring of this bill be print- ed in the RECORD at this point. There being no objection, the mate- rial was ordered to be printed in the RECORD, as follows: TRANSPORTATION SUBCOMMITTEE\u2014SPENDING TOTALS\u2014 SENATE-REPORTED BILL\u2014FISCAL YEAR 1997 [In millions of dollars] Budget authority Outlays Defense discretionary; Outlays from prior-year BA and other actions completed ……………………………………………. ……………. 37 H.R. 3675, as reported to the Senate …………. ……………. ……………. Scorekeeping adjustment …………………………… ……………. ……………. Subtotal defense discretionary ……………….. ……………. 37 Nondefense discretionary: Outlays from prior-year BA and other actions completed ……………………………………………. ……………. 23,748 H.R. 3675, as reported to the Senate …………. 11,950 11,668 Scorekeeping adjustment …………………………… ……………. ……………. Subtotal nondefense discretionary ………….. 11,950 35,416 Mandatory: Outlays from prior-year BA and other actions completed ……………………………………………. ……………. ……………. H.R. 3675, as reported to the Senate …………. 608 602 Adjustment to conform mandatory programs with Budget Resolutions assumptions ……. \u00a53 ……………. Subtotal mandatory ………………………………. 605 602 Adjusted bill total …………………………….. 12,555 36,055 Senate Subcommittee 602(b) allocation: Defense discretionary ………………………………… ……………. 37 Nondefense discretionary …………………………… 11,950 35,416 Violent crime reduction trust fund ……………… ……………. ……………. Mandatory ……………………………………………….. 605 602 Total allocation …………………………………….. 12,555 36,055 Adjusted bill total compared to Senate Sub- committee 602(b) allocation: Defense discretionary ………………………………… ……………. ……………. Nondefense discretionary …………………………… ……………. ……………. Violent crime reduction trust fund ……………… ……………. ……………. Mandatory ……………………………………………….. ……………. ……………. Total allocation ………………………………………… ……………. ……………. Note: Details may not add to totals due to rounding. Totals adjusted for consistency with current scorekeeping conventions. Mr. DOMENICI. Mr. President, I sup- port the bill and urge its adoption. Mr. HATFIELD. Mr. President, I know of no further amendments to be offered. I ask for third reading of the bill. The PRESIDING OFFICER. The question is on the engrossment of the amendments and third reading of the bill. The amendments were ordered to be engrossed and the bill to be read a third time. The bill was read a third time. Mr. DOMENICI. I ask for the yeas and nays. The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. The PRESIDING OFFICER. The bill having been read for the third time, the question is, Shall the bill pass? On this question, the yeas and nays have been ordered, and the clerk will call the roll. The assistant legislative clerk called the roll. Mr. FORD. I announce that the Sen- ator from Louisiana [Mr. JOHNSTON], the Senator from Arkansas [Mr. PRYOR], and the Senator from Illinois [Mr. SIMON], are necessarily absent. The PRESIDING OFFICER. Are there any other Senators in the Chamber who desire to vote? The result was announced\u2014yeas 95, nays 2, as follows: [Rollcall Vote No. 261 Leg.] YEAS\u201495 Abraham Akaka Ashcroft Baucus Bennett Biden Bingaman Bond Boxer Bradley Breaux Brown Bryan Bumpers Burns Byrd Campbell Chafee Coats Cochran Cohen Conrad Coverdell Craig D’Amato Daschle DeWine Dodd Domenici Dorgan Exon Faircloth Feingold Feinstein Ford Frahm Frist Glenn Gorton Graham Gramm Grams Grassley Gregg Harkin Hatch Hatfield Heflin Helms Hollings Hutchison Inhofe Inouye Jeffords Kassebaum Kempthorne Kennedy Kerrey Kerry Kohl Lautenberg Leahy Levin Lieberman Lott Lugar Mack McConnell Mikulski Moseley-Braun Moynihan Murkowski Murray Nickles Nunn Pell Pressler Reid Robb Rockefeller Roth Santorum Sarbanes Shelby Simpson Smith Snowe Specter Stevens Thomas Thompson Thurmond Warner Wellstone Wyden NAYS\u20142 Kyl McCain NOT VOTING\u20143 Johnston Pryor Simon The bill (H.R. 3675), as amended, was passed. Mr. HATFIELD. Mr. President, I move to reconsider the vote by which the bill was passed. Mr. LAUTENBERG. I move to lay that motion on the table. The motion to lay on the table was agreed to. Mr. HATFIELD. Now, Mr. President, I move that the Senate insist on its amendments, request a conference with the House of Representatives on the disagreeing votes of the two Houses, and the Chair be authorized to appoint conferees on the part of the Senate. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00079 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9288 July 31, 1996 The motion was agreed to, and the Presiding Officer appointed Mr. HAT- FIELD, Mr. DOMENICI, Mr. SPECTER, Mr. BOND, Mr. GORTON, Mr. SHELBY, Mr. LAUTENBERG, Mr. BYRD, Mr. HARKIN, Ms. MIKULSKI and Mr. REID conferees on the part of the Senate. Mr. HATFIELD. Mr. President, I want to call attention to a matter re- lating to one of our staff people, Pat McCann, who is the staff director for the majority party. He is a very inter- esting person who has been on this committee, the transportation sub- committee, for 13 years. It is illus- trative of another matter, and that is how our committee must operate on a bipartisan basis. When we bring a bill to the floor we have to have comanagers, in which the ranking member and whoever he or she may be, a Democrat and a Republican, and the Chair, have to have agreed to the bill and therefore present a united front. I say this is unusual about com- mittees in the Senate, but we are the only committee that has to report bills by law. We have to keep this country going and, therefore, we have to report 13 bills, come whatever may. I happened to be chairing the Appro- priations Committee in a previous cycle, from 1981 to 1987. I, at that time, had an opportunity to hire on the com- mittee Pat McCann, as the Republican majority at that time. But subsequent chairmen of that committee, the full committee, Senator Stennis and Sen- ator BYRD, followed the same pattern that I followed and that is that we do not wipe out our staff in each election cycle, because they are truly profes- sionals, serving both sides of the com- mittee. So Pat McCann continued on in that professional role. My immediate predecessor, Senator LAUTENBERG, now the ranking member, as the chairman of that subcommittee, continued Pat McCann, and Anne Miano, our assistant staff director, was hired by Senator D’AMATO when he chaired that particular subcommittee. As it was with Peter Rogoff, who is now the staff director for the minority. They continued all through these var- ious changes of party and majorityship. So I not only pay tribute to Pat McCann for his faithful service, totally professional service that he has pro- vided the committee, but to all the staff on our particular committee. I thank also at this time the out- standing work of Senator LAUTENBERG. We could not have brought this bill to the floor without Senator LAUTEN- BERG’s leadership, and we could not have resolved the many conflicts and problems that we faced in this com- mittee. Again, I say to Anne Miano, Peter Rogoff, Pat McCann that we only are able to do this when we have this kind of staff. We look good, and at the same time we have to realize it is more than just our charming personalities. It is the fine work of staff that has made possible the producing of this bill. So I just want to call attention to Pat’s leaving of the Senate. He is going to move through the conference with us. By the time we get that conference report back here, he will probably be up in the balcony, up in the gallery. I hope he is not editorializing verbally up there as we proceed with the con- ference report, because I expect it to be of such quality that we will be able to pass it with a voice vote within a very, very brief time. I thank the Chair. Mr. LAUTENBERG addressed the Chair. The PRESIDING OFFICER. The Sen- ator from New Jersey. Mr. LAUTENBERG. Mr. President, I, too, want to add some words of com- mendation and appreciation to the staff, particularly on this occasion when Pat McCann will have seen the last transportation appropriations bill that he is going to have to work on. I reminded him, sometime he is going to look back here, where it is a quarter to 10 at night, he has not had dinner, has not seen his family, he has not been able to watch the Olympics, how much he is going to miss this place. He start- ed to weep, and I could see a tear fall down his cheek, but he will be strong. On a serious note, Pat’s service has been truly exemplary of bipartisanship. He came to me as a Republican, stayed with me as a Republican and left as a Republican. That is really bipartisan. But we have worked very well to- gether\u2014again, trying to be serious, Pat and Peter, the two senior people on each of the subcommittee staffs, the majority and the minority, have given loyal service wherever and whenever called upon to do so. We are going to miss Pat. He brings a special touch and a good sense of humor and knows the subject ex- tremely well, and he had the good judg- ment to send his daughter to college in New Jersey. Princeton, of course, is a nice place to have a child. Mine didn’t go there. He felt it was too close to dad or too close to home. Pat has been a marvelous, marvelous influence on staff and on Members as well. So it is with other members. Peter Rogoff is really busy these days. We learned the difference between being in the majority and being in the minor- ity. It is numbers of people that you have to do the job. Peter has been a very able assistant throughout this. I thank also Anne Miano. I have got- ten to know Anne over the years and watched her approach motherhood and do that very well, while also staying on top of the work she has here. Joyce Rose who has been helpful, Carole Geagley and Mike Brennan, his first time on the bill. To all the staff, my deepest appreciation and thanks for a good job. When I look at how complicated things are right now and see how sparse the funding for major, signifi- cant programs has become, we just dealt with over 37 billion dollars’ worth of funding, very important transpor- tation programs dealing with aviation, highways, rail, Coast Guard, and I think have done it with balance and with consideration for the value of all of the programs. That resulted, Mr. President, from the influence of Senator HATFIELD, his leadership, his constancy, his conscien- tious belief that things have to be right among all, not just a few. It has en- abled me to feel very good and feel like a full partner, though in the minority status and throughout the negotiation and the planning and the hearings and the markup of this bill. So, we note with a degree of sadness, though he will be here with other bills, this is the last time that we will have Senator HATFIELD’s valued hand as chairman. I hope, too, the conference will go through on a voice vote and, as a tribute to MARK HATFIELD, perhaps I can call on the goodness of the hearts of our colleagues to do it just that way. As a friend, as a leader, as an out- standing citizen and American, MARK HATFIELD has been an enlightenment for many of us and particularly for me in the years I have had a chance to work with him. We close this bill hoping our col- leagues are satisfied with the job we have tried to do as best we can. I thank the Chair. Mr. GRASSLEY addressed the Chair. The PRESIDING OFFICER. The Sen- ator from Iowa. f MORNING BUSINESS Mr. GRASSLEY. Mr. President, I ask unanimous consent that there now be a period for the transaction of morning business, with Senators permitted to speak for up to 5 minutes each. The PRESIDING OFFICER. Without objection, it is so ordered. f NOMINATIONS OF ADM. JAY L. JOHNSON, U.S. NAVY, TO BE AD- MIRAL Mr. THURMOND. Mr. President, this is a joint statement by Senator NUNN and myself on behalf of the Committee on Armed Services. Today, the Armed Services Com- mittee voted unanimously to favorably report the nomination of Adm. Jay Johnson for reappointment to the grade of admiral and assignment as the Chief of Naval Operations. The vote followed both a closed ses- sion and an open hearing of the Com- mittee on Armed Services in which the Members considered information pro- vided by the Department of Defense relevant to admiral Johnson’s quali- fications to be Chief of Naval Oper- ations. During the hearing, Admiral Johnson discussed his attendance at Tailhook. In addressing the Committee he stated, ”While I can’t change the past, I can\u2014 and did\u2014learn from it; so did the rest of the Navy. I was cautioned by the Secretary of the Navy for not being proactive in monitoring the conduct of VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00080 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9289 July 31, 1996 junior officers and not taking effective action to prevent misconduct at Tailhook ’91. Because I was there and have seen and felt first hand how much Tailhook hurt our great Navy, I am even more committed to ensuring that such an atmosphere will never again be tolerated.” Information provided by the Depart- ment of Defense relevant to the nomi- nation is available at the Committee Office for review personally by Sen- ators. f THE VERY BAD DEBT BOXSCORE Mr. HELMS. Mr. President, at the close of business yesterday, Tuesday, July 30, the Federal debt stood at $5,183,982,827,241.61. On a per capita basis, every man, woman, and child in America owes $19,532.86 as his or her share of that debt. f FULL HONOR REVIEW AND AWARD CEREMONY FOR SENATOR SAM NUNN Mr. WARNER. Mr. President, history will record Senator SAM NUNN’s distin- guished public service with many chap- ters. There are, I am certain, more to come covering future challenges he will accept. None, however, will be more impor- tant, more meaningful to him, than his ever vigilant concern for the men and women of all ranks of the armed serv- ices. I can attest to his work, for I was privileged to serve on the Armed Serv- ices Committee for 6 years, when Sen- ator NUNN was chairman, as the rank- ing Republican. We were partners and a very high de- gree of bipartisanship prevailed among all members. One of the many tributes to his serv- ice on this committee was paid to Sen- ator NUNN on July 12, 1996, with a Trooping of the Colors by the troops for their chairman. I ask unanimous consent to have printed in the RECORD remarks made on this memorable auspicious occasion. There being no objection, the mate- rial was ordered to be printed in the RECORD, as follows: FULL HONOR REVIEW AND AWARD CEREMONY FOR SENATOR SAM NUNN AWARD NARRATIVE For exceptional and outstanding service as Chairman, Ranking Member, and Member of the Armed Services Committee of the United States Senate from 1972 through 1996. Senator Nunn has been the leading legisla- tive voice on national security issues during a period of extraordinary change and chal- lenge for the Department of Defense. With his unparalleled knowledge of national de- fense and foreign policy issues, his contribu- tions to the security and well-being of our Nation are profound. His clear and eloquent voice has focused public debate on defining the vital interests of the United States, and promoted a strong defense and peace for fu- ture generations. Senator Nunn has taken the initiative in authoring and sustaining legislation that has strengthened the morale and welfare of our men and women in uniform and their families, including the Nunn-Warner in- creases in military pay and benefits in 1980 to put the All-Volunteer Force on a sound footing, the Persian Gulf benefits package for the men and women who fought in Oper- ation Desert Storm, and the post-cold-war transition benefits for military personnel, Department of Defense civilians, and defense industry employees. Senator Nunn co-authored the Nunn-Lugar Cooperative Threat Reduction Program which has reduced significantly the threat of nuclear war by providing incentives for the states of the former Soviet Union to dis- mantle their arsenals. Senator Nunn played a critical role in the development of the Department of Defense Reorganization Act of 1986, creation of the combatant command for special operation forces, enactment of the Federal Acquisition Streamlining Act of 1994, establishment of cooperative acquisition programs with our NATO allies, passage of legislation to facili- tate cost savings through the closing of mili- tary bases, and in the development of the an- nual National Defense Authorization Acts. At the request of President Clinton, he ac- companied former President Jimmy Carter and retired General Colin Powell to Haiti during the 1994 crisis, where he helped to achieve an agreement that averted a mili- tary confrontation. Senator Nunn has consistently articulated his views in a bipartisan manner that recog- nizes and sustains the traditional values of military service, duty, and patriotism. His achievements and dedication represent the highest traditions of government and public service, and reflects great credit upon him- self, the Department of Defense, and the Congress of the United States. For these and his many other contributions, I take great pleasure in presenting Sam Nunn the Depart- ment of Defense Medal for Distinguished Public Service. [Applause] Secretary Perry: Less than a mile up the Potomac River from here on Roosevelt Is- land are inscribed these words of President Theodore Roosevelt: ”In popular govern- ment, results worth having can be achieved only by men who can combine worthy ideals with practical good sense.” For more than two decades, our government has been blessed with the worthy results achieved by a man known for combining worthy ideals with practical good sense. That man is Sen- ator Sam Nunn. Worthy ideals and practical good sense are the hallmarks of each of Sam Nunn’s many achievements. In 1991, Senator Nunn had the practical good sense that the world would be a much safer place if the thousands of nu- clear weapons in the former Soviet Union were dismantled and safeguarded. He com- bined that practical good sense with worthy ideals, and along with Senator Richard Lugar, created the Nunn-Lugar program. This program has been a remarkable success. Perhaps the most compelling Nunn-Lugar success story is centered on the Ukrainian town of Pervomaysk, which once housed 700 nuclear warheads, all of them aimed at tar- gets in the United States. I have visited Pervomaysk four times in the last two years. The first visit was in March 1994, just after we signed the Trilateral Agreement, when I looked down into a nuclear missile silo and saw the missile, then saw the first batch of warheads on the way out. On my fourth visit this June, I joined the defense ministers of Ukraine and Russia in planting sunflower seeds at the site. By harvest time, that former missile field will be a productive sun- flower field. Thanks to the vision of Senator Sam Nunn, over 4,000 nuclear warheads have been removed from deployment and more than 700 bombers and ballistic missile launchers have been dismantled. Ukraine is now nuclear- weapons free. Kazakstan is already weapons free and Belarus will be nuclear weapons free by the end of the year. The worthy ideals and common sense that lie behind the Nunn-Lugar program, are em- blematic of Senator NUNN’s entire career in the U.S. Senate. He has applied these traits to making America safer and stronger. He was the unsung hero of the Goldwater-Nich- ols Act. Sam never minded being unsung, but I think today we ought to sing him. And\u2014 [Applause] \u2014I believe the Goldwater-Nichols Act is perhaps the most important defense legisla- tion since World War II. It dramatically changed the way that America’s forces oper- ate by streamlining the command process and empowering the Chairman of the Joint Chiefs of Staff and the unified commanders. These changes paid off in the resounding suc- cess of our forces in Desert Storm, in Haiti, and today, in Bosnia. Sam Nunn provided much of the thinking and logic behind the legislation and was the persuasive force be- hind its passage into law. I will always think of it as the Goldwater-Nichols-Nunn legisla- tion. Throughout his career, Senator Nunn left his mark throughout the U.S. Armed Forces. In the 1970’s and the 1980’s, he championed the stealth technology that helped win the Gulf War. In the 1990’s, he led the fight for acquisition reform, ensuring that our forces get the best equipment, at the best price, at the quickest time. And he’s been a strong ad- vocate of making the most use of the Guard and Reserve and their unique talents and re- sources. And nobody\u2014I mean nobody\u2014has done more for our men and women in uniform than Sam Nunn. He knows that they are the ones we count on to keep our country safe. And he’s worked tirelessly to help build our quality force. Thanks to his efforts, we now have the best force in our history and the best force in the world. I have seen that quality force in action everywhere I’ve trav- eled. I’ve seen it at the DMZ in Korea, on the carriers in the Med and along the zone of separation in Bosnia. I visited our IFOR troops in early January. It was the day after we opened up the Pon- toon Bridge over the Sava River on the Bos- nia border. The tanks and the Bradleys were rolling across the bridge and General Nash, General Joulwan, General Shalikaskvili and I decided that our entry to Bosnia would be on foot. And we decided to walk across the Sava River bridge from Croatia into Bosnia. Halfway across, we met some of the combat engineers who built the bridge, still working on finishing up some of the details. One of them was Sergeant First Class Kidwell, who stepped forward and said his enlistment was up and he wanted to reenlist. After all he and his comrades had been through to build this bridge\u2014the bitter cold, the flooding of epic proportions, the danger of land mines\u2014 this sergeant still wanted to reenlist. And so we swore him in for another four years in the Army, right there in the middle of the Sava River bridge. And I can tell you I have never been more proud of our Armed Forces than at that moment. And that mo- ment\u2014[Applause]\u2014that moment is a tribute to Sam Nunn and to the quality force he has fought to build. Today, the Department of Defense is thanking Senator Nunn, through his Distin- guished Public Service Award. And to this award, I want to add my personal thanks. Three-and-a-half years ago, as I was consid- ering whether or not to return to public service and to Washington, I consulted Sen- ator Nunn. He urged me to accept the job as VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00081 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9290 July 31, 1996 Deputy Secretary of Defense, and he talked about the exciting opportunities to improve the security of our country. And as I weighed my decision, one of the big pluses in my thinking was the opportunity to work with a public servant as intelligent, thoughtful, and courageous as Sam Nunn. Well, this is Sam Nunn’s last year in the U.S. Senate, but his influence will last for decades to come. He influenced the Senate and the Department of Defense. He’s influ- enced the Nation. He leaves a magnificent legacy; a legacy of wisdom, tenacity, vision, and patriotism; a legacy which will make our world a better and safer world for our children and our grandchildren. Thank you, Senator Nunn. [Applause] General Shalikashvili: Senator Nunn, Mrs. Nunn, distinguished guests, let me begin by congratulating these magnificent soldiers, sailors, airmen, marines, and coast guards- men standing in front of you. [Applause] My thanks to you. You’ve really made this day very, very special. Now, in ancient times, the purpose of pa- rades was for soldiers to come together in a very formal way to honor a man of very great status. And that very much is the pur- pose of this ceremony today\u2014to honor a most remarkable man and to thank him for 24 years of service in the U.S. Senate. President Theodore Roosevelt had a favor- ite admonishment\u2014a warning really\u2014a warning that you cannot spread patriotism too thin. Surely, as much as any American alive today, Sam Nunn has painted a pic- ture\u2014a vibrant canvas of patriotism\u2014a can- vas unstained by partisanship or personal gain, or even personal pride. But painted, in- stead, with broad brush strokes of wisdom, of conscience, of love for his country and of heartfelt love for the men and women in uni- form. He has sat through year after year, for over two decades, of endless hearings and briefings, of going on trip after trip, listen- ing to the needs and requests from our coun- try’s senior military and defense officials\u2014 always patiently, always with the court- liness for which he’s so well known. And al- ways it has been with the dedication to en- sure that our policies are correct, that are plans are well-conceived, and that our mili- tary has the resources to remain the finest and most capable military in the world. It has been said of him, that on issues of national security, Sam Nunn is the E.F. Hut- ton of the Hill. Well, actually, he’s bigger than that. People not only eavesdropped to hear his views, they sought his views. [Ap- plause] There is an old saying that if you want peace, then you must understand war. It is a dictum that Sam Nunn has spent his career heeding\u2014to the great benefit of his fellow Americans and of every American that’s worn the uniform during his 24 years in the Senate. I, for one, will greatly miss his counsel, his support, and his friendship and his unyielding efforts to maintain the Armed Services Committee as a serious body where issues of national security receive a fair and open hearing, and where wisdom and con- science, rather than partisanship, rule. Senator Nunn, on behalf of the Joint Chiefs of Staff and on behalf of every man and woman in uniform, I thank you and I sa- lute you. And I also suspect, indeed, I sin- cerely hope, that your voice and your coun- sel and your service will remain a national asset for a long, long time to come. My thanks to you. [Applause] Senator NUNN: Secretary Perry, General Shalikashvili, members of the Joint Chiefs, Department of Defense personnel, Chairman Thurmond, my colleagues in the Senate and House and staffs\u2014we should never forget them\u2014distinguished ambassadors, men and women of our military service, members of my family and many friends. From the bottom of my heart, I thank you for this great honor, for this medal and for this ceremony. Colleen and I will cherish this day, this parade, this ceremony, and we will remember it forever. Chairman Carl Vinson, my great-uncle, upon the chris- tening of the nuclear aircraft carrier named in his honor, stated, ”My star has reached its zenith.” I feel that way today, Secretary Perry, General Shali and all of you gathered here. Secretary Perry and General Shali, your remarks were so laudatory that I may change my mind and follow in the footsteps of Senator Strom Thurmond by becoming a write-in candidate for the U.S. Senate. [Ap- plause] Congress has no higher responsibility than its duty under our Constitution to provide for the common defense. That is our con- stitutional charge. During my quarter cen- tury in the Senate, my greatest sense of sat- isfaction has been working with our out- standing men and women in uniform that serve our Nation all over the world, as well as the personnel in the Department of De- fense. To those who proudly marched in to- day’s parade and to your comrades in arms who are on duty around the world\u2014those of us in the Congress of the United States, and I think I can speak for everyone on both sides of the aisle, we are very proud of you and we are very proud of your families and we are proud of the job you do for the Amer- ican people. When I look around this audience, I feel like a pupil standing with gratitude before his mentors, his teachers and his heroes. Secretary of Defense Bill Perry is all three. He has matched his technological genius with his dedicated commitment to the well- being of our men and women that serve our Nation in uniform. His personal integrity and his ability to explain complex issues in understandable terms is particularly valued by those of us whose VCRs are always blink- ing at 12 o’clock. [Laughter] Secretary Perry’s ability to judge char- acter and leadership is exemplified in his choice of General Shalikashvili to head our Nation’s armed forces. General Shali, we are grateful for your outstanding career and most of all we are grateful for your leader- ship of our military and for your example to the young people in the military and all young Americans. When I see here today the Under Secretary for Acquisition and the Vice Chairman of the Joint Chiefs, I am reminded of 1977 when then Air Force Colonel Paul Kaminski and his assistant, then Major Joe Ralston, were driving Arnold Punaro and me on a cloak- and-dagger route to see the then highly-clas- sified Stealth fighter at a clandestine loca- tion which could not be mentioned to any- one. The reason the F 117 stayed secret so long is that these guys couldn’t find the base. [Laughter] We ended up calling for help at a McDon- alds’ pay phone. There was, however, no doubt about their ability to keep a secret. Perhaps, that is why they are such good leaders today. When I see retired General James Hol- lingsworth, my dear friend, in the audience, it brings back memories of his outstanding leadership in Korea and his leadership in the fundamental strengthening of our NATO pos- ture at a very crucial time in our history. Thank you, Holly. When I see one of my great friends and teachers, Jim Schlesinger, former ”Sec- retary of Everything,” I am reminded of his enormous contributions to our national se- curity for the last four decades. Jim con- tinues to be America’s intellectual ”pillar of iron” on matters of national security and foreign policy. I also think back today to the courageous leadership of General David Jones, former Chairman of the Joint Chiefs; General Shy Meyer, the head of the U.S. Army; as well as Admiral Bill Crowe, now Ambassador, in leading the way toward fundamental Depart- ment of Defense reorganization which has paid off big-time as Secretary Perry has al- ready mentioned. I also recall my good friend, the late General Dick Ellis, who as commander of the Strategic Air Command, prepared the foundation for much of the work I have done in risk reduction and non- proliferation. John Warner remembers that well because he was my partner in that en- deavor. I am reminded of industry giants like David Packard who recently passed away and others like him in industry today\u2014many of whom are in this audience\u2014who have led the way in making America the techno- logical superpower of the world. I think today of our excellent Committee staff who have assisted me and the Senate for the last 24 years, indeed, assisted all of us in the Congress, led by Staff Directors like Ed Braswell, Frank Sullivan, Rhett Dawson, Jim Roche, Jim McGovern, Carl Smith, Pat Tucker, Dick Reynard, Les Brownlee and, of course, Arnold Punaro, who likes to be called general. These staff directors and those who serve with them are the unsung heroes of America’s military strength. They work day and night. They are assisted every day by outstanding people on our personal staffs. Many of those are here today. I will not try to call all of their names, but I am indebted to them and they know it. There are two important footnotes to every national security improvement in which I have been involved. First, I take full responsibility for my mistakes and my bad ideas. No one else is responsible for those. But all of my good ideas were inspired by our men and women in uniform like those who stand so proudly here today. I have been the beneficiary of the leadership, guidance, ad- vice and support of Senators like Senator John Stennis, Senator Scoop Jackson, and Senator Robert Byrd, as well as my other colleagues on the Armed Services and Appro- priations Committees and my many friends in the House of Representatives. That’s the first footnote. My second footnote, I believe, is of some relevance in this era of unfortunate but in- creasing political party warfare. And that’s what it is. Each time I have been involved in a major national security initiative, it has been with a Republican partner. From Barry Goldwater and Strom Thur- mond on defense reorganization; to John Warner on risk reduction and pay and bene- fits for our troops; to Bill Cohen on special operations and low intensity conflict and de- mirving our missiles; and to Dick Lugar and Pete Domenici on preventing the spread of weapons of mass destruction. Every major improvement in defense dur- ing my time in the Senate has been the re- sult of a few Senators and House Members of both parties putting our Nation’s security before partisan politics. [Applause.] I submit, ladies and gentlemen, that there is no serious problem facing America today that can be solved by one political party. The American people recognize that and it is time for those of us in Washington to recog- nize that. [Applause.] I could go on and on, but most of the pa- rades I have attended were as an enlisted man standing at parade rest so the time has come for self-imposed cloture. [Laughter.] VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00082 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9291 July 31, 1996 Thomas Jefferson once said, ”The blood of martyrs is the seed of freedom’s tree.” Amer- ica’s independence and our continued free- dom have rested for 220 years on this premise. Freedom is in greater supply around the world today thanks to the United States and our allies\u2014our allies played a big role and we should never forget that\u2014but it comes at no small price in terms of required courage and commitment. To the men and women in uniform and to all those who serve our Nation, I will leave the Senate keenly aware of what every American should remember. Our sense of se- curity depends on your vigilance and your discipline. Our prosperity depends on your sacrifice. Our dreams and our children’s dreams depend on your sleepless nights. And our freedom to live our lives in freedom de- pends on your willingness to risk yours. May God bless each of you and all of those who serve America in the cause of freedom. Mr. WARNER. Mr. President, I rise today to recognize the dedication, pub- lic service, and patriotism that per- sonified the life of Capt. John William Kennedy, U.S. Air Force. Lieutenant Kennedy, or Jack as he was better known, was reported as missing in ac- tion on August 16, 1971, in South Viet- nam. He was presumed killed in action on July 16, 1978, and finally confirmed as having been killed in action in May of this year. Jack was born here in Washington, DC, but grew up in nearby Arlington, VA. He graduated from the Virginia Military Institute in 1969. While at VMI, he was the 1969 Southern Con- ference 160-pound wrestling champion, a member of the VMI honor court, and was inducted into the VMI sports hall of fame in 1980. In October 1970, a year after entering the Air Force, Jack graduated from pilot training at Craig FBI in Selma, AL, and was awarded the Under- graduate Pilot Training Office Train- ing Award for being tops in his class. He then attended O 2A pilot training at Hurlburt Field, Eglin AFB, FL, and was thereafter assigned to the 20th Tactical Air Support Squadron [PACAF] in South Vietnam. Unfortunately, Jack’s promising young career was tragically ended while Captain Kennedy was flying on a visual reconnaissance mission over the Quangtin Province in South Vietnam. On August 16, 1971, radio contact with Jack’s O 2A aircraft was lost. A search effort was initiated, but no crash site or radio contacts or witnesses were un- covered. U.S. Army intelligence reports indicated that the 31st North Viet- namese Regiment was in the area at this time. In 1993, over 20 years later, remains were found at a crash site in Quangtin Province. The DNA from these bone fragments were positively identified as a match with Jack’s mother in 1995, and Captain Kennedy’s remains were returned to the United States in late June 1996. On Friday, August 2, a fu- neral is scheduled for Captain Kennedy in the Old Post Chapel on Fort Myer, and internment with full military hon- ors will follow at Arlington National Cemetery. For his remarkable, yet short career, Lieutenant Kennedy was awarded the Distinguished Flying Cross, the Purple Heart, the Air Medal with two oak leaf clusters, the National Defense Service Medal, the Vietnam Service Medal, and the Republic of Vietnam Campaign Medal. Capt. John Kennedy was the embodi- ment of an American hero. A true pa- triot and a superb Air Force officer who served with courage and integrity, he lost his life during one of the most intense and demanding periods in our Nation’s history. His mother, who lives in Lake Ridge, VA, and his brother, Dan, who many of us know from his ef- forts on the Hill as Bechtel’s represent- ative, should be proud of Jack and what he accomplished during his short life. I am thankful that Jack’s fate has been determined, and that he has now been returned home for a proper burial. f TRIBUTE TO SETH J. DIAMOND Mr. BURNS. Mr. President, Montana suffered a large loss on Friday after- noon. A plane crash in the northwest corner of our State claimed the life of three men, Seth Diamond, Ken Kohli, and Al Hall. Seth lived in Missoula, MT, and Ken and Al lived in Cour d’Alene, ID. Over the last few years, my staff and I had the pleasure of getting to know Seth Diamond. As a representative of the timber community in the inter- mountain West, I had many opportuni- ties to work with Seth. Whether we were working on changing the way our Government deals with the Endangered Species Act or working in issues re- lated to forest health and management, Seth was there with fresh ideas on how to solve hotly contested issues. It was Seth’s sense of fairplay that gave him such a good standing with groups on both ends of the natural resource man- agement spectrum. I valued and re- spected his comments and advice. Seth Diamond was born in Philadel- phia and grew up on Long Island, NY. He received an undergraduate degree from Duke and a wildlife biology mas- ters from Virginia Polytechnic Insti- tute and State University. In 1988, Seth found his way to Montana as a biolo- gist for the U.S. Forest Service. He worked on the Lewis and Clark Na- tional Forest out of Choteau, MT. The West is truly an unique area. Most believe you have to grow up in the West to appreciate our way of life and feel a strong commitment to pro- tecting the businesses that have made Montana economically and culturally what it is today. It amazes me that a kid who grew up on the east coast could come to Montana and work to keep the wood products industry a part of Montana’s economy, but most im- portantly believe it is vital to the well- being of Montana. Seth did just that. Montana’s resource dependent com- munities owe a great debt to Seth. He worked to achieve a common goal of providing jobs for families and pro- tecting a renewable resource. In addition to his commitment to Montana, Seth was a proud family man. He is survived by his wife, Carol, and children Kale, Laura, and Jesse Lynn. They and the rest of the Dia- mond family have Phyllis’ and my prayers. Montana is a richer place today be- cause of the work and dedication of Seth Diamond. I feel fortunate to have been given an opportunity to consider him a friend. Mr. President, I yield the floor. f FOREIGN OIL CONSUMED BY U.S.? HERE’S THE WEEKLY BOX SCORE Mr. HELMS. Mr. President, the American Petroleum Institute reports that for the week ending July 26, the United States imported 7,500,000 barrels of oil each day, the same amount im- ported during the same week a year ago. Americans relied on foreign oil for 53.9 percent of their needs last week, and there are no signs that the upward spiral will abate. Before the Persian Gulf war, the United States obtained about 45 percent of its oil supply from foreign countries. During the Arab oil embargo in the 1970’s, foreign oil ac- counted for only 35 percent of Amer- ica’s oil supply. Anybody else interested in restoring domestic production of oil\u2014by U.S. producers using American workers? Politicians had better ponder the eco- nomic calamity sure to occur in Amer- ica if and when foreign producers shut off our supply\u2014or double the already enormous cost of imported oil flowing into the United States\u2014now 7,500,000 barrels a day. f SALUTING THE ALABAMA NSSC DIRECTORS ASSOCIATION Mr. HEFLIN. Mr. President, in 1981, the Alabama Association of Retired Senior Volunteer Program [RSVP] project directors developed a proposal requesting State funding for their projects as a supplement to their Fed- eral budgets. During State budget ne- gotiations, the funding was also ex- tended to Alabama’s Senior Companion and Foster Grandparent projects, marking the beginning of a collabora- tion among senior service corps pro- grams in my State that has continued for 15 years. As a State association known as the Alabama National Senior Service Corps Directors Association, these three programs\u2014RSVP, Senior Com- panion, and Foster Grandparents\u2014have worked together to secure other fund- ing. The Senior Corps’ 35 State projects receive more than a quarter million dollars annually from the State budget to cover costs related to volunteers. These funds have been used to establish several programs, including a public housing mentoring program and train- ing programs in prescription and over- the-counter drug misuse. The funds have also been used to conduct free VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00083 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9292 July 31, 1996 community intergenerational work- shops at sites throughout the State. The association also contracts with the IRS to provide tax counseling services for the elderly. The association is now seeking Med- icaid waiver funding and hopes to soon venture into the arena of private sector funding. Project directors have taken the first step toward seeking private sector support by incorporating as a 501(c)(3) organization. I am pleased to congratulate and commend the Alabama National Senior Service Corps Directors Association for developing an array of outstanding pro- grams and for providing a model that illustrates the power and potential of these kinds of partnerships in pro- viding important services to our senior citizens. f THE MENTALLY ILL AND THE HEALTH INSURANCE BILL Mr. DOMENICI. Mr. President, today I was informed by the chairman of Labor, Health and Human Services, Senator NANCY KASSEBAUM, that the conferees on the health insurance bill were not going to include\u2014with ref- erence to the mentally ill in this coun- try\u2014were not going to include even the compromise which had been offered to them that has been pending for the last 2 or 3 weeks. Frankly, the U.S. Senate voted overwhelmingly to rid this coun- try of a terrible, terrible plight, the discrimination against the mentally ill in insurance coverage in this country. And not only the discrimination but the lack of fairness and parity of cov- erage. I say publicly now to the business community of the United States, in particular the large companies, some of which are self-insured\u2014I do not say this very often\u2014but ”Shame, shame on you. Shame on you.” It is a very sim- ple proposition of parity that is not going to cost very much and will say to the 5 million severely mentally ill Americans and their families that they are not going to be treated any longer like second-rate, if not third-rate, citi- zens. All we asked of them in our com- promise Senator WELLSTONE and I sub- mitted was that if you are going to cover mental illness, if you are going to cover mental illness, that you must include two things: One, the same life- time cap that is total coverage, and the same annual allowable per year as you include in insurance for everyone else. Let me repeat, that amendment did not require any kind of insurance. It did not dictate coinsurance, deduct- ibility or anything. So companies could still tailor mental health coverage. If they are concerned about abuses, they can write the abuses out before they even offer them. All we asked for was the simple prop- osition to get started recognizing the discrimination that is in our current situation. That is to say, those who are mentally ill, do not cover them with $50,000 for life while you cover cancer patients with $1 million, do not cover the mentally ill with a $100,000 total lifetime if you cover those who have tuberculosis or have serious heart trou- ble with $500,000 or $1 million. Just par- ity, total coverage for total lifetime. On an annual basis, do not say to those who are mentally ill, you can only col- lect $10,000 a year maximum where you have $100,000 or $50,000 for others. I truly believe there is a total lack of willingness to understand the nature of this problem. This problem is a blight on America, a blight on our insurance companies, and a blight on the business community who continues to resist moving in the direction of parity. I want to thank those companies in the United States that already cover the mentally ill. And there are many. And I can say they are not running around complaining about the extraor- dinary costs. As a matter of fact, if this amendment, the one we told them we would settle for, were adopted, the increases are almost insignificant ac- cording to the Congressional Budget Office, because there are not a lot of people who will reach those limits. It is just to make sure we do not say to them, you are second-rate citizens. If you have insurance, your parents bought insurance, they cover somebody in their family with schizophrenia, they did not get the shock of their life that after they have spent $100,000 they have no more for the rest of their life and look around at their neighbor who had a heart condition and they get $1 million worth of coverage. No. I am not sure where we are going to end up. But I can say that a counteroffer was proposed, and I regret to say it was tantamount to a whole menu of options. And if you have a menu of options, you are going to get nothing, you are going to dump the mentally ill where they are already being dumped. So I hope that they will reconsider this decision. I, for one, am prepared to look, at this moment, at any way I can\u2014I am not sure I can succeed\u2014but at any way I can to make it hard to pass that bill. And any way I can find to make it impossible to pass that bill, I will do it. I am not sure on this con- ference I will accomplish a great deal, but we will make some noise about it because there is no need for this deci- sion to go this way. If those on the business side will look at the proposed amendment that was offered in lieu of the Senate-passed amendment, if they can come forth and tell me and tell those who support it how it will hurt them, how it is going to cost them, what their problems are, then I would be willing to say indeed they are trying to do something fair. Thus far, I think it is stubbornness, I think it is totally shameful, and I, for one, have been a staunch supporter of making sure we do not put undue bur- dens on business. It is a joke to say they do not want any additional man- dates when the whole bill is a mandate. The whole bill is a mandate. We man- date insurance companies and busi- nesses to pay for people with pre- existing conditions which is going to cost billions of dollars, and they do not talk about that. There is no excuse. I, for one, believe we have made a reasonable case. We have been more than fair. The millions of Americans suffering from this disgraceful dis- crimination are willing to accept a foot in the door, a little bit, just a start, and we get the door slammed right on them. Obviously, we have a lot of work to do, but any conferees that are unaware of the decision to give the mentally ill people of this country nothing in this conference report, maybe they ought to start with the conferees. That is what they are about to do. Mr. WELLSTONE. I say that the Senator from New Mexico spoke with great eloquence and power, and speaks for me. f MESSAGES FROM THE PRESIDENT Messages from the President of the United States were communicated to the Senate by Mr. Thomas, one of his secretaries. EXECUTIVE MESSAGES REFERRED As in executive session the Presiding Officer laid before the Senate messages from the President of the United States submitting sundry nominations which were referred to the Committee on Armed Services. (The nominations received today are printed at the end of the Senate pro- ceedings.) f MESSAGES FROM THE HOUSE At 12:30 p.m., a message from the House of Representatives, delivered by Ms. Goetz, one of its reading clerks, an- nounced that the House has passed the following bill, with an amendment, in which it requests the concurrence of the Senate: S. 640. An act to provide for the conserva- tion and development of water and related resources, to authorize the Secretary of the Army to construct various projects for im- provements to rivers and harbors of the United States, and for other purposes. The message also announced that the House has passed the following bills, in which it requests the concurrence of the Senate: H.R. 3846. An act to amend the Foreign As- sistance Act of 1961 to authorize the provi- sion of assistance for microenterprises, and for other purposes. H.R. 3870. An act to authorize the Agency for International Development to offer vol- untary separation incentive payments to em- ployees of that agency. At 3:58 p.m., a message from the House of Representatives, delivered by Mr. Hays, one of its reading clerks, an- nounced that the House has passed the following bills and joint resolution, in which it requests the concurrence of the Senate: VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00084 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9293 July 31, 1996 H.R. 740. An act to confer jurisdiction on the United States Court of Federal Claims with respect to land claims of Pueblo of Isleta Indian Tribe. H.R. 885. An act to designate the United States Post Office building located at 153 East 110th Street, New York, New York, as the ”Oscar Garcia Rivera Post Office Build- ing.” H.R. 1734. An act to reauthorize the Na- tional Film Preservation Board, and for other purposes. H.R. 1786. An act to regulate fishing in cer- tain waters of Alaska. H.R. 2391. An act to amend the Fair Labor Standards Act of 1938 to provide compen- satory time for all employees. H.R. 2700. An act to designate the building located at 8302 FM 327, Elmendorf, Texas, which houses operations of the United States Postal Service, as the ”Amos F. Longoria Post Office Building”. H.R. 3118. An act to amend title 38, United States Code, to reform eligibility for health care provided by the Department of Veterans Affairs. H.R. 3139. An act to redesignate the United States Post Office building located at 245 Centereach Mall on Middle Country Road in Centereach, New York, as the ”Rose Y. Caracappa United States Post Office Build- ing.” H.R. 3198. An act to reauthorize and amend the National Geologic Mapping Act of 1992, and for other purposes. H.R. 3215. An act to amend title 18, United States Code, to repeal the provision relating to Federal employees contracting or trading with Indians. H.R. 3287. An act to direct the Secretary of the Interior to convey the Crawford National Fish Hatchery to the city of Crawford, Ne- braska. H.R. 3435. An act to make technical amend- ments to the Lobbying Disclosure Act of 1995. H.R. 3546. An act to direct the Secretary of the Interior to convey the Walhalla National Fish Hatchery to the State of South Caro- lina. H.R. 3557. An act to direct the Secretary of the Interior to convey the Marion National Fish Hatchery and the Claude Harris Na- tional Aquacultural Research Center to the State of Alabama. H.R. 3586. An act to amend title 5, United States Code, to strengthen veterans’ pref- erence, to increase employment opportuni- ties for veterans, and for other purposes. H.R. 3680. An act to amend title 18, United States Code, to carry out the international obligations of the United States under the Geneva Conventions to provide criminal pen- alties for certain war crimes. H.R. 3735. An act to amend the Foreign As- sistance Act of 1961 to reauthorize the Devel- opment Fund for Africa under chapter 10 of part 1 of that act. H.R. 3768. An act to designate a United States Post Office to be located in Groton, Massachusetts, as the ”Augusta ‘Gusty’ Hornblower United States Post Office.” H.R. 3815. An act to make technical correc- tions and miscellaneous amendments to trade laws. H.R. 3834. An act to redesignate the Dun- ning Post Office in Chicago, Illinois, as the ”Roger P. McAuliffe Post Office.” H.R. 3867. An act to amend the Develop- mental Disabilities Assistance and Bill of Rights Act to extend the Act, and for other purposes. H.R. 3868. An act to extend certain pro- grams under the Energy Policy and Con- servation Act through September 30, 1996. H.J. Res. 166. Joint resolution granting the consent of Congress to the Mutual Aid Agreement between the city of Bristol, Vir- ginia, and the city of Bristol, Tennessee. The message also announced that the House has agreed to the following con- current resolutions, in which it re- quests the concurrence of the Senate: H. Con. Res. 142. Concurrent resolution re- garding the human rights situation in Mau- ritania, including the continued practice of chattel slavery. H. Con. Res. 155. Concurrent resolution concerning human and political rights and in support of a resolution of the crisis in Kosova. H. Con. Res. 191. Concurrent resolution to recognize and honor the Filipino World War II veterans for their defense of democratic ideals and their important contribution to the outcome of World War II. At 5:54 p.m., a message from the House of Representatives, delivered by Ms. Goetz, on of its reading clerks, an- nounced that the House has passed the following bill, in which it requests the concurrence of the Senate: H.R. 2297. An act to codify without sub- stantive change laws related to transpor- tation and to improve the United States Code. At 7:34 p.m., a message from the House of Representatives, delivered by Ms. Goetz, one of its reading clerks, an- nounced that the House agrees to the committee of conference on the dis- agreeing votes of the two Houses on the amendment of the Senate to the bill (H.R. 3734) to provide for reconcili- ation pursuant to section 201(a)(1) of the concurrent resolution on the budg- et for fiscal year 1997. MEASURES REFERRED The following bills were read the first and second times by unanimous con- sent and referred as indicated: H.R. 885. An act to designate the United States Post Office building located at 153 East 110th Street, New York, New York, as the ”Oscar Garcia Rivera Post Office Build- ing”; to the Committee on Governmental Af- fairs. H.R. 1734. An act to reauthorize the Na- tional Film Preservation Board, and for other purposes; to the Committee on the Ju- diciary. H.R. 1786. An act to regulate fishing in cer- tain waters of Alaska; to the Committee on Energy and Natural Resources. H.R. 2297. An act to codify without sub- stantive change laws related to transpor- tation and to improve the United States Code; to the Committee on the Judiciary. H.R. 2700. An act to designate the building located at 8302 FM 327, Elmendorf, Texas, which houses operations of the United States Postal Service, as the ”Amos F. Longoria Post Office Building”; to the Committee on Governmental Affairs. H.R. 3118. An act to amend title 38, United States Code, to reform eligibility for health care provided by the Department of Veterans Affairs; to the Committee on Veterans’ Af- fairs. H.R. 3198. An act to reauthorize and amend the National Geologic Mapping Act of 1992, and for other purposes; to the Committee on Energy and Natural Resources. H.R. 3287. An act to direct the Secretary of the Interior to convey the Crawford National Fish Hatchery to the city of Crawford, Ne- braska; to the Committee on Environment and Public Works. H.R. 3546. An act to direct the Secretary of the Interior to convey the Walhalla National Fish Hatchery to the State of South Caro- lina; to the Committee on Environment and Public Works. H.R. 3557. An act to direct the Secretary of the Interior to convey the Marion National Fish Hatchery and the Claude Harris Na- tional Aquacultural Research Center to the State of Alabama; to the Committee on En- vironment and Public Works. H.R. 3586. An act to amend title 5, United States Code, to strengthen veterans’ pref- erence, to increase employment opportuni- ties for veterans, and for other purposes; to the Committee on Veterans’ Affairs. H.R. 3786. An act to designate a United States Post Office to be located in Groton, Massachusetts, as the ”Augusta ‘Gusty’ Hornblower United States Post Office”; to the Committee on Governmental Affairs. . H.R. 3815. An act to make technical correc- tions and miscellaneous amendments to trade laws; to the Committee on Finance. H.R. 3846. An act to amend the Foreign As- sistance Act of 1961 to authorize the provi- sion of assistance for microenterprises, and for other purposes; to the Committee on For- eign Relations. H.R. 3867. An act to amend the Develop- mental Disabilities Assistance and Bill of Rights Act to extend the Act, and for other purposes; to the Committee on Labor and Human Resources. The following concurrent resolutions were read and referred as indicated: H. Con. Res. 142. Concurrent resolution re- garding the human rights situation in Mau- ritania, including the continued practice of chattel slavery; to the Committee on For- eign Relations. H. Con. Res. 155. Concurrent resolution concerning human and political rights and in support of a resolution of the crisis in Kosova; to the Committee on Foreign Rela- tions. H. Con. Res. 191. Concurrent resolution to recognize and honor the Filipino World War II veterans for their defense of democratic ideals and their important contribution to the outcome of World War II; to the Com- mittee on the Judiciary. The following bill, previously re- ceived from the House of Representa- tives for the concurrence of the Senate, was read the first and second times by unanimous consent and referred as in- dicated: H.R. 3665. An act to transfer to the Sec- retary of Agriculture the authority to con- duct the census of agriculture; to the Com- mittee on Governmental Affairs. f MEASURES PLACED ON THE CALENDAR The following measure was read the first and second times by unanimous consent and placed on the calendar: H.R. 3868. An act to extend certain pro- grams under the Energy Policy and Con- servation Act through September 30, 1996. f MEASURE READ THE FIRST TIME The following measure was read the first time: H.R. 2391. An act to amend the Fair Labor Standards Act of 1938 to provide compen- satory time for all employees. f EXECUTIVE AND OTHER COMMUNICATIONS The following communications were laid before the Senate, together with VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00085 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9294 July 31, 1996 accompanying papers, reports, and doc- uments, which were referred as indi- cated: EC 3573. A communication from the Assist- ant Secretary of Legislative Affairs, Depart- ment of State, transmitting, pursuant to law, the report on the program recommenda- tions of the Riyadh Accountability Review Board; to the Committee on Foreign Rela- tions. f REPORTS OF COMMITTEES The following reports of committees were submitted: By Mr. PRESSLER, from the Committee on Commerce, Science, and Transportation, without amendment: S. 1311. A bill to establish a National Fit- ness and Sports Foundation to carry out ac- tivities to support and supplement the mis- sion of the President’s Council on Physical Fitness and Sports, and for other purposes (Rept. No. 104 340). By Mr. PRESSLER, from the Committee on Commerce, Science, and Transportation, with amendments: S. 1735. A bill to establish the United States Tourism Organization as a non- governmental entity for the purpose of pro- moting tourism in the United States (Rept. No. 104 341). By Mr. PRESSLER, from the Committee on Commerce, Science, and Transportation, without amendment: S. 1840. A bill to amend the Federal Trade Commission Act to authorize appropriations for the Federal Trade Commission (Rept. No. 104 342). By Mr. HATCH, from the Committee on the Judiciary: Report on the Activities of the Committee on the Judiciary of the U.S. Senate During the 103d Congress (Rept. No. 104 343). By Mrs. KASSEBAUM, from the Com- mittee on Labor and Human Resources, with an amendment in the nature of a substitute: S. 1643. A bill to amend the Older Ameri- cans Act of 1965 to authorize appropriations for fiscal years 1997 through 2001, and for other purposes (Rept. No. 104 344). By Mrs. KASSEBAUM, from the Com- mittee on Labor and Human Resources, without amendment: S. Con. Res. 52. A bill to recognize and en- courage the convening of a National Silver Haired Congress (Rept. No. 104 345). By Mr. MCCAIN, from the Committee on Indian Affairs, without amendment: S. 1869. A bill to make certain technical corrections in the Indian Health Care Im- provement Act, and for other purposes (Rept. No. 104 346). f EXECUTIVE REPORTS OF COMMITTEES The following executive reports of committees were submitted: By Mr. PRESSLER, from the Committee on Commerce, Science, and Transportation: Thomas Hill Moore, of Florida, to be a Commissioner of the Consumer Product Safety Commission for a term of 7 years from October 26, 1996. (The above nominations were re- ported with the recommendation that he be confirmed, subject to the nomi- nee’s commitment to respond to re- quests to appear and testify before any duly constituted committee of the Sen- ate.) By Mr. THURMOND, from the Committee on Armed Services: The following-named officers for pro- motion in the Naval Reserve of the United States to the grade indicated under title 10, United States Code, section 5912: UNRESTRICTED LINE To be rear admiral Rear Adm. (1h) James Wayne Eastwood, 000 00 0000, U.S. Naval Reserve. Rear Adm. (1h) John Edwin Kerr, 000 00 0000, U.S. Naval Reserve. Rear Adm. (1h) John Benjamin Totushek, 000 00 0000, U.S. Naval Reserve. RESTRICTED LINE To be rear admiral Rear Adm. (1h) Robert Hulburt Weidman, Jr., 000 00 0000, U.S. Naval Reserve. STAFF CORPS To be rear admiral Rear Adm. (1h) M. Eugene Fussell, 000 00 0000, U.S. Naval Reserve. The following-named officer for appoint- ment to the grade of lieutenant general in the U.S. Marine Corps while assigned to a po- sition of importance and responsibility under the provisions of section 601(a), Title 10, United States Code: To be lieutenant general Maj. Gen. Carlton W. Fulford, Jr., 000 00 0000. The following-named colonel of U.S. Ma- rine Corps for promotion to the grade of brigadier general, under the provisions of section 624 of Title 10, United States Code: To be brigadier general Col. Arnold Fields, 000 00 0000, USMC. The following-named officer, on the active duty list, for promotion to the grade of brig- adier general in the U.S. Marine Corps in ac- cordance with section 5046 of title 10, United States Code: Theodore G. Hess, 000 00 0000. The following-named colonels of the U.S. Marine Corps for promotion to the grade of brigadier general, under the provisions of section 624 of title 10, United States Code: To be brigadier general Col. Robert R. Blackman, Jr., 000 00 0000, USMC. Col. William G. Bowdon III, 000 00 0000, USMC. Col. James T. Conway, 000 00 0000, USMC. Col. Keith T. Holcomb, 000 00 0000, USMC. Col. Harold Mashburn, Jr., 000 00 0000, USMC. Col. Gregory S. Newbold, 000 00 0000, USMC. The following-named officer for appoint- ment to the grade of lieutenant general while assigned to a position of importance and responsibility under title 10, United States Code, section 601: To be lieutenant general Maj. Gen. John B. Sams, Jr., 000 00 0000, U.S. Air Force. The following-named officer for appoint- ment in the Reserve of the Air Force, to the grade indicated, under title 10, United States Code, sections 8374, 12201, and 12212: To be brigadier general Col. Christopher J. Luna, 000 00 0000, Air Na- tional Guard of the United States. The following-named officer for promotion in the Regular Air Force of the United States to the grade indicated under title 10, United States Code, section 624: To be brigadier general Col. Gilbert J. Regan, 000 00 0000, U.S. Air Force. The following-named brigadier generals of the U.S. Marine Corps Reserve for promotion to the grade of major general, under the pro- visions of section 5898 of title 10, United States Code: To be major general Brig. Gen. John W. Hill, 000 00 0000, USMCR. Brig. Gen. Dennis M. McCarthy, 000 00 0000, USMCR. The following-named colonel of the U.S. Marine Corps for promotion to the grade of brigadier general, under the provisions of section 624 of title 10, United States Code: To be brigadier general Col. Guy M. Vanderlinden, 000 00 0000, USMC. The following-named officers for pro- motion in the Regular Army of the United States to the grade indicated under title 10, United States Code, sections 611(a) and 624: To be major general Brig. Gen. Michael W. Ackerman, 000 00 0000. Brig. Gen. Frank H. Akers, Jr., 000 00 0000. Brig. Gen. Leo J. Baxter, 000 00 0000. Brig. Gen. Roy E. Beauchamp, 000 00 0000. Brig. Gen. Kenneth R. Bowra, 000 00 0000. Brig. Gen. Kevin P. Byrnes, 000 00 0000. Brig. Gen. Michael A. Canavan, 000 00 0000. Brig. Gen. Robert T. Clark, 000 00 0000. Brig. Gen. Michael L. Dodson, 000 00 0000. Brig. Gen. Robert B. Flowers, 000 00 0000. Brig. Gen. Peter C. Franklin, 000 00 0000. Brig. Gen. Thomas W. Garrett, 000 00 0000. Brig. Gen. Emmitt E. Gibson, 000 00 0000. Brig. Gen. David L. Grange, 000 00 0000. Brig. Gen. David R. Gust, 000 00 0000. Brig. Gen. Mark R. Hamilton, 000 00 0000. Brig. Gen. Patricia R.P. Hickerson, 000 00 0000. Brig. Gen. Robert R. Ivany, 000 00 0000. Brig. Gen. Joseph K. Kellogg, Jr., 000 00 0000. Brig. Gen. John M. LeMoyne, 000 00 0000. Brig. Gen. John M. McDuffie, 000 00 0000. Brig. Gen. Freddy E. McFarren, 000 00 0000. Brig. Gen. Mario F. Montero, Jr., 000 00 0000. Brig. Gen. Stephen T. Rippe, 000 00 0000. Brig. Gen. John J. Ryneska, 000 00 0000. Brig. Gen. Robert D. Shadley, 000 00 0000. Brig. Gen. Edwin P. Smith, 000 00 0000. Brig. Gen. John B. Sylvester, 000 00 0000. Brig. Gen. Ralph G. Wooten, 000 00 0000. The following-named Army Medical Corps Competitive Category officers for appoint- ment in the Regular Army of the United States to the grade of brigadier general under the provisions of title 10, United States Code, sections 611(a) and 624(c): To be brigadier general Col. Ralph O. Dewitt, Jr., 000 00 0000, U.S. Army. Col. Kevin C. Kiley, 000 00 0000, U.S. Army. Col. Michael J. Kussman, 000 00 0000, U.S. Army. Col. Darrel R. Porr, 000 00 0000, U.S. Army. The following-named Army Medical Corps Competitive Category officer for appoint- ment in the Regular Army of the United States to the grade of brigadier general under the provisions of title 10, United States Code, sections 611(a) and 624(c): To be brigadier general Col. Mack C. Hill, 000 00 0000, U.S. Army. The following-named officer for appoint- ment to the grade of lieutenant general in the U.S. Army while assigned to a position of importance and responsibility under title 10, United States Code, section 601(a): To be lieutenant general Maj. Gen. David L. Benton, 000 00 0000. The following-named officer for appoint- ment to the grade of lieutenant general while assigned to a position of importance and responsibility under title 10, United States Code, section 601: To be lieutenant general Maj. Gen. Frank B. Campbell, 000 00 0000, U.S. Air Force. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00086 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9295 July 31, 1996 The following-named officer for reappoint- ment to the grade of lieutenant general in the U.S. Air Force while assigned to a posi- tion of importance and responsibility under title 10, United States Code, section 601: To be lieutenant general Lt. Gen. Lester L. Lyles, 000 00 0000. The following-named officer for appoint- ment to the grade of lieutenant general in the U.S. Air Force while assigned to a posi- tion of importance and responsibility under title 10, United States Code, section 601: To be lieutenant general Maj. Gen. Patrick K. Gamble, 000 00 0000. The following-named officer for appoint- ment to the grade of lieutenant general in the U.S. Air Force while assigned to a posi- tion of importance and responsibility under title 10, United States Code, section 601: To be lieutenant general Maj. Gen. Roger G. DeKok, 000 00 0000. The following-named officer for reappoint- ment to the grade of lieutenant general while assigned to a position of importance and responsibility under title 10, United States Code, section 601: To be lieutenant general Lt. Gen. Charles T. Robertson, 000 00 0000, U.S. Air Force. The following-named officers for appoint- ment in the Reserve of the Air Force, to the grade indicated, under the provisions of title 10, United States Code, sections 8373, 8374, 12201, and 12212: To be major general Brig. Gen. Keith D. Bjerke, 000 00 0000, Air National Guard. Brig. Gen. Edmond W. Boenisch, Jr., 000 00 0000, Air National Guard. Brig. Gen. Stewart R. Byrne, 000 00 0000, Air National Guard. Brig. Gen. John H. Fenimore V, 000 00 0000, Air National Guard. Brig. Gen. Johnny J. Hobbs, 000 00 0000, Air National Guard. Brig. Gen. Stephen G. Kearney, 000 00 0000, Air National Guard. Brig. Gen. William B. Lynch, 000 00 0000, Air National Guard. To be brigadier general Col. Brian E. Barents, 000 00 0000, Air Na- tional Guard. Col. George P. Christakos, 000 00 0000, Air National Guard. Col. Walter C. Corish, Jr., 000 00 0000, Air Na- tional Guard. Col. Fred E. Ellis, 000 00 0000, Air National Guard. Col. Frederick D. Feinstein, 000 00 0000, Air National Guard. Col. William P. Gralow, 000 00 0000, Air Na- tional Guard. Col. Douglas E. Henneman, 000 00 0000, Air National Guard. Col. Edward R. Jayne II, 000 00 0000, Air Na- tional Guard. Col. Raymond T. Klosowski, 000 00 0000, Air National Guard. Col. Fred N. Larson, 000 00 0000, Air National Guard. Col. Bruce W. Maclane, 000 00 0000, Air Na- tional Guard. Col. Ronald W. Mielke, 000 00 0000, Air Na- tional Guard. Col. Frank A. Mitolo, 000 00 0000. Col. Frank D. Rezac, 000 00 0000. Col. John P. Silliman, Jr., 000 00 0000. Col. George E. Wilson III, 000 00 0000. The following-named officer for reappoint- ment to the grade of admiral in the U.S. Navy while assigned to a position of impor- tance and responsibility under title 10, United States Code, sections 601 and 5033: CHIEF OF NAVAL OPERATIONS To be admiral Adm. Jay L. Johnson, 000 00 0000. The following-named officer for appoint- ment to the grade of general in the U.S. Air Force while assigned to a position of impor- tance and responsibility under title 10 United States Code, section 601: To be general Lt. Gen. Howell M. Estes III, 000 00 0000. The following U.S. Army National Guard officer for promotion in the Reserve of the Army to the grade indicated under title 10, United States Code, sections 3385, 3392 and 12203(a): To be major general Brig. Gen. Gerald A. Rudisill, Jr., 000 00 0000. The following-named officer for promotion in the Regular Air Force of the United States to the grade indicated under title 10, United States Code, section 624: To be brigadier general Col. Garry R. Trexler, 000 00 0000. *Everett Alverez, Jr., of Maryland, to be a Member of the Board of Regents of the Uni- formed Services University of the Health Sciences for a term expiring May 1, 1999. *Alberto Aleman Zubieta, a citizen of the Republic of Panama, to be Administrator of the Panama Canal Commission The following named officer for appoint- ment to the grade of lieutenant general in the U.S. Army while assigned to a position of importance and responsibility under title 10, United States Code, section 601(a): To be lieutenant general Maj. Gen. Eric K. Shinseki, 000 00 0000. The following-named officer for appoint- ment to the grade of vice admiral in the U.S. Navy while assigned to a position of impor- tance and responsibility under title 10 United States Code, section 601: To be vice admiral Rear Adm. (Selectee) Lyle G. Bien, 000 00 0000. (The above nominations were re- ported with the recommendation that they be confirmed.) Mr. THURMOND. Mr. President, for the Committee on Armed Services, I report favorably the attached listing of nominations. Those identified with a double asterisk (**) are to lie on the Secretary’s desk for the information of any Senator, since these names have already appeared in the RECORDS of May 17, 1996, June 3, 18, and July 9, 11, 1996, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar, that these nomi- nations lie at the Secretary’s desk for the information of Senators. The PRESIDING OFFICER. Without objection, it is so ordered. (The nominations ordered to lie on the Secretary’s desk were printed in the RECORDS of May 17, 1996, June 3, 18, and July 9, 11, 1996, at the end of the Senate proceedings.) **In the Air Force there are 31 promotions to the grade of lieutenant colonel (list begins with Gregory O. Allen) (Reference No. 1132). **In the Navy there are 170 promotions to the grade of captain (list begins with Wil- liam S. Adsit) (Reference No. 1133). **In the Navy there are 304 promotions to the grade of captain (list begins with Johnny P. Albus) (Reference No. 1134). **In the Air Force there are 2,525 pro- motions to the grade of lieutenant colonel and below (list begins with Derrick K. Ander- son) (Reference No. 1135). In the Navy there are 317 promotions to the grade of captain (list begins with Mi- chael P. Agor) **In the Army there is 1 promotion to the grade of lieutenant colonel (Wayne E. Ander- son) (Reference No. 1165). **In the Air Force there are 13 promotions to the grade of colonel and below (list begins with Stephen D. Chiabotti) (Reference No. 1188). **In the Marine Corps there are 2 pro- motions to the grade of lieutenant colonel and below (list begins with Richard L. West) (Reference No. 1189). **In the Navy there are 10 appointments to the grade of ensign (list begins with Anthony L. Evangelista) (Reference No. 1190). **In the Marine Corps there is 1 post- humous appointment to the grade of lieuten- ant colonel (John J. Canney) (Reference No. 1195). **In the Army there are 200 promotions to the grade of lieutenant colonel (list begins with Ann L. Bagley) (Reference No. 1196). **In the Army there are 423 promotions to the grade of major (list begins with James W. Baik) (Reference No. 1197). Total: 3,742. f INTRODUCTION OF BILLS AND JOINT RESOLUTIONS The following bills and joint resolu- tions were introduced, read the first and second time by unanimous con- sent, and referred as indicated: By Mr. WYDEN (for himself, Ms. SNOWE, and Mrs. BOXER): S. 2004. A bill to modify certain provisions of the Health Care Quality Improvement Act of 1986; to the Committee on Labor and Human Resources. By Mr. WYDEN: S. 2005. A bill to prohibit the restriction of certain types of medical communications be- tween a health care provider and a patient; to the Committee on Labor and Human Re- sources. By Mr. HATCH (for himself, Mr. BIDEN, Mr. THURMOND, and Mr. GRASSLEY): S. 2006. A bill to clarify the intent of Con- gress with respect to the Federal carjacking prohibition; read the first time. By Mr. BIDEN (for himself, Mr. HATCH, Mr. LEAHY, Mr. KOHL, Mr. GRASSLEY, Mrs. BOXER, Ms. MIKULSKI, and Ms. MOSELEY-BRAUN): S. 2007. A bill to clarify the intent of Con- gress with respect to the Federal carjacking prohibition; read the first time. By Mr. DASCHLE (for himself, Mr. ROCKEFELLER, Mr. KERRY, Mr. WELLSTONE, Ms. MIKULSKI, Mr. BYRD, Mr. DODD, Mr. CONRAD, Mr. INOUYE, Mr. PELL, Mr. SIMON, Mr. FEINGOLD, Mr. BREAUX, Mrs. BOXER, Mr. DOR- GAN, Mrs. FEINSTEIN, Mr. GLENN, Mr. HARKIN, Mr. ROBB, and Mr. KENNEDY): S. 2008. A bill to amend title 38, United States Code, to provide benefits for certain children of Vietnam veterans who are born with spina bifida, and for other purposes; to the Committee on Veterans’ Affairs. By Mr. ASHCROFT: S.J. Res. 58. A joint resolution proposing an amendment to the Constitution of the United States relative to granting power to the States to propose constitutional amend- ments; to the Committee on the Judiciary. f STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. WYDEN (for himself, Ms. SNOWE, and Mrs. BOXER): VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00087 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9296 July 31, 1996 S. 2004. A bill to modify certain pro- visions of the Health Care Quality Im- provement Act of 1986; to the Com- mittee on Labor and Human Resources. By Mr. WYDEN: S. 2005. A bill to prohibit the restric- tion of certain types of medical com- munications between a health care pro- vider and a patient; to the Committee on Labor and Human Resources. THE PATIENT COMMUNICATIONS PROTECTION ACT OF 1996 Mr. WYDEN. Mr. President, I rise today to introduce two new bills which I believe will help more fully inform patients and consumers about the health care choices they face, and safe- guard the most critical relationship be- tween care giver and patient. The first bill, which I introduce with my colleagues Senator SNOWE and Sen- ator BOXER, is the Health Care Quality Improvements Act of 1996. It amends and improves the 1986 public law which created the national practitioner databank, an informational resource maintained by the Department of Health and Human Services which is a compendium of State disciplinary ac- tions and civil malpractice case judg- ments against caregivers. As of this year, some 86,000 caregivers are listed in this taxpayer-supported databank. Currently, this informational resource is accessible only by hospitals, insur- ance plans, and State boards of medi- cine and health care licensing. The leg- islation introduced by Senator SNOWE and me, today, would for the first time allow public access to critically impor- tant databank records. Caregivers who have had at least three reportable inci- dents in their files would have their en- tire databank records opened to the public. This legislation also would cre- ate an Internet site on the World Wide Web allowing easier access for publicly accessible information. The second bill, the Patient Commu- nications Protection Act of 1996, would make illegal provisions in some con- tracts between caregivers and health plans which restrict communications between caregivers and their patients. Too often, I believe, these contract pro- visions limit the free and necessary communications of information to pa- tients regarding their medical condi- tion and all possible modalities of treatment. This legislation, while up- holding the right of plans to work with physicians to improve the overall qual- ity of care within a health plan, clearly restricts plans from impeding the free flow of medical information between State-licensed caregivers and patient. The Health Care Quality Improve- ments Act is endorsed by a number of groups including Families USA, Con- sumer Action, the National Associa- tion of Health Data Organizations, and the United Seniors Health Cooperative. The Patient Communications Protec- tion Act is supported by the Oregon Medical Association, the American As- sociation of Retired Persons, the Cen- ter for Patient Advocacy, Citizen Ac- tion, the Consumers Union, and the American College of Emergency Physi- cians. Mr. President, I ask unanimous con- sent that the text of the bills be print- ed in the RECORD. There being no objection, the bills were ordered to be printed in the RECORD, as follows: S. 2004 Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ”Health Care Quality Improvement Act Amendments of 1996”. SEC. 2. STANDARDS FOR PROFESSIONAL REVIEW ACTIONS. Section 412(a) of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11112(a)) is amended in the matter after and below paragraph (4) by adding at the end the fol- lowing sentence: ”A motion for summary judgment that such standards have been met shall be granted unless, considering the evi- dence in the light most favorable to the op- posing party, a reasonable finder of fact could conclude that the presumption has been so rebutted. The decision on such a mo- tion may be appealed as of right, without re- gard to whether the motion is granted or de- nied, and the courts of appeals (other than the United States Court of Appeals for the Federal Circuit) have jurisdiction of appeals from such decisions of the district courts.”. SEC. 3. REQUIRING REPORTS ON MEDICAL MAL- PRACTICE DATA. (a) IN GENERAL.\u2014Section 421 of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11131) is amended\u2014 (1) by striking subsections (a) and (b); (2) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and (3) by inserting before subsection (d) (as so redesignated) the following subsections: ”(a) IN GENERAL.\u2014 ”(1) REQUIREMENT OF REPORTING.\u2014Subject to the subsequent provisions of this sub- section, each person or entity which makes payment under a policy of insurance, self-in- surance, or otherwise in settlement (or par- tial settlement) of, or in satisfaction of a judgment in, a medical malpractice action or claim shall report, in accordance with sec- tion 424, information respecting the payment and circumstances thereof. ”(2) PAYMENTS BY PRACTITIONERS.\u2014The persons to whom the requirement of para- graph (1) applies include a physician or other licenses healthcare practitioner who makes a payment described in such paragraph and whose acts or omissions are the basis of the action or claim involved. The preceding sen- tence is subject to paragraph (3). ”(3) REFIND OF FEES.\u2014With respect to a physician or other licensed health care prac- titioner whose acts or omissions are the basis of an action or claim described in para- graph (1), the requirement of such paragraph shall not apply to a payment described in such paragraph if\u2014 ”(A) the payment is made by the physician or practitioner as a refund of fees for the health services involved, and ”(B) the payment does not exceed the amount of the original charge for the health services. ”(4) DEFINITION OF ENTITY AND PERSON.\u2014 For purposes of this section, the term ‘enti- ty’ includes the Federal Government, any State or local government, and any insur- ance company or other private entity; and the term ‘person’ includes Federal officers and employees. ”(b) INFORMATION TO BE REPORTED.\u2014The information to be reported under subsection (a) by a person or entity regarding a pay- ment and an action or claim includes the fol- lowing: ”(1)(A) The name of each physician or other licensed health care practitioner whose acts or omissions were the basis of the ac- tion or claim; and (to the extent authorized under title II of the Social Security Act) the social security account number assigned to the physician or practitioner. ”(B) The medical field of the physician or practitioner, including as applicable the medical specialty. ”(C) The date on which the physician or practitioner was first licensed in the medical field involved, and the number of years the physician or practitioner has been practicing in such field. ”(D) If the physician or practitioner could not be identified for purposes of subpara- graph (A)\u2014 ”(i) a statement of such fact and an expla- nation of the inability to make the identi- fication, and ”(ii) the name of the hospital or other health services organization (as defined in section 431) for whose benefit the payment was made. ”(2) The amount of the payment. ”(3) The name (if known) of any hospital or other health services organization with which the physician or practitioner is affili- ated or associated. ”(4)(A) A statement that describes the acts or omissions and injuries or illnesses upon which the action or claim was based, that specifies whether an action was filed, and if an action was filed, that specifies whether the action was a class action. ”(B) A statement by the physician or prac- titioner regarding the action or claim, if the physician or practitioner elects to make such a statement. ”(C) If the payment was made without the consent of the physician or practitioner, a statement specifying such fact and the rea- sons underlying the decision to make the payment without such consent. ”(5) Such other information as the Sec- retary determines is required for appropriate interpretation of information reported under this section. ”(c) CERTAIN REPORTING CRITERIA; NOTICE TO PRACTITIONERS.\u2014 ”(1) REPORTING CRITERIA.\u2014The establishing criteria under section 424(a) for reports under this section, the Secretary shall estab- lish criteria regarding statements under sub- section (b)(4). Such criteria shall include\u2014 ”(A) criteria regarding the length of each of the statements, ”(B) criteria regarding the notice required by paragraph (2) of this subsection, and ”(C) such other criteria as the Secretary determines to be appropriate. ”(2) NOTICE OF OPPORTUNITY TO MAKE STATEMENT.\u2014In the case of an entity that prepares a report under subsection (a)(1) re- garding a payment and an action or claim, the entity shall notify any physician or prac- titioner identified under subsection (b)(1)(A) of the opportunity to make a statement under subsection (b)(4)(B). Criteria under paragraph (1)(B) of this subsection shall in- clude criteria regarding the date by which the reporting entity is to provide the notice and the date by which the physician or prac- titioner is to submit the statement to the entity.”. (b) DEFINITION OF HEALTH SERVICES ORGA- NIZATION.\u2014Section 431 of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11151) is amended\u2014 (1) by redesignating paragraphs (5) through (14) as paragraphs (6) through (15), respec- tively; and VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00088 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9297 July 31, 1996 (2) by inserting after paragraph (4) the fol- lowing paragraph: ”(5) The term ‘health services organiza- tion’ means an entity that, directly or through contracts, provides health services. Such term includes hospitals; health mainte- nance organizations and other health plans; and health care entities (as defined in para- graph (4)).”. (c) CONFORMING AMENDMENTS.\u2014 (1) IN GENERAL.\u2014The Health Care Quality Improvement Act of 1986 (42 U.S.C. 11101 et seq.) is amended\u2014 (A) in section 411(a)(1), in the matter pre- ceding subparagraph (A), by striking ”431(9)” and inserting ”431(10)”; (B) in section 421(d) (as redesignated by subsection (a)(2) of this section), by inserting ”person or” before ”entity”; (C) in section 422(a)(2)(A), by inserting be- fore the comma at the end the following: ”, and (to the extent authorized under title II of the Social Security Act) the social secu- rity account number assigned to the physi- cian”; and (D) in section 423(a)(3)(A), by inserting be- fore the comma at the end the following: ”, and (to the extent authorized under title II of the Social Security Act) the social secu- rity account number assigned to the physi- cian or practitioner”. (2) APPLICABILITY OF REQUIREMENTS TO FED- ERAL ENTITIES.\u2014 (A) Section 432 of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11152) is amended\u2014 (i) by striking subsection (b); and (ii) by redesignating subsection (c) as sub- section (b). (B) Section 432 of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11133) is amended by adding at the end the following subsection: ”(e) APPLICABILITY TO FEDERAL FACILITIES AND PHYSICIANS.\u2014 ”(1) IN GENERAL.\u2014Subsection (a) applies to Federal health facilities (including hos- pitals) and actions by such facilities regard- ing the competence or professional conduct of Federal physicians to the same extent and in the same manner as such subsection ap- plies to health care entities and professional review actions. ”(2) RELEVANT BOARD OF MEDICAL EXAM- INERS.\u2014For purposes of paragraph (1), the Board of Medical Examiners to which a Fed- eral health facility is to report is the Board of Medical Examiners of the State within which the facility is located.”. (C) Section 425 of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11135) is amended by adding at the end the following subsection: ”(d) APPLICABILITY TO FEDERAL HOS- PITALS.\u2014This section applies to Federal hos- pitals to the same extent and in the same manner as such subsection applies to other hospitals.”. SEC. 4. REPORTING OF SANCTIONS TAKEN BY BOARDS OF MEDICAL EXAMINERS. Section 422(a) of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11132(a)) is amended\u2014 (1) in paragraph (1)(A), by striking ”which revokes or suspends” and inserting ”which denies, revokes, or suspends”; and (2) in paragraph (2)\u2014 (A) in subparagraph (B), by striking ”(if known)” and all that follows and inserting ”for the action described in paragraph (1)(A) that was taken with respect to the physician or, if known, for the surrender of the li- cense,”; (B) by redesignating subparagraph (C) as subparagraph (E); and (C) by inserting after subparagraph (B) the following subparagraphs: ”(C) the medical field of the physician, if known, including as applicable the medical specialty, ”(D) the date on which the physician was first licensed in the medical field, and the number of years the physician has been prac- ticing in such field, if known, and”. SEC. 5. REPORTING OF CERTAIN PROFESSIONAL REVIEW ACTIONS TAKEN BY HEALTH CARE ENTITIES. Section 423(a)(3) of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11133(a)(3)) is amended\u2014 (1) in subparagraph (B), by striking ”and” after ”surrender,”; (2) by redesignating subparagraph (C) a subparagraph (E); and (3) by inserting after subparagraph (B) the following subparagraphs: ”(C) the medical field of the physician, if known, including as applicable the medical specialty, ”(D) the date on which the physician was first licensed in the medical field, and the number of years the physician has been prac- ticing in such field, if known, and”. SEC. 6. FORM OF REPORTING. Section 424 of the Health Care Quality Im- provement Act of 1986 (42 U.S.C. 11134) is amended by adding at the end the following subsection: ”(d) ADDITIONAL REQUIREMENTS.\u2014Not later than 30 days after the effective date for this subsection under section 11 of the Health Care Quality Improvement Act Amendments of 1996, the information reported under sec- tions 421, 422(a), and 423(b) shall be available (to persons and entities authorized in this Act to receive the information) in accord- ance with the following: ”(1) The methods of organizing the infor- mation shall include organizing by medical field (and as applicable by medical spe- cialty). ”(2) With respect to medical malpractice actions reported under section 421(b)(4)(A), the methods of organizing shall specify whether the action was a class action.”. SEC. 7. DUTY TO OBTAIN INFORMATION. Part B of the Health Care Quality Improve- ment Act of 1986 (42 U.S.C. 11131 et seq.) is amended by inserting after section 425 the following section: ”SEC. 425A. DUTY OF BOARDS OF MEDICAL EXAM- INERS TO OBTAIN INFORMATION. ”(a) IN GENERAL.\u2014Effective 2 years after the date of the enactment of the Health Care Quality Improvement Act Amendments of 1996, it is the duty of each Board of Medical Examiners to request from the Secretary (or the agency designated under section 424(b)) information reported under this part con- cerning a physician\u2014 ”(1) at the time the physician submits the initial application for a physician’s license in the State involved, and ”(2) at each time the physician submits an application to continue in effect the license, subject to subsection (d). A Board of Medical Examiners may request information reported under this part con- cerning a physician at other times. ”(b) FAILURE TO OBTAIN INFORMATION.\u2014 With respect to an action for mandamus or other cause of action against a Board of Med- ical Examiners, a Board which does not re- quest information respecting a physician as required under subsection (a) is presumed to have knowledge of any information reported under this part to the Secretary with respect to the physician. ”(c) RELIANCE ON INFORMATION PROVIDED.\u2014 With respect to a cause of action against a Board of Medical Examiners, each Board of Medical Examiners may rely upon informa- tion provided to the Board under this title, unless the Board has knowledge that the in- formation provided was false. ”(d) STATE OPTION REGARDING CONTINU- ATION OF LICENSES.\u2014 ”(1) ESTABLISHMENT OF ELECTRONIC SYSTEM FOR TRANSMISSION OF DATA.\u2014After consulta- tion with the States, the Secretary shall es- tablish a system for electronically transmit- ting information under this part to States that elect to install equipment necessary for participation in the system. The system shall possess the capability to receive trans- missions of data from such States. ”(2) STATE OPTION REGARDING ELECTRONIC SYSTEM.\u2014With respect to compliance with subsection (a)(2) (relating to applications to continue in effect physicians’ licenses), if a State is participating in the system under paragraph (1) and provides the Board of Med- ical Examiners of the State with access to the system, the Board may elect, in lieu of complying with subsection (a)(2), to comply with paragraph (3) of this subsection. ”(3) DESCRIPTION OF OPTION.\u2014For purposes of paragraph (2), a Board of Medical Exam- iners is complying with this paragraph if\u2014 ”(A) through the system under paragraph (1), the Board annually transmits to the Sec- retary (or the agency designated under sec- tion 424(b)) data identifying all individuals who hold a valid physician’s license issued by the Board, without regard to whether the licenses are expiring, and ”(B) after receiving from the Secretary (or such agency) a list of physicians under para- graph (4)(B), the Board complies with para- graph (5). ”(4) IDENTIFICATION BY SECRETARY OF REL- EVANT PHYSICIANS.\u2014After receiving data under paragraph (3)(A) from a Board of Med- ical Examiners, the Secretary (or the agency designated under section 424(b)) shall\u2014 ”(A) from among the physicians identified through the data, determine which of such physicians has been the subject of informa- tion reported under this part, and the State in which the incidents involved occurred, and ”(B) provide to the Board, through the sys- tem under paragraph (1), a list of the physi- cians who have been such subjects, which list specifies for each physician the States in which the incidents involved occurred. ”(5) REQUEST BY STATE OF INFORMATION ON RELEVANT PHYSICIANS.\u2014For purposes of para- graph (3)(B), a Board of Medical Examiners of a State is complying with this paragraph if, after receiving the list of physicians under paragraph (4)(B), the Board promptly\u2014 (A) identifies which of the physicians has had, for purposes of paragraph (4), an inci- dent in another State, and (B) requests for the Secretary (or the agen- cy) information reported under this part con- cerning each of the physicians so identi- fied.”. SEC. 8. ADDITIONAL PROVISIONS REGARDING ACCESS TO INFORMATION; MIS- CELLANEOUS PROVISIONS. (a) ACCESS TO INFORMATION.\u2014Section 427(a) of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11137(a)) is amended to read as follows: ”(a) ACCESS REGARDING LICENSING, EM- PLOYMENT, AND CLINICAL PRIVILEGES.\u2014The Secretary (or the agency designated under section 424(b)) shall, upon request, provide information reported under this part con- cerning a physician or other licensed health care practitioner to\u2014 ”(1) State licensing boards, and ”(2) hospitals and other health services or- ganizations\u2014 ”(A) that have entered (or may be enter- ing) into an employment or affiliation rela- tionship with the physician or practitioner, or ”(B) to which the physician or practitioner has applied for clinical privileges or appoint- ment to the medical staff.”. (b) FEES.\u2014Section 427(b)(4) of the Health Care Quality Improvement Act of 1986 (42 VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00089 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9298 July 31, 1996 U.S.C. 11137(b)(4)) is amended to read as fol- lows: ”(4) FEES.\u2014In disclosing information under subsection (a) or section 426, the Secretary may impose fees in amounts reasonably re- lated to the costs of carrying out the duties of the Secretary regarding the information reported under this part (including the func- tions specified in section 424(b) with respect to the information), except that a fee may not be imposed for providing a list under sec- tion 425A(d)(4)(B) to any Board of Medical Examiners. Such fees are available to the Secretary (or, in the Secretary’s discretion, to the agency designated under section 424(b)) to cover such costs. Such fees remain available until expended.”. (c) ADDITIONAL DISCLOSURES OF INFORMA- TION.\u2014Section 427 of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11137) is amended by adding at the end the following subsection: ”(e) AVAILABILITY OF INFORMATION TO PUB- LIC.\u2014 ”(1) IN GENERAL.\u2014Not later than 30 days after the effective date for this subsection under section 11 of the Health Care Quality Improvement Act Amendments of 1996, and every 3 months thereafter, the Secretary shall, except as provided in paragraph (2), make available to the public all information reported under sections 421, 422(a), and 423(b). For such purpose, the information shall be published as a separate document whose principal topic is such information, and in addition the information shall be made available through the method described in paragraph (3). ”(2) LIMITATIONS.\u2014In the case of a physi- cian or other licensed health care practi- tioner with respect to whom one or more in- cidents have been reported under sections 421, 422(a), and 423(b), the following applies: ”(A) Information may not be made avail- able under paragraph (1) if, subject to sub- paragraph (B), the aggregate number of dis- crete incidents reported under such sections is not more than 2. ”(B) A discrete incident reported under section 421 may not be counted under sub- paragraph (A) if the payment for the medical malpractice action or claim involved was less than $25,000. ”(C) If the number of discrete incidents counted under subparagraph (A) is 3 or more, the resulting availability of information under paragraph (1) with respect to such practitioner shall include information re- ported on all the discrete incidents that were so counted. Such availability may not in- clude information on any incident not count- ed by reason of subparagraph (B). ”(D) Of the information reported under section 421, the following information may not be made available under paragraph (1) (regardless of the number of discrete inci- dents counted under subparagraph (A) and regardless of the amount of the payments in- volved): ”(i) The social security account number of the physician or practitioner. ”(ii) Information disclosing the identity of any patient involved in the incidents in- volved. ”(iii) With respect to information that the Secretary requires under section 421(b)(5) (if any)\u2014 ”(I) the home address of the physician or practitioner, and ”(II) the number assigned to the physician or practitioner by the Drug Enforcement Ad- ministration. ”(iv) Information not required to be re- ported under such section. ”(3) USE OF INTERNET.\u2014For purposes of paragraph (1), the method described in this paragraph is to make the information in- volved available to the public through the telecommunications medium known as the World Wide Web of the Internet. The Sec- retary, acting through the Administrator of the Health Resources and Services Adminis- tration, shall provide for the establishment of a site on such medium, and shall update the information maintained through such medium not less frequently than once every 3 months. ”(4) DISSEMINATION; FEES.\u2014The Secretary shall disseminate each publication under paragraph (1) to public libraries without charge. In providing the publication to other entities, and in making information avail- able under paragraph (3), the Secretary may impose a fee reasonably related to the costs of the Secretary in carrying out this sub- section. Such fees are available to the Sec- retary (or, in the Secretary’s discretion, to the agency designated under section 424(b)) to cover such costs. Such fees remain avail- able until expended.”. (d) CONFORMING AMENDMENTS.\u2014Section 427 of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11137) is amended\u2014 (1) in subsection (b)(1), in the first sen- tence, by striking ”Information reported” and inserting the following: ”Except for in- formation disclosed under subsection (e), in- formation reported”; and (2) in the heading for the section, by strik- ing ”MISCELLANEOUS PROVISIONS” and inserting the following: ”ADDITIONAL PRO- VISIONS REGARDING ACCESS TO INFOR- MATION; MISCELLANEOUS PROVISIONS”. SEC. 9. OTHER MATTERS. The Health Care Quality Improvement Act of 1986 (42 U.S.C. 11101 et seq.) is amended\u2014 (1) by redesignating part C as part D; and (2) by inserting after part B the following part: ”PART C\u2014OTHER MATTERS REGARDING IMPROVEMENT OF HEALTH CARE QUAL- ITY ”SEC. 428. PROHIBITION AGAINST SETTLEMENT WITHOUT CONSENT OF PRACTI- TIONER. ”(a) PROHIBITION.\u2014With respect to a physi- cian or other licensed health care practi- tioner whose acts or omissions are the basis of a medical malpractice action or claim, an entity may not make a payment described in section 421(a)(1) without the written consent of the physician or practitioner, subject to subsection (b). ”(b) EXCEPTIONS.\u2014Subsection (a) shall not apply with respect to a payment by an entity regarding an action or claim, subject to sub- section (c)\u2014 ”(1) if the payment is made in satisfaction of a judgment in a court of competent juris- diction, ”(2) if, with respect to the action or claim, the physician or other licensed health care practitioner involved enters a process of al- ternative dispute resolution, and the process has been concluded or any of the individuals involved has terminated participation in the process, ”(3)(A) the entity delivers directly, or makes a reasonable effort to deliver through the mail, a written notice to the physician or practitioner involved providing the infor- mation specified in subsection (c), and ”(B) a 30-day period elapses, at the conclu- sion of which the entity has a reasonable be- lief that the physician or practitioner does not object to the payment. ”(c) CRITERIA REGARDING NOTICE.\u2014For pur- poses of subsection (b)(3) regarding a written notice to a physician or practitioner\u2014 ”(1) the notice shall be considered to have been delivered if the notice was delivered to the home or business address of the physi- cian or practitioner, and to the attorney (if any) representing the physician or practi- tioner in the action or claim involved, ”(2) the notice shall be considered to have been delivered directly if the notice was de- livered personally by the entity involved or by an agent of the entity, ”(3) the entity shall be considered to have made a reasonable effort to deliver the no- tice through the mail if the entity provided the notice through certified mail, with re- turn receipt requested, ”(4) the information specified in this para- graph for the notice is that the entity in- tends to make the payment involved; that the physician or practitioner has a legal right to prohibit the payment; and that such right expires in 30 days, with a specification of the date on which the right expires, and ”(5) the 30-day period begins on the date on which the notice is delivered directly to the physician or practitioner, or on the seventh day after the date on which the notice is posted, as the case may be. ”(d) CIVIL MONEY PENALTY.\u2014An entity that makes a payment in violation of sub- section (a) shall be subject to a civil money penalty of not more than $10,000 for each such payment involved. Such penalty shall be imposed and collected in the same manner as civil money penalties under subsection (a) of section 1128A of the Social Security Act are imposed and collected under that sec- tion. ”SEC. 429. EMPLOYMENT TERMINATION OF PHY- SICIAN. ”(a) REQUIREMENT OF ADEQUATE NOTICE AND HEARING.\u2014 ”(1) IN GENERAL.\u2014A health services organi- zation may not terminate the employment of a physician, and may not terminate a con- tract with a physician for the provision of health services, unless adequate notice and hearing procedures have been afforded the physician involved. ”(2) APPLICABILITY.\u2014Section 412(a)(3) ap- plies in lieu of paragraph (1) in the case of an employment termination that is a profes- sional review action. (With respect to the preceding sentence, paragraph (1) does apply to an employment termination that is an ac- tion described in subparagraph (A) of section 431(10) or in the other subparagraphs of such section.) ”(b) SAFE HARBOR.\u2014 ”(1) IN GENERAL.\u2014A health services organi- zation is deemed to have met the adequate notice and hearing requirement of subsection (a) with respect to the employment of, or a contract of, a physician if the conditions de- scribed in paragraphs (2) through (4) are met (or are waived voluntarily by the physician). ”(2) NOTICE OF PROPOSED ACTION.\u2014Condi- tions under paragraph (1) are that the physi- cian involved has been given notice stating\u2014 ”(A)(i) that the health services organiza- tion proposes to take action to terminate the employment or contract, ”(ii) reasons for the proposed action, ”(B)(i) that the physician has the right to request a hearing on the proposed action, ”(ii) any time limit (of not less than 30 days) within which to request such a hear- ing, and ”(C) a summary of the rights in the hear- ing under paragraph (4). ”(3) NOTICE OF HEARING.\u2014Conditions under paragraph (1) are that, if a hearing is re- quested on a timely basis under paragraph (2)(B), the physician involved must be given notice stating\u2014 ”(A) the place, time, and date, of the hear- ing, which date shall not be less than 30 days after the date of the notice, and ”(B) a list of the witnesses (if any) ex- pected to testify at the hearing on behalf of the health services organization. ”(4) CONDUCT OF HEARING AND NOTICE.\u2014Con- ditions under paragraph (1) are that, if a hearing is requested on a timely basis under paragraph (2)(B)\u2014 VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00090 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9299 July 31, 1996 ”(A) subject to subparagraph (B), the hear- ing shall be held (as determined by the health services organization)\u2014 ”(i) before arbitrator mutually acceptable to the physician involved and the health services organization, ”(ii) before a hearing officer who is ap- pointed by the organization and who is not in direct economic competition with the physician, or ”(iii) before a panel of individuals who are appointed by the organization and are not in direct economic competition with the physi- cian, ”(B) the right to the hearing may be for- feited if the physician fails, without good cause, to appear, ”(C) in the hearing the physician has the right\u2014 ”(i) to representation by an attorney or other person of the physician’s choice, ”(ii) to have a record made of the pro- ceedings, copies of which may be obtained by the physician upon payment of any reason- able charges associated with the preparation thereof, ”(iii) to call, examine, and cross-examine witnesses, ”(iv) to present evidence determined to be relevant by the hearing officer, regardless of its admissibility in a court of law, and ”(v) to submit a written statement at the close of the hearing, and ”(D) upon completion of the hearing, the physician has the right\u2014 ”(i) to receive the written recommendation of the arbitrator, officer, or panel, including a statement of the basis for the rec- ommendations, and ”(ii) to receive a written decision of the health services organization, including a statement of the basis for the decision. ”(c) RULE OF CONSTRUCTION.\u2014A health services organization’s failure to meet the conditions described in paragraphs (2) through (4) of subsection (b) shall not, in itself, constitute failure to meet the stand- ards of subsection (a).”. SEC. 10. DEFINITIONS. Section 431(6) of the Health Care Quality Improvement Act of 1986, as redesignated by section 3(b)(1) of this Act, is amended by in- serting before the period the following: ”(ex- cept that such term means an institution de- scribed in such paragraph (1) (without regard to such paragraph (7)) if, under applicable State or local law, the institution is per- mitted to operate without being licensed or otherwise approved as a hospital)”. SEC. 11. EFFECTIVE DATES. (a) INCORPORATION OF TEXT OF AMEND- MENTS.\u2014The amendments described in this Act are made upon the date of the enactment of this Act. (b) SUBSTANTIVE EFFECT.\u2014Except as pro- vided in subsection (c)(1) and subsection (d), and except as otherwise provided in this Act\u2014 (1) the amendments made by this Act take effect upon the expiration of the 1-year pe- riod beginning on the date of the enactment of this Act; and (2) prior to the expiration of such period, the Health Care Quality Improvement Act of 1986, as in effect on the day before such date of enactment, continues in effect. (c) REGULATIONS.\u2014 (1) IN GENERAL.\u2014With respect to the amendments made by this Act, the Secretary of Health and Human Services may issue reg- ulations pursuant to such amendments be- fore the expiration of the period specified in subsection (b)(1), and may otherwise take ap- propriate action before the expiration of such period to prepare for the responsibil- ities of the Secretary to the amendments. (2) ABSENCE OF FINAL RULE.\u2014The final rule for purposes of paragraph (1) may not take effect before the expiration of the period specified in subsection (b)(1), and the absence of such a rule upon such expiration does not affect the provisions of subsection (b). (d) TRANSITIONAL PROVISIONS REGARDING MALPRACTICE PAYMENTS BY PERSONS.\u2014With respect to the reporting of information under section 421 of the Health Care Quality Im- provement Act of 1986, the following applies: (1) The requirement of reporting by per- sons under section 421(a)(1) of such Act (as amended by section 3(a) of this Act) takes ef- fect 180 days after the date of the enactment of this Act. (2) The requirement of reporting by per- sons applies to payments under such section 421(a)(1) made before, on, or after such date of enactment. (3)(A) The information received by the Sec- retary of Health and Human Services on or before August 27, 1993, pursuant to regula- tions requiring reports from persons (in addi- tion to reports from entities) shall be main- tained in the same manner as the informa- tion was maintained prior to such date, and shall be available in accordance with the regulations in effect under such Act prior to such date (which regulations remain in effect unless a provision of this Act takes effect pursuant to this section and requires other- wise). (B) Subparagraph (A) takes effect on the date of the enactment of this Act. S. 2005 Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; FINDINGS. (a) SHORT TITLE.\u2014This Act may be cited as the ”Patient Communications Protection Act of 1996”. (b) FINDINGS.\u2014Congress finds the fol- lowing: (1) Patients need access to all relevant in- formation to make appropriate decisions, with their physicians, about their health care. (2) Restrictions on the ability of physicians to provide full disclosure of all relevant in- formation to patients making health care decisions violate the principles of informed consent and practitioner ethical standards. (3) The offering and operation of health plans affect commerce among the States. Health care providers located in one State serve patients who reside in other States as well as that State. In order to provide for uniform treatment of health care providers and patients among the States, it is nec- essary to cover health plans operating in one State as well as those operating among the several States. SEC. 2. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL COMMUNICA- TIONS. (a) IN GENERAL.\u2014 (1) PROHIBITION OF CERTAIN PROVISIONS.\u2014 Subject to paragraph (2), an entity offering a health plan (as defined in subsection (d)(2)) may not include any provision that prohibits or restricts any medical communication (as defined in subsection (b)) as part of\u2014 (A) a written contract or agreement with a health care provider, (B) a written statement to such a provider, or (C) an oral communication to such a pro- vider. ”(2) CONSTRUCTION.\u2014Nothing in this sec- tion shall be construed as preventing an en- tity from exercising mutually agreed upon terms and conditions not inconsistent with paragraph (1), including terms or conditions requiring caregivers to participate in, and cooperate with, all programs, policies, and procedure developed or operated by the per- son, corporation, partnership, association, or other organization to ensure, review, or im- prove the quality of health care. (3) NULLIFICATION.\u2014Any provision de- scribed in paragraph (1) is null and void. (b) MEDICAL COMMUNICATION DEFINED.\u2014In this section, the term ”medical communica- tion” means a communication made by a health care provider with a patient of the provider (or the guardian or legal representa- tive of such patient) with respect to the pa- tient’s physician or mental condition or treatment options. (c) ENFORCEMENT THROUGH IMPOSITION OF CIVIL MONEY PENALTY.\u2014 (1) IN GENERAL.\u2014Any entity that violates paragraph (1) of subsection (a) shall be sub- ject to a civil money penalty of up to $15,000 for each violation. No such penalty shall be imposed solely on the basis of an oral com- munication unless the communication is part of a pattern or practice of such commu- nications and the violation is demonstrated by a preponderance of the evidence. (2) PROCEDURES.\u2014The provisions of sub- sections (c) through (l) of section 1128A of the Social Security Act (42 U.S.C. 1320a 7a) shall apply to civil money penalties under paragraph (1) in the same manner as they apply to a penalty or proceeding under sec- tion 1128A(a) to a penalty or proceeding under section 1128A(a) of such Act. (d) DEFINITIONS.\u2014For purposes of this sec- tion: (1) HEALTH CARE PROVIDER.\u2014The term ”health care provider” means anyone li- censed under State law to provide health care services, including a practitioner such as a nurse anesthetist or chiropractor who is so licensed. (2) HEALTH PLAN.\u2014The term ”health plan” means any public or private health plan or arrangement (including an employee welfare benefit plan) which provides, or pays the cost of, health benefits, and includes an organiza- tion of health care providers that furnishes health services under a contract or agree- ment with such a plan. (3) COVERAGE OF THIRD PARTY ADMINISTRA- TORS.\u2014In the case of a health plan that is an employee welfare benefit plan (as defined in section 3(1) of the Employee Retirement In- come Security Act of 1974), any third party administrator or other person with responsi- bility for contracts with health care pro- viders under the plan shall be considered, for purposes of this section, to be an entity of- fering such health plan. (e) NON-PREEMPTION OF STATE LAW.\u2014A State may establish or enforce requirements with respect to the subject matter of this section, but only if such requirements are consistent with the Act and are more protec- tive of medical communications than the re- quirements established under this section. (g) EFFECTIVE DATE.\u2014Subsection (a) shall take effect 180 days after the date of the en- actment of this Act and shall apply to med- ical communications made on or after such date. By Mr. HATCH (for himself, Mr. BIDEN, Mr. THURMOND, and Mr. GRASSLEY): S. 2006. A bill to clarify the intent of Congress with respect to the Federal carjacking prohibition. THE CARJACKING CORRECTION ACT OF 1996 Mr. HATCH. Mr. President, I rise to introduce the Carjacking Correction Act of 1996. This bill adds an important clarification to the Federal carjacking statute, which is to provide that a rape committed during a carjacking should be considered a serious bodily injury. I am pleased to be joined in this ef- fort by the ranking member of the Ju- diciary Committee, Senator BIDEN. He VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00091 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9300 July 31, 1996 has long been a leader in addressing the threat of violence against women, and our partnership in enacting the Vi- olence Against Women Act is evidence of strong bipartisan outrage at every incident of assault or domestic vio- lence. This correction to the law is neces- sitated by the fact that at least one court has held that under the Federal carjacking statute, rape would not con- stitute a serious bodily injury. Few crimes are as brutal, vicious, and harmful to the victim than rape. Yet, under this interpretation, the sen- tencing enhancement for such injury may not be applied to a carjacker who brutally rapes his victim. In my view, Congress should act now to clarify the law in this regard. The bill we introduce today would do this by specifically including rape as seri- ous bodily injury under the statute. I want to thank Representative JOHN CONYERS, the ranking member of the House Judiciary Committee, who brought this matter to my attention and is leading the effort in the House for passage of this legislation. I urge my colleagues to support swift passage of this bill. By Mr. DASCHLE (for himself, Mr. ROCKEFELLER, Mr. KERRY, Mr. WELLSTONE, Ms. MIKULSKI, Mr. BYRD, Mr. DODD, Mr. CONRAD, Mr. INOUYE, Mr. PELL, Mr. SIMON, Mr. FEINGOLD, Mr. BREAUX, Mrs. BOXER, Mr. DOR- GAN, Mrs. FEINSTEIN, Mr. GLENN, Mr. HARKIN, Mr. ROBB, and Mr. KENNEDY): S. 2008. A bill to amend title 38, United States Code, to provide benefits for certain children of Vietnam vet- erans who are born with spina bifida, and for other purposes; to the Com- mittee on Veterans Affairs. THE AGENT ORANGE BENEFITS ACT OF 1996 Mr. DASCHLE. Mr. President, today, with 19 of my colleagues, I am intro- ducing the Agent Orange Benefits Act of 1996. This legislation is an important step toward easing the burden of inno- cent, indirect victims of our country’s use of agent orange during the Viet- nam war. The bill would extend health care and related benefits, including a monthly monetary allowance, to Viet- nam veterans’ children suffering from spina bifida\u2014a serious neural tube birth defect that requires lifelong care. This bill is a necessary followup to the Agent Orange Act of 1991, which I coauthored with Senators KERRY and Cranston and Representative LANE EVANS and which unanimously passed the Senate. Among other things, the Agent Orange Act required the Depart- ment of Veterans Affairs [VA] to con- tract with the Institute of Medicine [IOM], which is part of the National Academy of Sciences [NAS], to conduct a scientific review of all evidence per- taining to exposure to agent orange and other herbicides used in Vietnam and the subsequent occurrence of dis- ease and other health-related condi- tions. The law required an initial re- port, which was issued by NAS in 1993, followed by biennial updates for 10 years. The first update was published by NAS last March. In accordance with the law, Vietnam veterans are not required to prove ex- posure to agent orange; the law pre- sumes that all military personnel who served in Vietnam were exposed to agent orange. The Secretary is to pro- vide presumptive disability compensa- tion for diseases suffered by Vietnam veterans whenever he determines, based on all credible evidence, includ- ing the congressionally mandated NAS reports, that a positive association ex- ists between exposure and the occur- rence of such diseases in humans. For purposes of this law, a positive associa- tion must be found to exist whenever credible evidence for an association is equal to or outweighs the credible evi- dence against the association. We have been struggling for decades to provide compensation and health care for Vietnam veterans\u2014and, if war- ranted, their children\u2014for health prob- lems associated with exposure to agent orange. Since 1985, Vietnam veterans have been eligible for free VA health care for conditions believed to be re- lated to exposure to agent orange. Vietnam veterans are also eligible for presumptive disability compensation for several diseases, including chloracne and various cancers, associ- ated with exposure to agent orange or other herbicides used in Vietnam. Most recently, in response to the March NAS report, the Secretary of Veterans Af- fairs awarded service-connected dis- ability compensation for prostate can- cer and acute and subacute peripheral neuropathy. An area of key concern to Vietnam veterans has been what they believe to be a high rate of birth defects in the children born to them since their serv- ice in Vietnam. The Agent Orange Act of 1991 specifically mandated that the area of reproductive disorders and birth defects be given special attention to determine whether or not compen- satory action is warranted. The March NAS report showed new evidence sug- gesting a link between exposure to agent orange and the occurrence of spina bifida in Vietnam veterans’ chil- dren. The report also noted that there is growing evidence, though not as strong as the evidence on spina bifida at this point, suggestive of an increase in other birth defects among Vietnam veterans’ children. In response to the NAS report, the Secretary of Veterans Affairs assem- bled an interdepartmental task force, which consulted with interested vet- erans’ service organizations and ex- perts in spina bifida, to review the NAS findings and make policy recommenda- tions to the Secretary. In May, the Secretary delivered to the President several policy rec- ommendations based on the VA’s re- view of the NAS report. These included recommendations to add prostate can- cer and acute and subacute peripheral neuropathy to the list of presumptive diseases, and, if authority were grant- ed, to treat spina bifida in veterans’ children in the same manner. The VA does not currently have the authority to provide benefits to veterans’ chil- dren. Subsequently, President Clinton announced that the administration would propose legislation to provide an appropriate remedy for Vietnam vet- erans’ children who suffer from spina bifida. This bill reflects that effort. Clearly, the Government’s responsi- bility does not end once veterans re- turn from war. Effects of combat, even those passed down through reproduc- tive disorders, are a direct result of our decisions to place our Nation’s men and women in harm’s way. We have a moral responsibility to help veterans whose children suffer from spina bifida and to meet those children’s health care needs. It should be noted that spina bifida is a devastating, irreversible birth defect resulting from the failure of the spine to properly close early in pregnancy. It requires lifelong medical treatment, and the cost of caring for a child with spina bifida can be financially dev- astating for families. While spina bifida affects approximately one of every 1,000 newborns in the United States, a study of Vietnam veterans that was included in the NAS report showed three spina bifida cases in a group of only 792 infants of Vietnam veterans\u2014a statistically significant re- sult. The Agent Orange Benefits Act of 1996 would provide health care, limited vocational rehabilitation, and a monthly stipend to Vietnam veterans’ children with spina bifida based on the severity of each child’s condition. It in- cludes the provision of essential med- ical care and case management serv- ices to coordinate health and social services for the child. Unfortunately, the NAS report con- firmed what Vietnam veterans have long feared: the Vietnam war continues to claim innocent victims. Nothing can erase the physical and psychological wounds of the war, but, by providing limited benefits to affected children, the Agent Orange Benefits Act of 1996 will allow us to heal some of the lin- gering scars from Vietnam. The NAS report also serves as a valu- able reminder that the impact of any war is felt decades beyond the final shots. Just as reproductive disorders and birth defects in their children have been among Vietnam veterans’ great- est health concerns, health problems in their children is of great concern to veterans who served in the Gulf war. We must be prepared to learn from the scientific effort on agent orange and apply these lessons to the effort to dis- cover the true health effects of envi- ronmental hazards on the men and women who served in the Gulf and on their children. Based on the NAS re- port’s findings related to spina bifida in the children of Vietnam veterans, VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00092 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9301 July 31, 1996 the VA is establishing a reproductive outcomes research center to inves- tigate potential environmental hazards of military service. I look forward to seeing those efforts come to fruition, and I am hopeful they will help us pro- vide answers to the many outstanding questions in this area. I applaud the President and Sec- retary Jesse Brown, along with my col- leagues who have been committed to this fight for years, for working to- gether to develop a proposal that ade- quately addresses the needs of these children and their families, and for pro- viding modest compensation for a wrong that can never fully be righted. With the passage of this legislation, we can begin to fulfill our promise to these most innocent victims and their families. Vietnam veterans’ families have suffered for decades and now live with the pain of knowing that their military service may have jeopardized the health and welfare of their chil- dren. The very least we can do is ease their burden by providing this limited assistance and care. Mr. President, I ask unanimous con- sent that the text of the bill, a sum- mary of the bill, a letter of support from the administration, and a table from the NAS report that explains the four-tiered classification system for agent orange-related illnesses, be printed in the RECORD. There being no objection, the mate- rial was ordered to be printed in the RECORD, as follows: S. 2008 Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, SECTION 1. REFERENCES TO TITLE 38, UNITED STATES CODE. Except as otherwise expressly provided, whenever in this Act an amendment or re- peal is expressed in terms of an amendment or repeal is expressed in terms of an amend- ment to, or repeal of, a section or other pro- vision, the reference shall be considered to be made to a section or other provision of title 38, United States Code. SEC. 2. BENEFITS FOR THE CHILDREN OF VIET- NAM VETERANS WHO ARE BORN WITH SPINA BIFIDA. (a) SHORT TITLE.\u2014This section may be cited as the ”Agent Orange Benefits Act of 1996.” (b) ESTABLISHMENT OF NEW CHAPTER 18.\u2014 Part II is amended by inserting after chapter 17 the following new chapter: ”CHAPTER 18\u2014BENEFITS FOR THE CHIL- DREN OF VIETNAM VETERANS WHO ARE BORN WITH SPINA BIFIDA ”Sec. ”1801. Purpose. ”1802. Definitions. ”1803. Health care. ”1804. Vocational training. ”1805. Monetary allowance. ”1806. Effective date of Awards. SEC. ”1801. PURPOSE. ”The purpose of this chapter is to provide for the special needs of certain children of Vietnam veterans who were born with the birth defect spina bifida, possibly as the re- sult of the exposure of one or both parents to herbicides during active service in the Re- public of Vietnam during the Vietnam era, through the provision of health care, voca- tional training, and monetary benefits. ”SEC. 1802. DEFINITIONS. ”For the purposes of this chapter\u2014 ”(1) The term ‘child’ means a natural child of a Vietnam veteran, regardless of age or marital status, who was conceived after the date on which the veteran first entered the Republic of Vietnam during the Vietnam era. ”(2) The term ‘Vietnam veteran’ means a veteran who, during active military, naval, or air service, served in the Republic of Viet- nam during the Vietnam era. ”(3) The term ‘spina bifida’ means all forms of spina bifida other than spina bifida occulta. ”SEC. 1803. HEALTH CARE. ”(a) In accordance with regulations the Secretary shall prescribe, the Secretary shall provide such health care under this chapter as the Secretary determines is need- ed to a child of a Vietnam veteran who is suffering from spina bifida, for any disability associated with such condition. ”(b) The Secretary may provide health care under this section directly or by con- tract or other arrangement with a health care provider. ”(c) For the purposes of this section\u2014 ”(1) the term ‘health care’ means home care, hospital care, nursing home care, out- patient care, preventive care, habilitative and rehabilitative care, case management, and respite care, and includes the training of appropriate members of a child’s family or household in the care of the child and provi- sion of such pharmaceuticals, supplies, equipment, devices, appliances, assistive technology, direct transportation costs to and from approved sources of health care au- thorized under this section, and other mate- rials as the Secretary determines to be nec- essary. ”(2) the term ‘health care provider’ in- cludes, but is not limited to, specialized spina bifida clinics, health-care plans, insur- ers, organizations, institutions, or any other entity or individual who furnishes health care services that the Secretary determines are covered under this section. ”(3) the term ‘home care’ means outpatient care, habilitative and rehabilitative care, preventive health services, and health-re- lated services furnished to an individual in the individual’s home or other place of resi- dence. ”(4) the term ‘hospital care’ means care and treatment for a disability furnished to an individual who has been admitted to a hospital as a patient. ”(5) the term ‘nursing home care’ means care and treatment for a disability furnished to an individual who has been admitted to a nursing home as a resident. ”(6) the term ‘outpatient care’ means care and treatment of a disability, and preventive health services, furnished to an individual other than hospital care or nursing home care. ”(7) the term ‘preventive care’ means care and treatment furnished to prevent dis- ability or illness, including periodic exami- nations, immunizations, patient health edu- cation, and such other services as the Sec- retary determines are necessary to provide effective and economical preventive health care. ”(8) the term ‘habilitative and rehabilita- tive care’ means such professional, coun- seling, and guidance services and treatment programs (other than vocational training under section 1804 of this title) as are nec- essary to develop, maintain, or restore, to the maximum extent, the functioning of a disabled person. ”(9) the term ‘respite care’ means care fur- nished on a intermittent basis in a Depart- ment facility for a limited period to an indi- vidual who resides primarily in a private res- idence when such care will help the indi- vidual to continue residing in such private residence. ”SEC. 1804. VOCATIONAL TRAINING. ”(a) Pursuant to such regulations as the Secretary may prescribe, the Secretary may provide vocational training under this sec- tion to a child of a Vietnam veteran who is suffering from spina bifida if the Secretary determines that the achievement of a voca- tional goal by such child is reasonably fea- sible. ”(b)(1) If a child elects to pursue a program of vocational training under this section, the program shall be designed in consultation with the child in order to meet the child’s in- dividual needs and shall be set forth in an in- dividualized written plan of vocational reha- bilitation. ”(2)(A) Subject to subparagraph (B) of this paragraph, a vocational training program under this subsection shall consist of such vocationally oriented services and assist- ance, including such placement and post- placement services and personal and work adjustment training, as the Secretary deter- mines are necessary to enable the child to prepare for and participate in vocational training or employment. ”(B) A vocational training program under this subsection\u2014 ”(i) may not exceed 24 months unless, based on a determination by the Secretary that an extension is necessary in order for the child to achieve a vocational goal identi- fied (before the end of the first 24 months of such program) in the written plan formu- lated for the child, the Secretary grants an extension for a period not to exceed 24 months; ”(ii) may not include the provision of any loan or subsistence allowance or any auto- mobile adaptive equipment; and ”(iii) may include a program of education at an institution of higher learning only in a case in which the Secretary determines that the program involved is predominantly voca- tional in content. ”(c)(1) A child who is pursuing a program of vocational training under this section who is also eligible for assistance under a pro- gram under chapter 35 of this title may not receive assistance under both of such pro- grams concurrently but shall elect (in such form and manner as the Secretary may pre- scribe) under which program to receive as- sistance. ”(2) The aggregate period for which a child may receive assistance under this section and chapter 35 of this title may not exceed 48 months (or the part-time equivalent there- of). ”SEC. 1805. MONETARY ALLOWANCE. ”(a) The Secretary shall pay a monthly al- lowance under this chapter to any child of a Vietnam veteran for disability resulting from spina bifida suffered by such child. ”(b) The amount of the allowance paid under this section shall be based on the de- gree of disability suffered by a child as deter- mined in accordance with such schedule for rating disabilities resulting from spina bifida as the Secretary may prescribe. The Sec- retary shall, in prescribing the rating sched- ule for the purposes of this section, establish three levels of disability upon which the amount of the allowance provided by this section shall be based. The allowance shall be $200 per month for the lowest level of dis- ability prescribed, $700 per month for the in- termediate level of disability prescribed, and $1,200 per month for the highest level of dis- ability prescribed. ”(c)(1) Whenever there is an increase in benefit amounts payable under title II of the Social Security Act (42 U.S.C. 401 et seq.) as a result of a determination under section VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00093 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9302 July 31, 1996 215(i) of such Act (42 U.S.C. 415(i)), the Sec- retary shall, effective on the date of such in- crease in benefit amounts, increase each rate of allowance under this section, as such rates were in effect immediately prior to the date of such increase in benefits payable under title II of the Social Security Act, by the same percentage as the percentage by which such benefit amounts are increased. ”(2) Whenever there is an increase in the rates of the allowance payable under this section, the Secretary shall publish such rates in the Federal Register. ”(3) Whenever such rates are so increased, the Secretary may round such rates in such manner as the Secretary considers equitable and appropriate for ease of administration. ”(d) Notwithstanding any other provision of law, receipt by a child of an allowance under this section shall not impair, infringe, or otherwise affect the right of such child to receive any other benefit to which the child may otherwise be entitled under any law ad- ministered by the Secretary, nor shall such receipt impair, infringe, or otherwise affect the right of any individual to receive any benefit to which he or she is entitled under any law administered by the Secretary that is based on the child’s relationship to such individual. ”(e) Notwithstanding any other provision of law, the allowance paid to a child under this section shall not be considered income or resources in determining eligibility for or the amount of benefits under any Federal or federally assisted program. ”SEC. 1806. EFFECTIVE DATE OF AWARDS. ”Effective date for an award for benefits under this chapter shall be fixed in accord- ance with the facts found, but shall not be earlier than the date of receipt of applica- tion therefor.”. (c) EFFECTIVE DATE.\u2014The amendments made by this section shall become effective on October 1, 1996. (d) CLERICAL AMENDMENT.\u2014The tables of chapters before part I and at the beginning of part II are each amended by inserting after the item referring to chapter 17 the fol- lowing new item: ”18. Benefits for children of Vietnam veterans who are born with spina bifida ……………………………………. 1801”. SEC. 3. CLARIFICATION OF ENTITLEMENT FOR BENEFITS FOR DISABILITY RESULT- ING FROM TREATMENT OR VOCA- TIONAL SERVICES PROVIDED BY DE- PARTMENT OF VETERANS AFFAIRS. (a) Section 1151 is amended\u2014 (1) by striking out the first sentence and inserting in lieu thereof the following: ”(a) Compensation under this chapter and dependency and indemnity compensation under chapter 13 of this title shall be award- ed for qualifying additional disability to or death of a veteran in the same manner as if such additional disability or death were serv- ice-connected. For purposes of this section, additional disability or death is qualifying only if it was not the result of the veteran’s willful misconduct and\u2014 ”(1) it was caused by hospital care, medical or surgical treatment, or examination fur- nished the veteran under any law adminis- tered by the Secretary, either by a Depart- ment employee or in a Department facility as defined in section 1701(3)(A) of this title, where the additional disability or death proximately resulted\u2014 ”(A) from carelessness, negligence, lack of proper skill, error in judgment, or similar in- stance of fault on the part of the Department in furnishing the hospital care, medical or surgical treatment, or examination; or ”(B) from an event not reasonably foresee- able; or ”(2) it was incurred as a proximate result of the provision of training and rehabilita- tion services by the Secretary (including by a service-provider used by the Secretary for such purpose under section 3115 of this title) as part of an approved rehabilitation pro- gram under chapter 31 of this title.”; and (2) in the second sentence\u2014 (A) by redesignating that sentence as sub- section (b); (B) by striking out ”, aggravation,” both places it appears; and (C) by striking out ”sentence” and sub- stituting in lieu thereof ”subsection”. (b) The amendments made by subsection (a) shall govern all administrative and judi- cial determinations of eligibility for benefits under section 1151 of title 38, United States Code, made with respect to claims filed on or after the date of enactment of this Act, in- cluding those based on original applications and applications seeking to reopen, revise, reconsider, or otherwise readjudicate on any basis claims for benefits under section 1151 of that title or predecessor provisions of law. AGENT ORANGE BENEFITS FOR VIETNAM VET- ERANS’ CHILDREN SUFFERING FROM SPINA BIFIDA The Agent Orange Act of 1996 would extend health care and related benefits, including a monthly monetary allowance, to Vietnam veterans’ children suffering from spina bifida\u2014a serious neural tube birth defect that requires life-long care\u2014provided the children were conceived after the veterans began their service in Vietnam. BACKGROUND A March National Academy of Sciences (NAS) report cited new evidence that sup- ports a link between exposure to Agent Or- ange and the occurrence of spina bifida in children of veterans who served in Vietnam. This report was required by the Agent Or- ange Act of 1991. Since 1985, Vietnam veterans have been eli- gible for free VA health care for conditions believed to be related to exposure to Agent Orange. Veterans’ disability compensation for several Agent Orange-related illnesses\u2014 including non-Hodgkin’s lymphoma, soft-tis- sue sarcoma, Hodgkin’s disease, chloracne, respiratory cancers, and multiple myeloma\u2014 has been awarded as a result of either con- gressional or VA action, some of which was based on a 1993 NAS report. Earlier this year, Secretary Brown and the President, in re- sponse to the March NAS report, extended service-connected benefits to veterans suf- fering from prostate cancer and acute and sub-acute peripheral neuropathy. Reproductive disorders and birth defects in their children have been among veterans’ greatest Agent Orange-related health con- cerns. This legislation is necessary because, while the VA has recommended that spina bifida in veterans’ offspring be service-con- nected, the VA does not currently have the authority to extend health care or other ben- efits to children of veterans. COST CBO has not yet provided an estimate for this proposal. However, costs would be offset by overturning the Gardner case, which would limit the VA’s liability for non-mal- practice-related injuries occurring in VA fa- cilities. This non-controversial provision was included in Democratic and Republican budget proposals for FY 96. Excess savings would be directed to deficit reduction. ROLE OF THE NATIONAL ACADEMY OF SCIENCES The Agent Orange Act of 1991 directed the VA to contract with the National Academy of Sciences to conduct for 10 years biennial, comprehensive evaluations of the scientific and medical information regarding the health effects of exposure to Agent Orange and other herbicides used in Vietnam. The first report, ”Veterans and Agent Or- ange: Health Effects of Herbicides Used in Vietnam,” was published in 1993. It created the following categories to classify the level of association between certain health condi- tions and exposure to Agent Orange: Cat- egory I (”sufficient evidence of an associa- tion”); category II (”limited\/suggestive evi- dence of an association”); category III (”in- adequate\/insufficient evidence to determine whether an association exists”); category IV (”limited\/suggestive evidence of NO associa- tion”). Following the 1993 report, the VA began to compensate Vietnam veterans suffering from three diseases in categories I and II that had not been service-connected through previous congressional or administrative action: porphyria cutanea tarda, respiratory can- cers, and multiple myeloma. The 1996 update, which was issued in March, confirmed many of the findings in the 1993 report, and found new evidence to link spina bifida in veterans’ children with exposure to Agent Orange. The NAS panel placed ”spina bifida in offspring” in category II, supporting a connection between birth de- fects and military service. The NAS report currently places birth defects other than spina bifida in category III. After reviewing the NAS report and other information, the VA has recommended that all remaining conditions in categories I and II, including spina bifida, be service-con- nected. THE SECRETARY OF VETERANS AFFAIRS, Washington, DC, July 5, 1996. Hon. CHRISTOPHER S. (KIT) BOND, Chairman, Subcommittee on VA, HUD, and Independent Agencies, Committee on Appro- priations, U.S. Senate, Washington, DC. DEAR MR. CHAIRMAN: I am pleased to share with you a copy of legislation we provided earlier today to Senator Daschle. This legis- lation, the ”Agent Orange Benefits Act of 1996,” would provide benefits to certain chil- dren of Vietnam veterans who are born with the birth defect spinal bifida. Enacting this legislation is a Presidential priority. Under Public Law 102 4, and with the ben- efit of a National Academy of Sciences re- port, I determined that a positive associa- tion exists between the exposure of Vietnam veterans to herbicides (such as a Agent Or- ange) and spinal bifida in their children. In approving this determination, the President promised to submit ”an appropriate remedy” for these veterans’ children. This legislation fulfills that commitment. It provides for health care, vocational training, and month- ly monetary allowance for these children. As set forth in the legislation, the Admin- istration proposes to offset the costs associ- ated with these new benefits with a savings proposal that would effectively reverse the U.S. Supreme Court decision in Gardner v. Brown which held that monthly VA dis- ability compensation must be paid for any additional disability or death attributable to VA medical treatment even if VA was not negligent in providing that care. Enactment of this legislation is a top Pres- idential priority. I strongly urge the Senate to include it in the earliest appropriate leg- islative vehicle. Thank you for your assistance in ensuring prompt and immediate action on this impor- tant legislation. The Office of Management and Budget has advised that there is no objection from the standpoint of the Administration’s program to the presentation of this letter. Sincerely, JESSE BROWN. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00094 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9303 July 31, 1996 EXECUTIVE SUMMARY TABLE 1 1\u2014UPDATED SUMMARY OF FINDINGS IN OCCUPATIONAL, ENVIRONMENTAL, AND VET- ERANS STUDIES REGARDING THE ASSOCIATION BETWEEN SPECIFIC HEALTH PROBLEMS AND EXPOSURE TO HERBICIDES Sufficient evidence of an association Evidence is sufficient to conclude that there is a positive association. That is, a positive association has been observed be- tween herbicides and the outcome in studies in which chance, bias, and confounding could be ruled out with reasonable confidence. For example, if several small studies that are free from bias and confounding show an asso- ciation that is consistent in magnitude and direction, there may be sufficient evidence for an association. There is sufficient evi- dence of an association between exposure to herbicides and the following health out- comes: Soft-tissue sarcoma; Non-Hodgkin’s lymphoma; Hodgkin’s disease; Chlorance. Limited\/suggestive evidence of an association Evidence is suggestive of an association be- tween herbicides and the outcome but is lim- ited because chance, bias, and confounding could not be ruled out with confidence. For example, at least one high-quality study shows a positive association, but the results of other studies are inconsistent. There is limited\/suggestive evidence of an association between exposure to herbicides and the fol- lowing health outcomes: Respiratory cancers (lung, larynx, trachea); Prostate cancer; Multiple myeloma; Acute and subacute pe- ripheral neuropathy (new disease category); Spina bifida (new disease category); Porphyria cutanea tarda (category change in 1996). Inadequate\/insufficient evidence to determine whether an association exists The available studies are of insufficient quality, consistency, or statistical power to permit a conclusion regarding the presence or absence of an association. For example, studies fail to control for confounding, have inadequate exposure assessment, or fail to address latency. There is inadequate or in- sufficient evidence to determine whether an association exists between exposure to herbi- cides and the following health outcomes: Hepatobiliary cancers; Nasal\/nasopharyngeal cancer; Bone cancer; Female reproductive cancers (cervical, uterine, ovarian); Breast cancer; Renal cancer; Testicular cancer; Leukemia; spontaneous abortion; Birth de- fects (other than spina bifida); Neonatal\/in- fant death and stillbirths; Low birthweight; Childhood cancer in offspring; Abnormal sperm parameters and infertility; cognitive and neuropsychiatric disorders; Motor\/co- ordination dysfunction; Chronic peripheral nervous system disorders; Metabolic and di- gestive disorders (diabetes, changes in liver enzymes, lipid abnormalities, ulcers); Im- mune system disorders (immune suppression and autoimmunity); Circulatory disorders; Respiratory disorders; Skin cancer (category change in 1996). Limited\/suggestive evidence of no association Several adequate studies, covering the full range of levels of exposure that human beings are known to encounter, are mutually consistent in not showing a positive associa- tion between exposure to herbicides and the outcome at any level of exposure. A conclu- sion of ”no association” is inevitably limited to the conditions, level of exposure, and length of observation covered by the avail- able studies. In addition, the possibility of a very small elevation in risk at the levels of exposure studied can never be excluded. There is limited\/suggestive evidence of no as- sociation between exposure to herbicides and the following health outcomes: Gastro- intestinal tumors (stomach cancer, pan- creatic cancer, colon cancer, rectal cancer); Bladder cancer; Brain tumors. Note: ”Herbicides” refers to the major her- bicides used in Vietnam: 2,4 D (2,4- dichlorophenoxyacetic acid); 2,4,5-T (2,4,5- trichlorophenoxyacetic acid) and its con- taminant TCDD (2,3,7,8-tetrachlorodibenzo-p- dioxin); cacodylic acid; and picloram. The evidence regarding association is drawn from occupational and other studies in which sub- jects were exposed to a variety of herbicides and herbicide components. Mr. BYRD. Mr. President, I am proud to cosponsor the legislation introduced by the able Democratic leader, Senator DASCHLE, which provides health care and assistance to the children of Viet- nam veterans who suffer from spina bifida. This legislation provides the needed authority for the Department of Veterans Affairs to treat these children for their service-connected disabilities arising from their father’s exposure to agent orange during the Vietnam con- flict. This is an unprecedented but ap- propriate action, since scientific re- search is now sufficiently sophisticated to allow us to understand the effects of toxic exposures on ourselves and on fu- ture generations. As a result of the Agent Orange Act of 1991, the Department of Veterans Af- fairs and the National Academy of Sciences have at regular intervals re- viewed the ongoing research on Agent Orange exposure. The report update issued this spring found ”limited\/sug- gestive evidence” linking the birth de- fect spina bifida to agent orange expo- sure. The report notes that all three epidemiologic studies reviewed suggest an association between herbicide expo- sure and increased risk of spina bifida in offspring. It further notes that in contrast to most other diseases, for which the strongest data have been from occupationally exposed workers, these studies focused on Vietnam vet- erans. All the studies were judged to be of relatively high quality, although they did suffer from some methodologic limitations. On the basis of this finding, Sec- retary Jesse Brown recommended that a service connection be granted to Vietnam veterans’ children with spina bifida. It is the right decision, and I ap- plaud him for it. The research and the legislation are long overdue for fami- lies that have been struggling for some twenty years. Some one has observed that ”procrastination is the thief of time.” These children and their fami- lies have already lost time, lost long years of doubt and wondering, of finan- cial hardship that they bore alone be- cause the government procrastinated in investigating and acknowledging its role in this tragedy. The legislation in- troduced today by Senator DASCHLE at- tempts to correct that injustice, and I commend him for it. The poet Edward Young (1683 1796) has said: ”Be wise today; ’tis madness to defer.” Support this legislation, take responsibility for the tragic aftermath of our involve- ment in Vietnam, and take care of these children. Mr. KERRY. Mr. President, I am pleased to join my distinguished col- league from South Dakota, Senator DASCHLE, in cosponsoring the Agent Orange Benefits Act of 1996. This bill takes another crucial step forward in repaying our debt to those who have served their country and are still suf- fering as a result of their service in Vietnam many years ago. In May, President Clinton announced that leg- islation would be proposed to aid Viet- nam veterans’ children who suffer from the disease spina bifida. This bill ful- fills that commitment by recognizing and accepting natural responsibility for one of the serious health care needs of veterans’ families that stem from the tragic effects of agent orange. Senator DASCHLE and I and many others have worked for the past decade to try to bring to a fair and just resolu- tion the questions surrounding agent orange and the effects it has had on the men and women who faithfully served this country. I know that there is still controversy about the effects of agent orange. There may always be con- troversy, just as there may always be controversy about the Vietnam war itself. But we must set aside the con- troversy\u2014or put it behind us\u2014to en- able suffering children to receive the care and treatment they need when that suffering can be followed back to a service person’s exposure to agent or- ange. After years of hard work, I believe we have reached an acceptable consensus on the effects of agent orange through numerous studies\u2014and independent scientific reviews of the many studies\u2014 which have been made on the effects of this dangerous chemical that contains deadly dioxin. I might add that it has been 30 years since agent orange was sprayed in Vietnam and we must stop debating over the bias of each indi- vidual analyzing the information. As I said back in May of 1988, ”It is offen- sive to veterans to tell them that there is not enough ‘scientific evidence’ to justify compensation * * * The evi- dence is in their own bodies, and even worse, in the bodies of their children.” We have made great strides in reach- ing a consensus in some areas of health care for Vietnam veterans. Since 1985, Vietnam veterans have been eligible for free health care from the Veterans Administration for conditions that are related to exposure to agent orange. Veterans’ disability compensation has been awarded to veterans affected by several agent orange-related illnesses including non-Hodgkins lymphoma, soft tissue sarcoma, Hodgkin’s disease, chloracne, respiratory cancers, mul- tiple myeloma, and, most recently, prostate cancer and acute and subacute peripheral neuropathy. Today, Mr. President, we are address- ing a particularly heinous effect of agent orange\u2014an effect that unfortu- nately will carry the legacy of the Vietnam war to yet another genera- tion. The bill we are introducing today would extend health care and related VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00095 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9304 July 31, 1996 benefits to children of Vietnam vet- erans who suffer from spina bifida, a serious neural tube birth defect that requires life-long care\u2014provided, of course, the children were conceived after the veterans began their service in Vietnam. The National Academy of Sciences released a report in March of this year, citing new evidence supporting the link between exposure to agent orange and the occurrence of spina bifida in chil- dren of veterans who served in Viet- nam. This report, Mr. President, war- rants our action. Both the President and the Secretary of Veterans Affairs, Jesse Brown, have asked that spina bifida in veterans’ off- spring be considered service connected. However, the VA currently does not have the authority to extend the health care and other related benefits to these children that they so greatly need. This bill will grant the VA the necessary authority to finally start providing needed care to these children who are suffering. Mr. President, these are children whose misery stems from physical damage caused to one of their parents who was fighting for this country in Vietnam. We should do no less than provide them with the care and treat- ment they need. We must not make some of the children of our Vietnam veterans the last victims of the Viet- nam war. I urge my colleagues to sup- port this bill. By Mr. ASHCROFT: S.J. Res. 58. A joint resolution pro- posing an amendment to the Constitu- tion of the United States relative to granting power to the States to pro- pose constitutional amendments; to the Committee on the Judiciary. STATE-INITIATED CONSTITUTIONAL AMENDMENT JOINT RESOLUTION Mr. ASHCROFT. Mr. President, I rise this afternoon to talk about first prin- ciples, about fundamental truths, about a battle that helped give birth to a nation. The amendment I have sent to the desk represents an effort to re- store the federal system conceived by the Framers over two centuries ago by giving the States the capacity to ini- tiate constitutional reforms. In considering my remarks earlier this morning, I was reminded of a trip my family and I made several years ago when I was Governor of the State of Missouri. In 1989, we were extended an opportunity to visit the site where the Continental Army, led by Gen. Atemas Ward, fought to seize Bunker Hill on the Charlestown peninsula. It was a moving experience. One can- not help but recall the monument, dedicated by Daniel Webster, that stands as a tribute to the lives that were lost. I recommend the trip to both Members and the viewing audience alike. I must confess, however, that the ex- pansive field you will find fails to fully capture the raw carnage that visited Bunker Hill in June of 1775. Close to 2,000 lives were lost in less than 2 hours. And, while General Howe’s regulars were masters of the peninsula at the end of the day, the casualties they sustained were more than twice that of the American militia. Historians, Mr. President, have come to record Bunker Hill as a bloody if in- decisive contest, an early salvo in a conflict which Dr. Jonathan Rossie has characterized as a ”glorious cause.” Glorious, if warfare can be called that, because the issue that animated the colonists that day was freedom, for themselves and generations yet to come; God, courage, and posterity were their invisible allies. And as I reflect on those events, I cannot help but wonder what has be- come of the first principles for which our forefathers fought? What has be- come of the fundamental truths that compelled those great patriots up that hill, bayonets flashing, voices shouting ”push on, push on.” For that battle outside of Boston helped give birth to a nation, a con- stitutional republic that was the first of its kind. A system where, as Madi- son suggested in ”Federalist” No. 46, ”the federal and state governments are in fact but different agents of the peo- ple, constituted with different powers, and designed for different purposes.” Unfortunately, Mr. President, Madi- son’s vision is being lost. Judicial ac- tivism, Federal intervention, and past constitutional reforms have led to a gradual erosion of State power. In par- ticular, the passage of the 16th and 17th amendments have had a disastrous ef- fect on the capacity of the States to check Federal expansion. The former, establishing the income tax, gave the central government a virtually unlim- ited spending power, while the latter, providing for the direct election of Senators, worked to undermine the Senate’s contemplated role as the pro- tector of State autonomy. One of the single, greatest challenges we face as a country and as a Congress, is addressing the constitutional imbal- ance that has arisen from the conver- gence of these trends. Allowing the States to initiate amendments on issues ranging from a balanced budget to congressional term limits would do just that. The operation of the proposed amend- ment is as simple as its intent is clear. Whenever two-thirds of the States pro- pose an amendment, in identical terms, it is submitted to the Congress for re- view. If two-thirds of both Houses fail to disapprove the amendment during the session in which it is received, the proposal is then forwarded to the States for ratification by three-fourths of the legislatures thereof. If adopted, the proposed amendment would have tremendous value on sev- eral different fronts. First, it would force the cold corridors of power on the Potomac to respond to the will of the people\u2014no more mandates, no more deficits, no more careerist in the Con- gress. Similarly, the amendment would allow the States to once again share the constitutional agenda of the Na- tion. And finally, it would provide a po- tential for addressing the problems of federalism in a context which could conceivably augment State power. In Gregory versus Ashcroft, Justice O’Connor opined that ”in the tension between Federal and State power lies the promise of liberty.” And so it does. I believe reconstituting the federal sys- tem of which Madison wrote must be- come conservatives’ new glorious cause. This amendment is a measured, moderate step toward achieving that end. For these reasons, Mr. President, I beg its adoption. f ADDITIONAL COSPONSORS S. 334 At the request of Mr. MCCONNELL, the name of the Senator from Okla- homa [Mr. INHOFE] was added as a co- sponsor of S. 334, a bill to amend title I of the Omnibus Crime Control and Safe Streets Act of 1968 to encourage States to enact a Law Enforcement Of- ficers’ Bill of Rights, to provide stand- ards and protection for the conduct of internal police investigations, and for other purposes. S. 729 At the request of Mr. BAUCUS, the name of the Senator from Minnesota [Mr. GRAMS] was added as a cosponsor of S. 729, a bill to provide off-budget treatment for the Highway Trust Fund, the Airport and Airway Trust Fund, the Inland Waterways Trust Fund, and the Harbor Maintenance Trust Fund, and for other purposes. S. 1744 At the request of Mr. INOUYE, the name of the Senator from West Vir- ginia [Mr. ROCKEFELLER] was added as a cosponsor of S. 1744, a bill to permit duty free treatment for certain struc- tures, parts, and components used in the Gemini Telescope Project. S. 1838 At the request of Mr. FAIRCLOTH, the name of the Senator from Oklahoma [Mr. INHOFE] was added as a cosponsor of S. 1838, a bill to require the Sec- retary of the Treasury to mint and issue coins in commemoration of the centennial anniversary of the first manned flight of Orville and Wilbur Wright in Kitty Hawk, North Carolina, on December 17, 1903. S. 1873 At the request of Mr. INHOFE, the name of the Senator from Montana [Mr. BURNS] was added as a cosponsor of S. 1873, a bill to amend the National Environmental Education Act to ex- tend the programs under the Act, and for other purposes. S. 1885 At the request of Mr. INHOFE, the names of the Senator from Tennessee [Mr. FRIST] and the Senator from Ha- waii [Mr. INOUYE] were added as co- sponsors of S. 1885, a bill to limit the liability of certain nonprofit organiza- tions that are providers of prosthetic devices, and for other purposes. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00096 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9305 July 31, 1996 S. 1938 At the request of Mr. BOND, the name of the Senator from New York [Mr. D’AMATO] was added as a cosponsor of S. 1938, a bill to enact the model Good Samaritan Act Food Donation Act, and for other purposes. S. 1951 At the request of Mr. FORD, the name of the Senator from Kentucky [Mr. MCCONNELL] was added as a cosponsor of S. 1951, a bill to ensure the competi- tiveness of the United States textile and apparel industry. S. 1963 At the request of Mr. ROCKEFELLER, the name of the Senator from Hawaii [Mr. INOUYE] was added as a cosponsor of S. 1963, a bill to establish a dem- onstration project to study and provide coverage of routine patient care costs for medicare beneficiaries with cancer who are enrolled in an approved clin- ical trial program. S. 1987 At the request of Mr. FAIRCLOTH, the name of the Senator from Utah [Mr. BENNETT] was added as a cosponsor of S. 1987, a bill to amend titles II and XVIII of the Social Security Act to prohibit the use of social security and medicare trust funds for certain ex- penditures relating to union represent- atives at the Social Security Adminis- tration and the Department of Health and Human Services. SENATE JOINT RESOLUTION 57 At the request of Mr. ASHCROFT, the name of the Senator from Texas [Mrs. HUTCHISON] was added as a cosponsor of Senate Joint Resolution 57, a joint res- olution requiring the Congressional Budget Office and the Joint Committee on Taxation to use dynamic economic modeling in addition to static eco- nomic modeling in the preparation of budgetary estimates of proposed changes in Federal revenue law. SENATE CONCURRENT RESOLUTION 64 At the request of Mr. INOUYE, the name of the Senator from Alabama [Mr. SHELBY] was added as a cosponsor of Senate Concurrent Resolution 64, a concurrent resolution to recognize and honor the Filipino World War II vet- erans for their defense of democratic ideals and their important contribu- tion to the outcome of World War II. f AMENDMENTS SUBMITTED THE DEPARTMENT OF TRANSPOR- TATION AND RELATED AGEN- CIES APPROPRIATIONS ACT, 1997 BAUCUS (AND OTHERS) AMENDMENT NO. 5141 Mr. BAUCUS (for himself, Mr. BINGA- MAN, Mr. GRASSLEY, and Mr. REID) pro- posed an amendment to the bill (H.R. 3675) making appropriations for the De- partment of Transportation and re- lated agencies for the fiscal year end- ing September 30, 1997, and for other purposes; as follows: At the appropriate place in title III, insert the following: SEC. 3 . CALCULATION OF FEDERAL-AID HIGH- WAY APPORTIONMENTS AND ALLO- CATIONS. (a) IN GENERAL.\u2014Except as provided in subsection (b), for fiscal year 1997, the Sec- retary of Transportation shall determine the Federal-aid highway apportionments and al- locations to a State without regard to the approximately $1,596,000,000 credit to the Highway Trust Fund (other than the Mass Transit Account) of estimated taxes paid by States that was made by the Secretary of the Treasury for fiscal year 1995 in correc- tion of an accounting error made in fiscal year 1994. (b) ADJUSTMENTS FOR EFFECTS IN 1996.\u2014The Secretary of Transportation shall, for each State\u2014 (1) determine whether the State would have been apportioned and allocated an in- creased or decreased amount for Federal-aid highways for fiscal year 1996 if the account- ing error referred to in subsection (a) had not been made (which determination shall take into account the effects of section 1003(c) of the Intermodal Surface Transpor- tation efficiency Act of 1991 (Public law 1002 240; 105 Stat. 1921)); and (2) after apportionments and allocations are determined in accordance with sub- section (a)\u2014 (A) adjust the amount apportioned and al- located to the State for Federal-aid high- ways for fiscal year 1997 by the amount of the increase or decrease; and (B) adjust accordingly the obligation limi- tation for Federal-aid highways distributed to the State under this Act. (c) NO EFFECT ON 1996 DISTRIBUTIONS.\u2014 Nothing in this section shall affect any ap- portionment, allocation, or distribution of obligation limitation, or reduction thereof, to a State for Federal-aid highways for fiscal year 1996. (d) EFFECTIVE DATE.\u2014This section shall take effect on September 30, 1996. WELLSTONE AMENDMENT NO. 5142 Mr. LAUTENBERG (for Mr. WELLSTONE) proposed an amendment to the bill, H.R. 3675, supra; as follows: At the appropriate place in title IV, insert the following: SEC. 4 . TRANSFER OF FUNDS AMONG MIN- NESOTA HIGHWAY PROJECTS. (a) IN GENERAL.\u2014Such portions of the amounts appropriated for the Minnesota highway projects described in subsection (b) that have not been obligated as of December 31, 1996, may, at the option of the Minnesota Department of Transportation, be made available to carry out the 34th Street Cor- ridor Project in Moorhead, Minnesota, au- thorized by section 149(a)(5)(A)(iii) of the Surface Transportation and Uniform Reloca- tion Assistance Act of 1987 (Public Law 100 17; 101 Stat. 181) (as amended by section 340(a) of the National Highway System Des- ignation Act of 1995 (Public Law 104 59; 109 Stat. 607)). (b) PROJECTS.\u2014The Minnesota highway projects described in this subsection are\u2014 (1) the project for Saint Louis County au- thorized by section 149(a)(76) of the Surface Transportation and Uniform Relocation As- sistance Act of 1987 (Public Law 100 17; 101 Stat. 192); and (2) the project for Nicollet County author- ized by item 159 of section 1107(b) of the Intermodal Surface Transportation Effi- ciency Act of 1991 (Public Law 102 240; 105 Stat. 2056). WYDEN (AND OTHERS) AMENDMENT NO. 5143 Mr. LAUTENBERG (for Mr. WYDEN, for himself, Mr. KERRY, and Ms. MOSELEY-BRAUN) proposed an amend- ment to the bill, H.R. 3675, supra; as follows: At the appropriate place, insert the fol- lowing new section: SEC. . TRAIN WHISTLE REQUIREMENTS. No funds shall be made available to imple- ment the regulations issued under section 20153(b) of title 49, United States Code, re- quiring audible warnings to be sounded by a locomotive horn at highway-rail grade cross- ings, unless\u2014 (1) in implementing the regulations or pro- viding an exception to the regulations under section 20153(c) of such title, the Secretary of Transportation takes into account, among other criteria\u2014 (A) the interests of the communities that have in effect restrictions on the sounding of a locomotive horn at highway-rail grade crossings as of July 30, 1996; and (B) the past safety record at each grade crossing involved; and (2) whenever the Secretary determines that supplementary safety measures (as that term is defined in section 20153(a) of title 49, United States Code) are necessary to provide an exception referred to in paragraph (1), the Secretary\u2014 (A) having considered the extent to which local communities have established public awareness initiatives and highway-rail cross- ing traffic law enrollment programs allows for a period of not to exceed 3 years, begin- ning on the date of that determination, for the installation of those measures; and (B) works in partnership with affected communities to provide technical assistance and to develop a reasonable schedule for the installation of those measures. LAUTENBERG AMENDMENTS NOS. 5144 5145 Mr. LAUTENBERG proposed two amendments to the bill, H.R. 3675, supra; as follows: AMENDMENT NO. 5144 On page 19, strike lines 10 through 12 and insert ”For the cost of direct loans, $8,000,000, as authorized by 23 United States Code 108.” AMENDMENT NO. 5145 On page 60, line 20, strike ”103 311” and in- sert ”103 331”. COHEN (AND OTHERS) AMENDMENT NO. 5146 Mr. COHEN (for himself, Ms. SNOWE, Mr. SMITH, and Mr. GREGG) proposed an amendment to the bill, H.R. 3675, supra; as follows: Insert at the appropriate place: ”No funds appropriated under this act shall be used to levy penalties prior to Sep- tember 1, 1997 on the States of Maine or New Hampshire based on non-compliance with federal vehicle weight limitations”. GRAMM (AND OTHERS) AMENDMENT NO. 5147 Mr. GRAMM (for himself, Mr. BOND, Mr. COATS, Mr. ABRAHAM, Mr. FAIR- CLOTH, Mrs. HUTCHISON, Mr. LEVIN, Mr. WARNER, and Mr. HELMS) proposed an amendment to amendment No. 5141 VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00097 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9306 July 31, 1996 proposed by Mr. BAUCUS to the bill, H.R. 3675, supra; as follows: At the end of the amendment, add the fol- lowing: SEC. . Prior to September 30, 1996, the Secretary of the Treasury and the Secretary of Transportation shall conduct a review of the reporting of excise tax data by the De- partment of the Treasury to the Department of Transportation for fiscal year 1994 and its impact on the allocation of Federal aid high- ways. If the President certifies that all of the fol- lowing conditions are met: 1. A significant error was made by Treas- ury in its estimate of Highway Trust Fund revenues collected in fiscal year 1994; 2. The error is fundamentally different from errors routinely made in such esti- mates in the past; 3. The error is significant enough to justify that fiscal year 1997 apportionments and al- locations of highway trust funds be adjusted; and finds that the provision in B appro- priately corrects these deficiencies, then subsection B will be operative. (b) CALCULATION OF FEDERAL-AID HIGHWAY APPORTIONMENTS AND ALLOCATIONS.\u2014(1) IN GENERAL.\u2014Except as provided in paragraph (2), for fiscal year 1997, the Secretary of Transportation shall determine that Fed- eral-aid highway apportionments and alloca- tions to a State without regard to the ap- proximately $1,596,000,000 credit to the High- way Trust Fund (other than the Mass Tran- sit Account) of estimated taxes paid by States that was made by the Secretary of the Treasury for fiscal year 1995 in correc- tion of an accounting error made in fiscal year 1994. (2) ADJUSTMENTS FOR EFFECTS IN 1996.\u2014The Secretary of Transportation shall, for the State\u2014 (A) determine whether the State would have been apportioned and allocated an in- creased or decreased amount for Federal-aid highways for fiscal year 1996 if the account- ing error referred to in paragraph (1) had not been made (which determination shall take into account the effects of section 1003(c) of the Intermodal Surface Transportation Effi- ciency Act of 1991 (Public Law 102 240; 105 Stat. 1921)); and (B) after apportionments and allocations are determined in accordance with paragraph (1)\u2014 (i) adjust the amount apportioned and allo- cated to the State for Federal-aid highways for fiscal year 1997 by the amount of the in- crease or decrease; and (ii) adjust accordingly the obligation limi- tation for Federal-aid highways distributed to the State under this Act. (3) NO EFFECT ON 1996 DISTRIBUTIONS.\u2014Noth- ing in this section shall affect any apportion- ment, allocation, or distribution of obliga- tion limitation, or reduction thereof, to a State for Federal-aid highways for fiscal year 1996. (4) EFFECTIVE DATE.\u2014This section shall take effect on September 30, 1996. f AUTHORITY FOR COMMITTEES TO MEET COMMITTEE ON ARMED SERVICES Mr. MURKOWSKI. Mr. PRESIDENT. I ask unanimous consent that the Com- mittee on Armed Services be author- ized to meet at the following times on Wednesday, July 31, 1996: 9:45 a.m. in executive session, to con- sider certain pending military nomina- tions; 11:15 a.m. in open session, to consider the nomination of Lieutenant General Howell M. Estes III, USAG for appoint- ment to the grade of general and to be Commander-in-Chief, United States Space Command\/Commander-in-Chief, North American Aerospace Defense Command; 1:30 p.m. in open session, to consider the nomination of Admiral Jay L. Johnson, USN for reappointment to the grade of admiral and to be Chief of Naval Operations; and 3:30 p.m. in executive session, to con- sider certain pending military nomina- tions. The Presiding Officer. Without objec- tion, it is so ordered. COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Com- mittee on Environment and Public Works be granted permission to meet to consider the nominations of Nils J. Diaz, and Edward McGaffigan, Jr., each nominated by the President to be a Member of the Nuclear Regulatory Commission, Wednesday, July 31, 1996, immediately following the first vote, in the President’s Room. The PRESIDING OFFICER. Without objection, it is so ordered. COMMITTEE ON FOREIGN RELATIONS Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Com- mittee on Foreign Relations be author- ized to meet during the session of the Senate on Wednesday, July 31, 1996, at 2 p.m. The PRESIDING OFFICER. Without objection, it is so ordered. COMMITTEE ON THE JUDICIARY Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Com- mittee on the Judiciary be authorized to meet during the session of the Sen- ate on Wednesday, July 31, 1996, at 10:00 a.m. to hold a hearing on ”Losing Ground on Drugs: The Erosion of Amer- ica’s Borders.” The PRESIDING OFFICER. Without objection, it is so ordered. COMMITTEE ON THE JUDICIARY Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Com- mittee on the Judiciary be authorized to meet during the session of the Sen- ate on Wednesday, July 31, 1996, at 2:00 p.m., to hold a hearing on judicial nominees. The PRESIDING OFFICER. Without objection, it is so ordered. COMMITTEE ON LABOR AND HUMAN RESOURCES Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Com- mittee on Labor and Human Resources be authorized to meet in executive ses- sion during the session of the Senate on Wednesday, July 31, 1996, at 9:30 a.m. The PRESIDING OFFICER. Without objection, it is so ordered. SELECT COMMITTEE ON INTELLIGENCE Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be author- ized to meet during the session of the Senate on Wednesday, July 31, 1996 at 9:30 a.m. to hold an open hearing on In- telligence Matters. The PRESIDING OFFICER. Without objection, it is so ordered. SUBCOMMITTEE ON INTERNATIONAL FINANCE Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Sub- committee on International Finance of the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Wednesday, July 31, 1996, to conduct a hearing on H.R. 361, ”The Export Ad- ministration Act of 1996.” The PRESIDING OFFICER. Without objection, it is so ordered. f ADDITIONAL STATEMENTS MORE THAN A ROOF \u2211 Mr. SIMON. Mr. President, for many years I have had the privilege of know- ing Ed Marciniak, now president of the Institute of Urban Life at Loyola Uni- versity, who chairs the City Club of Chicago’s committee on the future of public housing in Chicago. He had a commentary on public hous- ing that was published in Common- wealth, which is really more of a com- mentary on poverty and urban life and what we ought to do. He says: The average income of families living in Chicago’s public housing is $2,500. Broadly speaking, a fatal flaw of these projects is that they provide tenant families with little else than space: little in the way of oppor- tunity or incentive to better themselves and their children. In most cities the high-rise projects, often with as many inhabitants as a small town, house not a single teacher, nurse, firefighter, manager, technician, or civil servant and offer few role models for the children, few standard-setters for the adults, and scant motivation to become self- sufficient. Recently Congress has approved a pilot project called Moving to Oppor- tunity. Marciniak points out that it was based on a model in Chicago. He writes: Moving to Opportunity was modeled on a successful program sponsored by Chicago’s Leadership Council for Metropolitan Open Communities. Since 1976, the Council has used federal funds to screen and then relo- cate more than 6,000 public housing families, most of them female-headed, into privately owned apartments, half of them in suburbs. By bidding good-by to public housing, most of the families not only bettered their living conditions but also greatly improved their children’s opportunities. Among the subur- ban children only 5 percent dropped out of school, 54 percent attended college, and 27 percent found jobs. When people’s expecta- tions were raised and standards established, many started living up to them. Residential mobility made a difference. I have had a chance to observe this program and it is a great step forward. With a little creativity and sensi- tivity we can do much better in this country. What is required is that we recognize that we have to do something to ad- dress the problems of those who are the least successful now in our society. They lack success not because of lack of ability in most cases, but because they find themselves trapped. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00098 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9307 July 31, 1996 We have to open that trap. Mr. President, I ask that the article from Commonweal be printed in the Record. The article follows: MORE THAN A ROOF\u2014PROMISING MOVES IN PUBLIC HOUSING (By Ed Marciniak) Not long ago, I attended a national hous- ing conference where a featured panelist was a woman introduced as a longtime resident of public housing. She herself then noted, matter-of-factly, that she had lived in public housing for forty-five years. For me, that ad- mission was mind-blowing. Even more star- tling, however, was the realization that her remark had not caused even a ripple of sur- prise among the subsidized-housing profes- sionals in the audience. Nonchalantly, they had come to accept public housing’s way of life as a given for which they felt no personal responsibility. It’s unlikely that informed members of the general public are so complacent, whether as taxpayers concerned with the costs or as citizens aware of the pathologies associated with much public housing. People in the know are beginning to insist that govern- ment subsidies must not only meet their re- cipients’ immediate needs but must be ori- ented toward helping them become self-sup- porting. Recent developments in and around Chicago, the area I know best, confirm that most public housing clients, the poorest of the urban poor, have not given up. Many have already helped themselves escape the trap that public housing has become. We now know that there are ways of giving them a chance to do so that have been tested, at least on a small scale, and found workable. These approaches deserve to be better known and more broadly applied. But, as will be seen, many questions need to be asked and answered. In a bipartisan effort, Congress is cur- rently overhauling the U.S. Housing Act of 1937. Despite its noble purpose and promising beginnings with scattered, low-rise public housing, that legislation has produced some- thing of a monster. Today the U.S. Depart- ment of Housing and Urban Development [HUD} finances some 1.4 million apartments owned and managed by local hosing authori- ties. Another 1. 5 million privately owned units are federally subsidized through rent vouchers of one kind or another. Taking into account these programs and a host of others sponsored by HUD, the department has be- come the nation’s largest slumlord. But the problem is not primarily the num- bers or costs. Our giant high-rise public housing projects have become ghettos for the urban poor: conglomerations riddled with drugs, gangs, crime, and poverty, peopled by far too high a proportion of single-family households, some now in their third and fourth generation. The average income of families living in Chicago’s public housing is $2,500. Broadly speaking, a fatal flaw of these projects is that they provide tenant families with little else than space: little in the way of opportunity or incentive to better them- selves and their children. In most cities the high-rise projects, often with as many inhab- itants as a small town, house not a single teacher, nurse, firefighter, manager, techni- cian, or civil servant and offer few role mod- els for the children, few standard-setters for the adults, and scant motivation to become self-sufficient. In recognition of these realities, Congress has persuaded HUD to begin dismantling these housing projects by giving residents, through rent vouchers, the option of living in privately owned housing in mixed-income neighborhoods; by scattering low-rise public housing throughout the city and its suburbs; by tearing down vacant high rises instead of rebuilding them; by using HUD dollars to at- tract other investment in additional housing for families of low and moderate income; and by stricter screening of a applicants and the prompt eviction of lawbreakers who are drug dealers or gang leaders. In April, HUD Sec- retary Henry G. Cisneros released a report on ”The Transformation of America’s Public Housing,” reporting these and other steps HUD is taking to ensure ”long-term recov- ery.” Congress has approved, though as a pilot project, a ”Moving to Opportunity” initia- tive, which offers public housing families a chance to move to scattered-site public housing in the city or the suburbs. This mod- estly funded program, already in operation in Baltimore, Boston, Los Angeles, New York, and elsewhere, is being evaluated by its success or failure in escorting families into the urban mainstream. Important data will be collected about families who become home owners or leaseholders paying conven- tional rents. What were the bridges or esca- lators they used to leave public housing? Who provided the ladders of opportunity? Are the relocated families now in better housing? How many stayed in the suburbs, how many moved back to the city? ”Moving to Opportunity” was modeled on a successful program sponsored by Chicago’s Leadership Council for Metropolitan Open Communities. Since 1976, the Council has used federal funds to screen and then relo- cate more than 6,000 public housing families, most of them female-headed, into privately owned apartments, half of them in suburbs. By bidding good-by to public housing, most of the families not only bettered their living conditions but also greatly improved their children’s opportunities. Among the subur- ban children, only 5 percent dropped out of school, 54 percent attended college, and 27 percent were enrolled in a four-year college. As for the parents, 75 percent found jobs. When people’s expectations were raised and standards established, many started living up to them. Residential mobility made a dif- ference. This good news is part of a larger move- ment toward depopulation of Chicago’s fam- ily projects; occupancy has decreased from 137,000 in 1980 to 80,000 in 1995. More impor- tantly, the council’s work reflects a growing awareness among government and private funders of antipoverty programs of the need to find answers for certain key, long-ne- glected questions. How do people shed chron- ic dependency to achieve self-sufficiency? How do we reverse the nation’s poverty rate, which declined in the 1970s and early 1980s but has been inching up ever since? How is the underclass turned into a working class? Accordingly, the role of the private sector serving poverty-engulfed neighborhoods is also under scrutiny. Churches, social service agencies, youth clubs, and counseling cen- ters are being asked to link short-term aid to more lasting improvement, to do more than collect the statistics on Sunday attend- ance, on youngsters who use the gym, on Christmas baskets, on kids in day care, on midnight basketball, or on mothers in self- improvement classes. Funders want to know whether and how their dollars made a dif- ference: How many of the families were no longer on public aid? What percentage of the teen-agers finished high school? How many adults found jobs? Similar questions can be and are now being asked about the persistence of homelessness. How did it happen that the homeless were made the immediate responsibility of local housing officials? Many of the homeless are jobless or the victims of a family break-up. Many were evicted from mental health insti- tutions and dumped mercilessly on city streets. Some are vagabonds, down-and- outers addicted to drugs and\/or alcohol. All may qualify as homeless, but what they des- perately need encompasses a lot more than a space to live in. Too often, of course, discussion of such problems devolves into ideological debates, focused on ”Who is to blame?” rather than on ”What is to be done?” On homelessness, however, as with public housing, there are pragmatic initiatives in play. An example is Deborah’s Place in Chicago, a shelter for homeless women but with a difference. From day one, the purpose of Deborah’s Place has been to help the women return to a more normal lifestyle\u2014a job, a family, or, in case of need, to a caring institution that matches the woman’s special problem. At three dif- ferent locations, each with a staged program. Deborah’s Place works to ”help women leave the streets and shelters behind for new lives of independence, productivity, and well- being.” As clients move up and out, they leave room and time for other women to be assisted. On ending joblessness, strategy can also make a difference. Suburban Job Link, with offices in Chicago’s South Lawndale commu- nity and suburban Bensenville, uses a unique method for promoting upward mobility. On contract with relatively job-rich suburban employers, the organization buses workers to temporary jobs that often lead to ”work- ing interviews” for applicants who want to demonstrate their potential to fill entry- level positions. Factory owners and other employers are invited to hire any worker full-time without a fee, thus supplying the missing rung on a stepladder to year-round employment. Through its ”no-charge” ar- rangement, Job Link will place 1,000 ”temps” into regular jobs with benefits in the next twelve months. Finally, it con- tinues to bus the newly hired until they ar- range transportation on their own, through a car pool, for example. As a not-for-profit, Job Link is funded by government and foun- dation grants and by its own earned income. Another strategic point of entry for en- couraging upward mobility has to do with school choice. Over the past decade it has be- come evident that nonpublic schools, espe- cially those under religious sponsorship, have been remarkably successful in easing not only children but also their low-income parents into the urban mainstream. Nearly one of every four youngsters enrolled in an elementary or secondary school in Chicago attends a nonpublic school. Now, hundreds of scholarships to attend Catholic, Lutheran, and Episcopal schools are given to young- sters who live in the Cabrini Green, Henry Horner, Rockwell Gardens, and other public housing projects. The aid covers only part of the tuition, requiring parents or guardians to pay the balance and fees. Though statistics are not available, it is our experience that the decision by a public housing family to enroll children in a private school is often the first step that eventually leads to an apartment in the private housing market. The choice made by a deserted mother, taken at personal sacrifice, is re- warded and reinforced when she sees that her child is in fact making educational progress; she is likely to strive even harder to climb out of poverty in order to continue sending her child to the school of her choice. A final example\u2014useful even though at present it is a matter of aspiration rather than achievement\u2014returns to a housing pro- gram. It will be operative in 1997 when Chi- cago’s Lawson YMCA finishes rehabilitating its twenty-five-story building to provide 583 single-occupancy rooms. The difference here lies in the overall aim, which is not just to provide livable space for otherwise homeless VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00099 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9308 July 31, 1996 persons but also to help people who are homeless, jobless, and difficult-to-employ get jobs, preferably within walking distance, and become self-sufficient. The YMCA staff will work, for example, with people who are recovering from substance abuse by concen- trating aggressively on job training and job getting. Success will be measured not just by occupancy rates but, more importantly, by the number who have moved to independent living. As with the other examples, the virtue of the YMCA initiative lies in its responding not just to today’s need but also to tomor- row’s challenge. To paraphrase columnist Robert J. Samuelson, the United States struggles through a soul-searching transi- tion from an era of entitlement to an era of responsibility.\u2211 f MODEL EMPLOYMENT PROGRAMS FOR EX-OFFENDERS \u2211 Mr. CAMPBELL. Mr. President, I take this opportunity to recognize the continued outstanding accomplish- ments of a model employment program for ex-offenders in my home State of Colorado. The Golden Door program, founded and developed by Bill Coors, president of the Coors Brewing Co., was imple- mented 28 years ago this month. The goal of Golden Door is to provide ex-of- fenders with a comprehensive program for reentry into society with a focus on employment. In addition to an employ- ment opportunity targeting people with limited employment skills, the Golden Door program offers an edu- cation, training in personal finances, general counseling, and the stability that allows people to successfully maintain a job. Eighty percent of the participants in the Golden Door program complete it successfully and move on to assume full-time positions within the corpora- tion. While this kind of opportunity is somewhat rare, Colorado has proven that the concept can be effectively du- plicated, proving profitable to the sponsoring business, the community and the participants. Bill Coors’ vision for a better com- munity and a second change for people has left the State of Colorado with his legacy of philanthropic efforts and a solid example to which businesses, small and large alike, can aspire. It was in 1994 that I first called the atten- tion of Congress to the Golden Door program, commending its good will and success. I also used that opportunity to express my support for the Targeted Jobs Tax Credit\u2014now the Work Oppor- tunity Tax Credit\u2014initiative, a pro- gram designed to assist smaller busi- nesses in employing people of similar target groups. Since then, a variety of other legisla- tive action has been taken to encour- age the successful reentry of ex-offend- ers into society. Employment training is being institutionalized in prisons, and Congress is working to safeguard the continuation of these programs as we move through the legislative proc- ess. In addition to highlighting the ongo- ing success of Golden Door and the Na- tion’s concern over reducing the rate of recidivism, I would like to recognize a sister program to Golden Door called Gateway Through the Rockies, a com- munity partnership to reduce criminal recidivism. The El Paso County, CO, Sheriff’s Department recently kicked off Gateway to provide inmates nearing release with a comprehensive program of education, counseling, work experi- ence, social skills training and post-re- lease support. Modeled after Golden Door, Gateway offers ex-offenders a second chance at no cost to taxpayers. Golden Door and Gateway Through the Rockies are shining examples of how communities and businesses can work together toward improving the quality of life for the community, while drastically reducing the cost we now incur by simply shuffling people in and out of the penal system. On July 11 of this year, my colleague, Senator GRAHAM, stated in a Senate floor state- ment that in Florida, ”the recidivism rate among those prisoners who have been through our prison industry pro- gram is one-fifth of the recidivism rate of the population as a whole.” These figures are impressive. It is my hope that in our effort to practice fiscal re- sponsibility and become a less intru- sive and yet more responsive govern- ment, we would make practical deci- sions regarding that segment of our community that has paid its debt and is capable of making a positive con- tribution. Programs serving as this segue simply makes sense. Mr. President, I would like to state my commitment to encouraging such programs and exploring potential legis- lative initiatives to facilitate commu- nity partnerships to reduce recidivism. Again, my thanks to all of the individ- uals, organizations and businesses for their ground-breaking contributions to community-based programs in Colo- rado and across the country.\u2211 f CITY CAB CO. \u2211 Mr. LEVIN. Mr. President, I rise to honor City Cab Co. on its 68th anniver- sary. City Cab Co. is the Nation’s old- est African-American taxicab associa- tion. On July 17, 1928, a group of ambitious African-American taxi drivers met in Detroit to discuss the possibility of starting a nonprofit corporate associa- tion because they were not accepted at the major cab company. Two weeks later, City Cab Co. was founded with nine charter members. City Cab mem- bership has grown over the last 68 years, and as the company has re- mained in the city since its inception, it has become closely involved with the community. City Cab has transported children with special needs to and from school for over 30 years free of charge. This year, an anniversary gala will benefit these children further with pro- ceeds going to scholarship fund. City Cab has shown the people of De- troit what it means to be a supportive partner of the community. I know my Senate colleagues join me in congratu- lating City Cab Co. on its 68th anniver- sary.\u2211 f THE GATHERING STORM \u2211 Mr. BRYAN. Mr. President, I urge my colleagues to read an article by Maj. Gen. Edward J. Philbin, which I ask be printed in the RECORD. In the wake of downsizing our national de- fense apparatus, we will come to rely even more on the capabilities of United States’ Reserve Forces. As Members of Congress, we should take it upon our- selves to insure that guard and reserve units are prepared to carry this mis- sion well into the next century. The article follows: [From National Guard, June 1996] THE GATHERING STORM (By Maj. Gen. Edward J. Philbin (ret.)) Recently, I was conducting experiments on the aerodynamic behavior of low-altitude, low-velocity spherical bodies at the Andrews Air Force Base golf course. Like all weather- wary flyers, I kept a suspicious eye on the mutating cloud formations overhead. Across the initially cloudless, blue sky crept wisps of white, which slowly burgeoned into rising silver cloud towers, the pinnacles fattening into great overhanging mushrooms of gold and purple. Progressively, the sky was dark- ened by a great sea of these forbidding gray thunderstorms. And then, these ”duty boomers” unleashed a lightning barrage, which generated peals of thunder, followed by a monsoon-like deluge of water. With apologies to Winston Churchill for appropriating one of his titles, I was struck by the similarity between this atmospheric spectacle and the acerbic treatment ac- corded the Army Guard since Operation Desert Shield\/Desert Storm almost six years ago. At that time an orchestrated public af- fairs attack on the Army Guard was launched, concentrating on the three round- out brigades federalized on November 30, 1990. The most popular target of abuse was Georgia’s 48th Infantry Brigade, roundout to the 24th Infantry Division, because of its al- leged post-mobilization ineptitude at the Na- tional Training Center (NTC). The fact that the 48th Brigade had, before mobilization, been consistently evaluated as combat ready by the 24th Infantry Division was ignored. Also ignored was the 48th’s call-up 31\u20442 months after its parent division was alerted for Gulf deployment. Also never mentioned was the fact that, despite all the obstacles placed in its path at the NTC, the 48th was revalidated as combat ready in 91 calendar days, which was just one day more than scheduled, and on the very day the cease-fire went into effect. During those 91 days, the 48th Infantry Brigade spent only 65 days ac- tually training. Despite these facts, the 48th has been con- tinually flogged and castigated by the media for ”failure” to deploy to the combat area. With relentless determination, the media have published a rash of articles emphasizing fictional failings rather than positive accom- plishments of the 48th, concluding that since the 48th ”couldn’t hack it,” then none of the Army Guard ”can hack it.” This World War II tactic relies on the theory that ”if you tell a big enough lie, and tell it often enough, most people will eventually believe it.” The audience for which this propaganda is in- tended is the members of Congress in the hope they will relegate the Army National Guard to a state constabulary. The Reserve Officers Association (ROA), in its May issue of the ROA National Security VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00100 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9309 July 31, 1996 Report, published the written testimony of Richard Davis, General Accounting Office (GAO), which was presented at a hearing be- fore Senator John McCain (R-Arizona). Davis, among other things, claimed that ”at least one reserve component has not suffi- ciently adapted to the new challenges [of re- gional dangers rather than a global Soviet threat] and therefore may not be prepared to carry out its assigned missions.” Guess which one? It’s the Army National Guard. Davis went on to state that (1) the ”Army National Guard has considerable excess com- bat forces” while the ”big Army” hungers for more combat support units; (2) ”the abil- ity of some Army National Guard combat brigades to be ready for early deployment missions * * * is highly uncertain,” sug- gesting that Army National Guard roles and missions should be ”modified;” and (3) the Air National Guard force dedicated to conti- nental air defense ”* * * is not needed today” and eliminating them would free ”considerable funds” for better use. Since this issue will be resolved cooperatively with the United States Air Force and the Con- gress, no further comment will be made here. Davis, whose resume\u0301 is devoid of any hint of military experience, grounded his opinion upon the alleged military deficiencies of the three Army National Guard brigades, fed- eralized for the Gulf War. However, those three brigades met the Army’s deployability criteria, but were never given the mission to deploy and no sealift was ever requested or scheduled for them. I repeat: All three roundout brigades and the three additional Guard battalions (Texas, Alabama and South Carolina) met the readiness deployability criteria established by the Army Mobiliza- tion and Operations Planning System (AMOPS) on the first day of federalization. The truth, obscured by the slanderous bil- lingsgate that has been spewed on the Army Guard, is that Operation Desert Shield\/ Desert Storm was a significant success for the Army National Guard as well as the ”big Army.” Army Guard volunteers filled crit- ical positions early in the crisis. It was suc- cessful in rapidly deploying 60 COL\/LTC level commands to SWA, all of which made a sig- nificant contribution to Operation Desert Storm\/Desert Shield. Due to years of preparation, Army Guard units were ready for federalization and were successful. All Army Guard units were at their respective mobilization stations within 72 hours of federalization. More than 97 per- cent of ARNG units met or exceeded deployability criteria when federalized. Sixty-seven percent of all Army Guard units deployed within 45 days of being federalized. The primary obstacle to an even earlier de- ployment was unavailability of sealift and airlift. Almost 100 percent of the Army Guard sol- diers called-up reported for active duty and more than 94 percent of the units’ soldiers were deployable. Of the unit troops, only six percent (3,974 of 62,411) were ineligible for de- ployment under statutory provisions and DoD guidelines. Before federalization, the combat readiness of the Army National Guard was at an his- toric high. The Army Guard demonstrated its ability to alert, federalize and rapidly de- ploy to the theater of operations (CENTCOM)\u2014reports to the contrary not- withstanding. Did Mr. Davis (B.S. degree in accounting; M.S. in business administration) consider any of these data in arriving at the apoca- lyptic conclusions about the Army National Guard’s military prowess? If he did, he didn’t mention it in his written or oral testimony. But his oral testimony was liberally but- tressed with statements such as: ”I think,” ”I believe,” ”it’s my opinion,” but no evi- dence was given. Our ”good friends” in the ROA never men- tioned these facts to their readers. Nor did ROA mention that for various reasons a con- siderable portion of the Army Reserve is not deployable. Probably that is the reason the Army Reserve is energetically blocking the path of Army Reservists who wish to trans- fer to the Army Guard. ROA claims that the purpose of its National Security Report is to inform Reservists of the facts of readiness issues. Yet, ROA publishes only material that denigrates the Army Guard. The motive may be found in the following excerpt from a commentary printed beside the Davis testi- mony: ”Anyone reading carefully between the lines of the articles contained in this month’s NSR will become aware of the riptides and undercurrents that can impact negatively on the future size and role of the Reserves if we (ROA) are not careful. The problem is that many Reserve officers as- signed to units feel they do not have to join ROA in order to take advantage of the bene- fits of the highly effective legislative work ROA does on their behalf on Capitol Hill.” Sounds more like a membership drive than a crusade for the truth. ROA followed Mr. Davis’ fantasy with two other articles presented as if they were hot- off-the-press news flashes: ”21st Century Force: A Federal Army and a Militia” and ”The State Militia.” In fact, as the Brits say, they were ”mutton dressed up as lamb,” having been written in 1993 at the Army War College’s Strategic Studies Institute, by COL Charles Heller, who was an Army Reserve ad- visor. Heller’s first article blames the ”inordi- nate influence” of the AGAUS and NGAUS for the ”big Army’s” alleged difficulty in structuring a stronger Total Army. Not sur- prisingly, he paints the Army Reserve and ROA as more responsive to and supportive of the ”big Army.” Predictably, Heller alleges that the Army Reserve call-up and its serv- ice in the Gulf War were exemplary, while Army Guard combat maneuver elements re- quired, ”lengthy post-mobilization training and then [did] not deploy to the Gulf.” Heller concludes that, ”the Total Army should be organized into two components\u2014a federal Army (Active Army and the U.S. Army Re- serve) and a militia (the state Army Na- tional Guard.”) He stops short, just barely, of advocating equipping the Army Guard with horses, lances and swords. Heller proposes that the Army Reserve be made responsible for the Federal Emergency Management Agency (FEMA). That’s very interesting, since the ROA leadership, which published Heller’s musings, now professes to have utterly no interest in seeking new jobs for the Army Reserve. Yet, they feverishly sought and probably still seek passage of the Laughlin Bill (H.R. 1646), which would have interjected the Army Reserve into the Na- tional Guard’s constitutional state mission. Very solicitous of the National Guard’s welfare, Heller worries that the Army Guard will have no time to train adequately for both the state and federal mission, alleging without explanation that the Army Guard failed in the Gulf deployment and in the Los Angeles riots. He proposes of that the Army Guard should concentrate on the state mis- sion. He also advocates USAR involvement in the state, as well as the federal, mission in a contradiction in his argument, which in his exuberance to redesign the Army Guard, he ignores. His opinions and conclusions are heuristic, self-serving, internally contradictory and unsupported by any evidence. All of these al- legations are refuted by the actual perform- ance of the Army Guard in the Gulf War. But Heller performs a valuable service by raising an extremely important question: Why have two Army Reserve components? Why, in- deed? Certainly, the constitutional framers recognized, as did George Washington, the need to establish a full-time standing army and accordingly gave Congress the power to raise and support armies\u2014and only standing armies were contemplated by that particular language. The Founding Fathers never in- tended and the sovereign states never grant- ed the federal government the power to orga- nize and maintain a federal militia over which the states would have no control. They recognized the necessity of a well-regu- lated militia and, in the Militia Clause of the Constitution (Art. I, Sec. 8, Cl. 16), they made provisions accordingly. It is under this clause that the militia and its modern coun- terpart, the National Guard, have developed. A propaganda storm has been gathering and thickening around the Army National Guard since the Gulf War. These libels are intended to generate thunderous doubt about the capability of the Army Guard to perform its federal mission; to generate lightning bolts of criticism of the Army Guard from the Congress and ultimately to create a leg- islative deluge in which the Army Guard will sink into oblivion. This storm has been ener- gized by the hunger of the National Guard would-be competitors to co-opt our missions and the share of the federal military budget that supports these missions. There are two ways to deal with an immi- nent thunderstorn. One way is to huddle under an umbrella, close your eyes to the lightning, put your fingers in your ears to mute the thunder and hope for survival. The other way is to seed the clouds with a defusing substance like silver iodide, dis- sipate their destructive energy and make them vanish. The time may be at hand when supporters of the National Guard must resort to the defusing technique, which might very well answer, once and for all, Heller’s ques- tion. Why have two Army Reserve compo- nents? Why, indeed, when the United States Con- stitution authorizes only one\u2014the National Guard. Note: As this article was being written, troops of the 48th Brigade were packing up to once again deploy to the NTC. On April 23, Mr. Davis’ GAO Division notified DoD that it was initiating, on its own authority, a re- view of ”Roles, Missions, Functions and Costs of the Army Guard and Army Re- serve.” Be assured that the NGAUS will be scrutinizing both events for any signs of dis- sembling.\u2211 f LAKE SUPERIOR STATE UNIVERSITY \u2211 Mr. LEVIN. Mr. President, I rise today to honor Lake Superior State University on the 50th anniversary of its founding. The University has a long and interesting history. In 1822, Colonel Hugh Brady estab- lished a fort in Sault Ste. Marie along the Saint Mary’s River. The fort was later named after Colonel Brady, its first commanding officer. In 1866, Fort Brady was rebuilt to protect the State lock and canal from invasion or de- struction. In 1892, Fort Brady was moved to a nearby hill-top because in- creased commercial shipping raised the value of river-front property. During World War II, Fort Brady saw a lot of action as over 20,000 troops were stationed there for training. The Army used the winters of the region to condition its snowshoe troops for war- fare in northern Europe. At the end of VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00101 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9310 July 31, 1996 World War II, Fort Brady was placed on inactive status. After Fort Brady’s closing, local businessmen and officials were prompt- ed to find a way to keep the recently renovated buildings and property in use. At the same time that residents were working to keep Fort Brady func- tioning, the Sault branch of the Michi- gan College of Mining and Technology (currently Michigan Technological University) was being inundated with applications from war veterans. It was quickly decided that moving the school to Fort Brady would solve both prob- lems. In 1946, the Michigan College of Min- ing and Technology opened with a class of 272. The Sault Ste. Marie branch of- fered classes in chemical, electrical, and mechanical engineering and in for- estry. Michigan State University as- sisted in the founding of a general studies program that offered liberal arts credits for the first 2 years of course work that were transferrable to other institutions. In 1966, the college was renamed Lake Superior State College. The State Board of Education accorded the Col- lege 4-year status and authorized it to grant baccalaureate degrees. The Col- lege’s first class of 4-year students graduated in 1967. The College sepa- rated from Michigan Technological University in 1970, and on November 4, 1987, Governor James Blanchard signed legislation changing Lake Superior State from a College to a University. Over its 50 years, the University has grown steadily and currently has an enrollment of approximately 3,500 stu- dents. Lake Superior State has main- tained the school’s small personal at- mosphere, while achieving national recognition for accomplishments such as winning three NCAA division 1 hockey titles. In the field of academics, the school is particularly known for the quality of its criminal justice and nursing programs. Over the past 50 years, Lake Superior State University has prepared thou- sands of students, including several members of my Senate staff, to con- tribute to the State of Michigan and the Nation. I know my Senate col- leagues will join me in honoring Lake Superior State University on its 50 years of service to the community.\u2211 f TRIBUTE TO HARRIET TRUDELL \u2211 Mr. REID. Mr. President, I rise today to honor one of Nevada’s living leg- ends, Harriet Trudell. Harriet has had many titles during her life, from demo- cratic activist, human rights advocate, lobbyist, feminist, campaign manager, and champion of the poor, to mother and grandmother. To me, Harriet is both a valued friend and a trusted advi- sor. To her country and the State of Nevada, she is a courageous and tire- less fighter who can always be counted on to tell it like it is. For more than 20 years, Harriet has been a key player in the public arena, both in Nevada and across the Nation. She is an invaluable asset to all of the many organizations and groups to which she has lent her energy, her fer- vor, and her skill. Harriet has a strong voice, a quick mind, and a political acumen which she uses to great effect for those who often lack a voice in our society. Both her compassion and her outrage at injustice drive her to orga- nize, inspire, and fight, long after most would have been exhausted. From marching in protest down ”the Strip” in Las Vegas, to addressing the State legislature or lobbying Members of Congress, Harriet sticks to her convic- tions and never gives up the fight. Over the years, whether she was serv- ing on my staff or for another organi- zation, Harriet has fought for those in our society who are so often forgotten. Whenever there is a social issue con- fronting Congress, I can always expect a phone call from Harriet to remind me of my obligations. She is a champion of women, children, minorities, and the poor. When tough decisions have to be made, Harriet is there serving as our conscience. Even when her causes are politically unpopular, she steadfastly speaks out for justice. It is my pleasure to speak today in tribute to Harriet Trudell\u2014a Nevadan and a patriot\u2014and congratulate her on being selected for a well-deserved honor by the Southern Nevada Wom- en’s Political Caucus. Nevada and the Nation owe Harriet Trudell a debt of gratitude.\u2211 f TRIBUTE TO JOSH WESTON \u2211 Mr. LAUTENBERG. Mr. President, I rise today to pay tribute to Josh Wes- ton who is retiring as chief executive officer of Automatic Data Processing. It’s been said that you can’t judge a businessman by intentions, but by re- sults. If that’s true, then we can only judge Josh Weston as an incredible suc- cess. Josh joined ADP in 1970, and he has far exceeded the high expectations I had for him. During his 14 years as chairman and chief executive officer of ADP, Josh’s leadership accelerated ADP’s already extraordinary record of excellence. In the words of Wall Street Stock analyst James A. Meyer, ”This company is so well managed that it’s the envy of ev- eryone on Wall Street.” Josh has decided that it’s time to pass on his mantle at ADP, and he leaves a legacy that was not only good for ADP, its staff, clients, and share- holders, but for our country. His ex- traordinary talent for management will serve as a model to be studied by managers across our corporate society. ADP has grown phenomenally since two friends and I joined together in the early 1950’s. It went public in 1961 and continued to grow and prosper; in fact, ADP is the only public company in the Nation to achieve consistent, record growth in earnings and revenue for 139 quarters\u2014nearly 35 years. In the most recent quarter, which ended on March 31, ADP earned a net $143.9 million. Earnings grew 15 percent and revenue 20 percent. Yet, ADP’s success goes far beyond the debit and credit columns. It cur- rently has 350,000 clients, prepares checks for 19 million, and enjoys a fi- nancial history which has made inves- tors, many of them ordinary ADP em- ployees, financially secure. In addition, ADP provides jobs for 5,000 New Jerseyans and employs 29,000, world- wide. Much of this success is due to the leadership of Josh Weston over the past 14 years. He did it by following and building upon ADP’s established for- mula for success: striving to master new technology, to improve efficiency, to attract outstanding staff, to make profits every employee’s responsibility, and to develop new products and mar- kets . But perhaps most importantly, ADP has always invested in the morale, skills and training of its employees. These valuable men and women are ADP’s greatest resource, and Josh never failed to recognize this fact. In fact, in a recent article in the Newark Star Ledger, Josh credited ”team- work” as the key to ADP’s success. Although an extremely successful businessman, Josh has always believed that we make a living by what we gain, but we make a life by what we give. And Josh’s contributions to his com- munity are considerable. The numer- ous Pro Bono Boards on which he has been active include Chairman of Boys Town of Jerusalem; Chairman of Moun- tainside Hospital; Vice-Chairman of the Tri-State United Way; New Jersey Symphony Orchestra; Atlantic Health System; WNET\/Channel 13; I Have a Dream Foundation; Montclair Art Mu- seum; Montclair State University Busi- ness School; New Jersey Quality Edu- cation Commission; National Con- ference of Christians and Jews; New Jersey University of Medicine and Den- tistry; etc. This sampling undeniably demonstrates Josh’s breadth and depth of commitment. For the past 14 years, Josh Weston and ADP have been a great team, but Josh has decided that it’s time to relin- quish the CEO title to ADP’s current president and chief operating officer, Art Weinbach. As usual, Josh made an excellent decision. Management gurus John Clemens and Douglas Mayer once noted, ”From a management viewpoint, Shake- speare’s King Lear is a tragedy because Lear failed to understand two manage- rial concepts: the need to select com- petent successors and the need to let go.” Josh undeniably understands these concepts. However, ADP will miss his vision and vitality. Josh Wes- ton is not just a businessman or an ex- ecutive; his record of accomplishment, his commitment to his customers and his loyalty to his employees distin- guishes him as a true leader. I am proud to call him a friend, and I wish him the best as he goes on to other challenges. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00102 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9311 July 31, 1996 GEN. COLIN POWELL \u2211 Mr. SIMON. Mr. President, few would dispute the fact that one of the most distinguished and highly respected pub- lic servants in our lifetime is Gen. Colin Powell. I read in Carl Rowan’s column of a speech he gave at a commencement at Bowie State University. I contacted General Powell to obtain a copy of it, and I have just read his re- marks for the second time. They are common sense. They are compassionate. They are forward-look- ing. A significant part of his remarks, in my opinion, is what he has to say about affirmative action. Affirmative action can be abused like any good thing can be abused. His com- ments should be spread much more widely than simply to this graduating class. I ask that Gen. Colin Powell’s re- marks be printed in the CONGRESSIONAL RECORD. The remarks follow: REMARKS OF GEN. COLIN POWELL I can never speak at a commencement such as this without the years peeling away as I drift back into a reverie of my own com- mencement some 38 years ago. The world you have educated yourselves for is so very, very different from the world that I started in those many years ago. I graduated as the Cold War was deepening, as lethal arsenals of nuclear weapons were growing ever more ominous. The world in 1958 that I entered was a world that seemed on the verge of gloom and despair. For most of my years as a soldier, for most of those 35 years, I participated in a death struggle of survival between the forces of Communism and the evil empire, and the forces of good, the forces of democracy, that we rep- resented. It was a long, long struggle, a struggle that dominated most of my life. I can still remember the commission I got at my ROTC graduation in 1958. It was signed by Dwight Eisenhower, and the mission they gave Lt. Powell at that time was simple. ”Lt. Powell go to Germany. Take command of 40 soldiers. Find the City of Frankfurt. Go to the east of the City of Frankfurt. You’ll find the Iron Curtain. Lt. Powell, with your 40 soldiers, guard a small section of the Iron Curtain. In the time of war, don’t let the Russian Army come through. Got it?” ”Yes, sir. Got it.” And I did that for two years, successfully preventing World War II from breaking out. The years went by, and 28 years later, I got a new commission. This time from Ronald Reagan, and he made me a Lieutenant Gen- eral of Infantry And they gave me 75,000 proud American soldiers to command. And 28 yeas later, my mission was, ”General Powell, with your 75,000 soldiers, you’ll be in Ger- many, find the city of Frankfurt. Go the east of the city of Frankfurt. Guard a slightly wider section of the Iron Curtain this time. Try to do as good a job as you did when you were a Lieutenant.” During your years here at Bowie, that Cold War came to an end. The arsenals of nuclear weapons are being dismantled. The Soviet Union has broken into 15 individual nations, each seeking its own way down a difficult path of learning how democracy works, mas- tering the mysteries of free enterprise and market economic system. Communism lies discredited, its few remaining adherents cling to the corpse of a dead ideology. This historic reconciliation that has taken place between East and West has changed the old Cold War map that used to be red and blue with an Iron Curtain between the colors into a new kind of map, a map full of mosaic pieces, different colors as new nations and old nations seek to find a new way in a dif- ferent kind of world, a world structured as a world trading system as opposed to a world in conflict. This reconciliation that took place be- tween the Soviet Union and us is matched by other historic reconciliations that have taken place around the world in recent years. In the Middle East, the peace process is moving forward that we hope will be suc- cessful in finally bringing peace to that trou- bled part of the world. In South Africa, Nelson Mandela who was on trial when I graduated from college and who spent 27 years in prison, is now the president of his country. And in his triumph, he killed the evil ideology of Apartheid. In our own hemisphere, as I think back just seven years to when I was National Se- curity Advisor to the President of the United States and we had all kinds of problems here in Haiti, in Nicaragua, and Honduras and El Salvador and Panama and now, all of those nations are moving forward down the road to democracy with elected civilian leaders; all of them save one, Cuba. But Cuba cannot withstand the winds of historic change that are sweeping across our hemisphere. In Asia, the pattern is the same as we watch the Philippines and India, the Southeast Asia tiger, Vietnam, even China, emerging into this new world trading system. You are entering a world where our former adversaries, those that we were in conflict with for all these decades, have now become our economic competitors as well as becom- ing our new markets, new opportunities for us. It is not a world without problems or con- flicts. Bosnia, Liberia, North Korea, and other places of tragedy remind us on our tel- evision sets every evening of the dangers that will lurk ahead. Yet, I want you to see this as a time of hope and optimism because our value systems have prevailed. There is no cross-border war anywhere in the world today. No nation is fighting with any other nation across a national border. American troops on this Memorial Day are not at war. Instead, they are conducting peacekeeping operations. In Bosnia they are even working alongside Russian soldiers who were once their sworn enemies. The world that you are entering to make your contribution will increasingly be struc- tured not by armies staring at each other across iron or bamboo curtains. Instead, it will be structured by free world trade, by the power of the information and technology revolutions, by the instantaneous flow of capital, data, ideas, values. The cellular tele- phone, the fax machine and the Internet are breaking down all the old Cold War bound- aries that once divided people. What will not change is the responsibility that America will have to burden the very difficult, difficult task of world leadership. We have power that is trusted. We are still a beacon of freedom, and we are still an exam- ple of what can be achieved, what can be ac- complished when free people are allowed to determine their own destiny. With the end of the Cold War, we have now turned inward here in America to start to deal with those vexing problems that, per- haps, we overlook while we were worrying about nuclear warfare and World War III. We look inward and know that we need a more rapidly growing economy to provide good, well-paying jobs for all Americans. We know that we have to do something about the problems of violence on our streets and vio- lence in our schools. We have to do some- thing about an education system, while it serves you well, it is not structured to serve all our youngsters well. We must do something about the scourge of drugs that threatens to wipe out an entire generation of young people. We will have to deal with the breakdown that has occurred in the norms of civility within our society which have led to such public and political rancor that causes us to wonder what kind of a society we are becoming. We must do something about the racial separation that exists in our nation and keeps us from the dream of an integrated society that Dr. King set out for us. In some ways, the new world that we face will be more complex and demanding than the old world, both here and abroad. But de- spite the challenges, incredible opportunities await you in this new world, opportunities that await educated people. The education you received here, the additional education you must acquire in whatever field of en- deavor you enter\u2014because in this increas- ingly technical and competitive world, suc- cess will go to those who realize that edu- cation must now become a lifelong pursuit. America will not be going back to smoke- stack industries. The corporate restruc- turing that you see taking place allow us to be more competitive, more agile, more ready to deal with the challenges of a world eco- nomic system. You each face the prospect of several different careers in several different companies in different places around the country and around the world as you go about your working career. America has changed in so many, many wonderful ways since my graduation in 1958. When I graduated as a black man, I was, by law, a second-class citizen. When I graduated in 1958, the Declaration of Independence and the Bill of Rights didn’t fully apply to me. I entered at that time perhaps the only insti- tution in America that permitted a black person to rise in an integrated setting lim- ited only by my own willingness to work hard and my dreams and ambition. And that institution was the United States Army. The Army led the nation, and the nation followed. The young Captain Powell who was once refused service at a lunch counter in Georgia, when I came home from Vietnam after a year of fighting for my country, that Captain Powell was able to become General Powell, the Chairman of the Joint Chiefs of Staff for the Armed Forces of United States. But I didn’t do it alone. I climbed on the backs of the those who came before me and those who broke the trail, the Buffalo sol- diers and Tuskegee Airmen, and the other black military pioneers. I climbed on the backs of men and women who knew that they served a country that was not yet pre- pared to serve them. But they did it anyway because they had faith in what the future held for them and for their country. I benefited from the sacrifices of Dr. Mar- tin Luther King, Jr. and Jesse and Rosa and Andrew and so many, many others\u2014black and white\u2014who were determined to build an America that would be faithful to the dreams of its founding fathers. The men and women who are honored along with me today, your teachers and parents and family members who are present today, they strug- gled as well. We succeeded because we worked hard, we believed in ourselves, and because we be- lieved in the fundamental goodness of the American people and we believed in the re- demptive potential of our society; and we did it all for you. We now expect you to do even more. We expect you to climb higher. We ex- pect you to take advantage of the marvelous opportunities that are before you, opportuni- ties that were not there for us. We expect VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00103 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9312 July 31, 1996 you to let your shoulders be used by those who still search for success, who wonder if the dream is still there for them. Because you see, the struggle is not yet over. We’re not where we have got to be. We’re not where we want to be. We have a great America. We can make it a greater America. There are those who say, ”Well, you know, we can stop now. America is a color blind so- ciety.” But it isn’t yet. There are those who say, ”We have a level playing field.” But we don’t yet. There are those who say that, ”All you need is to climb up on your own boot straps.” But there are too many Americans who don’t have boots, much less boot straps. A few\u2014a few Horatio Alger stories, not enough to give hope to our fellow citizens who still live in the despair of racism, who are trapped in tightening circles of poverty and poor education, who wonder if compas- sion and caring are still the pillars of the American dream. There are those who rail against Affirmative Action. They rail against Affirmative Action preferences, while they have lived an entire life of pref- erence. There are those who do not under- stand that the progress we have achieved over the past generation must be continued if we wish to bless future generations. And so, Colin Powell believes in Affirma- tive Action. I believe it has been good for America, and I know that we can design Affirmative Ac- tion Programs that will satisfy the Constitu- tional requirements, because what we want is Affirmative Action that provides access for all Americans to the opportunities that rightfully belong to all Americans. In my travels around the country since re- tirement, I have visited with many corporate leaders, and I have been pleased to see how committed American industry is to Affirma- tive Action. They understand that we cannot waste any human potential. They under- stand that in the future that is ahead they must have diverse work forces. They must be prepared to operate in a world trading envi- ronment that is increasingly minority, as we would call it, becoming a majority. I’m very, very proud of what I’ve seen in American corporate life. In one case, one company leader said to me, ”We don’t care what the government does with respect to Affirmative Action. We believe in it. We be- lieve it’s the right thing to do. We are going to continue to move forward.” Affirmative Action finds and prepares qualified people for entry into the education system and into the work force. We must re- sist misguided government efforts that seek to shut it all down, efforts such as the Cali- fornia Civil Rights Initiative which poses as an Equal Opportunity Initiative, but which puts at risk every outreach program. It sets back the gains made by women, and puts the brakes on expanding opportunities for people who are in need. I don’t speak about Affirmative Action from an academic sense. I speak from experi- ence. In the military, we worked hard to in- clude all Americans. We used Affirmative Action to reach out to those who were quali- fied, but who were often overlooked or ig- nored as a result of indifference or inertia. We used Affirmative Action in the military to create the level playing field and to create the color blind environment that so many people speak of. We didn’t wait for it to happen. We made it happen in the military. We created an envi- ronment where advancement came from per- formance and a striving for excellence and not from color or gender. But first we had to open the gates to let people in. As a result, we produced an Armed Force rich in its di- versity and the very, very best in the world, a reflection of what all of America should look like. So we have to keep it up. We have to commit ourselves. There is no alternative. When one black man graduates, at the same time, 100 black men are going to jail. We still need Affirmative Action. When half of all African American men be- tween the ages of 24 and 35 years of age are without full-time employment, we still need Affirmative Action. When half of all black children live in poverty, we need Affirmative Action as well as quality education systems and a thriving economy to produce the good jobs, the good jobs that free enterprise and capitalism can produce, the jobs that at the end of day are the only solution to the prob- lems we face. Some people will say that Affirmative Ac- tion stigmatizes the recipients. Nonsense. Affirmative Action provides access for the qualified. And for anybody who feels stig- matized, go get A’s instead of C’s. Knock them dead. And then\u2014I tell the story in my book about when I was a young Lieutenant and one of my commanding officers back then in the late ’50s came up to me and said, ”Powell, you’re doing great. You’re one of best black Lieutenants I’ve ever known.” And I just said, ”Thank you, sir.” And I said to myself silently, ”That ain’t going to be good enough. You may have a stereotype of me, but I intend to be the best Lieutenant you ever saw.” And I will\u2014for the way to handle stereotypes and stigmatism is to let it be somebody else’s problem. You just per- form and do your very, very best. Because you see, the Army put me in an environment where I could be a winner, and I wanted to be a winner. Beautiful graduates before me this morning are all winners. You have benefited from the sacrifices of those who went before you. You have worked hard. And today, you receive your reward. You are filled by the love and by the dreams of your parents and families. You are nourished by the education you have received from the dedicated teachers here present who have given you the priceless gift of learning. We expect you to go forth and prosper and contribute to the economic growth of this nation. We expect you to lead a life of serv- ice to your community and to serve those who have not had the advantages that you have. You are people of accomplishment. You are now role models. Each of you must find a way to reach down and back to help someone in need, someone in pain, someone who wonders if anybody cares, somebody who wonders if the American dream is still there for them. In order to have a complete life, make sure you share your time, your talent, and your treasure with these who are less fortunate. We expect you to raise strong families. We expect you to raise children who are inspired to do even better than you are. Marry well, and marry for life. Be parents of value. Teach your children the difference between right and wrong. Teach your children the place of God in their lives. Teach your children the value of hard work and education. Teach them to love. Teach them to be tolerant. Teach them to be proud of their heritage, their color. And teach them to respect their fellow citizens who may look different but who are not different. Teach them to respect themselves, to be- lieve in themselves. Teach them, above all, to believe in America as you must believe in America. America, a noisy, noisy country, the noise has a name. It’s called ”democ- racy.” Democracy as we argue with each other to find the correct way forward. Amer- ica, a wonderful place. A place with prob- lems, problems that are now yours to solve and not just to curse, because we are a good people. We want to do the right thing. We must have faith in ourselves. We are, as Lin- coln put it, ”The last, best hope of earth,” I am so proud of you today, so very, very proud. Go forth now to make this a better land. Go forth to find your destiny. Go forth to find happiness. Go forth on your American journey. Go forth with my congratulations and with God’s blessings. Have a great life. Thank you.\u2211 f NOMINATION OF NINA GERSHON \u2211 Mr. MOYNIHAN. Mr. President, yes- terday, by unanimous consent the Sen- ate confirmed the nomination of Mag- istrate Judge Nina Gershon for the po- sition of U.S. District Judge for the Eastern District of New York. I rec- ommended Judge Gershon to President Clinton on July 11, 1995 and the Presi- dent nominated her on October 18, 1995. The Senate has confirmed a judge of impeccable credentials. She has been a magistrate court judge since 1976 and was chosen chief U.S. magistrate judge for the Southern District in January of 1992. Indeed, Judge Gershon has the distinction of being the first chief mag- istrate judge for the Southern District. Nina Gershon has shown herself to be an extremely able and well-respected magistrate. And I am confident that she will serve the Eastern District of New York with equal dedication. Throughout the nomination process she has had bipartisan support and I thank the leaders for bringing her nomination forward.\u2211 f RENEWABLE TECHNOLOGIES RESEARCH AND DEVELOPMENT Mr. AKAKA. Mr. President, I want to express my support of Jeffords-Roth- Leahy renewable energy amendment. This amendment will restore funding for the Department of Energy solar and renewable energy research and develop- ment program to the amount appro- priated in fiscal year 1996. I want to thank Senator JEFFORDS for offering this amendment because I believe that our country’s renewable energy program is at an important wa- tershed. With support from Congress and the Federal Government, our Na- tion can forge ahead in developing reli- able and cost-effective renewable tech- nologies. We can also position our re- newable energy industry to capture its share of the rapidly expanding market of solar and other renewable tech- nologies. And, we can expand power generation capacity in an environ- mentally responsible manner. In recent years, energy efficiency and renewable energy programs have been remarkably successful and have cre- ated a new industry capable of world leadership in a very important tech- nology sector. Energy efficient tech- nologies are generating billions of dol- lars of consumer energy savings and new business opportunities and play an important role in job creation, accord- ing to a study by energy expert Daniel Yergin. If we retreat from this prom- ising growth industry, as we did throughout the decade of 1980s, our international competitors will quickly carve up a market that will exceed a billion dollars by the turn of the cen- tury. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00104 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9313 July 31, 1996 We should not reduce funding for re- newable R&D and allow this initiative to sputter and stall. We must move for- ward, as other countries are doing, and make essential investments in tech- nologies that will create new jobs, open export markets, and promote a healthy environment. This is the choice we have made in approving this amend- ment. At stake is our ability to compete in an international energy market that will experience explosive growth in the decades ahead. Many countries cannot afford to meet the growing energy de- mand by building, operating, and main- taining centralized power plants and the costly infrastructure associated with them. The flexibility offered by renewable technologies is a natural fit for the developing world. Countries around the world are also making conscious strategic decisions to endorse and adopt renewable energy as a mainstay of their energy policy. These policies may lead to the amelio- ration of problems associated with global climate change. The past decade was a period of un- paralleled success in the drive to re- duce the cost of solar and renewable technologies. Some are at the verge of becoming cost competitive with con- ventional energy sources. This trend will continue to improve in the years ahead. As these technologies become more and more cost competitive, the rate at which these technologies are in- tegrated into the energy grid will steadily increase. What is at stake is the ability of a young, dynamic industry to capture the world markets for renewable tech- nologies so that Americans can hold their share of rewarding, high paying jobs. That is what the Jeffords amend- ment is all about. If we are to move into the future with a strong economy and a healthy environment, renewable energy technologies must be a part of our investment strategy for the future. Although the value of U.S. renewable energy exports exceeds a quarter of a billion dollars, the U.S. renewable en- ergy industry is barely penetrating the expanding world market for renewable energy technologies. This is a result of a weak commitment to renewable en- ergy research, development, and export promotion. Compared with seven other leading trading nations, the United States ranks lowest in resources allocated to solar and renewable export promotion, according to a 1992 Department of En- ergy report. National Science Foundation data confirms that the U.S. investment in R&D is in decline. Since 1987, Federal R&D investments have dropped stead- ily in real terms. Since 1992, industry R&D has stagnated. And today, less than one-third of private R&D is dedi- cated to research; the rest is being spent on product and process develop- ment. I support the Jeffords amendment be- cause I want to reverse this trend. Frankly, I would have preferred higher spending levels for solar and renewable programs, but this is not realistic given the budget constraints we face. Unless we maintain a reasonable fund- ing level for these programs, we will continue to lose ground and should not be surprised if other countries outcompete U.S. industry in this rap- idly expanding market. Finally, there are important energy security reasons for supporting this amendment. U.S. oil imports are at record levels, are continuing to grow, and could reach 60 percent of consump- tion by the year 2005. Oil imports that high would contribute nearly $90 bil- lion to the trade deficit. According to a recent Department of Commerce anal- ysis, this level of oil imports con- stitutes a threat to U.S. economic se- curity. Persian Gulf countries are pro- jected to control 70 percent of the glob- al market for oil by the year 2010, mak- ing world oil markets increasingly un- stable. Renewable energy technologies will lead to significant movement toward alleviating some of the potential nega- tive consequences of our continuing and increasing reliance on imported oil.\u2211 f TRIBUTE TO THE EXPERIMENTAL AIRCRAFT ASSOCIATION ON THE OCCASION OF THE 43D ANNUAL ”FLY IN” IN OSHKOSH, WIS- CONSIN, AUGUST 1, 1996 \u2211 Mr. FEINGOLD. Mr. President, I rise today to salute the 160,000 inter- national members of the Experimental Aircraft Association, based in Oshkosh, Wisconsin, on the opening day of their 43rd annual ”Fly In” convention, the single largest aviation event of its kind in the world. Mr. President, the Fly In, held at the Wittman Regional Airport in Oshkosh, is the stage for 12,000 experimental air- craft, vintage warplanes, showplanes, ultralights and rotorcraft. More than 700 exhibitors will present examples of cutting edge aviation technology, and more than 500 workshops, seminars and forums will feature many of the lead- ing figures in aviation passing along their knowledge and experience on sub- jects covering the whole spectrum of flight. More than 800,000 people from all over the world will attend the Fly In. This year’s program includes a salute to test pilots, the people who strap into the latest aviation designs and push them as far and as fast and as high as they can possibly go, pushing the per- formance envelope in the continuous quest for better aircraft. There will also be a salute to Korean War and Vietnam War veterans. Mr. President, the Fly In is a terrific show, but it is only part of the ongoing work of the EAA. The Experimental Aircraft Associa- tion works both to preserve aviation’s heritage and promote its future. If you are interested in designing, building, restoring, maintaining or flying air- planes, or if you simply take pleasure in watching aircraft perform, the EAA offers something for you through pro- grams at the state, regional, national and international level, all aimed at making flying safer, more enjoyable and more accessible for anyone inter- ested. The EAA supports a foundation dedi- cated to the education, history and de- velopment of sport flying. It maintains a large collection of aircraft, a portion of which is on display at the EAA Air Adventure Museum in Oshkosh. EAA has created the Young Eagles program to give a free flight experience to young people, and there’s a scholarship program for young people interested in aviation careers. All this began, Mr. President, in Jan- uary, 1953, a little less than 50 years after the Wright brothers flew at Kitty Hawk. Paul Poberezny and a group of flying enthusiasts met at Milwaukee’s Curtiss Wright field, now known as Timmerman Field. The first Fly In was held nine months later at Curtiss Wright, drawing fewer than 40 people and a handful of aircraft. Mr. Poberezny was elected the group’s first president, and he held that post until 1989, when his son, Tom, took the reins. For the first 11 years of its existence, EAA was run out of the basement of Mr. Poberezny’s home in Hales Corners, Wisconsin, near Mil- waukee. Now it operates from its head- quarters in Oshkosh. Mr. President, flight has fascinated the human race for centuries. Less than a century ago, powered flight be- came a reality. Sixty-six years later, we landed on the moon. Still, the won- der of traveling among the clouds re- mains, and that spirit, along with the inventiveness and daring of pilots, de- signers and engineers, is nurtured by the Experimental Aircraft Associa- tion.\u2211 f IT’S TIME TO END DEFERRAL \u2211 Mr. DORGAN. Mr. President, it’s time to end the perverse $2.2 billion U.S. jobs export subsidy called deferral that our Tax Code provides to big U.S. companies that move their manufac- turing plants and U.S. jobs to tax ha- vens abroad, and then ship back their tax-haven products into the United States for sale. Since 1979, we have lost about 3 million good-paying manufac- turing jobs in this country, in part, be- cause of this ill-advised subsidy. Presidents Kennedy, Nixon, and Carter all tried to curb this misguided tax subsidy. In 1975, the Senate voted to end it. In 1987, the House voted to stop it. But in each case, high-powered lobbyists for the big corporations were able to derail it before such action could be enacted and signed into law. In July, Robert McIntyre, Director of the Citizens for Tax Justice, offered compelling testimony in support of the effort to pull the plug on this mis- guided tax break at a recent Families VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00105 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9314 July 31, 1996 First forum on paycheck security issues. He thoroughly debunks the lob- byist-driven myths that repealing this $2.2 billion U.S. jobs export subsidy will somehow prevent large U.S. multi- national firms from competing in the global economy. I think that you will find his testimony provides an excel- lent perspective on this subject, and I hope that you will read it. I ask that the text of Mr. McIntyre’s recent testimony be printed in the RECORD. The material follows: STATEMENT OF ROBERT S. MCINTYRE, DIREC- TOR, CITIZENS FOR TAX JUSTICE, IN SUPPORT OF LEGISLATION TO CURB TAX SUBSIDIES FOR EXPORTING JOBS Citizens for Tax Justice strongly supports legislation to limit current federal tax defer- rals that subsidize the export of American jobs. Such reform legislation is embodied in S. 1355, Senator Byron Dorgan’s ”American Jobs and Manufacturing Preservation Act.” Similar legislation has been approved by the House of Representative in the past. We urge the full Congress to pass S. 1355 and send it to the President to sign. TAX BREAKS FOR EXPORTING JOBS SHOULD BE ELIMINATED\u2014WE SHOULDN’T PAY OUR COMPA- NIES TO MAKE GOODS FOR THE AMERICAN MARKET IN FOREIGN COUNTRIES In its 1990 annual report, the Hewlett- Packard company noted: ”As a result of cer- tain employment and capital investment ac- tions undertaken by the company, income from manufacturing activities in certain countries is subject to reduced tax rates, and in some cases is wholly exempt from taxes, for years through 2002.” In fact, said Hew- lett-Packard’s report, ”the income tax bene- fits attributable to the tax status of these subsidiaries are estimated to be $116 million, $88 million and $57 million for 1990, 1989 and 1988, respectively.” This is not an isolated instance. An exam- ination of 1990 corporate annual reports that we undertook a few years ago provided the following additional examples.1 Footnotes at end of article. Baxter International noted that it has ”manufacturing operations outside the U.S. which benefit from reductions in local tax rates under tax incentives that will continue at least through 1997.” Baxter said that its tax savings from these (and its Puerto Rican) operations totaled $200 million from 1988 to 1990.2 Pfizer reported that the ”[e]ffects of par- tially tax-exempt operations in Puerto Rico and reduced rates in Ireland” amounted to $125 million in tax savings in 1990, $106 mil- lion in 1989 and $95 million in 1988. Schlering-Plough said that it ”has subsidi- aries in Puerto Rico and Ireland that manu- facture products for distribution to both do- mestic and foreign markets. These subsidi- aries operate under tax exemption grants and other incentives that expire at various dates through 2018.” Becton Dickinson reported $43 million in ”tax reductions related to tax holidays in various countries” from 1988 to 1990. Beckman noted: ”Certain income of sub- sidiaries operating in Puerto Rico and Ire- land is taxed at substantially lower income tax rates,” worth more than $7 million a year to the company over the past two years. Abbot Laboratories pegged the value of ”tax incentive grants related to subsidiaries in Puerto Rico and Ireland” at $82 million in 1990, $79 million in 1989 and $76 million in 1988. Merck & Co. noted that ”earnings from manufacturing operations in Ireland [were] exempt from Irish taxes. The tax exemption expired in 1990; thereafter, Irish earnings will be taxed at an incentive rate of 10 percent.” In fact, under current law, American com- panies often are taxed considerably less if they move their manufacturing operations to an overseas ”tax haven” such as Singa- pore, Ireland or Taiwan, and then import their products back into the United States for sale. HOW WE SUBSIDIZE THE EXPORT OF AMERICAN JOBS The tax incentive for exporting American jobs results from current tax rules that: 1. allow companies to ”defer” indefinitely U.S. taxes on repatriated profits earned by their foreign subsidiaries; and 2. allow companies to use foreign tax cred- its generated by taxes paid to non-tax haven countries to offset the U.S. tax otherwise due on repatriated profits earned in low- or no-tax foreign tax havens. S. 1355 WOULD END THIS WRONG-HEADED SUBSIDY Why should the United States tax code give companies a tax incentive to establish jobs and plants in tax-haven countries, rath- er than keeping or expanding their plants and jobs in the United States? Why should our tax code make tax breaks a factor in de- cisions by American companies about where to make the products they sell in the United States? Why indeed? We believe that this tax break for overseas plants should be ended. Profits earned by American-owned companies from sales in the United States should be taxed\u2014 whether the products are Made in the USA or abroad. S. 1355 would end the current tax break for exporting jobs\u2014by taxing profits on goods that are manufactured by American compa- nies in foreign tax havens and imported back into the United States. It would achieve this result by (1) imposing current tax on the ”imported property income” of foreign sub- sidiaries of U.S. corporations; and (2) adding a new separate foreign tax credit limitation for imported property income earned by U.S. companies, either directly or through foreign subsidiaries. 3 legislation identical to S. 1355 was passed by the House in 1987. Unfortunately, at that time the reform provision was dropped in conference at the insistence of the Reagan administration. SPURIOUS ARGUMENTS AGAINST CURBING SUBSIDIES FOR EXPORTING JOBS Of course, Congress has heard loud com- plaints from lobbyists for companies that benefit from the current tax breaks for ex- porting jobs. Some have apparently argued that their companies will be at a competi- tive disadvantage in foreign markets if this legislation were approved. But since the bill applies only to sales in U.S. markets, that argument makes no sense. Lobbyists also have asserted that if Amer- ican multinationals have to pay U.S. taxes on their profits from U.S. sales for foreign- made goods, they might be disadvantaged compared to foreign-owned companies sell- ing products in the United States. Perhaps. But as the House concluded in 1987, it would be far better ”to place U.S.-owned foreign enterprises who produce for the U.S. market on a par with similar or competing U.S. en- terprises” rather than worrying about ”plac- ing them on a par with purely foreign enter- prises.” 4 Finally, lobbyists have made the spurious point that overall, foreign affiliates of U.S. companies have a negative trade balance with the United States, that is, they move more goods and services out of the United States than they export back in. To which, one might answer, so what? After all, S. 1355 does not deal with all for- eign affiliates of U.S. companies. Rather, it deals only with U.S.-controlled foreign sub- sidiaries that produce goods for the Amer- ican market in tax-haven countries.5 When U.S. companies shift what would otherwise be domestic production to these foreign sub- sidiaries it most certainly does not improve the U.S. trade balance; it hurts it.6 CONCLUSION American companies may move jobs and plants to foreign locations in order to make goods for the U.S. market for many rea- sons\u2014such as low wages or lack of regula- tion\u2014that the tax code can do little about. But we should not provide an additional in- ducement for such American-job-losing moves through our income tax policy. American multinationals should pay in- come taxes on their U.S.-related profits from foreign production. Such income should not be more favorably treated by our tax code than profits from producing goods here in the United States. We urge Congress to ap- prove the provisions of S. 1355. 1 Several of the companies mentioned here appar- ently have been lobbying hard against S. 1355. 2 Many companies do not separate the tax savings from their Puerto Rican and foreign tax-haven ac- tivities in their annual reports. 3 ”Imported property income means income . . . derived in connection with manufacturing, pro- ducing, growing, or extracting imported property; the sale, exchange, or other disposition of imported property; or the lease, rental, or licensing of im- ported property. For the purpose of the foreign tax credit limitation, income that is both imported property income and U.S. source income is treated as U.S. source income. Foreign taxes on that U.S. source imported property income are eligible for crediting against the U.S. tax on foreign source import[ed] property income. Imported property does not include any foreign oil and gas extraction in- come or any foreign oil-related income. ”The bill defines ‘imported property’ as property which is imported into the United States by the con- trolled foreign corporation or a related person.” House Committee on Ways and Means, ”Report on Title X of the Omnibus Budget Reconciliation Act of 1987,” in House Committee on the Budget, Omnibus Budget Reconciliation Act of 1987, House Rpt. 100 391, 100th Cong., 1st Sess., Oct. 26, 1987, pp. 1103 04. 4 Id. 5 Companies that manufacture abroad in non-tax- haven countries generally would not be affected by the bill, since they still will get foreign tax credits for the foreign taxes they pay. 6 Foreign affiliates of U.S. companies that produce goods for foreign markets\u2014not addressed by Senator Dorgan’s bill\u2014may well have a negative trade bal- ance with the United States, insofar as they transfer property from their domestic parent to be used in overseas manufacturing. But it would obviously be far better for the U.S. trade balance\u2014and for Amer- ican jobs\u2014if those final products were manufactured completely in the United States and exported abroad, rather than having much of the manufac- turing process occur overseas. To assert that foreign manufacturing operations by American companies helps the U.S. trade balance is to play games with statistics. For example, suppose an American company was making $100 million in export goods in the U.S. for foreign markets. Now, suppose it moves the assem- bly portion of that manufacturing process overseas, where half the value of the final products is pro- duced. At this point, instead of $100 million in ex- ports, there are only $50 million. America has thus lost exports and jobs\u2014even though the foreign affil- iate itself has a negative trade balance with the United States. For better or worse, however, S. 1355, does not address this situation.\u2211 f THE RUSSIAN ELECTIONS Mr. LEAHY. Mr. President, on June 16, something happened that has tre- mendous implications for the Amer- ican people and for people everywhere. On that day, Russia, which just a few years ago was the greatest threat to democracy in the world, held a demo- cratic election to select its President. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00106 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9315 July 31, 1996 That alone, Mr. President, is reason to celebrate. Despite calls from people across the Russian political spectrum who still do not understand what de- mocracy is about to cancel the elec- tion, the Russian government stuck by its commitment to democracy\u2014 No decisions were taken by secretive Politburos. Parties representing the full spec- trum of political sentiment partici- pated. Candidates crisscrossed that vast country making promises to win the votes of ordinary people. And in the end, most stunning of all, there was a graceful concession speech by the losing candidate, the leader of the Communist party that only a little while ago we regarded as the personi- fication of tyranny, committing the party to challenge irregularities in the election ”in the courts, not in the streets.” Mr. President, this was not a perfect election. There were irregularities. There may well have been instances of ballot box stuffing. I was quite con- cerned about the extent to which media coverage of the election ap- peared to favor one candidate. But it also occurred to me that, if I were a newspaperman covering an election in which one major party had a record of advancing democracy and the freedoms associated with it and the other had a 70-year history of suppressing the free- dom of newspapers like mine, I might have tended to advocacy rather than neutrality too. That is not an excuse, but despite the irregularities, there is general agreement that the will of the Russian people was heard in this elec- tion. The Russian people voted for democ- racy, and the tremendous significance of that should not be lost on anyone. Despite all of the hardship they are ex- periencing. Despite the crime and cor- ruption. Despite their loss of empire. Despite the fact that the standard- bearer of the forces of democracy has made many mistakes, the brutal war in Chechnya being the most egregious, and is in poor health. The Russian people voted for free- dom. Freedom to speak their minds. Freedom to associate. As ultra-nation- alist Vladimir Zhirinovsky, who is not someone I admire, put it in explaining why he would not support the com- munists: freedom to decide where to spend his vacation. For some, it came down to things as simple as that, things which we take for granted. Mr. President, the world has changed profoundly in the last decade. Com- munism as a world force is gone. What- ever the future may bring in terms of the distribution of power in the world, the age of ideological confrontation be- tween communism and democracy is over. While there remain many aggres- sive forces in the world, I cannot help but feel that the world will be a safer place when its two greatest powers are both committed to democracy and the protection of individual rights. And I think we owe credit to Presi- dent Clinton, Secretary of State Chris- topher, and Deputy Secretary Talbott. Over the past 3 years, they have braved the attacks by those, including some in this chamber, who cannot bring them- selves to give up their cold war notions about evil empires and would have us focus only on the vestiges of the old and ugly in Russia and ignore all that is new and promising. Where do we go from here? As the ranking member of the Foreign Oper- ations Subcommittee, I have watched as funding for foreign assistance has been slashed over the past 18 months, including assistance to Russia. Assist- ance to Russia is being phased out over the next 2 years, even though it is obvi- ous that it is going to take the Russian people at least another decade to be able to take control of their own lives instead of expecting the government to do it for them, and that our assistance would be valuable to them. President Yeltsin has won the sup- port of his people to continue reform. But the Russian economy remains a shambles. The Russian Government has no money to finance its reforms. Crime is rampant. There are still pen- sioners on the streets of Moscow hawk- ing pairs of children’s rubber boots in order to survive. Aid from the United States cannot possibly solve these problems directly. The problems are so immense that only the Russian people working together will be able to. But what our aid can do is show them the way. Most Russians still have only a faint notion of what a market econ- omy offers. Most also still carry the perceptions drilled into them by their Soviet masters that Americans are their enemies. I have not been fully satisfied with the results of our aid program in Rus- sia. There has been confusion, a lack of strategic thinking, and boilerplate ap- proaches that did not fit the unique conditions there. Too much of the money has ended up in the pockets of American contractors, without enough to show for it. But some programs have given the Russian people hope for a better future. People-to-people exchanges are an ex- ample of how we can help change old ways of thinking. I believe the thou- sands of exchanges of ordinary citizens that we have sponsored over the last 4 years played a role in President Yeltsin’s victory. Farmer-to-farmer programs. Business exchange pro- grams. Academic exchange programs. Civic organization development projects. They have shown the Russian people what is possible. Americans have learned from these exchanges too. We have learned that the Russian people are not ogres. Like us, they are mostly worried about the welfare of their families. But they are learning for the first time that it is possible to have a system of govern- ment whose primary aim is the defense of individual rights, and which actually serves them. Mr. President, there remains much to criticize in Russia. The democracy that exists there is fragile, and the future unpredictable. The future is far from predictable. There will continue to be setbacks, and instances when Russia behaves in ways that are inconsistent with international norms. I have been horrified by the brutality of the Rus- sian military in Chechnya. While it has been reassuring to see the outpouring of protest against this barbarity by the Russian people themselves, President Yeltsin and his security advisors need to recognize that Chechnya’s future is not going to be decided by bombing its people into submission. Having said that, let us today recog- nize how much has changed for the bet- ter in Russia compared to just a few years ago. And I hope we will also reaf- firm our commitment to support re- form in Russia. We know how to put our aid dollars to good use there, and there is much good yet to be done.\u2211 f YEAR-ROUND SCHOOLS Mr SIMON. Mr. President, recently a friend of mine, Gene Callahan, sent me an editorial from the Evansville Cou- rier suggesting that Evansville look at year-round schools. The reality is the whole Nation should do that. We take the summer months off, in theory, so that our children can go out and harvest the crops. That made sense a century ago and maybe even 60 years ago, but it does not make sense today. If we increased the school year from 180 days to 210, we would still be far be- hind Japan’s 243 days and Germany’s 240 days. And simply adding that 30 days would mean the equivalent of 2 additional years of school by the time the 12th grade is finished. But in re- ality it would be more than that. Any fourth grade teacher will tell you that part of the first weeks of teaching in the fourth grade is revisiting what stu- dents learn in the third grade. The three month lapse makes it more dif- ficult for students starting in the fourth grade. But suggesting year-round schools is not going to be simple. We will have to pay teachers more. We will have to air condition school rooms. In essence, what we will have to do is to make the priority out of education that we must, if we are to be a competitive Nation with the rest of the world. One not so incidental result of that would be that our students would be better prepared, we would gradually re- duce our illiteracy rate, and because students will have more opportunity upon graduation and would not be in the streets in the summer months, the crime rate is likely to drop some. The drop is not likely to be dramatic, but it would help. I commend the editors of the Evans- ville Courier. Mr. President, I ask that the edi- torial from the Courier be printed in the RECORD. The editorial follows: VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00107 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9316 July 31, 1996 [From the Evansville Courier, June 17, 1996] TAKE ANOTHER LOOK AT YEAR-ROUND SCHOOL The Evansville-Vanderburgh School Corp. has good cause to consider starting the school year in mid-August\u2014test-readiness of children is a valid concern in both home and classroom. And in our view, the same argu- ment weighs for future consideration of a year-round school calendar. The school administration has rec- ommended that the School Board approve a calendar that moves up the beginning of school by eight school days, in great part to allow students more time to prepare for state performance testing. The ISTEP tests have been given in the spring, but beginning in the fall, they will be administered the last week in September and first week of October. With students return- ing from a three-month vacation, it will be a challenge for teachers to get them up to school speed in time for the tests. The ear- lier start would buy time for students and teachers. The premise here\u2014that students returning from a long summer vacation are not pre- pared to take a test\u2014seems just cause for consideration of year-round school, such as the plan that will be tried at Lincoln Ele- mentary School on an experimental basis. In fact, children no longer need a three- month vacation; they no longer need to be off that long to work in the fields. Three months away from school is counter- productive to learning. As a result, valuable learning time is needed each fall to reac- quaint children with learning and to refresh what they learned the previous year. The School Board should approve the ad- ministration’s recommendation for the ear- lier school start, and then ask itself if the same rationale doesn’t justify a serious look at year-round school.\u2211 f EXECUTIVE SESSION NOMINATION OF FRANK R. ZA- PATA, OF ARIZONA, TO BE U.S. DISTRICT JUDGE FOR THE DIS- TRICT OF ARIZONA Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate im- mediately proceed to executive session to consider the following nomination on the Executive Calendar: Calendar No. 677, the nomination of Frank Za- pata, to be U.S. District Judge for the District of Arizona. I further ask unanimous consent that the nomination be confirmed, the mo- tion to reconsider be laid upon the table, and the President be imme- diately notified of the Senate’s action. The PRESIDING OFFICER. Without objection, it is so ordered. The nomination was considered and confirmed, as follows: Frank R. Zapata, of Arizona, to be United States District Judge for the District of Ari- zona. f NOMINATION OF ANN D. MONT- GOMERY, OF MINNESOTA, TO BE UNITED STATES DISTRICT JUDGE FOR THE DISTRICT OF MINNESOTA Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate proceed to consider the following nomi- nation on the Executive Calendar: Cal- endar No. 512, the nomination of Ann Montgomery to be U.S. District Judge for the District of Minnesota. I further ask unanimous consent that the nomination be confirmed, the mo- tion to reconsider be laid upon the table, and the President be imme- diately notified of the Senate’s action. The PRESIDING OFFICER. Is there objection? Mrs. HUTCHISON. I object, Mr. President. The PRESIDING OFFICER. Objec- tion is heard. Mr. DASCHLE addressed the Chair. The PRESIDING OFFICER. The mi- nority leader. Mr. DASCHLE. Would the Senator from Texas wish to state her reason for the objection? Mr. President, could we get the attention of the Senator from Texas? Mr. President, I have to say, if we are going to start playing this game\u2014I have been urging my colleagues to co- operate not 1 day, not 2 days, not a week, not 2 weeks, but ever since the majority leader got elected to that po- sition, every day. The majority leader has done an extraordinary job of work- ing with me. But I must tell you, that kind of act is going to end our cooperation pretty fast. That is unreasonable, not accept- able. And to not even respond. I have helped the Senator from Texas as late as last week. I worked very hard to get her legislation passed and sent over to the House. We got it done. We got it done. We would not have gotten it done. And this is the thanks we get, and this is the kind of cooperation we get in return. Mr. President, it is going to be a long 2 days here and, I must say, an even longer month in September if all the cooperation is expected to come from this side. So we are going to have a lot more to say about this. And before we go into any other unanimous-consent agreements we are going to have a good discussion about what kind of rec- iprocity there is in this institution. But that is very disappointing and very unacceptable. I yield the floor. f LEGISLATIVE SESSION Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate now return to legislative session. The PRESIDING OFFICER. Without objection, it is so ordered. f REPEAL OF TRADING WITH INDIANS ACT Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of H.R. 3215 which was received from the House. The PRESIDING OFFICER. The clerk will report. The assistant legislative clerk read as follows: A bill (H.R. 3215) to amend title 18, United States Code, to repeal the provision relating to Federal employees contracting or trading with Indians. The PRESIDING OFFICER. Is there objection to the immediate consider- ation of the bill? There being no objection, the Senate proceeded to consider the bill. TRADING WITH INDIANS ACT REPEAL Mr. KYL. Mr. President, I rise in very strong support of this legislation, H.R. 3215, to repeal the Trading with Indians Act. I would note that the Sen- ate has twice approved measures to re- peal this 19th century law\u2014in Novem- ber 1993, and again last October as part of a bill making technical corrections in Indian laws. Mr. President, I want to begin by thanking the chairman of the Indian Affairs Committee, JOHN MCCAIN, who joined me in sponsoring the Senate companion bill, S. 199, and who encour- aged his committee to incorporate it into last year’s technical corrections measure. I also want to commend Con- gressman J.D. HAYWORTH for cham- pioning the legislation in the House on behalf of his native American constitu- ents. Without his active support, it is safe to say that the House would not have acted on the measure this year. When the Trading with Indians Act was enacted in 1834, it had a very le- gitimate purpose: to protect native Americans from being unduly influ- enced by Federal employees. But, a law that started out with good intentions more than a century ago has become unnecessary, and even counter- productive, today. It established an ab- solute prohibition against commercial trading with Indians by employees of the Indian Health Service and Bureau of Indian Affairs. The problem is that the prohibition does not merely apply to employees, but to family members as well. It extends to transactions in which a Federal employee has an inter- est, either in his or her own name, or in the name of another person, includ- ing a spouse, where the employee bene- fits or appears to benefit from such in- terest. The penalties for violations can be severe: a fine of not more than $5,000, or imprisonment of not more than 6 months, or both. The act further pro- vides that any employee who is found to be in violation should be terminated from Federal employment. This all means that employees could be subject to criminal penalties or fired from their jobs, not for any real or perceived wrongdoing on their part, but merely because they are married to individuals who do business on an In- dian reservation. The nexus of mar- riage is enough to invoke penalties. It means, for example, that an Indian Health Service employee whose spouse operates a small business on a reserva- tion could be fined, imprisoned, or fired. It means that a family member could not apply for a small business loan without jeopardizing the employ- ee’s job. The legislation before us today will correct that injustice without sub- jecting native Americans to the kind of VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00108 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9317 July 31, 1996 abuse that prompted enactment of the law 160 years ago. The protection that the Trading with Indians Act origi- nally offered can now be provided under the Standards of Ethical Con- duct for Government Employees. The intent here is to provide adequate safe- guards against conflicts of interest, while not unreasonably denying indi- viduals and their families the ability to live and work\u2014and create jobs\u2014in their communities. Both Health and Human Services Secretary Donna Shalala and Interior Department Assistant Secretary Ada Deer have expressed support for the legislation to repeal the 1834 act. Sec- retary Shalala, in a letter dated No- vember 17, 1993, noted that repeal could improve the ability of IHS to recruit and retain medical professional em- ployees in remote locations. It is more difficult for IHS to recruit and retain medical professionals to work in re- mote reservation facilities if their spouses are prohibited from engaging in business activities with the local In- dian residents, particularly since em- ployment opportunities for spouses are often very limited in these locations. Let me cite one very specific case in which the law has come into play. The case, which surfaced a couple of years ago, involved Ms. Karen Arviso, who served as the Navajo area IHS health promotion and disease prevention coor- dinator. Ms. Arviso was one of those people who played a particularly crit- ical role during the outbreak of the hantavirus in the Navajo area at the time. She put in long hours traveling to communities across the reservation in an effort to educate people about this mysterious disease. Instead of thanks for her dedication and hard work, Ms. Arviso received a notice that she was to be fired because her husband applied for a small busi- ness loan from the Bureau of Indian Af- fairs. The Trading with Indians Act would require it. What sense does that make? Mr. President, repeal of the Trading with Indians Act is long overdue. I urge the Senate to pass this legislation again today, and finally send it on to the President for his signature. Mr. MCCAIN. Mr. President, I rise today to express my support for H.R. 3215 a bill to repeal certain provisions of laws relating to trading with Indians and to urge its immediate adoption. I am pleased to be joined by Senator JOHN KYL in sponsoring S. 199, the Sen- ate companion to H.R. 3215 to repeal the Trading with Indians Act. H.R. 3215 would address a long- standing problem in Indian policy. I have worked extensively with my col- leagues from Arizona, Senator KYL and Congressman HAYWORTH, to repeal the Trading with Indians Act. The Trading with Indians Act was originally en- acted in the 1800’s to protect Indians from unscrupulous Indian agents and other Federal employees. The prohibi- tions in the Trading with Indians Act were designed to prevent Federal em- ployees from using their positions of trust to engage in private business deals that exploited Indians. These pro- hibitions carried criminal penalties in- cluding a fine of up to $5,000 and re- moval from Federal employment. As time has passed, it has become appar- ent that the law is doing more harm than good. The Trading With Indians Act has had significant adverse impacts on em- ployee retention in the Indian Health Service [IHS] and the Bureau of Indian Affairs [BIA]. The problems stemming from the Trading with Indians Act are well-documented. The way that the law is written allows for the conviction of a Federal employee even when the em- ployee is not directly involved in a business deal with an Indian or an In- dian tribe. Because the prohibitions in the Trading with Indians Act apply to the spouses of IHS and BIA employees, the adverse impacts are far-reaching. For example, if a spouse of an IHS em- ployee is engaged in a business that is wholly unrelated to the BIA or the IHS and does not transact business with the BIA or the IHS, the spouse is still in violation of the Trading with Indians Act. Employee retention in often rural and economically depressed Indian communities is difficult enough with- out the additional deterrent of an out- dated prohibition to force out produc- tive and experienced employees who might otherwise stay. The act even prohibits Indians from the same tribe from engaging in business agreements or contracts entirely unrelated to the scope of the Federal employee’s em- ployment. Because the act applies to agreements between all BIA and IHS employees and all Indians regardless of their proximity or range of influence, it would prohibit a BIA or IHS em- ployee on the Navajo reservation in Ar- izona from selling his car to a Penob- scot Indian from Maine. As tribal governments become more sophisticated and more Indian people become better educated and able to adequately protect themselves against unscrupulous adversaries, the Federal Government must respect these changes by repealing outdated and pa- ternalistic laws which are still on the books. Respect for Indian sovereignty demands that the relics of paternalism fall away as tribal governments expand and grow toward self-reliance and inde- pendence. It is clear that although this statute served an admirable purpose in the 1800’s, it has become anachronistic and should be repealed. The important policies reflected in the Trading with Indians Act are now covered by the Standards of Ethical Conduct for Em- ployees of the Executive Branch. The Standards of Ethical Conduct for Em- ployees of the Executive Branch ade- quately protects the Indian people and tribes served and provides simple guidelines to follow for all Federal em- ployees when it comes to contracts with Indian people and Indian tribes. I would like to express my apprecia- tion for the work of Senator KYL and Congressman HAYWORTH in the devel- opment of this bill and I urge my col- leagues to support passage of H.R. 3215. I ask unanimous consent that the statement of Senator KYL be included in the RECORD immediately following my remarks. Mr. GRASSLEY. Mr. President, I ask unanimous consent that the bill be deemed read a third time and passed, the motion to reconsider be laid upon the table, and that any statements re- lating to the bill appear at the appro- priate place in the RECORD. The PRESIDING OFFICER. Without objection, it is so ordered. The bill (H.R. 3215) was deemed read the third time and passed. f MEASURE READ THE FIRST TIME\u2014H.R. 2391 Mr. GRASSLEY. Mr. President, I un- derstand that H.R. 2391 has arrived from the House. I now ask for its first reading. The PRESIDING OFFICER. The clerk will report. The assistant legislative clerk read as follows: A bill (H.R. 2391) to amend the Fair Labor Standards Act of 1938 to provide compen- satory time for all employees. Mr. GRASSLEY. Mr. President, I now ask for its second reading. The PRESIDING OFFICER. Is there objection? Mr. GRASSLEY. Mr. President, I ob- ject on behalf of the Democrat party. The PRESIDING OFFICER. Objec- tion is heard. f AUTHORIZING CONSTRUCTION OF SMITHSONIAN INSTITUTION NA- TIONAL AIR AND SPACE MU- SEUM DULLES CENTER Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Rules Committee be discharged from further consideration of S. 1995, and, further, that the Senate proceed to its imme- diate consideration. The PRESIDING OFFICER. Without objection, it is so ordered. The clerk will report. The assistant legislative clerk read as follows: A bill (S. 1995) to authorize construction of the Smithsonian Institution National Air and Space Museum Dulles Center at Wash- ington Dulles International Airport, and for other purposes. The PRESIDING OFFICER. Is there objection to the immediate consider- ation of the bill? There being no objection, the Senate proceeded to consider the bill. Mr. GRASSLEY. Mr. President, I ask unanimous consent that the bill be deemed read a third time and passed, the motion to reconsider be laid upon the table, and that any statements re- lating to the bill be placed at the ap- propriate place in the RECORD. The PRESIDING OFFICER. Is there objection? Without objection, it is so ordered. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00109 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9318 July 31, 1996 The bill (S. 1995) was deemed read the third time and passed, as follows: S. 1995 Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, SECTION 1. CONSTRUCTION OF MUSEUM CEN- TER. The Board of Regents of the Smithsonian Institution is authorized to construct the Smithsonian Institution National Air and Space Museum Dulles Center at Washington Dulles International Airport. SEC. 2. LIMITATION ON USE OF FUNDS. No appropriated funds may be used to pay any expense of the construction authorized by section 1. f MUTUAL AID AGREEMENT BE- TWEEN BRISTOL, VA, AND BRIS- TOL, TN Mr. GRASSLEY. I ask unanimous consent that the Senate now proceed to the consideration of House Joint Reso- lution 166 which was received from the House. The PRESIDING OFFICER. The clerk will report. The assistant legislative clerk read as follows: A joint resolution (H.J. Res. 166) granting consent of Congress to the mutual aid agree- ment between the city of Bristol, Virginia, and the city of Bristol, Tennessee. The PRESIDING OFFICER. Is there objection to the immediate consider- ation of the joint resolution? There being no objection, the Senate proceeded to consider the joint resolu- tion. Mr. GRASSLEY. I ask unanimous consent that the resolution be deemed read the third time and passed, the mo- tion to reconsider be laid upon the table, and that any statements relating to the bill appear at their appropriate place in the RECORD. The PRESIDING OFFICER. Without objection, it is so ordered. The joint resolution (H.J. Res. 166) was deemed read the third time, and passed. f MEASURE READ THE FIRST TIME\u2014S. 2006 Mr. GRASSLEY. Mr. President, it is my understanding S. 2006, introduced today by Senator HATCH, is at the desk and I ask for its first reading. The PRESIDING OFFICER. The clerk will report. The assistant legislative clerk read as follows: A bill (S. 2006), to clarify the intent of Con- gress with respect to the Federal carjacking prohibition. Mr. GRASSLEY. I now ask for its second reading, and I object to my own request on behalf of the Senators on the Democratic side of the aisle. The PRESIDING OFFICER. The ob- jection is heard. The bill will be read the second time on the next legislative day. MEASURE READ FOR THE FIRST TIME\u2014S. 2007 Mr. FORD. Mr. President, I under- stand that S. 2007, introduced today by Senator BIDEN, is at the desk and I ask for its first reading. The PRESIDING OFFICER. The clerk will report. The assistant legislative clerk read as follows: A bill (S. 2007) to clarify the intent of Con- gress with respect to the Federal carjacking prohibition. Mr. FORD. Now, Mr. President, I ask for its second reading, and I will object to my own request on behalf of Sen- ators on the Republican side of the aisle. The PRESIDING OFFICER. Without objection, it is so ordered. The bill will be read for the second time on the next legislative day. f ORDERS FOR THURSDAY, AUGUST 1, 1996 Mr. GRASSLEY. Mr. President, I ask unanimous consent that when the Sen- ate completes its business today it stand in adjournment until the hour of 9:30 a.m. on Thursday, August 1; that immediately following the prayer, the Journal of proceedings be deemed ap- proved to date; the morning hour be deemed to have expired; the time for the two leaders be reserved for their use later in the day, and the Senate immediately proceed to the consider- ation of the conference report to ac- company H.R. 3734, the reconciliation bill, with the reading of the report hav- ing been waived. The PRESIDING OFFICER. Without objection, it is so ordered. f PROGRAM Mr. GRASSLEY. Tomorrow morning the Senate will begin consideration of the reconciliation bill under a statu- tory 10-hour time limitation. It is hoped the Senate will be able to yield back some of that time to allow us to complete action on that important conference report in a reasonable amount of time. Senators can expect votes through- out the day and into the evening, and the Senate may also be asked to con- sider any other appropriation matters or conference reports that become available. f ORDER FOR ADJOURNMENT Mr. GRASSLEY. As long as there is no further business to come before the Senate tonight, I ask the Senate stand in adjournment under the previous order following my own remarks and the remarks of Senator WELLSTONE. The PRESIDING OFFICER. Without objection, it is so ordered. f ELECTRONIC FUNDS TRANSFER PAYMENTS Mr. GRASSLEY. Mr. President, I want to take a few minutes to an- nounce a temporary tax victory for small business taxpayers. The IRS has made a failed attempt to implement new rules for payroll tax deposits. These rules would require many em- ployers to make their biweekly payroll tax deposits electronically. On July 12, I authored a letter to Treasury Secretary Rubin and IRS Commissioner Margaret Milner Rich- ardson. This letter discussed problems that employers and banks are having in understanding new payroll tax de- posit rules and methods. First, my letter asks Secretary Rubin to address specific questions posed by employers and their banks. Employers and their banks have a growing series of questions about the new procedures. Many of these center around the degree of access that IRS has to bank customers’ accounts. Sec- ond, the letter reminds the Secretary that he has authority under the law to provide some regulatory relief for small businesses. Mr. President, I ask unanimous con- sent that the text of my letter be printed in the RECORD. There being no objection, the letter was ordered to be printed in the RECORD, as follows: U.S. SENATE, Washington, DC, July 12, 1996. Secretary ROBERT E. RUBIN, Department of the Treasury, Washington, DC. DEAR SECRETARY RUBIN: This letter is to express our great concern of the impact upon small businesses and their banks of new Electronic Fund Transfer (EFT) rules. We hope that you will act in accordance with Congressional intent to ensure that the regu- lations do not create hardships for small businesses. We also wish that you will an- swer specific questions posed by our con- stituents working in the banking industry. SMALL BUSINESS CONCERNS Because the current EFT rules create new and significant burdens for small businesses, and because the tax code specifically allows for exceptions from the EFT rules for small businesses, we request that you take imme- diate action to clarify the necessary excep- tions well in advance of the January 1, 1997 effective date. Small employers presently utilize the Fed- eral tax deposit (FTD) coupon system and their local bank to make periodic payroll tax deposits with the Federal government. Inter- nal Revenue Code Section 6302(h) seeks to re- duce paperwork by replacing the FTD cou- pon system with an electronic fund transfer system. However, Congress intended, as set out in section 6302(h) and its legislative his- tory, that the regulations prescribe exemp- tions and alternatives to the EFT rules for small businesses. To date, these exemptions and alternatives have not been promulgated. As a result, employers and their banks are confused. The current regulations seem to require EFT compliance by all employers that had made employment tax deposits ex- ceeding $50,000 in 1995. In anticipation of the approaching effective date, the Internal Rev- enue Service has begun the process of edu- cating employers of their new EFT compli- ance requirements. Nonetheless, small and rural employers know that the Congress in- tended that they be exempt, and they are eager to see the intended exemptions. In part, the legislative history of the new law prescribes the following. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00110 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATE S9319 July 31, 1996 ”The Committee [on Finance] intends that the regulations do not create hardships for small businesses.” ”The provision grants the Secretary con- siderable flexibility in drafting the regula- tions and, the Committee [on Finance] urges the Secretary to take into account the needs of small employers, including possible ex- emptions for the very smallest of businesses from the new electronic transfer system.” Small businesses will suffer unintended hardships if your agency is unable to clarify the exemptions in advance of the effective date. It seems that many small businesses will need their banks to affect these new EFT transactions. Because their banks may view this as a new and different service, those banks may find it necessary to require small businesses to pay added fees. Also, be- cause EFT transactions can involve a new variety of either debit or credit transactions, some small business persons are adverse to allowing the IRS the ability to deduct funds from their business accounts without what some may deem as an adequate ”paper trail”. Employers that do not need to com- ply should be spared the anxiety of the rule change. Again, since the tax code anticipates ex- emptions for small and rural businesses, we request that you act promptly to define those exemptions in order to spare these em- ployers the expense and anxiety of attempt- ing to comply. Because employer penalties are involved, and the compliance date is ap- proaching, we think that this requires your immediate attention. BANK CONCERNS Small businesses are not the only ones concerned about the pending EFT rules. Al- though Iowa banks support efforts to mod- ernize our banking system and increase the use of EFT, they have commented on poten- tial problems arising from implementation of these regulations. Since small businesses are not governed by Internal Revenue Serv- ice Regulation E (except sole proprietor- ships), banks question whether proper notice and disclosure requirements will be in place. The following are a list of unanswered ques- tions raised by banks. (1) What degree of access to bank cus- tomers’ accounts is provided to the Internal Revenue Service? Do the regulations give the Internal Revenue Service open access to a bank customer’s account? What protections are in place to guard against unfettered ac- cess and use of information in the customer’s account? (2) A business may authorize a specific transfer to be made for the purpose of paying depository taxes. However, if penalties are assessed by the Internal Revenue Service, would the bank then have the authority or requirement to withdraw additional monies without the customer’s approval from the customer’s bank account to pay these pen- alties? (3) Who is responsible for notifying busi- nesses of transactions involving the bank ac- count? Iowa banks maintain that these are only several of many unanswered questions about the practical applications of the new regula- tions. Small businesses, banks, and the In- ternal Revenue Service all have an interest in assuring the proper and appropriate im- plementation of the regulations. Properly promulgating efficient and effective regula- tions that do not devastate either small businesses or banks requires cooperation amongst all of the parties concerned. Two of the three interested parties, small businesses and banks, have expressed important and pressing concerns. We believe that these questions and concerns should be addressed before implementing regulations that pose unnecessary or burdensome requirements on small business taxpayers or their banks. Thank you in advance for your prompt and considerate attention to these matters. Be- cause taxpayers in our state are eager to clarify these new rules, and because of the coming effective date of January 1, 1997, we would appreciate your efforts to make your response to us before August 23, 1996. Sincerely, CHARLES E. GRASSLEY, United States Senator. GREG GANSKE, Member of Congress. Mr. GRASSLEY. Mr. President, 2 weeks ago, Secretary Rubin responded by letter that he appreciated my ef- forts to inform him of the problems, and that he was reviewing the matter. Today, IRS Commissioner Margaret Milner Richardson announced that the IRS was suspending the 10 percent pen- alty for 6 months. The IRS had origi- nally intended employers who had de- posited $50,000 or more last year to begin to follow the new electronic funds rules by January 1, 1997. Now, though employers are still encouraged to comply, no penalty will be imposed for failure to change deposit methods until after July 1, 1997. Mr. President, though only a tem- porary reprieve, this is a victory for small business employers, and I am proud of my part. I welcome the efforts of Treasury and IRS to make a better second try at educating taxpayers. In my view, tax- payers are the consumers of the serv- ices provided by Treasury and the IRS. I think that good customer service sometimes includes a good second try. I am also enthusiastic about the po- tential for Electronic Funds Transfers or EFT. For large and medium sized employers, EFT could become more ef- ficient and cost effective than the present coupon FTD system. Some small businesses may realize similar economies. Other small businesses should be allowed alternatives. The Treasury Department has also said that it will soon be responding to the questions that were posed in my letter. The response will be in the form of answers to some of the most com- mon questions. Though that response is still forth- coming, I think that the will allay some of the fears that employers and banks have posed. In part, the IRS seems to have simply done a poor job in its initial effort at education. How- ever, I am waiting for the official re- sponse before determining how com- pletely or adequately it answers all of my concerns. Mr. President, I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The assistant legislative clerk pro- ceeded to call the roll. Mr. WELLSTONE. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. A BROKEN AGREEMENT ON A JUDICIAL NOMINATION Mr. WELLSTONE. Mr. President, earlier tonight, at the time of our last vote, I was notified that we had an agreement\u2014and let us call it kind of a code of honor\u2014that Ann Montgomery, a very fine judge, who will be a great judge on the Federal district court in Minnesota, would be confirmed here to- night in the Senate. Mr. President, for really many, many months now, picking up with intensity in the last several months and the last several weeks, I have been in intensive discussions with the majority leader, whom I think has been operating in very good faith. I felt as if I had re- ceived a very firm commitment from him\u2014I believe his word is his bond\u2014 that while there had been some ”soft hold” put on Judge Montgomery, actu- ally at the beginning of this week or by the middle of this week\u2014it was to be tonight\u2014we would move her nomina- tion forward. Mr. President, much to my amaze- ment, after we had an agreement with a clear understanding that this would happen, at the last second one of my colleagues, the Senator from Texas, Senator HUTCHISON, objects. And when the minority leader, Senator DASCHLE, asks her why, there is no response at all. Mr. President, let me just say that it is my firm hope that tomorrow we will have this resolved, and if a Senator has a ”soft hold” on Judge Montgomery, then we should\u2014and I certainly hope the majority leader will do this. I feel as if he had made the commitment to move this nomination forward. Then let us move this forward for a vote. I did not ask for unanimous consent. If we need to have a vote, I would be pleased to debate with any Senator the merits of this nomination. Judge Mont- gomery has received just outstanding support and unbelievable recommenda- tions from across the broadest possible spectrum of the legal community; sup- port from myself and support from my colleague, Senator GRAMS from Min- nesota. So, Mr. President, let me just be crystal clear about it. What is so unfor- tunate is that here you have a fine judge who has been waiting to be dis- trict judge, has been waiting and wait- ing and waiting and waiting. I was just, I say to my colleague from Iowa, pick- ing up the phone to call her. I had just dialed it to say, ”I want you to know the long wait is over. Tonight will be the night. Tell your family. Tell your children.” This is outrageous. And I would ap- preciate it if my colleagues would have the courage to simply defend whatever positions they take, not just announce a hold at the last second and then have nothing to say. Mr. President, I am confident that we will resolve this. I believe the majority leader has given me his word. I think his word is good. I know it is good. But VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00111 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S CONGRESSIONAL RECORD \u2014 SENATES9320 July 31, 1996 I have to say to my colleagues, whom- ever they are\u2014I know it is not the Sen- ator from Iowa\u2014if you have a soft hold and you want to keep it anonymous, that is one of the procedures that is so outrageous to people in the country. We will just move this forward, and we will have debate, and we will have a vote. Mr. President, I am really dis- appointed for Judge Montgomery to- night. I am absolutely determined that this will be resolved by the end of this week. I will do everything I can as a Senator from Minnesota, will use every bit of knowledge that I know about this process and this Senate, and every bit of leverage I have to make sure that this eminently qualified woman becomes a U.S. district court judge. I hope we can work in the spirit of collegiality. I certainly did not see that tonight. Mr. President, I yield the floor. f ADJOURNMENT UNTIL 9:30 A.M. TOMORROW The PRESIDING OFFICER. Under the previous order, the Senate stands in adjournment until 9:30 a.m., Thurs- day, August 1, 1996. Thereupon, the Senate, at 10:09 p.m., adjourned until Thursday, August 1, 1996, at 9:30 a.m. f NOMINATIONS Executive nominations received by the Senate July 31, 1996: IN THE AIR FORCE THE FOLLOWING-NAMED OFFICER FOR APPOINTMENT TO THE GRADE OF LIEUTENANT GENERAL IN THE U.S. AIR FORCE WHILE ASSIGNED TO A POSITION OF IMPOR- TANCE AND RESPONSIBILITY UNDER TITLE 10, UNITED STATES CODE, SECTION 601: To be lieutenant general MAJ. GEN. DAVID J. MCCLOUD, 000 00 0000 IN THE ARMY THE FOLLOWING-NAMED OFFICER FOR APPOINTMENT TO THE GRADE OF LIEUTENANT GENERAL IN THE U.S. ARMY WHILE ASSIGNED TO A POSITION OF IMPORTANCE AND RESPONSIBILITY UNDER TITLE 10, UNITED STATES CODE, SECTION 601(A): To be lieutenant general MAJ. GEN. FREDERICK E. VOLLRATH, 000 00 0000 f CONFIRMATION Executive nomination confirmed by the Senate July 31, 1996: THE JUDICIARY Frank R. Zapata, of Arizona, to be U.S. District Judge for the District of Arizona. VerDate Aug 31 2005 05:36 Jun 20, 2008 Jkt 041999 PO 00000 Frm 00112 Fmt 4624 Sfmt 0634 J:\\ODA16\\1996_F~1\\S31JY6.REC S31JY6m m ah er o n M IK E T E M P w ith S O C IA L S E C U R IT Y N U M B E R S EXTENSIONS OF REMARKS \u2211 This ”bullet” symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. CONGRESSIONAL RECORD \u2014 Extensions of Remarks E1413July 31, 1996 LEGISLATION INTRODUCED TO CONSTRUCT AIR AND SPACE MU- SEUM AT WASHINGTON DULLES AIRPORT HON. FRANK R. WOLF OF VIRGINIA IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. WOLF. Mr. Speaker, I am pleased today to introduce legislation\u2014along with my col- leagues Representatives BOB LIVINGSTON, SAM JOHNSON, TOM DAVIS, TOM BLILEY, BOB GOODLATTE, JIM MORAN, L.F. PAYNE, RICK BOUCHER, OWEN PICKETT, and NORMAN SISI- SKY\u2014to authorize the Board of Regents of the Smithsonian Institution to construct the Na- tional Air and Space Museum Extension at Washington Dulles International Airport. This legislation represents the next critical step in making the extension a reality and I urge my colleagues to support this bill. The need for this extension is clear. The ex- isting Air and Space Museum on the Mall now faces a critical shortage of critical storage fa- cilities. Current facilities are inadequate, stor- age for larger artifacts is simply not available, and existing storage facilities do not provide controlled climate conditions necessary for the safe preservation of most museum artifacts. Not only that, as a result of current space limi- tations at the Mall Museum, only about 20 per- cent of the Nation’s aircraft collection is on public display. Mr. Speaker, some of our Nation’s most his- toric aircraft are hidden from public view. The Enola Gay, the SR 71 Blackbird spy plane, the space shuttle Enterprise, and many others sit in warehouses because there is no room for these large artifacts at the Mall Museum facility. The extension facility will provide the space necessary to house and exhibit these great artifacts for families who come from all over the country with the Air and Space Mu- seum at the top of their sightseeing list. The Mall Museum is the most popular of the Smithsonian’s museums and the extension is expected to draw significant crowds too. Ap- proximately 7 to 8 million people now visit the Air and Space Museum on the mall and an estimated 2 to 3.5 million visitors are expected annually at the extension. In 1993, the Smithsonian Institution was first authorized to plan and design an Air and Space Museum Extension at Washington Dul- les International Airport and I was pleased to support this effort. In fiscal year 1996, Con- gress and the Commonwealth of Virginia pro- vided funding for planning and design work on the extension. Further work on schematic plans are planned in preparation for the con- struction phase of the project. While Congress has authorized and appro- priated funding for planning and design work, Congress has previously made it clear that no Federal funds are to be made available for the construction portion of the project. Instead, the Smithsonian Institution is responsible for rais- ing private funds for construction of the exten- sion and already, the Air and Space Museum has begun to build a capital campaign infra- structure. A National Air and Space Society membership program was begun in 1995 to generate public support for the museum and the extension and already more than 4,000 people have joined and contributed. The legislation I am introducing today mere- ly authorizes the Board of Regents of the Smithsonian Institution to construct the mu- seum extension and also makes clear that no appropriated funds are to be used to pay any expense of the construction of this facility. The new Director of the Smithsonian Institution, former Federal Aviation Administration Admin- istrator and retired Adm. Donald Engen, has stated that his No. 1 priority will be to wage a national campaign to raise adequate funding for construction and his goal will be accom- plished more effectively once Congress has clearly authorized this construction. Mr. Speaker, the museum extension will sig- nificantly increase the amount of the collection on public display, provide safe and climate- controlled storage facilities, and provide a res- toration facility capable of the handling the largest artifacts in the collection in full view of visitors. Federal funds will not be used for construction of the extension and instead these costs will be paid for by privately raised funds. I urge my colleagues to support the Air and Space Museum Extension project and this leg- islation authorizing its construction. H.R. \u2014. Be it enacted by the Senate and House of Rep- resentatives of the United States of America in Congress assembled, SECTION 1. CONSTRUCTION OF MUSEUM CEN- TER. The Board of Regents of the Smithsonian Institution is authorized to construct the Smithsonian Institution National Air and Space Museum Dulles Center at Washington Dulles International Airport. SEC. 2. LIMITATION ON USE OF FUNDS. No appropriated funds may be used to pay any expense of the construction authorized by section 1. f TRIBUTE TO G. HUNTINGTON BANISTER HON. GERALD B.H. SOLOMON OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. SOLOMON. Mr. Speaker, a valued and trusted public servant retired from the Federal Government today. G. Huntington Banister, better known as Hunt, served proudly in a dis- tinguished career spanning 31 years. Beginning in 1972, Hunt put his skills to work for America at several agencies. He launched his public career as a Budget Ana- lyst with the Interstate Commerce Commis- sion. From 1976 to 1979, he served as Budget Officer for the Public Health Service’s National Institute on Drug Abuse. He was Financial Manager for the Commodity Futures Trading Commission from 1979 to 1985. But it is in his present position that I came to personally know and respect this fine gen- tleman. In 1985, he joined the staff of the Se- lective Service System as its Controller. He was indispensable at this small but vital Fed- eral agency that is near and dear to my heart. It has a nationwide staff of less than 200 full time people, yet its purpose and mission are enormous. Serving as America’s defense in- surance policy in a still dangerous world, it re- mains ready to mobilize and provide our Na- tion’s Armed Forces with the manpower nec- essary to fight in any future crisis that requires a return to the draft. Earning the admiration and respect of his superiors and subordinates alike, Hunt be- came the Acting Director of Selective Service in February 1994. For 9 months, until the con- firmation of a new Director, he led the Agency at a most critical time in its history. That sum- mer Selective Service faced possible termi- nation during the congressional budget proc- ess. Fortunately, those of us in Congress who appreciate the value of military personnel readiness did not let that happen, and the im- portant role played by the Agency in national security continues today without pause. In no small measure, the very survival of a strong and ready Selective Service System is attributable to the leadership abilities of Hunt Banister. He is a man whose intellect, people skills, and savvy set him apart. It is worthy of note that Hunt is ”Twice the citizen,” having also completed a parallel career as an Army Reserve officer and retiring as a colonel after 30 years of commissioned service, including almost 7 years of active duty and a tour of Vietnam. Throughout his long and distinguished ca- reer, Hunt Banister made a difference. When the going got rough, he remained tough, and his legacy is a more secure America. The citi- zens of this great Nation are in his debt, and wish G. Huntington Banister, his wife Linda, and his children Betsy and Carly, good health and happiness on his well deserved retirement day. f THANK YOU, MEGAN MACHEMAHL, FOR YOUR LOYAL SERVICE HON. JACK FIELDS OF TEXAS IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. FIELDS of Texas. Mr. Speaker, it was with mixed emotions that I announced last De- cember 11 my decision to retire from the House at the conclusion of my current term. As I explained at the time, the decision to re- tire was made more difficult because of the loyalty and dedication of my staff\u2014and be- cause of the genuine friendship I feel for them. Each one of them has served the men and women of Texas’ Eighth Congressional District in an extraordinary way. CONGRESSIONAL RECORD \u2014 Extensions of RemarksE1414 July 31, 1996 Today, I want to thank one member of my staff\u2014Megan Machemahl, my staff assistant in my College Station, TX, district office\u2014for ev- erything she’s done for me and my constitu- ents in the almost 2 years that she has served as my representative in College Station. Megan is a native of Houston who served as an intern in my Washington DC, office from August to December 1994. During her semes- ter-long internship, Megan helped my perma- nent staff track legislation in committee and on the House floor, conduct legislative research, and answer constituent correspondence. She performed each of these tasks with enthu- siasm and great professional skill, and I was grateful for all she did to help. Little did I realize that so soon after she left, she would be rejoining my staff. Shortly after her internship ended and she had returned to Texas A&M University, my staff assistant in the College Station office announced his deci- sion to leave. Remembering what a good job Megan had done during her internship, I of- fered her the opportunity to run the College Station office while she pursued her masters degree. Fortunaely, she agreed. Since 1995, Megan has represented me at events and meetings in the western half of my congressional district, which includes Brazos, Washington, and Aus- tin counties. Also, she has helped coordinate the congressional internship program for my College Station office\u2014recruiting, selecting and training new student interns. She also de- signed a training manual for handling congres- sional casework. Having earned her bachelors degree in jour- nalism from Texas A&M University in August 1995, Megan is now working to her masters degree in educational human resource devel- opment, which she expects to receive in May 1997. Megan is one of those hard-working men and women who make all of us in this institu- tion look better than we deserve. I know she has done that for me, and I appreciate this op- portunity to publicly thank her for the dedica- tion, loyalty, and professionalism she has ex- hibited throughout the years it has been my privilege to know and work with her. Megan’s plans after she earns here masters degree are as yet uncertain, but knowing her as well as I do, I am confident that her profes- sional skills and personal qualities\u2014skills and qualities she has demonstrated in my office\u2014 will lead to continued success in the future. Mr. Speaker, I know you join with me in saying thank you to Megan Machemahl for her loyal service to me, to the men and women of Texas’ Eighth Congressional District, and to this great institution. And I know you join with me in wishing her the very best in all of her future endeavors. f WE’RE GLAD OLIVIA SIMMONS AND DARYL EDWARDS WERE HERE HON. DONALD M. PAYNE OF NEW JERSEY IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. PAYNE of New Jersey. Mr. Speaker, like so many communities across America and some parts of the world, New Jersey’s 10th Congressional District lost some of its mem- bers in the crash of TWA flight 800 on July 17. This evening at the St. Matthew AME Church in Orange, NJ, a memorial service, organized under the direction of Orange Mayor Mims Hackett, is being held for Olivia Simmons, one of the victims. By all accounts, Olivia Simmons was a car- ing individual who cherished life. She did what she could to make life as beneficial as pos- sible for others. Ms. Simmons was a teacher in the Newark school system for 28 years. She taught at the Clinton Avenue School and the Broadway Elementary School. In the past several years, Ms. Simmons was also a school librarian. Ms. Simmons loved the written word and dedicated her life to opening new horizons by encouraging others to appreciate books and other written material. She was an avid, read- er who belonged to literary clubs and the International Reading Association. Ms. Simmons valued multiculturalism. In ad- dition to her teacher\/librarian duties she also was a flight attendant for 21 years. Because of her love and respect for our different cultures, she traveled during weekends and summers. Mr. Speaker, we also lost another in that terrible crash, Daryl Edwards. Mr. Edwards was a flight attendant with TWA for 18 years. He was born in Newark, NJ and raised in East Orange, NJ. He graduated from East Orange High School. He attended and graduated from American University in Washington, DC. One of Mr. Edwards’ delights was cooking. He was an accomplished chef, having been graduated from the Peter Kamp Culinary School in New York City. He owned a catering business. Mr. Edwards gave and received great joy through his culinary art. Mr. Speaker, Olivia Simmons and Daryl Ed- wards were two warm, friendly and caring indi- viduals. Their absence will be felt. However, although we will miss them, we’re glad they were here. f 2002 WINTER OLYMPIC GAMES FACILITATION ACT SPEECH OF HON. JAMES V. HANSEN OF UTAH IN THE HOUSE OF REPRESENTATIVES Tuesday, July 30, 1996 Mr. HANSEN. Mr. Speaker, following is the Congressional Budget Office cost estimate for H.R. 3907, a bill to facilitate the 2002 Winter Olympic Games in the State of Utah at the Snowbasin Ski area, to provide for the acquisi- tion of lands within the Sterling Forest Re- serve, and for other purposes, that passed the House on Tuesday, July 30, 1996. U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 29, 1996. Hon. DON YOUNG, Chairman, Committee on Resources, U.S. House of Representatives, Washington, DC. DEAR MR. CHAIRMAN: The Congressional Budget Office has reviewed H.R. 3907, a bill to facilitate the 2002 Winter Olympic Games in the state of Utah at the Snowbasin Ski Area, to provide for the acquisition of lands within the Sterling Forest Reserve, and for other purposes, as introduced in the House of Representatives on July 26, 1996. Assuming appropriation of the necessary sums, CBO es- timates that the federal government would spend $17.5 million over the next several years to implement Title II of this bill. In addition, Title I of the bill would affect di- rect spending; therefore, pay-as-you-go pro- cedures would apply. However, we estimate that any change in direct spending would be insignificant. FEDERAL BUDGETARY IMPACT Title I would authorize and direct the Sec- retary of Agriculture to transfer to the Sun Valley Company 1,230 acres of federally owned land for the Snowbasin Ski Area, lo- cated within the Cache National Forest in Utah. In exchange, the Forest Service would receive about 4,100 acres of privately owned land of roughly equal value located within the Cache National Forest. Based on con- versations with the committee staff, we un- derstand that the map designations are in- tended to be the same as those in H.R. 2402, as reported by the Committee on Resources on December 15, 1995. Based on information from the Forest Service, CBO estimates that this exchange would cause the federal gov- ernment to lose receipts from permit fees to- taling less than $25,000 annually. We esti- mate that no significant change in discre- tionary spending would result from imple- menting this title. Title II would authorize the Secretary of the Interior to transfer funds to the Pali- sades Interstate Park Commission for the purpose of acquiring lands and related inter- ests in the Sterling Forest Reserve in New York. The title would authorize the appro- priation of up to $17.5 million for this pur- pose. In addition, section 202 would authorize the Secretary to exchange unreserved federal lands for about 2,220 acres of nonfederal property in Sterling Forest. The Secretary would be directed to transfer to the commis- sion any land acquired by exchange. Assuming that the entire amounts author- ized for land acquisition would be appro- priated as needed by the commission, CBO estimates that the Secretary of the Interior would transfer $17.5 million to the commis- sion over the next several years. It is un- likely that any land exchanges would be exe- cuted under the authority provided in this title because there is probably no federal land suitable for exchange purposes in New York, and any federal land located in other states could probably not be used for the ex- change without specific legislative author- ity. IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS H.R. 3907 contains no intergovernmental mandates as defined in the Unfunded Man- dates Reform Act of 1995 (Public Law 104 4). The state of Utah would lose a small amount of receipts as a result of the proposed land transfer in Title I because it receives 25 per- cent of the permit fees paid by ski areas on federal lands within the state. The bill would impose no other costs on state, local, or trib- al governments. IMPACT ON THE PRIVATE SECTOR This bill would impose no new private-sec- tor mandates as defined in Public Law 104 4. PREVIOUS CBO ESTIMATES On March 17, 1995, CBO completed a cost estimate for S. 223, the Sterling Forest Pro- tection Act of 1995, as ordered reported by the Senate Committee on Energy and Natu- ral Resources on March 15, 1995. S. 223 also would authorize the appropriation of $17.5 million for acquisition and transfer of the Sterling Forest lands. The Senate bill con- tains other provisions that would have cost the federal government about $200,000. Be- cause these provisions are not included in H.R. 3907, estimated costs for this bill are lower. CONGRESSIONAL RECORD \u2014 Extensions of Remarks E1415July 31, 1996 On December 1, 1995, CBO completed a cost estimate for H.R. 2402, the Snowbasin Land Exchange Act of 1995, as ordered reported by the House Committee on Resources on No- vember 16, 1995. H.R. 2402 contains provisions that are very similar to those of Title I of H.R. 3907, and the estimated costs for those provisions in the two bills are identical. If you wish further details on this esti- mate, we will be pleased to provide them. The CBO staff contacts are Deborah Reis and Victoria V. Heid (for federal costs), who can be reached at 226 2860, and Marjorie Miller (for the state and local impact), who can be reached at 225 3220. Sincerely, JUNE E. O’NEILL, Director. f TRIBUTE TO EVESHAM TOWNSHIP POLICE CHIEF NICHOLAS L. MATTEO HON. JIM SAXTON OF NEW JERSEY IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. SAXTON. Mr. Speaker, I rise to take this opportunity to congratulate and recognize the distinguished career of Chief Nicholas L. Matteo, chief of police for Evesham Township in Burlington County, NJ. Chief Matteo is pre- paring to retire on January 1, 1997 upon com- pletion of more than 30 years of faithful serv- ice to the Evesham Township Police Depart- ment. A native of Medford, NJ, Chief Matteo began his career with the Evesham Township Police Department responding to calls as a patrolman in 1966. As a cop on the beat, Chief Matteo served his community during time of need and emergency situations. Mr. Matteo then ascended to the rank of de- tective first class where he was responsible for interviewing victims, perpetrators, and the fol- low-up of criminal investigations. Patrol sergeant, the next title held by Mr. Matteo, entailed the overseeing of the oper- ations of an entire patrol shift as well as direct supervision of critical incidents. Chief of police is the rank that he has held honorably since 1990. He has been respon- sible for the operation of a large, widely re- spected law enforcement agency. While serv- ing as chief of police, Mr. Matteo has earned the respect of the men and women of the Evesham Township Police Department, as well as residents of Burlington County, by par- ticipating on the Burlington County Chiefs As- sociation Executive Board. In 1996, the Delaware Valley Chiefs Asso- ciation named him to their executive board. This is a most prestigious honor. This appoint- ment highlights Chief Matteo’s genuine con- cern for protecting the safety of the residents of his own community as well as those sur- rounding it. Chief Matteo’s dedication to his community is not limited to his duties and responsibilities as a police officer. He is also keenly aware of the need for racial harmony and tolerance throughout our country. He promotes this ideal through the Coalition of Multi-Culture Under- standing of Burlington and Camden counties, of which he is president. Be it a patrolman, an administrator, or a su- pervisor, Chief Nicholas L. Matteo has been an excellent role model for other uniformed of- ficers and citizens of the United States. Mr. Speaker, I am honored to submit these com- memorative remarks in order to share the many accomplishments of a great man with my colleagues. A man of Nicholas Matteo’s stature and vi- sion is rare indeed. While his distinguished service will be genuinely missed, it gives me great pleasure to recognize him, and to wish him good luck as he brings to a close a long and dignified career with the Evesham Town- ship Police Department. f WILLIAM H. MORTON ENGINE CO. NO. 1 CELEBRATES 125TH ANNI- VERSARY HON. GERALD B.H. SOLOMON OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. SOLOMON. Mr. Speaker, anyone who visits my office can’t help but notice the dis- play of fire helmets that dominate my recep- tion area. They’re there for two reasons. First, I had the privilege of being a volunteer fireman in my hometown of Queensbury for more than 20 years, which helps explain the second rea- son, the tremendous respect that experience gave me for those who provide fire protection in our rural areas. Mr. Speaker, in a rural area like the 22d District of New York, fire protection is often solely in the hands of these volunteer compa- nies. In New York State alone they save countless lives and billions of dollars worth of property. That is why the efforts of people like those firefighters in Athens, NY, is so critical. And that’s why, Mr. Speaker, back in 1870 the residents of the growing village of Athens demanded more fire protection and the Wil- liam H. Morton Engine Co. was born in 1871. It was founded based on this need to serve one another. On that note, Mr. Speaker, those are the traits that make me most fond of such commu- nities, the undeniable camaraderie which ex- ists among neighbors. Looking out for one an- other and the good of the whole is what makes places like Athens a great place to live and raise a family. And this concept of com- munity service couldn’t be better exemplified than by the devoted service of the fine men and women who have comprised the William H. Morton Engine Co. No. 1 over its 125-year history. That’s right, for well over a century, this organization has provided critical services for the citizens of Athens on a volunteer basis. As a former volunteer fireman myself, I under- stand, and appreciate, the commitment re- quired to perform such vital public duties. Mr. Speaker, it has become all too seldom that you see fellow citizens put themselves in harms way for the sake of another. While al- most all things have changed over the years, thankfully for the residents of Athens, the members of their fire department have self- lessly performed their duty, without remiss, since back in 1871. You know, I have always said there is noth- ing more all-American than volunteering to help one’s community. By that measure, Mr. Speaker, the members of the William H. Mor- ton Engine Co. No. 1, past and present, are truly great Americans. In that regard, I ask that you, Mr. Speaker, and all Members of the House, join me now in paying tribute to these dedicated men and women. f FUNDING FOR THE FEDERAL MARITIME ACADEMIES HON. JACK FIELDS OF TEXAS IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. FIELDS of Texas. Mr. Speaker, I am deeply concerned about the viability and sus- tainability of our 6 State maritime academies given this bill’s funding level for the Maritime Administration’s operation and training ac- count. This portion of the Commerce, Justice, State appropriations bill does not specifically provide funding for the 6 schools and actually cuts $4.3 million from the operation and train- ing account that was to have funded the schools. The State maritime academies represent a model of State and Federal cost sharing in meeting the Nation’s need for officers for the American flag merchant fleet and other ele- ments of the maritime industry. The students and State governments underwrite most of the schools’ costs. The Federal Government his- torically has assisted the academies by loan- ing them training ships used to meet the Fed- eral mandate for the sea time required to fulfill the Coast Guard licensing requirements. The schools maintain these ships at approximately one-third the cost of maintaining Ready Re- serve Fleet ships. The mission of the State maritime acad- emies is to provide, in partnership with the Federal Government, licensed American mer- chant marine officers by the most cost-effec- tive means. The 6 schools, located in Maine, Massachusetts, New York, Texas, California, and Michigan provide 75 percent of the Na- tion’s licensed mariners. These State maritime academies represent a high return on a modest Federal investment. For only $9.3 million, which represents level funding over the past 7 years, they train and graduate 75 percent of the Nation’s licensed merchant marine offices; maintain a Ready Reserve Fleet ships at one-third the Govern- ment costs; commission an additional 100 Navy and Coast Guard Reserve officers each year; and enjoy a 100 percent job placement rate for graduates. I, along with many others on both sides of the aisle, hope the Senate will fully fund these much-needed State maritime academies. I also urge House appropriations conferees to work with the Senate to restore this funding. f A TRIBUTE TO WOODS MEMORIAL HOSPITAL HON. JOHN J. DUNCAN, JR. OF TENNESSEE IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. DUNCAN. Mr. Speaker, I want to con- gratulate Woods Memorial Hospital in Etowah, TN, for being nationally recognized for its suc- cess in advanced technology as well as its overall business success. In addition to its national recognition, the hospital was honored with the Tennessee CONGRESSIONAL RECORD \u2014 Extensions of RemarksE1416 July 31, 1996 Quality Commitment Award and received ac- creditation with commendation from the Joint Commission on Accreditation of Health Care Organizations earlier this year. These are fine honors which the hospital should be very proud to receive. Despite the growing shortage of quality medical care in our rural communities, Woods Memorial Hospital remains dedicated to pro- viding its patients with the best technology and high quality care from its professional staff. I am proud to have Woods Memorial Hospital in the 2d district of Tennessee. I request that a copy of the article ”Critical Care” which appeared in Inc. Technology be placed in the RECORD at this point. I would like to call it to the attention of my colleagues and other readers of the RECORD. CRITICAL CARE\u2014CASE STUDY (By Joshua Macht) The gurney crashes through the emergency room doors. On it lies a woman, lips pale, fading in and out of consciousness. In the glare of harsh lights, a quickly gathering knot of doctors and nurses steps into crisis mode. Needles, probes, and paddles move in and out of hands; a blood-sample is raced to the hospital laboratory. Moments later the lab sends the test results electronically to the emergency room: the woman’s blood pressure is low; she must be losing blood. Im- ages from a pelvic ultrasound are quickly de- livered to a radiologist. Around the corner, in the operating room, the surgeon prepares for the unscheduled morning performance. Before he scrubs, he dials a voice-mail box and retrieves a radi- ologist’s interpretation of the ultrasound. The diagnosis: a ruptured fallopian tube and massive internal bleeding. The doctors sus- pect an ectopic pregnancy (an inseminated egg attaches to the wall of a fallopian tube instead of the uterus); the embryo has to be removed. Barely an hour and a half after the woman is rushed to the hospital, she’s on the operating table; soon she’s recovering in her hospital bed. A routine crisis for one of the nation’s big- city, high-tech hospitals. Except for one thing. This scene is taking place in tiny Woods Memorial Hospital, a 72-bed non profit hospital in Etowah, Tenn., a rural commu- nity halfway between Chattanooga and Knoxville. Big changes are going on in health care, leaving hospitals across the country reeling from skyrocketing costs, a glut of beds, and all-out efforts by the government and the in- surance industry to reduce treatment and re- imbursement. Large urban hospitals, though they’ve felt the squeeze, are often able to weather the crisis because they’ve invested in sophisticated medical technologies that attract patients and in high-powered infor- mation systems that improve efficiency and manage costs. But smaller hospitals typically don’t have the money or the expertise to practice high- tech medicine or to buy computers. Those are some of the reasons small hospitals are collapsing or being swallowed up by larger competitors at an unprecedented rate. The crisis is all the greater for small hospitals like Woods that are located in rural areas, away from large pools of potential patients and technological know-how. Woods, however, is thriving. Outpatient care is at its highest level ever, while patient revenues swelled from $16 million in 1991 to $28 million last year. Net income, even al- lowing for money that will never be recov- ered from federal, state, and private health- care subsidies, rose to $1.6 million in 1995 from $953,327 in 1991. What makes Woods different? Three and a half years ago, the hospital began to trans- form itself. The focus: cost containment. The method: automation. Led by an adminis- trator who has applied a near-military zeal to the task of automating every aspect of the institution’s operations. Woods has proved that even organizations caught in the vortex of an industry’s downward spiral can buck the trend. Etowah is a sleepy town of 4,500 people, most of them paper-mill and textile workers, on the edge of the Cherokee National Forest. Etowah didn’t get a hospital until 1965. Not surprisingly, when it was built. Woods was a spartan facility: the emergency room was open only during certain hours, and there was no intensive care unit. In fact, there wasn’t an internist within 50 miles. Instead, family practitioners and general surgeons mended everything from sprained ankles to burst appendixes while cases of any complex- ity were referred to larger Bradley Memorial in the next county, the University of Ten- nessee Medical Center in Knoxville, or Er- langer Medical Center, in Chattanooga. Still, Woods was healthy. In most hospitals back then in the fee-for-services days, just about anyone with a medical degree and a stethoscope could make money by patching up a patient and billing the patient’s insur- ance company, few questions asked. In the late 1970s and early 1980s, the hospital, run by a retired air force colonel, added 40 beds to its original 30 and built an intensive care unit. Then came the crunch. In 1983 the federal government stopped paying Medicare reim- bursements based on a hospital’s tally of the actual cost of the care given; instead, it began doling out flat fees based on its esti- mate of what the treatment of a given illness should cost. The payments were especially meager to rural hospitals, on the theory that a hospital’s costs should be much lower out- side a city. Woods’s Medicare reimburse- ments plunged to less than 75% of the cost of treating its Medicare patients, who made up two-thirds of the hospital’s patient popu- lation. With its Medicare operations running deep- ly in the red, the hospital’s cash reserves were soon depleted, leaving no money for im- provements or even upkeep. Tile walls and floors began to crack. Patients waiting to be admitted sat in the lobby on folding chairs. More important, the hospital couldn’t af- ford to keep up with the latest medical tech- nology. That, in turn, made it all but impos- sible to recruit young talent to the staff. One of the few doctors to join the staff in the late 1980s was Charles Cox, who had started at Woods as an orderly in 1976 before going to medical school and whose family owned a dairy farm in the area. ”There really wasn’t much incentive for young doctors to come here,” calls Cox, who would sometimes save patients during the day and do farm chores at night. To make up for the reimbursement short- fall, the hospital tried raising its prices to non-Medicare patients. But that led to a lev- eling off of patients. It was clear that the only way to bridge the gap between Woods’s costs and reimbursements was to reduce costs by improving efficiency. Not an easy task. Inefficiency was in- grained in almost everything that went on at the hospital. Consider patient intake. Pa- tients would wait 30 minutes or more in the dreary lobby while nurses filled in hospital admission forms and then typed hospital bracelets. If a patient needed blood work or X rays, a nurse had to fill in a three-page carbon-copy requisition form and hand-de- liver copies to the lab and to billing. Ah, billing: two women in a cramped office entering the charges for each patient into a bare-bones minicomputer-based system. and that was the high-tech part. They had to pre- pare the special forms for billing third par- ties, like Medicare and Blue Cross of Ten- nessee, by hand and then mail them. Four to six weeks later, when a batch of reimburse- ment checks came in, the switchboard opera- tor would use the time between calls to record the payments in a 30-column ledger. ”Things moved slowly back then,” says Carol Ethridge, chief financial officer and in- formation officer. ”And because everything was done manually, there was plenty of room for error.” When Phil Campbell arrived at Woods in 1990 to take over as CEO, the hospital was $200,000 shy of making its payroll and was struggling to survive. Campbell had been working as associate administrator of a health-care facility in Rome, Ga., when Woods’s board hired him. ”I had wanted to go to a ”rural hospital,” says Campbell. ”But I underestimated how difficult it would be.” For the first few months, Campbell tried to persuade large suppliers to extend the small hospital’s payment schedule. But then, sud- denly, he took the offensive. Most hospitals charge for small items\u2014a Band-Aid (as much as $10 in some hospitals) or a single aspirin (as much as $4 or more a pop). Campbell, who seemed determined to become the Crazy Eddie of health care, decided to give them away. Next he slashed prices on lab work, the hospital’s biggest profit center. Then, as though the county board of trustees weren’t already apoplectic, Campbell presented the group with an expanded budget that called for automating every last department of the small hospital. ”Oh, sure, some employees and citizens thought we were crazy,” says Campbell. ”But I knew we had no choice.” Campbell, a tall imposing figure with the middle-aged-boy looks of a high school foot- ball coach, knows he can come off as a little overbearing. ”My wife tells me I’m more conservative than Rush Limbaugh,” he says, meaning it as a boast. If his administrative style seems somewhat military, it probably is. Campbell spent two years at the U.S. Army’s Fort Stewart in Hinesville, Ga. But Campbell wasn’t a soldier there; he was a student in a master’s of health-services-ad- ministration program run by Central Michi- gan University. Alongside army colonels and majors, Campbell was drilled in the mantras of hard-core health-care management: Im- prove quality. Lower costs. Increase volume. Although he had studied health-care insti- tutes in crisis, he faced the real thing for the first time when he took over at Woods. He was on the front line. And he admits to feel- ing green: ”There was nothing I could have done to prepare for this job.” The single-level brick building looks more like a suburban elementary school than a hospital. In that respect Woods hasn’t changed much from the day it was founded. Inside, though, it’s a different story. To start, almost every inch of every surface has been redone\u2014with carpet, paint, or wall- paper\u2014in mellow lavender and mauve. A ”new” Woods had to look the part. An inte- rior designer chose the color scheme. Other- wise, each department was free to redecorate as it saw fit. But the hospital’s makeover was more than skin deep. Campbell knew that the heart of the transformation would be auto- mation. The only problem was figuring out a way to afford it. The hospital had already so- licited a bid from a computer vendor for an automation package; the bid came in at close to $1 million, about four times what the hospital could conceivably spend. Camp- bell got on the phone to see if he could do better. Exhorting vendors to cut corners and margins wherever possible, explaining that the old health-care gravy train had been de- railed, Campbell finally got the proposal he CONGRESSIONAL RECORD \u2014 Extensions of Remarks E1417July 31, 1996 was looking for; an extensive new system for $250,000. That proposal came from Health Systems Resources Inc., in Atlanta. HSR agreed to install an IBM RS6000 and a UNIX- based work-station, along with 60 terminals and 12 PCs\u2014enough to put every department in the hospital on-line. Now all Campbell had to do was come up with a way to get the system to pay back. The key would be using the system to cut costs. Campbell divided the entire medical staff into small teams, each one with access to a PC and a mission\u2014to examine a dif- ferent element of the hospital’s service with an eye toward reducing waste. Take the pharmacy and therapeutics com- mittee, headed by Brandon Watters, an in- ternist. One of the committee’s tasks: to as- sess the hospital’s use of cephalosporins, a type of antibiotic. Harry Porter, a member of the committee and director of the phar- macy, called up records of what the hospital had been spending on antibiotics. It turned out that in the previous year, Woods’s use of all cephalosporins had gone up 204%, mainly because its use of Rocephin, the most expen- sive antibiotic, had gone up. So Porter, who documents the use of all drugs in the hos- pital, had the computer graph the applica- tions of Rocephin. The chart revealed that 70% of the time the powerful antibiotic was dispensed to treat infection but that 30% of the time it was administered to prevent in- fection in patients undergoing surgery. After a bit of research the committee de- termined that far less expensive (but equally effective) antibiotics could be substituted for the surgical use of Rocephin. The result; an estimated $40,000 savings on Rocephin in 1995. To keep the medical staff up to date with his committee’s findings, Watters im- ports all of his results from Quattro Pro into Microsoft Publisher, which he then uses to publish inPHARMation, the hospital’s phar- macy and therapeutics newsletter. Food waste was another target. Thanks to the dietary and food-services committee headed by Michele Fleming, director of food and nutrition services, Woods now uses a PC spreadsheet to track virtually every aspect of food service, from patient’s satisfaction with portion size to seasoning preferences. As a result, patients are less likely to end up with food they don’t like and won’t eat. Fleming knew, for example, that in the sec- ond quarter of 1995, only 92% of patients said they received the correct seasoning packets with their food. By the fourth quarter the number was up to 100%. To save nurses and administrative employ- ees time, the new system streamlined the la- borious admissions process. Today patients zip from the lobby to their hospital bed in minutes. With just a few keystrokes, an ad- missions clerk enters a new patient’s record into the system and instantly creates an electronic billing form on the main server. The clerk then hits another button to print out an embossed plastic identification card on a special printer. Using an imprint of the card, the clerk can also quickly manufacture a plastic hospital ID bracelet. Because bill- ing and accounting have been integrated into the system, patient charges and insurance bills are tallied electronically during the pa- tient’s stay. Gone, too, are the days of carbon-copy req- uisition forms. Now nurses simply order lab work and diagnostic images through the computer system. In addition, lab equipment has been electronically connected to the mainframe. Now Cindy Glaze, supervisor of the laboratory, can transfer blood-test re- sults from her lab instruments to her com- puter terminal and then, with a keystroke, on to the emergency room, the operating room, or a nursing station. Automation has all but eliminated some of the worst administrative chores. When a nurse electronically orders 500 ccs of eryth- romycin from the pharmacy for a patient, the system automatically charges the pa- tient’s billing record. It used to take weeks for the hospital to finalize patients’ bills; today bills are ready whenever patients are ready to leave the hospital. And no one fills in forms by hand or licks envelopes and mails them off to Blue Cross or Medicare; in- stead, charges are automatically transferred to the proper electronic form, and then, using a dial-up account, a bill is transmitted to the third-party payer. Ethridge says that reimbursement takes about 14 days. As for the new switchboard operator, Vir- ginia Huff, she rests easier knowing that the computer takes care of the Medicare logs. When a doctor orders an MRI for an elderly patient, the charge automatically transfers to an electronic log. Running the log for the entire year takes just a couple of hours of computer processing time. Campbell’s plan has worked. Not only have Wood’s outpatient utilization rates increased by 25%, but the hospital’s net income has nearly doubled in the past five years. Last year outpatient utilization rates actually surpassed inpatient rates\u2014which means higher revenues because insurance compa- nies typically reimburse outpatient proce- dures at a higher rate. After Campbell dropped the prices of lab work, the volume of work in the small lab increases dramati- cally\u2014300,000 tests in 1995, up from 115,000 in 1991. Remarkably the hospital has not raised the prices of care in five years, nor has Campbell added any clerical positions to the staff, even with all the increased billing. ”If we were still keying in bills, we would need at least twice as many people in the billing department alone,” says Ethridge. Fewer nonmedical positions means more dollars to recruit doctors\u2014a critical goal. The average can general $1 million in reve- nues for the hospital annually. Woods uses some of the freed-up money to pay for new recruits’ medical education in exchange for a commitment to practice there. The dif- ference in the opportunities for young doc- tors today and in 1988, when he joined the hospital, is huge, says Cox. ”Today we have all the technology that big urban medical centers have. So doctors can come here and not feel at a disadvantage.” Active recruitment efforts along with a healthy cash surplus have allowed Woods to expand services. For example, Campbell hired Dan Early to direct the new Resource Counseling Center. In addition, to reach Af- rican Americans in the county (a population that traditionally has had trouble accessing health care), Campbell founded the Minority Health Alliance for education and care. Recently the University of Tennessee Med- ical Center in Knoxville chose Woods as one of its first partners in its telemedicine pro- gram, which allows doctors to work via videoconferencing hookups. Woods’s tele- medicine facility is located in what used to be the gift shop. So far the state-of-the-art satellite link has been used primarily for dermatology. But doctors can also keep up to date with the medical advances at U.T. without leaving Etowah. Craig Riley, for ex- ample, an internist, attends live conferences at U.T. via satellite and can even use the live link to complete the continuing medical edu- cation credits he needs to meet Woods’s cred- it requirements. As Woods moves into a new era of health care, Campbell continues to position the small hospital for aggressive growth. Last year Woods joined Galaxy Health Alliance, in Chattanooga, a managed-care network of 13 rural and suburban hospitals in four states. (Woods is also part of another man- aged-care network that includes U.T.) Al- though managed care may represent a con- troversial new road for medicine, few hos- pitals want to be left out of the loop. An Zuvekas, senior research staff scientist at the Center for Health Policy Research at George Washington University Medical Cen- ter, in Washington, D.C., predicts that rural hospitals increasingly are going to depend on advanced electronic networks for their sur- vival. She reasons that it’s more effective for managed-care plans to interact just once with a group of hospitals than to deal with them individually; consequently, says Zuvekas, rural hospitals that are able to share both data and expertise over a wire are going to distinguish themselves as worthy partners in the managed-care relationship. The road ahead is filled with uncertainty. Potential Medicare cuts could make it even more difficult for rural hospitals to make ends meet, and managed care might force many more hospital mergers and acquisi- tions. Still, Campbell has a grand outlook for Woods. On a tour of the hospital, he points out the window to a mound of dirt. ”That will be a state-of-the-art women’s cen- ter,” he says. ”We are finally going to start delivering babies again.” A nearby parking lot will soon be transformed into an ex- panded intensive care unit and emergency room, he adds. Ethridge, meanwhile, is just trying to enjoy the fact that for once Woods isn’t struggling. ”We’ve been waiting six years to slow down,” she says. Given Campbell’s am- bitions, Ethridge probably shouldn’t plan on too long of a lull. f SUPPORT THE FEDERAL PROCUREMENT SYSTEM HON. WILLIAM H. ZELIFF, JR. OF NEW HAMPSHIRE IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. ZELIFF. Mr. Speaker, I am introducing a bill today which will foster the continued par- ticipation of small business in the Federal Government’s procurement system. During my tenure in Congress, I have been closely involved in the procurement reform de- bate. As a member of the key committees of jurisdiction over this issue, Government Re- form and Oversight and Small Business, and in my own experience as a small business- man, I know the importance of the small busi- ness community in Federal procurement. Small business is vital to this Nation’s eco- nomic success. And with enactment of the Federal Acquisition Reform Act, which I strongly supported, Congress created a newly reformed, streamlined procurement system de- signed to assist all businesses. Although recently, agency actions have lim- ited small business participation as prime con- tractors in the procurement process by inap- propriately bundling contract requirements in order to decrease the number of contracts an agency must manage. Government agencies have argued that by bundling these contract requirements, it is simply much easier for them to do their job because they only have to deal with one or two vendors instead of hundreds. Working with only one or two vendors as opposed to working with hundreds of suppliers may be easier for agencies, but limiting Fed- eral contract opportunities to only a few com- panies on a few contracts, is unfair to small businesses. Not only is this practice unfair, it eliminates built-in competition in the Federal CONGRESSIONAL RECORD \u2014 Extensions of RemarksE1418 July 31, 1996 contracting system, which in turn leads to an increase in costs for necessary goods and services paid for by the American taxpayer. This unfair contract bundling is corrected by the legislation before you today. In addition to maintaining the integrity of the procurement reforms passed last Congress and earlier this Congress, the bill directs agencies to avoid unnecessary agency contract consolidations. Removing these inappropriate consolidations ensures that more small business will compete for Federal contracts. This protective measure loudly echoes this Congress’s support for the counsel, assistance and protection of our Nation’s job creators\u2014 small business. By supporting this measure my colleagues will join me in my efforts to support both an efficient and openly competi- tive Federal procurement system. f TECHNICAL CORRECTIONS AND MISCELLANEOUS AMENDMENTS TO TRADE LAWS SPEECH OF HON. NANCY L. JOHNSON OF CONNECTICUT IN THE HOUSE OF REPRESENTATIVES Tuesday, July 30, 1996 Mrs. JOHNSON of Connecticut. Mr. Speak- er, I rise in support of H.R. 3815, a bill to make technical and miscellaneous changes to our trade laws. In particular, I want to call at- tention to a very important section of the bill which is necessary to provide clear direction to the Customs Service, preventing it from im- properly administering country of origin rules. Section 30 of the bill is intended to prevent the Customs Service from proceeding with any ac- tion that would change the status quo for the rules of origin governing the American hand tool industry. Section 30 of the bill represents the Ways and Means Committee’s concern that Cus- toms is attempting to significantly change longstanding rules of origin on which American manufacturers have relied, without authoriza- tion from Congress. First, the contention by Customs that a 1992 decision by the U.S. Court of International Trade in the National Hand Tool case, which upheld a determination by Customs that specific articles were not ”substantially transforme,” directed Customs to abrogate prior determinations for different products involving different domestic process- ing is not supported by the decision of the pre- siding judge. Given the record in the National Hand Tool case, the Government’s contem- poraneous arguments, and the court’s silence as to any intent to overturn precedent, no weight or credibility can be given to the present contention by Customs that National Hand Tool changed the law and now man- dates the revocation of the long-standing rul- ing letters for hand tools manufactured in the United States from imported metal forgings. Second, Customs’ proposal to apply a tariff- shift standard to supplant the traditional case- by-case substantial transformation test which follows the time-tested judicial interpretation of the marking statute and its criteria of changes in name, character, or use has not been au- thorized by Congress. On July 8, 1996, the U.S. Court of International Trade ruled that in attempting to overrule or abrogate the sub- stantial transformation test Customs ”con- travenes Congressional intent, exceeds Cus- toms’ authority to promulgate regulations . . . and therefore is arbitrary and . . . not in ac- cordance with law.” Section 30 of H.R. 3815 is a bipartisan ap- proach adopted unanimously by the committee after extensive debate. It would impose a 1- year moratorium on any actions by the admin- istration to revoke administrative ruling letters in effect on July 17, 1996. Additionally, it would require the Secretary of the Treasury, prior to issuing any significant policy change to the rules of origin, to consult with interested parties, and report to the congressional com- mittees of jurisdiction the rationale for the pro- posed policy change. Under section 30, a pro- posal to revoke longstanding ruling letters re- lied on by hand tool manufacturers at least since the early 1980’s, would constitute a sig- nificant policy change. The moratorium will provide a period for the committees of jurisdiction to review, study and determine the appropriate rules of origin for hand tools manufactured in the United States from imported forgings. The required consulta- tion with the Congress upon the expiration of the moratorium is an added precaution to en- sure that no policy changes are implemented by administrative action that amount to abro- gation of longstanding court rulings and Con- gressional intent. Finally, the moratorium will provide time for the WTO working group on the harmonization of rules of origin to continue their work without interim changes by the Cus- toms Service that may be disruptive to and have potentially profound adverse impact on American hand tool manufacturers and other manufacturing sectors of our economy. At this point, I would also like to submit the following letter from the Joint Industry Group [JIG], a coalition of over 100 companies and associations of importers who have also ex- pressed concerns regarding origin rules. THE JOINT INDUSTRY GROUP, Washington, DC, May 15, 1996. Hon. ROBERT E. RUBIN, Secretary of the Treasury, Department of the Treasury, Washington, DC. DEAR MR. SECRETARY: Earlier this year, Deputy Secretary Summers advised Con- gressman Crane that the Customs Service had been instructed to withhold publication of a final rule that would have extended Part 102 of the Customs Regulations (NAFTA Annex 311 Rules of Origin) to trade with all countries. The Joint Industry Group (JIG) is a coalition of over 100 companies, associa- tions and firms that represent billions of dol- lars annually in trade. Therefore, as import- ers and associations of importers that would have been badly damaged had those rules gone into effect, we were pleased by and fully supported that decision. There now appears to be a concerted effort underway, sponsored by a small group of manufacturers calling itself the American Hand Tool Coalition, to gain a competitive advantage by having the Treasury Depart- ment reverse its position. The implications of applying Part 102 to all trade are very broad and potentially unsettling. The proponents of such action suggest that the Treasury Department could limit it to a specific product, but adoption of rules under Part 102 on a piecemeal basis would be bad policy and set a disastrous precedent. To do so would inevitably lead to an endless suc- cession of changes and or exceptions and a proliferation of different origin rules for dif- ferent industries. Similar problems pre- viously occurred when Customs first imple- mented regulations in 1985 which nominally applied to textile products, but the prin- ciples of which have been extended on a piecemeal basis to all other commodities. From a practical standpoint, it would be vir- tually impossible to adopt any segment of Part 102 without also adopting the Part’s general interpretative rules, many of which are unsatisfactory and result in an unwar- ranted departure from existing law. We respectfully ask the Department to abide by its commitment not to publish the rule that would extend Part 102 to trade from all countries other than our NAFTA partners, Canada and Mexico. Sincerely, EVELYN SUAREZ, Chairperson, Rules of Origin Committee. f GIVE LAW ENFORCEMENT THE TOOLS THEY NEED TO FIGHT TERRORISM HON. VICTOR O. FRAZER OF THE VIRGIN ISLANDS IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. FRAZER. Mr. Speaker, I rise today to urge my colleagues to pass anti-terrorism leg- islation requiring the manufacturers of explo- sives to include chemical markers and smoke- less powders. The American people elected us to this body to do our job. Which is to pass legisla- tion that is in the best interest of this country, not interest of a group of owners. It is time to do our job. During the 104th Congress we have seen the bombing of a Federal building in Okla- homa City which caused the death of 170 people, the standoff between Federal law en- forcement officials and the Freeman group in Montana. Today, the American people are outraged by TWA flight 800 and the Atlanta Centennial Park bombing. The people of the Virgin Is- lands lost a loved one on TWA flight 800, which was a personal loss to me. Mr. Speaker, we have a role to play, which is to pass legislation that will give law enforce- ment the tools that they need to fight terror- ism. f INCENTIVES FOR AGRICULTURE HON. WILLIAM M. THOMAS OF CALIFORNIA IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. THOMAS. Mr. Speaker, 1 million acres of farmland in the United States will be eaten up by parking lots, freeways, and suburban growth this year. In fact, within the hour, one acre of precious farmland in the Central Valley of California will be taken out of production. The Central Valley of California currently produces over $13 billion in agriculture produce and feeds millions in the United States and around the world. Farmland in areas surrounding cities is being displaced by urban development at one of the fastest rates in history and for this reason our farmers have been placed under new pressures. A time can be foreseen in which an area like the Central Valley may not even be capable of feeding it- self because of urban outgrowth. CONGRESSIONAL RECORD \u2014 Extensions of Remarks E1419July 31, 1996 When the great cities of our country were settled, they were developed near rich agricul- tural land to assure an adequate food supply. As urban areas continued to sprawl, many fer- tile acres were consumed and many more were placed at risk. Over the past 10 years, urban sprawl has eaten up over 26 million acres of productive farmland: an area the size of Kentucky has been displaced by urban de- velopment. Most of the farmland lost in the country has been located in urban influenced counties\u2014where the density is at least 25 per- sons per square mile. A recent study by the American Farmland Trust estimated that the farmland in the urban influenced counties was 2.7 times more productive than the remaining U.S. counties. Eighty seven percent of our do- mestic fruit and nut production is also grown in these threatened counties. Every citizen should be concerned with a secure U.S. food supply and preservation of productive lands because the loss of farmland affects more than family farmers. Others af- fected by the land loss include the large agri- culture support sector that ranges from fer- tilizer and equipment suppliers to fruit and vegetable processors. The general public could also face grocery counters half-full of not so fresh, costly produce imported from around the world. Agriculture is a basic and fundamental part of life from the food we eat to the clothes we wear. It is important that dur- ing times of fast growth we take a closer look at how our land is being used and how we can protect those that are being displaced by the urban community. Farming has been placed under new pres- sures that are coupled with the rising costs of this capital intensive business. For example, farmers putting in a wine grap vineyard will encounter 4 years development costs over $17,000 dollars per acre above the land acqui- sition costs. Pistachio farmers should expect at least $7,000 dollars in preproductive costs per acre and olive growers $5,000 dollars an acre. These costs could literally double or tri- ple dependent on the value of the land. Aside from the high start up costs of crops such as orchards and vineyards U.S. farm real estate values also continue to rise. According to statistics compiled by the U.S. Department of Agriculture the value of U.S. farm real es- tate has risen 6.4 percent over the past year to $832 per acre. This $832 figure may be ris- ing, but it still does not nearly reflect the cost of acquiring a prime piece of farmland in high- ly productive, urban-influenced states like Cali- fornia and Florida. An average piece of farm- land in California and Florida is worth over $2,000 and can be worth as much as $17,000. Along with high costs farmers continue to be plagued with storms, disease, and pests that destroy many acres of orchards and vineyards annually. Some of this costly acreage has not even reached a productive state. Crops like tangerines and cherries can take 5 to 6 years to reach productivity. In a natural disaster a farmer with a crop in a preproductive state may have trouble sustaining large losses be- cause he does not have a return on his invest- ment. Most farmers do not realize an actual profit for many years after a productive state is achieved. Natural disasters particularly im- pact small family farms that already have a small profit margin. As a witness to the rate of urbanization in my own district, I have developed two incen- tives that would amend the 1986 tax code and keep families in farming and land in rural uses. I recently introduced H.R. 3749 to amend the tax code to promote replacement of crops destroyed by casualty. This bill will provide an incentive to replant by allowing them to deduct the cost of replanting their de- stroyed crop in the event of freezing tempera- tures, disease, drought, or pests, all events that cannot be controlled. It allows farmers to deduct the costs of replacing key infrastruc- ture. I have also introduced H.R. 520 to make it easier to tranfer farms from generation to gen- eration. According to the U.S. Department of Agriculture the average size farm in the United States is 469 acres. The land alone of an av- erage farm in California is worth over $1 mil- lion and can be worth as much as $8 million on prime farm land. These numbers are the primary reasons that I have introduced H.R. 520 to double the current maximum benefit under the estate tax special valuation deduc- tion. A farmer can be worth millions in terms of acreage but that does not necessarily mean that there is cash to pay estate taxes, or\u2014dur- ing his life\u2014other unexpected costs. This re- sults in many farmers splitting their land up into parcels and selling out to developers just in order to cover their costs. Current tax law that allows for $750,000 in maximum benefits is outdated in accordance to the cost of farming today. After you figure in the value of crops, irrigation systems, im- provements (buildings, etc.), and equipment, the value of today’s farm may be worth almost twice as much. The bills proection of $1,500,000 would allow for more continuity in farm acreage when transferring land between generations, avoiding the need for families to split up their land to pay off the estate tax. Prime agriculture land is being authorized as we speak. Providing these small incentives to America’s farmer would encourage families to stay in farming and secure an abundant food supply for the 21st century. f TRIBUTE TO VFW POST 8162 OF NASSAU, NEW YORK HON. GERALD B.H. SOLOMON OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. SOLOMON. Mr. Speaker, as you know, one group I have a particular admiration for is our veterans. It was one of the reasons I asked for a seat on the Veterans’ affairs Com- mittee in my first term, and it’s one of the rea- sons I fought so hard to have the Veterans Administration elevated to a full, cabinet-level department. And one group was always right beside me in such efforts, Veterans of Foreign Wars. I can think of no group that has done more to promote the interests of our Nation’s veterans. Today, I’d like to single out one VFW post, a very special one which is typical of VFW posts across the country. VFW Post 8162 of Nassau, NY is celebrat- ing its 50th anniversary this year. Think of that, Mr. Speaker. It’s first members were, of course, the boys just returning from Europe and the Pacific and every other theater of World War II. Then, in the early 1950’s, they were joined by veterans from the Korean war. In another 15 years, the veterans of the Viet- nam War arrived on the scene. And finally, in this decade, we’ve seen those who served in the Persian Gulf join their older comrades. From its beginning, Post 8162 was made up of citizen heroes, who left their homes and loved ones to undergo incredible hardships and sacrifices, including the supreme sacrifice, in defense of our freedoms. But the majority survived to return home, complete their edu- cations, find jobs, raise families, and become the most respected members of their commu- nities. I’ve met many of the members of Post 8162. I was thinking of them and of other vet- erans like them when Ronald Reagan signed into law my measure making the Veterans Ad- ministration a cabinet department in 1988. With that signature, we made sure the inter- ests of veterans would always have the ear of the U.S. President. It is to those same interests that Post 8162 has so faithfully applied itself for 50 years, since that first beginning on August 12, 1946. Mr. Speaker, I ask you and all members to join me in a special salute to VFW Post 8162 of Nassau, NY, as it celebrates its 50th year. f OUTSTANDING HIGH SCHOOL SENIORS HON. STEVEN SCHIFF OF NEW MEXICO IN THE HOUSE OF REPRESENTATIVES Wednesday, July 31, 1996 Mr. SCHIFF. Mr. Speaker, I rise today to honor the following graduating high school stu- dents from the First Congressional District of New Mexico who have been awarded to the Congressional Certificate of Merit. CERTIFICATE OF MERIT AWARD WINNERS 1996 Albuquerque Evening High School, Vera Lujan; Albuquerque High School, Monica Becerra; Bernalillo High School, Lance Darnell; Cibola High School, Jessica Shaw; Del Norte High School, Kathryn Gruchalla; Eldorado High School, Karli Massey, Matt Kaiser; Estancia High School, Wayne David- son; Evangel Christian Academy, Jonathon E. Rael; Highland High School, Kelly Shan- non McCormick; La Cueva High School, Tracy Carpenter; Los Lunas High School, Ni- cole J. Nagy; Menaul High School, Adam Cherry; Mountainair High School, Jessica Quintana; Rio Grande High School, Robert G. Coleman; Sandia High School, Krista Madril; Sandia Preparatory School, Anne Elizabeth Mannal; High School, St. Pius X High School, Autumn Nicole Grady, Laura C. Miner; Valley High School, Matthew Tennison; and West Mesa, Shane Gutiererz. It is my pleasure to recognize these out- standing students for their academic and lead- ership accomplishments as well as for their participation in school, community service, and civil activities. f CAMPAIGN FINANCE REFORM ACT OF 1996 SPEECH OF HON. JIM KOLBE OF ARIZONA IN THE HOUSE OF REPRESENTATIVES Thursday, July 25, 1996 Mr. KOLBE. Mr. Speaker, I rise in strong support of H.R. 3820, the Campaign Finance CONGRESSIONAL RECORD \u2014 Extensions of RemarksE1420 July 31, 1996 Reform Act. This bill fixes most of the com- monly mentioned problems we see in funding campaign activities. Mr. Speaker, I am especially pleased that this bill would require that at least half of our campaign funds would have to come from within our own district. This change alone makes the bill worth voting for. How often do we hear about special interests inside the belt- way buying elections for an incumbent? This reform means that if your own constituents do not like you well enough to contribute, you will not have resources to get your message out. And along that line, the bill cuts the influ- ence of PAC’s dramatically. Not only is their maximum contribution cut in half, but the can- didate cannot even take the reduced amount if it would put him or her over the 50 percent threshold. This changes the balance of power between PAC’s and individuals. On the other hand, the bill strengthens polit- ical parties, including the local parties. And we all know that real reform begins at the local level. By increasing the amounts that local parties can contribute to the candidate, the candidate will be listening more closely to the folks at home, not to the big national PAC’s. Finally, this bill makes it possible for a can- didate of modest means to run even if he or she is facing a very wealthy opponent or an incumbent with an intimidating war chest. The parties and PAC’s are allowed, under these circumstances, to increase their contributions to level the playing field. I am at a loss to understand why Common Cause would say that anyone who votes for this bill is a ”Protector of Corruption.” If I re- member correctly, they want taxpayers to fund campaigns, a situation that would require an individual to subsidize a candidate for whom he or she would not vote. I think that is cor- rupt. Mr. Speaker, I urge my colleagues to join me in supporting a true reform bill. CONGRESSIONAL RECORD \u2014 Extensions of Remarks E1421July 31, 1996 SENATE COMMITTEE MEETINGS Title IV of Senate Resolution 4, agreed to by the Senate on February 4, 1977, calls for establishment of a sys- tem for a computerized schedule of all meetings and hearings of Senate com- mittees, subcommittees, joint commit- tees, and committees of conference. This title requires all such committees to notify the Office of the Senate Daily Digest\u2014designated by the Rules Com- mittee\u2014of the time, place, and purpose of the meetings, when scheduled, and any cancellations or changes in the meetings as they occur. As an additional procedure along with the computerization of this infor- mation, the Office of the Senate Daily Digest will prepare this information for printing in the Extensions of Remarks section of the CONGRESSIONAL RECORD on Monday and Wednesday of each week. Meetings scheduled for Thursday, August 1, 1996, may be found in the Daily Digest of today’s RECORD. MEETINGS SCHEDULED AUGUST 2 9:30 a.m. Joint Economic To hold hearings to examine the employ- ment-unemployment situation for July. SD 106 10:00 a.m. Finance Social Security and Family Policy Sub- committee To hold hearings to examine how to edu- cate the public about the 1996 report of the Social Security Board of Trustees. SD 215 SEPTEMBER 4 9:30 a.m. Energy and Natural Resources To hold hearings on S. 1678, to abolish the Department of Energy. SD 366 SEPTEMBER 5 2:00 p.m. Energy and Natural Resources Forests and Public Land Management Sub- committee To hold hearings on S. 931, to authorize the construction of the Lewis and Clark Rural Water System and to au- thorize assistance to the Lewis and Clark Rural Water System, Inc., a non- profit corporation, for the planning and construction of the water supply sys- tem, S. 1564, to authorize the Secretary of the Interior to provide loan guaran- tees for water supply, conservation, quality and transmission projects, S. 1565, to supplement the Small Rec- lamation Projects Act of 1956 and to supplement the Federal Reclamation laws by providing for Federal coopera- tion in non-Federal projects and for participation by non-Federal agencies in Federal projects, S. 1649, to extend contracts between the Bureau of Rec- lamation and irrigation districts in Kansas and Nebraska, S. 1719, Texas Reclamation Projects Indebtedness Purchase Act, and S. 1921, to transfer certain facilities at the Minidoka project to Burley Irrigation District. SD 366 SEPTEMBER 11 10:00 a.m. Judiciary To hold hearings to examine competition in the telecommunications industry. SD 226 SEPTEMBER 17 9:30 a.m. Veterans’ Affairs To hold joint hearings with the House Committee on Veterans’ Affairs to re- view the legislative recommendations of the American Legion. 334 Cannon Building POSTPONEMENTS AUGUST 2 10:00 a.m. Judiciary To resume hearings to examine the dis- semination of Federal Bureau of Inves- tigation background investigation re- ports and other information to the White House. SD 226 D847 Wednesday, July 31, 1996 Daily Digest HIGHLIGHTS Senate passed Nuclear Waste Policy Act. Senate agreed to Agriculture Appropriations Conference Report. Senate Chamber Action Routine Proceedings, pages S9209 S9320 Measures Introduced: Five bills and one resolution were introduced, as follows: S. 2004 2008, and S. J. Res. 58. Page S9295 Measures Reported: Reports were made as follows: S. 1311, to establish a National Fitness and Sports Foundation to carry out activities to support and supplement the mission of the President’s Council on Physical Fitness and Sports. (S. Rept. No. 104 340) S. 1735, to establish the United States Tourism Organization as a nongovernmental entity for the purpose of promoting tourism in the United States, with amendments. (S. Rept. No. 104 341) S. 1840, to amend the Federal Trade Commission Act to authorize appropriations for the Federal Trade Commission. (S. Rept. No. 104 342) Report on the Activities of the Committee on the Judiciary of the U.S. Senate During the 103d Con- gress. (S. Rept. No. 104 343) S. 1643, to amend the Older Americans Act of 1965 to authorize appropriations for fiscal years 1997 through 2001, with an amendment in the na- ture of a substitute. (S. Rept. No. 104 344) S. Con. Res. 52, A bill to recognize and encourage the convening of a National Silver Haired Congress. (S. Rept. No. 104 345) S. 1869, to make certain technical corrections in the Indian Health Care Improvement Act. (S. Rept. No. 104 346) Page S9294 Measures Passed: Congressional Adjournment: Senate agreed to H. Con. Res. 203, providing for an adjournment of both Houses. Page S9216 Nuclear Waste Policy Act: By 63 yeas to 37 nays (Vote No. 259), Senate passed S. 1936, to amend the Nuclear Waste Policy Act, after taking action on amendments proposed thereto, as follows: Pages S9209 65 Adopted: By 86 yeas to 12 nays (Vote No. 256) Murkowski Amendment No. 5055, to provide that EPA issue standards for protection of the public from releases of radioactive materials from a permanent repository, to provide for the safe transportation of radioactive materials, to exempt the nuclear waste program from civil service laws, to eliminate the train inspection limitation, to clarify the scope of the Department of Transportation training standards, to eliminate the permanent disposal research provisions, to eliminate the budget priorities regarding construction costs of the interim storage facility, and to clarify routing. Pages S9209 15 Murkowski Amendment No. 5051, to establish compliance requirements. Pages S9222 28 Murkowski Amendment No. 5048, to establish a benefits agreement with the City of Caliente and Lincoln County, Nevada. Pages S9228 34 Rejected: Wellstone Modified Amendment No. 5037, to en- sure that the Secretary of Energy does not accept title to high-level nuclear waste and spent nuclear fuel unless protection of public safety or health or the environment so require. (By 83 yeas to 17 nays (Vote No. 257), Senate tabled the amendment.) Pages S9216 22 Bryan Amendment No. 5075, to specify contrac- tual obligations between the Department of Energy and waste generators. Pages S9234 37 Bryan Amendment No. 5073, to establish that the Secretary of Energy shall comply with all Federal laws and regulations in developing and implement- ing the integrated management system. (By 73 yeas to 27 nays (Vote No. 258), Senate tabled the amend- ment.) Pages S9237 41 CONGRESSIONAL RECORD \u2014 DAILY DIGESTD848 July 31, 1996 Transportation Appropriations, 1997: By 95 yeas to 2 nays (Vote No. 261), Senate passed H.R. 3675, making appropriations for the Department of Transportation and related agencies for the fiscal year ending September 30, 1997, as amended, and taking action on further amendments proposed thereto, as follows: Pages S9265 88 Adopted: Baucus Amendment No. 5141, to require the cal- culation of Federal-aid highway apportionments and allocations for fiscal year 1997 to be determined so that States experience no net effect from a credit to the Highway Trust Fund made in correction of an accounting error made in fiscal year 1994. (By 42 yeas to 57 nays (Vote No. 260), Senate earlier failed to table the amendment.) Pages S9268 75, S9278, S9280 81 Lautenberg (for Wellstone) Amendment No. 5142, to transfer previously appropriated funds among highway projects in Minnesota. Page S9275 Lautenberg (for Wyden) Amendment No. 5143, to provide conditions for the implementation of reg- ulations issued by the Secretary of Transportation that require the sounding of a locomotive horn at highway-rail grade crossings. Pages S9275 78 Lautenberg Amendment No. 5144, to make a technical correction. Page S9279 Lautenberg Amendment No. 5145, to make a technical correction. Page S9279 Cohen Amendment No. 5146, to prevent the De- partment of Transportation from penalizing Maine or New Hampshire for non-compliance with Federal ve- hicle weight limitations. Page S9280 Gramm Amendment No. 5147 (to Amendment No. 5141), to require a review of the reporting of excise tax data by the Department of the Treasury to the Department of Transportation for fiscal year 1994. Pages S9280 81 Senate insisted on its amendments, requested a conference with the House thereon, and the Chair appointed the following conferees: Senators Hatfield, Domenici, Specter, Bond, Gorton, Shelby, Lauten- berg, Byrd, Harkin, Mikulski, and Reid. Pages S9287 88 Federal Employees Indian Contracts Repeal: Senate passed H.R. 3215, to amend title 18, United States Code, to repeal the provision relating to Fed- eral employees contracting or trading with Indians, clearing the measure for the President. Pages S9316 17 Smithsonian Construction: Committee on Rules and Administration was discharged from further con- sideration of S. 1995, to authorize construction of the Smithsonian Institution National Air and Space Museum Dulles Center at Washington Dulles Inter- national Airport, and the bill was then passed. Pages S9317 18 Mutual Aid Agreement: Senate passed H. J. Res. 166, granting the consent of Congress to the Mutual Aid Agreement between the city of Bristol, Virginia, and the city of Bristol, Tennessee, clearing the meas- ure for the President. Page S9318 Budget Reconciliation Conference Report\u2014 Agreement: A unanimous-consent agreement was reached providing for the consideration of the con- ference report on H.R. 3734, to provide for rec- onciliation pursuant to section 201(a)(1) of the con- current resolution on the budget for fiscal year 1997. Page S9318 Nominations Confirmed: Senate confirmed the fol- lowing nominations: Frank R. Zapata, of Arizona, to be United States District Judge for the District of Arizona. Page S9316 Nominations Received: Senate received the follow- ing nominations: 1 Air Force nomination in the rank of general. 1 Army nomination in the rank of general. Page S9320 Messages From the House: Pages S9292 93 Measures Referred: Page S9293 Measures Placed on Calendar: Page S9293 Communications: Pages S9293 94 Executive Reports of Committees: Pages S9294 95 Statements on Introduced Bills: Pages S9295 S9304 Additional Cosponsors: Pages S9304 05 Amendments Submitted: Pages S9305 06 Authority for Committees: Page S9306 Additional Statements: Pages S9306 16 Record Votes: Six record votes were taken today. (Total\u2014261) Pages S9215, S9222, S9241, S9254, S9278, S9287 Adjournment: Senate convened at 9 a.m., and ad- journed at 10:09 p.m., until 9:30 a.m., on Thursday, August 1, 1996. (For Senate’s program, see the re- marks of the Acting Majority Leader in today’s Record on page S9318.) Committee Meetings (Committees not listed did not meet) NOMINATIONS Committee on Armed Services: Committee ordered favor- ably reported the nominations of Alberto Aleman Zubieta, a citizen of the Republic of Panama, to be CONGRESSIONAL RECORD \u2014 DAILY DIGEST D849July 31, 1996 Administrator of the Panama Canal Commission, Ev- erett Alvarez, Jr., of Maryland, to be a Member of the Board of Regents of the Uniformed Services Uni- versity of the Health Sciences, Lt. Gen. Howell M. Estes, III, USAF, for appointment to the grade of general and to be Commander-in-Chief, United States Space Command\/Commander-in-Chief, North American Aerospace Defense Command, Adm. Jay L. Johnson, USN, for reappointment to the grade of ad- miral and to be Chief of Naval Operations, Col. Garry R. Trexler, USAF, for promotion in the Regu- lar Air Force of the United States to the grade of Brigadier General, Brig. Gen. Gerald A. Rudisill, Jr., USA, for promotion in the Reserve of the Army to the grade of Major General, certain nominations on a Navy promotion list received by the Senate on May 17, 1996, certain nominations on an Air Force Reserve appointment list received by the Senate on May 1, 1996, and 3,742 nominations in the Army, Air Force, Navy, and Marine Corps. Prior to this action, committee concluded hearings on the nominations of Lt. Gen. Estes and Adm. Johnson (listed above), after the nominees testified and answered questions in their own behalf. Adm. Johnson was introduced by Senator Burns. EXPORT CONTROL REFORM Committee on Banking, Housing, and Urban Affairs: Subcommittee on International Finance concluded hearings on provisions of H.R. 361, to strengthen multilateral export controls, to reduce United States reliance on unilateral controls, to combat the pro- liferation of weapons of mass destruction and the missiles to deliver them, to prohibit sensitive exports to terrorist countries, to remove cold-war impedi- ments to export competitiveness, and to provide new procedures for ensuring U.S. exporters are treated fairly, after receiving testimony from Representative Roth; William A. Reinsch, Under Secretary of Com- merce for Export Administration; Mitchel B. Wallerstein, Deputy Assistant Secretary of Defense for Counterproliferation Policy; Thomas E. McNa- mara, Assistant Secretary of State for Political Mili- tary Affairs; William T. Archey, American Elec- tronics Association, Washington, D.C.; Thomas T. Connelly, Hardinge Inc., Elmira, New York, on be- half of the Association for Manufacturing Tech- nology; and Richard H. Burgess, Dupont Company, Wilmington, Delaware, on behalf of the Chemical Manufacturers Association. FOOD SECURITY IN AFRICA Committee on Foreign Relations: Subcommittee on Afri- can Affairs concluded hearings to examine the cur- rent state of food security in Africa, the future out- look for world food security, and the role of United States food aid programs, after receiving testimony from Eugene Moos, Under Secretary for Farm and Foreign Agricultural Services, and Mary Chambliss, Deputy Administrator, Export Credits, Foreign Agri- cultural Service, both of the Department of Agri- culture; Leonard M. Rogers, Acting Assistant Ad- ministrator for Humanitarian Response, Agency for International Development; Harold J. Johnson, Asso- ciate Director, International Relations and Trade Is- sues, General Accounting Office; Per Pinstrup-An- dersen, International Food Policy Research Institute, and Judy C. Bryson, Africare, both of Washington, D.C.; and Michael Davies, Cargill, Cobham Surrey, United Kingdom. DRUG TRAFFICKING Committee on the Judiciary: Committee held hearings to examine the drug trafficking situation along the Southwest border of the United States, focusing on Federal, State, and local efforts to develop and pro- mote U.S. counterdrug strategies, receiving testi- mony from Senators Domenici, Gramm, and Hutchison; Gen. Barry R. McCaffrey, Director, Of- fice of National Drug Control Policy; and Douglas Kruhm, Assistant Commissioner for Border Patrol, Immigration and Naturalization Service, and Donald F. Ferrarone, Special Agent in Charge, Houston Field Division, and Harold D. Wankel, Chief of Oper- ations, both of the Drug Enforcement Administra- tion, all of the Department of Justice. Hearings were recessed subject to call. NOMINATIONS Committee on the Judiciary: Committee concluded hearings on the nominations of Richard A. Paez, of California, to be United States Judge for the Ninth Circuit, Wenona Y. Whitfield, to be United States District Judge for the Southern District of Illinois, Clarence J. Sundram, to be United States District Judge for the Northern District of New York, Jo- seph F. Bataillon, to be United States District Judge for the District of Nebraska, Colleen Kollar-Kotelly, to be United States District Judge for the District of Columbia, and Thomas W. Thrash Jr., to be United States District Judge for the Northern Dis- trict of Georgia, after the nominees testified and an- swered questions in their own behalf. Mr. Paez was introduced by Senator Boxer, Mr. Bataillon was in- troduced by Senators Kerrey and Exon, Ms. Kollar- Kotelly was introduced by District of Columbia Del- egate Norton, Mr. Sundram was introduced by Sen- ator Moynihan, Mr. Thrash was introduced by Sen- ator Nunn, and Ms. Whitfield was introduced by Senator Simon. BUSINESS MEETING Committee on the Judiciary: On Tuesday, July 30, Sub- committee on Constitution, Federalism, and Property CONGRESSIONAL RECORD \u2014 DAILY DIGESTD850 July 31, 1996 Rights approved for full committee consideration the following measures: S.J. Res. 8, proposing an amendment to the Con- stitution of the United States to prohibit retroactive increases in taxes; and S. 1990, to authorize funds for fiscal years 1997 and 1998 for the United States Civil Rights Com- mission. PENSION AUDIT IMPROVEMENT ACT Committee on Labor and Human Resources: Committee began mark up of S. 1490, to amend title I of the Employee Retirement Income Security Act of 1974 to improve enforcement of such title and benefit se- curity for participants by adding certain provisions with respect to the auditing of employee benefit plans, but did not complete action thereon, and re- cessed subject to call. h House of Representatives Chamber Action Bills Introduced: 12 public bills, H.R. 3923 3934; 1 private bill, H.R. 3935; and 1 resolution, H. Res. 501 were introduced. Page H9566 Reports Filed: Reports were filed as follows: Revised Subdivision of Budget Totals for Fiscal Year 1997 (H. Rept. 104 727); H.R. 351, to amend the Voting Rights Act of 1965 to eliminate certain provisions relating to bi- lingual voting requirements, amended (H. Rept. 104 728); H. Res. 495, waiving points of order against the conference report to accompany H.R. 3734, to pro- vide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997 (H. Rept. 104 729); H. Res. 496, providing for consideration of H.R. 3603, making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs for the fiscal year ending September 30, 1997 (H. Rept. 104 730); H. Res. 497, providing for consideration of H.R. 3517, making appropriations for military construc- tion, family housing, and base realignment and clo- sure for the Department of Defense for the fiscal year ending September 30, 1997 (H. Rept. 104 731); H. Res. 498, providing for consideration of H.R. 3230, to authorize appropriations for fiscal year 1997 for military activities of the Department of Defense, to prescribe military personnel strengths for fiscal year 1997 (H. Rept. 104 732); Conference report on H.R. 3754, making appro- priations for the Legislative Branch for the fiscal year ending September 30, 1997 (H. Rept. 104 733); H. Res. 499, providing for consideration of H.R. 123, to amend title 4, United States Code, to declare English as the official language of the Government of the United States (H. Rept. 104 734); H. Res. 500, waiving a requirement of clause 4(b) of rule XI with respect to consideration of a certain resolution reported from the Committee on Rules (H. Rept. 104 735); and Conference report on H.R. 3103, to amend the Internal Revenue Code of 1986 to improve port- ability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings ac- counts, to improve access to long-term care services and coverage, and to simplify the administration of health insurance (H. Rept. 104 736). Pages H9473 H9564, H9565 66 Speaker Pro Tempore: Read a letter from the Speaker wherein he appointed Representative Hefley to act as Speaker pro tempore for today. Page H9379 Journal Vote: By a yea and nay vote of 302 yeas to 85 nays with 1 voting ”present”, Roll No. 373, the House agreed to the Speaker’s approval of the Journal of Tuesday, July 30. Pages H9379 80 Use of Exhibit: By a yea-and-nay vote of 386 yeas to 28 nays with 2 voting ”present”, Roll No. 374, agreed to permit the display of an exhibit by Rep- resentative Doggett. By a recorded vote of 232 ayes to 181 noes, Roll No. 375, agreed to the Castle mo- tion to table the Wise motion to reconsider the vote. Pages H9385 86 Motions to Adjourn: By a recorded vote of 76 ayes of 344 noes, Roll No. 376, rejected the Volkmer motion to adjourn. By a recorded vote of 57 ayes to 357 noes, Roll No. 377, rejected the Skaggs motion to adjourn. By a yea-and-nay vote of 50 yeas to 350 nays with 1 voting ”present”, Roll No. 378, rejected the Bonior motion to adjourn. Pages H9386 88 Use of Exhibit: By a yea-and-nay vote of 351 yeas to 53 nays with 2 voting ”present”, Roll No. 379, agreed to permit the display of an exhibit by Rep- resentative Ward. By a recorded vote of 239 ayes to CONGRESSIONAL RECORD \u2014 DAILY DIGEST D851July 31, 1996 172 noes, Roll No. 380, agreed to the Largent mo- tion to table the McDermott motion to reconsider the vote. Pages H9389 91 Personal Responsibility Act: By a yea-and-nay vote of 328 yeas to 101 nays, Roll No. 383, the House agreed to the conference report on H.R. 3734, to provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997. Pages H9392 H9424 H. Res. 495, the rule waiving points of order against consideration of the conference report was agreed to by a yea-and-nay vote of 281 yeas to 137 nays, Roll No. 382. Agreed to order the previous question by a yea-and-nay vote of 259 yeas to 164 nays, Roll No. 381. Earlier, agreed to H. Res. 492, waiving a requirement requiring a two-thirds vote to consider a rule on the same day it is reported from the Committee on Rules. Pages H9392 H9403 International Dolphin Conservation Program: By a recorded vote of 316 ayes to 108 noes, Roll No. 385, the House passed H.R. 2823, to amend the Marine Mammal Protection Act of 1972 to support the International Dolphin Conservation Program in the eastern tropical Pacific Ocean. Pages H9431 50 Agreed to the amendment in the nature of a sub- stitute made in order by the rule. Page H9438 42 Rejected the Stubbs amendment that sought to allow tuna destined for U.S. markets to be labeled safe for dolphins only if dolphins are not killed, chased, harassed, injured, or encircled with nets (re- jected by a recorded vote of 161 ayes to 260 noes, Roll No. 384). Pages H9442 49 H. Res. 489, the rule which provided consider- ation of the bill was agreed to earlier by a voice vote. Pages H9424 31 Presidential Veto Message\u2014Teamwork for Em- ployers and Managers: It was made in order that the veto message of the President, together with the accompanying bill, H.R. 743, to amend the Na- tional Labor Relations Act to allow labor manage- ment cooperative efforts that improve economic com- petitiveness in the United States to continue to thrive, be referred to the Committee on Economic and Educational Opportunities. Page H9450 Manzanar Historic Site: The House passed H.R. 3006, to provide for disposal of public lands in sup- port of the Manzanar Historic Site in the State of California. Pages H9452 54 Agreed to the committee amendment; and Page H9454 Agreed to amend the title. Page H9454 Japanese-American World War II Memorial: The House passed H.R. 2636, to transfer jurisdiction over certain parcels of Federal real property located in the District of Columbia. Pages H9454 55 Agreed to the committee amendment. Page H9455 Senate Messages: Messages received from the Senate today appear on pages H9380 and H9387. Quorum Calls\u2014Votes: Seven yea-and-nay votes and six recorded votes developed during the proceedings of the House today and appear on pages H9379 80, H9385, H9386, H9386 87, H9387 88, H9388, H9390, H9390 91, H9402, H9402 03, H9423 24, H9448 49, and H9449 50. There were no quorum calls. Recess: The House recessed at 11:02 p.m. and re- convened at 11:43 p.m. Page H9473 Adjournment: Met at 10 a.m. and adjourned at 11:44 p.m. Committee Meetings NATIONAL SOYBEAN CHECK-OFF PROGRAM Committee on Agriculture: Subcommittee on General Farm Commodities held a hearing to review the Na- tional Soybean Check-Off Program. Testimony was heard from Lon Hatamiya, Administrator, Agricul- tural Marketing Service, USDA; and public wit- nesses. REVISED SECTION 602(b) SUBDIVISION Committee on Appropriations: Approved a revised 602(b) Subdivision for fiscal year 1997. OVERSIGHT\u2014FANNIE MAE AND FREDDIE MAC Committee on Banking and Financial Services: Sub- committee on Capital Markets, Securities and Gov- ernment Sponsored Enterprises continued oversight hearings regarding Fannie Mae and Freddie Mac. Testimony was heard from Aida Alvarez, Director, Office of Federal Housing Enterprise Oversight, De- partment of Housing and Urban Development. Hearings continue tomorrow. 50 STATES COMMEMORATIVE COIN PROGRAM ACT Committee on Banking and Financial Services: Sub- committee on Domestic and International Monetary Policy approved for full Committee action amended H.R. 3793, 50 States Commemorative Coin Program Act. Prior to this action, the Subcommittee held a hearing on this legislation. Testimony was heard from public witnesses. CONGRESSIONAL RECORD \u2014 DAILY DIGESTD852 July 31, 1996 SOLID WASTE DISPOSAL ACT AMENDMENTS Committee on Commerce: Subcommittee on Commerce, Trade, and Hazardous Materials approved for full Committee action amended H.R. 3391, to amend the Solid Waste Disposal Act to require at least 85 percent of funds appropriated to the Environmental Protection Agency from the Leaking Underground Storage Tank Trust Fund to be distributed to States for cooperative agreements for undertaking corrective action and for enforcement of subtitle I of such Act. FDA INTEGRITY ISSUES Committee on Commerce: Subcommittee on Oversight and Investigations held a hearing on FDA Integrity Issues Raised by the Visx, Inc. Document Disclosure. Testimony was heard from public witnesses. DISTRICT OF COLUMBIA ECONOMIC RECOVERY ACT Committee on Government Reform and Oversight: Sub- committee on the District of Columbia held a hear- ing on H.R. 3244, District of Columbia Economic Recovery Act. Testimony was heard from Senator Lieberman; Speaker Gingrich; Thomas Ripy, Legisla- tive Attorney, American Law Division, Congressional Research Service, Library of Congress; and public witnesses. COMMITTEE BUSINESS Committee on House Oversight: Agreed to the introduc- tion of resolutions regarding the Office of Compli- ance Regulations. The Committee approved the following committee resolutions: regulations regarding official internet web sites; and regulations regarding Electronic Com- munications Security. The Committee also received the results of the 1995 House Audit and considered other pending Committee business. U.S. FOREIGN POLICY REVIEW Committee on International Relations: Held a hearing on Review of U.S. Foreign Policy. Testimony was heard from Warren Christopher, Secretary of State. REGULATORY FAIR WARNING ACT Committee on the Judiciary: Continued mark up of H.R. 3307, Regulatory Fair Warning Act. Will continue tomorrow. CONFERENCE REPORT\u2014PERSONAL RESPONSIBILITY ACT Committee on Rules: Granted, by a vote of 6 to 3, a rule waiving all points of order against the con- ference report on H.R. 3734, Personal Responsibility Act, and against its consideration. The rule provides that the conference report shall be considered as read. The yeas and nays are ordered on the adoption of the conference report and on any subsequent re- port or motion to dispose of an amendment between the Houses. The rule provides that the provisions of clause 5(c) of rule XXI (requiring a three-fifths vote on any tax rate increase) shall not apply to the bill, amendments thereto, or conference reports thereon. Testimony was heard from Chairman Kasich and Representatives Shaw, Sabo, Stenholm, Woolsey, Neal, Tanner, Becerra, and Mink. CONFERENCE REPORT\u2014NATIONAL DEFENSE Committee on Rules: Granted, by voice vote, a rule waiving all points of order against the conference re- port on H.R. 3230, National Defense Authorization Act, Fiscal Year 1997, and against its consideration. The rule provides that the conference report shall be considered as read. Testimony was heard from Chair- man Spence. CONFERENCE REPORT\u2014MILITARY CONSTRUCTION APPROPRIATIONS Committee on Rules: Granted, by voice vote, a rule waiving all points of order against the conference on H.R. 3517, making appropriations for military con- struction, family housing, and base realignment and closure for the Department of Defense for Fiscal Year 1997, and against its consideration. The rule pro- vides that the conference report shall be considered as read. Testimony was heard from Representatives Vucanovich and Hefner. CONFERENCE REPORT\u2014AGRICULTURE, RURAL DEVELOPMENT, FDA, AND RELATED AGENCIES APPROPRIATIONS Committee on Rules: Granted, by voice vote, a rule waiving all points of order against the conference re- port on H.R. 3603, making appropriations for Agri- culture, Rural Development, Food and Drug Admin- istration, and Related Agencies programs for the fis- cal year 1997, and against its consideration. The rule provides that the conference report shall be consid- ered as read. Testimony was heard from Representa- tive Skeen. ENGLISH LANGUAGE EMPOWERMENT ACT Committee on Rules: Granted, by voice vote, a modi- fied closed rule providing 1 hour of debate on H.R. 123, English Language Empowerment Act of 1996. The rule waives points of order against consideration of the bill for failure to comply with clause 2(l)(6) of rule XI (three day availability of committee re- ports). The rule makes in order an amendment in the na- ture of a substitute consisting of the text of H.R. CONGRESSIONAL RECORD \u2014 DAILY DIGEST D853July 31, 1996 3898 for further amendment purposes. The rule waives points of order against the amendment in the nature of a substitute for failure to comply with clause 7 of rule XVI (relating to germaneness). The rule provides for the consideration of the amendments printed in the report of the Committee on Rules only in the order specified; if offered by the Member designated in the report; debatable for the time specified in the report, equally divided and controlled by the proponent and an opponent; and which shall not be subject to amendment or a divi- sion of the question in the House or in the Commit- tee of the Whole. The rule waives all points of order against the amendment printed in the report. The rule authorizes the Chair to postpone and cluster votes on amendments. Finally, the rule pro- vides one motion to recommit, with or without in- structions. Testimony was heard from Representa- tives Cunningham, Canady, Martinez, Gene Green of Texas, Romero-Barcelo, Becerra, Jackson-Lee, Rich- ardson, Serrano, Underwood, and Velazquez. WAIVING 2\/3 VOTE REQUIREMENT Committee on Rules: Ordered reported, by voice vote, a resolution waiving clause 4(b) of rule XI (requiring 2\/3 vote to consider a rule on the same day it is re- ported from the Committee on Rules) against a reso- lution reported by the Rules Committee before Au- gust 2, 1996. The resolution applies the waiver to special rules providing for consideration or disposi- tion of a conference report to accompany H.R. 3103, Health Insurance Portability and Accountability Act. SPACE COMMERCIALIZATION PROMOTION ACT Committee on Science: Subcommittee on Space and Aer- onautics held a hearing on Space Commercialization Promotion Act of 1996. Testimony was heard from Lionel S. Johns, Associate Director, Technology, Of- fice of Science and Technology Policy; Spence M. Armstrong, Associate Director, Human Resources and Education, NASA; Robert Davis, Deputy Under Secretary, Space, Department of Defense; and public witnesses. SBA PROGRAMS TO ASSIST VETERANS Committee on Small Business: Subcommittee on Gov- ernment Programs and Subcommittee on Education, Training, Employment and Housing of the Commit- tee on Veterans’ Affairs held a joint hearing on SBA programs to assist veterans in readjusting to civilian life. Testimony was heard from Leon Bechet, Assist- ant Administrator, Veterans Affairs, SBA; and public witnesses. COMMITTEE BUSINESS Committee on Standards of Official Conduct: Met in ex- ecutive session to consider pending business. MISCELLANEOUS MEASURES Committee on Transportation and Infrastructure: Sub- committee on Public Buildings and Grounds ap- proved for full Committee action the following: H.R. 2062, amended, to designate the Health Care Financing Administration building under construc- tion at 7500 Security Boulevard, Baltimore, MD as the ”Helen Delich Bentley Building”; H.R. 3535, to redesignate a Federal building in Suitland, MD, as the ”W. Edwards Deming Federal Building”; H.R. 3576, amended, to designate the U.S. courthouse lo- cated at 401 South Michigan Street in South Bend, IN, as the ”Robert Kurtz Rodibaugh United States Courthouse”; H.R. 3710, amended, to designate a U.S. courthouse located in Tampa, FL, as the ”Sam M. Gibbons United States Courthouse”; 18 Repair and Alteration Resolutions; 1 Lease Resolution; and 2 11(b) Resolutions. REPLACING FEDERAL INCOME TAX\u2014 DOMESTIC MANUFACTURING AND ENERGY AND NATURAL RESOURCES Committee on Ways and Means: Continued hearings on the impact of replacing the Federal Income Tax, with emphasis on domestic manufacturing and on energy and natural resources. Testimony was heard from public witnesses. Joint Meetings BUDGET RECONCILIATION Conferees on Tuesday, July 30, agreed to file a con- ference report on the differences between the Senate- and House-passed versions of H.R. 3734, to provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997. NATIONAL DEFENSE AUTHORIZATION ACT Conferees on Tuesday, July 30, agreed to file a con- ference report on the differences between the Senate- and House-passed versions of H.R. 3230, to author- ize funds for fiscal year 1997 for military activities of the Department of Defense, for military construc- tion, and for defense activities of the Department of Energy, and to prescribe personnel strengths for such fiscal year for the Armed Forces. APPROPRIATIONS\u2014AGRICULTURE Conferees on Tuesday, July 30, agreed to file a con- ference report on the differences between the Senate- and House-passed versions of H.R. 3603, making CONGRESSIONAL RECORD \u2014 DAILY DIGESTD854 July 31, 1996 appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agen- cies programs for the fiscal year ending September 30, 1997. APPROPRIATIONS\u2014LEGISLATIVE BRANCH Conferees agreed to file a conference report on the dif- ferences between the Senate- and House-passed ver- sions of H.R. 3754, making appropriations for the Legislative Branch for the fiscal year ending Septem- ber 30, 1997. APPROPRIATIONS\u2014DISTRICT OF COLUMBIA Conferees met to resolve the differences between the Senate- and House-passed versions of H.R. 3845, making appropriations for the government of the District of Columbia and other activities chargeable in whole or in part against revenues of said District for the fiscal year ending September 30, 1997, but did not complete action thereon, and recessed subject to call. f NEW PUBLIC LAWS (For last listing of Public Laws, see DAILY DIGEST, p. D844) H.R. 2337, to amend the Internal Revenue Code of 1986 to provide for increased taxpayer protections. Signed July 30, 1996. (P.L. 104 168) BILL VETOED H.R. 743, to amend the National Labor Relations Act to allow labor management cooperative efforts that improve economic competitiveness in the Unit- ed States to continue to thrive. Vetoed July 30, 1996. f COMMITTEE MEETINGS FOR THURSDAY, AUGUST 1, 1996 (Committee meetings are open unless otherwise indicated) Senate Committee on Appropriations, business meeting, to mark up H.R. 3814, making appropriations for the Depart- ments of Commerce, Justice, and State, the Judiciary, and related agencies for the fiscal year ending September 30, 1997, 2 p.m., SD 192. Committee on Armed Services, to hold hearings to examine current U.S. participation in the NATO Implementation Force Mission in Bosnia, 10 a.m., SR 222. Committee on Commerce, Science, and Transportation, to hold hearings on aviation security challenges, 2 p.m., SR 253. Committee on Energy and Natural Resources, Subcommittee on Oversight and Investigations, to hold oversight hear- ings to review the propriety of a commercial lease issued by the Bureau of Land Management and Lake Havasu, Arizona, including its consistency with the Federal Land Policy and Management Act and Department of the Inte- rior land use policies, 9 a.m., SD 366. Full Committee, to hold oversight hearings on the im- plementation of Section 2001, Emergency Timber Sal- vage, of Public Law 104 19, 2 p.m., SD 366. Committee on Environment and Public Works, business meeting, to consider the nominations of Nils J. Diaz, of Florida, and Edward McGaffigan, Jr., of Virginia, each to be a Member of the Nuclear Regulatory Commission, time to be announced, S 216, Capitol. Committee on Foreign Relations, to hold hearings to re- view foreign policy issues, 10 a.m., SD 419. Committee on the Judiciary, business meeting, to mark up S. 1885, the Prosthetic Limb Access Act, S. 1952, Juve- nile Justice and Delinquency Prevention Act, S. 982, Na- tional Information Infrastructure Protection Act, and S.J. Res. 52, proposing an amendment to the Constitution of the United States to protect the rights of victims of crimes, 10 a.m., SD226. Select Committee on Intelligence, to hold hearings to exam- ine terrorism in the United States, 9:30 a.m., SH 216. NOTICE For a Listing of Senate Committee Meetings scheduled ahead, see page E1421 in today’s Record. House Committee on Agriculture, Subcommittee on Livestock, Dairy, and Poultry, hearing on the following bills: H.R. 3393, Family Pet Protection Act of 1996; and H.R. 3398, Pet Safety and Protection Act of 1996, 9:30 a.m., 1300 Longworth. Committee on Banking and Financial Services, Subcommit- tee on Capital Markets, Securities and Government Spon- sored Enterprises, to continue oversight hearings regard- ing Fannie Mae and Freddie Mac, 2 p.m., 2128 Rayburn. Committee on the Budget, to continue hearings on ”How Did We Get Here From There?” A Discussion of the Evolution of the Budget Process from 1974 to the Present, Part III, 10 a.m., 210 Cannon. Committee on Commerce, Subcommittee on Health and Environment, hearing on reauthorization of Existing Pub- lic Health Service Act Programs, 10 a.m., 2123 Rayburn. Committee on Economic and Educational Opportunities, to mark up the following measures: H.R. 3876, Juvenile Crime Control and Delinquency Prevention Act; H.R. 3863, Student Debt Reduction Act of 1996; and H. Res. 470, expressing the sense of the Congress that the De- partment of Education should play a more active role in monitoring and enforcing compliance with the provisions of the Higher Education Act of 1965 related to campus crime, 9:30 a.m., 2175 Rayburn. Committee on Government Reform and Oversight, hearing on Security of FBI Background Files, 9 a.m., 2154 Rayburn. Committee on International Relations, to mark up the fol- lowing: H. Res. 120, supporting the independence and sovereignty of Ukraine and the progress of its political and economic reforms; and H.R. 3916, to make available certain Voice of America and Radio Marti multilingual CONGRESSIONAL RECORD \u2014 DAILY DIGEST D855July 31, 1996 computer readable text and voice recordings, 10:30 a.m., 2172 Rayburn. Committee on the Judiciary, to continue mark up of H.R. 3307, Regulatory Fair Warning Act and H.R. 3565, Vio- lent Youth Crime Act of 1996, 10 a.m., 2141 Rayburn. Subcommittee on Immigration and Claims, oversight hearing regarding the possible shifting of refugee resettle- ment to private organizations, 8 a.m., 2237 Rayburn. Committee on Resources, to mark up the following bills: H.R. 3640, Torres-Martinez Desert Cahuilla Indians Claims Settlement Act; H.R. 3642, California Indian Land Claims Transfer Act; H.R. 2997, to establish certain criteria for administrative procedures to extend Federal recognition to certain Indian groups; H.R. 3671, United Houma Nation Recognition and Land Claims Settlement Act of 1996; H.R. 2591, Indian Federal Recognition Ad- ministrative Procedures Act of 1995; H.R. 3879, North- ern Mariana Islands Delegate Act; H.R. 2512, Crow Creek Sioux Tribe Infrastructure Development Trust Fund Act of 1996; H.R. 2710, Hoopa Valley Reservation South Boundary Correction Act; H.R. 3547, to provide for the conveyance of a parcel of real property in the Apache National Forest in the State of Arizona to the Al- pine Elementary School District 7 to be used for the con- struction of school facilities and related playing fields; H.R. 2693, to require the Secretary of Agriculture to make a minor adjustment in the exterior boundary of the Hells Canyon Wilderness in the States of Oregon and Idaho to exclude an established Forest Service road inad- vertently included in the wilderness; H.R. 1179 Histori- cally Black Colleges and Universities Historic Building Restoration and Preservation Act; H.R. 2392, to amend the Umatilla Basin Project Act to establish boundaries for irrigation districts within the Umatilla Basin; H.R. 3258, to direct the Secretary of the Interior to convey certain real property located within the Carlsbad Project in New Mexico to Carlsbad Irrigation District; S. 1467, Fort Peck Rural County Water Supply System Act of 1995; H.R. 3903, to require the Secretary of the Interior to sell the Sly Park Dam and Reservoir; H.R. 3910, Emergency Drought Relief Act of 1996; S. 811, Water Desaliniza- tion Research and Development Act of 1996; and H.R. 3828, Indian Child Welfare Act Amendments of 1996, 11 a.m., 1324 Longworth. Subcommittee on Fisheries, Wildlife and Oceans, over- sight hearing on the economic effects of the New Eng- land Groundfish Management Plan, 9 a.m., 1334 Long- worth. Subcommittee on Native American and Insular Affairs, hearing on H.R. 3595, to make available to the Santee Sioux Tribe of Nebraska its proportionate share of funds awarded in Docket 74 A to the Sioux Indian Tribe, 2 p.m., 1334 Longworth. Committee on Science, Subcommittee on Energy and Envi- ronment, hearing on funding Department of Energy Re- search and Development in a constrained Budget Envi- ronment, 10 a.m., 2318 Rayburn. Committee on Transportation and Infrastructure, to mark up the following: H.R. 2062, to designate the Health Care Financing Administration building under construc- tion at 7500 Security Boulevard, Baltimore, MD as the ”Helen Delich Bentley Building”; H.R. 3535, to redesig- nate a Federal building in Suitland, MD, as the ”W. Ed- wards Deming Federal Building”; H.R. 3576, to des- ignate the U.S. courthouse located at 401 South Michigan Street in South Bend, IN, as the ”Robert Kurtz Rodibaugh United States Courthouse”; H.R. 3710, to designate a U.S. courthouse located in Tampa, FL, as the ”Sam M. Gibbons United States Courthouse”; GSA Re- pair and Alteration and Lease Prospectuses; 11(b) Resolu- tions; and H.R. 3348, Snow Removal Policy Act of 1996, 9:30 a.m., 2167 Rayburn. Subcommittee on Aviation, hearing on H.R. 1309, to amend title 49, United States Code, to require the use of child safety restraint systems approved by the Secretary of Transportation on commercial aircraft, following full Committee markup, 2167 Rayburn. Subcommittee on Public Buildings and Economic De- velopment, hearing on the oversight of NEXCOM Lease, 1 p.m., 2253 Rayburn. Committee on Ways and Means, Subcommittee on Trade, to continue hearings on the Status and Future Direction of U.S. Trade Policy, with emphasis on U.S. Trade with Sub-Saharan Africa, 10 a.m., 1100 Longworth. Permanent Select Committee on Intelligence, executive hear- ing on Bosnia\/Iran Arms, 11 a.m., H 405 Capitol. CONGRESSIONAL RECORD \u2014 DAILY DIGEST Congressional Record The public proceedings of each House of Congress, as reported bythe Official Reporters thereof, are printed pursuant to directions of the Joint Committee on Printing as authorized by appropriate provisions of Title 44, United States Code, and published for each day that one or both Houses are in session, excepting very infrequent instances when two or more unusually small consecutive issues are printed at one time. \u00b6 Public access to the Congressional Record is available online through GPO Access, a service of the Government Printing Office, free of charge to the user. The online database is updated each day the Congressional Record is published. The database includes both text and graphics from the beginning of the 103d Congress, 2d session (January 1994) forward. It is available on the Wide Area Information Server (WAIS) through the Internet and via asynchronous dial-in. Internet users can access the database by using the World Wide Web; the Superintendent of Documents home page address is http:\/\/www.access.gpo.gov\/suldocs, by using local WAIS client software or by telnet to swais.access.gpo.gov, then login as guest (no password required). Dial-in users should use communications software and modem to call (202) 512 1661; type swais, then login as guest (no password required). For general information about GPO Access, contact the GPO Access User Support Team by sending Internet e-mail to
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