[Pages S5571-S5600]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

Ms. MIKULSKI. Mr. President, I am honored to join my good friends
Senators Snowe, Boxer, Feinstein, Murray, and Mosely-Braun in
introducing the Women's Health Equity Act. This years' bill, composed
of 37 separate bills, will improve the status of women's health in the
areas of research, services and prevention. The package builds on past
successes. It brings resources and expertise to bear on the unmet
health needs of America's women. This bill sets an agenda. It's where
women's health care needs to go as we enter the 21st century.
There has been a pattern of neglect and a history of indifference to
women's health needs. It's astonishing that between 1979 and 1986 the
death rate from breast cancer was up 24 percent. No one knew why. Yet
there was no research being done--the research community was ignoring
this very significant problem. I worked with colleagues to change that
by making sure that breast cancer research got its fair share of
research dollars.
I was frustrated when I found out that America's flagship medical
research center, the National Institutes of Health [NIH], was
supporting research that systematically excluded women. Less than a
decade ago, only 14 percent of every research dollar was going to study
the health problems of 51 percent of the American population. I wanted
to change that. And I did. With the help of my colleagues, I was
successful in setting up the Office of Women's Health Research at NIH.
This office is turning these statistics around. Women are now routinely
included in clinical trials.

[[Page S5572]]

Despite all our progress, we have a long way to go. We have to change
outdated attitudes. It's not easy to reverse gender biases. We take a
few steps forward and then a few steps back.
I want to make sure that women's health care needs are met
comprehensively and equitably. The NIH must allocate sufficient
resources to women's diseases. It should continue to include women in
clinical trials. It must continue to expand access to health services
for women. We must aggressively pursue prevention in women's diseases.
I pledge to fight for new attitudes and find new ways to end the
needless pain and death that too many American women face.
I am proud to introduce this bill with a great group of Senators that
care equally about women's health. This bill confirms our intent to
move forward in women's health equity. It is an outline, a framework,
an agenda. No doubt, it will take time, but I'm sure we will succeed.
Mrs. MURRAY. Mr. President, I rise in strong support of the Women's
Health Equity Act. I am proud to join my colleagues, Senators Snowe,
Mikulski, Feinstein, and Moseley-Braun, in offering this package of 39
legislative initiatives of critical importance to the health of women
and their children. Today we are sending a powerful and united message.
We are more committed than ever to keeping the spotlight on the
important issues surrounding women's health research, treatment and
education.
There are so many worthy pieces to this bill that I won't go into
each and every one separately. This bill underscores the lack of
attention that has been paid to women's health issues and the many
obstacles we face in getting accurate, vital information about our
health, the health of our children and the health care system as it
effects us.
Women face an array of unique and serious health risks. We must do
more to ensure that adequate research and education programs are
maintained, supported and enriched. We have much more to learn about
diseases like osteoporosis, lupus, and breast cancer that devastate the
lives of women across this country. And we need to continue to broaden
the scope of current efforts in research into AIDS, cardiovascular
disease and alcoholism to better understand how women are impacted. We
must enable women to protect themselves and their daughters.
Mr. President, our bill recognizes the need for supporting this kind
of research and specifically addresses all of these conditions which
jeopardize the health of women. We must encourage a coordinated and
committed effort from the top level of our government to make sure that
women's health issues receive the attention they deserve. For too long,
our concerns were ignored or given second-class status. If we continue
to allow this to happen--women will die, our children will get sick,
and future generations will be shortchanged of valuable information
about ways to prevent health-related tragedies.
And our bill acknowledges another critical health issue which
disproportionately affects women--domestic violence. The Women's Health
Equity Act includes a number of provisions which seek to protect women
who are victims of violence from being discriminated against when
seeking health insurance. Family violence is a public health crisis
which tears families apart and often prevents women, especially low-
income women, from providing their children with a safe, nurturing
environment in which to learn and grow.
As you know Mr. President, one of my biggest concerns as a Senator is
the well being of our Nation's young people. I am proud that this bill
includes provisions which encourage: adolescent health demonstration
projects; eating disorders research and education initiatives; fetal
alcohol syndrome research and prevention programs; and demonstration
projects to prevent smoking in WIC clinics. These efforts are critical
and send our young people an important message that we care about them,
their health, and their futures.
I am particularly pleased that the Newborns' and Mothers' Health
Protection Act was included in this act. By allowing longer hospital
stays after child-birth, we will see improved health for both mother
and baby. Women will receive essential information about care for their
newborn and if there are any health complications, mother and baby will
receive the attention they need.
Mr. President, I want to commend Senator Snowe for her leadership in
coordinating this effort and for all she has done for women's health
and health care. I am proud to be an original cosponsor of this bill
and I urge all of my colleagues to join and help move these initiatives
forward. Together, we can improve the lives and health of women and
children in our Nation, continue the important work we have started and
celebrate the great strides we have made. I look forward to this
challenge.
______

By Mr. D'AMATO (for himself, Mr. Kerry, Mrs. Boxer, Mr. Bryan,
Ms. Moseley-Braun, and Mrs. Murray):
S. 1800. A bill to amend the Electronic Fund Transfer Act to limit
fees charged by financial institutions for the use of automatic teller
machines, and for other purposes; to the Committee on Banking, Housing,
and Urban Affairs.

the fair atm fees for consumers act of 1996

Mr. D'AMATO. Mr. President, I rise today with Senators Kerry and
Murray as my primary cosponsor to introduce legislation to protect
consumers from excessive and redundant fees imposed by automated teller
machine (ATM) operators. I am also pleased that Senators Boxer, Bryan,
and Moseley-Braun have joined in cosponsoring this important
initiative.
Traditionally, a bank or financial institution, let's call it
Integrity Bank, agrees to provide a consumer with a package of services
in exchange for the use of the consumer's money. These services
typically include access to an ATM network, such as MOST, CIRRUS, or
PLUS, which consists of any Integrity Bank ATM's as well as ATM's
operated by other banks or financial institutions. Integrity Bank and
the consumer have an agreement about whether Integrity Bank will charge
the consumer for using ATM's not owned by Integrity Bank. Integrity
Bank, in turn, is responsible for paying the network a fee for
transactions completed by its consumers on ATM's not owned by Integrity
Bank.
Changes which took effect in April of this year may force the
consumer to pay new fees. Until April 1, the major electronic banking
networks prohibited the assessment of ATM user fees by the bank which
owned the ATM. The networks have revoked this policy, opening the door
to a new and outrageous practice beyond the control of Integrity Bank
and its customer. Now, despite the fact that Integrity Bank pays fees
to the ATM network, ATM owners and operators can now charge non-
customers who use their ATM's--a service that consumers thought was
included in any charges imposed by Integrity Bank--their bank.
Now many ATM users may be caught in the middle. Their own banks can
continue to impose fees while the operators of the ATM's they use are
entitled to ransack consumers' accounts. What is next, explicit and
redundant fees for deposit envelopes? A nighttime ATM surcharge? I will
refrain from offering banks any further suggestions on how to pick the
pockets of American consumers.
Mr. President, this double-dipping is unfair and unconscionable.
Consumers should not be charged twice for a single ATM transaction and
should certainly not be charged a fee which has nothing to do with the
relationship between the consumer and his or her financial institution.
Banks and other financial service providers argue that these
surcharges are necessary to cover the costs of ATM operation. In-branch
ATM's present minimal expense to financial institutions. How can banks
argue with straight faces that surcharges are necessary to cover costs
of operation?
Mr. President, the rules change which permits this extra fee was
enacted only recently. While some banks have already imposed the
surcharge, many others are testing the waters before they take
advantage of the rule change. Congress should act before this unfair
practice spreads like a wildfire.
It is hard to believe that banks are so strapped when industry
profits have never been higher. For the fourth straight year in 1995,
commercial banks reported record earnings. Last year, commercial banks
reported profits of $48.8 billion, exceeding the previous year's record
of $44.6 billion by

[[Page S5573]]

9.4 percent. These skyrocketing earnings are primarily the result of
increased interest and fee income. On top of this, commercial banks now
pay nearly nothing to receive deposit insurance.
Are banks really losing money on ATM operations or is this new fee
just an easy way to gouge the consumer? The U.S. Public Interest
Research Group and the Center for the Responsive Law recently reported
that ATM's generated $3.1 billion in transaction fees for banks in
1995. Though ATM transactions cost banks $3.2 billion, the report said,
profits increased by $2.2 billion as a result of the labor savings.
This new ATM surcharge is nothing more than a thinly veiled attempt to
artificially inflate profits at the consumer's expense.
Banks have spent the past 20 years enticing consumers to use ATMs to
reduce the need for branch offices. Banks have told regulators and the
Congress that branch closings save money without decreasing service
because ATM's fill the role once served by branch offices. Now it
appears providing that service comes only with an added cost to the
consumer and more profit for the provider.
Let me just say a few words about the impact of this fee on community
banks. These banks have already agreed to pay fees to ATM networks in
order to ensure that their customers have access to funds at convenient
locations. Now community banks face the threat of losing customers to
large banks with large ATM networks. Since community bank customers
depend on other institutions' ATM's, large banks can use ATM user fees
to steal community bank customers.
This moves comes at a time when some banks are charging their
customers a premium for teller service. These banks justify this teller
fee with claims that teller service is more expensive to provide than
ATM service. Now, some banks are squeezing consumers even harder with
new ATM user fees. Consumers are getting nickel-and-dimed to death and
it has got to stop.
Mr. President, the bill I introduce today would prohibit user fees
imposed by ATM operators. Under this bill, for example, banks would
remain free to charge their own customers for using the ATM's of other
banks. Other ATM owners and operators, however, would be prohibited
from taking a second bite out of the consumer.
There is congressional precedent for this type of legislation.
Congress originally passed legislation banning surcharges in the credit
card industry in 1976 and renewed the ban twice in 1978 and 1981. In
that instance, Congress prohibited retail institutions from charging
consumers surcharges on their credit card purchases. To allow
additional charges and fees for card use after the consumer had paid
for the use of the credit card would have forced customers to pay twice
and permitted some unscrupulous merchant to engage in deceptive
advertising and other harmful practices. This is analogous to our
current ATM situation.
I understand that some businesses that rely on retail sales through
credit and ATM cards may be concerned about this bill. They need not
worry. The sole purpose of this legislation is to prohibit excessive
fees to ATM users. I recognize that there may be some off-site ATM's
that are costly to maintain and have historically charged fees. I am
willing to consider necessary accommodations to this bill. However, I
will draw the line in cases where it is clear the consumer is being
fleeced.
Mr. KERRY. Mr. President, I am pleased to join my colleague from New
York, the chairman of the Banking Committee, Senator D'Amato, in
introducing this important piece of legislation.
It is not often that Senator D'Amato and I agree on issues on this
floor or in the Banking Committee, and when we do, there is
justification for strong bi-partisan support. That is indeed the case
on this legislation, and I am pleased to join with my colleague, and I
congratulate him on his leadership in moving to protect consumers
against the potential of double-bank-fees that amount to a banking-
penalty tax on consumers.
Why do we need this legislation now? Because, on April 1 of this
year, American depositors had a cruel April Fool's joke played on them.
That's the day Visa and MasterCard--owners of two of the largest
automated teller network--began letting their member banks charge a fee
to other banks' customers who use their automated tellers. Some banking
analysts tell me that across the country this surcharge can range from
50 cents to $2.50. Consumers can be charged an increased fee by both
their bank and the bank whose machine they are using which could cost
as much as $5 to make a deposit, a withdrawal, or to check your
balance.
Our legislation has a simple purpose: it prohibits a transaction fee
assessed by the owner or operator of an ATM machine. This bill will
stop double fees.
It gives consumers negotiating power with a financial services
industry which is consolidating and downsizing--laying off tellers,
shutting branches and reducing bank-lobby hours; it helps the small
banker from being run out of business by the big banks; and it bolsters
congressional oversight of antitrust violations.
Mr. President, Massachusetts is in a unique situation. Because of
pending bank mergers and consolidations the 2 largest banks will soon
own 2,200 of the 3,500 ATM machines in the State--about 65 percent.
In no other State does one bank control more than 15 percent of the
ATM's. I applaud the banking industry which has grown and is healthy
and strong, and there is room in financial services for large
institutions and for small credit unions and neighborhood savings and
loans. This bill not only protects consumers, but it protects small
banks that don't own more than a few ATM's from being run out of
business by the larger banks who can offer free transactions at
thousands of machines.
Let me put this in perspective. In a survey of just 228 of the 3,500
machines in my State--less than 10 percent of all the machines--it was
reported that 400,742 transactions per month would be subject to the
new surcharge--almost 5 million transactions per year at just 10
percent of the ATM's in my State.
If the larger financial institutions could offer no fee if a consumer
took their money out of a smaller institution, the fate of the smaller
institutions in an increasingly automated environment is obviously in
question, and we have to address this problem now. And to save the
community banks and avoid the 1990's version of the 1980's S&L crisis.
Mr. President, in a recent USA Today interview with an executive of
one of the Nation's largest banks, when asked ``are you instituting
surcharges on non-customers who use your automated teller machines?''
the answer was somewhat disturbing.
It was:

We're going to do it . . . The reason is frankly pretty
self-evident. You've got a community bank that likes to tell
you they're going to give you this wonderful service and you
can shake the President's hand and get a doughnut and a cup
of coffee in the lobby and so on. When you go in to open an
account they say we don't have any ATM's but don't worry
about it, here's our card and you can use anybody's ATM in
the country. So we're subsidizing the community banks. We're
not going to do that anymore.

Well, Mr. President, I ask, what's wrong with community banks. I like
the idea of neighborhood credit unions and having a cup of coffee and a
doughnut in the lobby. What this response tells me is that there is
more to the surcharge than meets the eye. And we should be aware of the
what lies around the corner as we head down the road.
You will hear from representatives of the industry, Mr. President.
Some of the biggest banks will lobby heavily saying that this fee is an
issue of convenience. But I suspect that other forces are at play.
Commercial banks posted record profits last year. This new fee is not
designed to raise profits.
Yet, community and cooperative bankers will tell you a different
story--a constituent of mine in Dorchester, MA, owns a profitable bank
with one ATM machine. He runs the bank well and serves the community.
But he is no match against far bigger competitors. He knows that once
these surcharges become pervasive and the big banks start charging his
customers to use their ATM's, they will just move their accounts to the
big banks to avoid the charge.
So, this is not an issue of establishing prices and fees; this is an
antitrust issue. I want to set the marker down clearly--the Congress
needs to do a

[[Page S5574]]

better job in monitoring and preventing the trend of consolidation from
running the smaller banks out of business.
I want to be clear about what else this bill does, and what it does
not do. This legislation does not regulate fees and prices, and does
not curtail the widespread use of ATM's especially in lower income
areas.
Mr. President, I do not believe that it is the business of the U.S.
Senate to set prices and fees at banks and other financial
institutions. I am a great believer in the free market--not the Federal
Government--dictating fee structures. But there is a general sense of
fairness that is being violated in this new surcharge.
When a depositor opens an account, he or she knows the fees
associated with transactions. It is current Federal law--found in
statutes like the Electronic Funds Transfer Act, the Truth-in-Savings
Act and the Truth-in-Lending Act--that mandates fees to be disclosed to
the consumer. So, when we open a bank account, we will know how much
each transaction will cost.
But now, with this new surcharge, we are left in the dark. We don't
find out how much it will cost to use an ATM machine, not associated
with our particular bank, until our statement appears in the mail, long
after the ATM transaction is completed.
That is bad for consumers and it is bad precedent. And the trend is
not favorable. Historic mergers, consolidations and acquisitions have
taken place in financial service industry. Consumers have less choice,
not more. Bank lobby hours have been curtailed so drastically, tellers
replaced by machines, that we are forced to use ATM's. This is the
direction of the industry and at some point the Congress must step in
and let the banks know enough is enough.
Thank you and I yield the floor.
______

By Mr. McCAIN:
S. 1801. A bill to amend title 49, United States Code, to authorize
appropriations for the Federal Aviation Administration for fiscal year
1997, to reform the Federal Aviation Administration, and for other
purposes; to the Committee on Commerce, Science, and Transportation.

THE OMNIBUS AVIATION ACT OF 1996

Mr. McCAIN. Mr. President, today, I am introducing the Omnibus
Aviation Act of 1996. This legislation reauthorizes for one year
several key programs of the Federal Aviation Administration, including
the vital Airport Improvement Program. It also provides needed,
comprehensive FAA reform, including the development of a stable, long-
term funding system for the FAA, and addresses other critical safety
and airport concerns. Specifically, this legislation would:
Reauthorize AIP at $1.8 billion for one year;
Expand the prohibition on airport revenue diversion;
Provide for thorough reform of the FAA;
Encourage Congress to meet the FAA's short-term funding needs;
Enhance airline safety by requiring airlines to share employment and
performance records before hiring new pilots; and
Abolish the MWAA Board of Review.
Significantly, this bill expresses the sense of the Senate that
Congress must act immediately to address the short-term funding needs
of the FAA. Mr. President, we have all heard by now that certain
aviation excise taxes that make up most of the Airport and Airway Trust
Fund, which provides nearly all of the FAA's funding, expired at the
end of last year. Since then, no money has been going into the aviation
trust fund. Yet, the FAA has determined that since the beginning of
this year, approximately half a billion dollars has been spent each
month from the existing trust fund balance. The FAA advises that at
this rate, all of the money in the trust fund will be spent by
December. Without immediate action by Congress to provide interim,
short-term funding for the FAA, confidence in the FAA and our nation's
air traffic control system could erode.
The legislation that I am introducing today not only encourages quick
resolution of the FAA's immediate funding problem, but also sets out a
plan for complete FAA reform. In specific, this bill incorporates the
Air Traffic Management System Performance Improvement Act, which I have
cosponsored with Senator Ford and Senator Hollings, to create a more
autonomous and accountable FAA that can continue to ensure the safety
of the traveling public while, at the same time, meet the needs of the
growing aviation industry.
This FAA reform measure is particularly important because while the
interim, short-term funding is in place and during the one-year
reauthorization of FAA programs, the FAA will be able to set up a
performance-based fee system to satisfy the FAA's long-term funding
needs. This FAA reform proposal would ensure that the new FAA funding
system must consider the FAA's costs of providing air traffic control
services and must increase the efficiency with which air traffic
control services are produced or used, without jeopardizing safety.
The existing aviation excise tax system does not enable the FAA to
determine whether the air traffic control system is becoming more or
less costly per flight, or whether air traffic control system
productivity is increasing or decreasing. By contrast, establishing a
user fee funding system under this bill would compel the FAA to
establish a cost accounting system, which would enable it to determine
the efficiency and costs of the FAA and the air traffic control system,
and develop investment and modernization programs that are viable.

This legislation also addresses other critical aviation issues.
First, it contains provisions intended to reverse the disturbing trend
of illegal diversion of airport revenues. To ensure that airport
revenues are used only for airport purposes, this legislation would
expand the prohibition on revenue diversion to cover more instances of
diversion. It also would establish clear penalties and stronger
mechanisms to enforce Federal laws prohibiting revenue diversion. In
addition, the bill would impose additional reporting requirements so
that illegal revenue diversion is easily identified and verified. It
also would provide important protections for whistleblowers.
To enhance the safety of the Nation's air transportation system, this
legislation also contains provisions that would require air carriers to
request and receive, after obtaining written consent from a pilot
application, relevant employment and performance records before hiring
someone as a pilot. These provisions focus on encouraging and
facilitating the flow of information between employers so that safety
is not compromised in any way.
To ensure that the burden of these pilot recordsharing provisions
does not fall on employers and the legal system, when a transfer is
requested and complied with, both the employer who turns over the
requested records and the prospective employer who receives them will
be immune from lawsuits related to the transferred information, unless
the employer who provides the information knows it is false. Complete
immunity is critical--without it, the airlines simply will not share
records. The legislation therefore could not achieve its objective of
making it a common practice of prospective employers to research to the
greatest extent the experience of pilots, and to learn significant
information that could affect air carrier hiring decisions and,
ultimately, airline safety.
Finally, this legislation makes certain changes to the Metropolitan
Washington Airports Authority required following recent Federal court
rulings. In specific, the bill would abolish the MWAA Board of Review,
and increase the number of presidentially appointed members of the MWAA
Board of Directors. It also conveys the sense of the Senate that the
MWAA should not provide free, reserved parking areas at either
Washington National Airport or Washington Dulles International Airport
for Members of Congress and other government officials or diplomats.
Mr. President, certain unfortunate, recent events have raised
questions about the safety of our nation's air transportation system.
We must do our part to reassure the traveling public that we have the
world's safest system. This comprehensive legislation will go a long
way in reassuring the public that the system is safe, and will provide
the FAA with a stable, predictable, and sufficient funding stream for
the long term.

[[Page S5575]]

______
By Mr. THOMAS (for himself and Mr. SIMPSON):
S. 1802. A bill to direct the Secretary of the Interior to convey
certain property containing a fish and wildlife facility to the State
of Wyoming, and for other purposes; to the Committee on Environment and
Public Works.

Ranch a Crook County, Wyoming Legislation

Mr. THOMAS. Mr. President, I rise today along with my colleague from
Wyoming, Senator Simpson, to introduce legislation to protect public
land in our State. This bill would transfer 680 acres of land currently
administered by the United States Fish and Wildlife Service to the
State of Wyoming. This property commonly known as Ranch A is located in
Crook County, WY, and is scheduled to be disposed of by the General
Services Administration in the coming months. Since the area is unique
and possesses many historic and distinctive characteristics, the State
of Wyoming would like to have the property transferred to it so that
the property and facilities on the land can be preserved for the public
for many years to come.
The Ranch A lodge, which sits on 680 acres of property, was
constructed by a private developer in the 1930's and acquired by the
U.S. Fish and Wildlife Service in 1963. Since the area has an abundant
supply of spring-fed water, it is ideal for trout research and the
study of trout genetics. The Fish and Wildlife Service continued its
research operations at Ranch A until 1980 when all of the agency's
trout research work was transferred to Bozeman, MT. Since that time,
the Service has maintained the facility but has leased the area to a
variety of groups including the Wyoming Game and Fish Department and
the South Dakota School of Mines.
Although the area has significant historical and cultural values, in
1995 the Department of Interior took action to divest itself of
ownership of Ranch A. Recently, the Fish and Wildlife Service declared
the property as ``surplus'' and is planning to dispose of Ranch A
through the General Services Administration. No formal action has been
taken on the disposal request and the property is still owned and
maintained by the Fish and Wildlife Service.
The State of Wyoming is interested in protecting Ranch A and working
to ensure the area is protected for future generations. Earlier this
year, the Wyoming congressional delegation was approached by Gov. Jim
Geringer and asked if we could introduce legislation to have the
property transferred to the State of Wyoming. The State is willing to
assume ownership of the area and maintain the facility and the adjacent
land for educational, historical and wildlife management purposes.
The legislation I am introducing today would achieve that goal. The
bill would transfer all right and title of the 680 acres and all
buildings on the Ranch A property to the State of Wyoming. The State
would assume control of the property and would be required to manage
the area for public purposes including fish and wildlife management,
education and historical uses. In order to ensure the area remains
public, the legislation contains a reverter clause that requires the
State of Wyoming to manage the property for public uses or it would be
transferred back to Federal ownership.
The bill is the product of long negotiations between the State of
Wyoming and the Fish and Wildlife Service. Initially, the State would
only accept the land if Federal funds were authorized to refurbish the
area. However, by working with the State, the Federal Government and
local officials, we have been able to craft a compromise that does not
require any Federal expenditures and keeps the land public.
Mr. President, the Ranch A property is a truly unique facility that
should be kept in public ownership. The area has significant historic
and cultural value in addition to its wildlife and research
opportunities. Keeping the area clean and pure is a goal of the
residents in the region who hope to preserve the beauty of the facility
and surrounding land for future generations to enjoy. The State of
Wyoming is willing to take on the responsibility of protecting this
wonderful property and I strongly support their efforts to ensure that
Ranch A is protected for many years to come.
Instead of allowing the Federal Government to dispose of this unique
property that has such a variety of uses, I urge Congress to take
action and allow the State of Wyoming to protect Ranch A. The choice is
clear--either we pass this bill and keep the area open to the public,
or we allow the Federal Government to move forward and dispose of the
land into private ownership. I hope we can move quickly to support this
outstanding area and pass this legislation in the near future.
______

By Mr. MURKOWSKI (for himself, Mr. Johnston and Mr. Akaka):
S. 1804. A bill to make technical and other changes to the laws
dealing with the territories and freely associated States of the United
States; to the Committee on Energy and Natural Resources.

Territories and Freely Associated States Legislation

Mr. MURKOWSKI. Mr. President, today I am introducing legislation that
will address several concerns that were brought to my attention by the
leadership in some of the United States territories and in the nations
in free association with the United States. I am pleased that this
legislation is cosponsored by the Ranking Member and former Chairman of
the Committee on Energy and Natural Resources, Senator Johnston, as
well as by Senator Akaka, who has also had a long and abiding interest
in the welfare of the territories and freely associated States.
During the February recess, I had the opportunity to meet with the
chief executives of the United States territories of American Samoa,
Guam, and the Commonwealth of the Northern Mariana Islands as well as
the Presidents of the Republic of Palau, the Republic of the Marshall
Islands, and the Federated States of Micronesia. I want to express my
appreciation to all of them for their courtesies and their willingness
to meet with Senator Akaka and myself and for their assistance in
arranging full and frank discussions.
I was impressed by the diversity within the Pacific and the magnitude
of the problems facing these island governments. I have some
appreciation for their problems in dealing with Washington because I
can recall the days of territorial administration for Alaska. I was
also able to point out that Statehood is not a complete remedy for
those who still think Alaska is their private reserve. Alaska, like the
islands, is noncontiguous and must deal with standards developed for
the lower 48 States. We have the problem of servicing small remote
populations, much like the Republic of the Marshalls and the Federated
States of Micronesia have.
The legislation that I am introducing today would address the
following issues:
Section 1 extends the supplemental food assistance program for
Enewetak and Bikini for an additional 5 years. Enewetak and Bikini were
the sites for the United States atmospheric nuclear testing program in
the Marshall Islands and the food assistance program is necessary to
supplement local food supplies while the populations resettle their
atolls. The difficulty that Enewetak has experienced in establishing a
local food supply should be ample warning to the population of Bikini
of the environmental consequences of a scrape, and I sincerely hope
that we can avoid that environmental degradation. While Enewetak is
making significant strides in reestablishing a local food supply, it is
clear that a continuation of the agriculture assistance is needed. The
language would also require the United States to ensure that the
program is designed to meet the actual needs of the populations. I
understand that the program is running at the same level as it did 10
years ago without taking into account the change in population.

A concern was also raised over the medical care and monitoring
program that the Department of Energy runs in the Northern Marshalls.
At the same time that I am introducing this legislation, I am also
introducing an amendment that would extend the program to Bikini and
Enewetak. While I do not want to jeopardize the effectiveness of the
program for the affected populations of Rongelap and Utirik, I also
want to ensure that the objectives of the four atoll program are being
met. This language will also provide the Committee with an opportunity
to review the administration of the program

[[Page S5576]]

since it was shifted out of defense programs and into environmental
health within DOE. I appreciate that the four atoll health program was
to be administered by the Tribunal established under the Compact of
Free Association, but I am also mindful of the special responsibility
that the United States has for the populations of the four affected
atolls. Under the terms of the Compact, we authorized further ex gratia
assistance if justified, and I think it is time for the Committee on
Energy and Natural Resources to examine how the programs--those being
provided by the Republic of the Marshall Islands and those provided by
the United States--are being implemented. I was very impressed by my
visit to Bikini and am grateful for the courtesies and hospitality
extended by the Mayor, the Council, and Senator Balos. During the
hearings on this legislation, I also want to examine what role the
Public Health Service can play in improving health care not only to the
four atolls, but throughout the Republic of the Marshall Islands and
also to the Federated States of Micronesia and the Republic of Palau. I
again want to emphasize that in no way do I want to jeopardize the
overriding objective of the health care being provided by Brookhaven to
the 133 exposed Marshallese, but I do not want to pass over the
opportunity to see if the populations of Bikini and Enewetak could
bootstrap onto the program using their trust funds.
Section 2 of the legislation would repeal a provision of law that
authorizes the government of the Commonwealth of the Northern Mariana
Islands to take over the American Memorial Park in Saipan. Senator
Akaka and I participated in a wreath laying at the park, and I was
impressed with the development of the area, especially in light of
staff descriptions of the site only a few short years ago. Ambassador
Haydn Williams deserves a great deal of credit for his persistence and
commitment to seeing the park established. While I am not opposed to
proposals for other arrangements, it seems to me that the area is now a
part of the National Park System and should remain so until the lease
expires unless some concrete proposal is brought forward that will
maintain the objectives and purposes for the memorial. I fully expect
that we will need to modify this provision to permit the commonwealth
the ability to develop the marina area, but at least for the time
being, I think the National Park Service should continue to operate and
maintain the memorial.

Section 3 is a technical amendment to the legislation dealing with
the land grant status of the College of Micronesia and was brought to
my attention by Susan Moses, the president of the college. The
amendment would provide separate land grant status to the three
successor institutions to the former College of Micronesia--the College
of Micronesia--FSM, the College of the Marshall Islands, and the Palau
Community College. This amendment will hopefully eliminate some
administrative headaches for the college.
Section 4 amends the Guam Organic Act to guarantee that any lands
acquired by the United States for Federal purposes will be made
available to the Government of Guam when those purposes have expired.
The Federal Government, principally the Department of Defense, controls
about one-third of the available land area in Guam. Those lands were
acquired for defense needs, and when those needs no longer exist, the
lands should be returned to Guam. I was particularly troubled by the
situation at Ritidian Point where the Fish and Wildlife Service,
seemingly in the dead of night, effectively stole land that the
Department of Defense and the Government of Guam had negotiated for
transfer. Whatever the justification for Fish and Wildlife's interest,
there is no excuse for the insensitivity shown by the Department of the
Interior in that acquisition. Rather than spending their time enlarging
their empire, the Fish and Wildlife Service could make better use of
their resources by going after the brown tree snake. At the rate they
are going, they will have the only wildlife refuge dedicated to extinct
species. I especially want to thank Congressman Underwood for his
assistance in developing this approach to guarantee a role for the
Government of Guam in any further Federal land disposal in Guam. The
Governor of Guam made an excellent presentation of the problems created
by the actions of the Fish and Wildlife Service and I think this is a
situation that needs to be addressed and I am grateful for the
comprehensive briefing he provided us during our brief visit to Guam.

Section 5 would repeal a provision of law that limits the use of
lands transferred to Guam. Again, I want to thank Congressman Underwood
for suggesting this amendment. I cannot think of any restriction more
onerous than transferring property for which the Federal Government has
no further need and then denying the Government of Guam the ability to
derive the economic benefits of its use and development.
Section 6 was suggested by the Resident Representative of the
Commonwealth of the Northern Mariana Islands and would provide State-
like treatment for the commonwealth, the Virgin Islands, and American
Samoa for certain drug enforcement programs. Guam and Puerto Rico
presently have State-like treatment, and this amendment simply provides
uniform treatment for all the territories.
Section 7 of the legislation would amend the Revised Organic Act of
the Virgin Islands at the request of the Governor of the Virgin
Islands. The first amendment would provide that the Governor would
retain his powers as Governor when he is temporarily absent from the
territory on official business. This amendment recognizes that with
modern communications and transportation, the current limitations are
archaic and impede continuity in the operations of the executive branch
in the Virgin Islands.
The second amendment would reform the authority granted to the Virgin
Islands in 1976 to issue bonds secured by the matching fund. The debt
is now priority debt, not parity debt. Priority debt places a premium
value on the earliest debt, while parity debt places all bond holders
on a level playing field. Although most communities now issue parity
debt, the current limitation handicaps the Virgin Islands by requiring
a higher fee and interest rate on subsequent issues as well as over
collateralization. The amendment would permit the Virgin Islands to
issue parity debt and allows for a transition to permit the Virgin
Islands to refinance their current priority debt. This would reduce the
debt service and free up needed revenues for school improvements and
emergency repairs made necessary by Hurricane Marilyn. I want to
emphasize that current bond holders will be fully protected.
Section 8 was suggested by Senator Johnston to begin to look at what
the economic future of the Virgin Islands will be in light of the
changes that are happening both politically and economically in the
Caribbean and what the Federal Government can do to provide a stable
and self-sustaining local economic base. I fully agree with Senator
Johnston that the time to do that analysis is now.

Mr. President, upon my return from my visit to the Pacific, I wrote
the President on what I thought was a fairly significant concern raised
by the Presidents of the Republic of the Marshall Islands and the
Federated States of Micronesia. While the political relationship under
the Compacts of Free Association is of indefinite duration, certain
provisions are subject to renegotiation and expire at the end of 15
years. The compacts require renegotiation in the 13th year and the
Presidents quite correctly pointed out that was not sufficient time to
conclude negotiations and obtain the necessary ratifications by the
United States and their governments. Like the Governor of the Virgin
Islands and Senator Johnston, they are looking to the future and trying
to plan for it. They asked if I would request the administration to
begin the process of formulating the U.S. position and begin discussion
while there was a degree of time. Given the number of years it took for
the original ratification, that seemed like a reasonable request. I
will not comment on the President's response, other than to ask
unanimous consent that a copy of my letter and his response be included
in the Record.
Mr. President, I appreciate that we are late in this session of the
Congress, but these are important matters that require the attention of
the Congress. I

[[Page S5577]]

want to announce that the Committee on Energy and Natural Resources
will hold a hearing on this legislation on June 25, 1996 and at the
same time we will review the report on the law enforcement initiative
in the commonwealth of the Northern Mariana Islands. I will not go into
great detail on the situation in the Commonwealth other than to say
that reforms need to be implemented. We had extensive and detailed
briefings and discussions with the Governor's staff, the Federal
officials on the island, the Chamber of Commerce, the legislature, the
U.S. attorney and Federal judiciary. It is my intention to move
expeditiously on this legislation immediately after the hearing is
concluded.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.

S. 1804

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

SECTION 1. MARSHALL ISLANDS AGRICULTURAL AND FOOD PROGRAMS.

Paragraph (2) of subsection (h) of section 103 of Public
Law 99-239, as amended, is further amended by striking the
word ``ten'' and inserting in lieu thereof the word
``fifteen'' and by adding at the end of subparagraph (B)
``Such technical assistance, programs and services shall
ensure, on an ongoing basis, that the commodities provided
reflect the changes in the population that have occurred
since the effective date of the Compact.''.

SEC. 2. AMERICAN MEMORIAL PARK.

Section 5 of Public Law 95-348 is amended by striking
subsection (f), and renumbering subsections (g) and (h) as
subsections (f) and (g), respectively.

SEC. 3. TERRITORIAL LAND GRANT COLLEGES--TECHNICAL AMENDMENT.

Subsection (b) of section 1361 of Public Law 96-374 is
amended by striking the words ``August 30, 1980 (7 U.S.C.
327), commonly referred to as the Second'' and inserting in
lieu thereof the words ``July 2, 1862 (7 U.S.C. 305),
commonly referred to as the First''.

SEC. 4. AMENDMENT TO THE GUAM ORGANIC ACT.

The Organic Act of Guam (48 U.S.C. 1421 et seq.), as
amended, is further amended by adding at the end thereof the
following new section:
``Sec. 36. (a) At least 180 days before transferring to any
Federal agency excess real property located in Guam, the
Administrator of General Services shall notify the government
of Guam that the property is available under this section.
``(b) The Administrator shall transfer to the government of
Guam all right, title, and interest of the United States in
and to excess real property located in Guam, by quit claim
deed and without reimbursement, if the government of Guam,
within 180 days after receiving notification under subsection
(a) regarding the property, notifies the Administrator that
the government of Guam intends to acquire the property under
this section.
``(c) For purposes of this section, the term 'excess real
property' means excess property (as that term is defined in
section 3 of the Federal Property and Administrative Services
Act of 1949, as in effect on the date of enactment of the
Guam Land Return Act) that is real property.''.

SEC. 5. REPEAL OF LIMITATION ON USE OF LANDS BY THE
GOVERNMENT OF GUAM.

(a) In General.--Section 818(b)(2) of Public Law 96-418 (94
Stat. 1782), is repealed.
(b) Execution of Instruments.--The Secretary of the Navy
and the Administrator General Services shall execute all
instruments necessary to implement this section.

SEC. 6. CLARIFICATION OF ALLOTMENT FOR TERRITORIES.

Section 901(a), Part 1, title I of the Act of June 19, 1968
(42 U.S.C. 3791(a)), as amended, is further amended in
paragraph (2) by changing the proviso to read as follows:
``(2) ``State'' means any State of the United States, the
District of Columbia, The Commonwealth of Puerto Rico, the
Virgin Islands, American Samoa, Guam, and the Commonwealth of
the Northern Mariana Islands.''

SEC. 7. AMENDMENTS TO THE REVISED ORGANIC ACT OF THE VIRGIN
ISLANDS.

(a) Section 7(a) of P.L. 90-496 (82 Stat. 839), as amended,
is futher amended by adding at the end thereof ``As used in
this section, the term 'temporary absence' shall not be
construed as being physically absent from the territory while
on official Government business.''
(b) Section 3 of P.L. 94-392 (90 Stat. 1195), as amended,
is further amended to read as follows:
(1) by inserting ``hereinafter'' between ``obligations''
and ``issued'';
(2) by deleting ``priority for payment'' and inserting in
lieu thereof ``a parity lien with every other issue of bonds
or other obligations hereinafter issued for payment''; and
(3) by deleting ``in the order of the date of issue''.
(c) The provisions of section 149(d)(3)(A)(i)(I) and
149(d)(2) of the Internal Revenue Code of 1986, as amended,
shall not apply to bonds issued:
(1) by an authority created by statute of the Virgin
Islands legislature, the proceeds of which will be used to
advance refund certain bonds issued by such authority on July
8, 1992; or
(2) by an authority created by statute of the Virgin
Islands Legislature, the proceeds of which will be used to
advance refund certain bonds issued by such authority on
November 3, 1994.
(d) The amendments made by subsections (b) and (c) shall
apply to obligations issued on or after the date of enactment
of this section.

SEC. 8. COMMISSION ON THE ECONOMIC FUTURE OF THE VIRGIN
ISLANDS.

(a) Establishment and Membership.--
(1) There is hereby established a Commission on the
Economic Future of the Virgin Islands (the ``Commission'').
The Commission shall consist of six members appointed by the
President, two of whom shall be selected from nominations
made by the Governor of the Virgin Islands. The President
shall designate one of the members of the Commission to be
Chairman.
(2) In addition to the six members appointed under
paragraph (1), the Secretary of the Interior shall be an ex-
officio member of the Commission.
(3) Members of the Commission appointed by the President
shall be persons who by virtue of their background and
experience are particularly suited to contribute to
achievement of the purposes of the Commission.
(4) Members of the Commission shall serve without
compensation, but shall be reimbursed for travel, subsistence
and other necessary expenses incurred by them in the
performance of their duties.
(5) Any vacancy in the Commission shall be filled in the
same manner as the original appointment was made.
(b) Purpose and Report.--
(1) The purpose of the Commission is to make
recommendations to the President and Congress on the policies
and programs necessary to provide for a secure and self-
sustaining future for the local economy of the Virgin Islands
through 2020 and on the role of the federal government in
providing for that future. In developing recommendations, the
Commission shall--
(A) solicit information and advice from persons and
entities that the Commission determines have expertise to
assist the Commission in its work;
(B) examine and analyze historical data since 1970 on
expenditures for infrastructure and services;
(C) analyze the sources of funds for such expenditures;
(D) assemble relevant demographic and economic data,
including trends and projections for the future; and
(E) estimate future needs of the Virgin Islands, including
needs for capital improvements, educational needs and social,
health and environmental requirements.
(2) The recommendations of the Commission shall be
transmitted to the President, the Committee on Energy and
Natural Resources of the United States Senate and the
Committee on Resources of the United States House of
Representatives no later than December 1, 1997. The
recommendations shall be accompanied by a report that sets
forth the basis for the recommendations and includes an
analysis of the capability of the Virgin Islands to meet
projected needs based on reasonable alternative economic,
political and social conditions in the Caribbean, including
the opening in the near future of Cuba to trade, tourism and
development.
(c) Powers.--
(1) The Commission may--
(A) hold such hearings, sit and act at such times and
places, take such testimony and receive such evidence as it
may deem advisable;
(B) use the United States mail in the same manner and upon
the same conditions as other departments and agencies of the
United States;
(C) enter into contracts or agreements for studies and
surveys with public and private organizations and transfer
funds to federal agencies to carry out such aspects of the
Commission's functions as the Commission determines can best
be carried out in such manner; and
(D) incur such necessary expenses and exercise such other
powers as are consistent with and reasonably required to
perform its functions.
(2) The Secretary of the Interior shall provide such office
space, furnishings and equipment as may be required to enable
the Commission to perform its functions. The Secretary shall
also furnish the Commission with such staff, including
clerical support, as the Commission may require and shall
provide to the Commission financial and administrative
services, including those related to budgeting, accounting,
financial reporting, personnel and procurement.
(3) The President, upon request of the Commission, may
direct the head of any federal agency of department to assist
the Commission and if so directed such head shall--
(A) furnish the Commission to the extent permitted by law
and within available appropriations such information as may
be necessary for carrying out the functions of the Commission
and as may be available to or procurable by such department
or agency; and
(B) detail to temporary duty with the Commission on a
reimbursable bases such personnel within his administrative
jurisdiction as the Commission may need or believe to be
useful for carrying out its functions, each such detail to be
without loss of seniority, pay or other employee status.

[[Page S5578]]

(d) Chairman.--Subject to general policies that the
Commission may adopt, the Chairman of the Commission shall be
the chief executive officer of the Commission and shall
exercise its executive and administrative powers. The
Chairman may make such provisions as he may deem appropriate
authorizing the performance of his executive and
administrative functions by the staff of the Commission.
(e) Appropriations.--There is authorized to be appropriated
such sums as may be necessary to carry out the purposes of
this section.
(f) Termination.--The Commission shall terminate three
months after the transmission of the report and
recommendations under subsection (b)(2).
____

U.S. Senate, Committee on Energy and Natural Resources,
Washington DC, March 11, 1996.
Hon. William J. Clinton,
President of the United States,
The White House,
Washington, DC.
Dear Mr. President: Recently Senator Akaka and I had the
opportunity to meet with President Amata Kabua of the
Republic of the Marshall Islands and his Cabinet and later
with President Bailey Olter of the Federated States of
Micronesia and the Speaker of their legislature. While we had
frank and informative meetings, one issue arose in both
meetings that we wanted to bring to your attention and
request your support.
As you know, in 1986, the Republic of the Marshall Islands
and the Federated States of Micronesia emerged from the
former United Nations Trust Territory of the Pacific Islands
as sovereign nations in free association with the United
States. That status had been requested by the Micronesian
governments in the late 1960's and negotiated with the United
States over more than a decade. Congress approved the
Compacts of Free Association for these two areas in Public
Law 99-239, signed by the President on January 14, 1986. That
approval came after several years of Congressional
consideration.
Under the terms of the Compacts, the political relationship
is open ended, but the federal assistance provisions
terminate after fifteen years, in 2001, with a possible two
year extension if negotiations on such assistance have not
concluded. Under section 231 of the Compacts, negotiations on
those provisions that expire at the end of fifteen years
shall commence no later than in year thirteen, in 1999. The
leadership in both countries strongly urged that discussions
begin prior to that time. I support that request.
In addition to the critical strategic and policy interests
of the United States in each of these areas, we have
developed a close and, I hope, an enduring relationship based
on mutually shared values. the political development of the
freely associated states and their emergence from the United
Nations trusteeship system was done peacefully. The option of
free association was a decision made by the Micronesians at a
time when full independence was the mark of decolonization
elsewhere in the world. While there have been significant
developments in the ten years of the Compacts, the process of
nation-building is not simple nor without setbacks and
problems. The relationship is unique, and while I understand
that there are some who find it troubling, I think an honest
review would demonstrate that it has exceeded the
expectations of all parties.
I do have some concerns with how the present relationship
has been implemented, not the least of which is the failure
of the Department of the Interior to assign an individual to
each of the freely associated states to provide assistance
and monitor the various federal programs and grants that have
been provided despite the clear intent of the Congress in
approving section 108 of P.L. 101-219 and explicit
appropriations. That is a situation that should be rectified
immediately. Some of the present economic problems might have
been avoided with a continuing presence from the Department.
While I support the Administration's economic policy reforms
being carried out in cooperation with the Asian Development
Bank, those reforms do not obviate the need for a full time
presence from the Department of the Interior in responding to
the problems.
I think it is clear, however, that the United States has
much to offer the micronesian governments consistent with
their sovereignty and our fiscal limitations. Technical and
other assistance in marine resources and tourism will be
important as these countries attempt to develop their
economic potential while preserving their culture and
traditions. Continued assistance in fiscal management will
also be vital.
I strongly suggest that you begin consideration of the
Administration's policy with respect to future assistance to
the freely associated states now and that you do so in close
consultation with the Congress. The history of the original
approval of the Compacts indicates that the two years
provided in section 231 is wholly inadequate for negotiations
and Congressional consideration. It would be even worse if
the Administration waited any longer to begin to formulate
its position.
I do want to emphasize the need for close Congressional
consultations. This Committee, as well as the relevant House
Committees, were involved in the discussions and negotiations
that led to the passage of the Covenant for the Northern
Mariana Islands and the Compacts for the three freely
associated states, and many of our concerns are reflected in
the final documents.
Sincerely,
Frank H. Murkowski,
Chairman.
____

THE WHITE HOUSE,

Washington, April 10, 1996.
Hon. Frank H. Murkowski,
U.S. Senate,
Washington, DC
Dear Mr. Chairman: Thank you for your letter regrading U.S.
policy toward the Federated States of Micronesia and the
Republic of the Marshall Islands. These former parts of the
Trust Territory of the Pacific Islands make an important
contribution to our security presence in the Asia-Pacific
region.
We are working closely with Micronesia and the Marshall
Islands to ensure the nearly $2 billion in scheduled U.S.
assistance from over forty agencies is effectively and
efficiently used. The Interior Department has dedicated
substantial personnel resources for this purpose.
I look forward to working with you and other members of
your committee to support the exciting process of nation-
building that is taking place in these former parts of the
Trust Territories.
Sincerely,
Bill Clinton.<bullet>

<bullet> Mr. JOHNSTON, Mr. President, I am pleased to join in the
introduction of this legislation that will address several important
areas of concern in the territories and freely associated states. Many
of the provisions result from a recent trip that the chairman of the
Committee on Energy and Natural Resources, Senator Murkowski, and
Senator Akaka recently took to most of the Pacific insular areas.
It is almost 24 years since I first came to the Senate and assumed
the chairmanship of the Subcommittee on Territories of the then
Committee on Interior and Insular Affairs. I thought it was important
to visit the areas under the committee's jurisdiction and meet with the
leadership. There is nothing that can replace that first-hand
knowledge. Given the enormous workload of the committee and the
critical nature of the legislation before us, it is often easy to
overlook the needs of the territories and freely associated states. I
sincerely hope that other members of the committee will also visit
these areas and come to appreciate the unique needs and problems that
confront the residents. The responsibility for these areas is one of
those unique constitutional authorities entrusted to Congress by
article IV.
In the time that I have been involved with the insular areas,
Congress has enacted legislation providing full local self-government
to the Virgin Islands, Guam, and American Samoa--including the election
of non-voting delegates to the House of Representatives. We have also
terminated the Trust Territory of the Pacific Islands, leader to the
emergence of three sovereign nations in free association with the
United States and a fully locally self-governing territory--the
Commonwealth of the Northern Mariana Islands. I also had the privilege
of serving on the Ad Hoc Advisory Group of Puerto Rico with our former
colleague Marlow Cook and former Governor Luis Munoz Marin.

I want to focus on one provision of this legislation, and that is the
study of the future economic needs of the Virgin Islands. Since 1960,
the Virgin Islands has experienced enormous growth and development. In
large part, that growth resulted from increased tourism after the
closure of Cuba and also from improved transportation links to the
Islands. Another component was the favorable trade status of the Virgin
Islands, which is outside the customs territory of the United States.
Those underpinnings are about to disappear. NAFTA and other trade
agreements are eroding the trade advantages that the Virgin Islands has
enjoyed. Within the foreseeable future, we will have a post-Castro Cuba
that will likely challenge the Virgin Islands tourist industry. Rather
than waiting for those events to happen, it is essential that we--the
Virgin Islands and the federal government--begin to plan for the
future. This legislation calls for the creation of a Commission on the
Economic Future of the Virgin Islands. The Commission would carry out
an in-depth study of what will need to be done to provide a transition
for the Virgin Islands to a fully self-sustaining local economy and
what the federal government needs to do to facilitate that transition.
I am pleased to cosponsor this legislation and I look forward to the
hearings that the Committee will conduct

[[Page S5579]]

in the next several weeks. At that time we will also review the report
from the Administration on the law enforcement initiative in the
Commonwealth of the Northern Mariana Islands. I was the floor manager
for the Covenant, and I take particular pride in the accomplishments
that have occurred in the past twenty years. The Northern Marianas
entered territorial status heavily dependent on federal support for
basic government operations. In twenty years, the territory has
progressed to the point that it no longer requires direct assistance in
operations and is capable of matching federal grants for capital
infrastructure. That progress has had a price, however, and I intend to
very carefully examine the labor situation and the continued reports of
abuse, especially in the garment industry. While I fully support the
authority for local self-government conferred under the Covenant, that
grant also included the responsibility for exercising that authority
properly.
In that context, on July 20, 1995, the Senate passed S. 638, a bill
containing, among other things, significant provisions addressing labor
issues in the Commonwealth of the Northern Mariana Islands. The House
has not yet responded to this important legislative initiative. My hope
is that we can obtain House action on S. 638 soon--in time for the
104th Congress to act to address these problems.<bullet>
______

By Mr. GRAMS:
S. 1805. A bill to provide for the management of Voyageurs National
Park, and for other purposes; to the Committee on Energy and Natural
Resources.

voyageurs national park accessibility and partnership act

Mr. GRAMS. Mr. President, there is a march toward democracy afoot in
America today.
That statement may seem surprising; after all, why would such a
movement be needed? We Americans take pride in the fact that our
Government is based on the pursuit of democracy--in the words of
Abraham Lincoln, ``a government of the people, by the people and for
the people.'' And that principle should have as much relevance today as
it did when President Lincoln delivered the Gettysburg Address 130
years ago--but does it?
In theory perhaps, but as a practical matter, it seems that the words
of Lincoln have been steadily eroded by the recent surge in the size
and power of the Federal Government. And with that growth in Washington
has come the slow but unmistakable shift in power from the people to
the government.
Under a democracy, government is needed to establish and enforce the
fundamental rules by which our society operates--with the express
support of the people. It is there to protect the rights of individuals
and to step in when those rights come into conflict--to resolve
disputes between people, not to create them.
But in recent years, the American people have been forced to watch
Government expand its role in our daily lives through the use of laws,
rules, and regulations--to the point of interference. Instead of
receiving its power from the people, it has usurped that authority and
as a result, abandoned any sense of public accountability.
As a result, many people believe that they have lost control of their
Government--indeed a growing number of us feel that the Government now
controls us.
There is no better example of this shift in power than in the Federal
Government's management of our natural resources and public lands,
particularly as it has affected the people of my home state in the
controversy surrounding Voyageurs National Park.
The Park, now comprising 218,000 acres in northern Minnesota, was
created in 1971 and established as part of the National Park System in
1975 following years of contentious debate and public hearings. While a
number of local residents supported the creation of the park, they did
so after promises by the Federal Government of increased economic
growth in the region; maintenance of the Park as a multiple
recreational use facility, for recreational activities like
snowmobiling; and the continued use of input from the public into the
management of the park.
But as the years passed, those promises fell by the wayside, leaving
local residents out in the cold and understandably distrustful of
government bureaucrats who have been unaccountable to the people they
are supposed to serve and unresponsive to their needs. Instead of
working for the people, the Federal Government has consistently ignored
their concerns and in some cases, actually worked against them.
For example, the people of northern Minnesota were promised that in
exchange for giving up their rights to the land that would comprise the
Park, they would receive opportunities to boost their local economy. In
fact, upon creation of the Park, Federal officials estimated that it
would host over 1.3 million visitors each year, thereby providing much-
needed economic growth for the surrounding communities.
But the road toward economic prosperity never found its way through
Voyageurs National Park. Park officials currently estimate the annual
number of visitors at 200,000--less than one-sixth their initial
projection. Even worse, the Park Service has tried to cover its tracks
by suggesting that the park--despite its low visitor rate--is not
underutilized.
While the facts and figures certainly counter the Park Service's
assertion, nothing beats a first-hand assessment of park use. So, on a
beautiful Saturday last July, I visited Voyageurs National Park. While
admiring the beauty and historical significance of the lands and waters
enclosed within the park, I was struck by the fact that hardly anyone--
with the exception of park officials and a few scattered visitors--was
there. It was only when I drove through the neighboring city of
International Falls, MN, that I did see a number of tourists and
visitors--in line--waiting to pass through customs--on their way to
Canada.
In 1983, Congress called for the Park Service to create a
comprehensive visitor use and facilities plan which would lay out a
strategy to increase park use. In spite of Congress' directive, no
attempt to carry out the study ever occurred--perhaps due to the Park
Service's belief that the park was not being underutilized,
bureaucratic stonewalling, or maybe just out of simple
negligence. Whatever the reason, Voyageurs National Park today remains
underutilized--an isolated enclave--with the people of northern
Minnesota forced to pay the price of the National Park Service's
mismanagement.

The Park Service and the U.S. Fish and Wildlife Service have also
worked together to curtail legitimate visitor access to and use in the
Park. Under the guise of the Endangered Species Act, certain bays were
shut off to snowmobiling in order to protect the nesting habitat of
bald eagles. While everyone agreed that the eagles should be protected,
many believed that both agencies failed to give valid, scientific
reasons for closing off the bays. Recently, a Federal district judge
ruled that Federal bureaucrats had abused the Endangered Species Act to
unfairly restrict snowmobile access in the bays. It is sadly ironic
that it took a Federal judge to recognize a legitimate use in the
Park--something the Park Service and Fish and Wildlife Service have
failed to comprehend.
But perhaps the greatest example of arrogance on the part of the
Federal Government concerns the question of wilderness designation
within the Park. Despite the clearly expressed intent of Congress that
Voyageurs National Park was to be a multiple recreational use facility,
the Park Service has continued to manage certain portions of the Park
for wilderness study characteristics. One need go no further than to
ask my colleague from Minnesota, Representative Jim Oberstar, who
helped create the Park when he served as a Congressional staffer, about
the intent of Congress that it was to be open for multiple use. Yet,
major segments of the Park continue to be shut off to legitimate and
recognized multiple uses--such as snowmobiling, boating and dog
sledding--further breaking the long-standing commitments made to
northern Minnesotans.
Mr. President, as much as we would like to, we cannot rewrite the
history of Voyageurs National Park or simply wave a magic wand to right
the wrongs to which the people of northern Minnesota have been
subjected over the last 25 years. But we can and must take action to
ensure that history does not repeat itself--that future management

[[Page S5580]]

of the Park be conducted in accordance with the views of the people.
For that reason, today, I am introducing legislation which would help
resolve this controversy by bringing democracy and government
accountability back to Voyageurs National Park.
Under my legislation, a new Planning and Management Council will be
charged with developing and monitoring a comprehensive management plan.
It will consist of 11 members appointed by the Secretary of the
Interior and will include representatives from Federal, State, local
and tribal governments.
The management council will be authorized to create Advisory Councils
made up of individuals representing diverse interests. All council
meetings will be open to the public, who will be given opportunities to
provide comment on agenda items.
Mr. President, under my bill, public input will no longer be
ignored--in fact, it will be encouraged as part of the management
process.
Finally, my legislation will prohibit the Park Service from issuing
any additional regulations regarding the Park between enactment of this
bill and the Secretary's final approval of the management plan, except
in cases of routine administration, law enforcement need and
emergencies.
To better understand how this new management council will improve the
situation in northern Minnesota, one need look no further than the
recent ban that was proposed by the National Park Service on the use of
live bait within the interior lakes of Voyageurs National Park--one
imposed without the solicitation of public input or notification to
area fisherman and the Minnesota Department of Natural Resources.
This unilateral action taken by the Park Service naturally created
enormous controversy and outrage in northern Minnesota. As one State
official said at the time, ``It was a big surprise to us * * *. There
was no prior discussion with us on the ban. There's a longstanding
tradition in the park of being able to use live bait.''
After many of us raised our objections and outrage over the ban, the
Park Service backpedaled, then lifted the ban, stating that it had
misread the law. In doing so, the Superintendent of the Park was quoted
in the papers saying, ``I had no idea this was going to be a problem.
If I had known, trust me, I would have dealt with it differently.''
Mr. President, think about those words for a second. According to the
Park Service, if they had just known, they never would have tried to
impose their will on the people. If they had just known, just listened,
just sought input, none of this would have happened. That is exactly
what we are seeking today.
My legislation would avoid such embarrassments in the future by
bringing everyone together to ensure that management of the Park is
conducted by agreement, not edict. It will ensure that everyone has a
seat at the table when the decisions are made. Above all, this new
management council will return democracy to the preservation of
Voyageurs National Park. It will return to the people of northern
Minnesota a voice in how the park is operated and its impact on their
communities, economy and livelihood.

Mr. President, I spoke earlier today of a growing movement toward
democracy in America--born in the heartland of our Nation, led by the
American people, and headed toward Washington. Since holding two public
field hearings in Minnesota on this issue last year, I have heard from
numerous citizen organizations, community leaders, and average
Minnesotans about the management of the park and how their daily lives
are affected by it.
Their message is simple: Let us have a say in how our natural
resources are maintained--return some of the power to the people--give
us back our government and our country. The silent majority, which has
been suppressed for so many years, is now finding its voice again--and
it is our responsibility to listen to it and act upon it. By conducting
our field hearings, which attracted well over 2,000 Minnesotans, we
took the first step by listening. Now, we must move ahead and take
action.
During those hearings, I heard a number of people give profound and
often moving testimony. Many presented facts and figures--invaluable
data about the history and management about the park. But what struck
me the most during the hearings were the personal stories--the real-
life accounts about how the Federal Government and its mismanagement of
Voyageurs National Park has truly changed the lives of the people it
was created to serve.
One of these stories belonged to Carol Selsaas of Cohasset, MN. In
her testimony, Carol described the work of her late father, George
Esslinger, who was one of the strongest supporters in northern
Minnesota for the creation of Voyageurs National Park.
Carol said:

For over 9 years, my father worked with other men and women
to fight for the creation of the park. He assisted the
Department of the Interior in physically identifying the
boundaries of the park. He traveled and spoke in favor of the
park. He gave his heart and soul to the park. He believed the
area he supported for a national park should be maintained
for the enjoyment of all people: snowmobilers, cross country
skiers, boaters, hikers, fishermen, hunters, yes and even dog
sledders. He felt that this would be a park for everyone who
had respect for this land, not one locked up except for a
chosen few.

Carol went on to describe how her father supported the park with the
understanding that the trails and roads already established--over 200
miles on the Kabetogama Peninsula alone-- would be maintained. To date,
all but 12 miles are now closed off to public access. On one of those
closed off trails, Carol said, rests a memorial to her father placed by
the Park Service. With tears in her eyes, she said that because of the
inaccessibility of the trail, she has never been able to visit her
father's memorial.
``My father died knowing that he had been lied to,'' said Carol. ``He
died apologizing to me, his grandson, his community. On his death bed,
I promised that I would fulfill his wish and tell the story of how he
was misled in his support for Voyageurs National Park.''
Indeed, she did--as did many other of my fellow Minnesotans. We
cannot forget their words or discard their testimonies. In the sterile
halls of the Federal buildings here in Washington, the words of Carol
Selsaas and others may not mean much, but to me, they describe the
heartfelt emotions and passions about the culture of northern
Minnesota--a culture that Washington may not understand, but cannot
take for granted.
Nor can we hide in the halls of Congress from the march of democracy
that is spreading throughout the heartland of our country. If we are
truly committed to operating as the open democracy described by
President Lincoln, we must turn the tide and return power back to its
legitimate source in America: the people.
The legislation I introduce today is a necessary step in bringing the
principles of democracy back to one small, but important region of our
Nation. Let us no longer obstruct the march of democracy but help pave
the way for it across America.
Mr. President, I ask unanimous consent that the test of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1805

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Voyageurs National Park
Accessibility and Partnership Act of 1996''.

SEC. 2. FINDINGS.

Congress finds that--
(1) Voyageurs National Park serves as a unique federal park
unit in 1 of the Nation's distinguished natural ecosystems;
(2) Voyageurs National Park shall serve as a year-round
multiple-use recreational unit as mandated under Public Law
91-661;
(3) current management of Voyageurs National Park has
unilaterally restricted use and accessibility within certain
portions of the park;
(4) intergovernmental cooperation that respects and
emphasizes the role of State, local, and tribal governments
in land management decision-making processes is essential to
optimize the protection and development of social,
historical, cultural, and recreational resources; and
(5) the national interest is served by--
(A) improving the management and protection of Voyageurs
National Park;
(B) ensuring appropriate public access, enjoyment, and use
throughout Voyageurs National Park; and

[[Page S5581]]

(C) allowing Federal, State, local, and tribal governments
to engage in an innovative management partnership in Federal
land management decisionmaking processes.

SEC. 3. PLANNING AND MANAGEMENT COUNCIL.

Public Law 91-661 (16 U.S.C. 160 et seq.) is amended--
(1) by redesignating sections 304 and 305 (16 U.S.C. 160i
and 160j) as sections 306 and 307, respectively; and
(2) by inserting after section 303 (16 U.S.C. 160h) the
following:

``SEC. 304. PLANNING AND MANAGEMENT COUNCIL.

``(a) Establishment.--There is established the Voyageurs
National Park Intergovernmental Council (referred to in this
Act as the `Council').
``(b) Duties of the Council.--The Council shall develop and
monitor a comprehensive management plan for the park in
accordance with section 305.
``(c) Membership.--The Council shall be composed of 11
members, appointed by the Secretary, of whom--
``(1) 1 member shall be the Assistant Secretary for Fish
and Wildlife and Parks, or a designee;
``(2) 3 members shall be appointed, from recommendations by
the Governor of Minnesota, to represent the Department of
Natural Resources, the Office of Tourism, and the
Environmental Quality Board, of the State of Minnesota;
``(3) 1 member shall be a commissioner from each of the
counties of Koochiching and Saint Louis, appointed from
recommendations by each of the county boards of
commissioners;
``(4) 1 member shall be a representative from the cities of
International Falls and Orr, appointed from recommendations
by each of the city councils;
``(5) 1 member shall be a State senator who represents a
legislative district that contains a portion of the park,
appointed from a recommendation by the Governor of Minnesota;
``(6) 1 member shall be a State representative who
represents a legislative district that contains a portion of
the park, appointed from a recommendation by the Governor of
Minnesota;
``(7) 1 member shall be an elected official from the
Northern Counties Land-Use Coordinating Board, appointed from
recommendations by the Board; and
``(8) 1 member shall be an elected official of the Native
American community to represent the 1854 Treaty Authority,
appointed from recommendations by the Authority.
``(d) Advisory Committees.--
``(1) In general.--The Council may establish 1 or more
advisory committees for consultation, including committees
consisting of members of conservation, sportsperson,
business, professional, civic, and citizen organizations.
``(2) Funding.--An advisory committee established under
paragraph (1) may not receive any amounts made available to
carry out this Act.
``(e) Quorum.--A majority of the members of the Council
shall constitute a quorum.
``(f) Chairperson.--
``(1) Election.--The members of the Council shall elect a
chairperson of the Council from among the members of the
Council.
``(2) Terms.--The chairperson shall serve not more than 2
terms of 2 years each.
``(g) Meetings.--The Council shall meet at the call of the
chairperson or a majority of the members of the Council.
``(h) Staff and Services.--
``(1) Staff of the council.--The Council may appoint and
fix the compensation of such staff as the Council considers
necessary to carry out this Act.
``(2) Procurement of temporary services.--The Council may
procure temporary and intermittent services under section
3109(b) of title 5, United States Code.
``(3) Administrative support services.--The Administrator
of General Services shall provide to the Council, on a
reimbursable basis, such administrative support services as
the Council requests.
``(4) Provision by the secretary.--On a request by the
Council, the Secretary shall provide personnel, information,
and services to the Council to carry out this Act.
``(5) Provision by other federal departments and
agencies.--A Federal agency shall provide to the Council, on
a reimbursable basis, such information and services as the
Council requests.
``(6) Provision by the governor.--The Governor of Minnesota
may provide to the Council, on a reimbursable basis, such
personnel and information as the Council may request.
``(7) Subpoenas.--The Council may not issue a subpoena nor
exercise any subpoena authority.
``(i) Procedural matters.--
``(1) Guidelines for conduct of business.--The following
guidelines apply with respect to the conduct of business at
meetings of the Council:
``(A) Open meetings.--Each meeting shall be open to the
public.
``(B) Public notice.--Timely public notice of each meeting,
including the time, place, and agenda of the meeting, shall
be published in local newspapers and such notice may be given
by such other means as will result in wide publicity.
``(C) Public participation.--Interested persons shall be
permitted to give oral or written statements regarding the
matters on the agenda at meetings.
``(D) Minutes.--Minutes of each meeting shall be kept and
shall contain a record of the persons present, an accurate
description of all proceedings and matters discussed and
conclusions reached, and copies of all statements filed.
``(E) Public inspection of record.--The administrative
record, including minutes required under subparagraph (D), of
each meeting, and records or other documents that were made
available to or prepared for or by the Council incident to
the meeting, shall be available for public inspection and
copying at a single location.
``(2) New information.--At any time when the Council
determines it appropriate to consider new information from a
Federal, State, or local agency or from a Council advisory
body, the Council shall give full consideration to new
information offered at that time by interested members of the
public. Interested parties shall have a reasonable
opportunity to respond to new data or information before the
Council takes final action on management measures.
``(j) Compensation.--
``(1) In general.--A member of the Council who is not an
officer or employee of the Federal government shall serve
without pay when carrying out duties pursuant to this Act.
``(2) Travel expenses.--While away from the home or regular
place of business of the member in the performance of
services for the Council, a member of the Council shall be
allowed travel expenses, including per diem in lieu of
subsistence, in the same manner as persons employed
intermittently in Federal Government service are allowed
expenses under section 5703 of title 5, United States Code.
``(k) Funding.--Of amounts appropriated to the National
Park Service for a fiscal year, the Secretary shall make
available such amounts as the Council shall request, not to
exceed $150,000 for the fiscal year.
``(l) Termination of Council.--The Council shall terminate
on the date that is 10 years after the date of enactment of
this subsection.

``SEC. 305. MANAGEMENT PLAN.

``(a) Schedule.--
``(1) In general.--Not later than 3 years after the date of
enactment of this subsection, the Council shall submit to the
Secretary and the Governor of Minnesota a comprehensive
management plan (referred to in this section as the `plan')
for the park, to be developed and implemented by the
responsible Federal agencies, the State of Minnesota, and
local political subdivisions.
``(2) Preliminary report.--Not later than 1 year after the
date of the first meeting of the Council, the Council shall
submit a preliminary report to the Secretary describing the
process to be used to develop the plan.
``(b) Development of Plan.--
``(1) In general.--In developing the plan, the Council
shall examine all relevant issues, including--
``(A) appropriate public access and recreational use,
including--
``(i) snowmobiling opportunities;
``(ii) campsites and trails;
``(iii) the management policies of harvesting fish and
wildlife;
``(iv) aircraft access throughout the park;
``(v) policies affecting hiking, bicycling, snoeshoeing,
skiing, current watercraft opportunities, and other
recreational activities the Council considers appropriate for
the park; and
``(vi) visitation and services at the Kettle Falls
facilities;
``(B) the proper distribution of visitors in the park;
``(C) a comprehensive visitor education program; and
``(D) the need for wilderness management for certain areas
of the park.
``(2) Conditions.--In carrying out subparagraphs (A)
through (D) of paragraph (1), the Council shall--
``(A) be subject to relevant environmental law;
``(B) consult on a regular basis with appropriate officials
of each international, Federal, or State agency or local
government that has jurisdiction over land or water in the
park;
``(C) consult with interested conservation, sportsperson,
business, professional, civic, and citizen organizations; and
``(D) conduct public meetings at appropriate places to
provide interested persons the opportunity to comment on
matters to be addressed by the plan.
``(3) Prohibited considerations.--The Council may not
consider--
``(A) removing park designation; or
``(B) allowing mining, logging, or commercial or
residential development.
``(4) Report.--The Council shall report to the
International Joint Commission on water levels in the Rainy
Lake Watershed, pursuant to the Convention Providing for
Emergency Regulation of the Level of Rainy Lake and of
Certain Other Boundary Waters, signed at Ottawa September 15,
1938 (54 Stat. 1800).
``(c) Approval of Plan.--
``(1) Submission to secretary and governor.--The Council
shall submit the plan to the Secretary and the Governor of
Minnesota for review.
``(2) Approval or disapproval by secretary.--
``(A) Review by the governor.--The Governor may comment on
the plan not later than 60 days after receipt of the plan
from the Council.

[[Page S5582]]

``(B) Secretary.--
``(i) In general.--The Secretary shall approve or
disapprove the plan not later than 90 days after receipt of
the plan from the Council.
``(ii) Criteria for review.--In reviewing the plan, the
Secretary shall consider--

``(I) the adequacy of public participation;
``(II) assurances of plan implementation from State and
local officials in Minnesota;
``(III) the adequacy of regulatory and financial tools that
are in place to implement the plan;
``(IV) provisions of the plan for continuing oversight by
the Council of implementation of the plan; and
``(V) the consistency of the plan with Federal law.

``(iii) Notification of disapproval.--If the Secretary
disapproves the plan, the Secretary shall, not later than 30
days after the date of disapproval, notify the Council in
writing of the reasons for the disapproval and provide
recommendations for revision of the plan.
``(C) Revision and resubmission.--Not later than 60 days
after receipt of a notice of disapproval under subparagraph
(B) or (D), the Council shall revise and resubmit the plan to
the Secretary for review.
``(D) Approval or disapproval of revision.--The Secretary
shall approve or disapprove a plan submitted under
subparagraph (C) not later than 30 days after receipt of the
plan from the Council.
``(d) Review and Modification of Implementation of Plan.--
The Council--
``(1) shall review and monitor the implementation of the
plan; and
``(2) may, after providing for public comment and after
approval by the Secretary, modify the plan, if the Council
and the Secretary determine that the modification is
necessary to carry out this Act.
``(e) Interim Program.--Before the approval of the plan,
the Council shall advise and cooperate with appropriate
Federal, State, local, and tribal governmental entities to
minimize adverse impacts on the park.
``(f) National Park Service Regulations.--During the period
beginning on the date of enactment of this subsection and
ending on the date a management plan is approved by the
Secretary under subsection (c)(2), the Secretary may not
issue any regulation that relates to the park, except for--
``(1) regulations required for routine business, such as
maintenance, visitor education, and law enforcement; and
``(2) emergency regulations.
``(g) State and Local Jurisdiction.--Nothing in this Act
diminishes, enlarges, or modifies any right of the State of
Minnesota or any political subdivision of the State to--
``(1) exercise civil and criminal jurisdiction;
``(2) carry out State fish and wildlife laws in the park;
or
``(3) tax persons, corporations, franchises, or private
property on land and water included in the park.''.
______

By Mr. D'AMATO (for himself, Mr. Dodd and Mr. Frist):

S. 1806. A bill to amend the Federal Food, Drug, and Cosmetic Act to
clarify that any dietary supplement that claims to produce euphoria,
heightened awareness or similar mental or psychological effects shall
be treated as a drug under the Act, and for other purposes; to the
Committee on Labor and Human Resources.

Legislation to Control Herbal Street Drugs

<bullet> Mr. D'AMATO. Mr. President, today I am introducing
legislation--along with my colleagues Senators Dodd and Frist--to
control the growing problem of dangerous herbal stimulants that are
marketed and sold as alternatives to powerful and illegal street drugs.
This carefully-drafted bill will make these herbal street drugs subject
to pre-market safety reviews and allow the Food and Drug
Administration, the FDA, to take prompt and decisive action against
this narrow class of products.
I strongly support the right of the American people to have access to
legitimate dietary supplements, and I want to clearly state that this
bill will not limit that access. However, herbal street drugs are not
legitimate dietary supplements. They are quite simply dangerous
products masquerading as dietary supplements to evade Government review
and sanctions.
Mr. President, on March 7, 1996, one of these products, called
Ultimate Xphoria, killed 20-year-old Peter Schlendorf of Northport, NY.
Peter, a junior at the State University of New York at Albany, died
from a lethal combination of herbal stimulants found in this product. A
statement issued by the medical examiner's office in Panama City, FL,
where Peter died, specifically states that Peter's death ``was a result
of the use of Ultimate Xphoria, an herbal product containing Ma
Huang.'' Ma Huang--also known as Ephedra--is a botanical source of the
powerful stimulant ephedrine. The medical examiner's statement lists
Peter's cause of death as the ``synergistic effect of ephedrine'' and
several other herbal stimulants contained in this product. The
statement further explains that these stimulants ``can have an adverse
effect on the heart and central nervous system.''
Mr. President, I am committed to doing everything that I can to
ensure that no more young people die from these dangerous herbal street
drugs. And let me be perfectly clear: if Congress fails to act, it will
just be a matter of time before these products kill more young people.
This is a battle to protect our children. The slick peddlers of these
herbal street drugs have specifically targeted young people. They sell
their products in novelty shops, using flashy signs and posters that
appeal to and attract adolescents. They give their products names like
Cloud 9, Herbal Ecstacy, Ultimate Xphoria, Magic Mushrooms and E-Ludes.
Using the Internet and showy brochures, they hawk their dangerous
wares with promises of ``euphoric stimulation, highly increased energy
levels, tingly skin sensations, increased sexual sensations, enhanced
sensory processing and mood elevations.'' One product, called Herbal
Ecstacy, even claims that it is ``a carefully formulated and thoroughly
tested organic alternative to actual MDMA or Ecstacy''--a dangerous,
illegal street drug. The marketing brochure for this product further
states that it ``acts on the same basis as MDMA, triggering similar,
but not identical, physical reactions in the body.'' This is just
outrageous.
In addition, many of these products falsely claim to be safe and
tested. Some are even advertised as ``100 percent and FDA approved''
and as ``100 percent natural . . . with no side effects''. As Peter's
death clearly demonstrates, however, these products can be deadly, and
none are FDA-approved. How can the producers of these herbal street
drugs claim that they are safe and tested when they can produce such
tragic results? This is wrong and must be stopped.
The manner in which these products are marketed invites misuse by
unsuspecting young people. These products are advertised as
alternatives to street drugs. They are intended to get young people
high. And what happens when the recommended dosage doesn't achieve the
desired high? Then, the claims that these products are safe, natural
and thoroughly tested lure young people into taking larger dosages.
Indeed, some sellers are telling people to take two, three and four
times the recommended dosage to achieve the desired high.
Mr. President, the legislation that I am introducing today will help
to ensure that no more young people die from these dangerous products.
The bill amends the Federal Food, Drug, and Cosmetic Act to clarify
that a dietary supplement shall be considered a drug if its label or
labeling claims or implies that the dietary supplement produces
euphoria, heightened awareness or similar mental or psychological
effects. As a result, this narrow class of dangerous products will be
subject to the same premarket safety reviews as other drugs, and the
FDA will have enhanced authority to take prompt and decisive action
against them. Now, the FDA will be able to quickly pull these herbal
street drugs, like the one that killed Peter Schlendorf, from stores
before they kill again. This legislation is necessary to protect the
health of the American public, particularly its youth, who are
obviously the target of these dangerous herbal street drugs.

Again, let me clearly state that this bill has been carefully drafted
to maintain the public's continued access to legitimate dietary
supplements. For example, it will not limit access to either over-the-
counter drugs, such as Sudafed, or legitimate dietary supplements, such
as herbal teas, that contain ephedra or its related products.
I am certain that no Member of Congress envisioned that the Dietary
Supplement Health and Education Act of 1994--the Dietary Supplement
Act--would protect dangerous products like these herbal street drugs,
but these products are currently covered by the literal language of
that act. Since these products are considered dietary

[[Page S5583]]

supplements under current law, the FDA's authority to regulate them is
significantly limited. For example, these products are not currently
subject to premarket safety reviews. In addition, the FDA cannot
regulate herbal street drugs as a class, but instead must take action
against each product individually. Indeed, the FDA must prove that a
particular formulation of an herbal street drug ``presents a
significant or unreasonable risk of illness or injury'' before it can
take any action against the product. This is a lengthy process that can
take years.
Moreover, under current law, an herbal street drug manufacturer can
easily evade an FDA enforcement action simply by changing the
composition of its product, while continuing to make the same labeling
claims for drug-like mental and psychological effects. Each time the
product formula changes, the FDA must evaluate the new formula and
build its case from the beginning. The product formula thus becomes a
moving target that the FDA must chase. The FDA should not have to chase
herbal street drugs.
Some will argue that this legislation is unnecessary and that the FDA
already has the authority to take action against herbal street drugs,
but the clever producers and marketers of these herbal street drugs
have been careful to take advantage of the protections afforded
legitimate dietary supplements under the Dietary Supplement Act. For
example, under that act, a dietary supplement is not subject to
regulation as a drug simply because its label or labeling bears a
truthful, nonmisleading claim regarding its effect on the body. This
provision significantly limits the FDA's ability to take action against
the peddlers of herbal street drugs who use carefully worded labels to
evade FDA review and control.
Other options available to the FDA would also be ineffective against
herbal street drugs. For example, the Dietary Supplement Act gives the
Secretary of Health and Human Services the authority to declare that a
dietary supplement poses an imminent hazard to public health or safety.
Once such a declaration is made, the dietary supplement can be banned.
A formal imminent hazard declaration requires lengthy formal rulemaking
procedures, however, including a trial-type hearing before an
administrative law judge. In addition, because what sells an herbal
street drug is its claims rather than its ingredients, the imminent
hazard declaration can easily be defeated by a formulation change
without any label change. One can easily imagine the slick peddlers of
these products switching a single ingredient--for example, from ephedra
to kava-kava, another powerful herbal stimulant--just as the FDA is
knocking on their door.
Mr. President, the marketing of herbal street drugs as dietary
supplements, rather than as drugs, does not promote any of the goals
identified by Congress in the Dietary Supplement Act. That act was
intended to promote the public health. Congressional findings in
section 2 of the act cite the role of a healthy diet, including safe
dietary supplements in disease prevention, long-term good health, and
reducing health care costs. Far from promoting the public health,
herbal street drugs endanger the health and safety of consumers and
give rise to unnecessary medical costs.
These dangerous products are not taken for nutritional purposes or to
otherwise improve health and thus are not within the intended coverage
of the Dietary Supplement Act. The manufacturers of herbal street drugs
should not be permitted to abuse the Dietary Supplement Act by using it
to legitimize the marketing of dangerous products. A narrowly drafted
statutory amendment to correct the inclusion of herbal street drugs in
the language of the act would achieve the intent of Congress by closing
a loophole that Congress never intended to create.
Herbal street drugs killed young Peter Schlendorf. We have to make
sure that this does not happen again. We have carefully drafted this
legislation to target the narrow class of products that killed Peter--
products that are being marketed and sold to young people as safe and
legal alternatives to dangerous, illegal street drugs. We must take
action quickly. I urge my fellow Senators to support this effort and
quickly pass this legislation. If we wait, herbal street drugs will end
more promising, young lives.<bullet>
<bullet> Mr. DODD. Mr. President, I am proud to sponsor this very
important legislation with my colleagues, Senators D'amato and Frist.
In my view, the legislation is necessary to protect the American
public, and particularly our Nation's youth, from what amount to common
street drugs.
The makers of these products make no attempt to sell them as products
to improve health or nutrition. The products carry names like ``Herbal
Ecstacy,'' ``Ultimate X-Phoria,'' and ``Cloud 9.'' One product claims
``It is a carefully formulated and thoroughly tested organic
alternative to actual MDMA or Ecstacy.'' I hardly think any of us
believe that our Nation's children should be able to go into any
novelty store and buy the equivalent of a powerful, dangerous, and I
might add, illegal street drug.
Let me share with you the claims and promotional language of these
products, lest there be any doubt what there purpose is for:

The effects of Herbal Ecstacy beyond smart drug capacity
include: Euphoric stimulation; highly increased energy
levels; tingly skin sensations; enhanced sensory processing;
mood elevations.
Herbal Ecstacy acts on the same basis as MDMA, triggering
similar but not identical physical reactions in the body.
Our herbs are 100% natural and are uniquely formulated to
give you a floaty, energetic, mind expanding, euphoric
experience.

And listen to what is presented on a brochure as endorsements by
users:

They don't call it ``ultimate'' for nothing!
This puts everything else I've tried to shame!!

Now, Mr. President, I guess we might feel differently if we knew
these products were without risk. But the fact is, they have proven
deadly. Peter Schlendorf, a 20-year-old from York, FL, died because he
took one of these products. The cause of death was identified by the
medical examiner's office in the Florida town where Peter died.
The makers of these products claim they are nutritional supplements,
legitimately sold and promoted. They point to a law passed a couple of
years ago that was meant to govern legitimate dietary supplements, that
improve health and nutrition. But make no mistake. These products do
nothing to improve health and nutrition.
So, the legislation we are proposing today is very simple. It says
that products claiming to produce euphoria, heightened awareness or
similar mental or psychological effects shall be treated as a drug. It
would make the products subject to the same review, by the U.S. Food
and Drug Administration, as other drugs. The products are not banned.
And the bill will have no effect on legitimate dietary supplements. It
only will affect products that are marketed and sold as alternatives to
powerful street drugs.
Mr. President, it is my hope that we can act quickly on this
legislation and prevent the kind of tragedy experienced by the
Schlendorfs.<bullet>
<bullet> Mr. FRIST. Mr. President, I rise today to join my
distinguished colleague from New York in introducing legislation to
address an alarming problem facing our children today.
A new class of street drugs is endangering our Nation's young people.
These products are being portrayed as safe, natural alternatives to
illegal street drugs, but they are far from safe.
As a medical doctor who specialized in heart ailments, I am familiar
with the powerful and even life-threatening effect some of these
products can have on the human heart and central nervous system. And as
the father of three young boys of the ages 8, 10 and 12, I am outraged
at the way these products are being blatantly marketed toward children
and young adults.
Therefore, I have joined Senators D'Amato and Dodd in introducing a
bill that will control the growing problem of herbal street drugs. This
bill will classify as drugs products marketed and sold, particularly to
young people, as alternatives to illegal street drugs. As a result
these products will be subject to the same Federal review and sanctions
as other pharmaceuticals.
This bill will not limit public access to legitimate dietary
supplements and over-the-counter medications. It is not drafted to
limit public access to products that contain particular ingredients.
The producers of legitimate products that make truthful claims about
their product have nothing to fear from

[[Page S5584]]

this bill. To the contrary, they should support the intent of this bill
because it addresses the problem of unscrupulous manufacturers who are
giving the dietary supplement industry a bad name and abusing the very
laws which permit dietary supplement manufacturers to place truthful
and nonmisleading claims on their products.
These herbal street drugs pose significant health risks to consumers.
These products are marketed under a variety of brand names, including
Cloud 9, Herbal Ecstasy and Ultimate Xphoria, with labels that claim or
imply that they produce such effects as euphoria, heightened awareness
and other effects. These labels often portray the products as legal
alternatives to illegal street drugs such as ``ecstasy.'' ``Ecstasy''
is the street name for MDMA (4-methyl-2, dimethoxyamphetamine), which
produces euphoria.
These products often contain botanical sources of ephedrine.
Ephedrine is an amphetamine-like stimulant that can have potentially
dangerous effects on the heart and central nervous system. Possible
adverse effects range from clinically significant effects such as heart
attack, stroke, seizures, psychosis and death, to clinically less
significant effects that may indicate the potential for more serious
effects. These effects can include dizziness, headache,
gastrointestinal distress, irregular heartbeat, and heart palpitations.
The labels on these herbal street drugs may list one or more ephedrine-
containing ingredients, including ma huang, Chinese ephedra, ma huang
extract, ephedra, Ephedra sinica, ephedra extract, ephedra herb powder,
epitonin or ephedrine.
Ephedrine and its related products are also available in many
legitimate forms that will not be affected by this bill. For example,
ephedrine can be useful for treating mild forms of seasonal or chronic
asthma and is also FDA-approved for treating enursesis hypotension,
nasal congestion and sisustitis.
According to a statement by the Panama City, Florida medical
examiner, 20-year-old Peter Schlendorf died ``as a result of the use of
Ultimate Xphoria, an herbal product containing Ma Huang''. Peter's
cause of death was listed as the ``synergistic effect of ephedrine,
pseudo-ephedrine, phenylpropanolamine and caffeine''. There is no
question that this combination of stimulants can have an adverse effect
on the heart and central nervous system.
As lawmakers, we have a responsibility to make sure that no more
young people die from these herbal street drugs. This bill provokes
debate on this important issue. I have already been contacted by a
major trade association, the Council for Responsible Nutrition [CRN],
and the Nutritional Health Alliance, an industry and consumer
coalition, expressing a desire to work with us to reach an effective
solution to this issue. I urge all interested parties to come to the
table and address the serious consequences of allowing these herbal
street drugs to fall into the hands of our children.<bullet>
______

By Mr. MURKOWSKI (for himself and Mr. Stevens):
S. 1807. A bill to amend the Alaska Native Claims Settlement Act,
regarding the Kake Tribal Corporation public interest land exchange; to
the Committee on Energy and Natural Resources.

kake land exchange legislation

<bullet> Mr. MURKOWSKI. Mr. President, today I introduce the Kake
Tribal Land Exchange Act on behalf of myself and Senator Stevens. This
legislation would amend the Alaska Native Claims Settlement Act which
authorized the transfer of 23,040 acres of land from the U.S.
Government to Kake Tribal Corporation.
The land was transferred to Kake to recognize ``an immediate need for
a fair and just settlement''
Unfortunately, Kake has not received the full beneficial use of its
23,040 acres because the city's watershed--over 2,400 acres--rest
within Kake Tribal's lands. In order to protect the city's watershed
and still receive beneficial use of their 23,040 acres we are proposing
an acre-for-acre land exchange. This will assist the people of Kake,
AK, as they move toward a safer, cleaner, and healthier future.
Under this proposal, Kake Tribal would exchange the watershed for
2,427 acres in southeast Alaska, thereby allowing Kake to receive its
full entitlement under ANCSA. This legislation is of great importance
to the residents of the community of Kake, AK.
This legislation will ensure protection of the Gunnuk Creek watershed
which is the main water supply for the city of Kake as well as protect
critical habitat for the Gunnuk Creek hatchery.
The legislation has received wide support in Alaska from diverse
groups such as: The Southeast Alaska Conservation Council, the city of
Kake, AK, the Organized Village of Kake, the Kake non-profit fishery,
the Alaska Federation of Natives, and Sealaska Corporation.
Additionally, the Governor of Alaska has written to me in support of
this exchange. Attached are copies of some of the letters of support I
have received for the record at this time.
Because this is an acre-for-acre exchange there will be no cost to
the Federal Government. I introduced this legislation with the
confidence that it is in the best interest of not only the citizens of
Kake but with the knowledge that it is in the best interest of all
Americans to protect drinking water for our communities. Lastly, this
legislation will help fulfill our commitment to the Natives of Alaska
that they will be treated fairly and justly under the Alaska Native
Claims Settlement Act.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1807

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Kake Tribal Corporation Land
Exchange Act.''

SEC. 2. AMENDMENT OF SETTLEMENT ACT.

The Alaska Native Claims Settlement Act (Public Law 92-203,
December 18, 1971, 85 Stat. 688, 43 U.S.C. 1601 et seq.), as
amended, is further amended by adding a new section to read:

SEC. 40. KAKE TRIBAL CORPORATION LAND EXCHANGE.

(a) To provide Kake Tribal Corporation with land suitable
for development, to acknowledge the corporation's return to
public ownership land needed as a municipal watershed area,
and to promote the public interest, the Secretary shall
convey to the corporation approximately 2, 427 acres of
Federal land as described in subsection (c). The land to be
conveyed includes:
(1) up to 388 acres in the Slate Lakes area, as described
in (c)(2) of this section, if, within five years after the
effective date of this section, the corporation has entered
into an agreement to lease or otherwise convey some or all of
the land to the operator of the Jualin Mine; or,
(2) at the corporation's option, the 388 acres mentioned in
(1) of this subsection and the remaining 2,039 acres may be
conveyed from the acres described in (c)(3) of this section.
(b) Title to Surface and Subsurface.--Subject to valid
existing rights and easements, the Secretary shall, no later
than the deadlines specified in (c)(2) and (3) of this
section, convey to Kake Tribal Corporation title to the
surface estate in this land and convey to Sealaska
Corporation title to the subsurface estate in that land.
(c) Description and Deadlines.--The land covered by this
section is in the Copper River Meridian and is further
described as follows:
(1) the land to be conveyed by Kake Tribal Corporation to
the United States, no later than 90 days after the effective
date of this section, as shown on the map dated __________
and labeled Attachment A, is the municipal watershed area and
is described as follows:

Municipal watershed

Approximate
Section acres

T56S, R72E
13......................................................... 82
23......................................................... 118
24......................................................... 635
25......................................................... 640
26......................................................... 346
34......................................................... 9
35......................................................... 349
36......................................................... 248
------------
Approximate total........................................ 2,427

(2) Kake Tribal Corporation shall have the option to select
up to 388 acres in the Slate Lakes area, as shown on the map
dated __________ and labeled Attachment B. This option shall
remain in effect for five years after the date of enactment
of this section. The land to be conveyed is identified on the
following maps as:

[[Page S5585]]

Slake lakes area

Approximate
Section Description acres

T35S, R62E
22................................. E\1/2\................ 27
23................................. W\1/2\................ 152
26................................. W\1/2\................ 119
27................................. E\1/2\................ 23

T36S, R62E
1.................................. W\1/2\, NW\1/4\....... 38
Two utility corridors: One beginning in the northwest
quarter of section 1, T36S, R62E, heading northwest through
the northeast quarter of section 2, then heading northwest
through section 26, T35S, R62E; another beginning in
section 23, T35S, R62E, heading northeast, then heading
northwest through section 23, then northwest through the
southwest quarter of section 15, then northwest through
section 16, then turning northeast in the northeast quarter
of section 16 to the Jualin patented group.
Approximate total............ .................... 388

(3) the remaining 2,039 acres of land to be conveyed to
Kake Tribal Corporation, or the entire 2,427 acres if the
option on the 388 acres mentioned in (2) of this subsection
is not exercised, shall be land in the Hamilton Bay and
Saginaw Bay areas and shall be conveyed within 90 days after
the effective date of this section; this land is shown on the
maps dated __________ and labeled Attachments C and D.
(d) Timber Manufacturing.--Notwithstanding any other
provision of law, timber harvested from lands conveyed to
Kake Tribal Council pursuant to this Act shall not be
available for export as unprocessed logs from Alaska, nor may
Kake Tribal Corporation sell, trade, exchange, substitute, or
otherwise convey such logs to any other person for the
purpose of exporting such logs from their.
(e) Relation to Other Requirements.--The land conveyed to
Kake Tribal Corporation and Sealaska Corporation under this
section is, for all purposes, considered land conveyed under
the Alaska Native Claims Settlement Act.
(f) Maps.--The maps referred to in this section shall be
maintained on file in the Office of the Chief, United States
Forest Service, and in the Office of the Secretary of the
Interior, Washington, D.C. The acreage cited in this section
is approximate, and if a discrepancy arises between cited
acreage and the land depicted on the specified maps the maps
shall control. The maps do not constitute an attempt by the
United States to convey State or private land.<bullet>
______

By Mr. MURKOWSKI (for himself and Mr. Johnston):
S. 1808. A bill to amend the Act of October 15, 1966 (80 stat. 915),
as amended, establishing a program for the preservation of additional
historic property throughout the Nation, and for other purpose; to the
Committee on Energy and Natural Resources.

the national historic preservation act of 1966 amendment act of 1996

<bullet> Mr. MURKOWSKI. Mr. President, on behalf of Senator Johnston
and myself, I introduce a bill to amend the National Historic
Preservation Act of 1966, that, when enacted, will continue the
appropriations authorization for the Advisory Council on Historic
Preservation.
Established in 1966, the Council is an independent Federal agency
responsible for advising the President and the Congress on historic
preservation matters and commenting to Federal agencies on the effects
of their activities upon historic properties.
Mr. President, over the past three decades, the Congress has made a
substantial commitment to the preservation and encouragement of our
national heritage. Established by the National Historic Preservation
Act, the Advisory Council on Historic Preservation has served to
improve the effectiveness and coordination of public and private
efforts in historic preservation.
Historic preservation safeguards physical links to the past. It is
through these links that our important cultural resources are preserved
and passed on to succeeding generations. Destruction of our significant
cultural and historic resources serves no purpose. Our memory of
important history only becomes more difficult without the various
fabrics to view, touch and or experience.
Congress recognized this principle in the National Historic
Preservation Act of 1966: ``The historical and cultural foundations of
the nation should be preserved as a living part of our community life
and development in order to give a sense of orientation to the American
people.''
Mr. President, in addition to many educational programs, one of the
most important functions of the Advisory Council is mediating between
any Federal agency issuing a permit and the individual who is planning
to develop his property. Under the terms of Section 106 of the National
Historic Preservation Act, the Council seeks to negotiate a memorandum
of agreement in such cases, setting forth what will be done to reduce
or avoid and adverse effects the undertaking will have.
While the section 106 process has often been described as contentious
by private property rights advocates and others, I believe the Advisory
Council can and should serve as a solution to resolving conflicts
between a sometimes over-reaching bureaucracy and the individual
property owner.
It is my hope that the committee hearing process will shed light on
the problems, address the issues, as well as the successes of the
Council; and that we can move forward on this important program in a
positive and constructive manner.
The Council's appropriations authorization expires with the current
fiscal year. This legislation will authorize the continuing work of the
Council by providing appropriations authority from fiscal year 1997
through fiscal year 2002.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1808

Be it enacted by the Senate and the House of
Representatives of the United States of America in Congress
assembled, That the Act of October 15, 1966 (80 Stat. 915),
as amended (16 U.S.C. Section 470 et seq.) is further amended
as follows:
(a) Section 212(a) is amended by deleting the last sentence
and inserting in lieu thereof the sentence ``There are
authorized to be appropriated not to exceed $5,000,000 in
each fiscal year 1997 through 2002.''<bullet>
______

By Mr. MURKOWSKI:
S. 1809. A bill entitled the ``Aleutian World War II National
Historic Areas Act of 1996''; to the Committee on Energy and Natural
Resources.

THE ALEUTIAN WORLD WAR II NATIONAL HISTORIC AREAS ACT OF 1996

<bullet> Mr. MURKOWSKI. Mr. President, I introduce a bill entitled the
``Aleutian World War II National Historic Areas Act of 1996.''
Mr. President, the Ounalashka Corporation is the Alaska Native
village corporation for the Unalaska region of the Western Aleutian
Islands. The Corporation is the major land owner of Amaknak Island,
where the City of Unalaska is located. The Corporation has been working
closely with municipal officials of the City of Unalaska to identify
Corporation land which would be Federally recognized and designated as
a unique ``historic area''.
Many have forgotten that during World War II, Unalaska came under
attack. Unalaska was raided and bombed by Japanese aircraft in one of
the few sieges on U.S. territory. This area of Amaknak Island was
heavily fortified, and much of the original bunkers, tunnels, and
buildings remain. The Corporation owns the majority of land and
facilities occupied by U.S. military forces on Amaknak Island during
the war.
The area is rich in history and memories. In recent years World War
II veterans who were stationed in Unalaska, and in some cases family
members, have made pilgrimages back to honor fallen friends and relive
the past.
In addition to the historic significance of Unalaska during the War,
there is also a compelling story of the Aleutian Islands indigenous
people which is not well known. Alaska Native people from 23 villages
were evacuated from the region during the War, and many were interned
in relocation camps. As a result of the devastating bombing by the
Japanese, the city of Unalaska was the only village that was re-
inhabited following the World War II effort.
The Aleut people made substantial contributions to the war effort and
yet suffered hardships similar to those of the Japanese-Americans
throughout the war.
The Corporation, the City of Unalaska, and many historians believe
that the history of the Aleut people and the war effort in the region
are

[[Page S5586]]

intertwined. In response to the increased interest of the World War II
veterans and their survivors who have visited Unalaska, the Corporation
is considering constructing a World War II Historic Center on the
Island of Amaknak to tell this unique, but little known history of the
war in the Aleutians and the Aleut people to the rest of the world.
Mr. President, this legislation, when enacted, will establish the
``Aleutian World War II National Historic Area''. I am very cognizant
of the adverse effects that new units of the National Park System can
create on existing units of the System. This legislation provides us
with a unique opportunity to work with and for the private sector in
the development and operation of this important historic resources.
There will be no land acquisition or day-to-day operational expenses
normally associated with other units of the National Park System. The
Ounakashka Corporation has exclusive ownership and control of the
lands, buildings and historic structures which would comprise the
historic area.
The Corporation is not seeking land exchanges with the Department of
the Interior and does not desire to convey or encumber title to, or
control of, its lands to the Federal Government. The Corporation only
wants to work with the Federal Government to save this significant
piece of the history of the United States. The expense to the National
Park Service would be minimal, and would consist of technical
assistance and training. The contribution to the public will be a
historic site that is preserved for the enjoyment and education of all
Americans.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1809

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Aleutian World War II
National Historic Areas Act of 1996''.

SEC. 2. PURPOSE.

The purpose of this Act is to designate and preserve the
Aleutian World War II National Historic Area within lands
owned by the Ounalaska Corporation on the island of Amaknak,
Alaska and to provide for the interpretation, for the
educational and inspirational benefit of present and future
generations, of the unique and significant circumstances
involving the history of the Aleut people, and the role of
the Aleut people and the Aleutian Islands in the defense of
the United States in World War II.

SEC. 3. BOUNDARIES.

The Aleutian World War II National Historic Area shall be
comprised of areas on Amaknak island depicted on the map
entitled ``Aleutian World War II National Historic Area''.

SEC. 4. TERMS AND CONDITIONS.

Nothing in this Act shall--
(a) authorize the conveyance of lands between the Ounalaska
Corporation and the U.S. Department of the Interior, nor
remove land or structures appurtenant to the land from the
exclusive control of the Ounalaska Corporation; or
(b) provide authority for the Department of the Interior to
assume the duties associated with the daily operation of the
Historic Area or any of its facilities or structures.

SEC. 5. TECHNICAL ASSISTANCE.

The Secretary of the Interior may award grants and provide
technical assistance to the Ounalaska Corporation and the
City of Unalaska to assist with the planning, development,
and historic preservation from any program funds authorized
by law for technical assistance, land use planning or
historic preservation.<bullet>
______

By Mr. GORTON (for himself and Mrs. Murray):
S. 1810. A bill to expand the boundary of the Snoqualmie National
Forest and for other purposes; to the Committee on Energy and Natural
Resources.

the snoqualmie national forest boundary adjustment act of 1996

<bullet> Mr. GORTON. Mr. President, today I am joined by junior Senator
from Washington State, Mrs. Murray, in introducing the ``Snoqualmie
National Forest Boundary Adjustment Act of 1996.'' Earlier this week
Representative Jennifer Dunn, of Washington State, introduced identical
legislation in the House.
This legislation will facilitate the exchange of land between the
Weyerhaeuser Company and the Forest Service by adjusting a National
Forest Boundary. As Chairman of the Interior Appropriations
Subcommittee, which funds our National Forest and Parks, land exchanges
result in less expense to the Federal taxpayer than do land
acquisitions.
I will be working over the course of the next few months to get this
legislation passed by both the House and Senate, and I encourage my
colleagues to support this legislation.<bullet>
<bullet> Mrs. MURRAY. Mr. President, I fully support this landmark
agreement negotiated by the Sierra Club's Cascade Checkerboard Project,
the Weyerhaeuser Company, and the Forest Service. I particularly
applaud the Weyerhaeuser Company's donation of approximately 1,900
acres of land, 900 acres of which will become part of the Alpine Lakes
Wilderness Area.
This exchange will give Weyerhaeuser 7,200 acres of 80- to 100-year-
old trees within the Mount Baker-Snoqualmie National Forest in Pierce
County, WA, in exchange for 33,000 acres of company's land.
Essentially, the company gets timber to cut now, and the public gets
much more land upon which future forests will be grown. Both
Weyerhaeuser and the Forest Service will also be better able to manage
their lands as ecosystems and reduce costs and administrative burdens
of checkerboard management.
I strongly support such negotiated trades. I believe it is in all of
our interests to reduce the checkerboard pattern of ownership--which
Congress created through a massive land grant to the Northern Pacific
Railroad in 1864. I will continue to encourage cooperation between
public and private landowner, and environmental and timber interests.
Such agreements provide models for resolution of natural resources
disputes and other environmental issues.
Mr. President, I urge the Senate to take expeditious action on this
bill, which simply alters the boundary of Mount Baker-Snoqualmie
National Forest. The boundary change is needed before the exchange can
occur. I thank my colleagues for any support they can give to their
bipartisan, non-controversial bill.<bullet>
______

By Mr. MACK (for himself, Mr. Bradley, Mr. Roth, Mr. Lautenberg
and Mr. Biden):

S. 1811. A bill to amend the Act entitled ``An Act authorizing
Federal participation in the cost of protecting the shores of publicly
owned property'' to confirm and clarify the authority and
responsibility of the Secretary of the Army, acting through the Chief
of Engineers, to promote and carry out shore protection projects,
including beach nourishment projects, and for other purposes; to the
Committee on Environment and Public Works.

The Shore Protection Act of 1996

Mr. MACK. Mr. President, I rise today to announce legislation I am
introducing--along with Senator Bradley and others--to reaffirm the
Federal role in beach preservation and renourishment. I want to thank
the Senator from New Jersey for his steadfast efforts on this issue and
for all he did to make this bill possible.
Mr. President, in my State of Florida, healthy beaches mean a healthy
economy. Each year, millions of people travel from around the world to
enjoy the recreational benefits of my State's coastlines. This tourist
activity sustains our economy and provides hundreds of thousands of
jobs for Floridians. As a consequence, people in Florida care deeply
about the future of our beaches and look to us to ensure that they are
properly maintained.
For 60 years, Mr. President, the U.S. Army Corps of Engineers worked
in partnership with the Congress, the States, and coastal communities
to devise a workable policy on sandy beach renourishment. The Corps
brought to this partnership a wealth of accumulated technical expertise
and institutional knowledge about beach preservation. Further, they
brought funding which was leveraged with State and local participation
into projects which directly benefited the Nation's coastlines.
This all ended last year when the Clinton administration turned its
back on coastal communities by ending the traditional Federal role in
beach renourishment. In its 1996 budget request, the administration
indicated that beach preservation and maintenance was no longer of
national significance.
I strongly disagree. Almost half our population lives in or near
coastal communities. The coastal economy is responsible for one-third
of our gross domestic product and more than 28 million jobs. Much of
this economic activity derives from the vacationtime

[[Page S5587]]

lure of healthy beaches. These projects truly are of national
significance, Mr. President, and the Corps of Engineers ought to remain
a full partner in this effort.
Last year, I joined Senator Bradley and several of my colleagues in
twice writing the administration in protest. Further, we restored the
Corps' authority through the appropriations process. This victory was
only short term, however, and coastal communities throughout the Nation
asked Congress for assurance of a permanent Federal presence in this
sector.
When the administration released this year's budget and again
proposed to end the Corps' involvement in restoring beaches, we began
to explore a permanent legislative solution to this problem. The
culmination of our efforts is the bill we are introducing today.
Our legislation is very simple, Mr. President. We amend the mission
of the Corps to include shore protection projects, and we mandate that
the Corps make recommendations to Congress on specific projects that
are worthy of Federal participation. Further, we require the Corps to
consider benefits to the local and regional economy and ecology when
considering preparing cost/benefit analyses on beach projects. And we
encourage the Corps to work with the States and local communities on
regional plans for the long-term preservation of our coastal resources.
Mr. President, this bill will ensure that the Federal Government
remains a full partner with the States and communities on the
preservation of our beach resources. This is critical to Florida and to
our Nation's economy. I encourage my colleagues to join the Senator
from New Jersey and me as we continue to move ahead on this issue.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1811

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Shore Protection Act of
1996''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--Congress finds that--
(1) the beach, shore, and coastal resources of the United
States--
(A) are critical assets that must be protected, conserved,
and restored; and
(B) provide economic and environmental benefits that are of
national significance;
(2) a network of healthy and nourished beaches is essential
to the economy, competitiveness in world tourism, and safety
of coastal communities of the United States;
(3)(A) the coasts of the United States are an economic
asset, supporting 34 percent of national employment, or
28,000,000 jobs; and
(B) the 413 coastal communities of the United States
generate $1,300,000,000,000, or \1/3\, of the gross domestic
product;
(4)(A) travel and tourism--
(i) is the second largest sector of the economy of the
United States; and
(ii) contributed over $746,000,000,000 to the gross
domestic product in 1995;
(B) the health of the beaches and shoreline of the United
States contributes to this economic benefit, since the
leading tourist destinations in the United States are
beaches; and
(C) 85 percent of all tourism-generated revenue in the
United States derives from coastal communities;
(5)(A) the value of the coastline of the United States lies
not only in the jobs and revenue that the coastline
generates, but also in the families, homes, and businesses
that the coastline protects from hurricanes, typhoons, and
tropical and extratropical storms;
(B) almost 50 percent of the total United States population
lives in coastal communities; and
(C) beaches provide protection to prevent the destruction
of life and hundreds of billions of dollars worth of
property;
(6) shoreline protection projects can provide ecological
and environmental benefits by providing for, or by restoring,
marine and littoral habitat;
(7)(A) the coastline of the United States is a national
treasure, visited by millions of Americans and foreign
tourists every year;
(B) over 90,000,000 Americans spend time boating or fishing
along the coast each year; and
(C) the average American spends 10 recreational days per
year on the coast; and
(8) since shoreline protection projects generate positive
economic, recreational, and environmental outcomes that
benefit the United States as a whole, Federal responsibility
for preserving this valuable resource should be maintained.
(b) Purpose.--The purpose of this Act is to provide for a
Federal role in shore protection projects, including projects
involving the replacement of sand, for which the economic and
ecological benefits to the locality, region, or Nation exceed
the costs.

SEC. 3. SHORE PROTECTION.

(a) In General.--The first section of the Act entitled ``An
Act authorizing Federal participation in the cost of
protecting the shores of publicly owned property'', approved
August 13, 1946 (33 U.S.C. 426e), is amended--
(1) in subsection (a)--
(A) by striking ``damage to the shores'' and inserting
``damage to the shores and beaches''; and
(B) by striking ``the following provisions'' and all that
follows through the period at the end and inserting the
following: ``this Act, to promote shore protection projects
and related research that encourage the protection,
restoration, and enhancement of sandy beaches, including
beach restoration and periodic beach nourishment, on a
comprehensive and coordinated basis by the Federal
Government, States, localities, and private enterprises. In
carrying out this policy, preference shall be given to areas
in which there has been a Federal investment of funds and
areas with respect to which the need for prevention or
mitigation of damage to shores and beaches is attributable to
Federal navigation projects or other Federal activities.'';
(2) in subsection (d), by striking ``or from the protection
of nearby public property'' and inserting ``, if there are
sufficient benefits to local and regional economic
development and to the local and regional ecology (as
determined under subsection (e)(2)(B)),''; and
(3) in subsection (e)--
(A) by striking ``(e) No'' and inserting the following:
``(e) Authorization of Projects.--
``(1) In general.--No''; and
(B) by adding at the end the following:
``(2) Studies.--
``(A) In general.--The Secretary shall--
``(i) recommend to Congress studies concerning shore
protection projects that meet the criteria established under
this Act (including subparagraph (B)(iii)) and other
applicable law;
``(ii) conduct such studies as Congress requires under
applicable laws; and
``(iii) report the results of the studies to the
appropriate committees of Congress.
``(B) Recommendations for shore protection projects.--
``(i) In general.--The Secretary shall recommend to
Congress the authorization or reauthorization of shore
protection projects based on the studies conducted under
subparagraph (A).
``(ii) Considerations.--In making recommendations, the
Secretary shall consider the economic and ecological benefits
of a shore protection project and the ability of the non-
Federal interest to participate in the project.
``(iii) Consideration of local and regional benefits.--In
analyzing the economic and ecological benefits of a shore
protection project, or a flood control or other water
resource project the purpose of which includes shore
protection, the Secretary shall consider benefits to local
and regional economic development, and to the local and
regional ecology, in calculating the full economic and
ecological justifications for the project.
``(iv) NEPA requirements.--Nothing in this subparagraph
imposes any requirement on the Army Corps of Engineers under
the National Environmental Policy Act of 1969 (42 U.S.C. 4321
et seq.).
``(C) Coordination of projects.--In conducting studies and
making recommendations for a shore protection project under
this paragraph, the Secretary shall--
``(i) determine whether there is any other project being
carried out by the Secretary or the head of another Federal
agency that may be complementary to the shore protection
project; and
``(ii) if there is such a complementary project, describe
the efforts that will be made to coordinate the projects.
``(3) Shore protection projects.--
``(A) In general.--The Secretary shall construct, or cause
to be constructed, any shore protection project authorized by
Congress, or separable element of such a project, for which
funds have been appropriated by Congress.
``(B) Agreements.--
``(i) Requirement.--After authorization by Congress, and
before commencement of construction, of a shore protection
project or separable element, the Secretary shall enter into
a written agreement with a non-Federal interest with respect
to the project or separable element.
``(ii) Terms.--The agreement shall--

``(I) specify the life of the project; and
``(II) ensure that the Federal Government and the non-
Federal interest will cooperate in carrying out the project
or separable element.

``(C) Coordination of projects.--In constructing a shore
protection project or separable element under this paragraph,
the Secretary shall, to the extent practicable, coordinate
the project or element with any complementary project
identified under paragraph (2)(C).
``(4) Report to congress.--The Secretary shall report
annually to the appropriate committees of Congress on the
status of all ongoing shore protection studies and shore
protection projects carried out under the jurisdiction of the
Secretary.''.

[[Page S5588]]

(b) Requirement of Agreements Prior to Reimbursements.--
(1) Small shore protection projects.--Section 2 of the Act
entitled ``An Act authorizing Federal participation in the
cost of protecting the shores of publicly owned property'',
approved August 13, 1946 (33 U.S.C. 426f), is amended--
(A) by striking ``Sec. 2. The Secretary of the Army'' and
inserting the following:

``SEC. 2. REIMBURSEMENTS.

``(a) In General.--The Secretary'';
(B) in subsection (a) (as so designated)--
(i) by striking ``local interests'' and inserting ``non-
Federal interests'';
(ii) by inserting ``or separable element of the project''
after ``project''; and
(iii) by inserting ``or separable elements'' after
``projects'' each place it appears; and
(C) by adding at the end the following:
``(b) Agreements.--
``(1) Requirement.--After authorization of reimbursement by
the Secretary under this section, and before commencement of
construction, of a shore protection project, the Secretary
shall enter into a written agreement with the non-Federal
interest with respect to the project or separable element.
``(2) Terms.--The agreement shall--
``(A) specify the life of the project; and
``(B) ensure that the Federal Government and the non-
Federal interest will cooperate in carrying out the project
or separable element.''.
(2) Other shoreline protection projects.--Section
206(e)(1)(A) of the Water Resources Development Act of 1992
(33 U.S.C. 426i-1(e)(1)(A)) is amended by inserting before
the semicolon the following: ``and enters into a written
agreement with the non-Federal interest with respect to the
project or separable element (including the terms of
cooperation)''.
(c) State and Regional Plans.--The Act entitled ``An Act
authorizing Federal participation in the cost of protecting
the shores of publicly owned property'', approved August 13,
1946, is amended--
(1) by redesignating section 4 (33 U.S.C. 426h) as section
5; and
(2) by inserting after section 3 (33 U.S.C. 426g) the
following:

``SEC. 4. STATE AND REGIONAL PLANS.

``The Secretary may--
``(1) cooperate with any State in the preparation of a
comprehensive State or regional plan for the conservation of
coastal resources located within the boundaries of the State;
``(2) encourage State participation in the implementation
of the plan; and
``(3) submit to Congress reports and recommendations with
respect to appropriate Federal participation in carrying out
the plan.''.
(d) Definitions.--
(1) In general.--Section 5 of the Act entitled ``An Act
authorizing Federal participation in the cost of protecting
the shores of publicly owned property'', approved August 13,
1946 (as redesignated by subsection (c)(1)), is amended--
(A) by striking ``Sec. 5. As used in this Act, the word
`shores' includes all the shorelines'' and inserting the
following:

``SEC. 5. DEFINITIONS.

``In this Act:
``(1) Secretary.--The term `Secretary' means the Secretary
of the Army, acting through the Chief of Engineers.
``(2) Separable element.--The term `separable element' has
the meaning provided by section 103(f) of the Water Resources
Development Act of 1986 (33 U.S.C. 2213(f)).
``(3) Shore.--The term `shore' includes each shoreline of
each''; and
(B) by adding at the end the following:
``(4) Shore protection project.--The term `shore protection
project' includes a project for beach nourishment, including
the replacement of sand.''.
(2) Conforming amendments.--The Act entitled ``An Act
authorizing Federal participation in the cost of protecting
the shores of publicly owned property'', approved August 13,
1946, is amended--
(A) in subsection (b)(3) of the first section (33 U.S.C.
426e(b)(3)), by striking ``Secretary of the Army, acting
through the Chief of Engineers,'' and inserting
``Secretary,''; and
(B) in section 3 (33 U.S.C. 426g), by striking ``Secretary
of the Army'' and inserting ``Secretary''.
(e) Objectives of Projects.--Section 209 of the Flood
Control Act of 1970 (42 U.S.C. 1962-2) is amended by
inserting ``(including shore protection projects such as
projects for beach nourishment, including the replacement of
sand)'' after ``water resource projects''.

Mr. BRADLEY. Mr. President, I rise today to join Senator Mack in
introducing a measure designed to provide for a continuing Federal role
in protecting a valuable national resource--our Nation's coastline. The
Shore Protection Act of 1996 states clearly that the Federal Government
has an obligation to provide necessary support--both financial and
technical--for projects that promote the protection, restoration and
enhancement of sandy beaches and shorelines in cooperation with States
and localities.
Beach, shore and coastal resources are critical to our economy and
quality of life, but they are fragile and must be protected, conserved
and restored. As a coastal State Senator, who walks the beaches of the
Jersey shore every year, I know first-hand the economic and
recreational benefits that are derived from healthy beaches. Every
summer, thousands of New Jerseyans and visitors from all over the U.S.
and the world, visit the beaches of the Jersey shore, generating
roughly $11 billion in travel and tourism revenues.
However, beaches are important not only to New Jersey's economy or to
those of other coastal communities, they are important to the Nation's
economy. Beaches support 28 million jobs, and coastal communities
generate $1.3 trillion, or one-third, of the Gross National Product.
Travel and tourism is the second largest sector of our economy,
contributing over $746 billion in 1995 and amounting to a $26 billion
trade surplus. Beaches are responsible for this economic boom. As the
leading tourist destination in the U.S., coastlines generate 85 percent
of tourism-related revenue. If we allow this valuable resource to
simply wash away, billions of dollars in beach related revenues will
disappear as well.
The value of our coastline lies not only in the jobs and revenue that
they generate, but also in the families, homes and business they
protect from hurricanes, nor'easters and tropical storms. With almost
50% of all Americans living in our coastal communities, we simply must
have healthy beaches as our first line of defense. Nourished beaches
can also provide ecological and environmental benefits for certain
species of wildlife by providing, or restoring, marine and littoral
habitat.
In 1995, the Administration proposed an end to the Federal role in
shore protection projects. Citing budgetary concerns, the
Administration proposal called for Federal involvement in projects that
were of ``national significance'' only. This bill makes the case that
the preservation of an invaluable economic and environmental resource--
our shoreline--is of national significance. Our bill would permit all
the local, regional and national economic and ecological benefits of a
shoreline protection project to be considered when judging a project's
merit. I am confident this comprehensive evaluation will demonstrate
that shore protection projects are indeed of national significance.
Mr. President, let me take a moment to outline the major provisions
of the bill. Specifically, the bill would mandate a continuing Federal
role in shore protection projects. The bill changes the mission of the
Corps from one of general authority to do beach projects to a specific
mandate to undertake the protection, restoration and enhancement of
beaches in cooperation with states and local communities.
Additionally, the bill would require that new criteria be used in
conducting the cost/benefit analysis of a proposed project. Currently,
when undertaking cost/benefit analysis to determine the suitability of
proposed projects, the Corps is only required to consider the property
values of property directly adjacent to the beach. The Corps can take
into account revenues generated through recreation, but is not required
to do so, nor can the recreational values be weighed as anything other
than an ``incidental'' benefit. This bill requires that the benefits to
the local, regional and national economy and the local, regional and
national ecology be considered. This comprehensive evaluation will
demonstrate that shore protection projects are of national
significance.
The bill also requires that the Corps report annually to Congress on
beach project priorities. The Corps will be required to submit
information (reports) to Congress on projects that, when evaluated with
the bill's new cost/benefit criteria, are found to merit Federal
involvement. In current law, this authority is discretionary and has
been suspended by the Administration.
The bill also encourages the Corps to work with state and local
authorities to develop regional plans for preservation, restoration and
enhancement of shorelines and coastal resources. Further the Corps is
encouraged to work with other agencies to coordinate with other
projects that may have a complimentary effect on shoreline protection
projects.
A network of healthy and nourished beaches is essential to our
economy, competitiveness in world tourism and the safety of our coastal
communities.

[[Page S5589]]

Protection of the Nation's shoreline must be a continued Federal
priority.
______

By Mr. GRAHAM:
S. 1812. A bill to provide for the liquidation or replication of
certain frozen concentrated orange juice entries to correct an error
that was made in connection with the original liquidation; to the
Committee on Finance.

legislation to correct inequity suffered by juice farms, inc.

<bullet> Mr. GRAHAM. Mr. President, I am introducing legislation today
that will order Customs to take the necessary steps to correct an
inequity suffered by a Florida company, Juice Farms, Inc., resulting
from a Customs administrative error arising from a dumping case.
From 1987 to 1990, several anti-dumping orders were issued covering
Brazilian frozen concentrated orange juice. Juice Farms imported juice
from Brazil and deposited duties with Customs. As required by law,
liquidation of the import entries by Customs was suspended by Commerce
pending the outcome of administrative dumping reviews to be conducted
by Commerce.
In 1991, after three successive reviews, the Department of Commerce
found no sales at less than fair value. Commerce instructed Customs to
return Juice Farms' anti-dumping duty deposits plus interest. Juice
Farms learned, however, that Customs had mistakenly liquidated a number
of entries. Such liquidations were in clear violation of the suspension
order.
Juice Farms pursued court challenges but received an unfavorable
decision because the court found that the company filed its protest of
the premature liquidations too late. Accordingly, even though the
duties were required by law to be returned to Juice Farms, to date the
deposits have not been received. The legislation I propose today simply
will correct that error and require Customs to refund the funds
properly owed Juice Farms.<bullet>
______

By Mr. HELMS (for himself and Mr. Grassley):
S. 1813 A bill to reform the coastwise, intercoastal, and
noncontiguous trade shipping laws, and for other purposes; to the
Committee on Commerce, Science, and Transportation.

The Coastal shipping competition act of 1996

Mr. HELMS. Mr. President, since 1920 there has been a Federal statute
in force in America that, however well intentioned, has nonetheless
prevented a vast segment of the farming community in North Carolina and
other States from obtaining reasonably much-needed and priced grain
from the Midwest.
In doing so, of course, it has long prevented Midwestern grain
producers from delivering grain to grain deficit States which
repeatedly experience difficulty in sustaining their livestock. North
Carolina is one of the those States.
That is why I am today introducing S. 1813, the Coastal Shipping
Competition Act, which will eliminate a harmful anachronism that
enables a few waterborne carriers to cling to a monopoly on shipping.
The victims of this system, in North Carolina and elsewhere, assert
accurately that those shippers have no certified Jones Act ships to
meet the demands of producers who need the gain.
In fact, Mr. President, poultry and pork farmers in North Carolina
say they can't get enough grain for their farms to feed their animals.
North Carolina cannot now, nor ever be able, to produce enough grain to
satisfy the urgent needs of the poultry and pork producers in North
Carolina. As a result, they must rely upon grain shipped in from the
Midwest. The railroads can't guarantee enough railcars to move this
grain from the Midwest, and the costs of such shipments as can be
arranged are enormous.
The increase in transportation costs, coupled with the price of
grain, inevitably leads to excessively high overhead costs for North
Carolina farmers. To put it succinctly, the shortage of grains and
shortage of trains means sharply elevated costs and prices that
threaten the livelihoods of many farmers.
Mr. President, I ask unanimous consent that letters from two highly
respected North Carolina farmers, both of whom urge introduction and
passage of this legislation, be printed in the Record at the conclusion
of my remarks.
Mr. President, according to the most recent North Carolina
Department of Agriculture statistics, North Carolina was, in 1995, No.
1 in the Nation in turkey production with 61.2 million birds; in hog
production, North Carolina was No. 2, with 8.3 million heads--Iowa was
No. 1--and in commercial broilers North Carolina was No. 4 with 644
million birds--Arkansas, Georgia, and Alabama ranked first, second, and
third.
Mr. President, this past Saturday an article in the May 18 edition
of the Raleigh News and Observer, reported that 800 poultry jobs in
Chatham County, N.C., were threatened by, among other things, high-feed
grain prices. I ask unanimous consent that this article ``800 Perdue
Jobs in Danger'' be printed in the Record at the conclusion of my
remarks.
Mr. President, additionally, in times of severe weather--such as
this past winter--railroads often are unable to get through mountain
passes because of snow or flooding.
Mr. President, the Jones Act unfairly and unreasonably restricts
shipping between ports in the United States because it requires that
merchandise and produce shipped by water between U.S. points be shipped
only on U.S.-built, U.S.-flagged, U.S.-manned, and U.S.-citizen owned
vessels specifically documented and authorized by the Coast Guard for
such shipments.
But, Mr. President, the problem with that is that not nearly enough
certified vessels exist to transport grain to farmers in North Carolina
and other States. As a matter of fact, my farmers are now being forced
to go to foreign sources for feed grain.
Last year, according to a report in the September 12, 1995, Journal
of Commerce, Murphy family farms brought in a cargo shipment of 1
million bushels of Canadian wheat to the port of Wilmington, NC, aboard
Canada steamship lines.
Mr. President, the Jones Act is simply not fair. It's not fair to
farmers in the Midwest and it is unfair to countless producers in my
own State and in other States.

Those who may protest this legislation are likely to claim that it
will somehow destroy American shipping. That simply is not so.
Moreover, if the status quo is maintained, my farmers will have no
choice but to purchase their foreign grain from Canada, Argentina, and
other countries--and all of it will be shipped on foreign flagged
vessels.
According to a December 1995 report by the U.S. International Trade
Commission,

The economy wide effect of removing the Jones Act is a U.S.
economic welfare gain of approximately $2.8 billion. This
figure can also be interpreted as the annual reduction in
real national income imposed by the Jones Act. A primary
reason for the large gain in welfare is a decline of
approximately 26 percent in the price of shipping services
formerly restricted by the Jones Act.

Mr. President, isn't it ironic that the United States--the
breadbasket of the world--has such an unwise and unfair lid on that
bread basket? That lid, Mr. President, is the Jones Act.
That is my reason for offering this legislative remedy, Mr.
President. If Senators truly believe in the free enterprise system,
they will support this proposal to allow American grain to be shipped
unhindered to grain deficit States that are in need of it.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1813

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Coastal Shipping Competition
Act of 1996''.

SEC. 2. MISCELLANEOUS AMENDMENTS TO DEFINITIONS IN TITLE 46,
UNITED STATES CODE.

Section 2101 of title 46, United States Code, is amended--
(1) in each of paragraphs (1) through (45), by striking the
period at the end and inserting a semicolon;
(2) in paragraph (46), by striking the period at the end
and inserting ``; and'';
(3) by striking paragraph (3a) and inserting the following:
``(3a) `citizen of the United States' means--
``(A)(i) a national of the United States, as defined in
section 101(a)(22) of the Immigration and Nationality Act (8
U.S.C. 1101(a)(22));
``(ii) a corporation established under the laws of the
United States or under the laws

[[Page S5590]]

of a State, territory, district, or possession of the United
States, that has--
``(I) a president or other chief executive officer and
chairman of the board of directors of that corporation who
are citizens of the United States; and
``(II) a board of directors, on which a majority of the
number of directors necessary to constitute a quorum are
citizens of the United States;
``(iii) a partnership existing under the laws of a State,
territory, district, or possession of the United States that
has at least 1 general partner who is a citizen of the United
States;
``(iv) a trust that has at least 1 trustee who is a citizen
of the United States; or
``(v) an association, joint venture, limited liability
company or partnership, or other entity that has at least 1
member who is a citizen of the United States; but
``(B) such term does not include--
``(i) with respect to a person or entity under clause (ii),
(iii), or (v) of subparagraph (A), any parent corporation,
partnership, or other person (other than an individual) or
entity that is a second-tier owner (as that term is defined
by the Secretary) of the person or entity involved; or
``(ii) with respect to a trust under clause (iv), any
beneficiary of the trust.'';
(4) by inserting after paragraph (4) the following new
paragraph:
``(4a) `coastwise trade'--
``(A) subject to subparagraph (B), means the transportation
by water of merchandise or passengers, the towing of a vessel
by a towing vessel, or dredging operations embraced within
the coastwise laws of the United States--
``(i) between points in the United States (including any
district, territory, or possession of the United States);
``(ii) on the Great Lakes (including any tributary or
connecting waters of the Great Lakes and the Saint Lawrence
Seaway);
``(iii) on the subjacent waters of the Outer Continental
Shelf subject to the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.); and
``(iv) in the noncontiguous trade; and
``(B) does not include the activities specified in
subparagraph (A) on the navigable waters included in the
inland waterways trade except for activities specified in
subparagraph (A) that occur on mixed waters.'';
(5) by inserting after paragraph (11c) the following new
paragraph:
``(11d) `foreign qualified vessel' means a vessel--
``(A) registered in a foreign country; and
``(B) the owner, operator, or charterer of which is a
citizen of the United States or--
``(i) has qualified to engage in business in a State and
has an agent in that State upon whom service of process may
be made;
``(ii) is subject to the laws of the United States in the
same manner as any foreign person doing business in the
United States; and
``(iii) either--

``(I) employs vessels in the coastwise trade regularly or
from time to time as part of a regularly scheduled freight
service in the foreign ocean (including the Great Lakes)
trades of the United States; or
``(II) offers passage or cruises on passenger vessels the
owner, operator, or charterer employs in the coastwise trade
or in the coastwise trade as part of those cruises offered in
the foreign ocean (including the Great Lakes) trades of the
United States.'';

(6) by redesignating paragraph (14a) as paragraph (14b);
(7) by inserting after paragraph (14) the following new
paragraph:
``(14a) `inland waterways trade'--
``(A) means--
``(i) the transportation of merchandise or passengers on
the navigable rivers, canals, lakes other than the Great
Lakes, or other waterways inside the Boundary Line;
``(ii) the towing of barges by towing vessels in the waters
specified in clause (i); or
``(iii) engaging in dredging operations in the waters
specified in clause (i); and
``(B) includes any activity specified in subparagraph (A)
that is conducted in mixed waters.'';
(8) by redesignating paragraph (15a) as paragraph (15b);
(9) by inserting after paragraph (15) the following:
``(15a) `mixed waters' means--
``(A) the harbors and ports on the coasts and Great Lakes
of the United States; and
``(B) the rivers, canals, and other waterways tributary to
the Great Lakes or to the coastal harbors and coasts of the
United States inside the Boundary Line,

that the Secretary of Transportation determines to be
navigable by oceangoing vessels.'';
(10) by redesignating paragraph (17a) as paragraph (17b);
(11) by inserting after paragraph (17) the following:
``(17a) `noncontiguous trade' means transportation by water
of merchandise or passengers, or towing by towing vessels--
``(A) between--
``(i) a point in the 48 continental States and the District
of Columbia; and
``(ii) a point in Hawaii, Alaska, Puerto Rico, Guam, the
Virgin Islands, American Samoa, the Northern Mariana Islands,
or any other noncontiguous territory or possession of the
United States, as embraced within the coastwise laws of the
United States; or
``(B) between 2 points described in subparagraph
(A)(ii).'';
(12) in paragraph (21)(A)--
(A) in clause (ii), by striking ``or'' after the semicolon;
(B) in clause (iii), by inserting ``or'' after the
semicolon; and
(C) by adding at the end the following new clause:
``(iv) an individual who--

``(I) is a member of the family or a guest of the owner or
charterer; and
``(II) is not a passenger for hire;'';

(13) by striking paragraph (40) and inserting the
following:
``(40) `towing vessel' means any commercial vessel engaged
in, or that a person intends to use to engage in, the service
of--
``(A) towing, pulling, pushing, or hauling alongside (or
any combination thereof); or
``(B) assisting in towing, pulling, pushing, or hauling
alongside;''; and
(14) by inserting after paragraph (40) the following new
paragraphs:
``(40a) `towing of a vessel by a towing vessel between
points' means attaching a towing vessel to a towed vessel
(including any barge) at 1 point and releasing the towed
vessel from the towing vessel at another point, regardless of
the origin or ultimate destination of either the towed vessel
or the towing vessel; and
``(40b) `transportation of merchandise or passengers by
water between points' means, without regard to the origin or
ultimate destination of the merchandise or passengers
involved--
``(A) in the case of merchandise, loading merchandise at 1
point and permanently unloading the merchandise at another
point; or
``(B) in the case of passengers, embarking passengers at 1
point and permanently disembarking the passengers at another
point.''.

SEC. 3. DOCUMENTATION.

(a) Definitions.--Section 12101(b)(2) of title 46, United
States Code, is amended--
(1) by striking paragraph (2) and inserting the following:
``(2) `license', `enrollment and license', `license for the
coastwise (or coasting) trade', `enrollment and license for
the coastwise (or coasting) trade', and `enrollment and
license to engage in the foreign and coastwise (or coasting)
trade on the northern, northeastern, and northwestern
frontiers, otherwise than by sea' mean a coastwise
endorsement provided in section 12106.'';
(2) by striking paragraph (3); and
(3) by redesignating paragraph (4) as paragraph (3).
(b) Vessels Eligible for Documentation.--Section 12102(a)
of title 46, United States Code, is amended--
(1) by striking all that precedes paragraph (5) and
inserting the following:
``(a) A vessel of at least 5 net tons that is not
registered under the laws of a foreign country or that is not
titled in a State is eligible for documentation if--
``(1)(A) the vessel is owned by an individual who is a
citizen of the United States, or a corporation, association,
trust, joint venture, partnership, limited liability company,
or other entity that is a citizen of the United States; and
``(B) the owner of the vessel is capable of holding title
to a vessel under the laws of the United States or under the
laws of a State;''; and
(2) by redesignating paragraphs (5) and (6) as paragraphs
(2) and (3), respectively.
(c) Coastwise Endorsements.--Section 12106 of title 46,
United States Code, is amended to read as follows:

``Sec. 12106. Coastwise endorsements and certificates

``(a) In General.--A certificate of documentation may be
endorsed with a coastwise endorsement for a vessel that is
eligible for documentation.
``(b) Eligibility.--
``(1) In general.--Any of the following vessels may be
issued a certificate to engage in the coastwise trade if the
Secretary of Transportation makes a finding, pursuant to
information obtained and furnished by the Secretary of State,
that the government of the nation of registry of such vessel
extends reciprocal privileges to vessels of the United States
to engage in the transportation of merchandise or passengers
(or both) in its coastwise trade:
``(A) A foreign qualified vessel (as defined in section
2101(11d)).
``(B) A vessel of foreign registry--
``(i) if the vessel is subject to a demise or bareboat
charter, for the duration of that charter, to a person or
entity that would be eligible to document that vessel if that
person or entity were the owner of the vessel; or
``(ii) that engages irregularly in the coastwise trade of
the United States.
``(2) Vessel engaging irregularly in the coastwise trade.--
For purposes of this subsection, a vessel engages irregularly
in the coastwise trade of the United States if that vessel--
``(A) during any 60-day period does not make, in the
aggregate, more than 4 calls to United States ports; and
``(B) during any calendar year does not make, in the
aggregate, more than 6 calls to United States ports.
``(c) Employment in the Coastwise Trade.--Subject to the
applicable laws of the United States regulating the coastwise
trade and trade with Canada, only a vessel with a certificate
of documentation endorsed with a coastwise endorsement or
with a certificate issued under subsection (b) may be
employed in the coastwise trade.''.

[[Page S5591]]

(d) Inland Waterways Endorsements.--Section 12107 of title
46, United States Code, is amended to read as follows:

``Sec. 12107. Inland waterways endorsements

``A certificate of documentation may be endorsed with an
inland waterways endorsement for a vessel that--
``(1) is eligible for documentation; and
``(2)(A) was built in the United States; or
``(B) was not built in the United States; but was--
``(i) captured in war by citizens of the United States and
lawfully condemned as prize;
``(ii) adjudged to be forfeited for a breach of the laws of
the United States; or
``(iii) is qualified for documentation under section 4136
of the Revised Statutes (46 App. U.S.C. 14).''.
(e) Limitations on Operations Authorized by Certificates.--
Section 12110(b) of title 46, United States Code, is
amended--
(1) by striking ``coastwise trade'' and inserting
``coastwise trade or inland waterways trade''; and
(2) by striking ``that trade'' and inserting ``those
trades''.

SEC. 4. TRANSPORTATION OF MERCHANDISE IN THE COASTWISE AND
INLAND WATERWAYS TRADES.

(a) In General.--Section 27 of the Merchant Marine Act,
1920 (46 U.S.C. App. 883) is amended to read as follows:

``SEC. 27. PROHIBITION.

``No merchandise, including merchandise owned by the United
States Government, a State (as defined in section 2101 of
title 46, United States Code), or a political subdivision of
a State, and including material without value, shall be
transported by water, on penalty of forfeiture of the
merchandise (or a monetary amount not to exceed the value of
the merchandise, as determined by the Secretary of the
Treasury, or the actual cost of the transportation, whichever
is greater, to be recovered from any cosigner, seller, owner,
importer, consignee, agent, or other person that transports
or causes the merchandise to be transported by water)--
``(1) in the coastwise trade, in any vessel other than--
``(A) a vessel documented with a coastwise endorsement
under section 12106(a) of title 46, United States Code; or
``(B) a vessel that has been issued coastwise certification
under section 12106(b) of title 46, United States Code, that
is in effect for engaging in the transportation of
merchandise; or
``(2) in the inland waterways trade in any vessel other
than a vessel documented with an inland waterways endorsement
under section 12107 of title 46, United States Code.''.
(b) Repeal.--Section 27A of the Merchant Marine Act, 1920
(46 App. U.S.C. 883-1) is repealed.

SEC. 5. TRANSPORTATION OF PASSENGERS.

(a) In General.--Section 8 of the Act of June 19, 1886 (24
Stat. 81, chapter 421; 46 U.S.C. App. 289) is amended to read
as follows:

``SEC. 8. PROHIBITION.

``No passengers shall be transported by water, on penalty
of $200 for each passenger so transported or the actual cost
of the transportation, whichever is greater, to be recovered
from the vessel so transporting the passenger--
``(1) in the coastwise trade, in any vessel other than--
``(A) a vessel documented with a coastwise endorsement
under section 12106 of title 46, United States Code; or
``(B) a vessel that has been issued a coastwise
certification under section 12106(b) of title 46, United
States Code, that is in effect for engaging in the
transportation of merchandise; and
``(2) in the inland waterways trade, in any vessel other
than a vessel documented with an inland waterways endorsement
under section 12107 of title 46, United States Code.''.
(b) Repeals.--The following provisions are repealed:
(1) The Act of April 26, 1938 (52 Stat. 223, chapter 174;
46 U.S.C. App. 289a).
(2) Section 12(22) of the Maritime Act of 1981 (46 U.S.C.
App. 289b).
(3) Public Law 98-563 (46 U.S.C. App. 289c).

SEC. 6. TOWING AND SALVAGING OPERATIONS.

Section 4370(a) of the Revised Statutes (46 U.S.C. App.
316(a)) is amended to read as follows:
``(a)(1) No vessel (including any barge), other than a
vessel in distress, may be towed--
``(A) in the coastwise trade by any vessel other than--
``(i) a vessel documented with a coastwise endorsement
under section 12106(a) of title 46, United States Code; or
``(ii) a vessel registered in a foreign country, if the
Secretary of the Treasury finds, pursuant to information
furnished by the Secretary of State, that the government of
that foreign country and the government of the country of
which each ultimate owner of the towing vessel is a citizen
extend reciprocal privileges to vessels of the United States
to tow vessels (including barges) in the coastal waters of
that country; or
``(B) in the inland waterways trade by any vessel other
than a vessel documented with an inland waterways endorsement
under section 12107 of title 46, United States Code.
``(2)(A) The owner and master of any vessel that tows
another vessel (including a barge) in violation of this
section shall each be liable to the United States Government
for a civil penalty in an amount not less than $250 and not
greater than $1,000. The penalty shall be enforceable through
the district court of the United States for any district in
which the offending vessel is found.
``(B) A penalty specified in subparagraph (A) shall
constitute a lien upon the offending vessel, and that vessel
shall not be granted clearance until that penalty is paid.
``(C) In addition to the penalty specified in subparagraph
(A), the offending vessel shall be liable to the United
States Government for a civil penalty in an amount equal to
$50 per ton of the measurement of the vessel towed in
violation of this section, which shall be recoverable in a
libel or other enforcement action conducted through the
district court for the United States for the district in
which the offending vessel is found.''.

SEC. 7. DREDGING OPERATIONS.

The first section of the Act of May 28, 1906 (34 Stat. 204,
chapter 2566; 46 U.S.C. App. 292), is amended to read as
follows:

``SECTION 1. VESSELS THAT MAY ENGAGE IN DREDGING.

``(a) In General.--A vessel may engage in dredging
operations--
``(1) on the navigable waters included in the coastwise
trade, if--
``(A) the vessel is documented with a coastwise endorsement
under section 12106(a) of title 46, United States Code; or
``(B) the vessel is registered in a foreign country and the
Secretary of the Treasury finds, pursuant to information
furnished by the Secretary of State, that the government of
that foreign country and each government of the country of
which an ultimate owner of the vessel is a citizen extend
reciprocal privileges to vessels of the United States to
engage in dredging operations in the coastal waters of that
country; or
``(2) on the navigable waters included in the inland
waterways trade, if--
``(A) the vessel is documented with an inland waterways
endorsement under section 12107 of title 46, United States
Code; or
``(B) the vessel would be qualified to be documented under
the laws of the United States with a coastwise endorsement
under section 12106(a) of title 46, United States Code,
except that the vessel was not built in the United States.
``(b) Penalties.--When a vessel is operated in knowing
violation of this section, that vessel and its equipment are
liable to seizure by and forfeiture to the United States
Government.''.

SEC. 8. CITIZENSHIP AND TRANSFER PROVISIONS.

(a) Citizenship of Corporations, Partnerships, and
Associations.--Section 2 of the Shipping Act, 1916 (46 U.S.C.
App. 802) is amended--
(1) in subsection (a)--
(A) by inserting a period after ``possession thereof''; and
(B) by striking all that follows the period inserted in
subparagraph (A) through the end of the subsection; and
(2) by striking subsection (c).
(b) Approval of Transfer of Registry or Operation Under
Authority of a Foreign Country or for Scrapping in a Foreign
Country; Penalties.--Section 9 of the Shipping Act, 1916 (46
U.S.C. App. 808) is amended--
(1) by striking subsection (c) and inserting the following:
``(c) Except as provided in section 611 of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1181) and section
31322(a)(1)(D) of title 46, United States Code, a person may
not, without the approval of the Secretary of
Transportation--
``(1) place under foreign registry--
``(A) a documented vessel; or
``(B) a vessel with respect to which the last documentation
was made under the laws of the United States;
``(2) operate a vessel referred to in paragraph (1) under
the authority of a foreign government; or
``(3) scrap or transfer for scrapping a vessel referred to
in paragraph (1) in a foreign country.''; and
(2) by striking subsection (d) and inserting the following:
``(d)(1) A person that places a documented vessel under
foreign registry, operates that vessel under the authority of
a foreign country, or scraps or transfers for scrapping that
vessel in a foreign country--
``(A) in violation of this section and knowing that that
placement, operation, scrapping, or transfer for scrapping is
a violation of this section shall, upon conviction, be fined
under title 18, United States Code, imprisoned for not more
than 5 years, or both; or
``(B) otherwise in violation of this section shall be
liable to the United States Government for a civil penalty of
not more than $10,000 for each violation.
``(2) A documented vessel may be seized by, and forfeited
to, the United States Government if that vessel is placed
under foreign registry, operated under the authority of a
foreign country, or scrapped or transferred for scrapping in
a foreign country in violation of this section.''.

SEC. 9. LABOR PROVISIONS.

(a) Liability for Injury or Death of Master or Crew
Member.--Section 20(a) of the Act of March 4, 1915 (38 Stat.
1185, chapter 153; 46 U.S.C. App. 688(a)) is amended--
(1) by inserting ``(1)'' after ``(a)'';
(2) by adding at the end of paragraph (1) (as designated
under paragraph (1) of this subsection) the following new
sentence: ``In an action brought under this subsection
against

[[Page S5592]]

a defendant employer that does not reside or maintain an
office in the United States (including any territory or
possession of the United States) and that engages in any
enterprise that makes use of 1 or more ports in the United
States (as defined in section 2101 of title 46, United States
Code), jurisdiction shall be under the district court most
proximate to the place of the occurrence of the personal
injury or death that is the subject of the action.''; and
(3) by adding at the end the following new paragraph:
``(2)(A) The employer of a master or member of the crew of
a vessel--
``(i) may, at the election of the employer, participate in
an authorized compensation plan under the Longshore and
Harbor Workers' Compensation Act (33 U.S.C. 901 et seq.); and
``(ii) if the employer makes an election under clause (i),
notwithstanding section 2(3)(G) of the Longshore and Harbor
Workers' Compensation Act (33 U.S.C. 902(3)(G)), shall be
subject to that Act.
``(B) If an employer makes an election, in accordance with
subparagraph (A), to participate in an authorized
compensation plan under the Longshore and Harbor Workers'
Compensation Act--
``(i) a master or crew member employed by that employer
shall be considered to be an employee for the purposes of
that Act; and
``(ii) the liability of that employer under that Act to the
master or crew member, or to any person otherwise entitled to
recover damages from the employer based on the injury,
disability, or death of the master or crew member, shall be
exclusive and in lieu of all other liability.''.
(b) Minimum Requirements.--All vessels, whether documented
in the United States or not, operating in the coastwise trade
of the United States shall be subject to minimum
international labor standards for seafarers under
international agreements in force for the United States, as
determined by the Secretary of Transportation on the advice
of the Secretaries of Labor and Defense.

SEC. 10. REGULATIONS REGARDING VESSELS.

(a) Applicable Minimum Requirements.--Except as provided in
paragraph (2), the minimum requirements for vessels engaging
in the transportation of cargo or merchandise in the United
States coastwise trade shall be the recognized international
standards in force for the United States (as determined by
the Secretary of the department in which the Coast Guard is
operating, in consultation with any other official of the
Federal Government that the Secretary determines to be
appropriate).
(b) Consistency in Application of Standards.--In any case
in which any minimum requirement for vessels referred to in
paragraph (1) is inconsistent with a minimum that is
applicable to vessels that are documented in a foreign
country and that are admitted to engage in the transportation
of cargo and merchandise in the United States coastwise
trade, the standard applicable to United States documented
vessels shall be deemed to be the standard applicable to
vessels that are documented in a foreign country.
(c) Minimum Requirements for Vessels.--As used in this
subsection, the term ``minimum requirements for vessels''
means, with respect to vessels (including United States
documented vessels and foreign documented vessels), all
safety, manning, inspection, construction, and equipment
requirements applicable to those vessels in United States
coastwise passenger trade, to the extent that those
requirements are consistent with applicable international law
and treaties to which the United States is a signatory.

SEC. 11. ENVIRONMENT.

All vessels, whether documented under the laws of the
United States or not, regularly engaging in the United States
coastwise trade shall comply with all applicable United
States and international environmental standards in force for
the United States.

SEC. 12. GENERAL REQUIREMENTS.

Each person or entity that is not a citizen of the United
States, as defined in section 2101(3a) of title 46, United
States Code, that owns or operates vessels that regularly
engage in the United States domestic coastwise trade shall--
(1) establish an office or place, and qualify under the
laws of that place, to do business in the United States;
(2) name an agent upon whom process may be served;
(3) abide by all applicable laws of the United States; and
(4) post evidence of--
(A) financial responsibility in amounts as considered
necessary by the Secretary of Transportation for the business
activities of that person or entity; and
(B) compliance with applicable United States laws.
____

Murphy Family Farms,

Rose Hill, NC, May 21, 1996.
Hon. Jesse Helms,
U.S. Senate, Washington, DC.
Dear Senator Helms: I am writing to urge you to introduce
and sponsor the Coastal Shipping Competition Act--Legislation
that I believe would bring much needed, yet fair reform to
our nation's antiquated maritime transportation laws.
North Carolina consumes in its animal and poultry
production businesses far more grain and oilseed meals than
our North Carolina farmers are able to produce. Thus far, we
have relied upon rail transportation originating in the
``Eastern Grain Belt'' states to augment local supplies. As
our demand increases, we will likely continue to use rail
transportation as our primary source of grains and oilseed
meals from production areas outside North Carolina. However,
we are beginning to experience the symptoms of over taxing
the capacity of the rail corridors that serve us.
Additionally, realization of the risks inherent in relying
too heavily on a single source of dry bulk transport to feed
live animals and poultry is becoming far too real when we
have had major service interruptions on at least three
occasions since early December 1995.
We believe that the only other viable transportation source
to supply our needs is via water. Yet, after some five years
of diligent effort, the only reasonably competitive cargo
that we have been able to procure via water has been foreign
cargoes delivered to the port of Wilmington on foreign
vessels. This seems illogical to us because we know that the
United States is the most efficient and largest producer of
grains and oilseed meals in the world and that our country
serves as the world's repository of supply of these
invaluable resources.
Why can't we access these domestic supplies via water? We
believe that a major impediment lies within the constraints
imposed upon us and others by the Merchant Marine Act of
1920, more commonly known as the Jones Act. Legislation to
reform the Jones Act is desperately needed to help rebuild a
viable, competitive United States domestic shipping industry
and to enhance the competitive position of ours and other
American agricultural producers and businesses. I believe
that without this legislation we will experience the not so
gradual erosion of the economic viability of our existing
capital asset base and likewise the economic demise of many
of our good citizens and business persons who depend upon the
animal and poultry production industry of North Carolina for
their livelihoods.
As a member of the business community and a farmer from
your district, I assure you that this is an issue of utmost
importance and one that merits your attention and support.
Thank you for your time and effort and please let me know
if I may be of assistance.
Sincerely,
Wendell H. Murphy,
Chairman and CEO.
____

Goldsboro Milling Company,

Goldsboro, NC, May 21, 1996.
Dear Senator Helms: Let me start by thanking you for all
you have done in the past in support of agri-business in this
country. Your support has meant a great deal to all of us.
I'm also writing you today to ask you to introduce and
support the Coastal Shipping Competition Act--legislation
that would bring much needed reform to our nation's
antiquated maritime transportation laws.
These laws negatively affect thousands of businesses across
America every day because the laws have eliminated
competitive deepwater domestic waterbourne transportation for
essential manufacturing inputs and finished products.
The Merchant Marine Act of 1920 (known as the Jones Act)
has had an ironically anti-American impact. While it may have
been originally written to protect the U.S. shipping
industry, the resulting noncompetitive domestic industry is
sparsely available, if at all in many U.S. locations. Not a
single coastal freighter over 1,000 tons is operating on the
entire 2,000 mile East Coast of the United States.
Those of us in the poultry and hog business on the East
Coast really need an alternative transportation option for
our inputs (such as grain) because the infrastructure of the
railroads is getting critically overloaded. However, being
restricted to using a U.S. owned, operated and manned ship
effectively eliminates the possibility of getting inputs
delivered by water to east coast ports.
Legislation to reform the Jones Act is desperately needed
to help build the competitive position of American businesses
and agricultural producers.
As a member of the business community in North Carolina, I
can assure you this is an issue that merits your attention
and support. Thanks for all that you have already done and
for your consideration on this matter.
Sincerely,
J.L Maxwell, Jr.
Chairman.
____

[From the News & Observer, May 18, 1996]

800 Perdue Jobs in Danger

(By Jay Price)

Siler City.--Perdue Farms announced Friday that it will
padlock its Chatham County chicken processing plant unless
the plant can be sold within 60 days, placing the future of
800 workers in doubt and sending shock waves through the
local economy.
The company, which has headquarters in Salisbury, Md.,
blamed the move on high feed costs and a glutted chicken
market. ``Hopefully, we'll find a buyer, and if we don't
we'll make the workers aware of job opportunities at other
Perdue facilities,'' said company spokesman Richard Auletta
in New York.
The news from one of Chatham County's largest employers
cast a pall over the annual Siler City Chicken Festival,
which begins today.

[[Page S5593]]

``I've worked here a long time,'' said Frank Torres, a
Perdue employee since 1985. ``I don't know what happened. I
can't do nothing new. Now all everybody's got is one piece of
paper and a check. I don't know what will happen.''
Torres said that Friday morning, employees were given a
letter in Spanish and English outlining the company's plans.
Perdue said employment at a 28-worker feed mill in Staley
also will be scaled back, and the operation may later be
closed.
Also affected are 118 growers who raise chickens for Perdue
under contract, mostly in Chatham and Randolph counties. Only
30 of those will continue to raise birds for the company,
which will process them at other plants.
The company said it will try to arrange for the remaining
growers to work with other poultry companies in the area.
Perdue said the plant workers, most of whom earn $7 to
$7.10 an hour, can apply for jobs at other plants, but the
closest ones are in Robbins and Concord, a considerable
distance away by car.
About noon Friday, workers dressed in jeans, work boots and
hard hats trickled solemnly out of the yellow brick plant and
into a gravel parking lot. Many, like Torres, are migrant
workers from Mexico who made their way to Chatham County in
search of stability.
Domingo Gonzales, 28 years old and the father of two, has
been at the plant for only three months.
``I don't know what I'll do,'' he said, noting that he has
been working at odd jobs in the United States for nearly nine
years and was hoping to finally settle down. ``Maybe I'll go
back to Mexico.''
The fate of many workers like Torres and Gonzales may
depend on complex business forces over which they have no
control.
Besides record-high feed prices Perdue cited a recent jump
in fuel costs and an abundance of poultry, beef and pork as
major reasons for the decision.
Producers are paying an estimated 40 percent more for feed
than they did a year ago, and are getting lower prices for
their products, said Dr. Tom Carter, a poultry specialist
with the N.C. Cooperative Extensive Service.
``It's an unusual situation with the grain prices so
high,'' Carter said. ``The cost of production is higher than
the market, and that's because of high corn prices.''
Carter, however, was optimistic that another company would
buy the 61,000-square-foot plant, which can process 625,000
birds a week.
``Very seldom does a facility like that go without a
buyer,'' Carter said. ``On the surface, it looks like the
situation is such that people wouldn't want to buy it, but if
you look beneath the surface, you usually get the best buy
when the price is down.''
Growers also may be able to sell birds elsewhere, Carter
said. Townsend, Golden Poultry and Mount Aire have poultry
processing plants in Siler City, Sanford and Bonlee,
respectively, Carter said.
``Eventually, growers will adjust and move in with other
companies,'' Carter said, ``but it may take longer than some
can adjust their finances for.''
Growers work under contract to processors like Perdue. The
processor owns the chickens, so in this case the farmers
won't get stuck with the birds. But they could get stuck with
big investments in chicken houses, which cost about $120,000.
The average farmer in the area has three houses, said Dr.
Glenn Carpenter, a Pittsboro extension agent specializing in
poultry. Some older houses may have cost just a few thousand
dollars, he said.
Many growers raise chickens part-time. Typically, it's a
family affair employing between one and three people, but
some operations are larger and full-time.
The plant was one of a group of processing facilities that
Perdue bought from Showell Farms in January 1995. Its
products are sold mostly to institutional users such as
schools, hospitals and restaurants.

mixed signals

In recent months, signs were that it was prospering.
Olivier Devaud, director of Chatham's Economic Development
Commission, said the plant had been hiring workers since
announcing in December that it needed 150 more. In the past
year Perdue spent $4 million for new equipment at the plant
and $1 million on an expansion, which was still under way
when Friday's announcement came.
Other signals were more ominous. In March, Perdue--the
nation's No. 2 poultry producer--said it would cut production
by 7 percent, but that it didn't plan layoffs. Other large
poultry firms, including Tyson, Hudson Foods Inc. and
Pilgrims Pride Corp., had already announced similar cuts.
Poultry and eggs make up the most lucrative agricultural
industry in the state, said Kim Decker of the state
Agriculture Department. In 1994, the most recent year for
which statistics were available, poultry and eggs earned
farmers $1.9 billion, he said.
In contrast, revenue from hogs was $980 million and from
tobacco, $943 million. Statewide, the industry employs more
than 27,000 people.

major job source

The plant is Chatham's third largest employer. Devaud said
its closing would be a blow to the local economy. But new
companies and expansions are expected to bring 120 new jobs
to Siler City in the next month alone, and the county's
unemployment rate is just 2.7 percent.
Devaud said he hopes that Townsend, the county's biggest
employer, can eventually hire some of the workers at its
chicken processing plant.
One who might be looking is Steven Garner, who landed a job
loading trucks at the Perdue plant three weeks ago. He was
angry Friday.
``That's 800 people,'' he said between puffs of a
cigarette.
``I've got a family. I'm the one who buys the groceries and
pays the bills. It's going to be really hard.''
______

By Mr. GRAMM (for himself, Mr. D'Amato, Mr. Bryan, and Ms.
Moseley-Braun):
S. 1815. A bill to provide for improved regulation of the securities
markets, eliminate excess securities fees, reduce the costs of
investing, and for other purposes; to the Committee on Banking,
Housing, and Urban Affairs.

THE SECURITIES INVESTMENT PROMOTION ACT OF 1996

Mr. GRAMM. Mr. President, today I am joined by Senators D'Amato,
Dodd, Bryan, and Moseley-Braun in introducing the Securities Investment
Promotion Act of 1996. This is important legislation incorporating
reforms supported by business and by State and Federal Securities
regulators.
This legislation moves forward in a significant way to define a
division of labor between the State and Federal governments for the
supervision of the securities industry. In the process two very
important goals are achieved. We improve administration of our nation's
securities laws while at the same time greatly reducing the cost of
that regulation.
We must always remember that the cost of securities regulation,
however desirable or effective that regulation may be, is ultimately
born by the people who invest. Today, that includes almost everyone.
Not everyone may have a stock portfolio, although an increasing number
of American families do. But most Americans have investments in a
mutual fund or have a stake in a pension fund that invests in our
nation's securities markets. More and more small businesses are funding
their growth, expansion, and job creation with financing from the
securities markets.
When I became Chairman of the Securities Subcommittee, I was struck
by the number of State and Federal regulators, and people in the
securities business, as well as investors, who commented on the need to
reform out-of-date and unnecessary securities regulation. The most
immediate need in that regard the Congress addressed last year, with
our bill to reform securities litigation. That was a measured,
bipartisan effort.
The legislation that we are introducing today is a continuation of
that bipartisan spirit. I am proud to be joined by the Chairman of the
Banking Committee, Senator D'Amato, as well as by the Ranking Member of
the Securities Subcommittee, Senator Dodd, together with Senators Bryan
and Moseley-Braun of the Banking Committee. We have all worked closely
in drafting the bill that we are introducing, and have in addition
benefited from comments and suggestions from the SEC, State securities
regulators, trade associations, the stock exchanges, and self-
regulatory organizations, among others. I invite further comments as we
consider this bill in the Committee and then on the floor of the
Senate. I have intentionally sought to cast the net wide in seeking
comment from the public on this legislation, since, ultimately, what we
do in this bill affects the people of this country in very important
ways.
Mr. President, I would like to comment briefly on some of the key
provisions of the bill.
Title I of the bill is called the Investment Advisers Integrity Act.
It is an updated version of a bill that I introduced on the first day
of the 104th Congress, S. 148. There are approximately 25,000
registered investment advisers in the nation today, and the number
keeps growing. The SEC has testified that they do not have the
resources to supervise effectively such a large number of advisers. In
the past, proposals were put forward to increase SEC funding for
enforcement of the Investment Adviser Act of 1940 by assessing a $16
million tax on the industry. Even with such a tax, however, an
investment adviser could have gone several years without an inspection.

[[Page S5594]]

Title I of the bill tries a different approach, first suggested to me
by former SEC Commissioner Rick Roberts. This approach addresses the
problem through a partnership between the Federal and State securities
regulators, dividing up the responsibility. The States would have
exclusive jurisdiction to register investment advisers who manage less
than $25 million in client assets. These are the investment advisers
whose activities are most likely to be within their home State. In
fact, about half of all investment advisers do not personally manage
any client assets at all.
The SEC would have exclusive responsibility for registration of
investment advisers who manage $25 million or more of client assets, as
well as for all investment advisors to mutual funds. These are the
investment advisers most likely to be engaged in interstate commerce,
appropriately a Federal concern.
I would add, Mr. President, that this provision does not impose a
Federal mandate on the States, for under the provisions of the bill,
any State that did not want to assume the responsibility for
registration of investment advisers is not required to do so. The
advisers in such a State would then be required to register with the
SEC, regardless of the size of their business.
The effect of this division of responsibility will be that between
two-thirds and three-quarters of investment advisers will be supervised
by the States where they do their business. On the other hand, perhaps
as much as two-thirds or more of the assets under management will be
managed by investment advisers supervised by the SEC, demonstrating the
concentration of managed assets in the hands of the larger investment
advisers, having multi-state operations.
I would like to express my appreciation to the representatives of the
investment adviser industry, the SEC, and the Texas State Securities
Commissioner, Denise Crawford, for their assistance in revising and
crafting this title of the bill, and the support that they have
expressed for this approach. Whereas today investment adviser
supervision is limited at best, and more often than not effectively
non-existent, this division of labor will mean that adequate resources
and attention can not be brought to bear to encourage the integrity of
the industry and further increase the investment opportunities for
American families.
Mr. President, perhaps the most significant impact of this bill will
come from the provisions assigning responsibility for mutual fund
prospectuses review to the SEC. Mutual funds spend tens of millions of
dollars each year complying with a patchwork of varied and
often conflicting State requirements governing the prospectuses by
which funds are offered to investors. These requirements are merely
different, usually duplicative, and to not provide investors with any
added useful information than what is already required by the SEC.
Moreover, complying with these requirements is time consuming. In just
one example, while a particular mutual fund was awaiting delays in
clearing its prospectus with a certain State regulator, its value
increased by 16%. That was a 16% growth denied to the investors of that
State who could not place funds with the mutual fund until its
prospectus had cleared the State regulators. No investor was helped by
that delay. The mutual fund industry has dramatically increased the
investment opportunities for American families of all levels of income,
and I am please to further the efforts of my colleagues, Congressmen
Fields and Bliley, to move forward this important relief from
unnecessary regulatory burden.

Similarly, stocks that are traded on the national stock exchange and
trading systems would be exempted from State regulation under the
provisions of this bill. Again, as with mutual funds, this is a
national business, the very kind of activity contemplated by the
Founding Fathers with the interstate commerce clause of the Commission.
One of the provisions of the bill, which I consider of high
importance, is a requirement that the Chief Economist of the SEC
conduct and publish an economic analysis of each new regulation before
the regulation can enter into effect. Mr. President, the SEC is a
lawyer-heavy agency. The Officer of General Counsel, for example, has a
budget of over $10 million and 120 staff members. By comparison, the
Office of Economic Analysis, even with the increase required by my
amendment to the appropriation bill, has a budget of $3 million and
about two dozen employees.
The actions of the SEC in regulating the nation's capital markets
have a profound impact on the economy of the nation and of the world.
It is therefore of paramount importance that a high priority be given
within the SEC to careful examination and analysis of the economic and
market consequences of its regulations. Otherwise, we are in danger of
regulating blindly, which the economic livelihood and health of the
nation cannot risk.
While there are many other important provisions of the bill, I will
conclude, Mr. President, by emphasizing the last section of the bill.
This provision addresses the need for improving the access to U.S.
stock exchanges for the listing of world-class foreign companies.
Today, U.S. accounting standards are in many points different from the
accounting standards of other countries. They are not necessarily
better, just different. Under current regulations, a foreign company
wishing to list on a U.S. stock exchange would first have to meet U.S.
accounting standards, which in effect may mean that the company would
have to keep two sets of books.
The SEC has sought to address this problem through a greater
harmonization of international accounting standards. The bill
encourages the SEC to redouble its efforts to achieve a level of
generally accepted accounting standards and to report to the Congress
on its progress.
Our nation's stock exchanges are the preeminent exchanges in the
world. It is hard to see how we can continue that position long into
the next century while maintaining formidable obstacle to the listing
on our exchanges of the major corporations of the world. I do not see
how any American investor is protected by being forced to resort to the
London or Frankfurt stock exchanges in order to invest in foreign
corporations.
Mr. President, this is important legislation. Congressman Jack Fields
and the members of the House Commerce Committee have done the country a
great service by setting in motion a process by which the Congress will
begin to delineate clearly the roles of the State and Federal
governments in securities regulation. I hope that this bill can be
adopted in short order and meet in conference with similar legislation
recently adopted unanimously by the House Commerce Committee.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Securities Investment Promotion Act of 1996

SECTION 1. SHORT TITLE: TABLE OF CONTENTS.

Securities Investment Promotion Act of 1996.

SEC. 2. SEVERABILITY.

Court striking any provision of the Act does not affect
other provisions.

TITLE I. INVESTMENT ADVISERS INTEGRITY ACT

SEC. 101. SHORT TITLE.

Investment Advisers Integrity Act.

SEC. 102. ENHANCED FUNDING FOR ENFORCEMENT.

Authorizes appropriation of up to $16 million in each of
FY1997 and FY1998 for enforcement of the Investment Advisers
Act of 1940.

Sec. 103. Improved Supervision Through Federal and State
Cooperation

Investment advisers with less than $25 million in assets
under management and that do not advise a mutual fund are
exempted from registering with the SEC if they are required
to register with the state where the adviser maintains its
business.
The SEC may exempt from requirements to register with the
SEC other persons or classes of persons if the SEC determines
that registration would be unfair, a burden on interstate
commerce, or for other reasons. The SEC is given similar
authority to make exemptions from state registration.
Investment advisers registered with the SEC are exempt from
state investment adviser regulation. States may require such
investment advisers to file notice with the state and pay
appropriate fees.

SEC. 104. INTERSTATE COOPERATION.

Investment advisers complying with books and records
requirements of the state of their principal place of
business cannot be subject to added books and records
requirements by other states where they may conduct business.

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A state may not require an investment adviser to maintain a
higher net capital to post a higher bond than required by the
sate where the principal offices are located.

SEC. 105. DISQUALIFICATION OF CONVICTED FELONS.

The SEC is authorized to deny investment advisery
registration to anyone convicted of a felony in the previous
10 years.

TITLE II. FACILITATING INVESTMENT IN MUTUAL FUNDS

SEC. 201. SHORT TITLE.

Investment Company Act Amendments of 1996.

SEC. 202. FUNDS OF FUNDS.

Allows mutual funds to invest in other mutual funds in the
same group or family of funds and allows just one of the
funds to impose sales charges on investors.

SEC. 203. FLEXIBLE REGISTRATION OF SECURITIES.

Simplifies the calculation and payment of registration fees
by mutual funds.

SEC. 204. INVESTMENT COMPANY ADVERTISING PROSPECTUS.

Allows mutual funds to include in their advertising
information that was not included in their last prospectus.

SEC. 205. VARIABLE INSURANCE CONTRACTS.

Gives insurance companies that issue variable annuities the
same ability as mutual funds to set product charges.

SEC. 206. PROHIBITION ON DECEPTIVE INVESTMENT COMPANY NAMES.

Mutual funds may not have deceptive or misleading names.

SEC. 207. EXCEPTED INVESTMENT COMPANIES.

Exempts from mutual fund regulation any fund not publicly
offered and whose investors are persons who each own at least
$5 million in investments or are institutional investors
owning at least $25 million in investments.
Within one year the SEC shall prescribe rules to allow
employees of such a fund to invest in the fund.

SEC. 208. PERFORMANCE FEES.

Gives authority to the SEC to allow investment advisers to
be paid performance fees for advising sophisticated
investors.

TITLE III. REDUCING THE COSTS OF SAVING AND INVESTMENT

SEC. 301. EXEMPTION FOR ECONOMIC, BUSINESS, AND INDUSTRIAL
DEVELOPMENT COMPANIES.

Exempts business industrial development companies from the
Investment Company Act if at least 80% of its securities are
sold to ``accredited'' investors who are of the state where
the company is organized.

SEC. 302. INTRASTATE CLOSED-END INVESTMENT COMPANY EXEMPTION.

Raises from $100,000 to $10 million the limit for closed-
end investment companies to qualify for an exemption from the
Investment Company Act.

Sec. 303. Definition of Eligible Portfolio Company

Expands the definition of an eligible portfolio company to
include companies with up to $4 million in assets.

Sec. 304. Definition of Business Development Companies

Removes requirement that a business development company
provide significant managerial assistance.

Sec. 305. Acquisition of Assets by Business Development
Companies

Permits BDCs to acquire securities of a company it may
invest in from sources other than the company itself.

Sec. 306. Capital Structure Amendments

Allows BDCs that meet certain requirements to issue a
broader range of securities.

Sec. 307. Filing of Written Statements

Authorizes the SEC to require BDCs to include a description
of risk factors associated with their capital structure in a
written annual report to shareholders.

Sec. 308 Facilitating National Securities Markets.

Codifies existing state exemptions from state registration
for securities that are traded on a national exchange, the
Nasdaq National Market System, or other exchange or system
identified by the SEC, and securities sold to qualified
purchasers. Exempts from state registration mutual funds and
other investment companies. No state review of prospectuses
for such securities or mutual funds. States may impose notice
and appropriate fee requirements and are not limited from
enforcing state fraud laws in connection with such
securities.

Sec. 309. Regulatory Flexibility

Gives the SEC authority to make exemptions from provisions
of the Securities Act of 1933 and the Securities Exchange Act
of 1934.

Sec. 310. Analysis of Economic Effects of Regulation

Requires the Chief Economist of the SEC to prepare and
publish an economic analysis of any proposed SEC regulation
before it becomes effective. Authorizes $6 million in
appropriations for FY 1997 and $6 million for FY 1998 for the
SEC's Economic Analysis Program, including the Office of
Economic Analysis.

Sec. 311. Privatization of EDGAR

Requires the SEC, within 180 days of enactment, to submit
to Congress a report on its plan for promoting competition
and innovation of EDGAR through the privatization of all or
parts of the system.

Sec. 312. Improving Coordination of Supervision

Directs the SEC and other securities examination
authorities to coordinate their examinations.

Sec. 313. Increased to Foreign Business Information

Facilitates participation by U.S. information media in
financial press briefings held outside of the United States.

Sec. 314. Short-Form Registration

Clarifies that voting and non-voting shares shall be
considered in determining whether a company is eligible to
use the short-form registration statement.

Sec. 315. Church Employee Pension Plans

Exempts church employee pension plans from federal and
state securities laws, except the anti-fraud provisions. The
plans would continue to be subject to Internal Revenue Code
regulations regarding eligibility, governance, and operations
of such plans.

Sec. 316. Promoting Preeminence of American Securities
Markets

Expresses the sense of the Congress that the SEC should
reinforce its efforts in developing generally accepted
international accounting standards in order to enhance the
ability of foreign corporations to list their stocks on U.S.
exchanges, and requires the SEC to report to Congress in one
year on its progress.

Mr. D'AMATO. Mr. President, it is with great enthusiasm that I rise
today with my colleagues, the chairman and ranking member of the
Securities Subcommittee, Senator Gramm and Senator Dodd, and Senators
Bryan and Moseley-Braun to introduce the Securities Investment
Promotion Act of 1996.
The U.S. securities market is the preeminent market in the world. It
is a fair, efficient and orderly market. In 1995, the U.S. equity
market capitalization of $7.98 trillion represented nearly half of the
$16.48 worldwide equity market. The market is at an all time high,
having increased in trading volume 168 percent in the last decade from
77.3 billion to 207.4 billion. Clearly our securities market is a
national treasure.
This bill my colleagues and I introduce today represents a bi-
partisan effort to improve regulation of the securities market. The
legislation seeks to maintain our preeminent securities market by
making it even more efficient and more accessible to those individuals
and entities who seek entry in order to raise capital.
The legislation streamlines securities regulation by peeling back
layers of duplicative, unnecessary and burdensome regulation--opening
up the capital markets and promoting capital formation. It makes more
efficient use of precious State and Federal resources by dividing
rather duplicating regulatory responsibility. These changes will also
strengthen consumer and investor protection.

investment advisers

The Securities Investment Promotion Act fills a significant
regulatory gap in the area of investment advisers. As low interest
rates have caused individuals to flock to the securities markets with
their savings and retirement money--often seeking advice from an
investment adviser--it becomes increasingly critical for Congress to
ensure that investment advisers are adequately regulated. The increase
in mutual fund investments, which are usually managed by investment
advisers, has also contributed to the growing number of investment
advisers.
Right now, 22,000 investment advisers manage approximately $10.6
trillion in assets. The SEC does not have sufficient resources to
maintain an adequate inspection program for investment advisers.
According to some SEC estimates, they are only able to inspect some of
the smaller investment advisers once every 30 years.
The bill creates a rational system of regulation for investment
advisers by dividing between the SEC and the States responsibility for
regulating investment advisers. States will regulate the smaller
investment advisers who operate in their State and manage $25 million
or less in assets. The SEC will regulate the larger advisers. This
system will enable the States and the SEC to share regulatory
responsibility--better protecting investors.

mutual funds

The Securities Investment Promotion Act of 1996 facilitates the
registration, operation and certain disclosures made by mutual funds.
Over 30 million U.S. households, or about 31 percent now own mutual
funds. In part because of low interest rates, by the end of last year
mutual fund assets hit the $2.7 trillion mark--exceeding bank deposits
for the first time.
This bill allows the mutual fund market to operate as a national
market, comprehensively regulated by the SEC. Right now, when a mutual
fund registers its shares it must register with the SEC and the States.
As a result, mutual funds must comply with a

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crazy quilt of regulation imposed by the laws of each of the 50 States.
This bill facilitates mutual fund registration by eliminating the
requirement that mutual funds register with the States.
The bill makes it easier for mutual funds to provide current
information in advertisements; calculate their registration fees and
invest in other mutual funds in their family of funds. It also provides
additional consumer and investor protection by giving the SEC authority
to prohibit mutual funds from naming their funds in a manner that could
mislead or confuse investors.

capital formation

The bill promotes capital formation by eliminating overlapping State
and Federal requirements for registering certain types of securities,
such as securities sold to ``qualified purchasers'' or securities that
are listed on a national securities exchange or market system. It also
gives the SEC flexibility to identify other exchanges or systems that
should qualify for the exemption from registration.
The bill promotes investment in small projects and business by making
it easier for economic, business, and industrial development companies
to raise money without having to register with the SEC. These companies
will not have to register their securities if 80 percent or more of the
securities are sold to accredited investors within the State the
company operates. This bill provides further relied for companies
operating within one State. The SEC may now exempt from the securities
laws a company with $100,000 in assets that is operating within a
State. The Securities Investment Promotion Act of 1996 raises this
level to $10 million.
The bill provides liquidity and investment opportunities to business
development companies--enabling these companies to invest more capital
in small businesses. It also helps venture capitalists tap the capital
markets to fund business endeavors by allowing individuals and entities
to pool a certain amount of investment funds without having to register
with the SEC.

regulatory modernization

The legislation updates the securities laws to reflect the reality of
today's marketplace. It simplifies certain procedures for paying fees
and making disclosures. It gives the SEC flexibility to adapt to the
changing financial market by giving the SEC authority to exempt
transactions, individuals or entities from the Federal securities laws.
The bill fosters awareness of the cost of regulation by requiring the
SEC to publish an economic analysis of a proposed regulation before it
becomes effective. It also reduces the costs associated with revolving
door compliance examinations, where one regulator completes its
examination only to be replaced by the next. The legislation requires
the regulators to coordinate examinations.
The Securities Investment Promotion Act of 1996 is a significant
piece of legislation that will ensure that the U.S. securities market
remains number one in the world. It is not a controversial bill, it
enjoys support on both sides of the aisle. This bill thoughtfully and
carefully tightens the laws governing the securities market. I commend
my colleagues and their staff for their excellent work in drafting this
legislation and plan to move it quickly through the Banking Committee.
Mr. DODD. Mr. President, I rise today to join Senators Gramm,
D'Amato, Bryan, and Moseley-Braun in introducing the Securities
Investment Promotion Act of 1996.
The U.S. capital markets are vitally important for the good economic
health not only of virtually every American company but for millions
and millions of individual investors who have placed some of their
assets either directly in securities or, as has become more and more
common, into mutual funds.
We must recognize that sustained economic growth is heavily dependent
upon the continuing ability of our capital markets and financial
services industry to function efficiently and with integrity. If
companies find impediments to obtaining capital, they will not grow. If
individuals find impediments to their access to securities and other
investments, they will not save. Taking steps to enhance the access of
both corporations and individuals to the securities markets is a
prudent means by which Congress can help sustain or even increase the
Nation's rate of economic growth.
Furthermore, the American capital markets are the envy of the world.
No other nation enjoys the international reputation of our capital
markets and it is necessary for Congress periodically to review and
modernize, where necessary, the laws that make our markets and our
financial services industry the world's leader.
The legislation that is being introduced today is the culmination of
a lengthy bipartisan effort to reform those aspects of the securities
laws that are an outdated impediment to the efficient functioning of
the securities industry. The bill will also provide clearer statutory
directives to both state and Federal regulators so that the integrity
of--and confidence in--our capital markets and financial services
industry is enhanced.
Mr. President, let me provide a brief summary of the major elements
of this legislation. The three main areas that the bill addresses are:
improving the regulation of investment advisors under the Investment
Advisors Act of 1940; modernizing and streamlining the regulation of
mutual funds under the Investment Company Act of 1940; and, making
modest adjustments in the securities laws to account for changes in the
financial world over the past 60 years.
Title I, the Investment Advisors Integrity Act, would provide much
needed clarity to regulators for the regulation of investment advisors
under the Investment Advisors Act of 1940. The most important feature
of this title is to draw a clear, bright line between those registered
investment advisors who should be regulated at the Federal level by the
Securities and Exchange Commission, and those advisors who are more
properly regulated by the state that is the advisor's principal place
of business.
The bill would require investment advisors with more than $25 million
under management to be regulated by the Securities and Exchange
commission, while those with assets under the $25 million threshold
would be regulated by the state.
This bifurcation is necessary because it is not realistic to expect
the SEC to be able to thoroughly supervise the more than 25,000
advisors who are registered under the IAA nor is it reasonable to have
the advisor industry burdened by duplicative state and Federal
regulation. This change will allow the state and Federal regulators to
focus on those parts of the industry that is within their regulatory
expertise, while freeing the industry from the burden of duplicative
layers of regulation.
The second title of the bill is entitled Facilitating Investment in
Mutual Funds. While most of my colleagues are aware of the rapid growth
in the mutual fund industry, I wonder how many are aware that nearly
one out of every three American families has money invested, in some
form or another, in mutual funds. Mutual funds, as of 1995, have
slightly more than $2 trillion dollars under management, with $800
billion coming from individual investors and $1.2 trillion coming from
institutional investors.
The significantly increasing importance of the mutual fund industry
led to a lengthy review by the Securities and Exchange Commission in
1992, entitled ``Protecting Investors: A Half-Century of Investment
Company Regulation,'' which made recommendations for modernizing of the
Investment Company Act of 1940. The last time Congress revised the ICA
was in 1970, and many believe that it is approriate--a quarter century
later--for Congress to take a fresh look at the issue of modernization.
Several of the mutual fund provisions of the legislation being
introduced today were originally proposed by the SEC in their 1992
report. Other suggestions have been forthcoming since that report and
represent a careful balance between the need to make the Investment
Company Act fit the mutual fund industry as it exists today, without
sacrificing any investor protection.
This section of the bill contains two major components: the first is
to eliminate unnecessary state regulation of mutual funds, while
preserving the state's authority to investigate for fraud and other
types of wrongdoing. Mutual funds are highly regulated by the
Securities and Exchange Commission through the Investment Company

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Act of 1940; in fact, this is one of the most successfully regulated
industries in America, borne out by the explosive growth in mutual
funds since the Act was passed. In 1940, there were 105 registered
companies with $2 billion in assets (according to the SEC); today, as I
mentioned above, there are more than 5,300 funds holding over $2
trillion in assets.
The very success of SEC regulation has rendered most individual state
regulations obsolete, not to mention that complying with these
duplicative statutes is both expensive and burdensome on the industry.
The costs of this regulatory burden are passed onto consumers. The
legislation we are introducing today will preempt most state regulation
of mutual funds, while preserving the state's necessary ability to
protect consumers through anti-fraud and other statutes.
Another area that will be modernized through adoption of this
legislation will be in the area of smaller funds whose investors are
either wealthy individuals--defined in the bill as those with more than
$5 million in investments--and institutional investors. These funds,
which are exempt from many of the provisions of the Investment Company
Act of 1940 because of their smaller size and unique nature, often
provide critically needed capital directly to new corporations and
generally to America's emerging industries. By modestly expanding the
pool of people and institutions eligible to participate in such funds,
the legislation seeks to expand the amount of capital available for
investment, particularly newer, small and moderate sized companies.
There are also enhanced mutual fund disclosure requirements
benefiting investors that we are continuing to develop, and I would
anticipate that if and when this bill goes to mark-up, they will be
added to the legislation.
The last title of the bill contains a number of provisions that
attempt to remove anomalies that have developed within the securities
laws as the financial world has changed over the last sixty years.
These changes, while modest in and of themselves, will nevertheless
provide significant and needed relief to both investors and industry.
In all, Mr. President, this is an extremely balanced and thoughtful
bill that has been drafted in close consultation with the Securities
and Exchange Commission and the North American Securities
Administrators Association, the umbrella group for the fifty state
securities administrators. It has been written in bipartisan manner
that is increasingly rare in this body, and as a result, the bill
provides statutory reform that is needed by investors, corporations and
the financial services industry without sacrificing any consumer
protections. I hope that the Senate will move expeditiously to pass
this legislation.
Mr. BRYAN. Mr. President, I am pleased to sign on as a co-sponsor of
the Securities Investment Promotion Act of 1996. This comprehensive
effort to modernize our regulation of the capital markets will help us
achieve the most efficient possible regulatory scheme, while preserving
investor confidence in our markets by maintaining needed investor
protection safeguards.
I come to this issue believing that our capital formation process is
fundamentally sound. America's capital markets are the fairest, most
successful, and the most liquid the world has ever known. By virtually
every statistical measure, our capital markets are vibrant and healthy.
The stock market has been setting new records for some time now and is
in the midst of the longest run in this century. This has been an
unprecedented boom for companies, investors and Wall Street firms.
The manner in which we reform our regulation of securities is
important because tens of millions of Americans increasingly rely on
our nation's financial markets to save for retirement, fund their
children's college education, and to receive a rate of return on
savings that exceeds the rate of inflation. Today, more than ever, the
people of America are investing in America. For the first time in
history, mutual fund assets exceed the deposits of the commercial
banking system.
The growth in the mutual fund industry has been nothing short of
phenomenal. Today, there are 2,222 stock funds, 2,576 bond and fixed-
income funds, plus another 1,000 money-market funds, according to the
Investment Company Institute. In fact, there are now twice as many
mutual funds--with a value of around $2.8 trillion--as stocks listed on
the New York Stock Exchange. The reason for this huge expansion of
funds may be summed up in one word: demand. Funds continue to roll off
the assembly line because investors want more avenues in which to put
their money.
Investors are attracted to mutual funds because the market has
remained generally trouble-free and because of its relative safety.
While much of the credit for this environment should go to go to the
industry itself, so too should credit go to an effective system of
regulation. In our enthusiasm for updating and modernizing the
oversight of this marketplace, care must be taken to maintain vital
investor protections that have helped this industry grow and prosper.
Our securities laws and regulations are designed first and foremost
to protect investors and to maintain the integrity of the marketplace,
thereby promoting trust and confidence in our system of capital
formation. We should strive for a securities regulatory system that is
tough--but one that also is fair and reasonable.
On balance, I believe that this legislation does a good job of
eliminating or modernizing laws and regulations that either are
duplicative or outdated--without sacrificing investor protection.
However, I also recognize that the introduction of this bill is just
the first step in a longer process and that further fine tuning and
revisions will be in order as we learn more about the practical effect
of several of its specific provisions. I have decided to sign on as a
co-sponsor despite the reservations I have about specific provisions
contained in the bill. I will seek out the comments and views of
federal and state regulators, industry representatives, and investor
advocates on these matters.
I would like to take just a few minutes to briefly highlight a few
key provisions of this legislation:
More rational investment adviser oversight. This bill seeks to
rationalize the regulatory scheme for investment advisers. Over the
last decade, both the House of Representatives and the Senate have held
numerous hearings in which we have been told that our system of
investment adviser regulation is woefully inadequate, both in terms of
the resources we devote to the effort and the laws that govern the
industry. Today, we take a modest first step in the effort to establish
a credible program of investment adviser oversight. While I applaud the
sensible approach contained in this bill, it is my hope that Congress
does not end its consideration of this issue here.

This bill will direct the Securities and Exchange Commission to focus
on the biggest investment advisers--those who manage more than $25
million of client assets. Investment advisers who fall below this
threshold will be overseen by the State securities regulators, who
appropriately are given the task of overseeing the smaller, local
investment advisers. Now, it may be that the $25 million is not an
appropriate dividing line. I would look for guidance here to the
regulators and the industry who will be questioned on this issue. If we
learn that the threshold is too high, too low, or too inflexible, I
expect we will make the necessary revisions.
The oversight of investment advisers is an extremely important issue,
as more and more Americans turn to these financial professionals to
help guide them through the increasing complexity of our financial
markets. Both the Senate and the House of Representatives have
addressed the issue of improving investment adviser oversight for
several years now, but each time we have failed to reach an agreement
on how best to accomplish such a goal. Establishing a more rational
system for determining jurisdiction is a helpful step. But, it is only
a first step. If we can all agree on this, I hope that we can also
agree to come back next year and begin the process of evaluating
whether our investment adviser laws are adequate for the protection of
investors. For example, as I understand it, there is little more to the
federal system of regulation than filling out some paperwork and paying
a one-time fee. There are no minimum standards of competency, training,
or education to become an investment adviser. We

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must take a closer look at this law to determine where it may be
deficient and to make the necessary improvements.
Improved State-Federal Coordination. Today, both the Securities and
Exchange Commission and the 50 State securities regulators share the
responsibility for overseeing our capital markets. By and large, this
system of shared regulatory responsibility has worked well, with the
SEC taking responsibility for market-wide issues, while the States
focus their attention on the issues most affecting individual investors
and small businesses.
I also believe that there is room for improved coordination and a
more clearly defined allocation of responsibility between the States
and the SEC. I support the goal of eliminating duplicative and
overlapping regulations that do not provide any additional protections
to investors or to the markets but which do serve to increase the costs
of raising capital. I believe this bill draws brighter lines of
responsibility between the States and the SEC, and streamlines the
securities offering process for American businesses. However, I will
withdraw my support if any changes are made to the bill that will have
the effect of weakening the State role in policing sales practices, or
that will in any way undermine the enforcement authority of State
securities regulators or the ability of defrauded investors to recover
their losses in court under State laws.
Modernization of mutual fund oversight. This bill recognizes the
fundamentally national character of the mutual fund industry by
assigning exclusive responsibility for the routine review of mutual
fund offering documents and related materials to the SEC and NASD. The
legislation also encourages further innovation in the mutual fund
industry by means of advertising prospectuses and fund of funds.
While I understand that this section of the bill generally
corresponds to a similar section contained in H.R. 3005 recently
approved by the House Commerce Committee, I am troubled that the Senate
version fails to incorporate two key provisions of the House bill that
deal with Commission authority with respect to reporting and record
keeping requirements.
In closing, I want to say that it is my intention to carefully
consider the feedback and comments we receive on this legislation--from
Federal and State securities regulators--from representatives of the
securities industry--and from investor advocates. I will work to revise
any provisions that are identified as having the potential to upset the
delicate balance between promoting capital formation and protecting
investors that this bill now seeks to accomplish.
______

By Mr. GRASSLEY (for himself, Mr. Hatch, Mrs. Kassebaum, and Mr.
Bond):
S. 1817. A bill to limit the authority of Federal courts to fashion
remedies that require local jurisdictions to assess, levy, or collect
taxes, and for other purposes; to the Committee on the Judiciary.

the wisconsin works act of 1996

Mr. GRASSLEY. Mr. President, I rise today to introduce a measure that
will assist the President of the United States in carrying out a
promise he made to the people of Wisconsin that he would approve the
Wisconsin Works program. There have been some problems getting welfare
actually acted on. I had a very nice letter from the President last
year for the work that we did on the welfare reform bill. But that
measure got vetoed and so did a subsequent measure.

Now, the President has said that he supports the welfare reform
demonstration project in Wisconsin, known as Wisconsin Works. Well,
today, on behalf of myself, Senators Coats, Abraham, Gramm of Texas,
Ashcroft, Craig, Coverdell, Grassley, Gregg, Santorum, Faircloth, and
Nickles, I am submitting a very brief bill, which, in substance, says
that when waivers are submitted by the Wisconsin Department of Health
and Services to conduct a demonstration project known as Wisconsin
Works, those waivers shall be deemed approved.
We have heard many stories about the need to reform welfare, Mr.
President, and one of those stories that has been repeated recently is
that of an experiment in Sedalia, MO, where applicants for food stamps
were sent to an employer. Many of them took jobs, which is good. It
moved them off public assistance. Those who were turned down because
they were not capable could stay on public assistance. Those who
refused to show up were taken off of the food stamp rolls. So there was
an incentive for those who did not want to work. Two people went for
the job, but they were turned down because they tested positive for
drugs.
Under existing Federal law, the State of Missouri could not sanction
those people, even though they were turned down for a job because they
tested positive for drugs. The simple point of that is that that
creates the most perverse of incentives--the incentive for people who
are on public assistance and who do not want to have to take a job to
get on drugs and they can stay on the public assistance rolls.
That is the kind of thing that needs to be changed. That is why we
need welfare reform. Today, Mr. President, I am simply acting to
expedite one of the many waivers now pending from the States, which has
been delayed, I understand from the Governors, an average of 210 days.
This measure, if and when adopted, will deem the waivers submitted by
the State of Wisconsin to be approved.
______

the fairness in judicial taxation act of 1996

<bullet> Mr. GRASSLEY. Mr. President, I introduce the Fairness in
Judicial Taxation Act of 1996. I would like to thank Senator Hatch,
Senator Kassebaum, and Congressman Manzullo for their leadership on
this issue. I hope that both the House and Senate will move quickly to
pass this bill.
This important piece of legislation will curb the awesome power that
the Federal courts gave themselves in the Supreme Court Case of
Missouri versus Jenkins. As this body well knows, in that case the U.S.
Supreme Court ruled that Federal courts could force towns and cities
across America to raise taxes--even if State law forbids a tax
increase. Amazingly, the Supreme Court failed to place any effective
limitation on this power.
This is outrageous and violates one of the basic principles our great
Nation was founded on--no taxation without representation. I really
can't think of a more un-American creature than a tax imposed by an
unelected, unaccountable Federal judge. I urge my fellow Senators to
remember--the power to tax is the power to destroy.
This Congress is working hard to reduce the tax burdens on American
families and small businesses. It would be a dereliction of duty not to
do what we can to protect the American taxpayer from the destructive
power of judge-imposed taxes.
Today, I expect to be appointed to a national commission which is
charged with looking into ways to change the way the IRS operates so
that it will be fairer to the American taxpayer. The bill I introduce
today is intended to deal with the same sort of problem--helping to
protect the American people from the abusive use of Federal power in
the collection of taxes.
In my view, and I believe in the view of the vast majority of
American taxpayers, it doesn't matter where the abuse comes from--the
IRS or some Federal judge. The bottom line is that the scale has tipped
too far in the direction of the Federal Government and away from
protecting the rights of the American people.
Now, we cannot by statute overturn Missouri versus Jenkins. And we
don't have the votes to pass a constitutional amendment. Since the
Supreme Court has spoken, and we are stuck with judge-imposed taxes,
the Fairness in Judicial Taxation Act goes as far as we can. The bill
sets up a six-part test which must be met before a judge can compel the
raising of taxes. In brief, before a court could impose a tax, the
judge would have to prove:

That there is no way--other than a tax--to achieve justice; right
now, courts can compel the raising of taxes

[[Page S5599]]

without even looking to see what else can be done;
The tax won't in reality make the problems the tax is supposed to fix
even worse;
That the tax will not force property owners to leave the area,
thereby actually reducing the amount of tax revenue for the town or
city;
The proposed tax will not cause property values to plummet; when
property owners leave to avoid judge-imposed taxes, this can cause the
value of land and property to go through the floor;
The tax will not override tax caps set by local law; in Missouri
versus Jenkins, the Supreme Court actually ruled that Federal Judge can
strike down local tax caps;
The proposed tax will effectively redress only the narrow issue
before the court; in some cases, Federal judges have used judge-imposed
taxation plans to pay for vast social engineering schemes.
As you can see, Mr. President, these six factors will make it
difficult--but not impossible--for courts to raise taxes. I wish we
could just overturn Missouri versus Jenkins, but we can't. So, this is
the next best thing.
Importantly, the Fairness in Judicial Taxation Act gives everyday,
average Americans the right to go before the court and be heard on the
issue of tax increases. Congress might not be able to force courts not
to raise taxes, but we can at least make the courts listen to people
who will be harmed by the tax increase. And anyone who wants to, and
who has appeared before the judge to oppose the tax, can file their own
independent appeal--immediately, and not at the end of the court case,
which can drag on for many years.
Mr. President, this bill is good and fair and reasonable. It returns
power back to the American people in a real and effective way.<bullet>
<bullet> Mrs. KASSEBAUM. Mr. President, I am pleased to join today
Senator Grassley in introducing the Fairness in Judicial Taxation Act
of 1996. I want to commend Senator Grassley, Senator Hatch, and
Congressman Manzullo for their leadership on this important issue.
In recent years, a number of judges have ordered local governments to
impose taxes on citizens as a means to remedy a constitutional
violation. In many of these cases, I have believed that Federal courts
exceeded their limited jurisdiction under article III of the
Constitution. While I fully understand the role of the judiciary in
protecting constitutional rights, I do not believe that judges should
be in the business of needlessly imposing taxes.
Our legislation addresses this issue by requiring Federal courts to
meet certain criteria before imposing a tax. The Federal court must
find that: There is no other means available to remedy the deprivation
of rights, the tax will not contribute to the deprivation intended to
be remedied, the tax will not result in a loss of revenue, the tax will
not disproportionately affect any racial, ethnic, or national group,
and plans submitted by a locality will not effectively redress the
deprivation.
These five criteria are similar to the analysis any effective
legislature would undertake before imposing a tax on its people. It is
a reasonable, moderate approach to a difficult issue.
Mr. President, in 1990, I joined Senator Danforth in supporting a
constitutional amendment which would prohibit judicial taxation.
Senator Thurmond has advocated a legislative solution to this same
issue. While these various approaches have not yet been successful, I
believe they represent the emerging consensus that courts should stay
out of the business of imposing taxes.
I would hope that the legislation we are introducing today will
contribute to the important debate about this issue.
Mr. President, my interest in the issue of judicial taxation grew out
of the experience of the Kansas City, MO, school system. In that case,
the Federal judge has essentially taken over the school system by
imposing a tax on the local population in order to finance
implementation of a magnet school plan. His intervention, I would
argue, has created an undercurrent of ill will, exacerbated racial
tension, and done little to solve, over the long term, the problems
with the Kansas City of school system.
School desegregation is not an easy issue. It is fraught with
emotion, and there are no magic answers. But imposing a comprehensive
solution from the bench--without the support of the community--has not
proven effective. We simply must find a better approach to this
problem--an approach which brings a community together.
I, for one, have strongly supported neighborhood schools. One of the
real strengths of our education system has been in its local base. The
sense of connection among students, parents, school officials, and
communities is a vitally important source of support for children. When
education loses its roots in the neighborhood, we lose the commitment
and emphasis which are critical to academic success.
Moreover, at a time when the stresses and outright breakdown of many
families have denied to children the strong and positive messages they
should be receiving from the parents, the sense of connection and
belonging that a school can provide becomes even more vital.
I fear that complex, Rube Goldberg solutions involving busing, magnet
schools, and the such--financied by judicially imposed taxes--undermine
community support for effective schooling. The business at hand is to
guarantee that all our students have an opportunity for a quality
education in their neighborhoods. That is where we should devote our
energies and our financial resources.
Mr. President, I am pleased to join with Senator Grassley in
proposing legislation which deals with a key aspect of this problem--
the imposition of taxes by Federal courts. It is my hope that the
Senate will act expeditiously on this important legislation, and
communities will again work together to improve education for all their
children.<bullet>
______

By Mr. DASCHLE (for himself, Mr. Bryan, Mr. Dodd, Mr. Kennedy,
Mr. Leahy, Ms. Mikulski, Ms. Moseley-Braun Mr. Rockefeller, and
Mr. Simon) (by request):
S. 1818. A bill to amend the Employee Retirement Income Security Act
of 1974 to provide for retirements savings and Security; to the
Committee on Labor and Human Resources.
S. 1819. A bill to amend the Railroad Retirement Act of 1974 to
provide for retirement savings and security; to the Committee on Labor
and Human Resources.
S. 1820. A bill to amend title 5 of the United States Code to provide
for retirement savings and security; to the Committee on Governmental
Affairs.
S. 1821. A bill to amend the Internal Revenue Code of 1986 to provide
for retirement savings and security; to the Committee on Finance.

retirement savings legislation

Mr. DASCHLE. Mr. President, lack of retirement security is America's
quiet crisis.
Americans who work hard all their lives--either in the workplace or
at home--deserve peace of mind that a secure retirement awaits them.
But too many Americans live in fear that they cannot afford to retire
because they do not have adequate pension coverage.
Right now, 51 million working Americans--more than half of private
sector workers--have no private pension plan. Women are especially hard
hit by this quiet crisis. Nearly two-thirds of working women do not
have pension plans. And if you work in a small business, you only have
a 1-in-4 chance of getting pension coverage.
Even those workers fortunate enough to have a pension plan cannot be
sure their pensions will actually be there when they are ready to
retire. Add to that the fact that more Americans are spending every
dollar they earn just to pay the bills, leaving less and less for
retirement, and it is no wonder people are worried about the future.
Working Americans should be able to count on a pyramid of income
sources that, along with Medicare, provides them with a secure
retirement. Social Security is the base of that pyramid, the foundation
of retirement security. At the top of the pyramid are employer-provided
pensions and private savings.
From day one, Democrats in this Congress have had to fight to protect
Social Security and Medicare from attacks by the far right. And we will
continue to defend those programs as the critical bedrock of retirement
security.
But Social Security and Medicare--alone--were never intended to
provide

[[Page S5600]]

full retirement security. If people are going to retire with dignity
and security, they need personal savings, and they need adequate
pension coverage. But too many obstacles exist in our current system
for millions of Americans to get and keep pension coverage.
That is why pension reform is one of the top 3 priorities for
Democrats between now and November. We are committed to getting some,
if not all, of this package back to the President for his signature
before this Congress ends.
Democrats plan to ease the fears of working Americans by making it
easier for businesses to offer pension plans, and easier for workers
who do not have access to employer-sponsored pensions plans to set up
their own, tax-free pension plans.
We will also establish a new kind of 401(k) plan to help people save
up to $5,000 a year, tax-free, for retirement.
Workers will be able to take their pensions and retirement savings
accounts with them when they change jobs. They will not lose what they
have already saved every time they take a new job. That is essential in
an economy where the average worker will change jobs up to 8 times in
his or her career.
In addition to more pensions, this plan will make all pensions more
secure by requiring pension funds to be invested in a more timely
manner, and by increasing civil and criminal penalties for pension
raiding.
Finally, Democrats in the Senate will push to dramatically increase
women's retirement security by enabling them to earn pensions
themselves, and by making sure women are aware of the spousal pension
funds to which they may be entitled.
My colleague from Kansas, Senator Kassebaum, predicted in a recent
speech that pension reform would be the big issue for the next
Congress. I respectfully disagree with my colleague. Senate Democrats
believe that pension reform is a big issue for this Congress. There is
no reason the American people should have to wait that long.
People who work hard all their lives deserve to be able to retire
with dignity and security. We intend to ensure that they can, and we
intend to do so this year.
<bullet> Ms. MOSELEY-BRAUN. Mr. President, I am pleased to have this
opportunity to join my colleagues in introducing President Clinton's
pension legislation, the Retirement Savings and Security Act. This
legislation addresses some of the most serious concerns of the Nation's
work force, and it will have a positive and lasting impact on the
working people of this country. The Retirement Savings and Security Act
will help America's working people prepare for their retirement, and
help ensure their future economic security.
This plan tackles the significant problems of pension coverage and
portability by making it easier for people to enroll in pension plans,
by making it easier for small businesses to offer benefits to their
employees, and by making it easier for people to save for their
retirement.
A baby boomer will turn 50 every 7 seconds this year. The average
American will hold between four and eight jobs in his or her lifetime.
These trends require that we concern ourselves with increasing access
to our Nation's pension system and ensuring that pensions are portable.
As the sponsor of S. 1756, the Women's Pension Equity Act, I want to
take special note of the attention the President's plan gives to some
of the pension issues which have a disproportionate impact on women.
Our pension system was not designed for working women, either those
in the work force or in the home. The statistics vividly make the case.
Women make up 60 percent of seniors over 65 years old, but 75 percent
of the elderly poor. An elderly woman is twice as likely as a man to
live below the poverty line. One reason for the high incidence of
poverty among older women is clear--less than one-third of female
retirees receive any pension benefits at all and for those that do, the
average benefit is only half that of male retirees. Over half of all
male retirees receive pension benefits.
There are a number of reasons for the disparity in men's and women's
pension coverage and benefits. Women are more likely to move in and out
of the work force to care for family, women are more likely to work at
home, or to work in industries without generous salary or pension
benefits, and women earn less compared to men--all of which contributes
to little or no pension income.
This legislation encourages increased portability and lower vesting
requirements. Allowing workers to earn pension benefits quickly and to
take those benefits with them when they change jobs will directly
benefit women, who are more likely than men to take time out of the
work force to care for their children or their parents.
This legislation encourages small business to offer 401(k) plans.
Expanding pension coverage into small businesses will directly benefit
women, who disproportionately work in small businesses.
This legislation encourages employers to accept a lump sum rollover
of a new employee's pension funds from the previous employer. Making it
easier to transfer retirement funds directly into a new account,
thereby decreasing the likelihood of pension savings being spent before
retirement, will directly benefit women, who are almost a third more
likely to receive a lump sum payment as their sole pension income, will
benefit directly.
In addition, this plan contains several targeted initiatives that
were drawn, in part, from S. 1756, and that will help to further ensure
retirement security for older women. These are initiatives to protect
working women and homemakers alike who face widowhood or divorce. The
current pension laws often leave widows and divorced women without any
of the pension benefits earned by their husbands during many years of
marriage.

I am very pleased that the President acted to ensure that these
provisions were included in the administration's pension bill. The
President understands that our pension laws have to reflect the reality
faced by women today in the work force, in the home, and in retirement.
I want to take particular note of the President's interest in dealing
with two problems affecting widows and divorced widows whose deceased
husbands participated in the Federal civil service retirement system.
The first provision in this legislation allows a widow or divorced
widow to collect their husband's civil service pension if he dies after
leaving his civil service job and before collecting his pension
benefits. The second provision allows a court that awards a woman part
of her husband's civil service pension upon divorce, to extend that
award to any lump sum payment made if the husband dies before
collecting benefits.
These provisions ensure that women will not be left without pension
income in their retirement years because of absurd, yet potentially
devastating, pension loopholes in the civil service retirement system.
Similar language is included in S. 1756.
Mr. President, the President's pension initiative will result in
significant improvements in pension coverage for older women. This bill
is just another example of the President's commitment to increase the
economic security of all Americans.
All Americans need improved pension coverage. We need to know that we
can retire without falling into poverty or becoming a huge financial
burden for our families. We need to know that the golden years are not
going to turn into disposable years.
I commend the President on his efforts to expand pension coverage,
portability, and security for all Americans and I commend the President
for making a special effort when it comes to older women living alone--
those most likely to live in poverty.
I am proud to be able to cosponsor this important initiative. All
Americans, women included, deserve to retire with dignity.<bullet>

____________________