[Pages S4217-S4246]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. DOMENICI (for himself, Mr. Ashcroft, Mr. Wyden and Mr.
Campbell):
S. 718. A bill to amend the Juvenile Justice and Delinquency
Prevention Act of 1974, and for other purposes; to the Committee on the
Judiciary.

THE JUVENILE CRIME CONTROL AND COMMUNITY PROTECTION ACT OF 1997

Mr. DOMENICI. Mr. President, I rise today, with the Senator from
Missouri, Senator Ashcroft, and the Senator from Oregon, Senator Wyden,
to introduce the Juvenile Crime Control and Community Protection Act of
1997. I don't think there is anything that is worrying the American
people more than what is happening to the criminal justice system in
their cities, their counties, and their States.
Senator Ashcroft, a former attorney general from Missouri, knows a
lot about these matters on a firsthand basis from having been there. I
am hopeful he will arrive before the time expires to speak to one
aspect of the bill, which we are introducing, and then I will, as soon
as I can, yield to Senator Wyden for some of his observations.
Last year, I had field hearings in New Mexico to hear the concerns
and problems faced by all of the people affected by juvenile crime. We
heard from the police, prosecutors, judges, social workers and, most
important, Mr. President, as you well know, the victims who reside in
our communities.
The sentiments expressed at these hearings are the same ones felt by
people all over this country: One, some juveniles are out of control
and the juvenile justice system cannot cope with them; second, other
children do not have enough constructive things to do to keep them from
sliding into delinquency; third, the current system does little, if
anything, to protect the public from senseless youth violence; and
fourth, the current system has failed its victims.
I want to tell my colleagues about an 18-year-old girl from New
Mexico named Renee Garcia who was stabbed and left paralyzed by a 15-
year old gang member. The stabbing was part of that

[[Page S4218]]

gang's initiation ritual. The gang member later received only a
sentence of 4 years in a juvenile facility. This is what Renee Garcia
had to say about the current justice system as it applied to her and
her family:

The outdated laws which exist in our legal system today are
nothing but a joke to juveniles. Our laws were meant for
juveniles who were committing [small] crimes like truancy and
breaking curfews. They are not designed to deal with violent
crimes that juveniles are committing today.

Renee has made quite a recovery from her attack, and we are quite
pleased that she is doing reasonably well in our community and in our
State.
The time has come, in my opinion, for the U.S. Government to be a
better partner in a major American effort to improve the criminal
juvenile justice system across this land. For many, it is well known,
we have an adult juvenile system that developed over a long period of
time, but we have a juvenile justice system that sort of evolved willy-
nilly. It has never reached the stature of the adult system. There are
vagaries and much has been left to judges who are asked to respond to
the young criminals in a way completely different than if they were
adults.
Some statutes were passed that made this response mandatory, and
those statutes still exist today. Still today, in many States, you do
not disclose to the public the name and detailed information about
juvenile criminals who are committing adult crimes. Their fingerprints
and their records are not part of law enforcement's ability to cope
with repeated crime, committed over and over, from one State to another
by some of these same teenage criminals.
The Federal Government, in my opinion, should get involved. As we do
this, however, we should expect the States to get tough on youth
sentencing. We should reward States for enacting law enforcement and
prosecutorial policies designed to take violent juvenile criminals off
the streets.
This bill makes some fundamental changes to the crime-fighting
partnership which exists between the States and the Federal Government.
It contains two important ideas: One, strict law enforcement and
prosecution policies for the most violent offenders. We cannot tell the
States they must do that, but in this bill, we set up a very
significant grant program, part of which goes to States that do certain
minimal things to improve their system. If they do not, they do not get
that money. It goes to States that choose to modernize their system in
accordance with a series of options that we have found are clearly
necessary today.

This approach is going to help States fight crime as well as prevent
juveniles from entering the juvenile justice system in the first place.
It makes important fundamental changes to the Federal juvenile justice
system, and I am going to leave an explanation of how we change our
Federal juvenile justice system and modernize it to the Senator from
Missouri. It would be a shame if we tell the States to do things
better, but we leave the prosecutions in the Federal juvenile justice
system alone.
The bill adopts an approach that I suggested last year as part of a
juvenile justice bill. It authorizes--we do not have it appropriated
yet--but we authorize $500 million to provide the States with two
separate grant programs: One, with virtually no strings attached, based
on a current State formula grant program; the second is a new incentive
grant for States that enact what we call ``best practices'' to combat
and prevent juvenile violence.
This bill authorizes $300 million, divided into two $150 million
pots, for a new grant program, the purpose of which is to encourage
States to get tough and enact reforms to their juvenile justice
systems.
I am not going to proceed with each one, but I will just read off the
suggested reforms that will comprise ``getting tough'' and ``best
practices'':
Victims' rights, including the right to be notified of the sentencing
and release of the offender;
Mandatory victim restitution;
Public access to juvenile records;
Parental responsibility laws for acts committed by juveniles released
to their parents' custody;
Zero tolerance for deadbeat juvenile parents, a requirement that
juveniles released from custody attend school or vocational training
and support their children;
Zero tolerance for truancy;
Character counts training, or similar programs adopted and enacted
among the States;
And mentoring.
These programs are a combination of reforms which will positively
impact victims, get tough on juvenile offenders, and provide states
with resources to implement prevention programs to keep juveniles out
of trouble in the first place.
The bill also increases from around $68 million to $200 million the
amount available to states under the current OJJDP grant program. It
also eliminates many of the strings placed on states as a condition of
receiving those grants.
In my home state of New Mexico, juvenile arrests increased 84 percent
from 1986 to last year.
In 1996, 36,927 juveniles were referred to the state juvenile parole
and probation office. Some 39 percent of those referred have a history
of 10 or more referrals to the system.
While the Justice Department has said that the overall juvenile crime
rate in the United States dropped last year, states like New Mexico
continue to see yearly increases in the number of juveniles arrested,
prosecuted and incarcerated.
I mention these numbers because they have led to a growing problem in
my home State, a problem which this bill will help fix.
More juvenile arrests create the need for more space to house
juvenile criminals. But, because of burdensome federal ``sight and
sound separation'' rules, New Mexico has been unable to implement a
safe, reasonable solution to alleviate overcrowding at its juvenile
facilities.
Instead, the state has been forced to consider sending juvenile
prisoners to Iowa and Texas to avoid violating the federal rules and
losing their funding. That is unacceptable and this bill will fix that.
Mr. President, I am pleased to work with the Senator from Missouri on
this important legislation. I know that many of my colleagues share my
concerns about the need to update our juvenile justice system. I hope
that they will examine our bill and lend their support.
I am going to stop here. I ask unanimous consent that the entire bill
and a summary of the bill be printed in the Record, and that it be
appropriately referred. It will bear the signatures today of Senator
Ashcroft, Senator Wyden, and Senator Campbell as cosponsors.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 718

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Juvenile
Crime Control and Community Protection Act of 1997''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Severability.

TITLE I--REFORM OF EXISTING PROGRAMS

Sec. 101. Findings and purposes.
Sec. 102. Definitions.
Sec. 103. Office of Juvenile Justice and Delinquency Prevention.
Sec. 104. Annual report.
Sec. 105. Block grants for State and local programs.
Sec. 106. State plans.
Sec. 107. Repeals.

TITLE II--INCENTIVE GRANTS FOR ACCOUNTABILITY-BASED REFORMS

Sec. 201. Incentive grants for accountability-based reforms.

TITLE III--REFORM OF FEDERAL JUVENILE JUSTICE SYSTEM

Sec. 301. Juvenile adjudications considered in sentencing.
Sec. 302. Access to juvenile records.
Sec. 303. Referral of children with disabilities to juvenile and
criminal authorities.
Sec. 304. Limited disclosure of Federal Bureau of Investigation
records.
Sec. 305. Amendments to Federal Juvenile Delinquency Act.

TITLE IV--GENERAL PROVISIONS

Sec. 401. Authorization of appropriations.

SEC. 2. SEVERABILITY.

If any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or

[[Page S4219]]

circumstance is held to be unconstitutional, the remainder of
this Act, the amendments made by this Act, and the
application of the provisions of such to any person or
circumstance shall not be affected thereby.
TITLE I--REFORM OF EXISTING PROGRAMS

SEC. 101. FINDINGS AND PURPOSES.

(a) Findings.--Section 101 of the Juvenile Justice and
Delinquency Prevention Act of 1974 (42 U.S.C. 5601) is
amended--
(1) by striking subsection (a) and inserting the following:
``(a) Findings.--Congress finds that--
``(1) the Nation's juvenile justice system is in trouble,
including dangerously overcrowded facilities, overworked
field staff, and a growing number of children who are
breaking the law;
``(2) a redesigned juvenile corrections program for the
next century should be based on 4 principles, including--
``(A) protecting the community;
``(B) accountability for offenders and their families;
``(C) restitution for victims and the community; and
``(D) community-based prevention;
``(3) existing programs have not adequately responded to
the particular problems of juvenile delinquents in the
1990's;
``(4) State and local communities, which experience
directly the devastating failure of the juvenile justice
system, do not have sufficient resources to deal
comprehensively with the problems of juvenile crime and
delinquency;
``(5) limited State and local resources are being
unnecessarily wasted complying with overly technical Federal
requirements for `sight and sound' separation currently in
effect under the 1974 Act, while prohibiting the commingling
of adults and juvenile populations would achieve this
important purpose without imposing an undue burden on State
and local governments;
``(6) limited State and local resources are being
unnecessarily wasted complying with the overly restrictive
Federal mandate that no juveniles be detained or confined in
any jail or lockup for adults, which mandate is particularly
burdensome for rural communities;
``(7) the juvenile justice system should give additional
attention to the problem of juveniles who commit serious
crimes, with particular attention given to the area of
sentencing;
``(8) local school districts lack information necessary to
track serious violent juvenile offenders, information that is
essential to promoting safety in public schools;
``(9) the term `prevention' should mean both ensuring that
families have a greater chance to raise their children so
that those children do not engage in criminal or delinquent
activities, and preventing children who have engaged in such
activities from becoming permanently entrenched in the
juvenile justice system;
``(10) in 1994, there were more than 330,000 juvenile
arrests for violent crimes, and between 1985 and 1994, the
number of juvenile criminal homicide cases increased by 144
percent, and the number of juvenile weapons cases increased
by 156 percent;
``(11) in 1994, males age 14 through 24 constituted only 8
percent of the population, but accounted for more than 25
percent of all homicide victims and nearly half of all
convicted murderers;
``(12) in a survey of 250 judges, 93 percent of those
judges stated that juvenile offenders should be
fingerprinted, 85 percent stated that juvenile criminal
records should be made available to adult authorities, and 40
percent stated that the minimum age for facing murder charges
should be 14 or 15;
``(13) studies indicate that good parenting skills,
including normative development, monitoring, and discipline,
clearly affect whether children will become delinquent, and
adequate supervision of free-time activities, whereabouts,
and peer interaction is critical to ensure that children do
not drift into delinquency;
``(14) school officials lack the information necessary to
ensure that school environments are safe and conducive to
learning;
``(15) in the 1970's, less than half of our Nation's cities
reported gang activity, while 2 decades later, a nationwide
survey reported a total of 23,388 gangs and 664,906 gang
members on the streets of United States cities in 1995;
``(16) the high incidence of delinquency in the United
States results in an enormous annual cost and an immeasurable
loss of human life, personal security, and wasted human
resources; and
``(17) juvenile delinquency constitutes a growing threat to
the national welfare, requiring immediate and comprehensive
action by the Federal Government to reduce and eliminate the
threat.''; and
(2) in subsection (b)--
(A) by striking ``further''; and
(B) by striking ``Federal Government'' and inserting
``Federal, State, and local governments''.
(b) Purposes.--Section 102 of the Juvenile Justice and
Delinquency Prevention Act of 1974 (42 U.S.C. 5602) is
amended to read as follows:

``SEC. 102. PURPOSES.

``The purposes of this title and title II are--
``(1) to assist State and local governments in promoting
public safety by supporting juvenile delinquency prevention
and control activities;
``(2) to give greater flexibility to schools to design
academic programs and educational services for juvenile
delinquents expelled or suspended for disciplinary reasons;
``(3) to assist State and local governments in promoting
public safety by encouraging accountability through the
imposition of meaningful sanctions for acts of juvenile
delinquency;
``(4) to assist State and local governments in promoting
public safety by improving the extent, accuracy,
availability, and usefulness of juvenile court and law
enforcement records and the openness of the juvenile justice
system to the public;
``(5) to assist teachers and school officials in ensuring
school safety by improving their access to information
concerning juvenile offenders attending or intending to
enroll in their schools or school-related activities;
``(6) to assist State and local governments in promoting
public safety by encouraging the identification of violent
and hardcore juveniles and in transferring such juveniles out
of the jurisdiction of the juvenile justice system and into
the jurisdiction of adult criminal court;
``(7) to provide for the evaluation of federally assisted
juvenile crime control programs, and training necessary for
the establishment and operation of such programs;
``(8) to ensure the dissemination of information regarding
juvenile crime control programs by providing a national
clearinghouse; and
``(9) to provide technical assistance to public and private
nonprofit juvenile justice and delinquency prevention
programs.''.

SEC. 102. DEFINITIONS.

Section 103 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5603) is amended--
(1) in paragraph (3), by inserting ``punishment,'' after
``control,'';
(2) in paragraph (22)(iii), by striking ``and'' at the end;
(3) in paragraph (23), by striking the period at the end
and inserting a semicolon; and
(4) by adding at the end the following:
``(24) the term `serious violent crime' means--
``(A) murder or nonnegligent manslaughter, or robbery;
``(B) aggravated assault committed with the use of a
dangerous or deadly weapon, forcible rape, kidnaping, felony
aggravated battery, assault with intent to commit a serious
violent crime, and vehicular homicide committed while under
the influence of an intoxicating liquor or controlled
substance; or
``(C) a serious drug offense;
``(25) the term `serious drug offense' means an act or acts
which, if committed by an adult subject to Federal criminal
jurisdiction, would be punishable under section 401(b)(1)(A)
or 408 of the Controlled Substances Act (21 U.S.C.
841(b)(1)(A), 848) or section 1010(b)(1)(A) of the Controlled
Substances Import and Export Act (21 U.S.C. 960(b)(1)(A));
and
``(26) the term `serious habitual offender' means a
juvenile who--
``(A) has been adjudicated delinquent and subsequently
arrested for a capital offense, life offense, first degree
aggravated sexual offense, or serious drug offense;
``(B) has had not fewer than 5 arrests, with 3 arrests
chargeable as felonies if committed by an adult and not fewer
than 3 arrests occurring within the most recent 12-month
period;
``(C) has had not fewer than 10 arrests, with 2 arrests
chargeable as felonies if committed by an adult and not fewer
than 3 arrests occurring within the most recent 12-month
period; or
``(D) has had not fewer than 10 arrests, with 8 or more
arrests for misdemeanor crimes involving theft, assault,
battery, narcotics possession or distribution, or possession
of weapons, and not fewer than 3 arrests occurring within the
most recent 12-month period.''.

SEC. 103. OFFICE OF JUVENILE JUSTICE AND DELINQUENCY
PREVENTION.

Section 204 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5614) is amended--
(1) in subsection (a)(1)--
(A) by striking ``shall develop'' and inserting the
following: ``shall--
``(A) develop'';
(B) by inserting ``punishment,'' before ``diversion''; and
(C) in the first sentence, by striking ``States'' and all
that follows through the end of the paragraph and inserting
the following: ``States; and
``(B) annually submit the plan required by subparagraph (A)
to the Congress.'';
(2) in subsection (b)--
(A) in paragraph (1), by adding ``and'' at the end; and
(B) by striking paragraphs (2) through (7) and inserting
the following:
``(2) reduce duplication among Federal juvenile delinquency
programs and activities conducted by Federal departments and
agencies.'';
(3) by redesignating subsection (h) as subsection (f); and
(4) by striking subsection (i).

SEC. 104. ANNUAL REPORT.

Section 207 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5617) is amended to read as
follows:

``SEC. 207. ANNUAL REPORT.

``Not later than 180 days after the end of a fiscal year,
the Administrator shall submit to the President, the Speaker
of the House of

[[Page S4220]]

Representatives, the President pro tempore of the Senate, and
the Governor of each State, a report that contains the
following with respect to such fiscal year:
``(1) Summary and analysis.--A detailed summary and
analysis of the most recent data available regarding the
number of juveniles taken into custody, the rate at which
juveniles are taken into custody, the number of repeat
juvenile offenders, the number of juveniles using weapons,
the number of juvenile and adult victims of juvenile crime
and the trends demonstrated by the data required by
subparagraphs (A), (B), and (C). Such summary and analysis
shall set out the information required by subparagraphs (A),
(B), (C), and (D) separately for juvenile nonoffenders,
juvenile status offenders, and other juvenile offenders. Such
summary and analysis shall separately address with respect to
each category of juveniles specified in the preceding
sentence--
``(A) the types of offenses with which the juveniles are
charged, data on serious violent crimes committed by
juveniles, and data on serious habitual offenders;
``(B) the race and gender of the juveniles and their
victims;
``(C) the ages of the juveniles and their victims;
``(D) the types of facilities used to hold the juveniles
(including juveniles treated as adults for purposes of
prosecution) in custody, including secure detention
facilities, secure correctional facilities, jails, and
lockups;
``(E) the number of juveniles who died while in custody and
the circumstances under which they died;
``(F) the educational status of juveniles, including
information relating to learning disabilities, failing
performance, grade retention, and dropping out of school;
``(G) the number of juveniles who are substance abusers;
and
``(H) information on juveniles fathering or giving birth to
children out of wedlock, and whether such juveniles have
assumed financial responsibility for their children.
``(2) Activities funded.--A description of the activities
for which funds are expended under this part.
``(3) State compliance.--A description based on the most
recent data available of the extent to which each State
complies with section 223 and with the plan submitted under
that section by the State for that fiscal year.
``(4) Summary and explanation.--A summary of each program
or activity for which assistance is provided under part C or
D, an evaluation of the results of such program or activity,
and a determination of the feasibility and advisability of
replacing such program or activity in other locations.
``(5) Exemplary programs and practices.--A description of
selected exemplary delinquency prevention programs and
accountability-based youth violence reduction practices.''.

SEC. 105. BLOCK GRANTS FOR STATE AND LOCAL PROGRAMS.

(a) Section 221.--Section 221 of the Juvenile Justice and
Delinquency Prevention Act of 1974 (42 U.S.C. 5631) is
amended--
(1) in subsection (a)--
(A) by inserting ``(1)'' before ``The Administrator'';
(B) by inserting ``, including charitable and religious
organizations,'' after ``and private agencies'';
(C) by inserting before the period at the end the
following: ``, including--
``(A) initiatives for holding juveniles accountable for any
act for which they are adjudicated delinquent;
``(B) increasing public awareness of juvenile proceedings;
``(C) improving the content, accuracy, availability, and
usefulness of juvenile court and law enforcement records
(including fingerprints and photographs); and
``(D) education programs such as funding for extended hours
for libraries and recreational programs which benefit all
juveniles''; and
(D) by adding at the end the following:
``(2)(A) State and local governments receiving grants under
paragraph (1) may contract with religious organizations or
allow religious organizations to accept grants under any
program described in this title, on the same basis as any
other nongovernmental provider without impairing the
religious character of such organizations, and without
diminishing the religious freedom of beneficiaries of
assistance funded under such program.
``(B) A State or local government exercising its authority
to contract with private agencies or to allow private
agencies to accept grants under paragraph (1) shall ensure
that religious organizations are eligible, on the same basis
as any other private organization, as contractors to provide
assistance, or to accept grants under any program described
in this title so long as the programs are implemented
consistent with the Establishment Clause of the United States
Constitution. Neither the Federal Government nor a State or
local government receiving funds under such programs shall
discriminate against an organization which is or applies to
be a contractor to provide assistance, or which accepts
grants, on the basis that the organization has a religious
character.
``(C)(i) A religious organization that participates in a
program authorized by this title shall retain its
independence from Federal, State, and local governments,
including such organization's control over the definition,
development, practice, and expression of its religious
beliefs.
``(ii) Neither the Federal Government nor a State or local
government shall require a religious organization--
``(I) to alter its form of internal governance; or
``(II) to remove religious art, icons, scripture, or other
symbols,

in order to be eligible to contract to provide assistance, or
to accept grants funded under a program described in this
title.
``(D) A religious organization's exemption provided under
section 702 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-
1a) regarding employment practices shall not be affected by
its participation in, or receipt of funds from, programs
described in this title.
``(E) If a juvenile has an objection to the religious
character of the organization or institution from which the
juvenile receives, or would receive, assistance funded under
any program described in this title, the State in which the
juvenile resides shall provide such juvenile (if otherwise
eligible for such assistance) within a reasonable period of
time after the date of such objection with assistance from an
alternative provider that is accessible to the juvenile and
the value of which is not less than the value of assistance
which the juvenile would have received from such
organization.
``(F) Except as otherwise provided in law, a religious
organization shall not discriminate against an individual in
regard to rendering assistance funded under any program
described in this title on the basis of religion, a religious
belief, or refusal to actively participate in a religious
practice.
``(G)(i) Except as provided in clause (ii), any religious
organization contracting to provide assistance funded under
any program described in this title shall be subject to the
same regulations as other contractors to account in accord
with generally accepted accounting principles for the use of
such funds provided under such programs.
``(ii) If such organization segregates Federal funds
provided under such programs into separate accounts, then
only the financial assistance provided with such funds shall
be subject to audit.
``(H) Any party that seeks to enforce its rights under this
section may assert a civil action for injunctive relief
exclusively in an appropriate Federal district court against
the official or government agency that allegedly commits such
violation.
``(I) No State or local government may use funds provided
under this title to fund sectarian worship, proselytization,
or prayer, or for any purpose other than the provision of
social services under this title.''; and
(2) in subsection (b), by striking paragraph (1) and
inserting the following:
``(1) Of amounts made available to carry out this part in
any fiscal year, $10,000,000 or 1 percent (whichever is
greater) may be used by the Administrator--
``(A) to establish and maintain a clearinghouse to
disseminate to the States information on juvenile delinquency
prevention, treatment, and control; and
``(B) to provide training and technical assistance to
States to improve the administration of the juvenile justice
system.''.
(b) Section 223.--Section 223(a)(10) of the Juvenile
Justice and Delinquency Prevention Act of 1974 (42 U.S.C.
5633(a)(10)) is amended--
(1) by striking ``or through'' and inserting ``through'';
and
(2) by inserting ``or through grants and contracts with
religious organizations in accordance with section
221(b)(2)(B)'' after ``agencies,''.

SEC. 106. STATE PLANS.

Section 223 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5633) is amended--
(1) in subsection (a)--
(A) by striking the second sentence;
(B) by striking paragraph (3) and inserting the following:
``(3) provide for an advisory group, which--
``(A) shall--
``(i)(I) consist of such number of members deemed necessary
to carry out the responsibilities of the group and appointed
by the chief executive officer of the State; and
``(II) consist of a majority of members (including the
chairperson) who are not full-time employees of the Federal
Government, or a State or local government;
``(ii) include members who have training, experience, or
special knowledge concerning--

``(I) the prevention and treatment of juvenile delinquency;
``(II) the administration of juvenile justice, including
law enforcement; and
``(III) the representation of the interests of the victims
of violent juvenile crime and their families; and

``(iii) include as members at least 1 locally elected
official representing general purpose local government;
``(B) shall participate in the development and review of
the State's juvenile justice plan prior to submission to the
supervisory board for final action;
``(C) shall be afforded an opportunity to review and
comment, not later than 30 days after the submission to the
advisory group, on all juvenile justice and delinquency
prevention grants submitted to the State agency designated
under paragraph (1);
``(D) shall, consistent with this title--
``(i) advise the State agency designated under paragraph
(1) and its supervisory board; and

[[Page S4221]]

``(ii) submit to the chief executive officer and the
legislature of the State not less frequently than annually
recommendations regarding State compliance with this
subsection; and
``(E) may, consistent with this title--
``(i) advise on State supervisory board and local criminal
justice advisory board composition;
``(ii) review progress and accomplishments of projects
funded under the State plan; and
``(iii) contact and seek regular input from juveniles
currently under the jurisdiction of the juvenile justice
system;'';
(C) in paragraph (10)--
(i) in subparagraph (N), by striking ``and'' at the end;
(ii) in subparagraph (O), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(P) programs implementing the practices described in
paragraphs (6) through (12) and (17) and (18) of section
242(b);'';
(D) by striking paragraph (13) and inserting the following:
``(13) provide assurances that, in each secure facility
located in the State (including any jail or lockup for
adults), there is no commingling in the same cell or
community room of, or any other regular, sustained, physical
contact between--
``(A) any juvenile detained or confined for any period of
time in that facility; and
``(B) any adult offender detained or confined for any
period of time in that facility.'';
(E) by striking paragraphs (8), (9), (12), (14), (15),
(17), (18), (19), (24), and (25);
(F) by redesignating paragraphs (10), (11), (13), (16),
(20), (21), (22), and (23) as paragraphs (8) through (15),
respectively;
(G) in paragraph (14), as redesignated, by adding ``and''
at the end; and
(H) in paragraph (15), as redesignated, by striking the
semicolon at the end and inserting a period; and
(2) by striking subsections (c) and (d).

SEC. 107. REPEALS.

The Juvenile Justice and Delinquency Prevention Act of 1974
(42 U.S.C. 5601 et seq.) is amended--
(1) in title II--
(A) by striking parts C, E, F, G, and H;
(B) by striking part I, as added by section 2(i)(1)(C) of
Public Law 102-586; and
(C) by amending the heading of part I, as redesignated by
section 2(i)(1)(A) of Public Law 102-586, to read as follows:

``Part E--General and Administrative Provisions''; and

(2) by striking title V, as added by section 5(a) of Public
Law 102-586.
TITLE II--INCENTIVE GRANTS FOR ACCOUNTABILITY-BASED REFORMS

SEC. 201. INCENTIVE GRANTS FOR ACCOUNTABILITY-BASED REFORMS.

Title II of the Juvenile Justice and Delinquency Prevention
Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting
after part B the following:

``Part C--Incentive Grants for Accountability-Based Reforms

``SEC. 241. AUTHORIZATION OF GRANTS.

``The Administrator shall provide juvenile delinquent
accountability grants under section 242 to eligible States to
carry out this title.

``SEC. 242. ACCOUNTABILITY-BASED INCENTIVE GRANTS.

``(a) Eligibility for Grant.--To be eligible to receive a
grant under section 241, a State shall submit to the
Administrator an application at such time, in such form, and
containing such assurances and information as the
Administrator may require by rule, including assurances that
the State has in effect (or will have in effect not later
than 1 year after the date on which the State submits such
application) laws, or has implemented (or will implement not
later than 1 year after the date on which the State submits
such application)--
``(1) policies and programs that ensure that all juveniles
who commit an act after attaining 14 years of age that would
be a serious violent crime if committed by an adult are
treated as adults for purposes of prosecution, unless on a
case-by-case basis, as a matter of law or prosecutorial
discretion, the transfer of such juveniles for disposition in
the juvenile system is determined to be in the interest of
justice, except that the age of the juvenile alone shall not
be determinative of whether such transfer is in the interest
of justice;
``(2) graduated sanctions for juvenile offenders, ensuring
a sanction for every delinquent or criminal act, ensuring
that the sanction is of increasing severity based on the
nature of the act, and escalating the sanction with each
subsequent delinquent or criminal act; and
``(3) a system of records relating to any adjudication of
juveniles less than 15 years of age who are adjudicated
delinquent for conduct that if committed by an adult would
constitute a serious violent crime, which records are--
``(A) equivalent to the records that would be kept of
adults arrested for such conduct, including fingerprints and
photographs;
``(B) submitted to the Federal Bureau of Investigation in
the same manner in which adult records are submitted;
``(C) retained for a period of time that is equal to the
period of time that records are retained for adults; and
``(D) available to law enforcement agencies, prosecutors,
the courts, and school officials.
``(b) Standards for Handling and Disclosing Information.--
School officials referred to in subsection (a)(3)(D) shall be
subject to the same standards and penalties to which law
enforcement and juvenile justice system employees are subject
under Federal and State law for handling and disclosing
information referred to in that paragraph.
``(c) Additional Amount Based on Accountability-Based Youth
Violence Reduction Practices.--A State that receives a grant
under subsection (a) is eligible to receive an additional
amount of funds added to such grant if such State
demonstrates that the State has in effect, or will have in
effect, not later than 1 year after the deadline established
by the Administrator for the submission of applications under
subsection (a) for the fiscal year at issue, not fewer than 5
of the following practices:
``(1) Victims' rights.--Increased victims' rights,
including--
``(A) the right to be treated with fairness and with
respect for the dignity and privacy of the victim;
``(B) the right to be reasonably protected from the accused
offender;
``(C) the right to be notified of court proceedings; and
``(D) the right to information about the conviction,
sentencing, imprisonment, and release of the offender.
``(2) Restitution.--Mandatory victim and community
restitution, including statewide programs to reach
restitution collection levels of not less than 80 percent.
``(3) Access to proceedings.--Public access to juvenile
court delinquency proceedings.
``(4) Parental responsibility.--Juvenile nighttime curfews
and parental civil liability for serious acts committed by
juveniles released to the custody of their parents by the
court.
``(5) Zero tolerance for deadbeat juvenile parents.--A
requirement as conditions of parole that--
``(A) any juvenile offender who is a parent demonstrates
parental responsibility by working and paying child support;
and
``(B) the juvenile attends and successfully completes
school or pursues vocational training.
``(6) Serious habitual offenders comprehensive action
program (shocap).--
``(A) In general.--Implementation of a serious habitual
offender comprehensive action program which is a
multidisciplinary interagency case management and information
sharing system that enables the juvenile and criminal justice
system, schools, and social service agencies to make more
informed decisions regarding early identification, control,
supervision, and treatment of juveniles who repeatedly commit
serious delinquent or criminal acts.
``(B) Multidisciplinary agencies.--Establishment by units
of local government in the State under a program referred to
in subparagraph (A), of a multidisciplinary agency comprised
of representatives from--
``(i) law enforcement organizations;
``(ii) school districts;
``(iii) State's attorneys offices;
``(iv) court services;
``(v) State and county children and family services; and
``(vi) any additional organizations, groups, or agencies
deemed appropriate to accomplish the purposes described in
subparagraph (A), including--

``(I) juvenile detention centers;
``(II) mental and medical health agencies; and
``(III) the community at large.

``(C) Identification of serious habitual offenders.--Each
multidisciplinary agency established under subparagraph (B)
shall adopt, by a majority of its members, criteria to
identify individuals who are serious habitual offenders.
``(D) Interagency information sharing agreement.--
``(i) In general.--Each multidisciplinary agency
established under subparagraph (B) shall adopt, by a majority
of its members, an interagency information sharing agreement
to be signed by the chief executive officer of each
organization and agency represented in the multidisciplinary
agency.
``(ii) Disclosure of information.--The interagency
information sharing agreement shall require that--

``(I) all records pertaining to serious habitual offenders
shall be kept confidential to the extent required by State
law;
``(II) information in the records may be made available to
other staff from member organizations and agencies as
authorized by the multidisciplinary agency for the purposes
of promoting case management, community supervision, conduct
control, and tracking of the serious habitual offender for
the application and coordination of appropriate services; and
``(III) access to the information in the records shall be
limited to individuals who provide direct services to the
serious habitual offender or who provide community conduct
control and supervision to the serious habitual offender.

``(7) Community-wide partnerships.--Community-wide
partnerships involving county, municipal government, school
districts, appropriate State agencies, and nonprofit
organizations to administer a unified approach to juvenile
delinquency.
``(8) Zero tolerance for truancy.--Implementation by school
districts of programs to curb truancy and implement certain
and

[[Page S4222]]

swift punishments for truancy, including parental
notification of every absence, mandatory Saturday school
makeup sessions for truants or weekends in jail for truants
and denial of participation or attendance at extracurricular
activities by truants.
``(9) Alternative schooling.--A requirement that, as a
condition of receiving any State funding provided to school
districts in accordance with a formula allocation based on
the number of children enrolled in school in the school
district, each school district shall establish one or more
alternative schools or classrooms for juvenile offenders or
juveniles who are expelled or suspended for disciplinary
reasons and shall require that such juveniles attend the
alternative schools or classrooms. Any juvenile who refuses
to attend such alternative school or classroom shall be
immediately detained pending a hearing. If a student is
transferred from a regular school to an alternative school
for juvenile offenders or juveniles who are expelled or
suspended for disciplinary reasons such State funding shall
also be transferred to the alternative school.
``(10) Judicial jurisdiction.--A system under which
municipal and magistrate courts have--
``(A) jurisdiction over minor delinquency offenses such as
truancy, curfew violations, and vandalism; and
``(B) short term detention authority for habitual minor
delinquent behavior.
``(11) Elimination of certain ineffective penalties.--
Elimination of `counsel and release' or `refer and release'
as a penalty for juveniles with respect to the second or
subsequent offense for which the juvenile is referred to a
juvenile probation officer.
``(12) Report back orders.--A system of `report back'
orders when juveniles are placed on probation, so that after
a period of time (not to exceed 2 months) the juvenile
appears before and advises the judge of the progress of the
juvenile in meeting certain goals.
``(13) Penalties for use of firearm.--Mandatory penalties
for the use of a firearm during a violent crime or a drug
felony.
``(14) Street gangs.--A prohibition on engaging in criminal
conduct as a member of a street gang and imposition of severe
penalties for terrorism by criminal street gangs.
``(15) Character counts.--Establishment of character
education and training for juvenile offenders.
``(16) Mentoring.--Establishment of mentoring programs for
at-risk youth.
``(17) Drug courts and community-oriented policing
strategies.--Establishment of courts for juveniles charged
with drug offenses and community-oriented policing
strategies.
``(18) Recordkeeping and fingerprinting.--Programs that
provide that, whenever a juvenile who has not achieved his or
her 14th birthday is adjudicated delinquent (as defined by
Federal or State law in a juvenile delinquency proceeding)
for conduct that, if committed by an adult, would constitute
a felony under Federal or State law, the State shall ensure
that a record is kept relating to the adjudication that is--
``(A) equivalent to the record that would be kept of an
adult conviction for such an offense;
``(B) retained for a period of time that is equal to the
period of time that records are kept for adult convictions;
``(C) made available to prosecutors, courts, and law
enforcement agencies of any jurisdiction upon request; and
``(D) made available to officials of a school, school
district, or postsecondary school where the individual who is
the subject of the juvenile record seeks, intends, or is
instructed to enroll, and that such officials are held liable
to the same standards and penalties that law enforcement and
juvenile justice system employees are held liable to, for
handling and disclosing such information.
``(19) Evaluation.--Establishment of a comprehensive
process for monitoring and evaluating the effectiveness of
State juvenile justice and delinquency prevention programs in
reducing juvenile crime and recidivism.
``(20) Boot camps.--Establishment of State boot camps with
an intensive restitution or work and community service
requirement as part of a system of graduated sanctions.

``SEC. 243. GRANT AMOUNTS.

``(a) Allocation and Distribution of Funds.--
``(1) Eligibility.--Of the total amount made available to
carry out Part C of this title for each fiscal year, subject
to subsection (b), each State shall be eligible to receive
the sum of--
``(A) an amount that bears the same relation to one-third
of such total as the number of juveniles in the State bears
to the number of juveniles in all States;
``(B) an amount that bears the same relation to one-third
of such total as the number of juveniles from families with
incomes below the poverty line in the State bears to the
number of such juveniles in all States; and
``(C) an amount that bears the same relation to one-third
of such total as the average annual number of part 1 violent
crimes reported by the State to the Federal Bureau of
Investigation for the 3 most recent calendar years for which
such data are available, bears to the number of part 1
violent crimes reported by all States to the Federal Bureau
of Investigation for such years.
``(2) Minimum requirement.--Each State shall be eligible to
receive not less than 3.5 percent of one-third of the total
amount appropriated to carry out Part C for each fiscal year,
except that the amount for which the Virgin Islands of the
United States, Guam, American Samoa, and the Commonwealth of
the Northern Mariana Islands is eligible shall be not less
than $100,000 and the amount for which Palau is eligible
shall be not less than $15,000.
``(3) Unavailability of information.--For purposes of this
subsection, if data regarding the measures governing
allocation of funds under paragraphs (1) and (2) in any State
are unavailable or substantially inaccurate, the
Administrator and the State shall utilize the best available
comparable data for the purposes of allocation of any funds
under this section.
``(b) Allocated Amount.--The amount made available to carry
out Part C of this title for any fiscal year shall be
allocated among the States as follows:
``(1) 50 percent of the amount for which a State is
eligible under subsection (a) shall be allocated to that
State if it meets the requirements of section 242(a).
``(2) 50 percent of the amount for which a State is
eligible under subsection (a) shall be allocated to that
State if it meets the requirements of subsections (a) and (c)
of section 242.
``(c) Availability.--Any amounts made available under this
section to carry out Part C of this title shall remain
available until expended.''.

``SEC. 244. ACCOUNTABILITY.

``A State that receives a grant under section 241 shall use
accounting, audit, and fiscal procedures that conform to
guidelines prescribed by the Administrator, and shall ensure
that any funds used to carry out section 241 shall represent
the best value for the State at the lowest possible cost and
employ the best available technology.

``SEC. 245. LIMITATION ON USE OF FUNDS.

``(a) Nonsupplanting Requirement.--Funds made available
under section 241 shall not be used to supplant State funds,
but shall be used to increase the amount of funds that would,
in the absence of Federal funds, be made available from State
sources.
``(b) Administrative and Related Costs.--Not more than 2
percent of the funds appropriated under section 299(a) for a
fiscal year shall be available to the Administrator for such
fiscal year for purposes of--
``(1) research and evaluation, including assessment of the
effect on public safety and other effects of the expansion of
correctional capacity and sentencing reforms implemented
pursuant to this part; and
``(2) technical assistance relating to the use of grants
made under section 241, and development and implementation of
policies, programs, and practices described in section 242.
``(c) Carryover of Appropriations.--Funds appropriated
under section 299(a) shall remain available until expended.
``(d) Matching Funds.--The Federal share of a grant
received under this part may not exceed 90 percent of the
costs of a proposal, as described in an application approved
under this part.''.
TITLE III--REFORM OF FEDERAL JUVENILE JUSTICE SYSTEM

SEC. 301. JUVENILE ADJUDICATIONS CONSIDERED IN SENTENCING.

Pursuant to section 994 of title 28, United States Code,
the United States Sentencing Commission shall promulgate
guidelines or amend existing guidelines to provide that
offenses contained in the juvenile record of an adult
defendant shall be considered as adult offenses in sentencing
determinations if such juvenile offenses would have
constituted a felony had they been committed by the defendant
as an adult.

SEC. 302. ACCESS TO JUVENILE RECORDS.

Section 5038(a) of title 18, United States Code, is
amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(7) inquiries from officials of a school, school
district, or any postsecondary school where the individual
who is the subject of the juvenile record seeks, intends, or
is instructed or ordered to enroll.''.

SEC. 303. REFERRAL OF CHILDREN WITH DISABILITIES TO JUVENILE
AND CRIMINAL AUTHORITIES.

Section 615 of the Individuals with Disabilities Education
Act (20 U.S.C. 1415) is amended by adding at the end the
following:
``(g) Referrals to Juvenile and Criminal Authorities.--
``(1) Reporting.--Nothing in this part shall be construed
to prohibit an agency from reporting a criminal act committed
by a child with a disability to the police or a juvenile
authority, or to prohibit a State juvenile or judicial
authority from exercising the responsibility of the authority
with regard to the application of a juvenile or criminal law
to a criminal activity committed by a child with a
disability.
``(2) Filing petitions.--Nothing in this part shall be
construed to require a State educational agency or local
educational agency to exhaust the due process procedures
under this section or any other part of this Act prior to
filing a petition in a juvenile or criminal court with regard
to a child with a disability who commits a criminal act at
school or a school-related event under the jurisdiction of
the State educational agency or local educational agency.''.

[[Page S4223]]

SEC. 304. LIMITED DISCLOSURE OF FEDERAL BUREAU OF
INVESTIGATION RECORDS.

Section 534(e) of title 28, United States Code, is
amended--
(1) by redesignating paragraph (3) as paragraph (4); and
(2) by inserting after paragraph (2) the following:
``(3)(A) The Director of the Federal Bureau of
Investigation, Identification Division, shall provide, upon
request, the information received under paragraph (3) of
section 242(a) of the Juvenile Justice Delinquency and
Prevention Act of 1974, to officials of a school, school
district, or postsecondary school where the individual who is
the subject of such information seeks, intends, or is
instructed or ordered to enroll.
``(B) School officials receiving information under
subparagraph (A) shall be subject to the same standards and
penalties to which law enforcement and juvenile justice
system employees are subject under Federal and State law for
handling and disclosing information referred to in
subparagraph (A).''.

SEC. 305. AMENDMENTS TO FEDERAL JUVENILE DELINQUENCY ACT.

(a) Prosecution of Juveniles as Adults.--Section 5032 of
title 18, United States Code, is amended by inserting before
the first undesignated paragraph the following:
``Notwithstanding any other provision of law, a juvenile
defendant 14 years of age or older shall be prosecuted as an
adult, and this chapter shall not apply, if such juvenile is
charged with an offense that constitutes--
``(A) murder or attempted murder;
``(B) robbery while armed with a dangerous or deadly
weapon;
``(C) battery or assault while armed with a dangerous or
deadly weapon;
``(D) forcible rape;
``(E) any serious drug offense which, if committed by an
adult, would be punishable under section 401(b)(1)(A) or 408
of the Controlled Substances Act (21 U.S.C. 841(b)(1)(A),
848) or section 1010(b)(1)(A) of the Controlled Substances
Import and Export Act (21 U.S.C. 960(b)(1)(A)); and
``(F) the third or subsequent occasion, unrelated to any
previous occasion, on which such juvenile engages in conduct
for which an adult could be imprisoned for a term exceeding 1
year, unless, on a case-by-case basis--
``(i) a court determines that trying such a juvenile as an
adult is not in the interest of justice, except that the age
of the juvenile alone shall not be determinative of whether
or not such action is in the interest of justice;
``(ii) the court records its reasons for making such a
determination in writing and makes such record available for
inspection by the public; and
``(iii) the court makes a record in writing of the
disposition of the juvenile in the juvenile justice system
available to the public, notwithstanding any other law
requiring such information to be withheld or limited in any
way from access by the public.''.
(b) Amendments Concerning Records.--Section 5038 of title
18, United States Code, is amended--
(1) by striking subsections (d) and (f);
(2) by redesignating subsection (e) as subsection (d); and
(3) by adding at the end the following:
``(e)(1) The court shall comply with the requirements of
paragraph (2) if--
``(A) a juvenile under 14 years of age has been found
guilty of committing an act which, if committed by an adult,
would be an offense described in the first undesignated
paragraph of section 5032; or
``(B) a juvenile, age 14 or older, is adjudicated
delinquent in a juvenile delinquency proceeding for conduct
which, if committed by an adult, would constitute a felony.
``(2) The requirements of this paragraph are that--
``(A) a record shall be kept relating to the adjudication
that is--
``(i) equivalent to the record that would be kept of an
adult conviction for such an offense;
``(ii) retained for a period of time that is equal to the
period of time that records are kept for adult convictions;
``(iii) made available to law enforcement agencies of any
jurisdiction;
``(iv) made available to officials of a school, school
district, or postsecondary school where the individual who is
the subject of the juvenile record seeks, intends, or is
instructed to enroll; and
``(v) made available, once the juvenile becomes an adult or
is tried as an adult, to any court having criminal
jurisdiction over such an individual for the purpose of
allowing such court to consider the individual's prior
juvenile history as a relevant factor in determining
appropriate punishment for the individual at the sentencing
hearing;
``(B) officials referred to in clause (iv) of subparagraph
(A) shall be held liable to the same standards and penalties
that law enforcement and juvenile justice system employees
are held liable to under Federal and State law for handling
and disclosing such information;
``(C) the juvenile shall be fingerprinted and photographed,
and the fingerprints and photograph shall be sent to the
Federal Bureau of Investigation, Identification Division, and
shall otherwise be made available to the same extent that
fingerprints and photographs of adults are made available;
and
``(D) the court in which the adjudication takes place shall
transmit to the Federal Bureau of Investigation,
Identification Division, information concerning the
adjudication, including the name, date of adjudication,
court, offenses, and disposition, along with a prominent
notation that the matter concerns a juvenile adjudication.
``(3) If a juvenile has been adjudicated to be delinquent
on 2 or more separate occasions based on conduct that would
be a felony if committed by an adult, the record of the
second and all subsequent adjudications shall be kept and
made available to the public to the same extent that a record
of an adult conviction is open to the public.''.
TITLE IV--GENERAL PROVISIONS

SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

Section 299 of the Juvenile Justice and Delinquency
Prevention Act of 1974 (42 U.S.C. 5671) is amended by
striking subsections (a) through (e) and inserting the
following:
``(a) Office of Juvenile Justice and Delinquency
Prevention.--There are authorized to be appropriated for each
of fiscal years 1998, 1999, 2000, 2001, and 2002, such sums
as may be necessary to carry out part A.
``(b) Block Grants for State and Local Programs.--There is
authorized to be appropriated $200,000,000 for each of fiscal
years 1998, 1999, 2000, 2001, and 2002, to carry out part B.
``(c) Incentive Grants for Accountability-Based Reforms.--
There is authorized to be appropriated $300,000,000 for each
of fiscal years 1998, 1999, 2000, 2001, and 2002, to carry
out part C.
``(d) Source of Appropriations.--Funds authorized to be
appropriated by this section may be appropriated from the
Violent Crime Reduction Trust Fund.''.
____

Summary of Domenici-Ashcroft-Wyden ``Juvenile Crime Control and
Community Protection Act of 1997''

Funding--$500 million authorization for juvenile justice
grants: $200 million for current OJJDP state formula grants
(increase of $113 million from $86.5 million in FY 1997);
$300 million for new incentive grants.
To qualify for the first $150 million, states must enact
three reforms: (1) mandatory adult prosecution for juveniles
age 14 and over who commit serious violent crimes or serious
drug felonies; (2) graduated sanctions, so that every bad act
receives punishment; and (3) adult recordkeeping, including
fingerprints and photographs for juveniles under age 15 who
commit serious violent crimes.
To qualify for the next $150 million, states must enact 5
of 20 suggested reforms.
They include:
1) Increased victims' rights, including notification of
release or escape of the offender who committed a crime
against a particular victim.
2) Victim and community restitution.
3) Public access to juvenile court delinquency proceedings.
4) Nighttime curfews and parental responsibility laws,
holding parents civilly liable for the delinquent acts of
their children.
5) Zero tolerance for deadbeat juvenile parents--require as
a condition of parole that juvenile parents pay child support
and attend school or vocational training.
6) SHOCAP--interagency information sharing and monitoring
of the most serious juvenile offenders across the state.
7) Zero tolerance for truancy--parental notification of
every absence, mandatory make-up sessions, and denial of
participation in extra-curriculars for habitual truants.
8) Alternative schools and classrooms for expelled or
suspended students.
9) Judicial jurisdiction for local magistrates over minor
delinquency offenses and short-term detention authority for
habitual delinquent behavior.
10) Elimination of `counsel and release' as a penalty for
second or subsequent offenses.
11) Report-back orders for juveniles on probation--must
appear before the sentencing judge and apprise the judge of
the juvenile's progress in meeting certain goals.
12) Mandatory penalties for the use of a firearm during a
violent crime.
13) Anti-gang legislation.
14) Character Counts--character education and training.
15) Mentoring.
16) Drug courts, special courts or court sessions for
juveniles charged with drug offenses.
17) Community-wide partnerships involving all levels of
state and local government to administer a unified approach
to juvenile justice.
18) Adult recordkeeping for juveniles age 14 and under who
commit any felony under state law.
19) Boot camps, which include an intensive restitution and/
or community service component.
20) Evaluation and monitoring of the effectiveness of State
juvenile justice and delinquency prevention programs reducing
crime and recidivism.
Mandates--reforms or eliminates 3 of the most burdensome
federal mandates found in the 1974 Juvenile Justice and
Delinquency Prevention Act.
Modifies mandatory sight and sound separation of juveniles
and adults in secure facilities by prohibiting ``regular,
sustained physical contact'' between juveniles and adults in
the same facility. States would provide assurances that there
will be no commingling or regular physical contact between
juveniles and adults in the same cell

[[Page S4224]]

or community room. This will reduce costs for rural
communities, which often do not have a separate space to
house juveniles which meets the current strict sight and
sound requirement.
Eliminates two other mandates: (1) prohibition on placing
juveniles in any adult jail or lock-up; and (2) prohibition
on placing ``status offenders'' in secure facilities.

federal reforms

Adult prosecution. Requires mandatory adult prosecution for
juveniles age 14 or over for serious violent crimes and major
drug offenses. Also requires mandatory ``three strikes''
adult prosecution for juveniles age 14 and over when a
juvenile commits a third offense chargeable as a felony.
Judge has discretion under the ``three strikes'' provision to
refuse to prosecute the juvenile as a adult if the
``interests of justice'' determine that adult prosecution is
inappropriate.
Adult records. Requires equivalent of an adult record for
juveniles under age 14 who commit serious violent crimes and
for juveniles over age 14 who commit acts chargeable as
felonies. Includes fingerprints and photographs.
Access to juvenile records. Allows courts to consider
juvenile offenses when making adult sentencing decisions, if
juvenile offenses would have been felonies if committed by
adults. Gives school officials access to federal juvenile
records and FBI files, as long as confidentiality is
maintained.
IDEA amendment. Overturns court decision prohibiting school
officials from unilaterally reporting to authorities or
filing petitions in juvenile or criminal courts with regard
to criminal acts at school committed by children covered by
the IDEA.

Mr. DOMENICI. Mr. President, I yield to Senator Wyden at this time.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, I thank the Senator from New Mexico, and
want him to know I very much appreciate the chance to join him and
Senator Ashcroft on this bipartisan bill.
Mr. President, I say to my colleagues, it is very clear that the
juvenile justice system today in our country is very much like a
revolving door. A young person can commit a violent crime, a series of
violent crimes, be apprehended, visit the juvenile justice system--and
that is really an appropriate characterization--and be back on the
street virtually immediately. In fact, in our newspaper, the Oregonian,
it was recently reported that a child committed 52 crimes, 32 of which
were felonies, before the juvenile justice system took action to
protect the community.
I felt--and I think this is the focus of the legislation that the
Senator from New Mexico, the Senator from Missouri and I bring to the
floor today--that there should be three principles for the new juvenile
justice system for the 21st century.
The first ought to be community protection; the second should be
accountability; and the third should be restitution. The principle of
accountability is especially important with young people. I even see it
with my own small kids, a 7-year-old and a 13-year-old. If they act up,
there needs to be some consequences.
I am particularly pleased that the legislation the Senator from New
Mexico brings to the floor today puts a special focus on trying to deal
with offenses perpetrated by young people that have not yet risen to
that level of violent crime and, in effect, try to send a message to
young people that there will be consequences.
The last point that I will make, because I know time is short and we
have much to do today, is that this legislation is particularly
important in such areas as recordkeeping. We have found across the
country that it has not even been possible to keep tabs on the violent
juveniles, because there are so many gaps in the recordkeeping in the
States. Both the Senator from New Mexico and the Senator from Missouri
have done yeoman work in this regard.
This is a balanced bill; it is a bipartisan bill. It moves to update
the laws dealing with juveniles for the 21st century.
I thank my friend from New Mexico and the Senator from Missouri for
allowing me to be part of this bipartisan coalition. They included a
number of provisions that are important to our State in the drafting
that went on in the last week. I thank the Senator from New Mexico.
Mr. DOMENICI. Mr. President, I ask unanimous consent that Senator
Campbell be added as an original cosponsor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ASHCROFT. Mr. President, I am proud to join with the Senators
Domenici and Wyden in introducing the Juvenile Crime Control and
Community Protection Act of 1997 to reform the juvenile justice system
in order to protect the public and hold juvenile offenders accountable
for their actions.
In 1994, juvenile courts handled an estimated 120,200 drug offense
cases, a jump of 82 percent from 1991. Violent crime arrests among
juveniles in 1995 was 12 percent higher than the level in 1991 and 67
percent above the level in 1986.
This year, Mr. President, it seems as though incidents of juvenile
violence are occurring every day and everywhere.
In Alton, IL, two teens were gunned down--one shot twice in the face
and the other shot once in the back of the head when he turned to
flee--by a 15-year-old of East St. Louis who had driven 30 miles to
carry out the shooting.
In Dayton, KY, a 15-year-old killed her 5-month-old son. She was
given the maximum sentence--30 days of detention.
In Montgomery County, MD, a 14-year-old girl along with three adults
were arrested for two bank robberies in Silver Spring.
In Boston, MA, three schoolgirls--two 14-year-olds and one 15-year-
old--were charged with putting knives to the throat or stomach of
classmates and stealing their gold jewelry and lunch money.
As these incidents demonstrate, the perpetrators of violence and
their victims are getting younger. Similarly, gang activity is getting
worse in our inner cities, suburbs, and rural communities. A 1995
nationwide survey of law enforcement agencies reported a total of
23,388 gangs, and 664,906 gang members in their jurisdiction. In
comparison, a 1993 survey showed an estimated 4,881 gangs with 249,324
gang members in the United States.
The need for juvenile justice reform is clear, especially in light of
the fact that probation was the sentence handed out for 56 percent of
the 1992 juvenile court cases in which the juvenile was adjudicated
delinquent whether the offense was a felony or misdemeanor in nature.
Mr. President, this bill takes substantial steps toward addressing
the problems of violent juvenile offenders and the prevalence of youth
gangs. The Federal Government would assist State and local efforts in
dealing with the epidemic of juvenile crime by helping target the most
violent and problematic offenders.
Mr. President, the Juvenile Crime Control and Community Protection
Act of 1997 would provide $1.5 billion over 5 years in incentive grants
to encourage and assist States in reforming their juvenile justice
systems.
States are encouraged to revise their laws to reflect three much-
needed reforms. First, juveniles age 14 or older who commit serious
violent crimes--such as murder, forcible rape, aggravated assault, or
serious drug offenses--should be tried as the adult criminals they are.
By making sure that the punishment fits the seriousness of the crime,
this proposal would deter juveniles who currently believe that the law
cannot touch them.
Second, the States are encouraged to ensure that records of juveniles
under age 15, who are found to be delinquent regarding serious violent
crimes and serious drug offenses, are maintained and made available to
law enforcement agencies, including the Federal Bureau of
Investigation, prosecutors, adult criminal courts, and appropriate
school officials.
Finally, the States are encouraged to establish graduated sanctions
for juvenile offenders, ensuring a sanction for every delinquent or
criminal act and that the sanctions increase in severity based on the
nature of the act. The sanctions should also escalate with each
subsequent delinquent or criminal act, and should include mandatory
restitution to victims, longer sentences of confinement, or mandatory
participation in community service.
For States that enact such reforms, additional grant funds would be
made available to implement at least 5 of 18 accountability-based
practices including: record-keeping for juvenile criminals age 14 or
older who commit offenses equivalent to an adult felony; increasing
victims' rights concerning information about the conviction,
sentencing, imprisonment, and release of their juvenile attackers;
mandatory

[[Page S4225]]

restitution to victims of juvenile crimes; public access to juvenile
court proceedings; parental responsibility laws; zero tolerance for
deadbeat juvenile parents; implementation of a Serious Habitual
Offenders Comprehensive Action Program [SHOCAP]--a comprehensive and
cooperative information and case management process for police,
prosecutors, schools, probation departments, corrections facilities,
and social and community aftercare services; establishment of
community-wide partnerships involving county, municipal government,
school districts, and others to administrator a unified approach to
juvenile delinquency; antitruancy initiatives; alternative schooling
for juvenile offenders or juveniles who are expelled or suspended from
school for disciplinary reasons; tougher penalties for criminal street
gang crimes; and the establishment of penalties for juvenile offenders
who use a firearm during a violent crime or a drug felony.
The bill would provide $200 million in formula grants, a $130 million
increase over the FY1997 level for each fiscal year, FY1998 through
FY2002. Under current law, states and localities must comply with
several mandates to be eligible for these funds. For example, states
must currently ensure that (1) no status offender may be held in secure
detention or confinement; (2) juveniles cannot be held in jails and law
enforcement lockup in which adults may be detained or confined for any
period of time; and (3) complete sight and sound separation of juvenile
offenders from adult offenders in secure facilities.
These mandates are costly and burdensome on state and local law
enforcement efforts. For example, in February of this year, I visited
with law enforcement and juvenile justice officials in Kirksville, MO,
a rural community in Northeast Missouri, who told me about a problem
that is all too common for rural communities. A deputy juvenile officer
said that local law enforcement officers were able to apprehend four
Missouri 15-year-olds who had brutally murdered a Iowa farm wife in
October of 1994, and were even able to secure confessions to the
murder. However, the Kirksville police could not detain the murderers
because the Federal law prohibits juveniles from being held in jails in
which adults may be detained and Kirksville did not have secure
detention facilities.
As a result, the teens had to be detained in other Missouri
facilities. Two of the teen had to be transported to Boone County, MO--
100 miles from Kirksville--while the other two teens had to be taken to
Union, MO, more than 200 miles away.
The legislation introduced today would eliminate this absolute jail
and lockup prohibition. If enacted, the Kirksvilles of our country
would no longer have to bear additional costs in trying to find a
completely separate facility in order to detain violent juvenile
offenders.
A thorough reform of juvenile justice systems must also include
participation by our charitable and faith-based organizations.
Government needs to rebuild civil society by fostering a partnership
with charitable and faith-based organizations to promote civic virtues
and individual responsibility.
Govenrment needs to look beyond its bureaucratic, one-size-fits-all
programs and give assistance to those groups toiling daily in our
communities, often publicly unnoticed and virtually unaided by
Government.
For example, Teen challenge, which is headquartered in Missouri,
receives little or no local, State, or Federal government financial
assistance. Teen Challenge is a nonprofit, faith-based organization
that works with youth, adults and families. Teen challenge has 16
adolescent programs in several states, including Florida, Indiana, and
New Mexico.
Most of the juveniles in the program has drug or alcohol problems. A
large number of the adolescents have been physically or sexually
abused. Almost all of them had a major problem with rebelling against
authority, according to a 1992 survey of Indianapolis Teen Challenge.
Thirteen percent were court-ordered placements. This same study
indicated that 70 percent of the graduates were abstaining from illegal
drug use.
Mr. President, this bill would amend the Juvenile Justice and
Delinquency Prevention Act to allow states to conduct with, or make
grants to, private, charitable and faith-based organizations to provide
programs for at-risk and delinquent juveniles.
Charitable and faith-based organizations have a proven track record
of transforming shattered lives by addressing the deeper needs of
people, by instilling hope and values which help change behavior and
attitudes. Under this bill states would be allowed to enroll these
organizations as full-fledged participants in caring for and supporting
juveniles who are less fortunate.
The bill also proposes reforms to the federal criminal justice system
consistent with those it encourages those states to adopt. The
legislation strengthens the federal law by requiring the adult
prosecution of any juvenile age 14 or older who is alleged to have
committed murder, attempted murder, robbery while armed with a
dangerous or deadly weapon, assault or battery while armed with a
dangerous weapon, forcible rape or a serious drug offense. Repeat
juvenile offenders would also be subject to transfer to adult court, if
they have 2 previous adjudications for offenses that would amount to a
felony if committed by an adult.
Juvenile criminals found delinquent in U.S. district courts of
violent crimes would be fingerprinted and photographed, and then the
fingerprints and photograph are sent to the FBI to be made available to
the same extent as that of adult felons to law enforcement agencies,
school officials, and courts for sentencing purposes.
In addition, the bill would clearly express the intent of Congress
with regard to special education students who commit criminal acts at
school or school-related events. Earlier this year, the Sixth Circuit
Court of Appeals, in Morgan v. Chris L., upheld the ruling of a
district court that the Knox County Tennessee Public School violated
the procedural requirements of the Individuals with Disabilities
Education Act (IDEA) by in essence filing criminal charges against a
student with a disability. IDEA provides grants to states and creates
special due process procedures for children with disabilities.
In this case, a student diagnosed as suffering from attention deficit
hyperactivity disorder kicked a water pipe in the school lavatory until
it burst--a crime against property--resulting in about $1,000 water
damage. The Knox County School District filed a petition in juvenile
court against the child. The disabled student's father filed for a due
process hearing under the IDEA to review the filing of the petition in
juvenile court by the school. The hearing officer ordered the school
district to seek dismissal of its juvenile court petition and that
decision by the hearing officer was upheld by the Federal District
Court and the Sixth Circuit Court of Appeals.
The Court of Appeals concluded that under ``IDEA's procedural
safeguards, the school system must adopt its own plan and institute a
[multi-disciplinary] team meeting before initiating a juvenile court
petition.'' The problem with the circuit court's holding is that the
special due process procedures for disabled students take several
months, and sometimes a year, to complete. The practical effect of the
ruling is that schools, as a matter of law, cannot unilaterally file
charges against disabled students unless students' parents consent to
such referrals. Schools must keep a student in school--potentially
endangering others--and wait until the completion of the due process
procedures required by IDEA.
In addition to Tennessee, other States--such as Georgia, Ohio,
Minnesota, Illinois, Michigan, Rhode Island, and New Hampshire--allow
individuals, including school officials who witness students committing
crimes at school, to file petitions in juvenile courts against the
students. School officials should not be required to exhaust the IDEA's
significant due process procedures before filing criminal juvenile
petitions against students with disabilities.
The ramifications of the sixth circuit's ruling have been immediate
and troubling for school districts. Citing the ruling of the Chris L
holding as authority, a Knox County, TN chancellor recently set aside
the juvenile conviction of a high school special education student--
because he is deaf in his right ear--who brought a butterfly knife to

[[Page S4226]]

school. The chancellor court based its decision on the fact that the
school had failed to convene a multidisciplinary team before referring
the student with a disability to the juvenile court. The chancellor,
when asked about his ruling, reportedly said, ``There's a serious
question to whether or not a student under this IDEA program can be
charged at all.''
The bill we are introducing today would make it clear to the
Tennessee chancellor and other courts that students with disabilities
who commit criminal acts on school property are not shielded from
immediate referral to juvenile court or law enforcement authorities
under IDEA's special due process procedures. We must restore the
capacity of schools to create secure environments where all students
can learn and achieve their highest potential.
Mr. President, this bill would assist State and local governments in
increasing public safety by holding juvenile criminals accountable for
their serious and violent crimes, by encouraging accountability through
the imposition of meaningful sanctions for delinquent acts, and by
improving the extent, accuracy, availability, and usefulness of
juvenile criminal records and public accessibility to juvenile court
proceedings.
In short, Mr. President, enactment of the Juvenile Crime Control and
Community Protection Act of 1997 would be a significant step in the
right direction toward addressing America's juvenile crime problem.
Mr. WYDEN. Mr. President, last month, I talked about the importance
of the innovative ``Community Justice'' model for juvenile justice
being developed in Deschutes County and Multnomah County, OR. Today,
Senators Domenici and Ashcroft and I are introducing legislation that
incorporates many important pieces of this Oregon model and also
represents an effort to bring some new, bipartisan thinking to the
issue of juvenile justice.
Oregon's idea is that the juvenile justice system should weave the
community into the very fabric of juvenile justice. This entails
treating the victim as a customer of the juvenile justice system and
realizing that when a crime is committed the whole community is the
victim. There is a reciprocal obligation in communities--first, to give
children the values and tools to ensure that youth crime is prevented
and second, to look for at-risk children and try to form a net of
services to keep these children from getting into trouble. However,
once a young person steps over the line and commits a crime, part of
the reciprocity involves the youth making the community whole through
restitution and community service.
I was pleased to work with Senators Domenici and Ashcroft to include
some of these Oregon ideas into this bill. In particular, I think that
the second tier of incentive grants will help encourage States to come
up with ways to integrate the community into the juvenile justice
process. In particular, the bill promotes consideration for victims and
restitution for all crimes. It will also ensure that this restitution
is collected. The legislation encourages States to look at mentorship
programs, parent accountability, and ways to bring together service
providers to form a network of information sharing to prevent juvenile
crime.
One of the key aspects of the Deschutes County model that is so
impressive is the coordination between schools, juvenile justice
services, child protection services, police, district attorneys,
judges, and others. Not only does this build a broad base of support
for the juvenile justice system, but it allows these agencies to
identify the most at-risk youth early, to see whether efforts to divert
them from delinquency are effective and to concentrate resources on
them.
When I began working on this issue in 1995, I laid out three
principles for a new juvenile justice system: community protection,
accountability, and restitution. We need to keep our streets safe,
punish criminals, and make sure victims--including the community
itself--are repaid. This legislation will encourage States to develop
systems based on these principles and to add to the the important
ingredient of community involvement in the juvenile justice system.
I thank the Senators from Missouri and New Mexico for their
bipartisan effort to develop juvenile justice legislation that takes a
balanced approach to juvenile justice.
______

By Mr. WELLSTONE:
S. 719. A bill to expedite the naturalization of aliens who served
with special guerrilla units in Laos; to the Committee on the
Judiciary.

the hmong veterans' naturalization act of 1997

<bullet> Mr. WELLSTONE. Mr. President, today, I have introduced the
Hmong Veterans' Naturalization Act of 1997.
The purpose of this bill is to help expedite the naturalization of
Hmong veterans who served and fought alongside the United States during
the United States secret war in Laos. This legislation acknowledges
their service and officially recognizes the service of Hmong and other
ethnic Lao veterans who sacrificed and loyally fought for America and
its principles of freedom, human rights, and democracy.
This legislation continues the tradition of recognizing the service
of those who came to the aid of the United States in times of war.
Current law permits aliens or noncitizens who served honorably in the
U.S. military forces during wartime to be naturalized, regardless of
age, period of U.S. residence, or physical presence in the United
States. However, expedited naturalization does not apply to Hmong and
Lao veterans and their families because of the covert status of their
work. This bill would help expedite this process by eliminating the
literacy requirement in the naturalization process.
Classified studies conducted by the defense policy think tank RAND
have recently been declassified. They show the unique and important
role that the Hmong people played during the Vietnam war. The studies
reveal that this group, the ``Secret Army,'' specially created by the
United States Government, played a critical role in the clandestine
military activities in Laos.
Hmong men, women, and children of all ages fought and died alongside
U.S. military personnel in units recruited, organized, trained, funded
and paid by the U.S. Government. It is estimated that during the United
States involvement in Vietnam, 35,000 to 40,000 Hmong veterans and
their families' were killed in conflict. 50,000 to 58,000 were wounded
in conflict and an additional 2,500 to 3,000 were declared missing.
During the Vietnam conflict, Hmong forces were responsible for
risking their lives by crossing enemy lines to rescue downed American
pilots. It is estimated that they saved at least 60 American lives and
often lost half their troops rescuing one soldier.
When the United States withdrew from Southeast Asia, thousands of
Hmong were evacuated by the U.S. Government. However, many were left
behind and experienced mass genocide at the hands of Communists. Many
fled to neighboring Thailand. During their journey, many were murdered
before they reached the Thai border. Even today, despite official
denial by the Lao Government, the Communist regime of Laos continues to
persecute and discriminate against the Hmong specifically because of
their role in the United States secret army.
Edgar Buell, the senior U.S. CIA official who worked with the Hmong
secret army, explained their critical role on national television:
``Everyone of them (Hmong) that died, that was an American back home
that didn't die, or one that was injured that wasn't injured. Somebody
in nearly every Hmong family was either fighting or died from fighting.
They became refugees because we (the United States) encouraged them to
fight for us. I promised myself: `` `Have no fear, we will take care of
you.' ''
It is now time to live up to earlier promises and take care of this
group that so valiantly fought alongside American forces. We can only
make good on our word by passing this legislation.
Currently, many of the 45,000 former soldiers and their refugee
family members living in the United States cannot become citizens
because they lack the sufficient English language skills to pass the
naturalization test. The intense and protracted war in Laos and the
subsequent exodus of the Hmong veterans into squalid refugee camps did

[[Page S4227]]

not permit these veterans the opportunity to attend school and learn
English. Also, many suffer from injuries that occurred during the war
that make learning difficult and frustrating.
Because of the welfare and immigration reform bill enacted last
Congress, aging, elderly, illiterate (in English), semiliterate and
wounded soldiers--usually with large families--will suffer greatly
because they are now facing the almost impossible task of immediately
learning English and finding gainful employment. People like Chanh
Chantalangsy are faced with an uncertain future:
Chanh served in the secret army and was seriously wounded in his
head, arm, and legs. After being in the hospital for 7 months, he
returned to combat, serving in a CIA sponsored unit. Fleeing Laos, he
spent 14 years in a refugee camp in Thailand. Realizing that the
conditions in his country would not improve, Chanh left the refugee
camp and came to the United States. He studied English for 5 years but
it became evident that mental and physical injuries prevented him from
learning English. In 1993, he was classified disabled and now receives
$561 a month in SSI benefits. As of August, he could lose this small
benefit.
Given the unique role that the veterans served on behalf of the U.S.
national security interests, we should waive the difficult
naturalization requirements for this group. We have a responsibility to
these people. This responsibility was supported by former CIA Director
William Colby when he said to a House subcommittee:
``The basic burden (of fighting in Laos) was born by the Hmong. We
certainly encouraged them to fight. We enabled them to fight in many
cases, and I think the spirit that they developed was in part a result
of our offering of support and our provision of it.''
Mr. President, it is now time to give our support. These people
fought for our country for 15 years and came to the United States with
an understanding that they would be cared for. One act of Congress, the
welfare reform law, wiped out this understanding and threw the Hmong
into a state of despair. They neither have the capacity to care for
themselves if benefits are terminated, nor the ability to return to
their homeland. I implore my colleagues to support one more act of
Congress that would fulfill our pledge and our obligation.
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. 719

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 ``Hmong Veterans'
Naturalization Act of 1997''.

SEC. 2. WAIVER OF ENGLISH LANGUAGE REQUIREMENT FOR CERTAIN
ALIENS WHO SERVED WITH SPECIAL GUERRILLA UNITS
IN LAOS.

The requirement of paragraph (1) of section 312(a) of the
Immigration and Nationality Act (8 U.S.C. 1423(a)) shall not
apply to the naturalization of any person who--
(1) served with a special guerrilla unit operating from a
base in Laos in support of the United States at any time
during the period beginning February 28, 1961, and ending
September 18, 1978, or
(2) is the spouse or widow of a person described in
paragraph (1).

SEC. 3. NATURALIZATION THROUGH SERVICE IN A SPECIAL GUERRILLA
UNIT IN LAOS.

(a) In General.--The first sentence of subsection (a) and
subsection (b) (other than paragraph (3)) of section 329 of
the Immigration and Nationality Act (8 U.S.C. 1440) shall
apply to an alien who served with a special guerrilla unit
operating from a base in Laos in support of the United States
at any time during the period beginning February 28, 1961,
and ending September 18, 1978, in the same manner as they
apply to an alien who has served honorably in an active-duty
status in the military forces of the United States during the
period of the Vietnam hostilities.
(b) Proof.--The Immigration and Naturalization Service
shall verify an alien's service with a guerrilla unit
described in subsection (a) through--
(1) review of refugee processing documentation for the
alien,
(2) the affidavit of the alien's superior officer,
(3) original documents,
(4) two affidavits from person who were also serving with
such a special guerrilla unit and who personally knew of the
alien's service, or
(5) other appropriate proof.

The Service shall liberally construe the provisions of this
subsection to take into account the difficulties inherent in
proving service in such a guerrilla unit.<bullet>
______

By Mr. GRASSLEY (for himself, Mr. Inouye, and Mr. Frist):

S. 720. A bill to amend titles XVIII and XIX of the Social Security
Act to expand and make permanent the availability of cost-effective,
comprehensive acute and long-term care services to frail elderly
persons through Programs of All-inclusive Care for the Elderly (PACE)
under the medicare and medicaid programs; to the Committee on Finance.

THE PACE PROVIDER ACT OF 1997

<bullet> Mr. GRASSLEY. Mr. President, I am pleased to introduce today,
along with Senator Inouye, the distinguished Senator from Hawaii, the
PACE Provider Act of 1997. PACE, the Program of All-Inclusive Care for
the Elderly, is a unique system of integrated care for the frail
elderly. This Act increases the number of PACE sites authorized to
provide comprehensive, community-based services to frail, elderly
persons.
As our population ages, we must continue to place a high priority on
long-term care services. Giving our seniors alternatives to nursing
home care and expanding the choices available, is not only cost
effective, but will also improve the quality of life for older
Americans.
PACE programs achieve this goal. PACE enables the frail elderly to
remain as healthy as possible, at home in their communities. By doing
so, elderly individuals maintain their independence, dignity and
quality of life.
Each PACE participant receives a comprehensive care package,
including all Medicare and Medicaid services, as well as community-
based long-term care services. Each individual is cared for by an
interdisciplinary team consisting of a primary care physician, nurse,
social worker, rehabilitation therapist, home health worker, and
others. Because care providers on the PACE team work together, they are
able to successfully accommodate the complex medical and social needs
of the elderly person in fragile health.
What's more, PACE provides high-quality care at a lower cost to
Medicare and Medicaid, relative to their payments in the traditional
system. Studies show a 5-15 percent reduction in Medicare and Medicaid
spending for individuals in PACE.
The potential savings to Medicare and Medicaid is significant. PACE
programs provide services for one of our most vulnerable, and costly,
population: frail, elderly adults who are eligible for Medicare and
Medicaid. In many cases, these ``dually eligible'' individuals have
complex, chronic care needs and require ongoing, long-term care
services. The current structure of Medicare and Medicaid does not
encourage coordination of these services. The result is fragmented and
costly care for our nation's most vulnerable population.
The PACE Provider Act does not alter the criteria for eligibility for
PACE participation in any way. Instead, it makes PACE programs more
available to individuals already eligible for nursing home care,
because of their poor health status. PACE is a preferable, and less
costly, alternative. Specifically, this Act increases the number of
PACE programs authorized from 15 to 40, with an additional 20 to be
added each year, and affords regular ``provider'' status to existing
sites.
The PACE Provider Act allows the success of PACE programs to be
replicated throughout the country. And, with an emphasis on
preventative and supportive services, PACE services can substantially
reduce the high-costs associated with emergency room visits and
extended nursing home stays often needed by the frail elderly in the
traditional Medicare and Medicaid programs.
My sponsorship of this bill grows out of my Aging Committee hearing
on April 29, Torn Between Two Systems: Improving Chronic Care in
Medicare and Medicaid. The plight of the dual eligibles is
unacceptable. This bill is an immediate and positive step in the right
direction.
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:

[[Page S4228]]

S. 720

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 ``Programs of All-inclusive
Care for the Elderly (PACE) Coverage Act of 1997''.

SEC. 2. COVERAGE OF PACE UNDER THE MEDICARE PROGRAM.

(a) In General.--Title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) is amended by adding at the end the
following new section:

``payments to, and coverage of benefits under, programs of all-
inclusive care for the elderly (pace)

``Sec. 1894. (a) Receipt of Benefits Through Enrollment in
PACE Program; Definitions for PACE Program Related Terms.--
``(1) Benefits through enrollment in a pace program.--In
accordance with this section, in the case of an individual
who is entitled to benefits under part A or enrolled under
part B and who is a PACE program eligible individual (as
defined in paragraph (5)) with respect to a PACE program
offered by a PACE provider under a PACE program agreement--
``(A) the individual may enroll in the program under this
section; and
``(B) so long as the individual is so enrolled and in
accordance with regulations--
``(i) the individual shall receive benefits under this
title solely through such program, and
``(ii) the PACE provider is entitled to payment under and
in accordance with this section and such agreement for
provision of such benefits.
``(2) PACE program defined.--For purposes of this section
and section 1932, the term `PACE program' means a program of
all-inclusive care for the elderly that meets the following
requirements:
``(A) Operation.--The entity operating the program is a
PACE provider (as defined in paragraph (3)).
``(B) Comprehensive benefits.--The program provides
comprehensive health care services to PACE program eligible
individuals in accordance with the PACE program agreement and
regulations under this section.
``(C) Transition.--In the case of an individual who is
enrolled under the program under this section and whose
enrollment ceases for any reason (including the individual no
longer qualifies as a PACE program eligible individual, the
termination of a PACE program agreement, or otherwise), the
program provides assistance to the individual in obtaining
necessary transitional care through appropriate referrals and
making the individual's medical records available to new
providers.
``(3) PACE provider defined.--
``(A) In general.--For purposes of this section, the term
`PACE provider' means an entity that--
``(i) subject to subparagraph (B), is (or is a distinct
part of) a public entity or a private, nonprofit entity
organized for charitable purposes under section 501(c)(3) of
the Internal Revenue Code of 1986, and
``(ii) has entered into a PACE program agreement with
respect to its operation of a PACE program.
``(B) Treatment of private, for-profit providers.--Clause
(i) of subparagraph (A) shall not apply--
``(i) to entities subject to a demonstration project waiver
under subsection (h); and
``(ii) after the date the report under section 5(b) of the
Programs of All-inclusive Care for the Elderly (PACE)
Coverage Act of 1997 is submitted, unless the Secretary
determines that any of the findings described in subparagraph
(A), (B), (C) or (D) of paragraph (2) of such section are
true.
``(4) PACE program agreement defined.--For purposes of this
section, the term `PACE program agreement' means, with
respect to a PACE provider, an agreement, consistent with
this section, section 1932 (if applicable), and regulations
promulgated to carry out such sections, between the PACE
provider and the Secretary, or an agreement between the PACE
provider and a State administering agency for the operation
of a PACE program by the provider under such sections.
``(5) PACE program eligible individual defined.--For
purposes of this section, the term `PACE program eligible
individual' means, with respect to a PACE program, an
individual who--
``(A) is 55 years of age or older;
``(B) subject to subsection (c)(4), is determined under
subsection (c) to require the level of care required under
the State medicaid plan for coverage of nursing facility
services;
``(C) resides in the service area of the PACE program; and
``(D) meets such other eligibility conditions as may be
imposed under the PACE program agreement for the program
under subsection (e)(2)(A)(ii).
``(6) PACE protocol.--For purposes of this section, the
term `PACE protocol' means the Protocol for the Program of
All-inclusive Care for the Elderly (PACE), as published by On
Lok, Inc., as of April 14, 1995.
``(7) PACE demonstration waiver program defined.--For
purposes of this section, the term `PACE demonstration waiver
program' means a demonstration program under either of the
following sections (as in effect before the date of their
repeal):
``(A) Section 603(c) of the Social Security Amendments of
1983 (Public Law 98-21), as extended by section 9220 of the
Consolidated Omnibus Budget Reconciliation Act of 1985
(Public Law 99-272).
``(B) Section 9412(b) of the Omnibus Budget Reconciliation
Act of 1986 (Public Law 99-509).
``(8) State administering agency defined.--For purposes of
this section, the term `State administering agency' means,
with respect to the operation of a PACE program in a State,
the agency of that State (which may be the single agency
responsible for administration of the State plan under title
XIX in the State) responsible for administering PACE program
agreements under this section and section 1932 in the State.
``(9) Trial period defined.--
``(A) In general.--For purposes of this section, the term
`trial period' means, with respect to a PACE program operated
by a PACE provider under a PACE program agreement, the first
3 contract years under such agreement with respect to such
program.
``(B) Treatment of entities previously operating pace
demonstration waiver programs.--Each contract year (including
a year occurring before the effective date of this section)
during which an entity has operated a PACE demonstration
waiver program shall be counted under subparagraph (A) as a
contract year during which the entity operated a PACE program
as a PACE provider under a PACE program agreement.
``(10) Regulations.--For purposes of this section, the term
`regulations' refers to interim final or final regulations
promulgated under subsection (f) to carry out this section
and section 1932.
``(b) Scope of Benefits; Beneficiary Safeguards.--
``(1) In general.--Under a PACE program agreement, a PACE
provider shall--
``(A) provide to PACE program eligible individuals,
regardless of source of payment and directly or under
contracts with other entities, at a minimum--
``(i) all items and services covered under this title (for
individuals enrolled under this section) and all items and
services covered under title XIX, but without any limitation
or condition as to amount, duration, or scope and without
application of deductibles, copayments, coinsurance, or other
cost-sharing that would otherwise apply under this title or
such title, respectively; and
``(ii) all additional items and services specified in
regulations, based upon those required under the PACE
protocol;
``(B) provide such enrollees access to necessary covered
items and services 24 hours per day, every day of the year;
``(C) provide services to such enrollees through a
comprehensive, multidisciplinary health and social services
delivery system which integrates acute and long-term care
services pursuant to regulations; and
``(D) specify the covered items and services that will not
be provided directly by the entity, and to arrange for
delivery of those items and services through contracts
meeting the requirements of regulations.
``(2) Quality assurance; patient safeguards.--The PACE
program agreement shall require the PACE provider to have in
effect at a minimum--
``(A) a written plan of quality assurance and improvement,
and procedures implementing such plan, in accordance with
regulations, and
``(B) written safeguards of the rights of enrolled
participants (including a patient bill of rights and
procedures for grievances and appeals) in accordance with
regulations and with other requirements of this title and
Federal and State law designed for the protection of
patients.
``(c) Eligibility Determinations.--
``(1) In general.--The determination of whether an
individual is a PACE program eligible individual--
``(A) shall be made under and in accordance with the PACE
program agreement, and
``(B) who is entitled to medical assistance under title
XIX, shall be made (or who is not so entitled, may be made)
by the State administering agency.
``(2) Condition.--An individual is not a PACE program
eligible individual (with respect to payment under this
section) unless the individual's health status has been
determined, in accordance with regulations, to be comparable
to the health status of individuals who have participated in
the PACE demonstration waiver programs. Such determination
shall be based upon information on health status and related
indicators (such as medical diagnoses and measures of
activities of daily living, instrumental activities of daily
living, and cognitive impairment) that are part of a uniform
minimum data set collected by PACE providers on potential
eligible individuals.
``(3) Annual eligibility recertifications.--
``(A) In general.--Subject to subparagraph (B), the
determination described in subsection (a)(5)(B) for an
individual shall be reevaluated not more frequently than
annually.
``(B) Exception.--The requirement of annual reevaluation
under subparagraph (A) may be waived during a period in
accordance with regulations in those cases where the State
administering agency determines that there is no reasonable
expectation of improvement or significant change in an
individual's condition during the period because of the
advanced age, severity of the advanced age, severity of
chronic condition, or degree

[[Page S4229]]

of impairment of functional capacity of the individual
involved.
``(4) Continuation of eligibility.--An individual who is a
PACE program eligible individual may be deemed to continue to
be such an individual notwithstanding a determination that
the individual no longer meets the requirement of subsection
(a)(5)(B) if, in accordance with regulations, in the absence
of continued coverage under a PACE program the individual
reasonably would be expected to meet such requirement within
the succeeding 6-month period.
``(5) Enrollment; disenrollment.--The enrollment and
disenrollment of PACE program eligible individuals in a PACE
program shall be pursuant to regulations and the PACE program
agreement and shall permit enrollees to voluntarily disenroll
without cause at any time.
``(d) Payments to PACE Providers on a Capitated Basis.--
``(1) In general.--In the case of a PACE provider with a
PACE program agreement under this section, except as provided
in this subsection or by regulations, the Secretary shall
make prospective monthly payments of a capitation amount for
each PACE program eligible individual enrolled under the
agreement under this section in the same manner and from the
same sources as payments are made to an eligible organization
under a risk-sharing contract under section 1876. Such
payments shall be subject to adjustment in the manner
described in section 1876(a)(1)(E).
``(2) Capitation amount.--The capitation amount to be
applied under this subsection for a provider for a contract
year shall be an amount specified in the PACE program
agreement for the year. Such amount shall be based upon
payment rates established under section 1876 for risk-sharing
contracts and shall be adjusted to take into account the
comparative frailty of PACE enrollees and such other factors
as the Secretary determines to be appropriate. Such amount
under such an agreement shall be computed in a manner so that
the total payment level for all PACE program eligible
individuals enrolled under a program is less than the
projected payment under this title for a comparable
population not enrolled under a PACE program.
``(e) PACE Program Agreement.--
``(1) Requirement.--
``(A) In general.--The Secretary, in close cooperation with
the State administering agency, shall establish procedures
for entering into, extending, and terminating PACE program
agreements for the operation of PACE programs by entities
that meet the requirements for a PACE provider under this
section, section 1932, and regulations.
``(B) Numerical limitation.--
``(i) In general.--The Secretary shall not permit the
number of PACE providers with which agreements are in effect
under this section or under section 9412(b) of the Omnibus
Budget Reconciliation Act of 1986 to exceed--

``(I) 40 as of the date of the enactment of this section,
or
``(II) as of each succeeding anniversary of such date, the
numerical limitation under this subparagraph for the
preceding year plus 20.

Subclause (II) shall apply without regard to the actual
number of agreements in effect as of a previous anniversary
date.
``(ii) Treatment of certain private, for-profit
providers.--The numerical limitation in clause (i) shall not
apply to a PACE provider that--

``(I) is operating under a demonstration project waiver
under subsection (h), or
``(II) was operating under such a waiver and subsequently
qualifies for PACE provider status pursuant to subsection
(a)(3)(B)(ii).

``(2) Service area and eligibility.--
``(A) In general.--A PACE program agreement for a PACE
program--
``(i) shall designate the service area of the program;
``(ii) may provide additional requirements for individuals
to qualify as PACE program eligible individuals with respect
to the program;
``(iii) shall be effective for a contract year, but may be
extended for additional contract years in the absence of a
notice by a party to terminate and is subject to termination
by the Secretary and the State administering agency at any
time for cause (as provided under the agreement);
``(iv) shall require a PACE provider to meet all applicable
State and local laws and requirements; and
``(v) shall have such additional terms and conditions as
the parties may agree to consistent with this section and
regulations.
``(B) Service area overlap.--In designating a service area
under a PACE program agreement under subparagraph (A)(i), the
Secretary (in consultation with the State administering
agency) may exclude from designation an area that is already
covered under another PACE program agreement, in order to
avoid unnecessary duplication of services and avoid impairing
the financial and service viability of an existing program.
``(3) Data collection.--
``(A) In general.--Under a PACE program agreement, the PACE
provider shall--
``(i) collect data,
``(ii) maintain, and afford the Secretary and the State
administering agency access to, the records relating to the
program, including pertinent financial, medical, and
personnel records, and
``(iii) make to the Secretary and the State administering
agency reports that the Secretary finds (in consultation with
State administering agencies) necessary to monitor the
operation, cost, and effectiveness of the PACE program under
this Act.
``(B) Requirements during trial period.--During the first
three years of operation of a PACE program (either under this
section or under a PACE demonstration waiver program), the
PACE provider shall provide such additional data as the
Secretary specifies in regulations in order to perform the
oversight required under paragraph (4)(A).
``(4) Oversight.--
``(A) Annual, close oversight during trial period.--During
the trial period (as defined in subsection (a)(9)) with
respect to a PACE program operated by a PACE provider, the
Secretary (in cooperation with the State administering
agency) shall conduct a comprehensive annual review of the
operation of the PACE program by the provider in order to
assure compliance with the requirements of this section and
regulations. Such a review shall include--
``(i) an on-site visit to the program site;
``(ii) comprehensive assessment of a provider's fiscal
soundness;
``(iii) comprehensive assessment of the provider's capacity
to provide all PACE services to all enrolled participants;
``(iv) detailed analysis of the entity's substantial
compliance with all significant requirements of this section
and regulations; and
``(v) any other elements the Secretary or State agency
considers necessary or appropriate.
``(B) Continuing oversight.--After the trial period, the
Secretary (in cooperation with the State administering
agency) shall continue to conduct such review of the
operation of PACE providers and PACE programs as may be
appropriate, taking into account the performance level of a
provider and compliance of a provider with all significant
requirements of this section and regulations.
``(C) Disclosure.--The results of reviews under this
paragraph shall be reported promptly to the PACE provider,
along with any recommendations for changes to the provider's
program, and shall be made available to the public upon
request.
``(5) Termination of pace provider agreements.--
``(A) In general.--Under regulations--
``(i) the Secretary or a State administering agency may
terminate a PACE program agreement for cause, and
``(ii) a PACE provider may terminate an agreement after
appropriate notice to the Secretary, the State agency, and
enrollees.
``(B) Causes for termination.--In accordance with
regulations establishing procedures for termination of PACE
program agreements, the Secretary or a State administering
agency may terminate a PACE program agreement with a PACE
provider for, among other reasons, the fact that--
``(i) the Secretary or State administering agency
determines that--

``(I) there are significant deficiencies in the quality of
care provided to enrolled participants; or
``(II) the provider has failed to comply substantially with
conditions for a program or provider under this section or
section 1932; and

``(ii) the entity has failed to develop and successfully
initiate, within 30 days of the receipt of written notice of
such a determination, and continue implementation of a plan
to correct the deficiencies.
``(C) Termination and transition procedures.--An entity
whose PACE provider agreement is terminated under this
paragraph shall implement the transition procedures required
under subsection (a)(2)(C).
``(6) Secretary's oversight; enforcement authority.--
``(A) In general.--Under regulations, if the Secretary
determines (after consultation with the State administering
agency) that a PACE provider is failing substantially to
comply with the requirements of this section and regulations,
the Secretary (and the State administering agency) may take
any or all of the following actions:
``(i) Condition the continuation of the PACE program
agreement upon timely execution of a corrective action plan.
``(ii) Withhold some or all further payments under the PACE
program agreement under this section or section 1932 with
respect to PACE program services furnished by such provider
until the deficiencies have been corrected.
``(iii) Terminate such agreement.
``(B) Application of intermediate sanctions.--Under
regulations, the Secretary may provide for the application
against a PACE provider of remedies described in section
1876(i)(6)(B) or 1903(m)(5)(B) in the case of violations by
the provider of the type described in section 1876(i)(6)(A)
or 1903(m)(5)(A), respectively (in relation to agreements,
enrollees, and requirements under this section or section
1932, respectively).
``(7) Procedures for termination or imposition of
sanctions.--Under regulations, the provisions of section
1876(i)(9) shall apply to termination and sanctions
respecting a PACE program agreement and PACE provider under
this subsection in the same manner as they apply to a
termination and sanctions with respect to a contract and an
eligible organization under section 1876.
``(8) Timely consideration of applications for pace program
provider status.--In considering an application for PACE
provider program status, the application shall

[[Page S4230]]

be deemed approved unless the Secretary, within 90 days after
the date of the submission of the application to the
Secretary, either denies such request in writing or informs
the applicant in writing with respect to any additional
information that is needed in order to make a final
determination with respect to the application. After the date
the Secretary receives such additional information, the
application shall be deemed approved unless the Secretary,
within 90 days of such date, denies such request.
``(f) Regulations.--
``(1) In general.--The Secretary shall issue interim final
or final regulations to carry out this section and section
1932.
``(2) Use of pace protocol.--
``(A) In general.--In issuing such regulations, the
Secretary shall, to the extent consistent with the provisions
of this section, incorporate the requirements applied to PACE
demonstration waiver programs under the PACE protocol.
``(B) Flexibility.--The Secretary (in close consultation
with State administering agencies) may modify or waive such
provisions of the PACE protocol in order to provide for
reasonable flexibility in adapting the PACE service delivery
model to the needs of particular organizations (such as those
in rural areas or those that may determine it appropriate to
use non-staff physicians accordingly to State licensing law
requirements) under this section and section 1932 where such
flexibility is not inconsistent with and would not impair the
essential elements, objectives, and requirements of the this
section, including--
``(i) the focus on frail elderly qualifying individuals who
require the level of care provided in a nursing facility;
``(ii) the delivery of comprehensive, integrated acute and
long-term care services;
``(iii) the interdisciplinary team approach to care
management and service delivery;
``(iv) capitated, integrated financing that allows the
provider to pool payments received from public and private
programs and individuals; and
``(v) the assumption by the provider over time of full
financial risk.
``(3) Application of certain additional beneficiary and
program protections.--
``(A) In general.--In issuing such regulations and subject
to subparagraph (B), the Secretary may apply with respect to
PACE programs, providers, and agreements such requirements of
sections 1876 and 1903(m) relating to protection of
beneficiaries and program integrity as would apply to
eligible organizations under risk-sharing contracts under
section 1876 and to health maintenance organizations under
prepaid capitation agreements under section 1903(m).
``(B) Considerations.--In issuing such regulations, the
Secretary shall--
``(i) take into account the differences between populations
served and benefits provided under this section and under
sections 1876 and 1903(m);
``(ii) not include any requirement that conflicts with
carrying out PACE programs under this section; and
``(iii) not include any requirement restricting the
proportion of enrollees who are eligible for benefits under
this title or title XIX.
``(g) Waivers of Requirements.--With respect to carrying
out a PACE program under this section, the following
requirements of this title (and regulations relating to such
requirements) are waived and shall not apply:
``(1) Section 1812, insofar as it limits coverage of
institutional services.
``(2) Sections 1813, 1814, 1833, and 1886, insofar as such
sections relate to rules for payment for benefits.
``(3) Sections 1814(a)(2)(B), 1814(a)(2)(C), and
1835(a)(2)(A), insofar as they limit coverage of extended
care services or home health services.
``(4) Section 1861(i), insofar as it imposes a 3-day prior
hospitalization requirement for coverage of extended care
services.
``(5) Sections 1862(a)(1) and 1862(a)(9), insofar as they
may prevent payment for PACE program services to individuals
enrolled under PACE programs.
``(h) Demonstration Project for For-Profit Entities.--
``(1) In general.--In order to demonstrate the operation of
a PACE program by a private, for-profit entity, the Secretary
(in close consultation with State administering agencies)
shall grant waivers from the requirement under subsection
(a)(3) that a PACE provider may not be a for-profit, private
entity.
``(2) Similar terms and conditions.--
``(A) In general.--Except as provided under subparagraph
(B), and paragraph (1), the terms and conditions for
operation of a PACE program by a provider under this
subsection shall be the same as those for PACE providers that
are nonprofit, private organizations.
``(B) Numerical limitation.--The number of programs for
which waivers are granted under this subsection shall not
exceed 10. Programs with waivers granted under this
subsection shall not be counted against the numerical
limitation specified in subsection (e)(1)(B).
``(i) Miscellaneous Provisions.--Nothing in this section or
section 1932 shall be construed as preventing a PACE provider
from entering into contracts with other governmental or
nongovernmental payers for the care of PACE program eligible
individuals who are not eligible for benefits under part A,
or enrolled under part B, or eligible for medical assistance
under title XIX.''.

SEC. 3. ESTABLISHMENT OF PACE PROGRAM AS MEDICAID STATE
OPTION.

(a) In General.--Title XIX of the Social Security Act is
amended--
(1) in section 1905(a) (42 U.S.C. 1396d(a))--
(A) by striking ``and'' at the end of paragraph (24);
(B) by redesignating paragraph (25) as paragraph (26); and
(C) by inserting after paragraph (24) the following new
paragraph:
``(25) services furnished under a PACE program under
section 1932 to PACE program eligible individuals enrolled
under the program under such section; and'';
(2) by redesignating section 1932 as section 1933, and
(3) by inserting after section 1931 the following new
section:

``SEC. 1932. PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY
(PACE).

``(a) Option.--
``(1) In general.--A State may elect to provide medical
assistance under this section with respect to PACE program
services to PACE program eligible individuals who are
eligible for medical assistance under the State plan and who
are enrolled in a PACE program under a PACE program
agreement. Such individuals need not be eligible for benefits
under part A, or enrolled under part B, of title XVIII to be
eligible to enroll under this section.
``(2) Benefits through enrollment in pace program.--In the
case of an individual enrolled with a PACE program pursuant
to such an election--
``(A) the individual shall receive benefits under the plan
solely through such program, and
``(B) the PACE provider shall receive payment in accordance
with the PACE program agreement for provision of such
benefits.
``(3) Application of definitions.--The definitions of terms
under section 1894(a) shall apply under this section in the
same manner as they apply under section 1894.
``(b) Application of Medicare Terms and Conditions.--Except
as provided in this section, the terms and conditions for the
operation and participation of PACE program eligible
individuals in PACE programs offered by PACE providers under
PACE program agreements under section 1894 shall apply for
purposes of this section.
``(c) Adjustment in Payment Amounts.--In the case of
individuals enrolled in a PACE program under this section,
the amount of payment under this section shall not be the
amount calculated under section 1894(d), but shall be an
amount, specified under the PACE agreement, which is less
than the amount that would otherwise have been made under the
State plan if the individuals were not so enrolled. The
payment under this section shall be in addition to any
payment made under section 1894 for individuals who are
enrolled in a PACE program under such section.
``(d) Waivers of Requirements.--With respect to carrying
out a PACE program under this section, the following
requirements of this title (and regulations relating to such
requirements) shall not apply:
``(1) Section 1902(a)(1), relating to any requirement that
PACE programs or PACE program services be provided in all
areas of a State.
``(2) Section 1902(a)(10), insofar as such section relates
to comparability of services among different population
groups.
``(3) Sections 1902(a)(23) and 1915(b)(4), relating to
freedom of choice of providers under a PACE program.
``(4) Section 1903(m)(2)(A), insofar as it restricts a PACE
provider from receiving prepaid capitation payments.
``(e) Post-Eligibility Treatment of Income.--A State may
provide for post-eligibility treatment of income for
individuals enrolled in PACE programs under this section in
the same manner as a State treats post-eligibility income for
individuals receiving services under a waiver under section
1915(c).''.
(b) Conforming Amendments.--
(1) Section 1902(j) of such Act (42 U.S.C. 1396a(j)) is
amended by striking ``(25)'' and inserting ``(26)''.
(2) Section 1924(a)(5) of such Act (42 U.S.C. 1396r-
5(a)(5)) is amended--
(A) in the heading, by striking ``from organizations
receiving certain waivers'' and inserting ``under pace
programs'', and
(B) by striking ``from any organization'' and all that
follows and inserting ``under a PACE demonstration waiver
program (as defined in subsection (a)(7) of section 1894) or
under a PACE program under section 1932.''.
(3) Section 1903(f)(4)(C) of such Act (42 U.S.C.
1396b(f)(4)(C)) is amended by inserting ``or who is a PACE
program eligible individual enrolled in a PACE program under
section 1932,'' after ``section 1902(a)(10)(A),''.

SEC. 4. EFFECTIVE DATE; TRANSITION.

(a) Timely Issuance of Regulations; Effective Date.--The
Secretary of Health and Human Services shall promulgate
regulations to carry out this Act in a timely manner. Such
regulations shall be designed so that entities may establish
and operate PACE programs under sections 1894 and 1932 for
periods beginning not later than 1 year after the date of the
enactment of this Act.
(b) Expansion and Transition for PACE Demonstration Project
Waivers.--
(1) Expansion in current number of demonstration
projects.--Section 9412(b) of the Omnibus Budget
Reconciliation Act of 1986, as amended by section 4118(g) of
the Omnibus

[[Page S4231]]

Budget Reconciliation Act of 1987, is amended--
(A) in paragraph (1), by inserting before the period at the
end the following: ``, except that the Secretary shall grant
waivers of such requirements to up to the applicable
numerical limitation specified in section 1894(e)(1)(B) of
the Social Security Act''; and
(B) in paragraph (2)--
(i) in subparagraph (A), by striking ``, including
permitting the organization to assume progressively (over the
initial 3-year period of the waiver) the full financial
risk''; and
(ii) in subparagraph (C), by adding at the end the
following: ``In granting further extensions, an organization
shall not be required to provide for reporting of information
which is only required because of the demonstration nature of
the project.''.
(3) Elimination of replication requirement.--Subparagraph
(B) of paragraph (2) of such section shall not apply to
waivers granted under such section after the date of the
enactment of this Act.
(4) Timely consideration of applications.--In considering
an application for waivers under such section before the
effective date of repeals under subsection (c), subject to
the numerical limitation under the amendment made by
paragraph (1), the application shall be deemed approved
unless the Secretary of Health and Human Services, within 90
days after the date of its submission to the Secretary,
either denies such request in writing or informs the
applicant in writing with respect to any additional
information which is needed in order to make a final
determination with respect to the application. After the date
the Secretary receives such additional information, the
application shall be deemed approved unless the Secretary,
within 90 days of such date, denies such request.
(c) Priority and Special Consideration in Application.--
During the 3-year period beginning on the date of enactment
of this Act:
(1) Provider status.--The Secretary of Health and Human
Services shall give priority, in processing applications of
entities to qualify as PACE programs under section 1894 or
1932 of the Social Security Act--
(A) first, to entities that are operating a PACE
demonstration waiver program (as defined in section
1894(a)(7) of such Act), and
(B) then entities that have applied to operate such a
program as of May 1, 1997.
(2) New waivers.--The Secretary shall give priority, in the
awarding of additional waivers under section 9412(b) of the
Omnibus Budget Reconciliation Act of 1986--
(A) to any entities that have applied for such waivers
under such section as of May 1, 1997; and
(B) to any entity that, as of May 1, 1997, has formally
contracted with a State to provide services for which payment
is made on a capitated basis with an understanding that the
entity was seeking to become a PACE provider.
(3) Special consideration.--The Secretary shall give
special consideration, in the processing of applications
described in paragraph (1) and the awarding of waivers
described in paragraph (2), to an entity which as of May 1,
1997 through formal activities (such as entering into
contracts for feasibility studies) has indicated a specific
intent to become a PACE provider.
(d) Repeal of Current PACE Demonstration Project Waiver
Authority.--
(1) In general.--Subject to paragraph (2), the following
provisions of law are repealed:
(A) Section 603(c) of the Social Security Amendments of
1983 (Public Law 98-21).
(B) Section 9220 of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (Public Law 99-272).
(C) Section 9412(b) of the Omnibus Budget Reconciliation
Act of 1986 (Public Law 99-509).
(2) Delay in application.--
(A) In general.--Subject to subparagraph (B), the repeals
made by paragraph (1) shall not apply to waivers granted
before the initial effective date of regulations described in
subsection (a).
(B) Application to approved waivers.--Such repeals shall
apply to waivers granted before such date only after allowing
such organizations a transition period (of up to 24 months)
in order to permit sufficient time for an orderly transition
from demonstration project authority to general authority
provided under the amendments made by this Act.

SEC. 5. STUDY AND REPORTS.

(a) Study.--
(1) In general.--The Secretary of Health and Human Services
(in close consultation with State administering agencies, as
defined in section 1894(a)(8) of the Social Security Act)
shall conduct a study of the quality and cost of providing
PACE program services under the medicare and medicaid
programs under the amendments made by this Act
(2) Study of private, for-profit providers.-- Such study
shall specifically compare the costs, quality, and access to
services by entities that are private, for-profit entities
operating under demonstration projects waivers granted under
section 1894(h) of the Social Security Act with the costs,
quality, and access to services of other PACE providers.
(b) Report.--
(1) In general.--Not later than 4 years after the date of
enactment of this Act, the Secretary shall provide for a
report to Congress on the impact of such amendments on
quality and cost of services. The Secretary shall include in
such report such recommendations for changes in the operation
of such amendments as the Secretary deems appropriate.
(2) Treatment of private, for-profit providers.--The report
shall include specific findings on whether any of the
following findings is true:
(A) The number of covered lives enrolled with entities
operating under demonstration project waivers under section
1894(h) of the Social Security Act is fewer than 800 (or such
lesser number as the Secretary may find statistically
sufficient to make determinations respecting findings
described in the succeeding subparagraphs).
(B) The population enrolled with such entities is less
frail than the population enrolled with other PACE providers.
(C) Access to or quality of care for individuals enrolled
with such entities is lower than such access or quality for
individuals enrolled with other PACE providers.
(D) The application of such section has resulted in an
increase in expenditures under the medicare or medicaid
programs above the expenditures that would have been made if
such section did not apply.
(c) Information Included in Annual Recommendations.--The
Physician Payment Review Commission shall include in its
annual recommendations under section 1845(b) of the Social
Security Act (42 U.S.C. 1395w-1), and the Prospective Payment
Review Commission shall include in its annual recommendations
reported under section 1886(e)(3)(A) of such Act (42 U.S.C.
1395ww(e)(3)(A)), recommendations on the methodology and
level of payments made to PACE providers under section
1894(d) of such Act and on the treatment of private, for-
profit entities as PACE providers.<bullet>
<bullet> Mr. FRIST. Mr. President, I join my colleagues in introducing
the PACE Provider Act of 1997. I am pleased to support this very worthy
program, aimed at increasing community based long term care options for
seniors which was initiated and pursued by Senator Dole over the past
several years.
This bill amends present law by increasing the number of high
quality, comprehensive, community based services available to seniors
who would otherwise be forced into nursing homes.
Frail older people, particularly those 85 years and older are the
fastest growing population group in this country and have multiple and
complex chronic illnesses. More than 50 percent of this population
require some assistance with activities of daily living.
At the same time, the cost of caring for the frail elderly is
skyrocketing. Many elderly and individuals with disabilities are
eligible for both Medicare and Medicaid. These dual eligibles have
multidimensional, interdependent, and chronic health care needs. They
are at risk for nursing home placement and require acute and long-term
care service integration if they are to remain at home. However, as
currently structured, the Medicare and Medicaid Programs are not
sufficiently coordinated to serve many of these complex health needs.
In addition, these programs have traditionally favored institutional
care rather than community based or home care. These problems result in
duplication and fragmentation of services as well as increased health
costs.
In my own State of Tennessee, the home health industry has come under
fire because of high Medicare utilization rates. This is partly because
there are almost no Medicaid long term care options available to
Tennesseans who want to stay at home. Consequently, nursing home care
is the only option for frail elders unless they have enough money to
pay privately for their care or if family members can afford to be the
primary giver. Tennesseans should be able to choose from a broad array
of community based long term care services and should not be limited to
institutional care.
So, if we are to control costs while providing high quality care to
this vulnerable population, we must increase long term care
opportunities and provide better coordination between Medicare and
Medicaid reimbursement systems.
PACE, Program for All-inclusive Care of the Elderly, is the only
program which integrates acute and long term care service delivery and
finance. Designed to help the at-risk elderly who need service
integration, it represents a fundamental shift in the way needed health
services are accessed. By using capitation mechanisms which pool funds
from Medicare, Medicaid and private pay sources, this program joins
medical services with established long term care services. Care is
managed and coordinated by an interdisciplinary team that is
responsible for service allocation decisions.

[[Page S4232]]

As a result: duplicate services and ineffective treatments are
eliminated; participants have access to the entire spectrum of acute
and long-term care services, all provided and coordinated by a single
organization; and enrollees are relieved of the burden of independently
navigating the bewildering health-care maze.
How well has it worked? The accomplishments of PACE include:
controlled utilization of both outpatient and inpatient services;
controlled utilization of specialist services; high consumer
satisfaction; capitation rates which provide significant savings from
per capita nursing home costs or community long term care costs; and
ethnic and racial distributions of beneficiaries served which reflect
the communities from which PACE draws its participants.
Most importantly, PACE has been able to shift location of care from
the inpatient acute care setting to the community setting. By
integrating social and medical services through adult day health care,
PACE has made it possible for frail elders to continue to live at home,
not in a nursing care facility.
Are there other alternatives? Medicare HMO's and Social HMO's have
also attempted to control costs while providing access to high quality
care. However, Medicare HMO's exclude long term care and typically do
not serve many frail older persons on an ongoing basis. Social HMO's
also limit the long term care benefits available to their members.
These programs are important, but simply do not meet the needs of this
particular population. PACE, on the other hand, serves frail elders
exclusively and provide a continuum of care. It provides all acute and
long term care services according to participant needs and without
limits on benefits.
Unfortunately, the number of persons enrolled in PACE nationally is
minuscule compared with other managed care systems. States such as
Tennessee are eager to participate. However, the number of
participating sites has been capped under current legislation.

The PACE Provider Act of 1997 increases the number of sites
authorized to provide comprehensive, community-based services to frail,
older adults from 15 to 40 with an additional 20 to be added each year;
and affords regular provider status to existing sites.
Specifically, the bill:
Specifies that PACE sites be lower in cost than the alternative
health care services available to PACE enrollees, a goal which has
already been accomplished; includes quality of care safeguards; gives
States the option of utilizing PACE programs based on their need for
alternatives to long-term institutional care and the program's
continuing cost-effectiveness; and allows for-profit entities to
participate in PACE as a demonstration project.
PACE services frail older people of diverse ethnic heritage and has
operated successfully under different state and local environments.
This program deserves expansion.
The PACE Provider Act of 1997 does exactly that. It makes the PACE
alternative available for the first time to many communities. It also
allows more entities in the healthcare marketplace to participate in a
new way of providing care for frail elders. PACE gives us a chance to
contain costs while providing high quality care to one of our most
vulnerable populations.
The PACE program's integration of health and social services, its
cost-effective, coordinated system of care delivery and its method of
integrated financing have wide applicability and appeal. It is an
exciting way to satisfying an urgent need and I wholeheartedly support
it.<bullet>
<bullet> Mr. INOUYE. Mr. President, I introduce the PACE Provider Act
of 1997 with my distinguished colleague Senator Grassley.
The Program for All-inclusive Care for the Elderly [PACE] Act of 1997
began in 1983 with the passage of legislation authorizing On Lok, the
prototype for the PACE model, as a demonstration program. In 1986
Congress passed legislation to test the replicability of On Lok's
success by authorizing Medicare and Medicaid waivers for up to 10
replication sites; and in 1989 the number of authorized sites was
increased to 15. The PACE Provider Act of 1997 is the next step in a
series of legislative actions taken by Congress to develop PACE as a
community-based alternative to nursing home care.
Currently PACE programs provide services to approximately 3,000
individuals in eight States: California, Colorado, Massachusetts, New
York, Oregon, South Carolina, Texas, and Wisconsin. There are also 15
PACE programs in development which are operational, although not
involved in Medicare capitation. In addition, a number of other
organizations are actively working to develop PACE programs in other
States including: Florida, Hawaii, Illinois, New Mexico, Michigan,
Ohio, Pennsylvania, Virginia, and Washington.
PACE is unique in a variety of ways. First, PACE programs serve only
the very frail--older persons who meet their States' eligibility
criteria for nursing home care. This high-cost population is of
particular concern to policy makers because of the disproportionate
share of resources they use relative to their numbers.
Second, PACE programs provide a comprehensive package of primary
acute and long-term care services. All services, including primary and
specialty medical care, adult day care, home care, nursing, social work
services, physical and occupational therapies, prescription drugs,
hospital and nursing home care are coordinated and administered by PACE
program staff.
Third, PACE programs are cost-effective in that they are reimbursed
on a capitated basis, at rates that provide payers savings relative to
their expenditures in the traditional Medicare, Medicaid, and private
pay systems. Finally, PACE programs are unique in that a mature program
assumes total financial risk and responsibility for all acute and long-
term care without limitation.
The PACE Provider Act does not expand eligibility criteria for
benefits in any way. Rather, it makes available to individuals already
eligible for nursing home care, because of their poor health status, a
preferable, and less costly alternative.
By expanding the availability of community-based long-term care
services, On Lok's success of providing high quality care with an
emphasis on preventive and supportive services, can be replicated
throughout the country. PACE programs have substantially reduced
utilization of high-cost inpatient services. Although all PACE
enrollees are eligible for nursing home care, just 6 percent of these
individuals are permanently institutionalized. The vast majority are
able to remain in the community and PACE enrollees are also
hospitalized less frequently. Through PACE, dollars that would have
been spent on hospital and nursing home services are used to expand the
availability of community-based long-term care.
This bill would expand the number of non-profit entities to become
PACE providers to 45 within the first year and allow 20 new such
programs each year thereafter. In addition, the PACE Provider Act of
1997 will establish a demonstration project to allow no more than 10
for-profit organizations to establish themselves as PACE providers. The
number of for-profit entities will not be counted against the numerical
limitation specified for non-profit organizations.
Analyses of costs for individuals enrolled in PACE show a 5- to 15-
percent reduction in Medicare and Medicaid spending relative to a
comparably frail population in the traditional Medicare and Medicaid
systems.
States have voluntarily joined together with community organizations
to develop PACE programs out of their commitment to developing viable
alternatives to institutionalization. This legislation provides States
with the option of pursuing PACE development; and, as under present
law, State participation would remain voluntary.
As our population ages, we must continue to place a high priority on
long-term care services. Giving our seniors alternatives to nursing
home care and expanding the choices available, is not only cost-
effective, but will also improve the quality of life for older
Americans.<bullet>
______

By Mr. TORRICELLI:
S. 721. A bill to require the Federal Trade Commission to conduct a
study of the marketing and advertising practices of manufacturers and
retailers of personal computers; to the Committee on Commerce, Science,
and Transportation.

[[Page S4233]]

THE PERSONAL COMPUTER TRUTH IN ADVERTISING ACT OF 1997

<bullet> Mr. TORRICELLI. Mr. President, today I am introducing ``The
Personal Computer Truth in Advertising Act of 1997,'' which is designed
to ensure that consumers are provided with accurate information about
the performance of what is becoming one of the most important consumer
products in the Nation, the personal computer.
My bill requires the Federal Trade Commission to investigate and
conduct a study of the marketing and advertising practices of personal
computer manufacturers and retailers with regard to possibly misleading
claims made about the performance of their products.
As we head into the next century, the personal computer is quickly
becoming one of the most important consumer products. Indeed, the
market for computers in the home has exploded in recent years with the
market expected to double by 2000. Still, despite their growing
popularity, purchasing a personal computer involves technology and
terminology that can be very intimidating and confusing to the average
consumer.
Of particular concern to me is a practice by personal computer
retailers and manufacturers in how they advertise the speed of the
central processing unit (CPU) of the personal computer. Indeed, when
marketing and advertising personal computers, the CPU speed is a
prominent selling point and consumers are frequently charged hundreds
of dollars more for models with faster CPU's.
The CPU is to the personal computer as an engine is to an automobile.
Measured in millions of cycles per second [mhz], the faster the CPU,
the better the software performs. The CPU's in personal computers,
including the popular Pentium chip, operate at two speeds, an external
speed and an internal speed. The external speed affects computing
activity the user sees in action--the scrolling of a web page or a word
processing document, the smoothness of an animated interactive
storybook and the complexity and frame rate of a flight simulator. The
internal speed of the CPU involves activity invisible to the user--
spreadsheet calculations, spell checking and database organization.
Nonetheless, personal computers are commonly marketed according to
their internal, and faster, speed. For example, a Pentium computer
advertised as a 200 mhz screamer runs at only 66 mhz externally. Still,
most advertisements fail to mention this discrepancy and retailers and
manufacturers charge hundreds of dollars more for the 200 mhz than they
would for a 66 mhz model.
Moreover, driving the sales of personal computers has been the
availability of advanced multimedia and interactive entertainment
software. This is the very software whose performance depends greatly
on the CPU's external clock speed.
My legislation would require the Federal Trade Commission to conduct
a study of the marketing and advertising practices of manufacturers and
retailers of personal computers, with particular emphasis on claims
made about the CPU. My bill requires the FTC to perform their study
within 180 days of enactment of the bill. I had previously written to
the FTC on this issue as a member of the House.
Car manufacturers provide both highway and city mileage performance
figures for the performance of their engines and computer manufacturers
should follow the same logic with the engines of the personal computer,
the CPU.
I urge my colleagues to cosponsor this bill and I will work hard for
its enactment into law.
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. 721

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 ``Personal Computer Truth in
Advertising Act of 1997''.

SEC. 2. FINDINGS.

(b) Findings.--Congress finds that--
(1) computer manufacturers and retailers commonly refer to
the speed of the central processing unit of a personal
computer in selling a personal computer;
(2) computer manufacturers and retailers commonly charge
hundreds of dollars more for a CPU that has a faster speed;
(3) all CPUs operate at 2 speeds (measured in megahertz
(MHz)), an external speed and an internal speed;
(4) the external speed of a personal computer affects
computing activities that computer users experience,
including the scrolling of a word processing document, the
smoothness of an animation, and the complexity and frame rate
of a flight simulator;
(5) the internal speed of a personal computer, which is
faster than the external speed of the computer, affects
activities, such as spreadsheet calculations, spelling
checks, and database organizations;
(6) it is common for manufacturers and retailers to mention
the internal speed of a CPU without mentioning its external
speed for the marketing and advertising of a personal
computer; and
(7) a study by the Federal Trade Commission would assist in
determining whether any practice of computer retailers and
manufacturers in providing CPU speeds in advertising and
marketing personal computers is deceptive, for purposes of
the Federal Trade Commission Act (15 U.S.C. 41 et seq.).

SEC. 3. DEFINITIONS.

In this Act:
(1) Central processing unit; cpu.--The term ``central
processing unit'' or ``CPU'' means the central processing
unit of a personal computer.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(3) Manufacturer.--The term ``manufacturer'' shall have the
meaning provided that term by the Commission.
(4) Megahertz.--The term ``megahertz'' or ``MHz'', when
used as a unit of measurement of the speed of a CPU, means
1,000,000 cycles per second.
(5) Retailer.--The term ``retailer'' shall have the meaning
provided that term by the Commission.

SEC. 4. PERSONAL COMPUTER MARKETING AND ADVERTISING STUDY.

(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Commission shall conduct a study
of the marketing and advertising practices of manufacturers
and retailers of personal computers.
(b) Contents of Study.--In conducting the study under this
subsection, the Commission shall give particular emphasis to
determining--
(1) whether the practice of the advertising of the internal
speed of a CPU in megahertz, without mentioning the external
speed of a CPU, could be considered to be an unfair or
deceptive practice, within the meaning of section 5 of the
Federal Trade Commission Act (15 U.S.C. 45); and
(2) the extent to which the practice referred to in
paragraph (1) is used in the marketing and advertising of
personal computers.
(c) Report.--Upon completion of the study under subsection
(a), the Chairman of the Commission shall transmit to
Congress a report that contains--
(1) the findings of the study conducted under this section;
and
(2) such recommendations as the Commission determines to be
appropriate.<bullet>
______

By Mr. THOMAS:
S. 722. A bill to benefit consumers by promoting competition in the
electric power industry, and for other purposes; to the Committee on
Energy and Natural Resources.

The Electric Utility Restructuring Empowerment and Competitiveness Act
of 1997 [EURECA]

Mr. THOMAS. Mr. President, I rise today to introduce the Electric
Utility Restructuring Empowerment and Competitiveness Act of 1997. This
legislation, which gives states the authority to order the delivery of
electric energy to all retail consumers, is based on the idea that less
government intervention is the best way to achieve affordable, reliable
and competitive options for retail electric energy services.
This is a substantially different approach from other measures that
have been introduced in both the House and Senate to restructure the
nation's electric utility industry. I do not believe that a federal
mandate on the states requiring retail competition by a date certain is
in the best interest of all classes of customers. I am concerned that
this method could result in increased electricity rates for low-density
states or states that have relatively low-cost power. Electricity is an
essential commodity critical to everyday life in this country. It is
also an industry heavily regulated at the Federal and State levels. If
the Congress is going to make fundamental changes to the last major
regulated monopoly, its role should be to help implement competitive
changes in a positive manner, rather than interject the heavy hand of
government with a ``Washington-knows-best'' mentality.
This legislation comes down on the side of States' rights. Having
been involved in the electric power industry, I understand the unique
characteristics of each State. As most everyone knows, California was
the first State to

[[Page S4234]]

pass a retail choice law. Since that time, Arizona, Massachusetts, New
Jersey, Pennsylvania, New Hampshire, Texas, Montana, Oklahoma and
others have followed suit.
According to Bruce Ellsworth, President of the National Association
of Regulatory Utility Commissioners [NARUC], ``more than one-third of
the Nation's population live in states that have chosen within the last
year to move to open-access, customer choice markets.'' All told, every
state except one is in the process of either examining or implementing
policies for retail consumers of electric energy. States are clearly
taking the lead--they should continue to have that role--and this bill
confirms their authority by affirming States' ability to implement
retail choice policies.
This initiative leaves important functions, including the ability to
recover stranded costs, establish and enforce reliability standards,
promote renewable energy resources and support public benefit and
assistance to low-income and rural consumer programs in the hands of
State Public Service Commissions [PUC's]. If a State desires to impose
a funding mechanism--such as wires charges--to encourage that a certain
percentage of energy production comes from renewable alternatives, they
should have that opportunity. However, I do not believe a nationally
mandated set-aside is the best way to promote competition. Likewise,
individual states would have the authority over retail transactions.
This ensures that certain customers could not bypass their local
distribution system and avoid responsibility for paying their share of
stranded costs.

One of the most important aspects of this debate--assuring that
universal service is maintained--is a critical function that each State
PUC should have the ability to oversee and enforce. In my legislation,
nothing would prohibit a state from requiring all electricity providers
that sell electricity to retail customers in that state to provide
electricity service to all classes and consumers of electric power.
Mr. President, at the wholesale level, my proposal attempts to create
greater competition by prospectively exempting the sale of electricity
for resale from rates determined by the Federal Energy Regulatory
Commission [FERC]. Although everyone talks about ``deregulating'' the
electricity industry, it is really the generation segment that will be
deregulated. The FERC will continue to regulate transmission in
interstate commerce, and State PUC's will continue to regulate retail
distribution services and sales.
When FERC issued Order 888 last year, it allowed utilities to seek
market-based rates for new generating capacity. This provision goes a
step further and allows utilities to purchase wholesale power from
existing generating facilities, after the date of enactment of this
Act, at prices solely determined by market forces.
Furthermore, the measure expands FERC authority to require non-public
utilities that own, operate or control transmission to open their
systems. Currently, the Commission cannot require the Federal Power
Marketing Administrations [PMA's], the Tennessee Valley Authority
[TVA], municipalities and cooperatives that own transmission, to
provide wholesale open access transmission service. According to
Elizabeth Moler, Chairwoman of FERC, approximately 22 percent of all
transmission is beyond open access authority. Requiring these non-
public utilities to provide this service will help ensure that a true
wholesale power market exists.
One of the key elements of this measure is streamlining and
modernizing the Public Utility Regulatory Policies Act of 1978 [PURPA]
and the Public Utility Holding Company Act of 1935 [PUHCA]. While both
of these initiatives were enacted with good intentions, and their
obligations fulfilled, there is widespread consensus that the Acts have
outlived their usefulness.
My bill amends section 210 of PURPA on a prospective basis. Current
PURPA contracts would continue to be honored and upheld. However, upon
enactment of this legislation, a utility that begins operating would
not be required to enter into a new contract or obligation to purchase
electricity under section 210 of PURPA.
With regard to PUHCA, I chose to incorporate Senator D'Amato's
recently introduced legislation in my bill. As Chairman of the Senate
Banking Committee, which has jurisdiction over the issue, he has
crafted a proposal that I believe will successfully reform the statute
and I support his efforts. Under his proposal, the provisions of PUHCA
would be repealed 18 months after the Act is signed into law.
Furthermore, all books and records of each holding company and each
associate company would be transferred from the Securities and Exchange
Commission [SEC]--which currently has jurisdiction over the 15
registered holding companies--to the FERC. This allows energy
regulators, who truly know the industry, to oversee the operations of
these companies and review acquisitions and mergers. These consumer
protections are an important part of PUHCA reform.
Mr. President, an issue which must be resolved in order for a true
competitive environment to exist is that of utilities receiving special
``subsidies'' by the federal government and the U.S. tax code. For
years, investor-owned utilities [IOU's] have claimed inequity because
of tax-exempt financing and low-interest loans that municipalities and
rural cooperatives receive. On the other side of the equation, these
public power systems maintain that IOU's are able to receive special
tax treatment, not offered to them, which amounts to a ``tax free''
loan. The jury is still out on how best to deal with this thorny and,
undoubtedly complex matter, but make no mistake about it, changes will
be made.
A viable option the Congress should consider is to ``build a fence''
around governmental utilities. Sales in existing service territories
could continue to be financed using current methods. However, for sales
outside of their traditional boundaries, these systems should operate
on the same basis and play by the same rules as other competitors.
The Congress should also address existing tax structures to determine
if the ``benefits'' tax-paying utilities receive results in unfair
advantages against their competitors. While tax initiatives, such as
accelerated depreciation and investment tax credits, are available to
all businesses that pay income tax, if this amounts to ``subsidies''
reforms may have to be made.
My bill would direct the Inspector General of the Department of
Treasury to file a report to the Congress detailing whether and how tax
code incentives received by all utilities should be reviewed in order
to foster a competitive retail electricity market in the future.
Furthermore, I am pleased that Senator Murkowski, Chairman of the
Senate Energy and Natural Resources Committee, requested a report by
the Joint Committee on Taxation to review all subsidies and incentives
that investor-owned, publicly-owned and cooperatively-owned utilities
receive.
Mr. President, I believe EURECA is a common-sense approach that
attempts to build consensus to solve some of the critical questions
associated with this important issue. The states are moving and should
continue to have the ability to craft electricity restructuring plans
that recognize the uniqueness of each state. This legislation is the
best solution to foster the debate and allow us to move forward with a
better product for all classes of consumers and the industry as a
whole.
______

By Mr. LAUTENBERG (for himself, Mrs. Boxer, and Mr. Kerry):
S. 723. A bill to increase the safety of the American people by
preventing dangerous military firearms in the control of foreign
governments from being imported into the United States, and for other
purposes; to the Committee on Foreign Relations.

THE ANTI-GUN INVASION ACT OF 1997

<bullet> Mr. LAUTENBERG. Mr. President, today Senators Boxer and Kerry
and I are introducing legislation to ensure that millions of lethal
American-manufactured military weapons will not be imported into this
country. Representatives Patrick Kennedy and Maloney are introducing
companion legislation in the House of Representatives.
The bill we are introducing repeals a loophole in the law that could
allow U.S. military weapons that were provided to foreign countries to
be sold back to gun dealers in this country. The loophole permits the
import of so-called ``curios or relics'' --weapons considered to have
historic value or which are more than 50 years old.

[[Page S4235]]

About 2.5 million American-manufactured military weapons that the U.S.
Government gave away, sold, or were taken as spoils of war by foreign
governments are at issue. This includes 1.2 million M-1 carbines, which
are easily converted to fully automatic weapons. Though these weapons
are older, they are lethal. I don't want them flooding America's
streets. And I don't want foreign governments making a windfall by
selling them to commercial gun dealers.
As some of my colleagues may know, the term ``curios or relics'' was
originally used in the Gun Control Act of 1968 to make it easier for
licensed collectors to buy curios or relics weapons from outside his or
her State of residence. The Treasury Department came up with a
definition and list of ``curios or relics'' for this purpose. At that
time, importation of surplus military weapons--whether of United States
or foreign origin--was prohibited, and the curios or relics list had
nothing to do with importing weapons.
Nearly 20 years later, in 1984, a law was passed that expanded the
scope of the curios or relics list in ways never foreseen at the time
the list was first created. The modified law said that guns that were
on the curios or relics list could not just be sold interstate within
this country, but could be imported as well.
However, the Arms Export Control Act still prohibited the importation
of U.S. military weapons that had been furnished to foreign
governments. Although a 1987 amendment to that Act authorized the
importation of U.S.-origin military weapons on the curios or relics
list as well, only one import license has been granted under the curios
or relics exception. Since that isolated incident, every
administration--Reagan, Bush, and Clinton--has adopted a policy
established by the Reagan administration and based on the Arms Export
Control Act of denying these kinds of import licenses.
Though the Clinton administration and the past two Republican
administrations have opposed importing these lethal weapons, the NRA
supports importing them and it has allies on the Hill. Last year, an
effort was made in the Commerce, Justice, State Appropriations bill to
force the State Department to allow these weapons to be imported for
any reason. That effort was killed as part of the negotiations on the
catchall appropriations bill that was signed into law on September 30.
The provision included in the Senate version of the C, J, S
appropriations bill last year, section 621, would have prohibited any
agency of the Government--notwithstanding any other provision of law--
from using appropriated funds to deny an application for a permit to
import previously exported United States-origin military firearms,
parts, or ammunition that are considered to be curios or relics. The
provision would have forced the State Department to allow large numbers
of U.S. military firearms that are currently in the possession of
foreign governments to enter the United States commercially. Because so
many of those firearms can be easily converted to automatic weapons, it
would have undermined efforts to reduce gun violence in this country.
In addition, it could have provided a windfall for foreign governments
at the expense of the taxpayer.

Certainly the dangers posed by many guns on the curios or relics
list--in particular the M-1 carbine, which is easily converted into an
automatic weapon--are an important reason for preventing imports of
those guns. It is the main reason I am proposing legislation to clarify
the law to prevent imports in the future. But the provisions of the
Arms Export Control Act that limit the imports are not merely
technical. They support a principle, included in the Arms Export
Control Act, that is basic to the integrity of our foreign military
assistance program: No foreign government should be allowed to do
anything with weapons we have given them that we ourselves would not do
with them. For example, the Department of Defense does not transfer
weapons to a country that is our enemy; no foreign government should be
allowed to use U.S.-supplied weapons in that way. The Department of
Defense does not sell its excess guns directly to commercial dealers in
the United States, and foreign governments should not be able to do so
either.
As recently as 1994, the General Services Administration Federal
weapons task force reviewed U.S. policy for the disposal of firearms
and confirmed a longstanding Government policy against selling or
transferring excess weapons out of Government channels. The Federal
Government has made a decision that it should not be an arms merchant.
The Federal regulations that emerged from that task force review are
clear. They say surplus firearms may be sold only for scrap after total
destruction by crushing, cutting, breaking, or deforming to be
performed in a manner to ensure that the firearms are rendered
completely inoperative and to preclude their being made operative.
These are sound regulations. The Department of Defense does not sell
its guns to private arms dealers. Under the Arms Export Control Act, we
should not allow foreign governments to sell 2.5 million U.S. military
weapons to private arms dealers either.
Flooding the market with these curios and relics would only make it
harder for law enforcement to do its job. The Bureau of Alcohol,
Tobacco, and Firearms has already seen an increase in M-1 carbines that
have been converted to fully automatic machine guns due to the
availability and relatively low cost of the weapons. The more military
weapons there are in this country, the more likely they are to fall
into criminal hands. Surplus military weapons are usually cheap, and,
if a government sells its whole stockpile, plentiful. A sudden increase
in supply of M-1 garands and carbines and M-1911 pistols would drive
down the price, making them less attractive to the collector and more
attractive to the criminal.
In fact, the administration opposed last year's provision, in part,
because of the increased availability of low-cost weapons for criminals
that invariably would have resulted. According to the administration,
``The criminal element thrives on low-cost firearms that are
concealable, or capable of accepting large-capacity magazines, or
capable of being easily converted to fully automatic fire. Thus, such
weapons would be particularly enticing to the criminal element. In
short, the net effect of the proposal would be to thwart the
administration's efforts to deny criminals the availability of
inexpensive, but highly-lethal, imported firearms.''
We know that the M-1 carbine has already been used to kill at least 6
police officers. Another 3 were killed with M-1911 pistols. As recently
as this January, two sheriff's deputies, James Lehmann, Jr. and Michael
P. Haugen, were killed with an M-1 carbine while responding to a
domestic violence call in Cabazon, CA. In October 1994, in Gilford, NH,
Sgt. James Noyes of the State Police Special Weapons and Tactics Unit
was killed in the line of duty with an M-1 carbine. In December 1992,
two Richmond, CA police officers were killed with an M-1 carbine. In
just one State, Pennsylvania, at least 10 people were killed using
U.S.-origin military weapons during a recent 5-year period. To those
who would argue that ``curios and relics'' are not used in crimes, I
would say talk to the families of these victims.

American-manufactured weapons were sold to foreign governments--often
at a discount rate subsidized by the U.S. taxpayer--because we believed
it was in our foreign policy interest to strengthen and assist our
allies. We did not intend to enable foreign governments to make a
profit by turning around and selling them back to commercial gun
dealers in the U.S. We certainly did not help our allies so they could
turn around and flood America's streets with lethal guns.
We also did not provide weapons to foreign governments so they could
reap a financial windfall at the expense of the taxpayer. Although the
law could allow the United States Government to receive the net
proceeds of any sales made by foreign governments of defense articles
it received on a grant basis, the provision in the appropriations bill
last year would have forced the administration--notwithstanding any
other law --to approve the import license, even if a foreign government
would not agree to provide proceeds of the sale. As such, it would
undermine our government's ability to require foreign governments to
return proceeds to the United States and could result in a windfall for
foreign governments.

[[Page S4236]]

Even more, some countries like Vietnam, which hold a significant
quantity of spoils of war weapons, including ``curios or relics,''
could sell those ``spoils of war'' to U.S. importers at a financial
gain. And, the Government of Iran, which received more than 25,000 M-
1911 pistols from the United States Government in the early 1970's,
could qualify to export weapons to the United States at a financial
gain as well.
Allowing more than 2 million U.S.-origin military weapons to enter
the United States would profit a limited number of arms importers. But
it is not in the interest of the American people. I don't believe
private gun dealers should have the ability to import these weapons
from foreign governments. These weapons are not designed for hunting or
shooting competitions. They are designed for war. Our own Department of
Defense does not sell these weapons on the commercial market for
profit. Why should we allow foreign countries to do so?
Mr. President, this bill would confirm the policy against importing
these lethal weapons by removing the ``curios or relics" exception from
the Arms Export Control Act. Under this legislation, U.S. military
weapons that the U.S. Government has provided to foreign countries
could not be imported to the United States for sale in the United
States by gun dealers. If a foreign government had no use for surplus
American military weapons, those weapons could be returned to the Armed
Forces of the United States or its allies, transferred to State or
local law enforcement agencies in the United States, or destroyed. The
legislation also asks the Treasury Department to provide a study on the
importation of foreign-manufactured surplus military weapons.
Mr. President, I ask unanimous consent that a copy of this
legislation appear in the Record, and I urge my colleagues to support
this legislation.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 723

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 ``Anti-Gun Invasion Act of
1997''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) Since 1950, the United States Government has furnished
to foreign governments at least 2,500,000 military firearms
that are considered to be ``curios or relics'' under the Gun
Control Act of 1968.
(2) These firearms include more than 1,200,000 M-1 Carbine
rifles and 250,000 M1911 pistols of United States manufacture
that have been furnished to foreign governments under United
States foreign military assistance grant, loan, or sales
programs.
(4) Criminals tend to use low-cost firearms that are
concealable, capable of accepting large-capacity magazines,
or are capable of being easily converted to fully automatic
fire.
(5) An M-1 Carbine can be converted easily to a fully
automatic weapon by disassembling the weapon and reassembling
the weapon with a few additional parts.
(6) An M1911 or M1911A pistol is easily concealable.
(7) At least 9 police officers have been murdered in the
United States using M-1 Carbines or M1911 pistols in the past
7 years.
(8) The importation of large numbers of ``curio or relic''
weapons would lower their cost, make them more readily
available to criminals, and constitute a threat to public
safety and to law enforcement officers.
(9) The importation of these ``curios or relics'' weapons
could result in a financial windfall for foreign governments.
(10) In order to ensure that these weapons are never
permitted to be imported into the United States, a provision
of the Arms Export Control Act must be deleted.

SEC. 3. REMOVAL OF EXEMPTION FROM PROHIBITION ON IMPORTS OF
CERTAIN FIREARMS AND AMMUNITION.

(a) Removal of Exemption.--Section 38(b)(1) of the Arms
Export Control Act (22 U.S.C. 2778(b)(1)) is amended by
striking subparagraph (B), as added by section 8142(a) of the
Department of Defense Appropriations Act, 1988 (contained in
Public Law 100-202).
(b) Savings Provision.--The amendment made by subsection
(a) shall not affect any license issued before the date of
the enactment of this Act.

SEC. 4. REPORT ON IMPORTS OF FOREIGN-MADE SURPLUS MILITARY
FIREARMS THAT ARE CURIOS OR RELICS

Not later than 1 year after the date of enactment of this
Act, the Secretary of the Treasury, acting through the Bureau
of Alcohol, Tobacco and Firearms, shall submit a report to
Congress on the scope and effect of the importation of
foreign-made surplus military firearms under section 925(e)
of title 18, United States Code. The report shall contain the
following:
(1) Current importation.--A list of types and models of
military firearms currently being imported into the United
States as ``curios or relics'' under section 925(e) of title
18, United States Code, which would otherwise be barred from
importation as surplus military firearms under section
925(d)(3) of that title.
(2) Importation during preceding 5 years.--A list of the
number of each type and model listed under paragraph (1) that
has been imported into the United States during the 5 years
preceding the date of submission of the report.
(3) Ease of conversion.--A description of the ease with
which each type and model listed under paragraph (1) may be
converted to a semi-automatic assault weapon as defined in
section 921(a)(30)(B) of that title or to a fully automatic
weapon.
(4) Involvement in criminal activities.--Statistics that
may be relevant to the use for criminal activities of each
type and model of weapons listed in paragraph (1),
including--
(A) statistics involving the use of the weapons in
homicides of law enforcement officials; and
(B) the number of firearm traces by the Bureau of Alcohol,
Tobacco and Firearms that involved those weapons.
(5) Comprehensive evaluation.--A comprehensive evaluation
of the scope of imports under section 925(e) of that title
and the use of such weapons in crimes in the United
States.<bullet>
By Mr. NICKLES (for himself, Mr. Rockefeller, Mr. Lott, Mr.
Breaux, Mr. Hatch, Ms. Mosley-Braun, Mr. Murkowski, Mr.
D'Amato, Mr. Gramm, Mr. Mack, Mr. Lieberman, Mr. Cochran, Mr.
Brownback, Mr. Enzi and Mr. Hutchinson):

S. 724. A bill to amend the Internal Revenue Code of 1986 to provide
corporate alternative minimum tax reform; to the Committee on Finance.

THE ALTERNATIVE MINIMUM TAX REFORM ACT OF 1997

Mr. NICKLES. Mr. President, today I join my colleague from West
Virginia, Senator Rockefeller, to introduce legislation to reform the
Alternative Minimum Tax, or AMT. We are joined in this effort by 13 of
our colleagues, including a total of 10 Finance Committee members.
Congress created the AMT in 1986 to prevent businesses from using tax
loopholes, such as the investment tax credit or safe harbor leasing, to
pay little or no tax. The use of these tax preferences sometimes
resulted in companies reporting healthy ``book'' income to their
shareholders but little taxable income to the government.
Therefore, to create a perception of fairness, Congress created the
AMT. The AMT requires taxpayers to calculate their taxes once under
regular tax rules, and again under AMT rules which deny accelerated
depreciation, net operating losses, foreign tax credits, and other
deductions and credits. The taxpayer then pays the higher amount, and
the difference between their AMT tax and their regular tax is credited
to offset future regular tax liability if it eventually falls below
their AMT tax liability.
Unfortunately, Mr. President, in the real world the AMT has reached
far beyond its original purpose. As it is currently structured, the AMT
is a massive, complicated, parallel tax code which places huge burdens
on capital intensive companies. Corporations must now plan for and
comply with two tax codes instead of one. Further, the elimination of
accelerated depreciation increases the cost of investment and makes
U.S. businesses uncompetitive with foreign companies.
It makes little sense, Mr. President, to allow a reasonable business
deduction under one tax code, and then take it away through another tax
code. Perhaps there are some bureaucrats who believe regular tax
depreciation is too generous and should be curtailed, but the AMT is an
extremely complicated and convoluted way to accomplish that goal.
The legislation I am introducing today would correct this problem by
allowing businesses to use the same depreciation system for AMT
purposes as they use for regular tax purposes. This one simple reform
removes the disincentive to invest in job-producing assets and greatly
simplifies compliance and reporting. In fact, this reform was first
suggested by President Clinton in 1993.
Further, my bill helps AMT taxpayers recover their AMT credits in a
more reasonable timeframe than under current law. Many capital-
intensive businesses have become chronic AMT taxpayers, a situation
that was not contemplated when the AMT was created. These companies
continue to pay AMT year after year with no relief in

[[Page S4237]]

sight, and as a matter of function they accumulate millions in unused
AMT credits. These credits are a tax on future, unearned revenues which
may never materialize, and because of the time-value of money their
value to the taxpayer decreases every year.
Since Congress did not intend for the AMT to become a permanent tax
system for certain taxpayers, my bill would allow chronic AMT taxpayers
to use AMT credits which are 5-years-old or older to offset up to 50
percent of their current-year tentative minimum tax. This provision
will help chronic AMT taxpayers dig their way out of the AMT and allow
them to recoup at least a portion of these accelerated tax payments in
a reasonable manner and time-frame.
Mr. President, as the Senate begins working out the details of the
recent bipartisan budget accord and the resulting tax bill, I hope we
will not forget the importance of savings and investment. In that
regard, there are few tax code changes we could make which are more
important than eliminating the investment disincentives created by the
AMT.
Does my legislation fix all of the AMT's problems? No, it does not.
This bill specifically addresses the depreciation adjustment, but there
are many other AMT adjustments, preferences, and limitations which are
unchanged. Some of these, such as the 90-percent net operating loss
limitation and the foreign tax credit limitation, are very damaging to
business profitability and competitiveness. I hope all these issues
will be examined when the Senate Finance Committee considers AMT
reform.
Mr. President, I ask unanimous consent that there appear in the
Record a list of the original cosponsors of this legislation, as well
as statements of support by the U.S. Chamber of Commerce and the
National Association of Manufacturers. I encourage my colleagues to
join Senator Rockefeller and me in this important initiative.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Alternative Minimum Tax Reform Act Cosponsors, 105th Congress

(15 total, 10 from Committee on Finance)

Sponsor: Nickles.
Cosponsors: Rockefeller, Lott, Breaux, Hatch, Moseley-
Braun, Murkowski, D'Amato, Gramm, Mack, Lieberman, Cochran,
Brownback, Enzi, and Hutchinson.
____

Chamber of Commerce of the

United States of America,

Washington, DC, May 8, 1997.
Hon. Don Nickles,
Assistant Majority Leader, U.S. Senate, Washington, DC.
Dear Senator Nickles: The U.S. Chamber of Commerce--the
world's largest business federation representing an
underlying membership of more than three million businesses
and organizations of every size, sector, and region--supports
your legislation to reform the Alternative Minimum Tax (AMT).
The current AMT system unfairly penalizes businesses that
invest heavily in plant, machinery, equipment and other
assets. The AMT significantly increases the cost of capital
and discourages investment in productivity-enhancing assets
by negating many of the capital formation incentives provided
under the regular tax system, most notably accelerated
depreciation. To make matters worse, many capital-intensive
businesses have been perpetually trapped in the AMT system,
and unable to utilize their suspended AMT credits.
Furthermore, the AMT is extremely complex, burdensome and
expensive to comply with.
Your legislation addresses many of the problems of the
current AMT and its passage will spur capital investment,
help businesses to sustain long-term grown and create jobs.
Recent analysis by Data Resources, Inc. demonstrates that
your reform bill will result in an increase in GDP of 1.6
percent, the creation of 100,000 new jobs each year, and an
increase in worker productivity of about 1.6 percent.
Thank you for introducing this important legislation, and
we look forward to working with you for its passage.
Sincerely,
R. Bruce Josten.
____

Statement of National Association of Manufacturers

nam calls the alternative minimum tax the ``anti-manfacturing tax''

Urges Support of AMT Reform Legislation

Washington, DC., May 8, 1997.--Calling the alternative
minimum tax (AMT) a disincentive for capital investment and
job creation, the National Association of Manufacturers urged
lawmakers to support AMT reform legislation introduced today
by Senators Don Nickles (R-OK) and John D. Rockfeller (D-WV).
``The alternative minimum tax is a fundamentally flawed,
counter-productive tax that stifles the creation of high-
skilled, high-paying manufacturing jobs,'' said Gil Thurm,
vice president taxation and economic policy, in support of
the reform bill. ``It's little wonder that many believe that
AMT really stands for `Anti-Manufacturing Tax.' ''
The legislation substantially reforms the AMT to allow
businesses to use the same depreciation rules for AMT
purposes as they use for their regular tax depreciation
rules. It also allows AMT taxpayers to recover their existing
tax credits quicker than under current law.
``No other industrialized country imposes such a penalty
tax on investment made by capital intensive companies.
Furthermore, when businesses report little or no profit, they
are still frequently required to pay the AMT,'' said Thurm.
``Substantially reforming the alternative minimum tax will
result in greater economic growth by creating thousands of
new jobs, stronger growth in GDP, increased productivity and
improved cash flow, especially for those companies that have
been penalized the most under the AMT,'' according to Thurm.
The NAM continues to lead a coalition of more than 100
companies and associations in support of complete repeal of
the AMT. However, absent complete repeal, the AMT Coalition
for Economic Growth supports substantive AMT reform.

<bullet> Mr. ROCKEFELLER. Mr. President, I am pleased to join my Senate
Finance Committee colleague, Senator Nickles, in introducing an
Alternative Minimum Tax [AMT] reform bill. Our bill will: first, allow
businesses to use the same depreciation system for AMT as they do under
regular tax, and second, permit businesses to use their AMT credits
more easily than under current law. It will help make it easier for
U.S. businesses to compete and reduce the unintended inequity of
current law.
For several years, I have looked for an opportunity to fix the
problems that AMT creates especially for capital intensive industries.
Two years ago, I introduced my own bill to reform the aspects of AMT
that I believe are most detrimental to businesses for which AMT is
frequently their method of tax payment. Unfortunately, with the
controversies and difficulties that made it impossible to enact a
budget plan in the last Congress, there was no ability to move that
effort forward.
This year, I am pleased to work with Senator Nickles to make the AMT
fairer. I hope this means we have a real chance of working together in
a bipartisan manner to compel Congress, the Finance Committee in
particular, to figure out a way to deal with some of the unintended
consequences of AMT as part of this year's budget deal. I think
previous efforts at AMT reform have failed in the part because it is
very tough to focus on the merits of certain corporate tax changes.
That remains true today in the context of a larger budget agreement,
but if we keep our perspective, I think AMT reform will win support on
its merits and Congress can responsibly find a way to finance it.
I am well aware of the fact that as we introduce this legislation,
there is no specific provision for AMT relief in the budget deal which
the President and Congressional leadership have struck in outline form.
As I have noted, the constraints of balancing the budget will require
us to carefully examine how much AMT relief is practical this year, as
part of an agreement to balance the budget over the next 5 years. I
understand that very well, as does Senator Nickles. I think that means
we will have to zero in on the aspects of AMT relief that are most
doable this year--and which can be financed without harming other
priorities. I am prepared to do that and recognize that it also means
the scope of the AMT bill we submit today will have to be tailored
accordingly. That does not mean that we should put off AMT relief for
another day, it just means we will have to be honest about what is
critical to do and what portions of this bill will have to remain on
the to-do list. I say all this because it is important to understand
the context for our introducing this relief bill now, and as the budget
agreement places some high hurdles on what can realistically be
accomplished.
I also would like to say that it is my strong belief that the
excruciating specifics of the budget agreement which relate to matters
under the jurisdiction of the Finance Committee are best left to the
expertise on that Committee. The Finance Committee serves an extremely
important role in the legislative process. That role cannot and

[[Page S4238]]

should not be supplanted by private negotiations between the
administration and congressional leadership--however worthwhile the
overall purpose. Reaching consensus on the approach to balancing the
budget and protecting priorities of the administration and both sides
of the aisle in congressional leadership provides the Finance Committee
with the framework for its detailed work. The Finance Committee will
soon have to work its will within the appropriate parameters of its
reconciliation instructions. When that happens, I think the committee
must address AMT relief, and I intend to work to build support for it
as we wend our way through the committee process.
Let me return to the substance of the bill we submit for our
colleagues' consideration today. First, I want to make it absolutely
clear--this bill does not repeal AMT. AMT has created during the 1986
Tax Reform Act in response to the problem raised when companies would
report profits to stockholders and yet claim losses to the IRS.
However, in an effort to simplify the code depreciation under AMT was
treated as an adjustment--which amounts to an increase in income. This
penalizes low-profit, capital intensive companies, like steel
companies. Compared to other countries, after 5 years, a U.S.
steelmaker under AMT recovers only 37 percent of its investment in a
new plant and equipment. The recovery of investment in other countries
is much higher--for example, in Japan it's 58 percent, in Germany
companies recover 81 percent, Korea is 90 percent, and in Brazil it's
100 percent.
The problem is not unique to the steel industry though. Other
capital-intensive industries that also have long-lived assets lose
under the current AMT. The chemical industry has 9\1/2\ years to
depreciate under the AMT, as opposed to 5 years under the regular tax.
And for paper, they have 13 years to depreciate under the AMT, as
opposed to 7 years under the regular tax. We need to fix the AMT so
that industries with very high capital costs which they cannot recover
for years are not put at such a disadvantage.

Today's AMT discourages investment in new plants and equipment, while
under our regular tax system depreciation investments are encouraged.
The need to improve our tax system to make it fairer to capital
intensive industries is clear--fixing the AMT is one way to do that.
U.S. companies have to be able to compete in an increasingly
competitive global market--that's almost an adage. It's what our trade
laws and agreements seek to ensure. We'll never be able to sufficiently
promote U.S. exports if we don't being to equalize the effects of our
tax laws on American companies as well.
This bill would eliminate depreciation as an adjustment under AMT--
treating AMT taxpayers the same as those companies that pay under our
regular tax system. It would also allow tax payers who have not used
their accumulated minimum tax credits which are at least 5 years old to
use those credits to offset up to 50 percent of their current year AMT
liability--with a provision to ensure that taxpayers could not reduce
their current payment below their regular tax liability for that year.
AMT has become the standard method of tax payment for many of our
Nation's capital intensive industries and it is not working the way
Congress initially intended. It's time to fix it.
The bill Senator Nickles and I submit for your consideration today
will fix the AMT so it works the way I believe Congress originally
intended. It will have the consequence of improving the competitiveness
of American business. It is time to stop talking about AMT and do
something that figures out how to address this real problem. I urge my
colleagues to cosponsor this legislation and work with me and my
Finance Committee colleagues to find a way to act on this important
issue in this year's budget bill.<bullet>
______

By Mr. CAMPBELL:
S. 725. A bill to direct the Secretary of the Interior to convey the
Collbran Reclamation Project to the Ute Water Conservancy District and
the Collbran Conservancy District; to the Committee on Energy and
Natural Resources.

the collbran project unit conveyance act

<bullet> Mr. CAMPBELL. Mr. President, today I reintroduce legislation
to transfer the Collbran project from the Federal Government back to
the people it serves. The bill is designed with only one goal in mind,
to guarantee the growing population in the Grand Valley of Colorado a
supply of water that they have relied on for the last 30 years.
At the same time, this legislation will be a model for transitioning
the Federal Government out of the daily operations of facilities where
its useful participation has ceased. This transfer will also be an
important and symbolic step in downsizing the Federal Government,
returning power to the States and localities, while contributing to our
continuing efforts to balance the Federal budget.
The Western slope of Colorado, like the rest of the Colorado Plateau,
has a unique blend of rich natural resources and beautiful scenery.
This fortunate combination attracts and sustains a strong economy of
both industry and tourism. Much of this booming economic development
and recreational opportunities would not exist if not for the water and
electricity provided by the various Federal reclamation projects in the
West. These projects were authorized in the Federal Reclamation Act in
1902 by a visionary Congress which saw the need and importance of water
projects to the development of the West. Without such projects, there
would be virtually no farming, mining, or ranching and little tourism.
It is appropriate for the Federal Government to shed the Collbran
project at this time because the goals of the project have been met.
The project, completed in 1964, provides a reliable supply of
irrigation water to the users on the arid west slope of Colorado. This
project is the main water supplier for a growing population in the
Grand Valley, currently serving over 55,000 people. It also provides
electric power to the grid that serves several Western States.
It is also time now to transfer the Collbran project because, as the
Bureau of Reclamation has acknowledged, due to unanticipated
circumstances this project has been a net-cash drain on the Treasury.
The Ute Water Conservancy District, the public entity that will
purchase the project, will pay the remaining debt on the project,
reimbursing the Government completely, returning over $12 million to
the Federal Treasury. It is time for the Government to stand aside.
Let me stress that this transfer will not in any way jeopardize any
of the recreation opportunities available in Vega Reservoir and related
Collbran project reservoirs. In fact, this legislation will transfer
the Vega Reservoir from the Federal Government to the State of
Colorado, ensuring continued recreation opportunities there. This bill
also preserves all water and power operations of the existing Collbran
project.
I also want to emphasize that we have striven to accommodate
environmental groups' concerns. Although there is no reason to think
that a mere transfer of ownership, without affecting the operations,
should require the water district to perform an environmental impact
statement under the National Environmental Policy Act, I have
accommodated the environmental community's requests and eliminated any
reference to NEPA. In this way, I have ensured that the transfer will
fully comply with all environmental laws.
Finally, as a symbol of the Ute Water Conservancy's good faith, this
bill explicitly requires that the conservancy district contributes
$600,000 to the Colorado River Endangered Fish Recovery Program and
that the project itself will remain subject to future ESA-related
obligations that could be imposed on similar projects.
Again, the object of this legislation is merely to ensure a reliable
supply of quality water for the residents of the Grand Valley who have
depended upon this supply for the last 30 years. This bill proposes a
fiscally and environmentally sound and sensible transfer of an existing
Federal project to the people it serves.
I look forward to working with all interested parties as this bill
proceeds. I urge my colleagues to join me and support this bill.
Thank you, Mr. President. I ask unanimous consent that the bill be
printed in the Record.

[[Page S4239]]

There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 725

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 ``Collbran Project Unit
Conveyance Act''.

SEC. 2. DEFINITIONS.

In this Act:
(1) District.--The term ``District'' means the Ute Water
Conservancy District and the Collbran Conservancy District
(including their successors and assigns), which are political
subdivisions of the State of Colorado.
(2) Federal reclamation laws.--The term ``Federal
reclamation laws'' means the Act of June 17, 1902, and Acts
amendatory thereof or supplementary thereto (32 Stat. 388,
chapter 1093; 43 U.S.C. 371 et seq.) (including regulations
adopted under those Acts).
(3) Project.--The term ``project'' means the Collbran
Reclamation project, as constructed and operated under the
Act of July 3, 1952 (66 Stat. 325, chapter 565), including
all property, equipment, and assets of or relating to the
project that are owned by the United States, including--
(A) Vega Dam and Reservoir (but not including the Vega
Recreation Facilities);
(B) Leon-Park dams and feeder canal;
(C) Southside Canal;
(D) East Fork diversion dam and feeder canal;
(E) Bonham-Cottonwood pipeline;
(F) Snowcat shed and diesel storage;
(G) Upper Molina penstock and power plant;
(H) Lower Molina penstock and power plant;
(I) the diversion structure in the tailrace of the Lower
Molina power plant;
(J) all substations and switchyards;
(K) a nonexclusive easement for the use of existing
easements or rights-of-way owned by the United States on or
across non-Federal land that are necessary for access to
project facilities;
(L) title to land reasonably necessary for all project
facilities (except land described in subparagraph (K) or
paragraph (1) or (2) of section 3(a));
(M) all permits and contract rights held by the Bureau of
Reclamation, including contract or other rights relating to
the operation, use, maintenance, repair, or replacement of
the water storage reservoirs located on the Grand Mesa that
are operated as part of the project;
(N) all equipment, parts inventories, and tools;
(O) all additions, replacements, betterments, and
appurtenances to any of the land, interests in land, or
facilities described in subparagraphs (A) through (N); and
(P) a copy of all data, plans, designs, reports, records,
or other materials, whether in writing or in any form of
electronic storage, relating specifically to the project.
(4) Vega recreation facilities.--The term ``Vega Recreation
Facilities'' includes--
(A) buildings, campgrounds, picnic areas, parking lots,
fences, boat docks and ramps, electrical lines, water and
sewer systems, trash and toilet facilities, roads and trails,
and other structures and equipment used for State park
purposes (such as recreation, maintenance, and daily and
overnight visitor use), at and near Vega Reservoir;
(B) lands above the high water level of Vega Reservoir
within the area previously defined by the Secretary as the
``Reservoir Area Boundary'' that have not historically been
utilized for Collbran project water storage and delivery
facilities, together with an easement for public access for
recreational purposes to Vega Reservoir and the water surface
of Vega Reservoir and for construction, operation,
maintenance, and replacement of facilities for recreational
purposes below the high water line; and
(C) improvements constructed or added under the agreements
referred to in section 3(f).
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.

SEC. 3. CONVEYANCE.

(a) In General.--
(1) Conveyance to districts.--
(A) In general.--On or before the date that is 1 year after
the date of enactment of this Act, the Secretary shall convey
to the Districts all right, title, and interest of the United
States in and to the project by quitclaim deed and bill of
sale, without warranties, subject only to the requirements of
this Act.
(B) Action pending conveyance.--Until the conveyance under
subparagraph (A) occurs, the Director of the Bureau of
Reclamation shall continue to exercise the responsibility to
provide for the operation, maintenance, repair, and
replacement of project facilities and the storage reservoirs
on the Grand Mesa to the extent that the responsibility is
the responsibility of the Bureau of Reclamation and has not
been delegated to the Districts before the date of enactment
of this Act or is delegated or transferred to the Districts
by agreement after that date, so that at the time of the
conveyance the facilities are in the same condition as, or
better condition than, the condition of the facilities on the
date of enactment of this Act.
(2) Easements on national forest system lands.--
(A) In general.--On or before the date that is 1 year after
the date of enactment of this Act, the Secretary of
Agriculture shall grant, subject only to the requirements of
this section--
(i) a nonexclusive easement on and across National Forest
System land to the Districts for ingress and egress on access
routes in existence on the date of enactment of this Act to
each component of the project and storage reservoir on the
Grand Mesa in existence on the date of enactment of this Act
that is operated as part of the project;
(ii) a nonexclusive easement on National Forest System land
for the operation, use, maintenance, repair, and replacement
(but not enlargement) of the storage reservoirs on the Grand
Mesa in existence on the date of enactment of this Act to the
owners and operators of the reservoirs that are operated as a
part of the project; and
(iii) a nonexclusive easement to the Districts for the
operation, use, maintenance, repair, and replacement (but not
enlargement) of the components of project facilities that are
located on National Forest System land, subject to the
requirement that the Districts shall provide reasonable
notice to and the opportunity for consultation with the
designated representative of the Secretary of Agriculture for
nonroutine, nonemergency activities that occur on the
easements.
(B) Exercise of easement.--The easement under subparagraph
(A)(ii) may be exercised if the land use authorizations for
the storage reservoirs described in subparagraph (A)(ii) are
restricted, terminated, relinquished, or abandoned, and the
easement shall not be subject to conditions or requirements
that interfere with or limit the use of the reservoirs for
water supply or power purposes.
(3) Easements to districts for southside canal.--On or
before the date that is 1 year after the date of enactment of
this Act, the Secretary shall grant to the Districts, subject
only to the requirements of this section--
(A) a nonexclusive easement on and across land administered
by agencies within the Department of the Interior for ingress
and egress on access routes to and along the Southside Canal
in existence on the date of enactment of this Act; and
(B) a nonexclusive easement for the operation, use,
maintenance, repair, and replacement of the Southside Canal,
subject to the requirement that the Districts shall provide
reasonable notice to and the opportunity for consultation
with the designated representative of the Secretary for
nonroutine, nonemergency activities that occur on the
easements.
(b) Reservation.--
(1) In general.--The conveyance of easements under
subsection (a) shall reserve to the United States all
minerals (including hydrocarbons) and a perpetual right of
public access over, across, under, and to the portions of the
project that on the date of enactment of this Act were open
to public use for fishing, boating, hunting, and other
outdoor recreation purposes and other public uses such as
grazing, mineral development, and logging.
(2) Recreational activities.--The United States may allow
for continued public use and enjoyment of such portions of
the project for recreational activities and other public uses
as are conducted as of the date of enactment of this Act.
(c) Conveyance to State of Colorado.--All right, title, and
interest in the Vega Recreation Facilities shall remain in
the United States until the terms of the agreements referred
to in subsection (f) have been fulfilled by the United
States, at which time all right, title, and interest in the
Vega Recreation Facilities shall be conveyed by the Secretary
to the State of Colorado, Division of Parks and Outdoor
Recreation.
(d) Payment.--
(1) In general.--At the time of the conveyance under
subsection (a)(1), the Districts shall pay to the United
States $12,900,000 ($12,300,000 of which represents the net
present value of the outstanding repayment obligations for
the project), of which--
(A) $12,300,000 shall be deposited in the general fund of
the Treasury of the United States; and
(B) $600,000 shall be deposited in a special account in the
Treasury of the United States and shall be available to the
United States Fish and Wildlife Service, Region 6, without
further Act of appropriation, for use in funding Colorado
operations and capital expenditures associated with the Grand
Valley Water Management Project for the purpose of recovering
endangered fish in the Upper Colorado River Basin, as
identified in the Recovery Implementation Program for
Endangered Fish Species in the Upper Colorado River Basin, or
such other component of the Recovery Implementation Program
within Colorado as may be selected with the concurrence of
the Governor of the State of Colorado.
(2) Source of funds.--Funds for the payment to the extent
of the amount specified in paragraph (1) shall not be derived
from the issuance or sale, prior to the conveyance, of State
or local bonds the interest on which is exempt from taxation
under section 103 of the Internal Revenue Code of 1986.
(e) Operation of Project.--
(1) In general.--
(A) Declaration.--The project was authorized and
constructed under the Act of July 3, 1952 (66 Stat. 325,
chapter 565) for the purpose of placing water to beneficial
use for authorized purposes within the State of Colorado.

[[Page S4240]]

(B) Operation.--The project shall be operated and used by
the Districts for a period of 40 years after the date of
enactment of this Act for the purpose for which the project
was authorized.
(C) Changes in operation.--The Districts shall attempt, to
the extent practicable, taking into consideration historic
project operations, to notify the State of Colorado of
changes in historic project operations which may adversely
affect State park operations.
(2) Requirements.--During the 40-year period described in
paragraph (1)(B)--
(A) the Districts shall annually submit to the Secretary of
Agriculture and the Colorado Department of Natural Resources
a plan for operation of the project, which plan shall--
(i) report on project operations for the previous year;
(ii) provide a description of the manner of project
operations anticipated for the forthcoming year, which shall
be prepared after consultation with the designated
representatives of the Secretary of Agriculture, the Board of
County Commissioners of Mesa County, Colorado, and the
Colorado Department of Natural Resources; and
(iii) certify that the Districts have operated and will
operate and maintain the project facilities in accordance
with sound engineering practices; and
(B) subject to section 4, all electric power generated by
operation of the project shall be made available to and be
marketed by the Western Area Power Administration.
(f) Agreements.--Conveyance of the project shall be subject
to the agreements between the United States and the State of
Colorado dated August 22, 1994, and September 23, 1994,
relating to the construction and operation of recreational
facilities at Vega Reservoir, which agreements shall continue
to be performed by the parties to the agreements according to
the terms of the agreements.

SEC. 4. OPERATION OF THE POWER COMPONENT.

(a) Conformity to Historic Operations.--The power component
and facilities of the project shall be operated in
substantial conformity with the historic operations of the
power component and facilities (including recent operations
in a peaking mode).
(b) Power Marketing.--
(1) Existing marketing arrangement.--The post-1989
marketing criteria, which provide for the marketing of power
generated by the power component of the project as part of
the output of the Salt Lake City area integrated projects,
shall no longer be binding on the project upon conveyance of
the project under section 3(a).
(2) After termination of existing marketing arrangement.--
(A) In general.--
(i) First offer.--After the conveyance under section 3(a),
the Districts shall offer all power produced by the power
component of the project to the Western Area Power
Administration or its successors or assigns (referred to in
this paragraph as ``Western''), which, in consultation with
its affected preference customers, shall have the first right
to purchase such power at the rates established under
subparagraph (B).
(ii) Second offer.--If Western declines to purchase the
power after consultation with its affected preference
customers, the power shall be offered at the same rates first
to Western's preference customers located in the Salt Lake
City area integrated projects marketing area (referred to in
this paragraph as the ``SLCAIP preference customers'').
(iii) Other offers.--After offers have been made under
clauses (i) and (ii), power may be sold to any other party,
but no such sale may occur at a rate less than a rate
established under subparagraph (B) unless the power is
offered at the lesser rate first to Western and second to the
SLCAIP preference customers.
(B) Rate.--The rate for power initially offered to Western
and the SLCAIP preference customers under this paragraph
shall not exceed that required to produce revenues sufficient
to provide for--
(i) annual debt service or recoupment of the cost of
capital for the amount specified in section 3(d)(1)(A) less
the sum of $310,000 (which is the net present value of the
outstanding repayment obligation of the Collbran Conservancy
District); and
(ii) the cost of operation, maintenance, and replacement of
the power component of the project.
(C) Determination of costs and rate.--Costs and a rate
under subparagraph (B) shall be determined in a manner that
is consistent with the principles followed, as of the date of
enactment of this Act, by the Secretary and by Western in its
annual power and repayment study.

SEC. 5. LICENSE.

(a) In General.--Before conveyance of the project to the
Districts, the Federal Energy Regulatory Commission shall
issue to the Districts a license or licenses as appropriate
under part I of the Federal Power Act (16 U.S.C. 791 et seq.)
authorizing for a term of 40 years the continued operation
and maintenance of the power component of the project.
(b) Terms of License.--
(1) In general.--The license under subsection (a)--
(A) shall be for the purpose of operating, using,
maintaining, repairing, and replacing the power component of
the project as authorized by the Act of July 3, 1952 (66
Stat. 325, chapter 565);
(B) shall be subject to the condition that the power
component of the project continue to be operated and
maintained in accordance with the authorized purposes of the
project; and
(C) shall be subject to part I of the Federal Power Act (16
U.S.C. 791 et seq.) except as stated in paragraph (2).
(2) Laws not applicable.--
(A) Federal power act.--
(i) In general.--The license under subsection (a) shall not
be subject to the following provisions of the Federal Power
Act: the 4 provisos of section 4(e) (16 U.S.C. 797(e));
section 6 (16 U.S.C. 799) to the extent that the section
requires acceptance by a licensee of terms and conditions of
the Act that this subsection waives; subsection (e) (insofar
as the subsection concerns annual charges for the use and
occupancy of Federal lands and facilities), (f), or (j) of
section 10 (16 U.S.C. 803); section 18 (16 U.S.C. 811);
section 19 (16 U.S.C. 812); section 20 (16 U.S.C. 813); or
section 22 (16 U.S.C. 815).
(ii) Not a government dam.--Notwithstanding that any dam
under the license under subsection (a) may have been
constructed by the United States for Government purposes, the
dam shall not be considered to be a Government dam, as that
term is defined in section 3 of the Federal Power Act (16
U.S.C. 796).
(iii) Standard form license conditions.--The license under
subsection (a) shall not be subject to the standard ``L-
Form'' license conditions published at 54 FPC 1792-1928
(1975).
(B) Other laws.--The license under subsection (a) shall not
be subject to--
(i) the Federal Land Policy and Management Act of 1976 (43
U.S.C. 1701 et seq.);
(ii) section 2402 of the Energy Policy Act of 1992 (16
U.S.C. 797c);
(iii) the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.);
(iv) the Endangered Species Act of 1973 (16 U.S.C. 1531 et
seq.);
(v) the Wild and Scenic Rivers Act (16 U.S.C. 1271 et
seq.);
(vi) the Federal Water Pollution Control Act (commonly
known as the ``Clean Water Act'') (33 U.S.C. 1251 et seq.);
(vii) the National Historic Preservation Act (16 U.S.C. 470
et seq.);
(viii) the Coastal Zone Management Act of 1972 (16 U.S.C.
1451 et seq.);
(ix) the Fish and Wildlife Coordination Act (16 U.S.C. 661
et seq.); or
(x) any other Act otherwise applicable to the licensing of
the project.
(3) Laws enacted after issuance of license.--The operation
of the project shall be subject to all applicable State and
Federal laws enacted after the date of issuance of the
license under subsection (a).
(c) Licensing Standards.--The license under subsection (a)
is deemed to meet all licensing standards of the Federal
Power Act (16 U.S.C. 791 et seq.).
(d) Power Site Reservation.--Any power site reservation
established under section 24 of the Federal Power Act (16
U.S.C. 818) or any other law that exists on any land, whether
federally or privately owned, that is included within the
boundaries of the project shall be vacated by operation of
law on issuance of the license for the project.
(e) Expiration of License.--All requirements of part I of
the Federal Power Act (16 U.S.C. 791 et seq.) and of any
other Act applicable to the licensing of a hydroelectric
project shall apply to the project on expiration of the
license issued under this section.

SEC. 6. INAPPLICABILITY OF PRIOR AGREEMENTS AND OF FEDERAL
RECLAMATION LAWS.

On conveyance of the project to the Districts--
(1) the repayment contract dated May 27, 1957, as amended
April 12, 1962, between the Collbran Conservancy District and
the United States, and the contract for use of project
facilities for diversion of water dated January 11, 1962, as
amended November 10, 1977, between the Ute Water Conservancy
District and the United States, shall be terminated and of no
further force or effect; and
(2) the project shall no longer be subject to or governed
by the Federal reclamation laws.

SEC. 7. LIABILITY OF THE DISTRICTS.

The Districts shall be liable, to the extent allowed under
State law, for all acts or omissions relating to the
operation and use of the project by the Districts that occur
subsequent to the conveyance under section 3(a), including
damage to any Federal land or facility that results from the
failure of a project facility.

SEC. 8. EFFECT ON STATE LAW.

Nothing in this Act impairs the effectiveness of any State
or local law (including a regulation) relating to land use.

SEC. 9. TREATMENT OF SALES FOR PURPOSES OF CERTAIN LAWS.

The sales of assets under this subchapter shall not be
considered to be a disposal of Federal surplus property
under--
(1) section 203 of the Federal Property and Administrative
Services Act of 1949 (40 U.S.C. 484); or
(2) section 13 of the Surplus Property Act of 1944 (50
U.S.C. App. 1622).<bullet>
______

By Mrs. FEINSTEIN (for herself, Mr. Graham, Mrs. Boxer, Ms.
Snowe, Mr. Reid, Mr. Johnson, Ms. Moseley-Braun, Ms. Landrieu,
Mr. Harkin, Mr. D'Amato, Mr. Specter, Mrs. Murray, and Mr.
Mack):
S. 726. A bill to allow postal patrons to contribute to funding for
breast cancer research through the voluntary

[[Page S4241]]

purchase of certain specially issued United States postage stamps; to
the Committee on Governmental Affairs.

the breast cancer research stamp act

<bullet> Mrs. FEINSTEIN. Mr. President, I, along with Senators Boxer,
Graham, Snowe, Moseley-Braun, Landrieu, Harkin, Specter, D'Amato, Mack,
Johnson, Reid, and Murray would like to introduce the Breast Cancer
Research Stamp Act.
In a time of shrinking budgets and resources for breast cancer
research, this legislation would provide an innovative way to provide
additional funding for breast cancer research.
This bill would: authorize the U.S. Postal Service to issue an
optional special first class stamp to be priced at 1 cent above the
cost of normal first-class postage; earmark a penny of every stamp for
breast cancer research; provide administrative costs from the revenues
for post office expenses; allow 100 percent of the proceeds from the
stamp to fund HHS breast cancer research projects; clarify current law,
in that any similar stamp would require an act of Congress to be issued
in the future.
If only 10 percent of all first class mail used this optional 33 cent
stamp, $60 million could be raised for breast cancer research annually.
There is wide support for this legislation. Congressman Fazio, along
with over 100 cosponsors have already introduced the companion bill
(H.R. 407) in the House.
The breast cancer epidemic has been called this Nation's best kept
secret. There are 2.6 million women in America today with breast
cancer, one million of whom have yet to be diagnosed with the disease.
In 1996, an estimated 184,000 were diagnosed with breast cancer. It
is the number one killer of women ages 40 to 44 and the leading cause
of cancer death in women ages 15 to 54, claiming a woman's life every
12 minutes in this country (source: National Breast Cancer Coalition).
For California, 17,100 women were diagnosed with breast cancer and
4,100 women will die from the disease (source: American Cancer Society
cancer facts and figures, 1996).
In addition to the cost of women's lives, the annual cost of
treatment of breast cancer in the United States is approximately $10
billion.
Over the last 25 years, the National Institutes of Health has spent
over $31.5 billion on cancer research--$2 billion of that on breast
cancer. In the last 6 years alone, appropriations for breast cancer
research have risen from $90 million in 1990 to $600 million today.
That's the good news.
But, the bad news is that the national commitment to cancer research
overall has been hamstrung since 1980. Currently, NIH is able to fund
only 23 percent of applications received by all the institutes. For the
Cancer Institute, only 23 percent can be funded--a significant drop
from the 60 percent of applications funded in the 1970's.
Most alarming is the rapidly diminishing grant funding available for
new researcher applicants.
In real numbers, the National Cancer Institute will fund
approximately 3,600 research projects, of which about 1,000 are new,
previously unfunded activities. For investigator-initiated research,
only 600 out of 1,900 research projects will be new.
The United States is privileged to have some of the most talented
scientists and many of the leading cancer research centers in the world
such as UCLA, UC San Francisco, Memorial Sloan-Kettering, and the M.D.
Anderson.
This lack of increase in funding is starving some of the most
important research, because scientists will have to look elsewhere for
their livelihood.
The U.S. must increase the research funds if these scientists and
institutions are to continue to contribute their vast talents to the
war on cancer and finding a cure.
What is clear is that there is a direct correlation between increase
in research funding and the likelihood of finding a cure.
Cancer mortality has declined by 15 percent from 1950 to 1992 due to
increases in cancer research funding. In fact, federally-funded cancer
research has yielded vast amounts of knowledge about the disease--
information which is guiding our efforts to improve treatment and
search for a cure. We have more knowledge and improvements in
prevention through: identification of a ``cancer gene'', use of
mammographies, clinical exams, and encouragement of self breast exams.
Yet there is still no cure.
The Bay Area has one of the highest rates of breast cancer incidence
and mortality in the world. According to data given to my staff by the
Northern California Cancer Center, Bay Area white women have the
highest reported breast cancer rate in the world, 104 per 100,000
population. Bay Area African-American women have the fourth highest
reported rate in the world at 82 per 100,000 (source: Northern
California Cancer Center).
I want to recognize Dr. Balazs (Ernie) Bodai who suggested this
innovative funding approach. Dr. Bodai is the Chief of the Surgery
Department at the Kaiser Permanente Medical Group in Sacramento,
California. He is the founder of Cure Cancer Now, which is a nonprofit
organization committed to developing a funding source for breast cancer
research.
This legislation is supported by the American Cancer Society,
American Medical Association, American Hospital Association,
Association of Operating Room Nurses, California Health Collaborative
Foundations, YWCA-Encore Plus, the Sacramento City Council and Mayor
Joe Serna, Siskiyou County Board of Supervisors, Sutter County Board of
Supervisors, Nevada County Board of Supervisors, Yuba City Council,
California State Senator Diane Watson and California State
Assemblywoman Dede Alpert as well as the Public Employees Union, San
Joaquin Public Employees Association, and Sutter and Yuba County
Employees Association and many more on the attached list.
Given the intense competition for Federal research funds in a climate
of shrinking budgets, the Breast Cancer Research Stamp Act would allow
anyone who uses the postal service to contribute in finding a cure for
the breast cancer epidemic.
In a sense, this particular proposal is a pilot. I recognize that the
postal service may oppose this since it hasn't been done before. I also
recognize that in a day of diminishing federal resources, this
innovation is an idea whose time has come.
It will make money for the post office and for breast cancer
research. No one is forced to buy it, but women's organizations may
even wish to sell the stamps in a fundraising effort.
The administrative costs can be handled with the 1 cent added on to
the cost of a first class stamp and conservatively it can make from $60
million per year for breast cancer research.
We need to find a cure for breast cancer and I believe the Breast
Cancer Research Stamp Act is an innovative response to the hidden
epidemic among women. I urge my colleagues to support this important
legislation.
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. 726

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

SECITON 1. SHORT TITLE.

This Act may be cited as the ``Breast-Cancer Research Stamp
Act''.

SEC. 2. SPECIAL POSTAGE STAMPS.

(a) In General.--In order to afford the public a convenient
way to contribute to funding for breast-cancer research, the
United States Postal Service shall establish a special rate
of postage for first-class mail under this section.
(b) Higher Rate.--The rate of postage established under
this section--
(1) shall be 1 cent higher than the rate that would
otherwise apply;
(2) may be established without regard to any procedures
under chapter 36 of title 39, United States Code, and
notwithstanding any other provision of law; and
(3) shall be offered as an alternative to the rate that
would otherwise apply.
The use of the rate of postage established under this
section shall be voluntary on the part of postal patrons.
(c) Use of Funds.--
(1) In general.--
(A) Payments.--The amounts attributable to the 1-cent
differential established under this Act shall be paid by the
United States Postal Service to the Department of Health and
Human Services.
(B) Use.--Amounts paid under subparagraph (A) shall be used
for breast-cancer research and related activities to carry
out the purposes of this Act.

[[Page S4242]]

(C) Frequency of payments.--Payments under subparagraph (A)
shall be paid to the Department of Health and Human Services
no less than twice in each calendar year.
(2) Amounts attributable to the 1-cent differential.--For
purposes of this subsection, the term ``amounts attributable
to the 1-cent differential established under this Act''
means, as determined by the United States Postal Service
under regulations that it shall prescribe--
(A) the total amount of revenues received by the United
States Postal Service that it would not have received but for
the enactment of this Act, reduced by
(B) an amount sufficient to cover reasonable administrative
and other costs of the United States Postal Service
attributable to carrying out this Act.
(d) Special Postage Stamps.--The United States Postal
Service may provide for the design and sale of special
postage stamps to carry out this Act.
(c) Sense of Congress.--It is the sense of the Congress
that--
(1) nothing in this Act should directly or indirectly cause
a net decrease in total funds received by the Department of
Health and Human Services or any other agency or
instrumentality of the Government (or any component or other
aspect thereof) below the level that would otherwise have
been anticipated absent this Act; and
(2) nothing in this Act should affect regular first-class
rates or any other regular rate of postage.

SEC. 3. ANNUAL REPORTS.

The Postmaster General shall include in each annual report
rendered under section 2402 of title 39, United States Code,
information concerning the operation of this Act.
____

Original Cosponsors

Tony Hall (OH)--original.
Charles Norwood (GA)--original.
Lynn Woolsey (CA)--original.
George Brown (CA).
Tom Barrett (WI).
Carrie Meek (FL).
Nancy Pelosi (CA).
Bernie Sanders (VT).
Robert Matsui (CA).
Corrine Brown (FL).
Eni Faleomavaega (AS).
Barney Frank (MA).
Tom Lantos (CA).
Gene Green (TX).
Lynn Rivers (MI).
Sheila Jackson-Lee (TX).
Gary Condit (CA).
Jose Serrano (NY).
Zoe Lofgren (CA).
Sam Farr (CA).
Carolyn Maloney (NY).
Bob Filner (CA).
Connie Morella (MD).
Martin Frost (TX).
Mike McNulty (NY).
Loretta Sanchez (CA).
Tom Coburn (OK).
John Dingell (MI).
Mel Watt (NC).
Sherrod Brown (OH).
Pete Stark (CA).
Anna Eshoo (CA).
John Olver (MA).
Paul McHale (PA).
Susan Molinari (NY).
Eleanor Holmes-Norton (DC).
Gary Ackerman (NY).
Jerry Lewis (CA).
Louise Slaughter (NY).
Frank Lobiando (NJ).
Kay Granger (TX).
Sam Gejdenson (CT).
Henry Gonzalez (TX).
Floyd Flake (NY).
Danny K. Davis (IL).
Elizabeth Furse (OR).
Eddie Bernice Johnson (TX).
Major Owens (NY).
William Jefferson (LA).
Thomas Foglietta (PA).
Ed Pastor (AZ).
John Ensign (NV).
John Tierney (MA).
Ron Packard (CA).
Ellen Tauscher (CA).
Rosa DeLauro (CT).
Brian Bilbray (CA).
Barbara Kennelly (CT).
Scott Klug (WI).
James McGovern (MA).
John Conyers (MI).
Carolyn Kilpatrick (MI).
J.D. Hayworth (AZ).
Gerald Kleczka (WI).
Robert Wexler (FL).
Richard Neal (MA).
Sue Kelly (NY).
John Doolittle (CA).
George Miller (CA).
Donna Christian-Green (Virgin Islands).
David Camp (MI).
Martin Meehan (MA).
Carlos Romero-Barcello (PR).
David Minge (MN).
Sonny Callahan (AL).
Peter Deutsch (FL).
John Baldacci (ME).
Harold Ford (TN).
Cynthia McKinney (GA).
Charlie Rangel (NY).
Nick Lampson (TX).
Richard Burr (NC).
Jim McDermott (WA).
Earl Hilliard (AL).
David Bonior (MI).
Frank Pallone (NJ).
88 as of 4/23/97.
____

Supporters of H.R. 407

American Association of Health Education.
American Association of Critical-Care Nurses.
American Cancer Society--National.
American College of Surgeons.
American Medical Association.
American Medical Student Association.
American Society of Anesthesiologists.
American Society of Clinical Pathologists.
American Society of Internal Medicine.
American Society of Plastic and Reconstructive Surgeons.
Association of Operating Room Nurses.
California Health Collaboration Foundations.
California Medical Association.
California Nurses Association.
California Schools Employees Association.
California State.
Committee for Freedom of Choice in Medicine, Inc.
Emergency Nurses Association.
Health Education Council.
Kaiser Permanente--Sacramento.
Louisiana Breast Cancer Task Force.
Merced County Board of Supervisors.
National Cancer Registrars Association.
National Lymphedema Network.
National Osteoporosis Foundation.
Nevada County Board of Supervisors.
ONE-California, organization of nurse leaders.
Public Employees Union--Local One.
Sacramento Area Mammography Society.
Sacramento City Council.
Sacramento-El Dorado Medical Society.
San Joaquin Public Employees Association.
Santa Cruz County Board of Supervisors.
Save Ourselves-Y-Me.
Sonoma County Board of Supervisors.
Sutter County Board of Supervisors.
The Breast Cancer Fund.
United Farm Workers of America AFL-CIO.
Vital Options TeleSupport Cancer Network.
WIN Against Breast Cancer.
YWCA-ENCORE.
Hadassah The Women's Zionist Organization of America, Inc.
Foundation Health Corporation.
American Association of Health Plans.
American College of Osteopathic Surgeons.
Association of Reproductive Health Professionals.<bullet>
______

By Mrs. FEINSTEIN (for herself, Ms. Mikulski, Mr. Wellstone, Mr.
Johnson, and Mrs. Murray):

S. 727. A bil to amend the Public Health Service Act and Employee
Retirement Income Security Act of 1974 to require that group and
individual health insurance coverage and group health plans provide
coverage for annual screening mammography for women 40 years of age or
older if the coverage or plans include coverage for diagnostic
mammography; to the Committee on Finance.

PRIVATE INSURANCE UNIFORM COVERAGE OF MAMMOGRAPHY LEGISLATION

<bullet> Mrs. FEINSTEIN. Mr. President, I am introducing a bill today
to try to bring some uniform coverage of mammography to private
insurance, Medicare and Medicaid, consistent with the American Cancer
Society and the National Cancer Institute guidelines. Joining me as
cosponsors are Senators Mikulski, Wellstone and Johnson.
I am introducing this bill because I believe mammography is our best
tool for finding breast cancer early and women will not get mammograms
without good insurance coverage. We now have the two leading
organizations, the American Cancer Society and the National Cancer
Institute, agreeing on screening guidelines and we cannot assume that
insurance companies will rush to follow those guidelines. In the
current highly competitive climate of managed care, with plans and
providers reducing services and benefits, with employers cutting back
on coverage, only congressional action will guarantee women the health
care they need, especially preventive services like this.

Breast Cancer's Toll

Breast cancer is the most common cancer among women, after skin
cancer. In 1996, 184,300 new cases were diagnosed and 44,300 women
died. Breast cancer is the second leading cause of cancer deaths among
women, after lung cancer. Breast cancer is the leading cause of cancer
death in women between ages 40 and 55.
Most women diagnosed with breast cancer are over age 50. For women
age 40 to 44, the incidence rate is 125.4 per 100,000 women; for women
ages 50 to 54, it jumps to 232.7 per 100,000.

Early Detection Saves Lives

The sooner breast cancer is detected, the better the survival rate.
If breast cancer is diagnosed when it is local--

[[Page S4243]]

confined to the breast--the 5-year survival rate is 96 percent. If
diagnosed later, when cancer has metastasized, the survival rate is 20
percent.
Regularly scheduled mammography screening offers the single best
method of finding breast cancer early. Mammograms, while never
absolutely certain, can detect cancer several years before physical
symptoms are obvious to a women or her doctor. Mammography has a
sensitivity that is 76-94 percent higher than that of a clinical breast
exam. Its ability to find an absence of cancer is greater than 90
percent. For women over 50, mammography can reduce breast cancer
mortality by at least 30 percent.
Earlier this year, the National Cancer Institute recommended that
asymtomatic women in their 40s have a screening mammogram every one to
two years. The American Cancer Society recommends that all women over
age 40 should have annual screening mammograms.
A February 1997 CBS poll found that 71 percent of women think early
detection of breast cancer significantly increases a woman's chances of
surviving. 85 percent believe mammograms are safe and 88 percent trust
the accuracy of mamograms. Between 1987 and 1992, the National Health
Interview survey found that there was at least a two-fold increase in
the percentage of women of all ages who had a recent mammogram.

Compliance with Guidelines Low

So women by and large understand the need for mammograms. However, a
study by the Centers for Disease Control found that only 41 percent of
women age 40 to 49 reported having a recent mammogram. Only half of
women aged 50 to 64 had a recent mammogram. And only 39 percent of
women over age 65 reported a recent mammogram.

Lack of Insurance a Deterrent

So the question is, if women understand the importance of mammograms,
why is adherence to the guidelines so low? The CDC study said, ``Health
insurance coverage and educational attainment were both strongly
associated with [mammograms] for women 40-49 years of age.''
A survey by the Jacob Institute of Women's Health likewise found that
56 percent of women in their 40's and 47 percent of women in the 50's
were meeting the ACS screening guideline. After lack of a family
history, the cost of a mammogram was the principal reason for not
having a mammogram.
The lack of insurance coverage, the CDC study found, is an important
factor in determining which women follow the recommended guidelines.
Among commercially insured women, more than half were following the
guidelines. However, for women in government insurance programs,
between 58 percent and 66 percent were not following the guidelines.
For women with no insurance of any kind, 84 percent were not in
compliance with the guidelines.
The cost of a mammogram also varies widely, depending on the
radiologist's technique, the location, the interpretation needed. One
unofficial estimate of cost is that a mammogram ranges from $75.00 to
$200.00 per visit. A $200 medical charge is not something most
Americans want to bear out of pocket. They expect their insurance plan
to cover medically necessary services.

Coverage Varies Widely

Commercial insurance coverage for mammograms varies widely, differing
in terms of the age of the covered person and frequency of the service.
Many plans follow the American Cancer Society's guidelines, but this is
not documented. At least 38 states have mandated some type of coverage
for commercial plans, but again the details vary. Medicare covers
mammograms every other year. Federal law does not require Medicaid to
have specific coverage. A 1993 Alan Guttmacher study attempting to
describe coverages of commercial health insurance coverage of
reproductive services is aptly titled ``Uneven & Unequal.'' So in
summary, insurance coverage is ``all over the map.''

The Bill

The bill addresses private commercial group and individual insurance
plans, Medicare and Medicaid. It would--
Require private plans that cover diagnostic mammograms for women
under 40 to also cover annual screening mammography.
Require Medicare and Medicaid to cover annual screening mammography
for women over age 40. (Medicare now covers biannual screening. Federal
law does not require State Medicaid programs to cover mammography for
any age and State approaches vary widely.)
Prohibits plans from denying coverage for annual screening
mammography because it is not medically necessary or not pursuant to a
referral or recommendation by any health care provider;
Deny a woman eligibility or renewal to avoid these requirements;
Provide monetary payments or rebates to women to encourage women to
accept less than the minimum protections of the bill;
Financially reward or punish providers for withholding mammographies.

Support for the Bill

The bill is supported by the American Cancer Society, the National
Breast Cancer Coalition, the Susan B. Komen Breast Cancer Foundation,
the Breast Cancer Resource Committee, the Association of Women's
Health, Obstetrics, and Neonatal Nurses.
I believe this bill will put some important principles into insurance
coverage for this very necessary service. I hope my colleagues will
join me in promptly moving this bill to enactment.<bullet>
______

By Mrs. FEINSTEIN (for herself, Mr. Mack, Mr. D'Amato, Mr. Reid,
and Mr. Johnson):

S. 728. A bill to amend title IV of the Public Health Service Act to
establish a Cancer Research Trust Fund for the conduct of biomedical
research; to the Committee on Finance.

THE CANCER RESEARCH FUND ACT OF 1997

<bullet> Mrs. FEINSTEIN. Mr. President, today Senators Mack, D'Amato,
Reid, and I are introducing a bill to give citizens two ways to
contribute to the Nation's cancer research program. In connection with
their annual tax return, taxpayers could make a tax deductible
contribution for cancer research of not less than $1 and could check
off or designate a contribution of not less than $1 from their tax
refund owed them by the Government.
The bill establishes a Cancer Research Trust Fund and directs the
National Institutes of Health to use the funds for research on cancer.
It prohibits expenditures from the fund if appropriations in any year
for the NIH are less than the previous year so that these funds do not
supplant appropriated funds.
In fiscal 1997, the National Cancer Institute could only fund 26
percent of grants received with appropriated funds. This approval rate
dropped from 29 percent in 1996 and 32 percent in 1992. Under the
President's budget request for fiscal 1998, the success rate is
estimated to drop again, to 25 percent.
While we do not have a specific estimate for how much our bill for
cancer research would raise, a Federal tax checkoff for health research
could raise $35 million in revenues for health research, if the average
contribution were $2, according to Research America. If taxpayers gave
$10, it would raise $410 million. Their study shows that the average
contribution would be $23 and at that rate, $1.1 billion could be
raised. In 1994, U.S. taxpayers contributed $25.7 million through State
checkoffs.
I believe Americans would be very willing to make a contribution to
health research and using the tax return is a very easy way. Sixty
percent of Americans say they would check off a box on the tax return
for medical research. The median amount people are willing to designate
is $23.
Virtually everyone is touched by disease and has had some experience
with incurable diseases. We all fear dreaded diseases. A May 1996
California poll found that 59 percent of my constituents would pay an
extra dollar a week in taxes to support medical research. An
overwhelming 94 percent of Americans believe it is important that the
United States maintains its role as a world leader in medical research
and medical research takes second place only to national defense for
tax dollar value.
Cancer mortality has risen in the past half-century. By the year
2000, cancer will overtake heart disease as the leading cause of death
of Americans. Over 40 percent of Americans will develop cancer and over
20 percent of us will die from cancers. Cancer is

[[Page S4244]]

causing twice as many deaths as in 1971. Cancer's total economic costs
in 1995, according to the National Institutes of Health, came to $104
billion.
In my own State of California, in 1996, 125,800 new cases of cancer
were diagnosed and 51,200 people died. The incidence of certain
cancers, specifically cervical, stomach, and liver, is higher than
national rates. The San Francisco area has some of the highest rates of
breast cancer in the world. There are areas in my State, such as
Alameda County, where prostate cancer incidence exceeds the national
rate. In my State, African-American women have a 60-percent higher risk
of developing cervical cancer than white women. Hispanic women have the
highest risk of cervical cancer in my State. Asian-Americans in
California are twice as likely to develop stomach cancer and five times
more likely to develop liver cancer than whites.
We have made great strides in understanding cancer, particularly the
genetics of cancer and what makes a normal cell become a cancer cell.
Because of research, cancer survival rates have increased for some
cancers. But we cannot rest until we find a cure.
The National Cancer Institute's bypass budget identifies five
promising areas of research and with 74 percent of grants going
unapproved, the scientific talent is there. As the National Cancer
Advisory Board said in its 1994 report to Congress, ``Current
investment is insufficient to capitalize on unprecedented opportunities
in basic science research.'' Clearly additional funds can be well used
by some of the world's leading cancer researchers.
By introducing this bill, I do not believe giving taxpayers an
opportunity to contribute to cancer research will or should be the
mainstay of funding for our national war on cancer. Congress needs to
continue increasing appropriations and I am disappointed that the
President's fiscal year 1998 budget for the National Cancer Institute
represents only a 2.5-percent increase over fiscal 1997. I hope we can
do better and I pledge my help in doing that. To insure that these
taxpayer contributions generated by this bill do not supplant
Congressionally appropriated funds, the bill includes a provision that
prohibits expenditures from the cancer research fund if appropriations
in any year for the NIH are less than the previous year.
Twenty-six years of research since the 1971 passage of the National
Cancer Act has brought great progress, but some say that the war on
cancer has really only been a skirmish. We must escalate that war, we
must launch an armada of scientists, we must push vigorously ahead, we
must find a cure for cancer. I hope this bill will help to escalate
that battle.<bullet>
______

By Mr. KEMPTHORNE (for himself, Mr. Craig, Mr. Torricelli, Mr.
Thomas, and Mr. Enzi):
S. 730. A bill to make retroactive the entitlement of certain Medal
of Honor recipients to the special pension provided for persons entered
and recorded on the Army, Navy, Air Force, and Coast Guard Medal of
Honor Roll; to the Committee on Veterans' Affairs.

medal of honor roll legislation

Mr. KEMPTHORNE. Mr. President, I rise today to introduce legislation
that is the final step toward correcting a wrong--a wrong which
lingered for more than 50 years.
In January of this year, I attended a moving ceremony at the White
House where the Congressional Medal of Honor was presented to seven
African-Americans who had been denied the award during World War II. I
can tell you, it was a solemn and dignified ceremony in the East Room
of the White House last January, when the medals were awarded.
Unfortunately, only one of the soldiers--Lt. Vernon Baker--was able to
receive the medal in person. The other six died, unaware their heroism
would one day be acknowledged.
Like the medal itself, the financial rewards that normally accompany
the honor are also past due. My bill offers the stipend that would have
been earned by the three heroes who survived the heroic act which
earned them the Congressional Medal of Honor.
This bill, co-sponsored by Senators Craig, Torricelli, Thomas, and
Enzi, provides Lt. Vernon Baker and the surviving spouse or children of
S. Sgt. Edward A. Carter, Jr., and Maj. Charles L. Thomas with the
financial benefits normally given to recipients of the Congressional
Medal of Honor. The other Medal of Honor recipients, S. Sgt. Ruben
Rivers, 1st Lt. John R. Fox, Pfc. Willy F. James, Jr., and Pvt. George
Watson were all killed in action performing acts of heroism, and have
no surviving family members.
Mr. Vernon Baker, the only living survivor, now makes his home in the
quiet north Idaho community of St. Maries. He is a soft spoken, humble
man, almost embarrassed by all the national and international attention
given him as a result of heroism. In April 1945, on a hill in Italy,
Lt. Vernon Baker performed acts of bravery above and beyond the normal
call of duty, risking his life to save the lives of others and taking a
strategically important position, which saved countless other American
lives.
Following the battle, Lieutenant Baker's commander recommended this
hero for our Nation's top military honors. But during World War II, no
African-American soldier received the Medal of Honor, and so Lieutenant
Baker never received the commendation due him--until 50 years after the
fact.
An Army review board studied thousands of service records and
reports, and determined that seven African-Americans should have been
awarded the Congressional Medal of Honor. I am proud the last Congress
finally stepped up to the challenge and overturned this stain on the
Nation's history, when it authorized the President to award the
Congressional Medal of Honor to Vernon Baker.
My bill will provide Mr. Baker and the surviving spouse or children
of S. Sgt. Edward A. Carter, Jr., and Maj. Charles L. Thomas with the
Congressional Medal of Honor pension that they would have received had
they been rightly given the award in 1945. My bill does not adjust the
pension for inflation nor does it offer interest. Instead, the bill I
am introducing today offers three American heroes only what they
rightly earned in combat defending our Nation and the free world.
The people of Idaho have embraced Vernon Baker as a true American
hero. The State's Governor has awarded Mr. Baker Idaho's top civilian
honor. The Nation has bestowed upon him its highest military honor.
This is a fair bill that will help provide three American heroes with
the reward they rightly earned. I urge my colleagues to take a look at
this important bill and I urge its adoption.
Mr. President, in closing, I will just say that as an Idahoan and as
an American, I am so proud to have been able to get to know Vernon
Baker, a truly great American, and his wife Heidi. I wish them all the
best success and joy as they continue a wonderful life in the State of
Idaho.
Again, as an American, I salute him and the other six African
Americans who are true American heroes.
Mr. President, I send to the desk the bill. I know that Senator Craig
wishes to now address this issue as well.
I yield the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, let me first thank my colleague, Senator
Kempthorne, for his action and the work in developing this legislation
that appropriately recognizes Vernon Baker, Edward A. Carter, Jr., and
Charles L. Thomas in what I think can best be called retroactivity,
certainly recognizing that there is a special pension tied to the Medal
of Honor.
The Medal of Honor was given to these African American soldiers and
citizens and wonderful people in the appropriate fashion, finally,
after a long, long wait. We had the opportunity to be at the White
House for the ceremonies, and it was truly moving.
Recognition of their outstanding courage and daring leadership during
their service to their country in World War II was far too long coming,
as I mentioned. However, their rewards should not be based upon the
delay in their recognition, but based on the moment of their heroism.
In the case of Vernon Baker, one of my fellow Idahoans--as Senator
Kempthorne said, we had the privilege of getting to know he and his
wife--more than 50 years have passed before the Nation did the
appropriate thing in recognizing their courageous actions and bestowing
them with the Congressional Medal of Honor. Now fairness demands that
we couple this honor with

[[Page S4245]]

the benefits entitled to them and the next of kin in the case of the
deceased, effective to the dates corresponding to their actions.
Mr. President, on behalf of a grateful Nation, I once more thank
Vernon Baker for his gallant actions on that April day so long ago and
encourage the support of my colleague's legislation to resolve this
issue for America for all time.
Mr. TORRICELLI. Mr. President, I rise today in strong support of
Senator Kempthorne's effort to provide Medal of Honor recipient Vernon
Joseph Baker, and the heirs of Medal of Honor recipients Edward Carter
and Charles Thomas, with retroactive compensation for their awards.
During World War II, Mr. Baker was an Army 2d lieutenant serving with
the 92d Infantry Division in Europe. During a 2-day action near
Viareggio, Italy, he single handedly wiped out two German machinegun
nets, led successful attacks on two others, drew fire on himself to
permit the evacuation of his wounded comrades, and then led a battalion
advance through enemy minefields. Mr. Baker is the only one of these
three men still alive today, and he currently resides in St. Maries,
ID.
Edward Carter, of Los Angles, was staff sergeant with the 12th
Armored Division when his tank was destroyed in action near Speyer,
Germany, in March 1945. Mr. Carter led three men through extraordinary
gunfire that left two of them dead, the third wounded and himself
wounded five times. When eight enemy riflemen attempted to capture him,
he killed six of them, captured the remaining two and, using his
prisoners as a shield, recrossed an exposed field to safety. The
prisoners yielded valuable information. Mr. Carter died in 1963.
Charles Thomas, of Detroit, was a major with the 103d Infantry
Division serving near Climbach, France, in December 1944. When his
scout car was hit by intense artillery fire, Mr. Thomas assisted the
crew to cover and, despite severe wounds, managed to signal the column
some distance behind him to halt. Despite additional multiple wounds in
the chest, legs, and left arm, he ordered and directed the dispersion
and emplacement of two antitank guns that effectively returned enemy
fire. He refused evacuation until certain his junior officer was in
control of the situation. Mr. Thomas died in 1980.
I commend Mr. Baker, Mr. Carter, and Mr. Thomas for their bravery and
Senator Kempthorne for leading this effort.
As a result of their heroics these men had clearly met the criteria
for being awarded a Medal of Honor, the Nation's highest award for
valor. This medal is only awarded to a member of the U.S. armed
services who ``distinguishes themselves conspicuously by gallantry and
intrepidity at the risk of their life and beyond the call of duty,''
with an act ``so conspicuous as to clearly distinguish the individual
above their comrades.'' However, because of the racial climate of the
time and the segregated nature of the Army in 1945, African-Americans
were denied the Medal of Honor. It is a sad testament to America's
legacy of discrimination that although 1.2 million African-Americans
served in the military during the Second World War, including Mr.
Baker, Mr. Carter, and Mr. Thomas, none received 1 of the 433 Medals of
Honor awarded during the conflict.
This past January our Nation took an important step in correcting
this injustice by awarding Mr. Vernon Joseph Baker, and six of his dead
comrades, the Medal of Honor during a long-overdue ceremony at the
White House. This recognition of these men's extraordinary courage was
a vindication for all African-American heroes of World War II. In order
to further demonstrate our profound thanks to these brave men, I
support Senator Kempthorne's effort to retroactively compensate Mr.
Baker, and the heirs of Mr. Carter and Mr. Thomas for the money that
they would have received from the Army for receiving the Medal of
Honor. The other three heroes died as a result of the brave deeds which
qualified them to receive the Medal, and thus would not have received
any compensation by the military.
Each recipient of this Medal is entitled to receive a token monthly
stipend from their respective branch of the military after they leave
active duty service. In 1945 the stipend was $10 and today it has risen
to $400. Since he was denied the Medal more than a half century ago,
Mr. Baker and the survivors of Mr. Carter and Mr. Thomas, deserve to
receive the same amount of money that they would have received had they
been awarded the Medal at the close of World War II. American is
profoundly thankful for the patriotism of these men, and awarding
retroactive compensation to them is a simple way to express our
gratitude for their service. For these reasons I stand today to
recognize Mr. Baker, Mr. Carter, and Mr. Thomas, and support
retroactively compensating them for their accomplishments.
______

By Mr. FAIRCLOTH (for himself, Mr. Helms, Mr. DeWine, Ms. Snowe,
Ms. Collins, Mr. Roberts, Mr. Mack, Mr. Domenici, Mr. Abraham,
Mr. Santorum, Mr. Thomas, Mr. Warner, Mr. Dodd, Mr. Cochran,
and Mr. Murkowski):
S. 732. A bill to require the Secretary of the Treasury to mint and
issue coins in commemoration of the centennial anniversary of the first
manned flight of Orville and Wilbur Wright in Kitty Hawk, North
Carolina, on December 17, 1903; to the Committee on Banking, Housing,
and Urban Affairs.

THE FIRST FLIGHT COMMEMORATIVE COIN ACT

Mr. FAIRCLOTH. Mr. President, I rise today, joined by my colleague
from North Carolina, Senator Helms, and 12 other Senators to introduce
the First Flight Commemorative Coin Act. This revenue-neutral
legislation instructs the Treasury Secretary to mint coins in
commemoration of the Wright Brothers' historic 1903 flight on the North
Carolina coast.
Mr. President, in the cold morning hours of December 17, 1903, a
small crown watched the Wright Flyer lift off the flat landscape of
Kitty Hawk. Orville Wright traveled just 120 feet--less than the
wingspan of a Boeing 747--in his 12-second flight. It was, however, the
first time that a manned machine sailed into the air under its own
power. The residents of Kitty Hawk, then an isolated fishing village,
thus bore witness to the realization of the centuries-old dream of
flight.
The significance of the Wright Brothers' flight reaches far beyond
its status as the first flight. Their flight represented the birth of
aviation. On that morning, aeronautics moved from untested theory to
nascent science, and it triggered a remarkable technological evolution.
In fact, just 24 years after their fragile craft rose unsteadily and
took to the air, Charles Lindbergh crossed the Atlantic Ocean. In 1947,
less than half a century after the pioneer 31 m.p.h. flight over Kitty
Hawk, Chuck Yeager shattered the sound barrier over the Mojave Desert.
The rapid aeronautical progression, which the Wright Brothers
initiated on that December morning in Kitty Hawk, is, of course,
remarkable. Mr. President, it was just 66 years after the Wright
Brothers' 120-foot flight--a timespan equivalent to the age of many
Members of this body--that Neil Armstrong traveled 240,000 miles to
plant the American flag on the moon. Today, some 86,000 planes lift off
from American airports on a daily basis, and air travel is routine. It
was with a sprinkling of onlookers, however, that the Wright Brothers
ushered in the age of flight on that cold winter morning in Kitty Hawk.
The site of the first flight, at the foot of Kill Devil Hill, was
initially designated as a national memorial in 1927 and is visited by
close to a half-million people each year.
I think that First Flight Commemorative Coin Act is a most
appropriate tribute to the Wright Brothers as the centennial
anniversary of the first flight approaches. The coin will be minted in
$10, $1, and 50 denominations, and its sales will fund educational
programs and improvements to the visitor center at the memorial. These
commemorative coins are struck to celebrate important historical
events, and, of course, the proceeds are an important revenue source to
the custodians of these legacies. The centennial anniversary of the
Wright Brothers' flight merits our observance.
Mr. President, because all of the funds raised under this legislation
will be used to, build, repair or refurbish structures all within a
national park, I have added an exemption to the mintage levels as
required by coin reform

[[Page S4246]]

legislation last year. Nevertheless, so that coin collectors can enjoy
some certainty that the coin will be of value in the future, the Mint
can reduce the mintage levels as it deems necessary.
Mr. President, I ask my colleagues for their support, and 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. 732

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 ``First Flight Commemorative
Coin Act of 1997''.

SEC. 2. COIN SPECIFICATIONS.

(a) Denominations.--The Secretary of the Treasury
(hereafter in this Act referred to as the ``Secretary'')
shall mint and issue the following coins:
(1) $10 gold coins.--Not more than 500,000 $10 coins, each
of which shall--
(A) weigh 16.718 grams;
(B) have a diameter of 1.06 inches; and
(C) contain 90 percent gold and 10 percent alloy.
(2) $1 silver coins.--Not more than 3,000,000 $1 coins,
each of which shall--
(A) weigh 26.73 grams;
(B) have a diameter of 1.500 inches; and
(C) contain 90 percent silver and 10 percent copper.
(3) Half dollar clad coins.--Not more than 10,000,000 half
dollar coins each of which shall--
(A) weigh 11.34 grams;
(B) have a diameter of 1.205 inches; and
(C) be minted to the specifications for half dollar coins
contained in section 5112(b) of title 31, United States Code.
(b) Reduced Amounts.--If the Secretary determines that
there is clear evidence of insufficient public demand for
coins minted under this Act, the Secretary of the Treasury
may reduce the maximum amounts specified in paragraphs (1),
(2), and (3) of subsection (a).
(c) Legal Tender.--The coins minted under this Act shall be
legal tender, as provided in section 5103 of title 31, United
States Code.

SEC. 3. SOURCES OF BULLION.

The Secretary shall obtain gold and silver for minting
coins under this Act pursuant to the authority of the
Secretary under other provisions of law, including authority
relating to the use of silver stockpiles established under
the Strategic and Critical Materials Stockpiling Act, as
applicable.

SEC. 4. DESIGN OF COINS.

(a) Design Requirements.--
(1) In general.--The design of the coins minted under this
Act shall be emblematic of the first flight of Orville and
Wilbur Wright in Kitty Hawk, North Carolina, on December 17,
1903.
(2) Designation and inscriptions.--On each coin minted
under this Act there shall be--
(A) a designation of the value of the coin;
(B) an inscription of the year ``2003''; and
(C) inscriptions of the words ``Liberty'', ``In God We
Trust'', ``United States of America'', and ``E Pluribus
Unum''.
(b) Selection.--The design for the coins minted under this
Act shall be--
(1) selected by the Secretary after consultation with the
Board of Directors of the First Flight Foundation and the
Commission of Fine Arts; and
(2) reviewed by the Citizens Commemorative Coin Advisory
Committee.

SEC. 5. PERIOD FOR ISSUANCE OF COINS.

(a) In General.--Except as provided in subsection (b), the
Secretary may issue coins minted under this Act only during
the period beginning on August 1, 2003, and ending on July
31, 2004.
(b) Exception.--If the Secretary determines that there is
sufficient public demand for the coins minted under section
2(a)(3), the Secretary may extend the period of issuance
under subsection (a) for a period of 5 years with respect to
those coins.

SEC. 6. SALE OF COINS.

(a) Sale Price.--The coins issued under this Act shall be
sold by the Secretary at a price equal to the sum of--
(1) the face value of the coins;
(2) the surcharge provided in subsection (d) with respect
to such coins; and
(3) the cost of designing and issuing the coins (including
labor, materials, dies, use of machinery, overhead expenses,
marketing, and shipping).
(b) Bulk Sales.--The Secretary shall make bulk sales of the
coins issued under this Act at a reasonable discount.
(c) Prepaid Orders.--
(1) In general.--The Secretary shall accept prepaid orders
for the coins minted under this Act before the issuance of
such coins.
(2) Discount.--Sale prices with respect to prepaid orders
under paragraph (1) shall be at a reasonable discount.
(d) Surcharges.--All sales shall include a surcharge of--
(1) $35 per coin for the $10 coin;
(2) $10 per coin for the $1 coin; and
(3) $1 per coin for the half dollar coin.
(e) Marketing Expenses.--The Secretary shall ensure that--
(1) a plan is established for marketing the coins minted
under this Act; and
(2) adequate funds are made available to cover the costs of
carrying out that marketing plan.

SEC. 7. GENERAL WAIVER OF PROCUREMENT REGULATIONS.

(a) In General.--Except as provided in subsection (b), no
provision of law governing procurement or public contracts
shall be applicable to the procurement of goods and services
necessary for carrying out the provisions of this Act.
(b) Equal Employment Opportunity.--Subsection (a) shall not
relieve any person entering into a contract under the
authority of this Act from complying with any law relating to
equal employment opportunity.

SEC. 8. DISTRIBUTION OF SURCHARGES.

(a) In General.--All surcharges received by the Secretary
from the sale of coins issued under this Act shall be
promptly paid by the Secretary to the First Flight Foundation
for the purposes of--
(1) repairing, refurbishing, and maintaining the Wright
Brothers Monument on the Outer Banks of North Carolina; and
(2) expanding (or, if necessary, replacing) and maintaining
the visitor center and other facilities at the Wright
Brothers National Memorial Park on the Outer Banks of North
Carolina, including providing educational programs and
exhibits for visitors.
(b) Audits.--The Comptroller General of the United States
shall have the right to examine such books, records,
documents, and other data of the First Flight Foundation as
may be related to the expenditures of amounts paid under
subsection (a).

SEC. 9. FINANCIAL ASSURANCES.

The Secretary shall take such actions as may be necessary
to ensure that minting and issuing coins under this Act will
not result in any net cost to the United States Government.

SEC. 10. WAIVER OF COIN PROGRAM RESTRICTIONS.

The provisions of section 5112(m) of title 31, United
States Code, do not apply to the coins minted and issued
under this Act.

____________________