[Pages S11698-S11708]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. ROBERTS (for himself and Mr. McCain):
S. 2563. A bill to amend title 10, United States Code, to restore
military retirement benefits that were reduced by the Military
Retirement Reform Act of 1986; to the Committee on Armed Services.

MILITARY RETIREMENT READINESS ENHANCEMENT ACT OF 1998

Mr. ROBERTS. Mr. President, a few weeks ago I called the Senate's
attention to several issues in the military that are contributing to
problems in recruiting and retention of key, midcareer military
personnel. Briefly, those issues were as follows:
We are asking the military, significantly smaller than it was during
the cold war, to operate and deploy much more frequently.
We are asking the military to deploy on missions that may not be in
the vital national interest of this Nation.
We are not paying servicemen and women a salary that is comparable to
the pay they could get outside the military for the same skills.
We are not providing quality health care for the families of the
military, and we have not provided the promised health care for the
retired members of the military.
We are not providing quality housing to all military families.
And we are not providing a retirement program that is adequate to
justify a career commitment to the arduous lifestyle and the difficult
family separations that are necessary in military life.
Mr. President, I rise today to offer legislation to address military
retirement. The bill that I am introducing repeals the Military Reform
Retirement Act of 1986, also known as REDUX. This experiment in the
military retirement system was introduced in 1986 with the intended
purpose--and it was a good one--of encouraging members of the military
to stay longer than the popular career of 20 years.
The service chiefs now say that retirement is one of the top reasons
that our men and women are leaving the service. The Chairman of the
Joint Chiefs of Staff, General Shelton, listed it among the most
pressing problems facing the military in retaining key people. The
Secretary of Defense has voiced very similar concerns.
Pay is being addressed slowly, including a 3.6 percent pay raise in
this defense appropriations bill.
The Department of Defense is working on housing issues that may solve
the problems. Problems with the health care programs are very complex
and multilayered and requires detailed study to solve. The issue of the
high rate of deployments and the quality of

[[Page S11699]]

missions rests at the feet of the administration and this Congress and
are now the subject of policy debate.
Congress must address, however, the issue of retirement. We must show
the men and women of our armed services that we are listening to their
concerns and that we deeply care about them, their families and the
commitment they make to the defense of this Nation.
While the purpose of this bill is to repeal the 1986 retirement
program, I want to emphasize it is not the final solution to the
military's retirement problem. I urge the Department of Defense to
start a comprehensive study--I think they are--and to examine all
creative options to solve the recruitment and retention problems that
now face the military.
The repeal of REDUX is only but one option. There may be others. I
know that private industry has many creative retirement programs that
may serve as part of a final solution. The civilian sector of the
Federal Government has long experience in retirement programs. Whatever
course we end up taking, the bottom line must be a retirement program
that is perceived as fair and adequate by our service men and women.
The fundamental job of the Federal Government is to provide for the
security of the Nation. That security begins and ends with people. It
is clear that they are sending a strong message that we are letting
them down. We are not providing adequately for their welfare and their
postmilitary life.
So providing better benefits for members of the military will pay
dividends for national security. And, Mr. President, it is the right
thing to do. We owe it to our military men and women who are making the
personal and family sacrifices to do such an important job. They do an
outstanding job under the most difficult of circumstances. It is not
too much to ask that we provide adequate support for them and their
families.
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. 2563

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

SECTION 1. SHORT TITLE; REFERENCES TO TITLE 10, UNITED STATES
CODE.

(a) Short Title.--This Act may be cited as the ``Military
Retirement Readiness Enhancement Act of 1998''.
(b) References to Title 10.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of title 10,
United States Code.

SEC. 2. RETIRED PAY MULTIPLIER.

(a) Repeal of Reduction for Less Than 30 Years of
Service.--Subsection (b) of section 1409 is amended by
striking out paragraph (2).
(b) Conforming Amendments.--(1) Paragraph (1) of such
subsection is amended by striking out ``paragraphs (2) and
(3)'' and inserting in lieu thereof ``paragraph (2)''.
(2) Paragraph (3) of such subsection is redesignated as
paragraph (2).

SEC. 3. ADJUSTMENTS OF RETIRED AND RETAINER PAY TO REFLECT
CHANGES IN THE CONSUMER PRICE INDEX.

(a) Repeal of Reduced COLA Rate.--Subsection (b) of section
1401a is amended--
(1) by striking out paragraphs (1), (2), (3), and (4), and
inserting in lieu thereof the following:
``(1) General rule.--Effective on December 1 of each year,
the Secretary of Defense shall increase the retired pay of
each member and former member of an armed force by the
percent (adjusted to the nearest one-tenth of 1 percent) by
which--
``(A) the price index for the base quarter of that year,
exceeds
``(B) the base index.''; and
(2) by redesignating paragraph (5) as paragraph (2).
(b) First COLA Adjustment.--Subsections (c)(3) and (d) of
such section are amended by striking out ``who first became a
member of a uniformed service before August 1, 1986, and''.
(c) Repeal of Special Rule on Pro Rating Initial Adjustment
for Post-1986 Reform Retirees.--Subsection (e) of such
section is repealed.
(d) Conforming Amendments.--Subsections (f), (g), and (h)
of such section are redesignated as subsections (e), (f), and
(g), respectively.

SEC. 4. RESTORAL OF FULL RETIREMENT AMOUNT AT AGE 62.

(a) Repeal.--Section 1410 is repealed.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 71 is amended by striking out the item
relating to section 1410.

SEC. 5. CONFORMING AMENDMENTS FOR SURVIVOR BENEFIT PLAN.

(a) Unreduced Retired Pay as Basis for Annuity.--Section
1447(6)(A) is amended by striking out ``(determined without
regard to any reduction under section 1409(b)(2) of this
title)''.
(b) Cost-of-Living Adjustments and Recomputations.--Section
1451 is amended by striking out subsections (h) and (i) and
inserting in lieu thereof the following:
``(h) Adjustments to Base Amount for Cost-of-Living.--
``(1) Increases in base amount when retired pay
increased.--Whenever retired pay is increased under section
1401a of this title (or any other provision of law), the base
amount applicable to each participant in the Plan shall be
increased at the same time.
``(2) Percentage of increase.--The increase shall be by the
same percent as the percent by which the retired pay of the
participant is so increased.''.
(c) Reduction in Retired Pay.--(1) Section 1452 is
amended--
(A) in subsection (c), by striking out paragraph (4); and
(B) by striking out subsection (i).
(2) Section 1460(d) is amended by striking out ``or
recomputed under section 1452(i) of this title'', or
recomputed, as the case may be,'' and ``or recomputation''.

SEC. 6. EFFECTIVE DATE.

This Act and the amendments made by this Act shall take
effect on October 1, 1999, and shall apply with respect to
retired or retainer pay accruing for months beginning on or
after that date.

Mr. McCAIN. Mr. President, I rise to support and cosponsor the
legislation that Senator Roberts introduced earlier today that
reinstates the 50 percent retirement ``earned benefit'' plan for men
and women in the military who retire with 20 years of military service.
I also implore the Senate leadership to act quickly on this legislation
and move for its swift passage before the 105th Congress adjourns for
the year.
Times have changed since 1986. Our economy has prospered, producing
historically high levels of employment and resulting in the emergence
of a very difficult recruiting and retention environment for the armed
services. Maintaining a top-quality force requires a military personnel
system that has the flexibility to react quickly to the dynamics of the
civilian market, and the leadership and confidence to follow through
with critical personnel decisions rather than neglecting them out of
fiscal opportunism. Regrettably, this year, first, second, and third-
term enlisted retention, pilot and mid-grade officer retention, and
recruiting are all short of the goal for each of the services.
Recruiting and retaining quality individuals requires pay scales that
adjust to meet prevailing rates rather than fall 14 percent behind
comparable civilian pay. It requires adequate funding for recruiting.
It requires proper promotion rates--not promotion boards that take five
months to process reports of promotion boards, as is the case with the
Navy. It requires proper living conditions and morale, welfare and
recreation services. It also requires reasonable tours of duty, a
higher quality of civilian leadership, and ``role models'' within the
leadership who are seen to take service members' quality-of-life
concerns to heart.
Reinstatement of the 50 percent retirement plan for career military
men and women would serve as an important signal of resolve to our
service members that the United States Congress is aware of the
shortfall in benefits for those who wear the uniform of their country
and is acting to improve those benefits. Last week, the Senate Armed
Services Committee heard directly from the Joint Chiefs that restoring
retirement benefits is a requirement for recruiting and retaining the
qualified individuals we rely on to defend this nation.
General Hugh Shelton, Chairman of the Joint Chiefs of Staff, stated
clearly that fixing the military retirement system is a top
recommendation for restoring the readiness of our armed forces. Army
Chief of Staff General Reimer has written to me that

. . .the retirement package we have offered our soldiers
entering the Army since 1986 is inadequate. Having lost 25
percent of its lifetime value as a result of the 1980's
reforms, military retirement is no longer our number one
retention tool. Our soldiers and families deserve better. We
need to send them a strong signal that we haven't forgotten
them.

The military medical health care system, particularly the TRICARE
program, has been described by Service

[[Page S11700]]

Chiefs as falling far short of what is warranted and needed. We cannot
ignore the erosion of retirement and health care benefits, and the
resultant impact on retention and readiness. General Reimer writes,

``The loss in medical benefits when a retiree turns 65 is
particularly bothersome to our soldiers who are making career
decisions.''

From the Service Chiefs' answers, it is highly questionable whether
we are meeting any of these requirements. On the contrary, it is clear
that there is much work to be done.
Finally, it is demoralizing to the men and women we send into harm's
way, and is incomprehensible to the American people, who expect a well-
trained and well-equipped force, to witness as many as 25,000 military
personnel and their families on food stamps. One tax provision that I
have tried to reverse this year excludes uniformed men and women in the
military from beneficial tax treatment on the profits resulting from
the sale of their homes. We order servicemembers to move from place to
place, but we do not afford them the same tax treatment as other U.S.
citizens. Should this issue have been permitted to exist for so many
years?
Mr. President, we cannot afford to neglect this array of personnel
concerns. Let us begin by acting immediately to restore the higher
earned benefit plan for retired service members. Senator Roberts has
offered critical legislation to help reverse the diminishing retention
rates that cripple our Armed Services and ultimately diminish their
ability to execute our National Military Strategy. On behalf of all men
and women who have honorably dedicated their careers to serving this
country in uniform, I urge my colleagues to join me in support of this
legislation.
______

By Ms. LANDRIEU (for herself, Mr. Murkowski, Mr. Lott, Mr.
Breaux, Mr. D'Amato, Mr. Cleland, Mr. Johnson, Mr. Cochran, Ms.
Mikulski, and Mr. Sessions):
S. 2566. A bill to provide Coastal Impact Assistance to State and
local governments, to amend the Outer Continental Shelf Lands Act
Amendments of 1978, the Land and Water Conservation Fund Act of 1965,
the Urban Park and Recreation Recovery Act, and the Federal Aid in
Wildlife Restoration Act (commonly referred to as the Pittman-Robertson
Act) to establish a fund to meet the outdoor conservation and
recreation needs of the American people, and for other purposes; to the
Committee on Energy and Natural Resources.

reinvestment and environmental restoration act of 1998

Ms. LANDRIEU. Mr. President, I begin by thanking my colleague from
Louisiana Senator Breaux, a cosponsor on this measure, as well as
Senator Murkowski, Senator Lott, Senator D'Amato, Senator Cleland,
Senator Johnson, Senator Cochran, Senator Sessions and Senator Mikulski
as cosponsors of this measure, and also thank the many leaders on the
House side that are today introducing this bill on the House side.
Surely, with the time so short, we will not be considering this bill
in this session, but we plan for a very lively debate as the 106th
Congress meets in January on this very important piece of environmental
legislation for our country.
I will take a few minutes to outline in a highlighted form what this
bill will attempt to do, something that we have worked on, a group of
us, earnestly and very excitedly for the last year. Then my colleague
from Louisiana, Senator Breaux, will say a few words about the bill.
This is the Reinvestment and Environmental Restoration Act of 1998.
It is going to attempt to take 50 percent of the moneys that are now
flowing into the Federal Treasury from offshore oil and gas revenues--
which have been very significant; $120 billion since 1955--and
redistribute those revenues in a smarter way, in a better way, and in a
way that our country can be proud of.
We are going to ask that 27 percent of those revenues be distributed
to coastal States for coastal conservation impact assistance, 16
percent to fund more fully the Land and Water Conservation Fund, and 7
percent to fund the Wildlife Conservation and Restoration Act. These
are the major titles of this bill. Let me very briefly hit on each one.
I am from Louisiana, a State that has supported, proudly supported,
oil and gas drilling and exploration. It has created many jobs in our
State. We try to do it in a more environmentally sensitive way each and
every year, and every decade we make tremendous progress. Other States
like Texas, Mississippi, and to a certain degree, Alabama, although not
as much, and Alaska, join in that effort.
There are many States that do not have drilling and many States that
have a moratorium on drilling. This bill is not a pro-drilling bill or
anti-drilling bill. The purpose is to say that the production of those
resources off the shores of our States, although they are offshore,
have tremendous impact--both positive and negative--on the States that
host drilling.
Louisiana has contributed since the 1950s over 90 percent of these
revenues that I spoke about, the $120 billion, and we have gotten less
than 1 percent back. It is time to correct that inequity. That is what
the first title of this bill does. It says to Louisiana, thank you for
your commitment to our energy security and for the way that you have
contributed to this oil and gas drilling. We believe that some of this
money should go back to help your State and the coastal areas to shore
up our wetlands and to reinvest in our environment. That is Title I of
this bill. It will distribute funds to all coastal States, whether they
have drilling or not.
As I said, there are no incentives; there are no disincentives. It is
a revenue-sharing bill to all the coastal States. These revenues are
collected from a nonrenewable resource. One day these oil and gas wells
will be dried up. It might be 10 years from now or 20 years from now,
but some day they will be dried up, and we want to make sure that a
portion of this money is reinvested back into our States for
environmental infrastructure and wetland conservation so that we have
something to show for it.
The second part of this bill amends the Land and Water Conservation
Act in an attempt to restore this fund, or to more fully fund it. I
will ask unanimous consent to have printed in the Record an excerpt
from an editorial from the New York Times on this subject.
I will read the first short paragraph of this editorial.

The problem is, this promise was never fulfilled. That is what the
second title of this bill will do. It seeks to make this promise real
for our families, for our children, and for the next generation. It
will take, as I said, 16 percent of these revenues to almost fully fund
the State side and the Federal side of the Land and Water Conservation
Fund. It will provide a reliable and steady stream of revenue to do
just that.
Let me share with you that on the Federal side in only 6 out of the
last 33 years have we really lived up to the promise that we made to
the land and water conservation side. On the State side, the funding
record has been even more dismal. Only 1 year out of 33 years since
this Land and Water Conservation Fund was enacted did we live up to
that promise. So title II happens to fully restore funding so that we
can plan and count on these moneys to help expand our parks and our
recreation for our children and families in rural and urban areas
around this great country.
Finally, title III is a new title, a new chapter, but an attempt to
sort of weave together some of the attempts by my colleague, Senator
Breaux, and others to improve the Wildlife Conservation and Restoration
Act. I believe it makes little sense to spend all of our money in this
area on the back end, after species have become endangered. Then we
have problems not only

[[Page S11701]]

with the species in question but with property rights. We have
questions with economies that can be very negatively affected when
industries have to move out or can't proceed because of this.
So we believe it is time to start investing some money on the front
end. That is what this title does--helping species, helping States to
give educational and technical assistance to stop these species from
becoming endangered, and therefore saving the taxpayers a lot of money
and local economies a lot of anguish, and to give some much-needed
revenue to our State wildlife agencies around this country.
So those are generally the titles of the bill.
I just want to say that it is high time that we live up to the
promise made 30 years ago, and we can do that by more wisely spending
this money. It makes no sense to take 100 percent of these revenues and
spend them on Federal operating expenses that have nothing to do with
our environment, or with this promise that was made, or with our
investments in future generations. It is time not just for Louisiana,
Texas, Alaska, and Mississippi, who have contributed so much to this
industry, but also it is high time for all of our States to benefit in
a more direct way than they are currently. This is a wiser fiscal
policy, it is a much wiser environmental policy, and it most certainly
is an idea whose time has come.
To reiterate, the Reinvestment and Environmental Restoration Act of
1998 will go farther than any legislation to date to make good on
promises that were made to the people of this country decades ago. In
addition, it will begin to right a wrong endured by oil and gas
producing states for over 50 years, particularly for the states along
the Gulf of Mexico, and my state of Louisiana.
The Reinvestment and Environmental Restoration Act first provides a
guaranteed source of funding equal to twenty-seven percent of all Outer
Continental Shelf revenues for Coastal Impact Assistance to states to
offset the impacts of offshore oil and gas activity, as well as to non-
producing states for environmental purposes. This funding goes directly
to States and local governments for improvements in air and water
quality, fish and wildlife habitat, wetlands, or other coastal
resources, including shoreline protection and coastal restoration.
These revenues to coastal states will help offset a range of costs
unique to maintaining a coastal zone. The formula is based on
population, coastline and proximity to production.
Second, the bill provides a permanent stream of revenue for the State
and Federal sides of the Land and Water Conservation Fund, as well as
for the Urban Parks and Recreation Recovery Program. Under the bill,
funding to the LWCF becomes automatic at sixteen percent of annual
revenues. Receiving just under half this amount, the state side of LWCF
will provide funds to state and local governments for land acquisition,
urban conservation and recreation projects, all under the discretion of
state and local authorities. Since its enactment in 1965, the LWCF
state grant program has funded more than 37,000 park and recreation
projects throughout the nation, including in Louisiana the Joe Brown
Park Development in New Orleans, the Baton Rouge Animal Exhibit, the
Veterans Memorial Park in Point Barre and the Northwestern State
University Recreation Complex in Natchitoches. The Urban Parks program
would enable cities and towns to focus on the needs of its populations
within our more densely inhabited areas with fewer greenspaces,
playgrounds and soccer fields for our youth. Stable funding, not
subject to appropriations, will provide greater revenue certainty to
state and local planning authorities.
A stable baseline will be established for Federal land acquisition
through the LWCF at a level higher than the historical average over the
past decade. Federal LWCF will receive just under half of the amount in
this title of the bill. And, nothing in this bill will preclude
additional Federal LWCF funds to be sought through the annual
appropriations process. Some very worthy national projects that have
received funding in the past include the Atchafalaya National Wildlife
Refuge in Louisiana, the Mississippi Sandhill Crane Wildlife Refuge,
the Cape Cod National Seashore, Voyageurs National Park in Minnesota
and the Sterling Forest in New Jersey. Federal LWCF dollars will be
used for land acquisition in areas which have been and will be
authorized by Congress. The bill will restore Congressional intent with
respect to the LWCF, the goal of which is to share a significant
portion of revenues from offshore development with the states to
provide for protection and public use of the natural environment.
Finally, the wildlife conservation and restoration provision includes
guaranteed funding of seven percent of annual OCS revenues for wildlife
habitat protection, conservation education and de-listing of endangered
species. Moreover, this funding may be used by states for habitat
preservation and land acquisition of wintering habitat for important
species, therefore preventing listings under the Endangered Species
Act.
While we are proud of the accomplishment represented by the
introduction of this bill, I feel compelled to mention other interests
that are not included in the legislation, but for which I maintain a
strong level of support and commitment. The National Historic
Preservation Fund is an important authorized use for Outer Continental
Shelf revenues. In fact, I introduced legislation earlier this year to
reauthorize the fund for its continued viability and vitality. We see
the Reinvestment and Environmental Restoration Act as a starting point
for debate and consideration of additional issues. I would like to work
with proponents of historic preservation over the course of the year to
see their needs addressed in the future. This would include similar
consideration for Historic Battlefield Preservation, which is important
to other members in this body. I also wish to work with other groups to
address their concerns about other provisions in the bill having to do
with formulas. Indeed, this is a measure that should enjoy broad
support, and I want to continue to work with groups to that end.
Mr. President, all three portions of the bill will effectively free
up State resources which in turn may then be used for other pressing
local needs. The Reinvestment and Environmental Restoration Act is a
perfect opportunity to reinvest in our nation's renewable resources for
the benefit of our children's future and our grandchildren's future. It
is an idea whose time has come. I urge my colleagues to carefully
consider this proposal.
Mr. President, I thank Chairman Murkowski, and I thank the majority
leader, Senator Lott, for all of their help in making this legislation
possible.
I ask unanimous consent that the bill and New York Times editorial be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[The bill was not available for printing. It will appear in a future
issue of the Record]

[From the New York Times, June 16, 1997]

Revive the Conservation Fund

More than 30 years ago, Congress passed a quiet little
environmental program that offered great promise to future
generations of Americans. Conceived under Dwight Eisenhower,
proposed by John F. Kennedy and signed into law by Lyndon
Johnson, the Federal Land and Water Conservation Fund was
designed to provide a steady revenue stream to preserve
``irreplaceable lands of natural beauty and unique
recreational value.'' Royalties from offshore oil and gas
leases would provide the money, giving the program an
interesting symmetry. Dollars raised from depleting one
natural resource would be used to protect another.
Since its inception, the fund has helped acquire seven
million acres of national and state parkland and develop
37,000 recreation projects. Its notable triumphs include the
Cape Cod National Seashore, the New Jersey Pinelands National
Reserve and Voyageurs National Park in Minnesota. But the
program fell apart during the Reagan Administration and has
yet to recover. Of the $900 million that has flowed to the
fund from oil and gas royalties each year since 1980,
Congress has seen fit to appropriate only a third, and in
some years far less. The rest has simply disappeared into the
Treasury, allocated for deficit reduction.
The biggest losers have been the states. Over time,
appropriations have been split about evenly between Federal
and state conservation projects. But for two years running,
not a dime has gone to the states--again for budgetary
reasons. This has been hard on New York, which needs Federal
help to buy valuable open space threatened by development in
the Adirondacks and elsewhere.

[[Page S11702]]

Now, quite suddenly, this legislative stepchild has
acquired a bunch of new friends. As part of the recent budget
deal, Republican leaders agreed to add $700 million to the
$166 million that President Clinton has requested for the new
fiscal year. The Republicans had been getting heat from
governors back home and saw a chance to polish their
environmental image. For his part, Mr. Clinton needed about
$315 million to complete two important Federal purchases,
both strongly supported by this page--$65 million to develop
on his pledge to buy the New World Mine on the edge of
Yellowstone National Park, the rest to acquire the Headwaters
Redwood Grove in California from a private lumber company.
That would still leave several hundred million dollars for
other Federal projects and for the states--but only if the
House and Senate appropriations committees honor the outlines
of the budget deal and commit to sizable share of the money
to state projects. State officials have been descending upon
Washington in recent days to plead their cased. Gov. George
Pataki has written every member of Congress and, last week,
the New York State Parks Commissioner, Bernadette Castro,
testified at hearings convened by Senator Frank Murkowski of
Alaska.

Mr. BREAUX. Mr. President, I thank the Senator from Louisiana and
congratulate her for all the effort she has put forth in bringing this
legislation to this point.
I have been in Congress for a long time--something like 26 years now,
in the House and in this body--and I have never really seen a first-
term Member who has been so dedicated to a major legislative effort as
has the Senator from Louisiana, Ms. Landrieu, in bringing this
legislation to the floor of the U.S. Senate. Many Members, on their
first day, have come in and introduced a bill, issued a press release,
and then forgotten about it. This has been an effort by the Senator
from Louisiana, Senator Landrieu, of very carefully prodding and very
carefully studying and working with Members on both sides of the aisle
to put together a bipartisan coalition to bring this legislation to the
floor of the Senate.
While this is brought to the floor of the Senate in the last days of
this session, we all know that there will be another day. The
groundwork that she has laid in putting this package and this coalition
together is going to be here in the next Congress. So in the next
Congress we will start not from scratch but from the groundwork that
she has laid in bringing this legislation to the point it is today.
I congratulate her for the way she has done it. It is something that
I have not seen by a new Member of the Congress in all of the years
that I have been here. It is a major accomplishment on her part. I am
very pleased to participate in it.
Just a brief word on the legislation. I think it is a fair thing to
do. Many non-coastal States have Federal property, owned 100 percent by
the Federal Government, within their borders. When minerals are
extracted or oil and gas are found on those Federal lands, the State in
which those lands are located gets as much as 50 percent of the
revenue. Coastal States, however, get nothing. That is clearly not
fair. Offshore mineral development operations have a major impact on
coastal Louisiana. These operations impact our roads, bridges and other
infrastructure, our freshwater supply, our housing and other vital
public resources. It is only fair that there be a reasonable sharing of
those revenues with states that bear these kinds of burdens. The impact
coastal states suffer is a burden borne for the good of the whole
country and, without it, the whole country would suffer.
Therefore, to share in a true partnership with the coastal States is
certainly something that this Congress should favorably consider, and I
think that we will because of what the Senator has been able to do in a
bipartisan fashion. So while it is late this year, it is early for next
year. The work that she has done this year will pay off next year.
Mr. MURKOWSKI. Mr. President, I rise today, along with Senators
Landrieu and Lott, to introduce the Reinvestment and Environmental
Restoration Act of 1998.
This important piece of legislation remedies a tremendous inequity in
the distribution of revenues generated by offshore oil and gas
production by directing that a portion of those moneys be allocated to
coastal States and communities who shoulder the responsibility for
energy development activity off their coastlines. It also provides a
secure funding source for state recreation and wildlife conservation
programs.
The OCS Impact Assistance portion of this bill is similar to
legislation I have introduced in prior Congresses and is an issue I
have worked on for my entire Senate career.
Title 1 of the bill directs that a portion of the revenues generated
from oil and natural gas production on the Outer Continental Shelf--or
OCS--be returned to coastal States and communities that share the
burdens of exploration and production off their coastlines.
Offshore oil and gas production generates $3 to $4 billion in
revenues annually for the U.S. Treasury. Yet, unlike mineral receipts
from onshore Federal lands, OCS oil and gas revenues are not directly
returned to the States in which production occurs.
This legislation remedies this disparity. States and communities that
bear the responsibilities for offshore oil and gas production will
share in its benefits.
This legislation would, for the first time, share revenues generated
by OCS oil and gas activities with counties, parishes and boroughs--the
local governmental entities most directly affected--and State
governments.
The bill also acknowledges that all coastal States, including those
States bordering the Great Lakes, have unique needs and directs that a
portion of OCS revenues be shared with these States, even if no OCS
production occurs off their coasts.
Coastal States and communities can use OCS Impact Assistance funds on
everything from environmental programs, to coastal and marine
conservation efforts, to new infrastructure requirements.
In Alaska, local communities could use OCS funds to participate in
the environmental planning process required by Federal laws before OCS
development occurs.
Other rural coastal communities in Alaska will use the money for
sanitation improvements. While still others, like Unalakleet, will use
the money to construct sea walls and breakwaters or beach
rehabilitation--efforts which will combat the impacts of coastal
erosion.
This is money that will be used, day-in and day-out, to improve the
quality of life on coastal State residents--money which comes from oil
and gas production.
Further, as the Federal OCS program expands in Alaska, this
legislation will mean even more revenues to the State, boroughs and
local communities.
This is a true investment in the future.
As Chairman of the Energy and Natural Resources Committee, I know all
too well that offshore oil and gas production is a lightning rod for
environmental groups who will go to great lengths to disparage an
activity that is vital to the long-term energy and economic security of
this country.
These groups will likely say that this bill creates incentives for
offshore oil and gas production because a factor in the distribution
formula is a State's proximity to OCS production.
Let us remember, this is an impact assistance bill--revenue sharing,
if you will.
States only will have impacts if they have production. The States
with production, obviously, have greater needs and are most deserving
of a larger share of OCS revenues.
Mr. President, let me also remind everyone, that OCS production only
occurs off the coasts of 6 States--yet the bill shares OCS revenues
with 34 States.
There are 28 coastal States that will get a share of OCS revenues
which have no OCS production. In fact, in all areas except the Gulf of
Mexico and Alaska there is a moratorium prohibiting any new OCS
production.
It is in the long-term best interest of this country to support
responsible and sustainable development of nonrenewable resources.
We now import more than 50 percent of our domestic petroleum
requirements and the Department of Energy's Information Administration
predicts, in ten years, America will be at least 64 percent dependent
on foreign oil.
OCS development will play an important role in offsetting even
greater dependence on foreign energy.
The OCS accounts for 24 percent of this Nation's natural gas
production

[[Page S11703]]

and 14 percent of its oil production. We need to ensure that the OCS
continues to meet our future domestic energy needs.
I firmly believe that the Federal Government needs to do all it can
to pursue and encourage further technological advances in OCS
exploration and production.
These technological achievements have and will continue to result in
new OCS production having an unparalleled record of excellence on
environmental and safety issues.
Additional technological advances with appropriate incentives will
further improve new resource recovery and therefore increase revenues
to the Treasury for the benefit of all Americans who enjoy programs
funded by OCS money.
I will do all I can to ensure a healthy OCS program, including new
OCS development in the Arctic.
A number of challenges face new developments in this area--I am
confident that we can work through them all.
History has shown us that in the Arctic, and in other OCS areas,
development and the environmental protection are compatible.
This bill also takes a portion of the revenues received by the
Federal Government from OCS development and invests it in conservation
and wildlife programs.
Thus, Titles II and III of the bill share OCS revenues with all
States for such purposes.
Title II of this bill provides a secure source of funding for the
Land and Water Conservation Fund. The LWCF was established over three
decades ago to provide Federal money for State and Federal land
acquisition and help meet Americans' recreation needs.
Over thirty years ago, Congress had the foresight to recognize the
ever growing need of the American public for parks and recreation
facilities with the passage of the Land and Water Conservation Fund
Act.
That landmark piece of legislation was premised on the belief that
revenues earned from the depletion of a nonrenewable resource need to
be reinvested in a renewable resource for the benefit of future
generations.
This rationale is as valid today as it was in the mid-1960's.
To accomplish this goal, the Land and Water Conservation Fund Act
directs that revenues earned from offshore oil and gas production
should be spent on the acquisition of Federal recreation lands by the
land management agencies.
The act also creates a state-side matching grant program.
The state-side matching grant program provides 50-50 matching grants
to States and local communities for the acquisition and construction of
park and recreation facilities.
The state-side program has a truly unique legacy in the history of
American conservation by providing the States with a leadership role in
the provision of recreation opportunities.
Through the 1995 fiscal year, over 3.2 billion in Federal dollars
have been leveraged to fund over 37,000 State and local park and
recreation projects.
Yet, despite these successes, the President had not requested any
money for the state-side program for the last 4 years.
This is a program supported by this Nation's mayors, Governors, and
the recreation community.
The state-side matching grant should not have to justify annually its
existence with congressional appropriators.
Title II makes this program self-sufficient and provides secure
funding from OCS revenues.
Title III of this bill provides funding for State fish and wildlife
conservation programs.
In Alaska, with its unparalleled natural beauty, fishing and hunting
are two of the most popular forms of outdoor recreation.
The bill directs that a portion of OCS revenues should go to the
States for wildlife purposes.
The money would be distributed through the Pittman-Robertson program
administered by the United States Fish and Wildlife Services.
With the inclusion of OCS revenues, the amount of money available for
State fish and game programs would nearly double.
This is a no-tax alternative to the Teaming with Wildlife proposal.
States will be able to use these monies to increase fish and wildlife
populations and improve fish and wildlife habitat.
States also could use the money for wildlife education programs.
I am proud of this proposal which is a win-win for the oil and gas
industry, the States, environmental and conservation groups, and all
Americans.
This bill will ensure not only that Coastal States have money to
address the effects of OCS-activities but that all States have funds
necessary to provide outdoor recreation and conservation resources for
all of us today to enjoy.
As we end the 105th Congress, I can pledge, as Chairman of the Energy
and Natural Resources Committee, that the enactment of this bill will
be one of my highest priorities next year.
Mr. LOTT. Mr. President, it is with great pleasure that I join my
colleagues, Senators Landrieu and Murkowski, in introducing the
Reinvestment and Environmental Restoration Act.
Mr. President, since the inception of the oil and gas program on the
Outer Continental Shelf (OCS), states and coastal communities have
sought a greater share of the benefits from development. And why
shouldn't they? These communities provide the infrastructure, public
services, manpower and support industries necessary to sustain this
development.
Currently, the majority of OCS revenues are funneled into the Federal
Treasury where they are used to pay for various federal programs and to
reduce the deficit. While funding programs and reducing the deficit are
certainly important, I believe that some percentage of the revenues
should be reinvested in that which makes them possible.
Our bill does that. The Reinvestment and Environmental Restoration
Act diverts one-half of the OCS revenues from the Federal Treasury to
coastal states and communities for a multitude of programs: air and
water quality monitoring, wetlands protection, coastal restoration and
shoreline protection, land acquisition, infrastructure, public service
needs, state park and recreation programs and wildlife conservation.
This bill allows states and communities to use these funds in
whatever manner they deem appropriate. In Pascagoula, for example,
authorities might choose to restore and secure the shoreline where
years of sea traffic have taken their toll. Further north in Vancleave,
they may choose instead to refurbish the roads and bridges that carry
the heavy machinery coming and going from the coast. This bill provides
a framework within which these localities can make the right decisions
for their citizens and environment.
Mr. President, I have been working on this issue for many, many
years. As a coast dweller myself, I know the impact that the oil and
gas industry can have on communities and the importance of reinvestment
in these areas. This is not to say that the industry mistreats the
states; on the contrary, they work very hard to comply with stringent
environmental regulations and to take care of the community as best
they can. The OCS Policy Committee said in 1993 that, despite the oil
industry's best efforts, ``OCS development still can affect community
infrastructure, social services and the environment in ways that cause
concerns among residents of the coastal states and communities.''
I know that there is no way to totally eliminate this impact on
coastal communities. I also know that, while the benefits of a healthy
OCS program are felt nationally, the infrastructure, environmental and
social costs are felt locally. Our bill would put money back into the
communities that need it most.
It would also put money back into the environmental resources of the
area. Exploration for non-renewable resources and stewardship of
coastal resources are not mutually exclusive, but must be carefully
balanced for both to be sustained. It is important that our wetlands,
fisheries and water resources are taken into consideration and afforded
adequate protection.
In addition to propping up the states and coastal communities, our
bill also provides funding for the Land and Water Conservation Fund
(LWCF). Over 30 years ago, Congress set up this fund to address the
American public's

[[Page S11704]]

desire for more parks and recreational facilities. This bill makes the
program self-sufficient, providing secure funding from the OCS
revenues. This is an investment in our future--our land, our resources
and our recreational enjoyment.
Mr. President, our bill makes yet another investment with these OCS
revenues--an investment in fish and wildlife programs. With the
inclusion of OCS revenues, the amount of money available for state
programs would nearly double. This is money that can be used to
increase populations and improve habitat for fish and wildlife. It
could even be used for wildlife education programs.
Mr. President, this bill was carefully crafted to strike a balance
between the needs and interests of the oil and gas industry, the
states, and the environmental and conservation groups. It's a good
package that will benefit all Americans, not just those who live and
work in coastal areas. It will benefit hunters and anglers. It will
benefit bird watchers and campers. It will benefit all Americans who
take solace in the fact that the oil industry is taking care of the
communities that support it.
I appreciate the hard work of my colleagues and look forward to
advancing this important legislation in the 106th Congress.
______

By Mr. WELLSTONE:
S. 2567. A bill to ensure that any entity owned, operated, or
controlled by the People's Liberation Army or the People's Armed Police
of the People's Republic of China does not conduct certain business
with United States persons, and for other purposes; to the Committee on
Finance.

trading with the people's republic of china military act of 1998

<bullet> Mr. WELLSTONE. Mr. President, today I'm introducing a bill
that would bar firms owned by China's People's Liberation Army and
People's Armed Police from operating in the United States and prohibit
the import into the United States of products made by these firms or
the export of products to these firms. It would also prohibit extension
of credit to or ownership interest in Chinese military companies. The
bill contains an exemption for humanitarian aid, waiving these
prohibitions if the President determines that a transaction involves
items intended to relieve human suffering such as food, medicine or
emergency supplies.
My bill is based in part on H.R. 4433 introduced in the House on
August 6, 1998 by Representatives Gephardt, Bonior, and Pelosi, who I
want to commend for taking this bold and important human rights
initiative.
Before I get into the key question of why I'm introducing this bill,
I would like to touch on the question of the extent of PLA and People's
Armed Police commercial relations with the United States. To begin
with, I should stress that there is uncertainty about the extent and
nature of activities of companies linked to Chinese military and
security forces in the United States. For example, a Rand study last
year estimated that there are ``between 20-30 PLA-affiliated companies
operating in the United States, although there are certainly more that
have not yet been identified.'' It added that one of the major
obstacles to identifying these companies is that they ``often
consciously disguise their military background by using offshore
holding companies and unfamiliar names.''
Nevertheless, while there is much we don't know, there is some hard
data available on PLA and People's Armed Police business dealings with
the United States. In June, 1997 the AFL-CIO's Food and Allied Services
Trades Department issued a report providing a wealth of detailed
information on these business dealings. The report, based on extensive
research, found twelve companies incorporated in the United States
owned by the People's Armed Police and various elements of the PLA,
including the General Staff Department and the Navy. In addition, the
report cited seven PLA companies that had been dissolved after their
officials had been accused of smuggling AK-47's into the United States
in 1996--an episode I will discuss later. For each company, the report
provided addresses and dates of incorporation, and for some companies
the names of registered agents, officers, and directors.
The AFL-CIO report also provided detailed data on the exports to the
United States of twenty-five People's Armed Police and PLA companies
during 1996. The companies included not only major PLA components such
as the General Staff and General Logistics Departments, but also some
owned by various PLA military regions. All told, these companies
exported 34 million pounds of products to the United States, including
furniture, chemicals, rain gear, toys, sport rifles, aircraft engines,
and fish. According to an AFL-CIO official, PLA companies were the
largest exporters of fish for U.S. fast-food restaurants. Finally, the
report contained a listing of U.S. companies that had purchased these
products. In testimony before the Senate Foreign Relations Committee
last November, an AFL-CIO official pointed out that several well-known
U.S. concerns had purchased products directly from PLA companies.
While it is not illegal for the People's Armed Police and PLA
companies to operate in the United States, on at least one occasion a
major PLA company participated in a clearly illegal activity. In May,
1996, federal law enforcement agencies carried out a sting operation
connected with seizure of 2,000 fully automatic AK-47 weapons from
China. Since 1994 Chinese gun exports to the United States have been
illegal and this was the largest seizure of fully automatic weapons in
U.S. history. One of the two Chinese companies involved, Poly
Technologies, is the most successful PLA-controlled company. Poly is
run by China's princelings, family members of top Chinese civilian and
military leaders. Poly's president is the late Deng Xiaoping's son-in-
law and a retired PLA Major General. The Chairman of Poly is the son of
the late Wang Zhen, who was China's vice-president and a retired
General. While China experts doubt there was high-level collusion in
the smuggling of AK-47's, a federal law enforcement officer noted that
those involved were ``in a position to deliver substantial arms and are
not low-level flunkies.''
Mr. President, I now want to turn to the key question of why I
decided to introduce this bill. Why is there a need for such
legislation? Because companies owned by the PLA--the Chinese
Government's main and indispensable instrument of repression--are
permitted to operate in the United States. Because the American people
are unwittingly purchasing products exported to the United States by
companies owned by the PLA and the People's Armed Police. Because the
American people would be outraged--as deeply outraged as I am--if they
knew they were subsidizing those responsible for massacring students,
workers, and other demonstrators for democracy in Tiananmen Square on
June 4, 1989, those who have occupied Tibet for almost 50 years,
brutally oppressing its people and seeking to erase their unique,
cultural, linguistic, and religious heritage. And because they would be
outraged--as deeply outraged as I am, that their government is not only
doing nothing to stop this, but is opposing efforts to end PLA and
People's Armed Police profit-making in the United States.
Mr. President, you may well ask what is the People's Armed Police.
The People's Armed Police, who are under the operational control of the
PLA, are an internal security force of over 1 million troops, one of
whose main purposes is to suppress the legitimate protests of the
Chinese people. For example, the People's Armed Police is often used to
quash the peaceful protests of Chinese workers.
Last year the People's Armed Police was used to brutally break up
protests by thousands of laid-off state enterprise workers in Sichuan
province. Hundreds of these workers, who took to the streets because
company officials embezzled their unemployment compensation, were
reportedly beaten by the People's Armed Police and several
``instigators'' were arrested. Chinese officials were said to have
ordered hospitals not to treat wounded demonstrators, comparing them to
``counterrevolutionary thugs'' who ``rioted'' at Tiananmen in June
1989. What were the laid-off workers seeking that provoked such a
vicious crackdown by the People's Armed Police? Just that the
government provide them with the subsistence they are entitled to and
that corrupt company officials be punished.

[[Page S11705]]

How can we continue to subsidize the thugs who repress Chinese
workers?
The People's Armed Police also man the guard towers of the Laogai,
China's massive forced labor camp system--the largest in the world. The
Laogai is China's version of the Soviet gulag. The Laogai is comprised
of more than 1,100 forced labor camps, with an estimated population of
6 to 8 million prisoners. Prisoners are overworked, denied medical
treatment and tortured.
How can we continue to subsidize those who guard slave laborers?
The People's Armed Police and the PLA are the key agents of
repression in Tibet. The People's Armed Police have been filmed in
Lhasa, the capital of Tibet, beating monks and nuns peacefully
demonstrating for their rights. This past May, the People's Armed
Police and PLA soldiers reportedly fired on 150 Tibetan political
prisoners who staged a demonstration in Tibet's main prison and the
police later stormed the prison and arrested the demonstrators. Chinese
officials were apparently offended when the political prisoners flew a
Tibetan national flag during the demonstration.
How can we continue to subsidize those who deny Tibetans fundamental
freedoms, beat and torture them, and seek to destroy their unique
culture and religion?
Mr. President, this is shameful and it must be stopped. Would we have
allowed Stalin's NKVD or Hitler's SS to subsidize their heinous
activities by running profit-making entities in the United States and
exporting goods to us and buying goods from us? Of course not. Why then
do we allow the likes of the PLA and the People's Armed Police to
profit from commercial relations with us and why does the
Administration oppose efforts to put an end to this?
Mr. President, the Administration in the past has justified the
unjustifiable by arguing that imposing sanctions on PLA and People's
Armed Police companies would be an ``impossible task'' for U.S. law
enforcement agencies, risk retaliation against major U.S. exporters,
and harm our efforts to develop a military-to-military dialog and
relationship with China.
While I believe these arguments don't hold water, they have been
overtaken by events. In July, President Jiang Zemin ordered the PLA and
the People's Armed Police to end the ``commercial activities'' of their
subordinate units. There are some questions about the extent to which
Jiang's orders will be carried out and over what time-frame. Tai Ming
Cheung, a noted expert on China's military, foresees some shrinkage of
the military-business complex, but predicts that it will ``remain
powerful and more focused.'' Some China experts estimate that as much
as one-third of total defense spending derive from profits from PLA
businesses and it would obviously be difficult for the government to
compensate the military for loss of this funding stream.
Be this as it may, the fact remains that it is now Chinese government
policy to end the commercial activities of the PLA and the People's
Armed Police. I believe that the Senate should do all we can to help
Beijing by passing my bill, which seeks to cut U.S. commercial ties
with the PLA and the People's Armed Police and to end their business
activities in the United States. Since we would be cooperating with
Jiang's policies, the Administration can no longer point to alleged
harmful effects on our military-to-military dialog or Chinese
retaliation against U.S. exporters. Moreover, we would have reason to
expect that the ability of U.S. law enforcement agencies to implement
the sanctions contained in this bill would be enhanced since PLA and
People's Armed Police business activities would be illegal both in
China and the United States. Jiang Zemin presumably would have
incentives to end or at least circumscribe Chinese military and police
business dealings with and in the United States and, perhaps, even
cooperate with U.S. law enforcement agencies.
While no one can predict how successful Jiang will be in eliminating
or even in cutting back China's military-business complex, we must act
to end U.S. subsidies to those who beat, torture, and imprison those
who bravely fight for freedom and democracy. By contributing to PLA and
People's Armed Police coffers we act in complicity with those who
repress workers, run slave labor camps, crush religious freedom, quash
Tibetans and other minorities seeking to preserve their identity
culture and religion. We betray those who laid down their lives at
Tiananmen Square, inspired by American principles of democracy and
individual rights and we betray those brave dissidents who rot in
Chinese jails or toil in forced labor camps, whose only crime was to
fight for the ideals all Americans hold dear. It is time to end this
complicity, end these betrayals of our friends.
I urge my colleagues to support this bill.
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. 2567

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 ``Trading With the People's
Republic of China Military Act of 1998''.

SEC. 2. FINDINGS AND POLICY.

(a) Findings.--Congress makes the following findings:
(1) The People's Liberation Army is the principal
instrument of repression within the People's Republic of
China and is responsible for massacring an unknown number of
students, workers, and other demonstrators for democracy in
Tiananmen Square on June 4, 1989.
(2) The People's Liberation Army is responsible for
occupying Tibet since 1950 and implementing the official
policy of the People's Republic of China to eliminate the
unique cultural, linguistic, and religious heritage of the
Tibetan people.
(3) The People's Liberation Army has operational control of
the People's Armed Police, an internal security force of over
1,000,000 troops, whose primary purpose is to suppress the
legitimate protests of the Chinese people.
(4) The People's Liberation Army is engaged in a massive
effort to modernize its military capabilities.
(5) The People's Liberation Army owns and operates hundreds
of companies and thousands of factories the profits from
which in some measure are used to support military
activities.
(6) Companies owned by the People's Liberation Army and the
People's Armed Police export to the United States such
products as toys, clothing, frozen fish, lighting fixtures,
garlic, glassware, yarn, footwear, chemicals, machinery,
metal products, furniture, decorations, gloves, tents, and
tools.
(7) Companies owned by the People's Liberation Army and the
People's Armed Police regularly solicit investment in joint
ventures with United States companies.
(8) The People's Liberation Army and the People's Armed
Police have established at least 23 different companies in
the United States over the past decade.
(9) The people of the United States are unaware that
certain products they purchase in retail stores are produced
by companies owned and operated by the People's Liberation
Army or the People's Armed Police.
(10) The purchase of these products by United States
consumers places them in the position of unwittingly
subsidizing the operations of the People's Liberation Army
and the People's Armed Police.
(11) The Government of the People's Republic of China, with
the assistance of the People's Liberation Army and the
People's Armed Police, continues to deny its citizens basic
human rights enumerated in the Universal Declaration of Human
Rights, persecutes those who seek to freely practice their
religion, and denies workers the right to establish free and
independent trade unions.
(b) Policy.--It is the policy of the United States to
prohibit any entity owned, operated, or controlled by the
People's Liberation Army or the People's Armed Police from
operating in the United States or from conducting certain
business with persons subject to the jurisdiction of the
United States.

SEC. 3. COMPILATION AND PUBLICATION OF LIST OF PEOPLE'S
REPUBLIC OF CHINA MILITARY COMPANIES.

(a) Compilation and Publication.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Secretary of Defense, in
consultation with the Secretary of the Treasury, the Attorney
General, the Director of Central Intelligence, and the
Director of the Federal Bureau of Investigation, shall--
(A) compile a list of persons who are People's Republic of
China military companies and who are operating directly or
indirectly in the United States or any of its territories and
possessions; and
(B) publish the list of such persons in the Federal
Register.
(2) Periodic updates.--Every 6 months after the date of the
publication of the list under paragraph (1), the Secretary of
Defense, in consultation with the officials referred to in
that paragraph, shall make such additions to or deletions
from the list as the

[[Page S11706]]

Secretary considers appropriate based on the latest
information available.
(b) People's Republic of China Military Company.--For
purposes of making the determination required by subsection
(a), the term ``People's Republic of China military
company''--
(1) means a person that is--
(A) engaged in providing commercial services,
manufacturing, producing, or exporting; and
(B) owned, operated, or controlled by the People's
Liberation Army or the People's Armed Police; and
(2) includes any person identified in Defense Intelligence
Agency publication numbered VP-1920-271-90, dated September
1990, or PC-1921-57-95, dated October 1995, or any updates of
such publications under subsection (c).
(c) Updating of Publications.--Not later than 90 days after
the date of enactment of this Act, and every 6 months
thereafter, the Defense Intelligence Agency shall update the
publications referred to in subsection (b)(2) for purposes of
determining People's Republic of China military companies
under this section.

SEC. 4. PROHIBITIONS.

(a) Officers, Directors, Etc.--It shall be unlawful for any
person to serve as an officer, director, or other manager of
any office or business anywhere in the United States or its
territories or possessions that is owned, operated, or
controlled by a People's Republic of China military company.
(b) Divestiture.--The President shall by regulation require
the closing and divestiture of any office or business in the
United States or its territories or possessions that is
owned, operated, or controlled by a People's Republic of
China military company.
(c) Importation.--No goods or services that are the growth,
product, or manufacture of a People's Republic of China
military company may enter the customs territory of the
United States.
(d) Contracts, Loans, Ownership Interests.--It shall be
unlawful for any person subject to the jurisdiction of the
United States--
(1) to make any loan or other extension of credit to any
People's Republic of China military company; or
(2) to acquire an ownership interest in any People's
Republic of China military company.
(e) Exports.--It shall be unlawful for any person subject
to the jurisdiction of the United States to export goods,
technology, or services to, or for any person to export
goods, technology, or services that are subject to the
jurisdiction of the United States to, a People's Republic of
China military company.
(f) Exception for Humanitarian Items.--Subsections (a)
through (e) shall not apply with respect to a transaction if
the President--
(1) determines that the transaction involves the transfer
of food, clothing, medicine, or emergency supplies intended
to relieve human suffering; and
(2) transmits notice of that determination to Congress.

SEC. 5. REGULATORY AUTHORITY.

The President shall prescribe such regulations as are
necessary to carry out this Act.

SEC. 6. PENALTIES.

Any person who knowingly violates section 4 or any
regulation issued thereunder--
(1) in the case of the first offense, shall be fined not
more than $100,000, imprisoned not more than 1 year, or both;
and
(2) in the case of any subsequent offense, shall be fined
not more than $1,000,000, imprisoned not more than 4 years,
or both.

SEC. 7. DEFINITIONS.

For purposes of this Act:
(1) People's Armed Police.--The term ``People's Armed
Police'' means the paramilitary service of the People's
Republic of China, whether or not such service is subject to
the control of the People's Liberation Army, the Public
Security Bureau of that government, or any other governmental
entity of the People's Republic of China.
(2) People's Liberation Army.--The term ``People's
Liberation Army'' means the land, naval, and air military
services and the military intelligence services of the
People's Republic of China, and any member of any such
service.<bullet>
______

By Mr. JEFFORDS (for himself and Mr. Dodd):
S. 2568. A bill to amend the Internal Revenue Code of 1986 to provide
that the exclusion from gross income for foster care payments shall
also apply to payments by qualifying placement agencies, and for other
purposes; to the Committee on Finance.

exclusion for foster care payments to apply payments by qualifying
placements agencies

Mr. JEFFORDS. Mr. President, today I am introducing a bill that will
eliminate unnecessary distinctions drawn by the Internal Revenue Code
for the tax treatment of payments received by families and individuals
who open their homes to care for foster children and adults. Currently,
the law allows an exclusion from income for foster care payments
received by some providers, while denying eligibility for the exclusion
to other foster care providers.
My bill expands the law's exclusion of foster care payments. Under my
bill, foster care payments to providers made by placement agencies that
contract with, or are licensed by, State or local governments will be
eligible for the exclusion, regardless of the age of the individual in
foster care. This bill is a companion to H.R. 3991, introduced by
Congressman Jim Bunning of Kentucky. By simplifying the tax treatment
of foster care payments, the bill will remove the inequities and
uncertainties inherent in the current tax treatment of foster care
payments.
Under current law, foster care providers are permitted to deduct
expenditures made while caring for foster individuals. Providers must
maintain detailed records to substantiate these deductions. In lieu of
this detailed record keeping, section 131 of the Internal Revenue Code
allows certain foster care providers to exclude from income the
payments they receive to care for foster care. Eligibility for this
exclusion depends upon a complicated analysis of three factors: the age
of the person in foster care; the type of foster care placement agency;
and the source of the foster care payments.
For children under age 19 in foster care, section 131 permits
providers to exclude payments when a State (or one of its political
subdivisions) or a charitable tax-exempt placement agency places the
individual in foster care and makes the foster care payments. For
persons age 19 and older, section 131 permits providers to exclude
foster care payments only when a State (or one of its political
subdivisions) places the individual and makes the payments.
This bill will simplify these anachronistic tax rules by expanding
the tax code's exclusion to include foster care payments for all
persons in foster care, regardless of age, even if the foster care
placement is made by a foster care placement agency and even if foster
care payments are received through a foster care placement agency,
rather than directly from a State (or one of its political
subdivisions). To ensure appropriate oversight, the bill requires that
the placement agency be either licensed by, or under contract with, a
State or a political subdivision thereof.
Increasingly, State and local governments are relying on private
agencies to arrange for foster care services for children and adults.
While foster care for children has been in existence for decades,
foster care for adults is a more recent phenomenon. Sometimes referred
to as ``host homes'' or ``developmental homes,'' adult foster care
facilities have proven to be an effective alternative to institutional
care for adults with disabilities. My home State of Vermont, at the
forefront of efforts to develop individualized alternatives to
institutional care, authorizes local developmental service providers to
act as placement agencies and to contract with families willing to
provide foster care in their homes. The tax law's disparate tax
treatment of foster care payments, however, impedes alternative
arrangements. Persons providing foster care for individuals placed in
their homes by the government can exclude foster care payments from
income. For providers receiving payments from private agencies,
however, the exclusion is not available (unless the individual in
foster care is under age 19 and the placement agency is a nonprofit
organization). These rules discourage families willing to provide
foster care in their homes to persons placed by private placement
agencies, thus reducing the availability of care alternatives. Because
of the complexity of the current law, providers often receive
conflicting advice from tax professionals regarding the proper tax
treatment of foster care payments they receive.
Mr. President, this bill will advance the development of family-based
foster care services, a highly valued alternative to
institutionalization. I urge my colleagues to support it.
Mr. DODD. Mr. President, I am very pleased to rise along with my
colleague, Senator Jeffords, in introducing a critically important
piece of legislation that will ensure fair treatment for individuals
and families who provide invaluable care to foster children and adults.
Presently, foster care providers are permitted to deduct expenditures
made while caring for foster individuals if detailed expense records
are maintained to support such deductions.

[[Page S11707]]

However, section 131 of the Internal Revenue Code permits certain
foster care providers to exclude, from taxable income, payments they
receive to care for foster individuals. Who specifically is available
for this exclusion depends upon a complicated analysis of three
factors: the age of the individual receiving foster care services, the
type of foster care placement agency, and the source of the foster care
payments.
Section 131 presently permits foster care providers to exclude
payments from taxable income only when a state, or one of its political
divisions, or a charitable tax exempt placement agency places the
individual and makes the foster care payments for children under 19
years of age. However, for adults over the age of 19, section 131
permits foster providers to exclude payments from taxable income only
when a State, or one of its divisisions, places the individual and
provides the foster care payments.
Mr. President, it is time that we remove the inequities and needless
complexities of the current system. States and localities across the
country are increasingly relying on private agencies to arrange for
foster care services for both children and adults. However, some foster
care providers are understandably reluctant to contract with private
placement agencies because current law requires such providers to
include foster care payments as taxable income. In contrast, current
law permits providers who care for foster individuals placed in their
homes by government agencies to exclude such payments from taxable
income. Current law, therefore, discourages families from providing
foster care on behalf of private placement agencies, thereby reducing
badly-needed foster care opportunities for individuals requiring
assistance.
The bill Senator Jeffords and I introduce today will greatly simplify
the outdated tax rules applicable to foster care payments. Under our
legislation, foster care providers would be able to avoid onerous
record keeping by excluding from income any foster care payment
received regardless of the age of the individual receiving foster care
services, the type of agency that placed the individual, or the source
of foster care payments. To ensure appropriate oversight, this bill
will require the placement agency to be licensed either by, or under
contract with, a state or one or its political divisions.
Mr. President, this legislation accomplishes what current law does
not--consistent and fair treatment of families and individuals who open
their homes and their hearts to foster children and adults.
______

By Mr. KOHL (for himself, Mr. Reid, and Mrs. Feinstein):
S. 2570. A bill entitled the ``Long-Term Care Patient Protection Act
of 1998''; to the Committee on Finance.

long-term care patient protection act of 1998

Mr. KOHL. Mr. President, I rise today to introduce the Long-Term Care
Patient Protection Act of 1998, along with Senators Reid and Feinstein.
I am pleased to introduce this legislation on behalf of the
Administration.
Recently, the Department of Health & Human Services Office of
Inspector General issued a report describing how easy it is for people
with abusive and criminal backgrounds to find work in nursing homes. On
September 14th, the Senate Aging Committee held hearings on this
disturbing problem, where we heard horrifying stories of elderly
patients being abused by the very people who are charged with their
care. While the vast majority of nursing home workers are dedicated and
professional, even one instance of abuse is inexcusable. This should
not be happening in a single nursing home in America.
Senator Reid and I have already introduced legislation, the Patient
Abuse Prevention Act, to require background checks for health care
workers. Those with prior abusive and criminal backgrounds would be
prohibited from working in patient care. I am pleased that the
Administration has also recognized the importance of addressing this
problem, and I have been glad to work with them in this effort. While
the bill we introduce today on the Administration's behalf is not
perfect, I believe it is another important step in our efforts to pass
strong patient protections.
Mr. President, it is estimated that more than 43 percent of Americans
over the age of 65 will likely spend time in a nursing home. The number
of people needing long-term care services will continue to increase as
the Baby Boom generation ages. The vast majority of nursing homes do an
excellent job in caring for their patients, but it only takes a few
abusive staff to cast a dark shadow over what should be a healing
environment.
A disturbing number of cases have been reported where workers with
criminal backgrounds have been cleared to work in direct patient care,
and have subsequently abused patients in their care. Just last year,
the Milwaukee Journal-Sentinel ran a series of articles describing this
problem. This past March, The Wall Street Journal published an article
describing the difficulties we face in tracking known abusers.
These news stories are only the tip of the iceberg. Unfortunately, it
is just far too easy for a worker with a history of abuse to find
employment and prey on the most vulnerable patients. The OIG report
found that 5 percent of nursing home employees in Maryland and Illinois
had prior criminal records. And it also found that between 15-20
percent of those convicted of patient abuse had prior criminal records.
It is just too easy for known abusers to find work in health care and
continue to prey on patients.
Why is this the case? Because current state and national safeguards
are inadequate to screen out abusive workers. All States are required
to maintain registries of abusive nurse aides. But nurse aides are not
the only workers involved in abuse, and other workers are not tracked
at all. Even worse, there is no system to coordinate information about
abusive nurse aides between States. A known abuser in Iowa would have
little trouble moving to Wisconsin and continuing to work with patients
there.
In addition, there is no Federal requirement that nursing homes
conduct a criminal background check on prospective employees. People
with violent criminal backgrounds--people who have already been found
guilty of murder, rape, and assault--could easily get a job in a
nursing home or other health care setting without their past ever being
discovered.
The Administration's bill that we introduce today builds upon the
extensive work that Senator Reid and I have done to address this issue,
and incorporates some new ideas as well.
First, this legislation will create a National Registry of abusive
nursing home employees. States will be required to submit information
from their current State registries to the National Registry. Nursing
homes will be required to check the National Registry before hiring a
prospective worker. Any worker with a substantiated finding of abuse
will be prohibited from working in nursing homes.
Second, the bill provides a second line of defense to prevent people
with criminal backgrounds from working in nursing homes. If the
National Registry does not include information about the prospective
worker, the nursing home is then required to contact the state to
initiate an FBI background check. Any conviction for patient abuse or a
relevant violent crime would bar that applicant from working in nursing
homes.
Let me be clear: I realize that this legislation is not perfect. I
have significant concerns about several unresolved issues that I
believe must be addressed. We must continue to work on minimizing costs
and determine a fair and reasonable way to distribute those costs. We
must ensure that the system is efficient and effective, with a quick
turnaround time and accurate information for providers. And I believe
that we must apply these requirements to other health care settings
besides nursing homes. It would do little good to ban these people from
working in nursing homes, and still permit them to work in home health
care.
Senator Reid and I have worked for a long time with patient
advocates, the nursing home and home health industries, and law
enforcement officials to address these issues. I have been very
heartened by their enthusiasm and willingness to work with us in this
effort. It is in all of our best interests to pass legislation that is
strong, workable, and enforceable.

[[Page S11708]]

Despite the unresolved issues I have mentioned, I am introducing the
Administration's legislation today because I believe it will provide a
strong incentive for everyone to stay at the table and resolve these
issues. All of us--the President, Congress, health care professionals
and consumer advocates--we all share the common goal of protecting
patients from abuse, neglect and maltreatment. We must keep working
together to create a viable national system that will prevent abusive
workers from working with patients.
Although the remaining days of this Congress are few, we all need to
come together once again to reach consensus on the remaining issues and
prepare to move this process forward. This legislation gives us an
opportunity to act now. I look forward to continuing our work on this
issue, and I welcome comments and suggestions for improving the bill.
Mr. President, I want to repeat that I strongly believe that most
nursing homes and their staff provide the highest quality care.
However, it is imperative that Congress act immediately to get rid of
the few that don't. When a patient checks into a nursing home, they
should not have to give up their right to be free from abuse, neglect,
or mistreatment. They should not have to worry about dying from
malnutrition and dehydration.
Our nation's seniors made our country what it is today. Before we
cross that bridge to the next century that we have all heard so much
about, we must make sure we treat the people that brought us this far
with the dignity, care, and respect they deserve. I look forward to
working with my colleagues and the administration in this effort to
protect patients. Our Nation's seniors and disabled deserve nothing
less than our full attention to this matter.
Mr. President, I ask that the text of the bill be printed in the
Record.
[The bill was not available for printing. It will appear in a future
issue of the Record.]
Mr. REID. Mr. President, I rise today to join my colleague, Senator
Kohl, in introducing the ``Long Term Care Patient Protection Act of
1998''. This legislation represents our latest step in a series of
efforts to institute greater protections for nursing home residents.
Over the past year, Senator Kohl and I, along with our colleagues on
the Senate Special Committee on Aging, have worked to ensure that
seniors are not placed in the hands of criminals in nursing homes. The
disturbing problem of nursing home abuse by workers with a violent or
criminal history was brought to our attention just over a year ago.
Shortly thereafter, Senator Kohl, Grassley, and I introduced S. 1122,
``The Patient Abuse Prevention Act.'' This measure would require
criminal background checks for potential long-term care facility
workers and would create a national registry of abusive health care
workers.
This past July, Senator Kohl and I sponsored an amendment that would
authorize nursing homes and home health agencies to use the FBI
criminal background check system. This amendment is an important step
towards our goal of mandatory background checks, and I am proud to
report that this language was included in the Commerce, Justice, State
Appropriations Bill.
Upon our request, the Senate Special Committee and Aging dedicated a
hearing to the issue of criminal background checks for long-term care
workers. At this time, the Office of the Inspector General (OIG) at the
Department of Health and Human Services released a report entitling,
``Safeguarding Long Term Care Residents''. The year-long investigation
by the OIG spanning facilities across the country produced the very
recommendations Senator Kohl and I have been advocating for over a
year. Specifically, the OIG concurred with our proposal to develop
criminal background checks, and to create a national registry for
nursing facility employees. Their findings were consistent with our
position that a criminal background check system could help weed out
potential employees with a history of abuse and prevent them from
working with patients.
Recently, President Clinton acknowledged the need for tough
legislative and administrative actions to improve the quality of
nursing homes. Using our original legislation as a guide, the
Administration drafted a proposal to address the crucial issue of
criminal background checks for nursing home workers. I am pleased that
the Administration has recognized the need for criminal background
checks and has modeled its initiative after our legislation. I am
introducing the ``Long-Term Care Patient Protection Act of 1998'' on
behalf of the Administration because it builds on our extensive work in
this area and represents an important step in the right direction.
The ``Long-Term Care Patient Protection Act of 1998'' would create a
national registry of abusive workers. Further, the bill would expand
the existing State nurse aide registries to include substantiated
findings of abuse by all nursing facility employees, not just nurse
aides. States would be required to submit any existing or newly
acquired information contained in the State registries to the national
registry of abusive workers. This provision is crucial because it would
ensure that once an employee is added to the national registry, the
offender will not be able to simply cross state lines and find
employment in another nursing home where he may continue to prey on
vulnerable seniors.
Another important portion of the bill outlines the process by which
nursing homes must screen prospective employees. According to this
legislation, all nursing homes must first initiate a search of the
national registry of abusive workers. In cases where the prospective
employee is not listed on the registry, the nursing home would be
required to conduct a State and national criminal background check on
the individual through the Federal Bureau of Investigations.
Finally, nursing homes would be required to report to the State any
instance in which the facility determines that an employee has
committee an act of resident neglect, abuse, or theft of a resident's
property during the course of employment. The OIG at the Department of
Health and Human Services reported that 46 percent of facilities
believe that incidents of abuse are under-reported. This provision
would ensure that offenders are reported and added to the national
registry before they have the opportunity to strike again.
One of the most difficult times for any individual or family is when
they must make the decision to rely upon the support and services of a
long-term care facility. Families should not have to live with the fear
that their loved one is being left in the hands of an individual with a
criminal record. No one should have to endure the pain and outrage of
learning that their loved one has fallen prey to a nursing home
employee with a violent or criminal record. At last month's Aging
Committee hearing, we heard the real life nightmare of Richard Meyer,
whose 92 year-old mother was sexually assaulted by a male certified
nursing assistant who had previously been charged and convicted for
sexually assaulting a young girl. We can and we must work to prevent
tragedies like this one from occurring again in the future.
Americans over the age of 85 are the fastest growing segment of our
elderly population. There are 31.6 million Americans over the age of
sixty-five, and as the baby boom generation ages, that number will
skyrocket. Over 43 percent of Americans will likely spend time in a
nursing home. As our nation seeks ways to care for an aging population,
we must establish greater protections to ensure that our seniors will
receive the best care possible.
I have visited countless nursing homes in my home state of Nevada.
During these visits, I have always been impressed by the compassion and
dedication of the staff. Most nurse aides and health care workers are
professional, honest, and dedicated. Unfortunately, it only takes one
abusive staff member to terrorize the lives of the residents. That is
why we must work to wed our the ``bad apples'' who do not have the best
interest of the patient in mind. I urge you join Senator Kohl and me in
our efforts to provide greater protections for all nursing home
residents.
______

By Mr. LIEBERMAN:
S. 2571. A bill to reduce errors and increase accuracy and efficiency
in the administration of Federal benefit programs, and for other
purposes; to the Committee on Governmental Affairs.

____________________