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105th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 105-584
DRUG-FREE WORKPLACE ACT OF 1998
June 18, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. Talent, from the Committee on Small Business, submitted the
R E P O R T
[To accompany H.R. 3853]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business, to whom was referred the
bill (H.R. 3853) to promote drug-free workplace programs,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Drug-Free Workplace Act of 1998''.
SEC. 2. FINDINGS; PURPOSES.
(a) Findings.--Congress finds that--
(1) 74 percent of adults who use illegal drugs are employed;
(2) small business concerns employ over 50 percent of the
(3) in over 88 percent of families with children under the
age of 18, at least 1 parent is employed; and
(4) employees who use and abuse addictive substances increase
costs for businesses and risk the health and safety of all
(A) absenteeism is 66 percent higher among
drug users than nondrug users;
(B) health benefit utilization is 300 percent
higher among drug users than nondrug users;
(C) 47 percent of workplace accidents are
(D) disciplinary actions are 90 percent
higher among drug users than nondrug users; and
(E) employee turnover is significantly higher
among drug users than nondrug users.
(b) Purposes.--The purposes of this Act are to--
(1) educate small business concerns about the advantages of a
(2) provide financial incentives and technical assistance to
enable small business concerns to create a drug-free workplace;
(3) assist working parents in keeping their children drug-
SEC. 3. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) businesses should adopt drug-free workplace programs; and
(2) States should consider incentives to encourage businesses
to adopt drug-free workplace programs. Financial incentives may
(A) a reduction in workers' compensation premiums;
(B) a reduction in unemployment insurance premiums;
(C) tax deductions in an amount equal to the amount
of expenditures for employee assistance programs,
treatment, or drug testing.
Other incentives may include adoption of liability limitation
as recommended by the President's Commission on Model State
SEC. 4. DRUG-FREE WORKPLACE DEMONSTRATION PROGRAM.
The Small Business Act (15 U.S.C. 636 et seq.) is amended by--
(1) redesignating sections 31 and 32 as sections 32 and 33,
(2) inserting the following new section:
``SEC. 31. DRUG-FREE WORKPLACE DEMONSTRATION PROGRAM.
``(a) Establishment.--There is established a drug-free workplace
demonstration program, under which the Administration may make grants,
cooperative agreements, or contracts to eligible intermediaries for the
purpose of providing financial and technical assistance to small
business concerns seeking to start a drug-free workplace program.
``(b) Eligibility for Participation.--An intermediary shall be
eligible to receive a grant, cooperative agreement, or contract under
subsection (a) if it meets the following criteria:
``(1) It is an organization described in section 501(c)(3) or
501(c)(6) of the Internal Revenue Code of 1986 that is exempt
from tax under section 5(a) of such Act, a program of such
organization, or provides services to such organization.
``(2) Its purpose is to develop comprehensive drug-free
workplace programs or to supply drug-free workplace services,
or provide other forms of assistance and services to small
``(3) It has at least 2 years of experience in drug-free
workplace programs or in providing assistance and services to
small business concerns.
``(4) It has a drug-free workplace policy in effect.
``(c) Requirements for Program.--Any drug-free workplace program
developed as a result of this section shall include--
``(1) a written policy, including a clear statement of
expectations for workplace behavior, prohibitions against
substances in the workplace, and the consequences of violating
such expectations and prohibitions;
``(2) training for at least 2 hours for employees;
``(3) additional training for employees who are parents;
``(4) employee drug testing by a drug testing laboratory
certified by the Substance Abuse and Mental Health Services
Administration, or approved by the Department of Health and
Human Services under the Clinical Laboratories Improvements Act
of 1967 (42 U.S.C. 263a), or the College of American
Pathologists, and each positive result shall be reviewed by a
Licensed Medical Review Officer;
``(5) employee access to an employee assistance program,
including assessment, referral, and short-term problem
``(6) continuing alcohol and drug abuse prevention program.
``(d) Evaluation and Coordination.--The Small Business Administrator,
in coordination with the Secretary of Labor, the Secretary of Health
and Human Services, and the Director of the Office of National Drug
Control Policy, shall evaluate drug-free workplace programs established
as a result of this section and shall submit a report of findings to
the Congress not later than 1 year after the date of the enactment of
``(e) Eligible Intermediary.--Any eligible intermediary shall be
located in a state, the District of Columbia, or the territories.
``(f) Definition of Employee.--For purposes of this section, the term
``(3) officers active in management of the business; and
``(4) owners active in management of the business.
``(g) Construction.--Nothing in this section shall be construed to
require an employer who attends a program offered by an intermediary to
contract for any services offered as part of a drug-free workplace
``(h) Authorization.--There are authorized to be appropriated to
carry out the provisions of this section, $10,000,000 for fiscal year
1999 and such sums may remain available until expended.''.
SEC. 5. SMALL BUSINESS DEVELOPMENT CENTERS.
Section 21(c)(3) of the Small Business Act (15 U.S.C. 648(c)(3)) is
(1) in subparagraph (R) by striking ``and'';
(2) in subparagraph (S) by striking the period and inserting
``; and''; and
(3) by inserting after subparagraph (S) the following new
``(T) providing information and assistance to small business
concerns with respect to developing drug-free workplace
SEC. 6. CONTRACT AUTHORITY.
The Small Business Administrator may contract with and compensate
government and private agencies or persons for services related to
carrying out the provisions of this Act.
SEC. 7. COLLECTION OF DATA AND STUDY.
(a) Collection and Study.--The Small Business Administrator shall
collect data and conduct a study on--
(1) drug use in the workplace among employees of small
(2) costs to small business concerns associated with illegal
drug use by employees; and
(3) a need for assistance in the small business community to
develop drug prevention programs.
(b) Report.--Not later than 6 months after the date of the enactment
of this Act, the Small Business Administrator shall submit a report
containing findings and conclusions of the study to the chairmen and
ranking members of the Small Business Committees of the House and
H.R. 3853 will initiate a demonstration program designed to
aid small businesses in the establishment of drug-free
workplace programs. Under H.R. 3853, non-profit intermediaries
will be awarded grants to establish drug-free workplace
programs for use by small businesses. These programs will
encourage employers to offer and use a variety of strategies of
employee assistance, training and intervention to reduce
substance abuse problems.
Need for Legislation
The abuse of drugs and alcohol in the workplace is a
significant hazard to working Americans, and a serious drain on
the economy in terms of lost productivity, increased health
costs and wasted potential. Small businesses employ the vast
majority of American workers. Yet the Institute for a Drug-Free
Workplace estimates that a majority of illicit drug users work
for organizations with less than 25 people--small businesses.
Furthermore, the 1996 Conference Board Survey estimated the
cost to the economy from absenteeism, injuries and diminished
productivity to be $200 billion.
These statistics point to a problem in our society that
goes beyond the economic costs. Workplace injuries and lost
productivity are often easily quantified. The costs to families
and children due to the problem of substance abuse are harder
to add up. H.R. 3853 will address both the obvious and hidden
damage this problem causes through the encouragement of
workplace-based programs of employee assistance and
On May 14, 1998, the Subcommittee on Empowerment of the
Committee on Small Business held a hearing to discuss H.R.
3853, the Drug-Free Workplace Act of 1998, and to discuss the
problem of substance abuse in the workplace generally. The
first panel of witnesses consisted of: the Honorable Rob
Portman, Representative from the Second Congressional District
of Ohio; Mr. Thomas J. Donohue, President of the U.S. Chamber
of Commerce; and Ms. Barbara Thomas, President of Warner-
Lambert Consumer Health Care.
Representative Portman explained the components of H.R.
3853. He also expressed his hope that the bill would attract
bipartisan support based on the bipartisan concerns over the
problem of substance abuse in the workplace. Representative
Portman discussed the fact that only three percent of small
businesses have drug-free workplace policies despite the fact
that they employ most of the workforce. Finally, Representative
Portman stressed that the costs to society of substance abuse
in the workplace amount to tens of billions of dollars and that
small businesses are willing to work to reduce those costs and
are willing to work with the intermediaries supported by H.R.
3853 to help eliminate substance abuse problems.
Mr. Thomas J. Donohue then testified that ``[H]uman
capital--is any ongoing organization's most valuable asset,''
and that absenteeism and diminished productivity accounted for
nearly 50% of the $200 billion that drug and alcohol dependency
costs employers every year. He stated, ``[a]nnual productivity
losses from substance abuse amount to $640 for every American
worker, regardless of whether they are substance abusers.'' Mr.
Donohue then cited surveys that showed that workers in
businesses with 25 or fewer employees admitted current illegal
drug use at over twice the rate reported by employees in large
firms. He concluded by stating, ``the Drug-Free Workplace Act
embodies precisely the type of guidance and leadership the
business community can use effectively to do its part. It is
good for employees, good for employers, good for their
communities, and good for the country. It is the smart thing to
do and the right thing to do.''
Ms. Barbara Thomas was the final witness for the first
panel and discussed ``Stop the Silence'' (Warner-Lambert's
program to help parents talk to their children about the
dangers of drugs) and how it has led to an increase from 9 to
146 calls to their employee assistance program related to
substance abuse. The ``Stop the Silence'' kit cost
approximately $5 per kit, and has helped numerous families deal
better with substance abuse problems. Ms. Thomas stated,
``[o]ur program relies heavily upon drug testing and
rehabilitation programs. The goal of each is to help people
stop destructive habits and ensure a safe workplace.'' Warner-
Lambert managers are included in the random drug-testing as
part of the ``highly-sensitive'' category of employees. Warner-
Lambert also requires contractors who do business on their
property to drug test their employees.
The second panel of witnesses consisted of Mr. Richard
Manfredi, President of Manfredi Motor Company, representing the
American Trucking Association; Mr. Ray Soldivan, Vice President
of Phoenix House, representing the American Council on Drug
Education; Ms. Beth Lindamood of the Great American Insurance
Company; and Mr. Scott Sutton of the William Jordan Company,
representing the Associated General Contractors.
Mr. Manfredi testified concerning the great success the
trucking industry has enjoyed with its program of drug-free
workplace initiatives. He testified in strong support of
testing and cited Federal Highway Administration studies that
showed that only 0.2 percent of truckers that were randomly
tested tested positive. The FHWA has also found the trucking
industry's drug use violation rate to be 2.2 percent, one-third
of the rate for the general population.
Mr. Ray Soldivan then testified for the American Council on
Drug Education, stating, ``[a]t ACDE, we recognize the
workplace as a key prevention site, a primary line of defense,
where we can not only confront substance abuse in the
workforce, but where we can prevent substance abuse throughout
society. It is a venue as critical as home and school * * * We
believe employers have much to gain by helping empower workers
to deal thoughtfully and knowledgeably with drug use--and with
the possibility of drug use--by their children, their friends
and neighbors, and their co-workers. In this way, the workforce
can become a positive force for demand reduction throughout the
Then Beth Lindamood, an analyst for the Great American
Insurance Company, testified on the need for drug-testing as
part of a drug-free workplace program. ``[I]n order to offer
assistance for a problem you must first detect the problem,''
Ms. Lindamood stated.
The last witness on the panel was Mr. Scott Sutton,
representing the Associated General Contractors of America. Mr.
Sutton cited a report in the Journal of Management estimating
the overall cost to organizations. The report found the cost
from applicant and employee drug testing to range from $160 per
employee in the first year of employment to $800 per employee
over an average tenure of 10 years. He also cited a report in
The National Law Journal that only 10 percent of workers
consider testing to be an invasion of privacy.
Mr. Sutton testified that small businesses, a major
component of the Associated General Contractors, are at high
risk and cited a report from The Institute for a Drug-Free
Workplace estimating that a majority of illicit drug users work
for organizations with less than 25 employees. Mr. Sutton then
testified concerning a test used by a Newport News, Virginia
company. The test costs only $3.50 per substance tested for and
takes just 6 or 7 minutes. Finally, Mr. Sutton praised the use
of Small Business Development Centers in H.R. 3853 because,
``[t]he Small Business Development Centers are known and
trusted advisors for emerging businesses. They have been
partners in small business development for years.''
The third and final panel consisted of Mr. Rudy Guzman of
L&R; Guzman Corporation; Mr. Larry Bennett of the Coalition for
a Drug-Free Greater Cincinnati; Mr. Tuck Krehbiel of the C.J.
Krehbiel Company; and Ms. Solange Bitol of the American Civil
Mr. Guzman testified that, after starting a new truss-
building business to supply an already successful business, he
found the business failing. He discovered stolen inventory and
low productivity were the result of employee drug abuse and he
implemented a drug-free workplace policy. The policy did not
just lead to success, it led to growth of the company to three
times its planned size.
Mr. Larry Bennett of the Coalition for a Drug-Free Greater
Cincinnati testified that after one year of a drug-free
workplace program, OSHA recordable accidents were reduced by
50%. He testified that parent training approaches work. Mr.
Bennett said, ``[s]mall business owners appreciate this
training approach. It not only helps employees improve their
parenting skills, it also helps the owner dispel the ``big
brother'' aspect of drug-free workplace programs.''
Mr. Tuck Krehbiel testified that at their company owners
test themselves in the same program to build confidence and set
the example. With a workplace program that follows up with EAP,
employees understand that management is not judging people, but
that it supports recovery.
The final witness was Ms. Solange Bitol of the American
Civil Liberties Union. Ms. Bitol testified concerning her
organization's concerns over the privacy rights of employees.
She testified that the ACLU believes that indiscriminate drug
testing is unfair; however, she also testified that Federal
courts are upholding random drug testing programs in
occupations involving safety.
Questioning by Members of the subcommittee focused on
several key areas. Mr. Jackson expressed concern that employers
must be encouraged to use intervention and assistance as often
as possible rather than resorting to firing. Mr. Jackson also
expressed concern over drug testing as a confidentiality issue.
Several of the employer witnesses testified that they do not
and would not test beyond drugs and alcohol. Such testing is
expensive and unnecessary. Ms. Millender-McDonald questioned
the panel regarding training and stressed the view that
training and education are of paramount importance. Lastly,
Chairman Souder questioned Ms. Bitol regarding the
constitutionality of testing and discussed the balance that
must be struck between privacy and safety.
On Thursday June 11, 1998, the Committee on Small Business
met to consider H.R. 3853. By unanimous consent, an amendment
in the nature of a substitute was offered by Chairman Talent
and accepted as original text for the purpose of amendment. The
substitute was then opened for amendment by section. No
amendments were offered to section one.
Mr. Hinojosa offered an amendment to section two that would
have required funding for the demonstration program to come
from any tobacco settlement bill passed by Congress. A point of
order was raised against the amendment based on germaneness.
The Chairman heard arguments regarding the point of order and
sustained the point of order. The amendment was ruled out of
order, and Ms. Velazquez appealed the ruling of the Chair. A
recorded vote was requested and the ruling of the Chair was
sustained by a vote of 13-6. There were no further amendments
offered to section two, and no amendments were offered to
In section four, the first amendment was offered by Mr.
Pascrell. The amendment expanded the eligibility of
intermediaries to include 501(c)(6) non-profit organizations
such as Chambers of Commerce or trade associations. Mr. Souder
questioned whether the amendment would apply to political
organizations and Mr. Pascrell assured him it would not. The
amendment was agreed to by unanimous voice vote.
Ms. Christian-Green offered an amendment requiring all
intermediaries to be State-certified as drug education
providers. The Chairman asked Ms. Christian-Green if all States
required such certification and Ms. Christian-Green replied
that she was uncertain. The Chairman then suggested that the
amendment be withdrawn in favor of report language directing
the Administration to draft regulations requiring certification
where applicable. Ms. Christian-Green agreed and the amendment
Mrs. McCarthy offered an amendment that would require
training for employees to be expanded to four hours. Mrs.
McCarthy explained that she believed more training time was
necessary to ensure effective drug abuse prevention. Mr. Souder
expressed concern that four hours would be more burdensome than
necessary and pointed out that the trucking industry, a model
for the demonstration program, only requires two hours of
training. Mr. Bartlett and Mrs. Kelly also expressed concern
over the four hour requirement. Mrs. McCarthy asked unanimous
consent to change her amendment from four hours to two hours;
consent was granted and the amendment, as modified, was passed
by unanimous voice vote.
Ms. Velazquez offered an amendment changing the nature of
any drug-testing program offered to ``for cause.'' Mr. Jackson
expressed a question regarding the voluntary nature of small
business participation in the testing aspect of the bill. Mr.
Bartlett expressed concern that ``for cause'' testing, as
opposed to random testing, might open small businesses to more
claims of discrimination. Ms. Millender-McDonald expressed
concern over the definition of ``for cause,'' and Ms. Velazquez
expressed belief that such definition was best left to the
intermediaries and the Administration. Mrs. Kelly then
questioned whether the amendment would preclude random testing.
The Chairman explained that the bill would only establish a
base of requirements and would not preclude any intermediary
from offering assistance with random testing as well as ``for
cause'' testing. Further debate was heard concerning the merits
of the amendment, and Ms. Velazquez withdrew the amendment by
Mr. Jackson offered an amendment to include supervisors,
owners and officers under the drug testing provision. The
Chairman asked to clarify that the amendment apply to those in
active control of their businesses, Mr. Jackson asked unanimous
consent to change the amendment to reflect that clarification.
The amendment was agreed to by unanimous voice vote.
Mr. Jackson then offered another amendment prohibiting the
use of any grant funds authorized under H.R. 3853 to conduct
religious services, build or maintain facilities used primarily
for religious purposes, or offer religious instruction as part
of a program. Mr. Souder expressed concern that the amendment
could have a chilling effect on the participation of faith-
based organizations. Such organizations have an excellent
record in rehabilitation but might be deterred from
participation if regulations required intrusive inspection and
reporting requirements. The Chairman expressed a desire to work
with Mr. Jackson to craft a less detailed amendment that would
nevertheless prohibit use of funds in a manner that would
violate the ``Establishment Clause.'' Mr. Jackson then withdrew
his amendment by unanimous consent, subject to his right to
offer it later in an amended form.
Ms. Velazquez offered an amendment requiring that drug
testing programs recommended under the legislation be
administered by certified laboratories and reviewed by medical
review officers. Mr. Souder offered clarifying language to
specify the certification required. The clarification was
agreed to by unanimous consent. The amendment was then approved
by unanimous voice vote.
Ms. Christian-Green offered an amendment to require that
any training offered be ``culturally sensitive''. Mr. Souder
expressed concerns over what the phrase ``culturally
sensitive'' meant. Ms. Christian-Green expressed her concern
that persons not be targeted due to their backgrounds and that
all employees be fully informed of the reasons for a drug-free
workplace program. Ms. Velazquez expressed her support for the
amendment as did Ms. Millender-McDonald. Mr. Bartlett expressed
his belief that the need for appropriate training was essential
but was concerned that the word ``culturally'' could lead to
confusion. The amendment was defeated by a voice vote and a
recorded vote was requested. By unanimous consent the recorded
vote was delayed to the end of the mark-up. Ms. Millender-
McDonald offered an amendment requiring that any drug testing
program be recommended by an ``employee assistance
professional'' and voluntary. The Chairman expressed his
concern that the amendment would remove the permissive nature
of programs and options offered by intermediaries. Mr. Souder
also expressed concern about the amendment. The amendment was
defeated by voice vote.
Ms. Millender-McDonald then offered another amendment to
add the offering of ``continuing alcohol and drug abuse
prevention programs'' to the drug-free workplace programs. The
amendment was adopted by a unanimous voice vote. This amendment
made clear that the programs established by this legislation
must focus on both drug and alcohol abuse problems.
Mr. Manzullo offered an amendment to clarify that the small
businesses would not be mandated to be financially responsible
for implementing any portion of the drug-free workplace
programs established by this bill. Mr. Manzullo was concerned
that small businesses would be obliged to provide all services
offered if they were to participate with an intermediary on a
drug-free workplace plan. Mr. Souder expressed concern that the
amendment would, in fact, confuse issues. His reading of the
bill was that small businesses were not obligated to use any
programs offered, and that programs offered were voluntary. Mr.
Manzullo stated that he believed the language of the bill was
not clear and that such ambiguity created the possibility for
litigation. Mrs. Smith and Mr. Bartlett expressed the opinion
that the bill was unclear and supported Mr. Manzullo's
amendment to make the situation explicit. At the request of the
Chairman, and by unanimous consent, Mr. Manzullo withdrew his
Ms. Velazquez offered an amendment to require the Small
Business Administration to perform a study on the costs of
substance abuse in the workplace and the needs of small
business to combat substance abuse. The amendment was approved
by a unanimous voice vote.
Ms. Christian-Green then offered an amendment to clarify
that organizations in the States, the District of Columbia, and
the territories are eligible for grants under the demonstration
program. The amendment was approved by a unanimous voice vote.
The Committee then returned to the amendment by Mr.
Manzullo. Debate continued centering on the issue of whether
small businesses would be obligated to provide all services
offered by an intermediary. Mr. Pascrell expressed his concern
that the amendment would deter employers from offering a full
range of services to their employees. Mr. Manzullo reiterated
his concern that small businesses have the choice of what
services they could afford to offer employees. The Chairman
suggested compromise language that no small business involved
in a program offered by an intermediary be obligated to
contract for any services offered as a part of a drug-free
workplace program. The proposal was accepted by unanimous
consent and the amendment was accepted by unnaimous voice vote.
The Committee then returned to the pending amendment by Ms.
Christian-Green and the roll was called. The amendment was
defeated by a vote of 10 against and 5 in favor.
The Chairman then moved for final passage of H.R. 3853, as
amended, and that the Committee report the bill with technical
and conforming amendments. The motion was approved and the
Committee, with a quorum present, reported the bill by
unanimous voice vote.
Section 1. Short title
Designates the bill as ``the Drug-Free Workplace Act of
Section 2. Findings, purposes
This section details Congressional findings regarding the
serious costs in health, safety and productivity that the abuse
of alcohol and drugs heaps on the economy and particularly,
small business. This section also lays out the fundamental
purpose of this bill--to aid working families and the small
businesses that employ them in combating the threat of
Section 3. Sense of Congress
This section expresses the sense of Congress that
businesses should adopt drug-free workplace policies and that
the States should encourage them in their efforts through tax
and insurance incentives.
Section 4. Drug-free workplace demonstration program
This section establishes the demonstration program
permitting the Small Business Administration to offer grants to
intermediary organizations who would provide assistance to
small businesses in setting up drug-free workplace programs.
The intermediaries must be 501(c)(3) or (6) non-profit
organizations with a background in assisting small businesses
and a specific history of at least two years experience in
establishing drug-free workplace programs.
This section, under paragraph (c), also establishes de
minimis components for any drug-free workplace program. These
components are (1) a clear written policy, (2) a minimum of two
hours of training for all employees, (3) additional training
for working parents, (4) drug testing by a certified
institution, (5) access to an employee assistance program, and
(6) a continuing drug and alcohol abuse prevention program.
Paragraph (d) requires the Small Business Administration,
in conjunction with the Departments of Labor and Health and
Human Services and the ``Drug Czar,'' to evaluate programs any
drug-free workplace programs establish. Paragraphs (e) and (f),
respectively, define eligible intermediaries to include
organizations in the District of Columbia and the territories,
and define ``employees'' as including supervisors, managers and
certain owners and officers.
Finally, paragraph (g) makes clear that participation in
drug-free workplace training sessions or other program does not
require any employer to contract for any services offered as
part of a drug-free workplace program, and paragraph (h)
authorizes the program for fiscal 1999 at $10,000,000.
While the Committee did not accept an amendment offered by
Ms. Christian-Green regarding the certification of intermediary
organizations it does wish to encourage the Administration,
when drafting regulations for this program, to use certified
intermediaries whenever possible. The Committee recognizes that
certification may not be required in all jurisdictions, and
does not wish to make it a statutory requirement. However, when
required in a jurisdiction, it should also be required for this
program. In jurisdictions where certification is not required,
the Administration should draft regulations that require
intermediaries to have some demonstrated skills and experience.
The certification or experience should not necessarily be
intrinsic to the intermediary itself, it may be acquired
through subcontracting or referral.
Section 5. Small business development centers
Section 5 adds providing drug-free workplace assistance and
information to the various duties and responsibilities of small
business development centers.
Section 6. Contract authority
Authorizes the Small Business Administration to contract
with other government agencies or organizations or private
organizations for the provision of services under this Act.
This provision will allow the Small Business Administration to
draw on the resources of other organizations in areas outside
their technical competencies.
Section 7. Collection of data and study
Directs the Small Business Administration to collect data
and perform a study on the abuse of drugs in the workplace and
its costs to small business.
Congressional Budget Office Cost Estimate
Congressional Budget Office,
Washington, DC, June 17, 1998.
Hon. James M. Talent,
Chairman, Committee on Small Business,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3853, the Drug-
Free Workplace Act of 1998.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Mark Hadley
(for federal costs) and Marc Nicole (for the state and local
June E. O'Neill, Director.
H.R. 3853--Drug-Free Workplace Act of 1998
Summary: H.R. 3853 would establish a drug-free workplace
demonstration program, require that Small Business Development
Centers (SBDCs) provide small businesses with information
regarding drug-free workplace programs, and direct the Small
Business Administration (SBA) to study the effects of drug use
in the workplace. The bill would authorize the appropriation of
$10 million to SBA for grants or contracts with not-for-profit
organizations to provide small businesses with drug-free
workplace programs. In addition, CBO estimates that
implementing the other provisions of the bill would require
expenditures of about $2 million over the 1999-2003 period.
Assuming appropriation of the authorized and estimated amounts,
CBO estimates that implementing the bill would cost $12 million
over the 1999-2003 period.
H.R. 3853 would not affect direct spending or receipts;
therefore, pay-as-you-go procedures would not apply. H.R. 3853
contains no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act (UMRA) and would
impose no costs on state, local, or tribal governments except
as conditions of federal assistance.
Estimated cost to the Federal Government: For the purposes
of this estimate, CBO assumes H.R. 3853 will be enacted by the
end of fiscal year 1998, and that the authorized and estimated
amounts will be appropriated by the start of each fiscal year.
The estimated budgetary impact of H.R. 3853 is shown in the
following table. The costs of this legislation fall within
budget function 370 (commerce and housing credit).
[By fiscal year in millions of dollars]
1999 2000 2001 2002 2003
SPENDING SUBJECT TO APPROPRIATION
Estimated authorization level...................................... 11 \1\ \1\ \1\ \1\
Estimated outlays.................................................. 3 6 2 \1\ \1\
\1\ Less than $500,000.
Basis of estimate: Based on information from SBA, CBO
estimates that implementing H.R. 3853 would result in total
costs to the government of about $12 million over the 1999-2003
period. Of that amount, $10 million is specifically authorized
in the bill for the drug-free workplace demonstration program.
In addition, we estimate that SBA would spend about $1 million
in 1999 to conduct the required study of drug use and less than
$500,000 a year (through SBDCs) to provide information and
assistance to help small businesses develop drug-free workplace
Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: H.R. 3853
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments except as conditions of federal assistance.
The bill would expand the services that Small Business
Development Centers are required to provide. SBDCs are operated
solely or jointly by state and local government and
institutions of higher education. SBDCs are funded by the
federal government, and requirements imposed on them are
conditions of receiving federal assistance.
Estimate prepared by: Federal Costs: Mark Hadley; Impact on
State, Local, and Tribal Governments; Marc Nicole.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Statement of Constitutional Authority
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, Section 8, clause 18 of the
Constitution of the United States.
In accordance with clause 2(l)(3)(D) of rule XI of the
Rules of the House of Representatives, the Committee states
that no oversight findings or recommendations have been made by
the Committee on Government Reform and Oversight with respect
to the subject matter contained in H.R. 3853.
In accordance with clause (2)(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the oversight findings
and recommendations of the Committee on Small Business with
respect to the subject matter contained in H.R. 3853 are
incorporated into the descriptive portions of this report.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italic, existing law in which no change is proposed
is shown in roman):
SMALL BUSINESS ACT
* * * * * * *
Sec. 21. (a) * * *
* * * * * * *
(c)(1) * * *
* * * * * * *
(3) Services provided by a small business development center
shall include, but shall not be limited to--
(A) * * *
* * * * * * *
(R) developing informational publications,
establishing resource centers of reference materials,
and distributing compliance guides published under
section 312(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996; [and]
(S) providing small business owners with access to a
wide variety of export-related information by
establishing on-line computer linkages between small
business development centers and an international trade
data information network with ties to the Export
Assistance Center program[.]; and
(T) providing information and assistance to small
business concerns with respect to developing drug-free
* * * * * * *
SEC. 31. DRUG-FREE WORKPLACE DEMONSTRATION PROGRAM.
(a) Establishment.--There is established a drug-free
workplace demonstration program, under which the Administration
may make grants, cooperative agreements, or contracts to
eligible intermediaries for the purpose of providing financial
and technical assistance to small business concerns seeking to
start a drug-free workplace program.
(b) Eligibility for Participation.--An intermediary shall be
eligible to receive a grant, cooperative agreement, or contract
under subsection (a) if it meets the following criteria:
(1) It is an organization described in section
501(c)(3) or 501(c)(6) of the Internal Revenue Code of
1986 that is exempt from tax under section 5(a) of such
Act, a program of such organization, or provides
services to such organization.
(2) Its purpose is to develop comprehensive drug-free
workplace programs or to supply drug-free workplace
services, or provide other forms of assistance and
services to small businesses.
(3) It has at least 2 years of experience in drug-
free workplace programs or in providing assistance and
services to small business concerns.
(4) It has a drug-free workplace policy in effect.
(c) Requirements for Program.--Any drug-free workplace
program developed as a result of this section shall include--
(1) a written policy, including a clear statement of
expectations for workplace behavior, prohibitions
against substances in the workplace, and the
consequences of violating such expectations and
(2) training for at least 2 hours for employees;
(3) additional training for employees who are
(4) employee drug testing by a drug testing
laboratory certified by the Substance Abuse and Mental
Health Services Administration, or approved by the
Department of Health and Human Services under the
Clinical Laboratories Improvements Act of 1967 (42
U.S.C. 263a), or the College of American Pathologists,
and each positive result shall be reviewed by a
Licensed Medical Review Officer;
(5) employee access to an employee assistance
program, including assessment, referral, and short-term
problem resolution; and
(6) continuing alcohol and drug abuse prevention
(d) Evaluation and Coordination.--The Small Business
Administrator, in coordination with the Secretary of Labor, the
Secretary of Health and Human Services, and the Director of the
Office of National Drug Control Policy, shall evaluate drug-
free workplace programs established as a result of this section
and shall submit a report of findings to the Congress not later
than 1 year after the date of the enactment of this section.
(e) Eligible Intermediary.--Any eligible intermediary shall
be located in a state, the District of Columbia, or the
(f) Definition of Employee.--For purposes of this section,
the term ``employee'' includes--
(3) officers active in management of the business;
(4) owners active in management of the business.
(g) Construction.--Nothing in this section shall be construed
to require an employer who attends a program offered by an
intermediary to contract for any services offered as part of a
drug-free workplace program.
(h) Authorization.--There are authorized to be appropriated
to carry out the provisions of this section, $10,000,000 for
fiscal year 1999 and such sums may remain available until
SEC. [31.] 32. HUBZONE PROGRAM.
(a) In General.--There is established within the
Administration a program to be carried out by the Administrator
to provide for Federal contracting assistance to qualified
HUBZone small business concerns in accordance with this
* * * * * * *
Sec. [32.] 33. All laws and parts of laws inconsistent with
this Act are hereby repealed to the extent of such
Committee Democrats support the goal of a drug free work
place. Unfortunately, H.R. 3853 falls short of this objective.
Although the legislation reported out of Committee is an
improvement over the original bill, H.R. 3853 still remains
deficient in a number of ways.
Thanks to amendments offered by Committee Members, such
critical issues as participation by local business groups,
supervisor training and accurate testing by labs were
addressed. These were important first steps to ensuring that
H.R. 3853 adequately addresses the issue of a drug free work
One of the biggest concerns many Democrats on the Committee
had was over the Small Business Administration's level of
expertise in this area. The adoption of H.R. 3853 represents a
venture into a new arena of social policy for the Small
Business Administration. In an attempt to address the lack of
expertise, the managers' amendment included language directing
the SBA to study the effectiveness of this new program.
Democrats were successful in expanding the study to include
examining the extent of the problem of drug use in small
business and the need for assistance from the Small Business
Administration. Nonetheless, further work still needs to be
done to make sure that the Small Business Administration is
prepared to effectively administer this program.
Another major concern was the lack of participation by
local chambers of commerce and trade associations. This issue
was corrected by Mr. Pascrell, who successfully offered an
amendment to include 501(c)6 and other organizations that
provide services to small business. It made no sense for every
other federal program that focuses on drugs in the work place
to include these organizations and for H.R. 3853 to bar them
The need for sufficient training was also problematic to
Democrats on the Committee. The Committee mark allowed for only
60 minutes of training. This was clearly an insufficient amount
of time to seriously provide employees and supervisors
instruction on such a sensitive and critical issue as substance
abuse in the work place. The issue was improved when the
Committee adopted Ms. McCarthy's modified amendment to increase
the training requirements under the bill to 2 hours. Committee
Democrats still remain concerned that more instruction is
needed and would have preferred Ms. McCarthy's original
amendment that required 4 hours of training.
Mr. Davis' concern that drug testing be conducted by an
accredited lab is important in order to insure that tests are
done in a manner that is both quick and accurate. This issue
was addressed by ensuring that all tests be performed at
accredited labs. Democrats on the Committee also want to
encourage the Department of Health and Human Services to
implement an out-reach program to make sure that more minority
owned labs are included.
An important milestone in abuse prevention was the approval
of Ms. Millender-McDonald's amendment that would include
alcohol in any continuing drug abuse prevention program. If the
goal of this legislation is to eliminate drugs that impair
faculties and cause danger in the work place, then it makes
sense to include alcohol as part of this program.
While many problem areas were addressed, the one size fits
all approach that H.R. 3853 takes severely limits the ability
of small businesses to tailor a program that meets their needs.
This approach leaves many unresolved questions which must be
addressed before the legislation guarantees that our work
places are truly drug free environments.
Democrats still remain concerned over the cost of the
program. With the Small Business Administration already under
fire, we are concerned that funds for this new program will be
siphoned from already established and critical programs, such
as the 7(j) management and technical assistance program, the
SBIC program and the Women Business Centers program.
Furthermore, the legislation still sorely lacks employee
protections. While Mr. Jackson was able to make the legislation
fairer by extending testing to supervisors and owners, this is
clearly not sufficient. In order for a drug free work place to
be successful, it is important that a commitment be made to
employees that they will be treated fairly. Under H.R. 3853
employees have little or no recourse. The bill reported out of
Committee contains no clear guidelines of what happens to
employees who tests positive or voluntarily come forward. This
issue must be resolved if we are to have a successful drug free
work place program.
An attempt by Ms. Christian-Green to ensure that all
training conducted take into account language and cultural
barriers was defeated by the Majority. It is critical that low-
skilled workers with a limited-English-proficiency clearly
understand the drug free workplace policy and its
The testing provisions of the legislation still remain
extremely vague, as well. For example, as currently drafted,
the legislation would allow for such controversial methods of
testing as hair samples, which has been questioned as
ethnically biased. These types of inconsistencies will not
foster a drug free work place, but create an environment filled
with tension and uncertainty between employees and supervisors.
As stated earlier, Democrats join in supporting efforts to
create a drug free work place. H.R. 3853, although improved
from the version considered by the Committee, still requires
substantial work in the areas of cost, drug testing, and
employee protections before it will truly create a work
environment that is drug free. Democrats look forward to the
continued process of refining this legislation during
consideration by the full House.
Nydia M. Velazquez.