8394 CONGRESSIONAL RECORD—SENATE May 5, 1999 SENATE—Wednesday, May 5, 1999

The Senate met at 9:30 a.m. and was I yield the floor. tion who played such a critical role in called to order by the President pro Mr. BYRD addressed the Chair. securing the release of our service men. tempore [Mr. THURMOND]. The PRESIDENT pro tempore. The ‘‘When I was in prison, you visited able Senator from West Virginia is rec- me.’’ That was one of the ways Jesus PRAYER ognized. said we could recognize those who do Mr. BYRD. Mr. President, I ask unan- The Chaplain, Dr. Lloyd John his work. In daring to visit our soldiers Ogilvie, offered the following prayer: imous consent that I may proceed for 2 in prison in Serbia, Reverend Jackson Almighty God, a very present Help in minutes. and the delegation of religious leaders trouble, You do not send natural catas- The PRESIDENT pro tempore. With- trophes but help us to endure them. out objection, it is so ordered. who accompanied him surely were fol- lowing Jesus’s teachings as they under- Our minds and hearts are focused on f the tragic deaths and the destruction stood them. Our nation owes them a left in the aftermath of the series of PRAYERS FOR THE PEOPLE OF debt of gratitude. tornadoes that wracked the Oklahoma OKLAHOMA AND KANSAS Some have questioned the wisdom of City area and sections of Kansas, leav- Mr. BYRD. Mr. President, I thank the delegation’s trip. There has been ing more than 45 people dead and the Chaplain for his prayer. This is a speculation about what effect their homes and neighborhoods razed. Espe- nation which, in the words of Benjamin going to Serbia could have on political cially we pray for the families who lost Franklin, believes in the scriptures and or military tactics. Frankly, I don’t loved ones and had their homes de- particularly that scripture to which want to get into that debate. This was stroyed. Care for them with Your sus- Franklin called the attention of the not a political or military mission. It taining comfort and strength. Bless the other framers of the Constitution in was a humanitarian mission. police, emergency workers, doctors, Philadelphia in 1787: Much praise rightly goes to Reverend and medical personnel who are seeking Except the Lord build the house, they to help those who are suffering. labour in vain that build it: except the Lord Jackson, who organized the trip. I also Strengthen Senators DON NICKLES and keep the city, the watchman waketh but in want to acknowledge another member JIM INHOFE of Oklahoma and SAM vain. of the delegation: Congressman ROD BROWNBACK and PAT ROBERTS of Kan- We, the colleagues of the Senators BLAGOJEVICH, a second-term Congress- sas as they give leadership in this from Oklahoma and Kansas, share man from Chicago’s North Side, and emergency. their concern about the people who the only Serbian-American in the We commit to You the work of the have lost lives, loved ones, and prop- House of Representatives. Senate today. Guide the Senators in all erty. Our hearts go out to their con- There are moments in history where that they do and say, discuss, and de- stituencies and to them as well as they a person emerges who seems almost to cide. As crises at home and abroad serve their people every day. have been born to fulfill a critical role. mount, grant them clear minds, steady f On this mission, ROD BLAGOJEVICH was hearts and wills to seek and to know that person. Not only is he a man of You and do Your will. Through our COMMENDING THE REVEREND Lord and Saviour. Amen. JESSE JACKSON significant political and moral cour- age, he is also the son of Yugoslav im- f Mr. BYRD. Mr. President, let me migrants. His father spent four years RECOGNITION OF THE ACTING read the resolving clause of the resolu- in a Nazi POW camp during World War MAJORITY LEADER tion on which we are about to vote. II. He learned to speak Serbo-Croation The PRESIDENT pro tempore. The (1) The Senate commends the Reverend as a child, and still speaks it. Jesse Jackson for his successful efforts in se- able acting majority leader is recog- curing the release of Sergeant Ramirez, Ser- I remember when I first was elected nized. geant Stone, and Specialist Gonzales and for to the House. I sought out several of f his leadership and actions arising from his my political heroes to ask them ‘‘How SCHEDULE deep faith in God; and can a young Congressman make a dif- (2) The Senate joins the families of Ser- Mr. ALLARD. Mr. President, this geant Ramirez, Sergeant Stone, and Spe- ference—a real difference—in people’s morning the Senate will immediately cialist Gonzales in expressing relief and joy lives?’’ ROD BLAGOJEVICH has found an begin a rollcall vote on the Byrd reso- of their safe release. answer to that question. Steven lution, S. Res. 94, commending Rev. Mr. President, I yield the floor. Gonzales, Andrew Ramirez and Chris- Jesse Jackson for his role in the return Mr. DASCHLE. Mr. President, Two topher Stone are united today with of our POWs. Following the vote, the days ago, when that military transport their families, in large measure be- Senate will be in a period of morning plane touched down at Andrews Air cause of the courage he, and Reverend business until 11 a.m., with Senators Force Base and we saw our three Amer- Jackson, and the other religious lead- COVERDELL and DORGAN in control of ican soldiers safe again at last, I said, ers in their delegation displayed in that time. At 11 a.m. the Senate will instinctively, ‘‘thank you.’’ going to Serbia. resume consideration of the Sarbanes ‘‘Thank you, God, and thank you, Today’s Washington Post contains an substitute amendment to S. 900, the fi- Jesse Jackson, for bringing Steven interesting account of their mission, Gonzales, Andrew Ramirez and Chris- nancial modernization bill, with a vote from the time it was first conceived by on the Gramm motion to table occur- topher Stone safely home from their Reverend Jackson through their trium- ring at approximately 12 noon. Addi- captivity in Serbia.’’ Millions of people phant return home. I ask unanimous tional amendments are expected and all across our country, I suspect, said consent that a copy of that article be therefore Senators can expect votes much the same thing. I am pleased throughout today’s session of the Sen- today to repeat those words here, in printed in the RECORD. ate. the United States Senate, and to sup- There being no objection, the article I thank my colleagues for their at- port this resolution honoring Reverend was ordered to be printed in the tention. Jackson and the others in his delega- RECORD, as follows:

● This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00001 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8395 [From the Washington Post, May 5, 1999] He felt he had a unique perspective to offer. there. Vice President Gore dropped by for a MISSION ACCOMPLISHED: THE CONGRESSMAN Ironically, some in the Serbian community moment. WHO PULLED STRINGS FOR POWS’ RELEASE here have been disappointed in him for not Jackson gave a detailed explanation and interpretation of what the delegation heard (By Kevin Merida) being more active in Serbain American af- fairs. and saw in Belgrade. He said that Milosevic’s The interview begins with a little shake- Shortly after the soldiers were captured on gesture deserved to be matched. He talked of rattle-and-roll. Rod Blagojevich doing Elvis March 31, Blagojevich telephoned national other leaders who were so far apart, but had Presley. security adviser Samuel ‘‘Sandy’’ Berger and talked to each other and had become closer ‘‘I’m all shook up, unh-hunh-hunh.’’ over time. Sadat and Begin. Blagojevich is a huge fan of The King (‘‘Do White House chief of staff John Podesta to offer his help. Nothing grew out of those ‘‘Then I was up,’’ recalled Blagojevich, who you think he’s still alive?’’), and he’s feeling told Clinton that the Serbs weren’t backing loose. It’s not often—let’s say never—that a calls. He then read in the newspapers that Jackson wanted to take a delegation of down. He pitched his proposal for a partition second-term congressman from the North of Kosovo, which would give Serbs control of Side of Chicago can thrust himself onto the American religious leaders over to visit the soldiers and try to win their release. Jackson the northern region where most of the Or- international stage, help rescue three Ameri- thodox cathedrals and historic sites impor- cans held captive and claim a patch of glory. was having trouble getting guarantees from Milosevic that the delegation could even see tant to them are located. An autonomous That would be the patch right behind Jesse homeland would be created in the south for Jackson’s. Meaning he’s in all the brought- the GIs. Blagojevich approached Rep. Jesse Jack- the ethnic Albanians driven out by back-our-boys camera shots, but not promi- Milosevic’s forces. nently placed. But he’s okay with that. son Jr. (D–Ill.) on the House floor and men- tioned that he had some contacts who might ‘‘I like Clinton. I’m happy I voted to im- Blagojevich is the boyish-looking dude with peach him. I do think he needs to step up to the mop of brown hair combed to the left, a be able to help. The younger Jackson put Blagojevich in contact with his father. the plate and take charge of this. With all cross between John Travolta and Henry due respect, I think Madeleine Albright and Winkler. He sometimes takes his meals at Blagojevich got to work. Soon, he was talk- ing directly to Yugoslavian deputy premier Sandy Berger are running the show.’’ Ben’s Chili Bowl on U Street. No one recog- Blagojevich says he is ‘‘extremely skep- nizes him there. Maybe someone will recog- Vuk Draskovic. Things were working out. Draskovic had assured the group’s safety and tical’’ that the bombing campaign will be nize him now. successful. The NATO allies have underesti- Without Rod Blagojevich (pronounced bla- a visit with the soldiers. The soldiers would be allowed to talk to their families. He’d get mated the Serbs’ resolve, he believes. ‘‘De- GOYA-vich), there might not have been a spite the bombs, daily life goes on.’’ The tim- trip to Belgrade, no meeting with President it in writing. The trip was back on. Except on the eve of departure, the maverick ing for a negotiated solution is right, he Slobodan Milosevic, no tearful family re- thinks. unions this week for U.S. soldiers Chris- Draskovic was axed. Blagojevich recalls the Rev. Jackson’s re- The administration apparently thinks not. topher Stone, Andrew Ramirez and Steven ‘‘They were on a mission of peace and it action to that development as they were Gonzales. Blagojevich was the arranger, was successful,’’ says National Security hashing out last-minute details for the trip working his contacts in the Serbian Amer- Council spokesman David Leavy of the Jack- in Washington. He lapses into his Jackson ican community when it looked like the trip son-led group, ‘‘but the fundamental reality impersonation. ‘‘Blagojevich, our boy just was dead. Those contacts ultimately cleared remains the same. There are a million got fired. You got any others out there?’’ a path to Milosevic himself. Kosovars who are not going home to their Actually, Blagojevich did. Not that the whole country is applauding. families.’’ Once in Belgrade, it was Jackson who set Some administration officials carped—anon- However the war ends, the Jackson- the agenda, Jackson who commanded the ymous carping is the best fun of all—that Blagojevich bond has strengthened. the unofficial Jackson peace mission only spotlight. Blagojevich, as he put it, ‘‘worked ‘‘I feel like I’m a second cousin now,’’ undercut the NATO bombing campaign and the corridors’’ and took advantage of his Blagojevich says. could potentially fracture the allies. Not to ‘‘cultural connection’’ and ability to speak The younger Jackson puts the relationship mention that it might damage President the language. in context: Blagojevich’s father-in-law, Al- Clinton’s credibility at home on the war. As Blagojevich explained his role in a con- derman Dick Mell, is a longtime Chicago ma- Pundits spouted: PR props for the Serb-led versation in his office yesterday, he pulled chine boss. Blagojevich’s district, 1 percent Yugoslav government. out two business cards. Nebojsa Vujovic, black, is a bastion of white ethnic pride. For ‘‘If Mother Teresa had been one of those spokesman for the Federal Ministry of For- many years, it was represented by Dan Ros- prisoners and we had gotten her out, we eign Affairs, Federal Republic of Yugoslavia. tenkowski. It is not a district in which Jesse would have been criticized,’’ Blagojevich They had a common friend in Chicago. Jackson and Jesse Jackson Jr. are exactly says. ‘‘I guess if you’re not being criticized, Bogoljub Karic, minister without portfolio, popular. you’re not important. But it’s thrilling to be Republic of Serbia. He had met with this guy ‘‘Us relating to Rod and Rod relating to us in the mix. It sure beats digging a ditch for in his congressional office two days before is something taboo,’’ Rep. Jackson explains, a living.’’ the bombing campaign. He later saw the noting that although he and Blagojevich and Blagojevich, 42, a Democrat, is the only same man on TV emerging from a Milosevic their wives have grown close personally, he House member of Serbian descent, which is cabinet meeting. understands that the North Side member perhaps the key part of this story. He grew While all the attention was focused on takes flak for the association. up speaking both English and Serbo-Cro- Jackson, Blagojevich says, ‘‘it was proper ‘‘You being part of that Jackson thing is atian. Still does. His father, Rade, was an and part of the strategy to be working these really going to cost you your career,’’ says immigrant to this country. A Yugoslavian other guys. He and I were working different Jackson Jr., imitating his friend’s critics. army officer, Rade Blagojevich was captured angles.’’ ‘‘But after this trip, he is now officially an by the Nazis in World War II and spent four Jackson and Blagojevich both were in the honorary South Sider. Apparently, it was a years in a German POW camp. He eventually three-hour meeting with Milosevic on Satur- great growing experience for both him and made his way to the United States and mar- day morning that produced the release of the Reverend Jackson.’’ ried a Chicago-born woman whose parents American prisoners the next day. Jackson After his 15 minutes of fame at Jackson’s had emigrated from Bosnia-Herzegovina. then met with Milosevic privately. side, Blagojevich’s only question is this: Together they tried to raise Rod and his The trip produced some light moments ‘‘When do I take my seat on the back bench brother as Americans, but as Americans with amid all the intensity and emotion— again?’’ Blogojevich, a member of the House Armed a rich understanding of their ancestry. Mr. MCCAIN. Mr. President, I will Services Committee, greeted Sgt. Stone by Often, their mother would pull in one direc- vote for this resolution because I share tion and their father would tug in the other. promising him a raise—but there were no It was one thing to play the tamburitza, a light moments with Milosevic. in the happiness and relief that the ukulele-like instrument; it was another ‘‘I detected absolutely no warmth toward families of Sergeant Ramirez, Sergeant thing to sport the white-socks-and-sandals me,’’ Blagojevich says. ‘‘In fact, I detected a Stone, and Specialist Gonzales, and all look that his dad thought was authentically decided lack of warmth.’’ Americans feel now that these fine Yugoslav. A lack of warmth? Could it be that young men have been released from ‘‘I don’t want to wear that,’’ he told his fa- Milosevic remembered that this Chicago con- captivity. We are all thankful that ther. ‘‘I’m going to get laughed out of the gressman had pronounced him guilty of they are home, safe from harm. neighborhood if I wear that. That’s a bad ‘‘ethnic cleansing’’ and compared his tactics I do not believe, however, that pri- look.’’ to those of Nazi leaders? Blagojevich parents have passed away, but Once back home, Jackson, Blagojevich and vate diplomacy that is at odds with our it is with their memory in mind and all that others met at the White House Monday country’s objectives in this war and he has learned about Serb culture over the evening with Clinton. Secretary of State public relations stunts by Mr. years that he injected himself into this war. Madeleine Albright was there. Berger was Milosevic deserve our praise. I cannot

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00002 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8396 CONGRESSIONAL RECORD—SENATE May 5, 1999 commend the participation of any Rockefeller Smith (NH) Thurmond particular tornado was much larger American in his propaganda. Roth Smith (OR) Torricelli than the others. Many reports said it Santorum Snowe Voinovich was a quarter of a mile wide, or maybe f Sarbanes Specter Wellstone Schumer Stevens Wyden half a mile wide, and at some points it RESERVATION OF LEADER TIME Shelby Thompson was maybe a mile wide and stayed on The PRESIDING OFFICER (Mr. AL- ANSWERED ‘‘PRESENT’’—5 the ground for a long period of time— LARD). Under the previous order, lead- Fitzgerald Sessions Warner some people said maybe as much as 2 ership time is reserved. Helms Thomas hours. NOT VOTING—3 What we did see was a tremendous f Dorgan Landrieu Moynihan amount of damage—a devastating COMMENDATION OF THE EFFORTS amount of damage that destroyed, it The resolution (S. Res. 94) was agreed was estimated, 1,500 or 2,000 homes. We OF THE REVEREND JESSE JACK- to. SON will find out. Unfortunately, it has The preamble was agreed to. taken 40-some lives. I say unfortu- The PRESIDING OFFICER. Under The resolution, with its preamble, nately. I think Oklahoma is very fortu- the previous order, the Senate will now reads as follows: nate. I think the fatality toll could proceed to vote on adoption of S. Res. S. RES. 94 have been in the hundreds if not thou- 94, which the clerk will report. Whereas on March 31, 1999, Staff Sergeant sands, because we looked at homes that The assistant legislative clerk read Andrew A. Ramirez, Staff Sergeant Chris- were just totally demolished as if a as follows: topher J. Stone, and Specialist Steven M. bomb had gone inside each one of those A resolution (S. Res. 94) commending the Gonzales were taken prisoner by the armed homes and absolutely exploded the efforts of the Reverend Jesse Jackson to se- forces of the Federal Republic of Yugoslavia while on patrol along the Macedonia-Yugo- homes. There was nothing but just cure the release of the soldiers held by the some elements of rubble. To think that Federal Republic of Yugoslavia. slav border; Whereas Sergeant Ramirez, Sergeant people survived in many of these homes The PRESIDING OFFICER. The yeas Stone, and Specialist Gonzales conducted is truly a blessing, truly a miracle that and nays have been ordered. The clerk themselves throughout their ordeal with dig- I think we will find recounted day after will call the roll. nity, patriotism, and faith; day. The legislative clerk called the roll. Whereas the Reverend Jesse Jackson led a Needless to say, we are moved by the Mr. FITZGERALD (when his name delegation of religious leaders to the Federal tragedy, and also by the compassion was called). Present. Republic of Yugoslavia that succeeded in ne- gotiating the release of Sergeant Ramirez, that is being expressed by so many peo- Mr. HELMS (when his name was ple from across the country. called). Present. Sergeant Stone, and Specialist Gonzales; and Whereas the Reverend Jesse Jackson has We were there to say that we wanted Mr. SESSIONS (when his name was previously succeeded in securing the release to help, that our government would called). Present. of hostages held in Syria, Cuba, and Iraq: help, that we will do everything that Mr. THOMAS (when his name was Now, therefore, be it we can. Our government steps in in called). Present. Resolved, That— times of tragedy and national disasters Mr. WARNER (when his name was (1) the Senate commends the Reverend to help lend assistance. And we will do called). Present. Jesse Jackson for his successful efforts in se- that. Mr. REID. I announce that the Sen- curing the release of Sergeant Ramirez, Ser- geant Stone, and Specialist Gonzales, and for I will also say that won’t be enough. ator from North Dakota (Mr. DORGAN) his leadership and actions arising from his It will take a lot of support from indi- and the Senator from New York (Mr. deep faith in God; and viduals, from churches, from commu- MOYNIHAN) are necessarily absent. (2) the Senate joins the families of Ser- nities, from families and friends to try I also announce that the Senator geant Ramirez, Sergeant Stone, and Spe- to replace these homes and these fami- from Louisiana (Ms. LANDRIEU) is ab- cialist Gonzales in expressing relief and joy lies, and to make them whole again. sent attending a funeral. at their safe release. And they will. They will survive. They I further announce that, if present Mr. NICKLES. Mr. President, I ask are very solid. and voting, the Senator from Louisiana unanimous consent to proceed as if in One of the things I will never forget (Ms. LANDRIEU) would vote ‘‘aye.’’ morning business for 10 minutes. was seeing this area that is totally de- The PRESIDING OFFICER. Are there The PRESIDING OFFICER (Mr. molished and one house which hardly any other Senators in the Chamber CRAPO). Without objection, it is so or- had anything left standing, and there who desire to vote? dered. was an American flag flying very high The result was announced—yeas 92, f with people very proud. nays 0, as follows: Mr. President, it makes me proud to MIDWEST TORNADOES [Rollcall Vote No. 99 Leg.] be an Oklahoman. It makes me proud YEAS—92 Mr. NICKLES. Mr. President, yester- to be an American, and proud to rep- Abraham Crapo Jeffords day, Senator INHOFE and myself, Con- resent the great people of Oklahoma. Akaka Daschle Johnson gressmen J.C. WATTS, FRANK LUCAS With that, Mr. President, I yield the Allard DeWine Kennedy and STEVE LARGENT, as well as the remainder of my time to my colleague Ashcroft Dodd Kerrey Governor of Oklahoma, and James Lee NHOFE Baucus Domenici Kerry from Oklahoma, Senator I . Bayh Durbin Kohl Witt, Director of FEMA, toured the Mr. INHOFE addressed the Chair. Bennett Edwards Kyl Oklahoma tornado disaster. The PRESIDING OFFICER. The Sen- Biden Enzi Lautenberg I have been in the Senate, I guess, 19 ator from Oklahoma is recognized. Bingaman Feingold Leahy Bond Feinstein Levin years now, and I have looked at the Mr. INHOFE. Thank you, Mr. Presi- Boxer Frist Lieberman damage of several tornadoes in the dent. I thank my colleague, the senior Breaux Gorton Lincoln State for the last many years. But I Senator from Oklahoma. Brownback Graham Lott have never seen this type of devasta- Mr. President, in Oklahoma we have Bryan Gramm Lugar Bunning Grams Mack tion nor this level and this extent be- gone through tragedies that are inde- Burns Grassley McCain fore. This may be the most devastating scribable. The Murrah Federal Office Byrd Gregg McConnell tornado that we have had in total dam- Building was the most significant ter- Campbell Hagel Mikulski Chafee Harkin Murkowski ages in our State history. It has cer- rorist attack on domestic soil in the Cleland Hatch Murray tainly produced one of the largest tor- history of America. It is one that you Cochran Hollings Nickles nadoes, probably the largest number of can’t describe standing here on the Collins Hutchinson Reed tornadoes. I read one press account Senate floor. I have been there. And I Conrad Hutchison Reid Coverdell Inhofe Robb that said there were 45 tornadoes in the remember so well the thundering Craig Inouye Roberts State of Oklahoma on Monday. One march, the cadence of the fire trucks

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00003 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8397 as they were going to try to extract so killed in Kansas, hundreds were in- gather themselves after losing their many people out of the building, and jured, and thousands of people lost mobile home near 55th Street, South, all types of volunteers. their homes and businesses. I know in Wichita. Their faces show the de- We saw the same thing yesterday. It they are in the hearts and minds of all struction they have been through, but was indescribable. I note the story of a Americans today, and we will stand also the hope and thanks they are alive horse that was picked up and taken a ready to assist in that in any way we and were not injured in the process. quarter of a mile in the air, and can. The Red Cross and Salvation Army dropped on top of a car, then a car on The devastation that these tornadoes are offering shelter for people in Wich- top of a house, and the twisted ‘‘I’’ left in their paths is just shocking. ita who need help. The Red Cross has beams. The power, the indescribable I want to show you a picture of the an 800 number, 800–HELP–NOW, to con- power that was there. aftermath. This was actually taken of tact to provide help. We can provide a James Lee Witt—I am very com- the damage that took place in Moore, local phone number. They are on the plimentary of James Lee Witt, a man I OK. You can just see the devastating Internet at www.DisasterRelief.org. have known long before he was Direc- power that is in one of these systems Funds can be sent to the American Red tor of FEMA. As chairman of the com- that can rise up so fast and cause so Cross in Wichita. The Salvation Army mittee that has jurisdiction over much destruction. In Wichita, the trail has an 800 number as well. FEMA, I work very closely with him. of destruction was 15 miles long and 5 I know the nature of Kansans and And I tell you right now, he had his miles wide. Americans is to help one another in a hands on there. He was personally in- As I mentioned previously, five Kan- time of need. I will work with Federal volved in it. He explained to us that sans lost their lives, and more than 70 and State authorities to provide fast this is the most significant tornado people were injured from the fatal and effective relief to families and that he had seen in terms of the dev- twisters. communities harmed by this natural astating damage and power that was More than 500 homes have been dam- disaster. there. aged or destroyed, leaving many people I know I speak for my Senate col- You always remember one or two homeless. league, my fellow Senator from Kan- things. I recall in the helicopter ride I have the second picture that I sas, Senator PAT ROBERTS, in saying going across a little town called Moore, wanted to show people, a view of what we will continue to keep the victims OK. Everything was devastated in that has taken place. This is an aerial view and their families in our actions, town, except right across the street of the Lake Shore Trailer Park in thoughts, and prayers as we hope much from the most devastating part of this South Wichita. You can see where the of the rest of the country will in this tornado stood the First Baptist Church path of the tornado was, where it was very difficult time. of Moore, OK. It had been untouched. the most intense going through with I yield the floor. As my senior Senator from Okla- just absolute destruction in the wake Mr. COVERDELL. Mr. President, I homa said, we are so appreciative of ev- of that path of where it went through. am sure all of our colleagues express eryone coming together, for all of the More than 50,000 people have been our deep sympathy to the Senators comments of our colleagues since we left without power. from Oklahoma and Kansas and the have been back, the prayers that we Sedgwick County, KS, where Wichita communities that were so devastated had this morning from the Senate is located, has reported that over 1,100 by these storms. Chaplain and others, and people like structures were destroyed, and more We have all seen these disasters hap- the Governor of Oklahoma, the mayor than 7,100 structures were damaged. pen, and then the inspiration that Sen- of Oklahoma City throughout yester- In the town of Haysville, right next ator NICKLES alluded to, with everyone day, the police departments and the to Wichita, 27 businesses have been coming together. Clearly, this takes a fire departments, all of the volunteers, wiped out, and virtually eliminating lot of effort and a long time to dig out. and certainly FEMA bringing this all the business district of this Wichita Our prayers will be with these Sen- together. suburb. ators and these citizens of the fine We are very thankful, and we in The father of one of my staffers—the States of Oklahoma and Kansas. Oklahoma will be bound to that. We person who is actually my scheduler— The PRESIDING OFFICER. The Sen- ask for your continued prayers for the is the principal of Chisolm Life Skills ator from North Dakota is recognized. families, for those who lost their lives, Center in Wichita. His entire school Mr. CONRAD. Mr. President, I add and for the families of those who lost was demolished by this tornado. my words to those who talked about their lives. We are very proud of the rapid re- the tragedy in Oklahoma this morning. I thank very much all of the govern- sponse of people who have reached out I remember watching television last ment coming together to help us re- to help us through this terrible trag- night and seeing the power and the de- build the damage that has been done. edy—the State and local authorities in structive might of those storms that Mr. President, I yield the floor. Kansas, the rescue personnel, the Kan- swept across Oklahoma and parts of Mr. BROWNBACK addressed the sas National Guard, FEMA, and citi- Kansas as well. Chair. zens of the Wichita area. They have I have a feeling for what the people The PRESIDING OFFICER. The Sen- really reached out in that typical Mid- are going through, as a result of the ator from Kansas. Mr. BROWNBACK. Mr. President, I western tradition of helping others disasters that hit North Dakota in 1997. ask unanimous consent to speak as if when they are having difficulty. We had the worst flood in 500 years in in morning business for a period of up I am also pleased to report that the Grand Forks, ND, and we had 95 per- to 5 minutes. President has responded quickly to the cent of the town evacuated, the largest The PRESIDING OFFICER. Without situation in both Kansas and Okla- mass evacuation of a city in the United objection, it is so ordered. homa by ordering Federal relief to States since the Civil War. I know the those counties hit by these devastating trauma those people are facing, and I f tornadoes. The American Red Cross know the difficulty of recovery. KANSAS TORNADOES and the Salvation Army have provided Our hearts go out to the people in Mr. BROWNBACK. Mr. President, the 800 numbers for those wishing to help Oklahoma and Kansas who have been State of Kansas was also hit by the victims of these disasters. so affected. I hope they know that we same system that hit Oklahoma which I have pictures of a couple of victims. are prepared to respond and to help. We caused so much tragedy and damage. I This apartment complex was destroyed in North Dakota remember very well would like to speak for a few minutes in the wake of the path of the tornado. how people reached out a helping hand on that. This is a picture of Suzie Dooley and to our State, so many people from We had a number of families that had her daughter, Sarah, who is 13, and around the country who actually came homes destroyed. We had five people their family dog, Wilma, trying to to North Dakota to help us rebuild—

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00004 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8398 CONGRESSIONAL RECORD—SENATE May 5, 1999 the Red Cross, the other organizations, tion’s effort to enrich the lives of all I think we all remember those early the Salvation Army. We had a woman our citizens through education. years of our lives when we started from California who came to town and I want to pay tribute today to a spe- school. I still remember the first day of gave $2,000 to every family that had cial Mississippi teacher. She is Mis- first grade. I remember going to school been affected, a gift of tens of millions sissippi Teacher of the Year, Mrs. Tina in my father’s hand and fearing what of dollars. Fisher Scholtes, of Sudduth Elemen- was going to happen to me. I remember We remember very well the Federal tary School in Starkville, Mississippi. Mrs. Anderson who greeted us all indi- Government’s rapid response, the agen- Tina has been an elementary school vidually at the door and how imme- cies of the Federal Government that teacher for sixteen years. She has diately I warmed up to her. It was then moved to assist the people who were af- spent the past fourteen years teaching I realized this really wasn’t going to be fected. FEMA did an absolutely superb first grade in Starkville. as bad as I thought. I can even remem- job under the leadership of James Lee First grade lays the foundation for ber where my seat was that year. Witt. We will never forget it. The De- formal education. Every parent hopes Ms. Maughn, in second grade, was an- partment of Housing and Urban Devel- their child will begin school with an other wonderful person. The teacher I opment, under the leadership of Sec- excellent teacher. Tina Scholtes is remember more was Viola Burns, my retary Cuomo, did a superb job, and we without a doubt an excellent teacher. third grade teacher. That was the be- will never forget their help. The SBA Being an excellent teacher requires ginning of World War II. She realized I was quick to move in to help busi- hard work, along with respect for chil- needed a little further work so she had nesses. We know all of those agencies dren and an understanding of the learn- me read Time magazine and come back will be ready to respond in Oklahoma ing process. Tina has those attributes to her to talk about it. I also had her and Kansas as well. and more. She also cares about out- in the sixth grade. She was an incred- I hope that we see the Congress re- comes. She wants all her students to ible individual who helped shape my spond. I believe the people in Okla- succeed. life. homa and Kansas deserve the same Beyond the Masters Degree she Then fourth grade was ‘‘teacher kind of rapid and full response that we earned at Mississippi State University, unappreciation year’’—I don’t want to received in North Dakota. Frankly, I Tina has completed professional devel- remember that. We rebelled. We ran opment for teaching reading and math- hope they don’t face some of the delays through five teachers before we settled ematics; the special needs of teaching we faced in trying to get a congres- down. I wiped that from my memory. I deaf students; National Board Certifi- sional response, because when people feel sorry for those five teachers. cation; and training other teachers. I think everyone has memories and are devastated, they should not have to Her resume is evidence of her capacity understands what an incredible help a wait for help. This Government is big for gaining knowledge and sharing it teacher can be in our lives. enough and strong enough and this with others. While continuing her first My mother was a music and art country is generous enough to move to grade teaching, she has returned to teacher; my sister, a third grade teach- help immediately. Mississippi State University where as a er; my niece is a teacher; the man Mr. President, again, our hearts go clinical instructor she directs the ac- across the street was the principal of out to the people in Oklahoma and tivities of student teachers. our high school. Kansas who have lived through this Tina has brought new teaching tech- Those schools are gone. My former trauma; and to those who have lost rel- niques into the schools where she has elementary school is now a private atives and loved ones, we share their taught. She serves as a mentor to new school, a Christian church school; mid- deep sorrow. teachers and has developed school wide dle school is the fire station; my high f curriculum reforms. She also has used school is now the middle school. TEACHER APPRECIATION WEEK local television programs to provide I still remember the teachers. It is early childhood education lessons to not brick and mortar but the teachers Mr. COVERDELL. Mr. President, this parents. that make a difference. Dindo Rivera week is Teacher Appreciation Week. Another indication that she is a dedi- goes around the country talking about Yesterday was National Teacher Day. cated teacher is her participation in the changes in education and how im- For a number of our colleagues, edu- the Parent Teacher Association where portant it is. If an office worker had cation is such a core subject—both of she served as President while teaching fallen asleep 20 years ago, woke up and the 105th Congress and now in the 106th at Emerson Elementary School. Tina walked through a modern office, they Congress—Members want to express recognizes the importance of teachers would be in incredible despair. They themselves on this subject. participating in the community and is wouldn’t know what to do. They I am joined today by the distin- active in her church, and in other com- wouldn’t know how to answer the guished Senator from Mississippi with munity activities. phone. some opening remarks about Teacher I was very pleased that Tina Scholtes But he goes on to say that if a teach- Appreciation Week. took time to visit my office when she er had the same experience of falling I yield up to 4 minutes to the Senator was in Washington recently for the Na- asleep and waking up now, that teacher from Mississippi. tional Teacher of the Year recognition would walk into the classroom and find The PRESIDING OFFICER. The Sen- events. that not much had changed. But the ator from Mississippi. I congratulate her on all her suc- world has changed and our teachers Mr. COCHRAN. Mr. President, let me cesses. The first graders in Starkville, cannot be made the scapegoats. We congratulate my friend, the distin- Mississippi are lucky, indeed, to begin should not indicate that it is their guished Senator from Georgia, for or- their lives as students with Tina problem. We, as a nation, have to rec- ganizing this special order and allow- Scholtes, and we are all grateful to her ognize the teachers need help and we ing this opportunity to speak on the for being such a good example for other have to give it to them. That means we subject of Teacher Appreciation Week. teachers to follow. have to develop professional training. TRIBUTE TO TINA SCHOLTES, MISSISSIPPI’S Mr. COVERDELL. Mr. President, I We have to be sure our colleges are pro- TEACHER OF THE YEAR yield up to 4 minutes to the distin- ducing teachers who are well qualified. Mr. COCHRAN. Mr. President, I am guished chairman of the Labor-Edu- At the same time, we have to recognize proud to cosponsor the Senate Resolu- cation Committee, Senator JEFFORDS. that our Nation will not prosper if we tion proclaiming this week Teacher The PRESIDING OFFICER. Senator do not realize it is the teachers who Appreciation Week. JEFFORDS is recognized. make the difference. We are increasing This week, in every state, students Mr. JEFFORDS. Mr. President, it is standards and doing all these things to and parents are taking time to thank a pleasure to participate in honoring envelop them with modern technology the school teachers, and we should too. our teachers in National Teacher Ap- which is difficult to understand, espe- They are the true heroes in our na- preciation Week. cially if you don’t have more than 10

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00005 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8399 minutes in a day to even think about our educators.’’ Mrs. Bieze characteris- people in our country. That is why it those things. tically deflects that praise and credits was so important that we declared this I think it is incredibly important we her students. She says she—in her week as the 14th Annual Teacher Ap- all remember the teachers, especially words—is ‘‘truly blessed’’ as ‘‘the re- preciation Week and that we recog- this year, since the Elementary and cipient of their unrestrained love, curi- nized May 4, 1999, as National Teacher Secondary Education Act is up for re- osity and enthusiasm for six hours Day. authorization. This is our moment, at each day.’’ If only we could be holding Mr. President, the resolution that we a critical time in our history, when we more speeches on the floor of this Sen- passed yesterday states that education must take a look at the problems and ate that deal with issues like love, cu- is key to the very foundation of Amer- the demands and the difficulties that riosity and enthusiasm. Mrs. Bieze, we ican freedom and democracy we all are presented to our teachers and de- salute you. enjoy, that teachers have a profound vise the means to help them help us be- I would be remiss in not mentioning impact on the development of our chil- come the Nation we all want to be. some of Idaho’s other outstanding dren, and that much of the success we Let’s think about our teachers today, teachers. Just last week, Idaho’s PTA enjoy here in the United States can be remember what they did for us, and honored Jeff Durner, a fifth-grade attributed to our teachers. The resolu- think about what we can do for them. teacher at Jefferson Elementary in tion also states that while ‘‘many peo- I yield the floor. Boise. The PTA credits Mr. Durner for ple spend their lives building careers, The PRESIDING OFFICER. The helping children ‘‘become the best they teachers spend their careers building Chair recognizes the distinguished Sen- can be.’’ lives.’’ ator from Idaho. The Idaho Education Association Mr. President, I want to take a cou- Mr. CRAPO. Mr. President, I want to credits a sixth-grade teacher from my ple of minutes to recognize a teacher personally thank you for arranging for hometown of Idaho Falls as being wor- from my home state of Idaho who has us to take this time out of our busy thy of special recognition. Zoe Ann truly spent her career building lives. schedules to recognize teachers during Jorgenson has helped develop a special Judy Bieze teaches first grade in Coeur Teacher Appreciation Week. program in her district that groups d’Alene, Idaho. Judy got her start with Providing the brightest future for children based on their needs, not on a bachelor’s degree in elementary edu- our nation’s children is one of the most their age. She says many parents have cation from Illinois State University, important things we will do here on chosen to keep their children in public began teaching elementary students in the floor of the Senate. After parents schools, rather than move them to pri- 1971, and hasn’t stopped since. For the and families, America’s teachers play vate classrooms, based on this innova- past 14 years, she has blessed the chil- the leading role in helping our children tive and unique program. dren of Idaho. reach their potential. Therefore, it Mrs. Jorgenson believes the system She is an active member of the Na- gives me great pleasure to join in trib- should be made to fit the children, not tional Council of Teachers of Mathe- ute to our nation’s outstanding edu- that children be forced to fit the sys- matics, the International Reading As- cators and recognize a few of the top tem. She says that parents are looking sociation, the Panhandle Reading teachers in my home state of Idaho. for choices within the structure of the Council, and the Association for Super- We all know the impact of teachers. public school system, and she wants to vision and Curriculum Development. Five days a week, for 9 months of every offer them those choices. She is a lead teacher in her school and year, nearly 3 million teachers in this Finally, Idaho Parents Unlimited has received numerous grants to do ev- country help mold our children’s fu- says a special education teacher for- erything from providing books for par- ture. I believe in the quality education merly from Blackfoot, and now from ents and children to check out and read our teachers, administrators, and oth- Meridian, ID deserves credit for trail- to underwriting a district-wide inserv- ers provide in Idaho. That is why my blazing programs for students that are ice training in spelling. children continue to reside in the great sometimes forgotten in our school sys- State of Idaho. My wife Susan and I tems. Somewhere amongst all of this, Judy made the decision nearly 7 years ago Barbara Jones earned the title of finds time to teach some of Idaho’s when I was first elected to Congress Special Education Consulting Teacher. children. In fact, Judy humbly reflects that she and our children would remain One parent in Blackfoot described her that her greatest accomplishments in Idaho. We wanted our children to as ‘‘a true gift to my son as well as my- come in 6- and 7-year-old bodies. continue to receive the quality edu- self.’’ Ms. Jones is now helping both It is no wonder. Judy practices some cation they now experience in Idaho’s fellow teachers and students learn how techniques in her classes which some public school system. special needs can offer special rewards. may call innovative, while others call That quality education takes many We all have a stake in this process, them back to the basics. For instance, faces. I want to show you one of them because our children’s success in edu- during the course of the year she takes this morning. Judy Bieze lives in Coeur cation depends on the support they re- time to recognize each child in her d’Alene, Idaho and teaches first grade ceive at home, and the future of our class as the ‘‘Special and Unique’’ per- at Hayden Meadows Elementary in nation depends on the leaders we are son and works each day to recognize nearby Hayden Lake. raising today. each child’s accomplishments. Further- Mrs. Bieze was honored this year by Some define leadership as what we do more, she believes that parents must the State of Idaho as Teacher of the with our opportunities. I am proud to be actively involved in their child’s Year. But she is more than that; she is praise these fine Idaho educators who education. From encouraging parents also a local softball coach and a Sun- have moved the bar higher—for our to be involved in classroom activities day school teacher, so I guess that children. to weekly letters home to detail what makes her a teacher 7 days a week. Mr. CRAIG. Mr. President, I rise their child has been doing in school, During each school year Mrs. Bieze today to recognize teachers across Judy recognizes that parents are first gives individual attention to her stu- America for the vital work they do. I and foremost in a child’s education. dents by profiling each one as the come from a family of educators, so I Judy has stated that each day she is ‘‘Special and Unique’’ person of the have seen firsthand the grueling work ‘‘rewarded by the large and small ac- week. She also encourages parents to teachers go through every day—not for complishments of the children en- volunteer in the classroom and to take their own gain, but because they care trusted to my care.’’ Last year, Judy’s an active role in their child’s learning. about each and every one of our chil- peers recognized these accomplish- It is the ability to give of herself that dren. Teachers are not the highest paid ments and her commitment to the edu- makes Mrs. Bieze special. Her super- people, they are not in the most glam- cation of our children by choosing intendent says she ‘‘exemplifies the orous profession—but they are, and Judy Bieze as the Idaho State Teacher initiative and dedication we seek in should be, among the most respected of the year for 1998–1999.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00006 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8400 CONGRESSIONAL RECORD—SENATE May 5, 1999 Judy believes that each child is a students with three quality teachers in tional Teacher Day and Teacher Appre- unique, unrepeatable miracle. On be- a row, scored over twice as high on ciation Week. I appreciate very much half of the great state of Idaho, I am math tests as those students with the work Senator FRIST has done on glad that Judy chose to come to Idaho teachers who are less qualified. Thus, behalf of reform in education. and work her miracles with our chil- we have anecdotal evidence and sci- Mr. President, I am pleased to join dren. I am proud of the work she does, entific evidence that a quality teacher my colleagues today to recognize May and am pleased that I have the oppor- has a tremendous impact on students. 2–8, 1999, as the 14th Annual Teacher tunity to recognize her accomplish- One such outstanding teacher is Appreciation Week, and to commend ments today. It is my hope that other Delise Teague, shown here in this por- thousands of dedicated teachers across teachers will see what she has done, see trait, who teaches English at McNairy the nation for their determined efforts how she cares for our children, and Central High School in Selmer, TN. to shape the intellect of our children. strive to follow her lead. With teachers She knows firsthand the impact a qual- The foundation of American freedom like Judy leading the pack, I have ity teacher can have on a student. and democracy is a strong, effective great confidence in the future of our Using her words, she notes, ‘‘I cannot system of education where every child country. take personal credit for my success as has the opportunity to learn in a safe The PRESIDING OFFICER (Mr. a classroom teacher. Great teachers and nurturing environment. CRAPO). The Chair recognizes the Sen- shared the light with me. I am simply America’s first rate education sys- ator from Tennessee. passing it on.’’ tem depends on a partnership between Mr. FRIST. Mr. President, I ask She adds it was her first Sunday parents, principals, teachers and chil- unanimous consent to speak as in School teacher whose influence ‘‘served dren. The success of our nation for morning business for 6 minutes. to fan the flame of learning that had much of the 20th century—is the result The PRESIDING OFFICER. Is there been sparked at home by loving par- of the hard work and dedication of objection? ents and an abundance of books.’’ She teachers across the land. Mr. CONRAD. Reserving the right to will further tell you that she had sev- While many people spend their lives object, and I will not object. building careers, teachers spend their The PRESIDING OFFICER. The eral teachers in the public school sys- careers building lives. Our nation’s Chair recognizes the Senator from tem who played a key role in her own teachers serve our children beyond the North Dakota. education and in her decision to pursue Mr. CONRAD. Mr. President, I ask a career in teaching. The teachers who call of duty as coaches, mentors, and unanimous consent we get 4 additional motivated Delise in her education were advisors without regard to fame or for- minutes on this side as well. the ones who saw her untapped poten- tune. Across the land nearly 3 million The PRESIDING OFFICER. Without tial and challenged her. This is a lesson men and women experience the joys of objection, it is so ordered. that Delise applies in her own class- teaching young minds the virtues of Mr. FRIST. Mr. President, it is ex- room. She challenges her students and reading, writing and arithmetic. pected the Senate will soon consider a believes in their potential to succeed. As part of the 14th Annual Teacher resolution that highlights the week of In fact, Courtney Carroll, a student Appreciation Week, I’d like to pay spe- May 2 to 8 as National Teacher Appre- at McNairy Central High School, cial tribute to Andrew Baumgartner of ciation Week. We have had a wonderful wrote, ‘‘Miss Teague is loved and re- Augusta, Georgia—who was recently 2 weeks in this Nation’s Capital. Last spected by her students because she named the 1999 National Teacher of the week the President signed the Ed-Flex truly wants each person who enters her Year. bill which returned much of the con- classroom to be successful.’’ Mr. Baumgartner, who teaches kin- trol—local accountability, local flexi- Delise coaches the varsity softball dergarten at A. Brian Merry Elemen- bility—to local schools and school dis- team and freshman basketball team. tary School in Augusta, has been a tricts. This week we honor our teach- She has served on the Technology Lit- teacher for 23 years. His motivation ers. eracy Grant Committee, the National and source of inspiration comes in part I rise today to honor the many out- Honor Society Selection Committee, from the belief that it was his duty to standing teachers across the Nation and as a student teacher supervisor/ give something back to society, and he and especially in my home State of mentor. She is active in her commu- has done so through his teaching. Tennessee. In particular, I would like nity and takes on projects such as dis- To achieve his goal of getting kids to to highlight the achievements of Ms. tributing fruit baskets for the elderly learn, Mr. Baumgartner creates a sense Delise Teague, the 1999 Tennessee and providing gifts through the project of adventure in his classroom. He has Teacher of the Year, whom I had the Angel Tree for underprivileged children used his creativity and imagination to honor to meet, as you can see in this and contributing to Saint Jude’s Chil- bring the magic of reading and learning photo, just several weeks ago. This is dren’s Hospital through fundraising ef- to the minds of his kids. Delise in the picture. forts. The award, sponsored by the Council First, I would like to cite some of the She is just one wonderful example of of Chief State School Officers and research which paints a clear picture the many dedicated teachers in our Na- Scholastic, Inc., will send Mr. about the quality of a teacher being so tion’s schools. In my own past I think Baumgartner on a promotional tour as critical to the future of our children of June Bowen, who taught me seventh 1999 National Teacher of the Year, and their education. Tennessee is one grade English, and Mary Helen Lowry, where he will share his innovative of the few States with data systems in who passed away this year, who taught ideas with other teachers around the place which make it possible to link me English through high school. I am nation. I wish Mr. Baumgartner the teacher performance to student so pleased to be able to participate in best of luck during this tour and am achievement. Researchers have the ca- this effort to honor our Nation’s teach- confident that he will inspire other pability of examining the impact ers by promoting National Teacher Ap- teachers with his creativity and will- teachers have in terms of their effec- preciation Week. ingness to do whatever it takes to get tiveness, how well they are teaching, As parents and community members, kids to learn. and what students actually learn. Data we should all take a few minutes to In closing Mr. President, I call on all from these studies show the least effec- celebrate this great cause for our chil- my colleagues—on both sides of the tive teachers produce gains of approxi- dren’s future. I yield the floor. aisle—to take a moment this week to mately 14 percentile points for low- Mr. COVERDELL addressed the give a special thanks to the nearly 3 achieving students. However, the most Chair. million important American men and effective teachers produce gains that The PRESIDING OFFICER. The Sen- women—like Andy—who have contrib- average 53 percentile points. ator from Georgia. uted to the emotional and intellectual The data also reveal that these ef- Mr. COVERDELL. Mr. President, I development of children across the fects are cumulative over time. In fact, thank all my colleagues honoring Na- land.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00007 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8401 Mr. ABRAHAM. Mr. President, I rise opportunity to provide today’s teach- those teachers all over America who in recognition of Teacher Appreciation ers with access to proven training pro- have made a real difference. Week. During this week we have a spe- grams while simultaneously recruiting One special teacher who made a real cial opportunity to thank the dedi- and training qualified and dedicated difference in my life was Mr. McElroy. cated professionals who open our chil- young people to become tomorrow’s When I was a young boy, I played my dren’s eyes to the world of discovery great educators. violin in the school orchestra. On the and learning, the world that will open Most importantly, Mr. President, we day of one of our most important per- the door to a brighter future for them must applaud and show our apprecia- formances, the student who was sup- and for all of Michigan. tion to the teachers who go that extra posed to play a solo on the bass got Five days a week, for nine months mile for our kids, capturing their at- sick and was unable to perform. My out of every year, America’s 2.7 million tention, helping them gain the knowl- music director, Mr. McElroy came to teachers help to mold our children’s fu- edge and skills they need, and pro- me and convinced me that, even ture, the future of Michigan, and the viding examples of dedication and skill though I had never played the bass, I future of America. Across Michigan that should inspire us all. could perform the solo. and across the United States, tomor- Mr. DOMENICI. Mr. President, I rise I had terrible doubts about my abil- row’s business leaders, inventors, doc- today to salute one of our nation’s ity to step in and do the job. But Mr. tors, and even teachers are building the most precious resources, our teachers McElroy had confidence in me, even if foundation of learning and experience and in particular New Mexico’s teacher I didn’t. And he worked with me and that will shape their lives and careers. of the year, Stan Johnston of Los Ala- encouraged me and coached me for This week, Mr. President, Michigan- mos High School. most of that afternoon. That night I ites like all Americans are taking time I would submit, teachers are the key was able to play the solo without mak- to pay tribute to our teachers, some of to America’s future. Christa McAuliffe, ing a mistake. the most important people in our chil- the teacher and astronaut put it in per- As I think back on it, this was one dren’s lives. After parents and families, fect perspective. She said, ‘‘I touch the experience that taught me that if I ap- teachers pay the most important role future, I teach.’’ plied myself I could meet a challenge. in helping our children reach their po- Building upon her statement I would When, in 1976, everyone believed I was tential. No teacher can take the place say: it is a simple fact that the future a long-shot to win the nomination and, of loving and attentive families, but is prejudiced in favor of those who can indeed, the election to become Utah’s the school experience plays a crucial read, write, and do math. A good edu- senator, I should have told them about role in shaping our children’s char- cation is a ticket to the secure eco- Mr. McElroy. acter. nomic future of the middle class. As I know that right now, in a classroom After the tragic events in Colorado, I the earning gap between brains and in Utah—maybe in the room of Diane hope all of us will take the time to brawn grows ever larger almost no one Crim, who teaches math at Salt Lake’s think about the difficult job our teach- doubts the link between education and Clayton Intermediate School and is ers have, in these troubled times, giv- an individual’s prospects. Utah’s 1998 Teacher of the Year—an- ing children the structure and habits And today the Senate is acknowl- other young student is learning these as well as the knowledge they need to edging those on the front lines with important lessons thanks to a dedi- become good citizens and productive our students, the unsung heroes, their cated and caring teacher. adults. teachers. Somewhere in this great Teaching is not just a job, it’s a call- I have always supported calls for bet- country of ours a teacher has a future ing. It is a calling to impart knowl- ter computer technology in our class- leader of the United States in his class- edge, to mete out discipline, to inspire, rooms. And it is true that our children room. Who knows; it could be one of to motivate. need to learn to use tools that will ex- the students in Stan Johnston’s Last week, our entire nation pand their access to information. But a English and Study Skills class at Los mourned the loss of a devoted teacher, qualified, highly trained teacher re- Alamos High School in New Mexico. Dave Sanders. The testimony of his mains the most important education My point is simple, after parents and students to his caring, whether in the tool in any classroom. Today’s techno- families, teachers play an important classroom or on the basketball court, logical innovations can help teachers role in helping our children reach their is a tribute better than any we here in capture our children’s attention and potential. After our children leave the Senate could pay. I hope that the bring the world to their eyes and fin- home each morning, it becomes the re- students he taught at Columbine High gertips. But no machine can take the sponsibility of America’s almost 3 mil- School will go on to practice the les- place of a dedicated teacher who genu- lion teachers to ensure our children are sons he taught and be the kind of citi- inely cares about a child’s future. With prepared for the future because in our zens in the community that he hoped the rapid advance of education tech- nation’s classrooms resides the future. they would be. nology, we must ensure that our teach- Hopefully, the future doctors who Mr. President, Mr. McElroy, Diane ers are trained in the most effective will find the cure for cancer, mental Crim, and Dave Sanders all represent educational use of this technology, and illness, and heart disease are right now the best of the teaching profession. that none of us are distracted from the in our classrooms. But, most impor- There are thousands of others we could basics of a good education by glittering tantly we have the next generation of mention here today who have helped machines. our country now attending classes our children learn the keys for living Unfortunately, Mr. President, there throughout our schools. such as reading, math, science, and his- are disturbing statistics about how In conclusion, I would like to thank tory. But, more than that, they have well our teachers are prepared to enter you and a job well done to all of our helped reinforce essential values like the classroom. More than 25 percent of teachers and in particular, Stan John- hard work, perseverance, team work, new teachers nationwide enter school ston of Los Alamos High School. and integrity. I am pleased to join in without adequate teaching skills or Again, thank you and please continue honoring these teachers today. without training in their subject ac- the superb work you are doing on be- I yield the floor. cording to the National Commission on half of our country. Mr. CONRAD. Mr. President, I also Teaching and America’s Future. One in Mr. HATCH. Mr. President, of all the want to comment on the National seven teachers has not fully met State occupations in America, teachers may Teacher Appreciation Week, because I standards. deserve their own ‘‘appreciation day’’ think all of us can look back in our We must do more to ensure that our the most. And, perhaps no occupation own backgrounds and remember what a teachers are fully prepared to meet the influences the future of our country difference teachers made in our lives. increasing challenges of their profes- more. I am delighted to join my col- I can remember very well the teach- sion. We must take advantage of every leagues today in paying tribute to ers who made a contribution to my life,

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00008 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8402 CONGRESSIONAL RECORD—SENATE May 5, 1999 to my growing up: Mrs. Goplin, who what teachers do in terms of training There is the crisis that is receiving taught American history and who real- our kids. So, today, we say thank you, enormous attention in Oklahoma and ly shared a great love for under- thank you for everything you have Kansas—and it should have enormous standing the Constitution of the done. You have made a difference. attention. Those people deserve for United States, always told us that this f others to understand what is happening is one of the greatest documents in and the suffering they are experi- CRISIS IN AMERICAN human history. I will never forget encing. AGRICULTURE those words of Mrs. Goplin. There is another crisis as well, and She was exactly right. Our Constitu- Mr. CONRAD. Mr. President, I want that is the crisis in farm country. tion is one of the greatest documents to talk about another crisis that is oc- Those people are suffering. And they in human history, and how lucky we curring in this country. It is not re- deserve attention as well. are to live in a country that has con- ceiving the attention as are the storms Let me just show another chart stitutional guarantees of freedom for in Oklahoma, the tornadoes, and the which goes right to the heart of the the American people and says to each tremendous damage that has been problem we are facing. This shows and every American, you have certain wreaked in those States by this set of what has happened to farm prices from rights, rights that protect you from the storms, but it is a crisis nonetheless. It 1946 to 1998 for wheat and barley. You overreach of government, because our is almost a stealth crisis. It is a crisis can see from the prices—this is 1998—it forefathers had known in Europe that in American agriculture, and I can tell has even gotten worse. We go out to government can become oppressive and you, it is causing trauma, too. 1999, and these prices continue to de- that government can make demands on In my State, we have just seen a se- cline in real terms. We have the lowest its citizenry that are not fair, that are ries of headlines in the major news- prices now for these commodities in 52 not reasonable. We are so lucky to papers that tell the story. I thought I years. This is a crisis by any definition. have these protections. would bring them to the attention of I just want to conclude by going back I remember other teachers: My third my colleagues today so hopefully we to what one of the articles said in the grade teacher, Mrs. Offerdahl, who is can reflect not only on the tragedy in papers back home. This says: ‘‘Banks’ still alive in a nursing home in North Oklahoma and Kansas, but we can re- Survey Shows Farm Income Dwin- Dakota, what a great woman. She flect on the tragedy that is happening dling.’’ In this article they say, ‘‘The came every morning to that class with in central America, and I mean the vice is tightening on farm borrowers in a sparkle in her eye and a love for central America of North Dakota and the Upper Great Plains. The outlook learning and a love for teaching. She South Dakota, Montana, Nebraska, and for farm income is grim unless com- made a difference not only in my life Kansas—States that have been hard hit modity prices increase.’’ but in the lives of hundreds and hun- by a virtual depression in agriculture. Mr. President, that is exactly the dreds of students whom she taught It is causing real trauma, Mr. Presi- case. We face a tightening noose over a very long career in the Bis- dent. These headlines tell the story. around the necks of literally thousands marck, ND, school system—Mrs. This headline sums it up: ‘‘The rural of farm families, and it is time for a re- Offerdahl. depression.’’ There is a real depression sponse from the Federal Government. And Mrs. Senzek, who was my fifth in the heartland of America. Prices, We need to pass the disaster supple- grade teacher, a highly intelligent the lowest we have seen in 50 years, are mental. We need to make the last dis- woman, somebody who was absolutely causing literally thousands of farmers aster program we passed whole, be- committed to improving the edu- to exit agriculture. cause we now know it will cost $1.5 bil- cational standards of the kids in Bis- Here is another headline which re- lion more to keep the promise which marck, ND. My sixth grade teacher, cently ran in papers back home: ‘‘Farm was made in that disaster program. We Miss Barbie, who was a very sophisti- prices, farm numbers both fall.’’ need to once again shore up the transi- cated woman, somebody who loved And this headline that says: ‘‘An- tion payments that are promised farm- reading and imparted that love to stu- other farm dies; does Washington real- ers under the new farm bill at this time dents. ly care?’’ That is the question we are of price collapse. I think back to how fortunate we going to be asking today and we are Those are steps we can take, we need were to have people of that quality and going to continue to ask as we see this to take, we must take. In addition, we that caring who provided education to crisis grow and develop affecting more should reform crop insurance, because us and at great sacrifice to themselves. and more farm families and starting to we know that program does not work I can say every one of these women affect the small towns of our State as when you have multiple years of dis- whom I have mentioned could have well. In fact, this headline says it well: aster. made much more money doing some- ‘‘AG Crisis Is Bigger Than N.D.’’ This I just close by saying once again, I thing else, but they were dedicated to is an editorial from the largest paper in hope America is listening and under- teaching young people, and they made our State pointing out that not only is stands that there are tragedies occur- enormous financial sacrifices to do it. North Dakota affected but other farm ring across the United States. We have There are so many other teachers States as well. a tragedy in Oklahoma, a tragedy in along the way whom I remember. Mrs. This is a headline which ran recently: Kansas, and we ought to respond. Hook was my second grade teacher. ‘‘State Loses Farmers.’’ And one head- There are also tragedies that are oc- She was a woman of real majesty, real- line which ran, again, in the biggest curring below the radar screen. They ly almost a regal person, very tall, paper in our State: ‘‘Crop Prices Are are not getting the attention of the na- very erect, very dignified, somebody the Problem.’’ And indeed they are. tional press. They are a crisis nonethe- who commanded respect. ‘‘Crop Prices Are the Problem.’’ This less, and we ought to respond to them These are people who made an im- article says, ‘‘Crop prices, that’s the as well. pression that has lasted a lifetime, big thing wrong with the region’s farm I thank the Chair and yield the floor. lasted a lifetime for me, but I know picture this year.’’ And they are ex- Mr. President, I know my colleague lasted a lifetime for other students in actly right. from Montana is waiting to speak. the Bismarck public school system as When I mentioned the crisis has I inquire of the Parliamentarian, how well. moved from the farmstead to the much time do we have remaining on Mr. President, I add our words of streets of North Dakota, this headline our side? praise to all the teachers across this tells that story: ‘‘Farm Downturn The PRESIDING OFFICER. Five country who make a difference in the Leaves Main Street Reeling. Three minutes 15 seconds are remaining. lives of kids. Other than family mem- family-run businesses in Michigan, Mr. CONRAD. I just ask my col- bers, other than parents, perhaps there North Dakota closed, with little hope league from the State of Montana if he is no more important relationship than of reopening.’’ would like that additional 5 minutes. I

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00009 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8403 would be happy to yield to him at this The WTO really began with the cre- is guaranteed the right to continue point. ation of the General Agreement on using nonmarket economy methods for The PRESIDING OFFICER. Would Tariffs and Trade, otherwise known as fighting dumping and unfair subsidies. the Senator from Montana—— the GATT, in 1948. At that time, 23 na- China will end investment practices Mr. GRAMM. Reserving the right to tions were members. Each of them intended to take jobs from other coun- object, may I hear the request again? agreed to a set of tariff cuts and agreed tries, for example, local content re- The PRESIDING OFFICER. The in- to apply the new tariffs to all other quirements which stop auto plants quiry was whether the Senator from GATT members. This is the famous, or from importing U.S. parts; export per- Montana desires time. infamous, principle of ‘‘MFN,’’ or formance clauses requiring production Mr. BAUCUS. Mr. President, I appre- ‘‘Most Favored Nation.’’ to be exported rather than sold on the ciate the inquiry of the Senator from Since then, since 1948, 111 other Chinese market, and so on. And China North Dakota. I would, but I want to economies—membership is no longer has agreed to a product-specific safe- accommodate the manager of the bill, restricted to countries, as Hong Kong guard which will strengthen our ability too. I would like, at some time in the and the European Union are now mem- to fight sudden import surges. next hour or two, to speak for 15 min- bers—have joined to make up today’s It is important in the weeks and utes. 134-member WTO. months ahead to ensure that these pro- Mr. GRAMM addressed the Chair. The original tariff agreements are visions have acceptable duration. But The PRESIDING OFFICER. The Sen- also joined by agreements on sanitary it is also clear both that we will be able ator from Texas. and phytosanitary standards—that is, to use the WTO to strengthen our guar- Mr. GRAMM. To accommodate the health standards—intellectual prop- antees of fair trade, and also that we Senator, why don’t we just take 5 min- erty, technical barriers to trade, and will be able to use our own domestic utes off each side. We are going to have other issues. And 30 more economies trade laws for the same purpose. These the vote at noon, so we will have less have applied to join, the largest being are fundamental parts of any success- time. Senator SARBANES and I had an China. ful WTO accession. opportunity to plow this ground in As these economies join, they must The American negotiators have also some depth, so why don’t we yield to also lower their trade barriers, live up won an impressive set of commitments the distinguished Senator 10 minutes to WTO’s intellectual property and ag- in market access. Let me offer a few now, and then we will begin the debate ricultural inspection commitments, examples: In agriculture, China has al- on the financial services modernization and so forth. For existing members, ready begun by lifting its infamous ban bill. however, the only requirement is the on Pacific Northwest wheat, American Mr. BAUCUS. If I might try once one they adopted back in 1948: that we beef, and also on citrus products. And more for 15. apply MFN—or today normal trade re- when it enters the WTO, it will accom- Mr. SARBANES. I yield the Senator lations—tariffs to the new members. pany this by major tariff cuts. For ex- another 5 minutes. That is the only commitment that cur- ample, beef tariffs will fall from 45 per- Mr. BAUCUS. Thank you very much. The PRESIDING OFFICER. So the rent members have to make. cent to 12 percent, and adoption of tar- So as we consider the commitments iff-rate quotas in bulk commodities; RECORD is clear, the Senator from Mon- tana will have 15 minutes—10 minutes China has and will make to be a WTO that is, minimum guarantees of im- from the Democratic side, 5 minutes member, we must also remember that ports into China. The wheat tariff-rate quota, for ex- from the majority side. these are fundamentally one-way con- The Senator from Montana is recog- cessions. Let me repeat, to enter the ample, has the potential to lift China’s nized for 15 minutes. WTO, China has committed to a set of imports from 2.4 million metric tons a Mr. BAUCUS. Mr. President, I ask one-way concessions. day to 7.3 tons for the first year China unanimous consent to speak in morn- Nothing in any WTO accession will is in the WTO and more afterwards. ing business. mean American concessions on market China will also give up any rights to The PRESIDING OFFICER. Without access; the use of our trade laws to ad- export subsidies, a far cry from, say, objection, it is so ordered. dress dumping, subsidies, or import Europe which has massive export sub- Mr. BAUCUS. Mr. President, I thank surges; or controls on American tech- sidies; China going much, much further very much not only my good friend nology exports. Likewise, if we should than Europe is today. from North Dakota but my good friend choose to tighten export controls at In industrial goods, China will grant from Texas, Senator GRAMM, and my some point in the future, nothing in full distribution rights, retailing, re- good friend from Maryland, Senator the WTO accession would prevent us pair, warehousing, trucking and more SARBANES. from doing so. in almost all products over 3 years. Let me now turn to the commit- And it will allow American companies f ments China has made and to the to import and export freely. These are CHINA’S WTO ACCESSION issues which remain. concessions that will fundamentally Mr. BAUCUS. Mr. President, I rise To enter the WTO, China and the ex- transform an economy which now oper- this morning to offer some thoughts on isting members must do two things: ates by requiring both Americans and the negotiations towards China’s WTO draft a ‘‘Protocol’’ covering a set of Chinese to use Chinese Government accession, in the aftermath of Premier fair trade policies, and agree on a set of middlemen in these areas. It will make Zhu Rongji’s visit to the United States. market access concessions. large tariff cuts to an average of 7.1 This, I submit, is a question of funda- These are the issues which the Amer- percent, and it will give up the quota mental importance to America’s trade ican negotiating team addressed in the policies at the heart of several indus- interests. China is now our fourth larg- months and weeks before Premier trial policy ventures. est trading partner—after Canada, Zhu’s visit. And the results are strik- Another concession of special inter- Japan, and Mexico—a major market, ing. China has made a significant set of est to my State of Montana is deep and the source of our most unbalanced concessions in both areas. The work is cuts in wood products, from levels trade relationship in the world. And it not done, but let me review for the reaching 18 percent today down to 5 is perhaps still more important to Senate some of the major elements. and 7 percent after WTO membership. America’s strategic interests in Asia. Under the protocol, China has made And in services, China has made com- Today, I would like to review the the following commitments: It will end mitments in every sector. They are es- progress thus far and its implications the practice of requiring technology pecially strong, as I noted, in distribu- for these interests. transfer as a condition for investment. tion, but also extend to telecommuni- Let me begin, however, with some That is very big. This includes refusing cations, to finance, to audiovisual, en- context about WTO accessions and the to enforce tech transfer provisions of vironmental services, law, franchising, commitments they require. existing contracts. The United States direct sales and more. These are very

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00010 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8404 CONGRESSIONAL RECORD—SENATE May 5, 1999 significant concessions which go most sions that will make trade with China Mr. SARBANES. Will the Senator of the way to creating a commercially fundamentally more fair for our coun- yield on that point very briefly? meaningful agreement. try. It will then be up to the Senate, to Mr. MACK. I will be glad to yield for The U.S. negotiators deserve im- our colleagues, to take the final step a moment. mense credit for their tremendous by making the normal trade relations Mr. SARBANES. I remember people achievements of the past months, abso- we now offer to China permanent. would say that the Japanese had all lutely amazing, perhaps even more for I thank the Chair. I yield the floor, the largest banks in the world and they their willingness to refuse bad offers in and I suggest the absence of a quorum. were saying, look. And now look at the the past years and remain firm in the f situation. commitment to strong accession in all Mr. MACK. It is a dramatic change, CONCLUSION OF MORNING areas. and here we are. We have been talking Several issues, however, remain unre- BUSINESS about this legislation for all those solved. I am especially and very strong- The PRESIDING OFFICER (Mr. years and we haven’t made the modi- ly concerned that we are not accepting HUTCHINSON). If the Senator will with- fications we needed to make. I hope we any rapid phaseout of nonmarket econ- hold, morning business is closed. will be successful this time. omy dumping rules or import surge f I rise in support of the underlying bill and in opposition to the Sarbanes provisions. We can also improve on the FINANCIAL SERVICES substitute. We all know that legisla- market access commitments in several MODERNIZATION ACT OF 1999 of the service sectors. However, we tion to overhaul the bank regulatory should also understand that there is a The PRESIDING OFFICER. Under structure is long overdue, and I join point at which we should say yes. We the previous order, the Senate will now many of my colleagues in thanking the should not set a goal of transforming resume consideration of S. 900, which chairman for his hard work in writing China’s trade regime into Hong Kong’s the clerk will report. this bill and bringing it to the floor. The legislative assistant read as fol- by next New Year’s Day. Rather, we I will begin by quoting the words of lows: should expect a good, commercially the Senate Banking Committee report, meaningful accession, and we are al- A bill (S. 900) to enhance competition in which I believe presents a strong case the financial services industry by providing for financial modernization. It states: most there now. a prudential framework for the affiliation of The argument for legislation to rationalize Finally, let me say a few words about banks, securities firms, insurance compa- our financial structure is strong. Regulatory the broader interests involved. A WTO nies, and other financial service providers, and court decisions have eliminated many of accession is a set of unilateral trade and for other purposes. concessions; in this case, made by the barriers between commercial and invest- Pending: ment banking. The barriers separating com- China. As such, it is in our economic Sarbanes (for DASCHLE/SARBANES) amend- mercial banks from investment banks have and our commercial interest. It will ment No. 302, in the nature of a substitute. been perforated in both directions. Finally, create opportunities while making The PRESIDING OFFICER. The time changes in the technology and practice of fi- trade fairer for our working people and until 12 noon shall be divided between nancial intermediation have rendered the re- farmers. But it is also a piece of a larg- the Senator from Texas and the Sen- strictions of Glass-Steagall increasingly in- effective and obsolete. er strategy designed to create a more ator from Maryland, with 23 minutes stable, a more prosperous and more for Senator GRAMM and 17 minutes for There is nothing particularly re- peaceful Asia-Pacific region. Senator SARBANES. markable about that language, Mr. China’s economic integration into The Senator from Texas. President. In fact, those same argu- the Pacific region since the opening Mr. GRAMM. Mr. President, I yield 3 ments will be made by many of my col- under President Nixon in 1972 has been minutes to the distinguished Senator leagues here today. But what is re- immensely important to our long-term from Florida. markable about the statement I just national interests. We can see that The PRESIDING OFFICER. The Sen- read is that it comes from a committee very clearly in the Asian financial cri- ator from Florida is recognized. report on banking legislation in 1991. sis, for example. Mr. MACK. I thank the Chair. Just as I believed those words to be sig- When I came to Congress, China was Mr. President, I thank Senator nificant 8 years ago, I believe them to a revolutionary power, which would GRAMM for yielding me the time. I have be even more so today. Unfortunately, have used this recent currency crisis to a comment or two with respect to the there was no overhaul of our banking spread disorder, spread revolution process that we have gone through in system in 1991. And despite much hard throughout Southeast Asia and the Ko- putting this legislation together. work and a clear need for action, there rean peninsula. But today it is a bene- I commend Senator GRAMM. I can’t has been none since. We are long over- ficiary of Thai, Singapore, Korean and think of a time in my now 17 years in due for this debate and I am pleased Malay investment, and these countries the Congress where I have had a chair- the Senate is addressing this important are also China’s markets. China has re- man of a committee that has spent as issue. sponded to the crisis by contributing to much time with the other members of Freedom and free enterprise have al- their recovery through currency sta- the committee, walking through a par- lowed our corporate and financial insti- bility and several billion dollars in ticular piece of legislation, each aspect tutions to respond to changing times contributions to IMF recovery pack- of it, making sure that each of us was and to adapt to a changing financial ages. prepared and educated on the various environment. But this ability has The WTO accession will deepen and issues. There are some difficult issues reached its limits within the confines strengthen this process. At the same that face us—the whole issue of CRA, of present law. For our financial insti- time, it will move China toward the unitary thrifts, the mixing of banking tutions to continue to grow, to com- rule of law, give Chinese working peo- and commerce, the issue of operating pete, and to evolve, we must give them ple, students and families more fre- subsidiaries versus affiliates, all of a new legislative climate in which to quent, more open contact with for- them complicated. operate. That is the purpose of the bill eigners and, thus, contribute to our I can remember not too many years before us today. work toward a China which has more ago when there was this sense in Amer- Mr. President, our banking system is respect of the law and more respect for ica that the model which should be fol- truly a model for the world. Emerging human rights. lowed was the Japanese banking sys- economies from Asia to Africa to Cen- Mr. President, the U.S. negotiators tem that people looked at and said, we tral Europe look to the United States thus far have done an excellent job. ought to look at Japan, the dynamic for the blueprint and technical exper- They have already offered American economy they were producing in the tise to build an effective financial in- farmers a ray of hope during a very dif- late 1980s. I think about how much frastructure. This is happening because ficult year. We are very close to acces- things have changed in those 10 years. we have found a remarkable balance

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00011 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8405 between community banks and global between these entities are carefully So today I want to pay particular at- institutions, between the regulators constructed to ensure institutional tention to our Mississippi Teacher of and the regulated, between the States safety and soundness and that the tax- the Year, Mary Beth Black. She teach- and the Federal Government, and be- payer-insured deposits of retail bank- es chemistry, physics, and advanced tween ordinary people and the money ing institutions are protected. placement physics. I remember those they need to finance their hopes and The structure provided for in this courses. They are the reason I didn’t go dreams. In recent years, we have wit- legislation will end the ad hoc expan- into pharmacy or med school. Biology, nessed a wave of high-profile mergers, sion and administration of our banking chemistry, physics—I took all the col- as institutions across the sectors hope sector and provide the industry with a lege preparatory courses, and I look to create ‘‘synergy’’ from offering a clear roadmap for the 21st century. In back now and I know that I was wast- broad range of financial products to an my view, it will lead to greater sta- ing space. I was really never destined expanding global customer base. For bility, enhanced safety and soundness, to major in the sciences. But it is so their part, many smaller, community- and improved choices for customers important that we have teachers who based institutions are using the new and consumers. inspire students in that area. If we are regulatory authorities to offer their So I urge my colleagues to support going to be competitive in the future, customers one-stop shopping for indi- passage of this important bill and de- in the next millennium, and partici- vidual financial needs—from ordinary feat the Sarbanes substitute. pate in the world economy, we are retail banking to insurance products With that, I yield the floor. going to have to have students who are and securities instruments. Mr. LOTT addressed the Chair. good in science, physics, computer All of this is very important to the The PRESIDING OFFICER. The ma- sciences, and the sciences in general. continued financial well-being of our jority leader is recognized. In order for them to learn what they Mr. LOTT. What is the parliamen- Nation and to the global competitive- need to know and to be inspired in that tary situation? field, you need great teachers like this ness of our financial services industry. The PRESIDING OFFICER. The time However, the expansions I speak of are teacher, the ‘‘Teacher of the Year’’ in is under the control of the Senator Mississippi, who teaches at Emory, MS, not taking place with the approval of from Texas and the Senator from a wonderful lady with a wonderful the Congress and are not occurring Maryland. record. through any action on our part to Mr. LOTT. I yield myself time out of She points, interestingly enough, to change the law. Rather, these things my leader time. her second-grade teacher who, she are happening because—as the 1991 re- The PRESIDING OFFICER. The ma- noted, inspired her when she was 7 port mentioned—court decisions and jority leader is recognized. years old—that she knew when she was the broadened interpretations of Mr. LOTT. Mr. President, I will be 7 she could be anything she chose to be: present law by the banking regulators brief because we have to get back to She could be a brain surgeon, she could have allowed them to take place in an this Financial Services Modernization drive a fire truck, or go to the Moon. ad hoc manner. In order to access the Act. I know the two managers man- But this second-grade teacher inspired right to affiliate with other sectors, fi- aging this are working on it stu- her to want to be a teacher. She always nancial companies have to jump over diously, and we will be having votes wanted to be a teacher—and to be more increasingly complicated regulatory later today. It looks to me as if we can than just a teacher, to be an inspira- hurdles in order to adapt and survive. make good progress. tion to young people. It is high time Congress weighed in on f She said: this important trend. It is high time Second grade can be challenging. My prob- we cleared the way for these affili- MARY BETH BOYER BLACK, MIS- lem was cursive writing or ‘‘real writing’’ as ations and repealed the underlying web SISSIPPI’S 1999 TEACHER OF THE we second graders called it. No matter how of Depression-era restrictions on our YEAR hard I tried, my loops and swoops and tilts banking industry. Mr. LOTT. Mr. President, I join my were never as good as my peers. That is what we accomplish in the other colleagues here today in recog- ‘‘Until now,’’ she said, ‘‘school had bill before us today, Mr. President. nizing National Teacher Appreciation been great.’’ But in this instance it got This legislation allows companies to Week. I am the son of a schoolteacher. to be a problem and a challenge. But diversify holdings by lifting the prohi- My mother taught school for 19 years, her second-grade teacher, Mrs. Hurt, bitions on affiliations among banks, in- between first and the sixth grade. She worked with her and taught her and surance companies, and securities finally had to leave teaching because then became an inspiration to her. So today I give thanks and apprecia- firms, thus allowing them to compete in those days teachers basically could tion to all of our teachers across our fully in a free-market environment. If not make enough money to live on. She great country, and in my State of Mis- Congress fails to act, we will once wound up in bookkeeping and broad- sissippi to the ‘‘Mrs. Hurts’’ who again limit the potential of our finan- casting. I also worked for a university taught in those small, sometimes one- cial sector and we will continue to im- for 3 years, and I have a very serious and two-classroom buildings as my pose needless and unnecessary regu- appreciation for our teachers and the mother did, who not only taught the latory burdens on individual financial jobs they do. course but inspired a generation of institutions. The other body is moving I have stayed in touch, over the more teachers such as Mary Beth with its own legislation. The Senate years, with my second-, third-, and Black, Mississippi’s Teacher of the needs to act now to ensure that our fi- fourth-grade teachers at Duck Hill, Year. nancial sector is on solid footing for MS. I don’t know why, but I particu- An 18th-century American historian, the new century. larly remember those three and have Henry Brooks Adams, said: ‘‘A teacher The bill before us repeals the Depres- always appreciated them. I guess we re- affects eternity; (she) can never tell sion-era Glass-Steagall law prohibiting member the ones who teach us to write where (her) influence stops.’’ affiliations between commercial and and do the basic reading. They were So our teachers influence our young investment banks. It allows banks and wonderful women and wonderful peo- people, and they affect the future of insurance companies to affiliate under ple, and they inspired me in many our country and the world. Thanks to the same corporate umbrella. It con- ways. all of them. tains provisions outlining the appro- So in appreciation of this National I yield the floor. priate regulation of bank sales of in- Teacher Appreciation Week, I will f surance, and it allows banks with as- quote from the Bible. It says: sets of less than $1 billion to engage in Train up the child in the way he should go, FINANCIAL SERVICES a broader range of financial services and when he’s old, he will not depart from it. MODERNIZATION ACT OF 1999 through operating subsidiaries. Of Those were the words of Solomon. The Senate continued with the con- course, Mr. President, the relationships That is good advice from Solomon. sideration of the bill.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00012 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8406 CONGRESSIONAL RECORD—SENATE May 5, 1999 Mr. DASCHLE addressed the Chair. by every civil rights group. It is op- American neighbors. If anything, the Mr. SARBANES. Mr. President, I posed by community groups, commu- globalization of our economy makes a yield such time as the minority leader nity organizations, and local govern- reasonable separation between banking may consume. mental officials. and other commercial activities even The PRESIDING OFFICER. The Instead of a clear path to enact- more important now than it was when Democratic leader. ment—which is what we would have those laws were first enacted. Mr. DASCHLE. Mr. President, I had had we stayed with the bipartisan Unfortunately, as the distinguished thank the distinguished ranking mem- approach to H.R. 10—financial services Senator from Maryland has observed, ber, the Senator from Maryland. I reform is now on two tracks. There is the underlying bill weakens the separa- thank him and the Democratic mem- the veto track. And make no mistake, tion of banking and commerce in a bers of the Banking Committee for the S. 900 is on this track. It will be vetoed number of ways. Our alternative does tremendous leadership and patience if the President receives it in its cur- not. It reflects the careful com- that, in particular, Senator SARBANES rent form. Then there is the enactment promises developed last year. It pre- has demonstrated in getting us to this track. That is the track our substitute serves the separation between banks point. and the bipartisan House Banking bill and other commercial activities with- I also want to acknowledge the ef- are on. out in any way limiting the flexibility forts of all my colleagues on the Sen- We are not saying, ‘‘It is our way, or financial service companies need in to- ate Banking Committee, and especially no way.’’ Neither side should ever issue day’s economy. It strikes the right bal- the fellow Democrats of the Banking such an ultimatum. That is not the ance between opportunity and respon- Committee, who have put so much ef- way of the Senate. We have discussed sibility. fort and energy and diligence into with the majority leader our desire to Let me interject here that, should bringing us to this very important de- find a bipartisan way to get the finan- our substitute fail, my colleague from bate, and ultimately this vote which cial services modernization bill back South Dakota, Senator JOHNSON, in- we will shortly have. on the enactment track. We have tends to offer a related amendment. It I might add, as I know the distin- agreed to a floor procedure which will would close a loophole which commer- guished Senator from Maryland has al- enable us to finish this bill in an expe- cial companies currently use to mix ready noted, that every Democratic ditious manner. banking and commerce by acquiring member of the Senate Banking Com- We do not want to delay this bill any existing unitary thrift holding compa- mittee is a cosponsor of the substitute longer. That has already happened. It nies. I will strongly support his effort. we will be voting on shortly. Together, has already been delayed. As I said, we A third difference between our sub- my colleagues on the committee have want to pass financial services mod- stitute and S. 900 has to do with con- produced a proposal to give financial ernization this year, and perhaps even sumer protection. H.R. 10—the bill the service companies new freedoms and this week. So the choice for the Senate Banking Committee passed out last new flexibility—without risking the fi- is clear. It is partisan brinkmanship, or year with overwhelming support—in- nancial well-being of our economy or of bipartisan accomplishment. cluded a number of consumer protec- individuals. It is a balanced, respon- We stand ready on this side of the tions having to do with such things as sible proposal—one the President can aisle to deliver a bill that the Presi- risk disclosure and licensing of per- sign—and, on behalf of the entire dent can sign. He has cited four serious sonnel. Those protections were essen- Democratic caucus, I thank them for flaws in S. 900 which he has said will tial for its passage last year. They re- producing it. force him to veto the bill. Our sub- main essential to the American people. Let me be very clear, Mr. President. stitute corrects all four flaws. They have all been stripped out of the Senate Democrats support financial First and foremost, our substitute underlying bill—every one of them. services modernization. We want to see does not gut CRA—the Community Re- They are all included in the Demo- a bill passed. There is no good reason investment Act—as S. 900 does. The cratic alternative. They must be in- that can’t happen this year—in fact, CRA has proven a huge success in ex- cluded in any financial services bill this week. panding access to credit and invest- this Congress passes, or the President This should not be a partisan issue. ment in low- and moderate-income will veto it. Historically, it has not been one. communities. Investment capital is the There is a fourth way in which our Our substitute is based on last year’s lifeblood of these communities. That bill differs from both the committee H.R. 10. The Senate Banking Com- capital must continue to be available bill and from last year’s bill. It in- mittee passed H.R. 10 on a vote of 16 to to qualified borrowers in all commu- volves what financial activities can 2—16 to 2. Republicans on the Senate nities. We cannot draw red lines around take place in subsidiaries of banks, and Banking Committee supported H.R. 10 the American dream. Democrats will under what conditions. last year. So did virtually every major not support a bill that undermines the As the legislative process has pro- financial services industry group. effectiveness of the CRA. gressed, the Treasury Department has In the House, the House Banking The second major difference between agreed to significant additional safe- Committee passed a very similar bill our substitute and the underlying bill guards regarding the financial activi- this year. Again, the vote was over- is the way the two proposals deal with ties of banks’ operating subsidiaries. whelmingly bipartisan—51 to 8. the separation of banking and com- Our alternative incorporates these Until recently, Democrats and Re- merce. safeguards. At the same time, it would publicans have agreed overwhelmingly For nearly 70 years, since the col- permit banks to structure certain new that the path laid out in our substitute lapse of the banking industry during activities in these so-called ‘‘op-subs’’ was the right path. That has all the Great Depression, U.S. law has sep- as they see fit. Again, it balances op- changed. Reform has suffered a major arated banking from other commercial portunity and responsibility. setback this year. In the Senate Bank- activities. An army of experts—from Mr. President, that is where we ing Committee, the majority forced Chairman Greenspan to Secretary stand—the juncture of two tracks: The through a new, harshly partisan bill on Rubin to former Federal Reserve Chair- veto track, and the enactment track. a party line vote of 11 to 9. This new man Paul Volcker—believe that sepa- S. 900—as it is currently written— bill shattered the consensus that so ration must be maintained. will put us on the veto track. We know many people worked so long and so But you don’t have to look in the his- that: hard to create. tory books to understand why mixing It undermines the Community Rein- In place of the broad support enjoyed banking and other commercial activi- vestment Act. by H.R. 10, the committee bill is op- ties is risky business. Look at the re- It breaches the separation of banking posed now by every Democrat on the cent currency crisis that started in and commerce. Banking Committee. It is also opposed Asia and spread to some of our Latin It ignores consumer protection.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00013 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8407 And, it fails to strike a responsible tain a satisfactory or better CRA rat- Mr. SARBANES. I thank the Chair. balance on the question of bank oper- ing. Currently, the enforcement action Mr. President, I rise in very strong ating subsidiaries. authorized for the banking agencies is support of the substitute amendment, The failure to proceed on a bipartisan the ability to deny the noncompliant which is the provisions contained in S. track has placed this bill at risk. Un- banks’ application to acquire another 753, introduced by Senator DASCHLE less we negotiate with each other once facility. and all of the Democratic members of again in good faith, I must say this bill The substitute would expand the the Senate Banking, Housing, and will be vetoed. reach of CRA to noninsured institu- Urban Affairs Committee. If that happens, it would represent a tions or wholesale financial institu- We have been at this for a long serious failure on the part of this Sen- tions, and they don’t even deal with time—those on the committee and ate. consumers. Previously it had been ar- other Members who have been inter- More important, it would deprive gued that banks and thrifts convey an ested in the issue of financial services American businesses, and the Amer- economic benefit as a result of deposit modernization. We have been seeking ican people, of important tools and insurance, and thus the CRA is justifi- to find a way to pass a bill to protect safeguards they need in this new global ably imposed on those institutions. But safety and soundness, to protect con- economy. now, for the first time, this amend- sumers, to ensure that CRA not be un- We appeal to our colleagues: Let’s ment would expand CRA to the non- dercut or eroded; and that permits fi- get this bill back on track. Let’s adopt FDIC-insured institutions. nancial service institutions within the this alternative. Let’s pass financial It would allow a Federal banking realm of financial services, in effect, to services modernization. This year. This agency to take enforcement action, enter into new arrangements in terms week. We can do it. I hope we will. such as the cease and desist order, civil of affiliations and the activities they Mr. GRAMM. Mr. President, I thank monetary penalties, or even criminal can conduct. the distinguished Democrat leader for sanctions, all for not complying with This is something that has been the effort he has made to get the Sen- the CRA. That is an expansion. These urged on us. Those in the industry ate to this point. Obviously, when we penalties could even be extended to an think it would be helpful to them. have votes on contentious issues, ulti- officer or director of the holding com- Some of this has been taking place mately Members come to the floor and pany or bank. without statute, but it is uncertain, vote. Somebody wins and somebody In addition to extraordinary CRA ex- unsure. It happens through regulation; loses. I think on many of the votes we pansion, I found several other problems it happens through court decision. I are going to have, neither of us knows with the substitute amendment. First, think most people think if we could ar- what the outcome will be. it reduces the authority of State insur- rive at a statutory framework in which We are beginning a process that will ance commissioners and creates the to place these developments that that go through conference. We have a bill National Association of Registered would be a desirable objective. in the House that is very different. I Agents and Brokers, NARAB. The in- That is why we introduced S. 753. think we all want to write a bill that surance agents in Wyoming oppose the That is why we are offering it as a sub- the White House can sign. NARAB provision because they believe stitute amendment to the committee Yesterday, the President came out it is the precursor to Federal regula- bill. It essentially tracks the language with six conditions for signing the bill, tion of insurance and Federal bureauc- of the bill that was reported last year two of which your substitute does not racy. on a vote of 16–2 from the committee comply with. Obviously, we are going The substitute amendment also re- with one exception with respect to op- to have to work with the White House duces the ability of the bank to engage erating subsidiaries. This substitute on a continuing basis. in trust and fiduciary activities. On the permits banks to conduct some activi- I want to assure you, Mr. Leader, I other hand, S. 900 allows a bank to en- ties in an operating subsidiary—not all will also sit down, roll up my sleeves, gage in traditional trust and fiduciary of the activities they can now engage and try to work. Maybe we can’t solve activities, just as they have done for so in—and that reflects, in part, an effort these problems, but if it is possible to many years. by Secretary Rubin to try to reach an solve them, I want to do it. Additionally, it is apparent that accommodation to ensure that some of I thank the Senator for his help. there is not consensus in the substitute the concerns that were raised are ad- Mr. President, how much time re- bill, and it differs from the product of dressed. mains on both sides? last year. I voted for H.R. 10 last year. There is a conflict, a difference of The PRESIDING OFFICER. The Sen- I will not vote for this substitute. It is view here, a very strong difference of ator from Texas has 11 minutes, and not the same bill. The most significant view here between Secretary Rubin and the Senator from Maryland has 7 min- difference lies in the operating sub- Chairman Greenspan, both of whom are utes 24 seconds. sidiary provisions. Last year, H.R. 10 saying to have a bill we have to have a Mr. GRAMM. I yield 5 minutes to the only passed the House by one vote. good bill, and their definition of a good distinguished Senator from Wyoming. Just last week the House Commerce bill, each of them, is one that cor- Mr. ENZI. Mr. President, I thank the Committee held a hearing on H.R. 10, responds to their views, particularly on chairman of the Banking Committee. I which is nearly identical to the sub- this important issue of the op-sub thank him for the time. I also thank stitute amendment, and the Members versus the affiliate, as far as carrying him for the leadership and direction on both sides of the aisle were very on activities. and focus he has had on this issue and critical of the bill. In this regard, I point out as we lis- his willingness to talk to others about I strongly encourage my colleagues ten to Secretary Rubin that we are the issues. to oppose the substitute amendment. It also listening, of course, to the possi- I rise to oppose the substitute does not represent a consensus, and it bilities of a Presidential veto. We can’t amendment offered by the ranking is certainly more burdensome and ex- get a bill into law without the Presi- member of the Banking Committee. pansive on the affected industries. It is dent’s signature—that is obvious and Most of the reasons for my opposition not the product of compromise. clear—and the President has taken a lie within the great expansion of the I yield back the remainder of my very strong position on this legisla- Community Reinvestment Act, or time. tion. In fact, he has sent a letter to the CRA. Mr. SARBANES. Mr. President, what committee stating in the clearest pos- For example, the amendment would is the parliamentary situation? sible terms that he would veto the allow the Federal banking agencies to The PRESIDING OFFICER. The Sen- committee bill if it was presented to take actions, including divestiture, ator from Texas controls 7 minutes 37 him in its current form. That is when forcing people to sell off parts of their seconds, and the Senator from Mary- we began the markup in the com- business if an institution fails to main- land has 7 minutes 24 seconds. mittee. The committee has issued a

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00014 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8408 CONGRESSIONAL RECORD—SENATE May 5, 1999 statement of administration policy in LEADERSHIP CONFERENCE from public comment unless individuals which they say: ON CIVIL RIGHTS present ‘‘substantial verifiable information’’ Washington, DC, March 18, 1999. to the contrary arising since the last exam- Nevertheless, because of crucial flaws in Hon. PHIL GRAMM, ination. Since over 95% of banks receive a the bill, the President has stated that if the Chairman, Committee on Banking, Housing, satisfactory rating, the provision would fun- bill were presented to him in its current and Urban Affairs, U.S. Senate, Wash- damentally undercut the right of community form, he would veto it. ington, DC. groups and others to comment on a bank’s We have had extended debate on the DEAR SENATOR GRAMM: We are writing to CRA performance.7 Community group par- differences between the committee bill express our deep concern over your public ticipation in the CRA process has been crit- and the substitute amendment. Sen- mischaracterizations of the Community Re- ical to the success of CRA. Public comment investment Act (CRA), and over the treat- on other aspects of a bank’s performance, ator GRAMM and I and others are par- ment of CRA in the Financial Services Mod- such as management or financial resources, ticipating in that. I am frank to say I ernization Act of 1999 as reported out of the would not face similar limitations on the thought the minority leader, Senator Senate Banking Committee on March 4. scope of information that may be introduced DASCHLE, just laid out a very clear, The Leadership Conference on Civil Rights nor be subject to the same burden of proof. concise, extremely well-stated position is the nation’s oldest, largest, and most di- Third, the bill exempts banks with less with respect to the differences between verse coalition of organizations committed than $100 million in assets from CRA. This 8 these approaches. to the protection of civil rights in the United represents 63% of all banks. If enacted the States. As leaders of the civil rights commu- provision will have devastating consequences We differ in banking and commerce. nity, we take strong issue with your descrip- for rural communities because small banks The substitute seeks to, in effect, reaf- tion of CRA as a vehicle for ‘‘fraud and ex- are often the only source of credit in rural firm, make clearer, the division be- tortion’’ 1 and to your characterization of areas. Despite claims that small banks by tween banking and commerce. We dif- CRA as ‘‘perhaps the greatest national scan- their nature serve the credit needs of local fer, as I indicated, with respect to the dal in America.’’ 2 To the contrary, we agree communities, data from regulators reveal operating subsidiary issue, which of with President Clinton that the Community that these institutions have disproportion- Reinvestment Act is ‘‘a law that has helped ately poor CRA records. course involves the sharp difference be- We would note that the financial services tween the Secretary of the Treasury to build homes, create jobs, and restore hope in communities across America.’’ 3 bill reported out of the House Banking Com- and the Chairman of the Federal Re- CRA has proven to be an effective means of mittee last week on a bipartisan vote of 51– serve. We differ very strongly on CRA. encouraging federally insured financial insti- 8 did not contain any of these shortcomings It is asserted that the substitute ex- tutions to extend prudent and profitable in regard to CRA. This is in sharp contrast pands CRA. In fact, what the substitute loans in underserved urban and rural com- to the 11–9 party line vote by which the Sen- seeks to do is to ensure that if banks munities. CRA has been credited with the ate Banking Committee reported out its bill, in significant measure because of the con- move into securities and insurance, dramatic increase in homeownership rates among minority, and low- and moderate-in- troversial CRA provisions. that those banks should have a satis- Fair access to credit, which is the purpose come individuals. Since 1993, the number of factory CRA rating before they can un- of CRA, is a critical civil rights issue. As the home mortgage loans extended to African- President has said, ‘‘CRA is working, and we dertake such a merger or affiliation. Americans has increased by 58%, to His- must preserve its vitality as we write the fi- It requires the banks to be in compli- panics by 62%, and to low- and moderate-in- nancial constitution for the 21st century.’’ 9 ance with CRA. It in effect says that a come borrowers by 38%.4 CRA has similarly As reported out of the Senate Banking Com- served as the impetus for revitalizing dis- bank with an unsatisfactory CRA rat- mittee, the Financial Services Act of 1999 tressed rural and urban communities ing is not going to be able to use this would drastically weaken CRA. Unless this through small business and small farm lend- additional power now being given to shortcoming is addressed, we would urge ing and community development invest- them to move into securities and to strong opposition to this legislation. ments. move into insurance. At the moment, Data from federal bank regulators reveal Sincerely, they do a limited amount of that activ- that the CRA has not been used arbitrarily Dr. Dorothy I. Height, Chairperson, ity. But if they are going to actually to block or delay bank applications to the Leadership Conference on Civil Rights; go into it in a full-scale way, which is regulators. Community groups and others Barbara Arnwine, Executive Director, Lawyers’ Committee for Civil Rights what this legislation offers—which rarely file adverse comments to bank appli- cations based on CRA. Less than 1% of bank Under Law; Andrew H. Mott, Executive both pieces of legislation offer to the Director, Center for Community banks, we do not differ on that propo- applications have received adverse com- 5 Change; Wade Henderson, Executive sition; both as a part of the financial ments. Moreover, assertions that banks pro- vide commitments to community groups and Director, Leadership Conference on services modernization approach are others because they are afraid that regu- Civil Rights; Karen Narasaki, Execu- prepared to permit that—but we feel lators will deny or substantially delay the tive Director, National Asian Pacific very strongly that they should be in processing of their application is not sup- American Legal Consortium; JoAnn K. compliance, the banks should be in ported by the record. Bank applications that Chase, Executive Director, National receive adverse comments are denied only Congress of American Indians. compliance with CRA, if they intend to Shanna L. Smith, Executive Director, 1% of the time.6 In addition, few applications do that. National Fair Housing Alliance; Hugh A number of very important groups are substantially delayed due to an adverse CRA comment. B. Price, President and Chief Executive in the community support the sub- Despite the strong record of CRA success Officer, National Urban league; Hilary stitute. I will have printed in the and the lack of evidence of abuse, the bill Shelton, Washington Bureau Director, RECORD letters from civil rights orga- that was reported out of the Senate Banking National Association for the Advance- nizations—from Hispanic organiza- Committee seriously weakens CRA in three ment of Colored People; Raul Yzaguirre, President, National Council tions, which have been very strong in ways. First, it does not require that all banks in a bank holding company have a of La Raza; Manuel Mirabal, President perceiving that CRA has made a big, and Chief Executive Officer, National big difference in their community in ‘‘satisfactory’’ CRA rating to exercise the new powers provided by the legislation. This Puerto Rican Coalition, Inc. terms of home ownership and in terms would substantially roll back CRA by per- FOOTNOTES of investment, and that there has been mitting banks that are not meeting the cred- 1 Congressional Record, September 30, 1998. very significant benefit for Native it needs of their communities to benefit from 2 Congressional Record, October 5, 1998. American organizations that report on the expanded powers to affiliate with securi- 3 Letter from President Clinton to Senator Phil ties and insurance firms. Gramm, March 2, 1999. what has happened on the Indian res- 4 Second, the bill would provide a ‘‘safe har- Home Mortgage Disclosure Act data cited in Sec- ervations, from farm and rural groups, retary Robert Rubin’s letter to Senator Phil and from over 200 mayors, all of whom bor’’ from public comment on CRA perform- Gramm, February 23, 1999. prefer the substitute amendment. ance for banks with a ‘‘satisfactory’’ CRA 5 Comptroller of the Currency, Office of Thrift Su- rating. Under the bill, an institution receiv- pervision, Federal Deposit Insurance Corporation, I ask unanimous consent those let- ing at least a satisfactory CRA rating during and Federal Reserve Board. ters be printed in the RECORD. the previous 36-month period would be 6 Id. There being no objection, the letters deemed in compliance with CRA and immune 7 Federal Financial Institutions Examination Council. were ordered to be printed in the 8 Federal Deposit Insurance Corporation. RECORD, as follows: Footnotes at end of letter. 9 See supra note 3.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00015 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8409

APRIL 8, 1999. Third, the Act proposes to exempt all In its current form, we believe the Finan- Hon. PAUL S. SARBANES, small rural banks (those with less than $100 cial Services Modernization Act of 1999 Senate Hart Office Building, U.S. Senate, million in assets) from CRA, thereby releas- would seriously erode the effectiveness of Washington, DC. ing 76% of all rural banks from their CRA the CRA, a law that has certainly helped to DEAR SENATOR SARBANES: The undersigned obligations. As with the safe harbor provi- build homes, create jobs and restore hope in organizations write to express strong opposi- sion, this undermines the spirit and the ef- many of our communities. We are particu- tion to the Financial Services Modernization fectiveness of the law by exempting most larly concerned that the bill reported by Act of 1999 as reported out of the Senate rural banks. This would have particularly your committee would exempt small rural Banking Committee on March 4th. The Act adverse consequences in low-income rural banks from coverage by the CRA and would would restructure the financial services in- communities where often the only source of create a ‘‘safe harbor’’ under CRA for banks dustry in the United States by allowing credit is a small bank. Moreover, researchers with satisfactory or better ratings thus mak- broad affiliations among banks, insurance have found that small banks have dispropor- ing it much more difficult for the public to companies, and security firms. Currently, tionately poor CRA records compared to comment on problems with a bank’s CRA the law strictly limits ownership among dif- larger banks, thereby highlighting the need performance in conjunction with an expan- ferent financial entities and between finan- for CRA in rural communities and small sion application filed by a bank. We are also cial companies and commercial corporations. towns. concerned that your bill does not require The Act seeks to ease these restrictions, CRA is one of the strongest incentives to that all banks in a bank holding company without commensurate expansion of the encourage investment in low-income and mi- have a ‘‘satisfactory’’ CRA rating to exercise Community Reinvestment Act (CRA) to nority communities. Over the last twenty- the new powers provided by the legislation. cover insurance companies, securities firms, two years, neighborhoods across the country This would substantially roll back the CRA mortgage companies, and other financial en- have benefited from CRA-encouraged invest- by permitting banks that are not meeting tities allowed to affiliate with banks. The ments. This has resulted in increases in the credit needs of communities to benefit Act would undermine one of the most effec- homeownership and business development, from the expanded powers to affiliate with tive revitalization vehicles for underserved leading to the rebirth of many American securities and insurance firms. low-income and minority communities, in- neighborhoods. However, many communities We strongly urge you to reconsider these cluding Hispanic American communities remain underserved by capital and invest- provisions of the bill. As reported out of the across the country. ment vehicles. For this reason, reinforce- Senate Banking Committee, the Financial We have found, and research confirms, that ment, not weakening, of CRA is critically Services Act of 1999 drastically weakens the all too often the credit and financial needs of needed. We urge you to support the contin- CRA and unless this shortcoming is ad- these communities are severely underserved. ued strengthening of America’s communities dressed, we would urge strong opposition to Historically, many financial institutions by vigorously opposing the Financial Serv- the legislation. have avoided investing in these communities ices Modernization Act of 1999 as reported Sincerely, due to their perceived higher level of risk. out of Committee, and supporting amend- W. RON ALLEN, Unfortunately, ‘‘perceived higher level of ments that would strengthen the Bill’s CRA President. risk’’ is often code for ‘‘low-income’’ or ‘‘mi- protections. Thank you. (Also signed by 17 representatives of tribes nority.’’ But the facts show that low-income Sincerely, and tribal organizations.) and minority communities are not inher- Rick Dovalina, National President, ently riskier than other communities. In League of United Latin American Citi- THE UNITED STATES fact, most financial institutions find them to zens; Arturo Vargas, Executive Direc- CONFERENCE OF MAYORS be quite profitable, once they begin invest- tor, NALEO Educational Fund; Ruth Washington, DC, April 29, 1999. ing in them. Unfortunately, without the Pagani, Executive Director, National DEAR SENATOR: The Community Reinvest- CRA, many financial institutions have not Hispanic Housing Council (NHHC); ment Act (CRA) has played a critical role in and would not be encouraged to do so. Juan Figueroa, President and General encouraging federally insured financial insti- As the data show, Hispanics are the fast- Counsel, Puerto Rican Legal Defense tutions to invest in the cities of our country. est-growing population in the United States. and Education Fund (PRLDEF); Anto- Legislation reported out of the Senate Bank- We are a growing force in the expansion of nia Hernandez, President and General ing Committee on March 4, the Financial homeownership and small business develop- Counsel; MALDEF; Raul Uzaguirre, Modernization Act of 1999, would dramati- ment, two leading indicators of the economic President and Chief Executive Officer, cally weaken CRA. We strongly urge you to well-being of this country. For example, be- National Council of La Raza (NCLR); oppose this legislation unless CRA is pre- tween 1987 and 1992, Hispanic-owned business Manual Mirabal, President and Chief served and strengthened. grew by 76%, compared to 26% for U.S. busi- Executive Officer, National Puerto The United States Conference of Mayors is nesses overall. According to a 1997 Harvard Rican Coalition (NPRC). the nation’s largest nonpartisan organiza- study, ‘‘the number of Hispanic homeowners tion dedicated to ensuring the economic sta- has shown the most spectacular rise’’ in re- NATIONAL CONGRESS OF bility of the nation’s largest cities. As may- cent years compared to that of Whites and of AMERICAN INDIANS, ors, we recognize that CRA has been an es- other minority groups. Population projec- Washington, DC, April 14, 1999. sential tool in revitalizing cities around this tions forecast Hispanics to be the largest mi- Hon. PHIL GRAMM, nation. In fact, there is now increasing rec- nority group in the U.S. by the year 2005, Chairman, Committee on Banking, Housing and ognition that the strength and economic causing the U.S. economy to be increasingly Urban Affairs, U.S. Senate, Washington, health of whole regions require strong and dependent on the continued prosperity of the DC. vibrant cities. Creating new economic activ- Hispanic American community. Without the DEAR SENATOR GRAMM: On behalf of the ity—new businesses, new jobs, new home- CRA, this growth may be impeded. National Congress of American Indians owners—is key to the revival of urban areas As reported out of the Senate Banking (‘‘NCAI’’), we are writing to express our seri- and their surrounding regions, CRA has been Committee, the Financial Services Mod- ous concern over the treatment of the Com- a key component to creating this new eco- ernization Act of 1999 would hinder that munity Reinvestment Act (‘‘CRA’’) in the nomic activity. growth by weakening the CRA in the fol- Financial Services Modernization Act of Private sector investment encouraged lowing three ways. First, a ‘‘satisfactory’’ 1999. NCAI is the oldest, largest and most under CRA has helped to stabilize commu- CRA rating is not required in order for finan- representative national Indian organization nities suffering from economic decline. CRA cial institutions to enjoy the new powers af- devoted to promoting and protecting the has similarly helped to spur bank and thrift forded to them by the legislation, thereby al- rights of tribal governments and their citi- investment in multi-family rental housing lowing banks to exercise their privilege, zens. development and rehabilitation, small busi- even if they are not meeting the credit needs The CFA has proven to be an effective ness expansion, and community economic of the communities where they do business. means of encouraging federally insured fi- development. CRA is a crucial complement Second, banks receiving a ‘‘satisfactory’’ nancial institutions to extend prudent and to FHA Insurance, The HOME program, CRA rating would be given a ‘‘safe harbor’’ profitable loans in traditionally underserved Community Development Block Grants, and from public comment on CRA performance. areas including Indian Country. Specifically, the low-income housing tax credit. These Since over 95% of banks receive a ‘‘satisfac- the CRA has helped focus attention to the programs, which have built or financed the tory’’ rating, this would undermine the effec- challenges of extending credit to reserva- purchase of millions of units of affordable tiveness of the law by restricting a commu- tions under current law and has acted as a rental and ownership homes, work so effec- nity’s right to voice its experience with catalyst to reservation based economic de- tively because they leverage tens of millions banks. While a ‘‘satisfactory’’ rating pro- velopment. Since the implementation of the of private dollars. vides a helpful guide to a bank’s overall per- CRA, Native American groups and banks In light of the success of CRA and our ex- formance, it may not provide an accurate have negotiated agreements for lending more periences with community revitalization ef- picture at the neighborhood level. than $155 million within Indian Country. forts, we are very troubled by allegations

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00016 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8410 CONGRESSIONAL RECORD—SENATE May 5, 1999 that have been made that CRA has ‘‘since Garry Fazzino, Palo Alto, CA Jack Lynch, Butte, MT been corrupted into a system of legalized ex- Mary Rocha, Antioch, CA Patrick McCrory, Charlotte, NC tortion.’’ In contrast to the description of Shirley Dean, Berkeley, CA George W. Liles, Concord, NC community based organizations as ‘‘rack- Eunice M. Ulloa, Chino, CA Jerry Ryan, Bellevue, NE eteers’’ and ‘‘thugs’’ many of us have partici- Judy Nadler, Santa Clara, CA Ken Gnadt, Grand Island, NE pated in successful partnerships with private Chris Christiansen, Covina, CA James Anzaldi, Clifton, NJ institutions and members of the community. George Pettygrove, Fairfield, CA Anthony, Russo, Hoboken, NJ These relationships have resulted in a tre- Larry R. Green, Glendora, CA Sara B. Bost, Irvington, NJ mendous infusion of capital into underserved Chris B. Silva, Indio, CA Margie Semler, Passaic, NJ communities as well as increased banking Roosevelt F. Dorn, Inglewood, CA Albert McWilliams, Plainfield, NJ services. Cathie Brown, Livermore, CA Thalia C. Kay, Pemberton Township, NJ The bill that was reported out of the Sen- Donald E. Lahr, Santa Maria, CA Douglas Palmer, Trenton, NJ ate Banking Committee would have dire con- David Smith, Newark, CA Lavonne Bekler Johnson, Willingboro Town- sequences for the nation’s cities if it were William E. Cunningham, Redlands, CA ship, NJ enacted. First, the failure to require that Willie L. Brown, Jr., San Francisco, CA Jan Laverty Jones, Las Vegas, NV banks seeking to affiliate with securities and Harriett Miller, Santa Barbara, CA Sandra L. Frankel, Brighton, NY insurance firms have a ‘‘satisfactory’’ CRA Gary Podesto, Stockton, CA Anthony M. Masiello, Buffalo, NY rating would permit banks to ignore the Robert R. Nolan, Upland, CA James C. Galie, Niagara Falls, NY credit needs of their communities and ben- Wally Gregory, Visalia, CA William F. Glacken, Freeport, NY efit from the powers provided in the legisla- Robert Frie, Arvada, CO James A. Garner, Hempstead, NY tion. This is a substantial rollback of CRA Wellington E. Webb, Denver, CO Roy A. Bernardi, Syracuse, NY and would most certainly reduce the flow of John DeStefano, Jr., New Haven, CT Edward A. Hanna, Utica, NY capital in these areas—returning us to a Dannel P. Malloy, Stamford, CT Ernest D. Davis, Mount Vernon, NY time when banks and thrifts redlined com- Anthony A. Williams, Washington, DC Donald L. Plusquellic, Akron, OH munities with credit worthy borrowers. Gerald Broening, Boynton Beach, FL Richard D. Watkins, Canton, OH In addition, the bill provides a ‘‘safe har- Alex Penelas, Miami-Dade County, FL Michael B. Keys, Elyria, OH bor’’ from public comment on CRA perform- Mara Giulianti, Hollywood, FL Paul Oyaski, Euclid, OH ance to banks with a ‘‘satisfactory’’ or bet- Ralph L. Fletcher, Lakeland, FL Beryl E. Rothschild, University Heights, OH ter CRA rating. This provision effectively Richard J. Kaplan, Lauderhill, FL William L. Pegues, Warrensville Heights, OH eliminates public comment on a bank’s CRA James F. Fielding, Port St. Lucie, FL Thomas J. Longo, Garfield Heights, OH performance. As you are undoubtedly aware, Alex G. Fekete, Pembroke Pines, FL Debora A. Mallin, Bedford Heights, OH the opportunity to comment on a bank’s per- Joe Schreiber, Tamarac, FL Marilou W. Smith, Kettering, OH formance is a right given to every member of Bill Campbell, Atlanta, GA David Berger, Lima, OH the public. Public comment participation in Bob Young, Augusta, GA Joseph F. Koziura, Lorain, OH the CRA process is considered a critical com- Patsy Jo Hilliard, East Point, GA Cicil E. Powell, Lawton, OK ponent of the law’s success. The public often Felix F. Ungacta, Hagatna, Guam M. Susan Savage, Tulsa, OK raises community investment issues which Stephen K. Yamashiro, Hawaii, HI Bill Klammer, Lake Oswego, OR have been overlooked by regulators. This Lee R. Clancey, Cedar Rapids, IA Vera Katz, Portland, OR provision singles out CRA comments for un- H. Brent Coles, Boise, ID Donald T. Cunnigham, Jr., Bethlehem, PA fair treatment. Unlike CRA comments, indi- Gregory R. Anderson, Pocatello, ID Timothy M. Fulkerson, New Castle, PA viduals seeking to comment on other aspects Neil Dillard, Carbondale, IL Joyce A. Savocchio, Erie, PA of a bank’s performance would not face limi- Richard Daley, Chicago, IL Stephen R. Reed, Harrisburg, PA tations on the scope of information that Jerry P. Genova, Calumet City, IL Ted LeBlanc, Norristown, PA they may introduce or be required to carry a Angelo A. Ciambrone, Chicago Heights, IL Edward Rendell, Philadelphia, PA burden of proof. Moreover, data from regu- Lydia Reid, Mansfield, IL Charles H. Robertson, York, PA lators indicated that the comment process Stanley F. Leach, Moline, IL William Miranda Marin, Caguas, PR has not been abused. Barbara Furlong, Oak Park, IL James E. Doyle, Pawtucket, RI Finally, the bill exempts small banks in R. David Tebben, Pekin, IL Vincent A. Cianci, Jr., Providence, RI rural areas (assets less than $100 million in Ross Ferraro, Carol Stream, IL James E. Talley, Spartanburg, SC assets) from CRA obligations. These institu- Stephen J. Luecke, South Bend, IN Jon Kinsey, Chattanooga, TN tions represent 76% of banks and thrifts in Joseph R. Zickgraf, Columbia City, IN Kirk Watson, Austin, TX rural communities. This provision would se- James P. Perron, Elkhart, IN David W. Moore, Beaumont, TX riously compromise the capital needs of Duane W. Dedelow, Jr., Hammond, IN Ronald Kirk, Dallas, TX rural residents who depend almost exclu- Paul W. Helmke, Fort Wayne, IN Jack Miller, Denton, TX sively on small banks and thrifts to meet Carol Marinovich, Kansas City, KS Mary Lib Saleh, Euless, TX their credit needs. Residents in these com- David L. Armstrong, Louisville, KY Charles Scoma, North Richland Hills, TX munities rely on CRA to encourage banks to Waymond Morris, Owensboro, KY Lee P. Brown, Houston, TX make mortgage, small farm, and small busi- Edward G. ‘‘Ned’’ Randolph, Jr., Alexandria, Michael D. Morrison, Waco, TX ness loans. LA Kenneth Barr, Fort Worth, TX Prior to the enactment of CRA, banks, and Ruth Fontenot, New Iberia, LA Deedee Corradini, Salt Lake City, UT thrifts routinely redlined low- and moderate- Walter Comeaux, Lafayette, LA William E. Ward, Chesapeake, VA income neighborhoods in our nation’s cities. Marc Morial, New Orleans, LA Paul D. Fraim, Norfolk, VA The modest requirement in CRA that finan- John Barrett, III, North Adams, MA Peter Clavelle, Burlington, VT cial institutions meet the credit needs of Nicholas J. Costello, Amesbury, MA Mark Asmundson, Bellingham, WA their communities has lead to the successful Thomas M. Menino, Boston, MA Lynn Horton, Bremerton, WA channeling of billions of dollars into local- David Ragucci, Everett, MA Paul Schell, Seattle, WA ities. Patrick J. McManus, Lynn, MA Paul F. Jadin, Green Bay, WI As reported out of the Senate Banking Richard C. Howard, Malden, MA John D. Medinger, La Crosse, WI Committee, the Financial Services Act of Thomas V. Kane, Portland, ME Susan J. Bauman, Madison, WI 1999 would severely weaken CRA and our na- James L. Barker, Garden City, MI Maricolette Walsh, Wauwatosa, WI tion’s cities. Unless the onerous CRA provi- Dennis Archer, Detroit, MI John Lipphardt, Wheeling, WV sions are addressed and CRA is preserved and Woodrow Stanley, Flint, MI strengthened, we would urge strong opposi- Aldo Vagnozzi, Farmington Hills, MI APRIL 29, 1999. tion to the Senate bill. Robert B. Jones, Kalamazoo, MI Sincerely, David C. Hollister, Lansing, MI FAMILY FARM AND RURAL ORGANIZATIONS Richard Arrington, Jr., Birmingham, AL Jack E. Kirksey, Livonia, MI SUPPORT COMMUNITY REINVESTMENT ACT: Patrick Henry Hays, North Little Rock, AR Linsey Porter, Highland Park, MI OPPOSE THE FINANCIAL SERVICES MOD- Robert Mitchell, Casa Grande, AZ Walter Moore, Pontiac, MI ERNIZATION ACT OF 1999 Alex J. Harper, San Luis, AZ Donald F. Fracassi, Southfield, MI DEAR SENATOR: As organizations working Neil Giuliano, Tempe, AZ Sharon Sayles Belton, Minneapolis, MN with and representing rural residents, we George Miller, Tucson, AZ Chuck Canfield, Rochester, MN write to register our strong opposition to the Richard F. Archer, Sierra Vista, AZ Joseph L. Adams, University City, MO Financial Services Modernization Act of 1999 Marilyn R. Young, Yuma, AZ Larry R. Stobbs, St. Joseph, MO as reported out of the Senate Banking Com- Ralph Appezzato, Alameda, CA Harvey Johnson, Jr., Jackson, MS mittee in late March. We are very concerned

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00017 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8411 that the bill substantially undercuts the ex- compliance requirements are unfounded. The law, I urge them to vote for the sub- isting Community Reinvestment Act (CRA) CRA regulations were revised in 1995 in part stitute. and totally ignores the need to modernize to reduce compliance burdens on small I assume the chairman will probably CRA to meet the dramatic changes in finan- banks. The new rules provide for a stream- make a motion to table. cial services across the country. lined examination for banks with less than Mr. GRAMM. I will. Rural America remains in desperate need $250 million in assets including an exemption Mr. SARBANES. Therefore, I urge of affordable credit. CRA has been a law that from data collection and reporting require- Members to vote against the motion to has significantly expanded access to credit ments. Small bank ratings now focus exclu- in rural areas of our country. Despite this in- sively on lending and lending related activi- table the substitute, thereby giving us creased access, there remain widening gaps ties. The need to reduce an already minimal the opportunity to then go forward and and unmet needs in ensuring credit access to regulatory burden on small banks should not adopt the substitute. all rural residents. A recent Small Business outweigh the credit needs of residents of I thank the Chair and yield the floor. Administration (SBA) report analyzing the rural communities. The PRESIDING OFFICER. The Sen- June 1998 Federal Reserve Data shows a 4.6% Third, unlike last year’s H.R. 10 voted out ator from Texas. decline in the number of small farm loans. of the Senate Banking Committee and this Mr. GRAMM. Mr. President, let me The value of total farm loans was $74.5 bil- year’s House Banking Committee version of begin by noting that not one single or- lion. Of great concern is the statistic that re- financial modernization, the Senate Banking ganization which represents anyone veals a troubling trend; the value of very Committee reported bill fails to require that who makes a living in any industry di- large farm loans (over $1 million) increased banks have a ‘‘satisfactory’’ CRA rating in rectly affected by this bill supports the by 25% while ‘‘small’’ farm loans (under order to affiliate with securities and insur- Sarbanes substitute. The Sarbanes sub- $250,000) increased a mere 3.9%. Larger loans ance firms. In the absence of this require- are going to fewer operations. ment, a bank could ignore the credit needs of stitute is opposed by insurance compa- Rural areas continue to suffer from a seri- its communities and still benefit from the nies, by those who represent the com- ous shortage of affordable housing. Farmers new affiliations and powers provided under panies; it is opposed by the American are facing the worst financial conditions in this legislation. Bankers Association, by the Bankers more than a decade due to declining com- The Small Business Administration (SBA) Roundtable, and by the Independent modity prices. Rural Americans continue to report on bank holding company lending in Bankers of America. It is opposed by need the tools of the CRA to ensure account- rural communities reaffirms this concern. every organization that represents any ability of their local lending institutions. While the 57 largest bank holding companies facet of the securities industry. This CRA helps to meet the credit demand of mil- held 68.6 percent of all domestic bank assets substitute is literally a substitute in June 1998, they made just 10.7% or 160,000 lions of family farmers, rural residents, and which has no support by anyone who is local businesses. of all the outstanding farm loans. These We strongly oppose three provisions in the loans totaled just .18 percent of total assets going to be directly affected by these Senate Banking Committee reported bill in these bank holding companies. This in- laws. which would have particularly negative con- creasing concentration and consolidation in What are the major problems with it? sequences for our communities. financial services comes at a time when the There are more problems than I can First, the bill contains a ‘‘safe harbor’’ for community role in determining whether this possibly outline in 6 minutes, so let me banks that have achieved a ‘‘satisfactory’’ expansion is appropriate is being reduced. just take a couple of them. We all CRA rating in each of its examinations in In closing, CRA has been a valuable tool know Alan Greenspan. We know he is the prior 36-month period. This provision for over twenty years to encourage financial the most respected person in America would make banks and thrifts immune to institutions to help meet the credit needs of on economic matters. We all know if public comment during pending expansion rural communities across this nation. Access to affordable capital is important to restor- there is anybody on this planet who applications unless individuals or groups are can lay any legitimate claim to the able to provide ‘‘substantial verifiable infor- ing economic prosperity in our nation’s rural mation’’ that the bank is not in compliance areas. In its current form, the Financial current level of prosperity in America, with CRA. This provision would essentially Services Modernization Act of 1999 permits it is Alan Greenspan, because of his eliminate the public’s opportunity to com- banks to ignore the needs of our commu- banking and monetary policies. ment on a bank’s performance in meeting nities and remove one of the few tools that We also know that Alan Greenspan is the credit needs of its communities. More has resulted in a level of accountability. We not someone who goes out looking for than 95% of banks consistently receive ‘sat- urge you to vote against the Financial Serv- a fight. If he has to say something that isfactory’ or higher ratings. Rural residents ices Modernization Act of 1999 unless these anybody does not want to hear, he play an important role in bringing CRA per- objections are addressed. Please contact (202) tends to go all around the barn before formance issues to the attention of regu- 543–5675 with any questions. he says it. You need to know those lators and making banks responsive to com- Sincerely, American Corn Growers Association things to understand how strongly munity needs. This provision would deny Chairman Greenspan feels in his oppo- citizens and community based organizations Center for Rural Affairs the opportunity to comment on the credit Federation of Southern Cooperatives sition to the Sarbanes substitute. In needs of their community. Intertribal Agriculture Council fact, he has said, ‘‘I and my col- Two, the bill exempts from CRA banks and Iowa Citizens for Community Improvement leagues’’—and by ‘‘colleagues’’ he thrifts with less than $100 million in assets Land Loss Prevention Project (NC) means every member of the Board of located in non-metropolitan areas. These in- Missouri Rural Crisis Center Governors of the Federal Reserve, most stitutions represent 76% of banks and thrifts National Black Caucus of State Legislators of whom were appointed by Bill Clin- in rural communities. This provision would National Catholic Rural Life Conference ton—‘‘are firmly of the view that the seriously compromise the capital needs of National Family Farm Coalition long-term stability of the U.S. finan- rural residents who depend almost exclu- National Farmers Union National Neighborhood Housing Network cial markets and the interests of the sively on small banks and thrifts to meet American taxpayer would be better their credit needs. Banks and thrifts in rural National Rural Housing Coalition areas face little competition from other fi- North American Farm Alliance served by no financial modernization nancial services institutions. Presbyterian Church (USA), Washington of- bill rather than one that allows the In addition, despite assertions from the in- fice proposed new activities to be con- dustry, many small banks do not by their na- Rural Coalition ducted by the bank. . ..’’ ture serve the credit needs of their commu- Sin Fronteras Organizing Project Alan Greenspan says in the strongest nities. In fact, data from the regulators show United Methodist Church, General Board of way possible, in the most passionate that small banks do not invest more in their Church and Society terms that he has ever spoken on any communities, on average than larger banks. Wisconsin Rural Development Center issue in his public life: You would be In addition, small banks have a dispropor- Mr. SARBANES. Finally, let me sim- better not to pass a bill than to pass tionately high share of less than satisfactory ply say, as the Democratic leader indi- the Sarbanes substitute. CRA ratings. A Congressional Research Serv- cated, unless we can get the substitute Why? Because the Sarbanes sub- ice study of data from 1997 to mid-1998, found in place, we are on a veto track with S. that banks with less than $100 million in as- stitute lets banks engage in these ex- sets received 70% of the below ‘‘satisfactory’’ 900. The substitute will eliminate the panded financial services within the CRA ratings. veto problem. So, for those who want bank, thereby putting at risk the tax- In addition, arguments that CRA subjects legislation, who want to see financial payer through FDIC insurance. By per- small banks to intrusive and time consuming services modernization enacted into forming these services in banks, they

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00018 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8412 CONGRESSIONAL RECORD—SENATE May 5, 1999 get an implicit subsidy from FDIC in- For example, financial services re- that would make a bank, if it fell out surance, from the discount window, form would make it easier for banks, of compliance with CRA, potentially from the Federal wire, that will make securities firms and insurance compa- subject to a $1 million fine, not just on banks able—not because they are more nies to merge into oligopolies. The sav- the bank but on the bank officer or on efficient, but because of this subsidy— ings of many would be controlled by a the bank director. ultimately able to dominate the securi- few. Americans will know less about We have two letters here, one from ties industry and all other industries where their deposits are kept and how the Independent Bankers and one from which would be affected. We would end they are used. the ABA, raising the point that one of up with a banking system that looks What would be the effect of these the toughest things to do now in this very much like the Japanese banking mergers on consumers? I am concerned period of massive lawsuit liability is to system, totally dominating our finan- that these mega institutions could lead get good people to serve on a bank cial markets. Alan Greenspan is op- to higher fees and fewer choices for board. Both the Independent Bankers posed to that. It is very dangerous for consumers. of America and the ABA have written the American economy. It is dangerous Marylanders used to have savings ac- urging us not to adopt a provision that for the taxpayer. I urge my colleagues counts with local banks where the tell- would make it virtually impossible for to reject this substitute. er knew their name and their family. small banks, especially, to get quali- A second issue I want to talk about is We have already seen the trend toward fied officers and board members be- CRA. The current bill preserves CRA. mega-mergers, accompanied by higher cause of the liability costs. I urge my The current bill makes two modest fees, a decline in service, and the loss colleagues to reject this substitute. changes. One, it says that if a bank has of neighborhood financial institutions. The PRESIDING OFFICER. Under a long-term history of compliance This legislation accelerates that trend. the previous order, the hour of 12 noon —has been in compliance three years in In addition, what would be the affect having arrived, the Senator from Texas a row and is currently in compliance— of this legislation on the alarming in- is recognized to make a motion to that if a protest group or individual crease in foreign takeovers of US table. wants to inject themselves into the banks? I support increased Mr. SARBANES. Mr. President, I ask process, they can do it. They can say globalization, but what will happen for 1 minute so I can pose a question to whatever they want to say. But the when home town banks are taken over the Senator from Texas. regulator can’t hold up the bank’s ac- by companies that have no roots or The PRESIDING OFFICER. Is there tion in the name of CRA, given their commitments to the community? objection? long history of compliance and given With a globalization of financial re- Mr. GRAMM. Mr. President, I want 1 that they are currently in compliance, sources, the local bank could be bought minute to respond. unless the protester has more than a by a holding company based outside Mr. SARBANES. How does the Sen- scintilla of evidence; unless the pro- the United States. Instead of the ator get this $1 trillion figure? tester can present such relevant evi- friendly neighborhood teller, con- Mr. GRAMM. We have had 16,380 ex- dence as a reasonable mind might ac- sumers would be contacting a com- aminations of small, rural institutions cept as adequate to support the claim; puter operator in a country half-way since 1990. Those small, rural institu- unless the protester has real, mate- around the globe through an 800 num- tions report to us that it costs them rial—not seeming or imaginary—evi- ber. Their account could be subject to about $80,000 a year to keep the records dence. In other words, if you are going risks that have nothing to do with to comply with these examinations, to stop a bank from doing something their job, their community or even the and that is where the number came that it has been found qualified to do, economy of the United States. I know from. you have to present some evidence— that impersonalized globalization is Mr. SARBANES. My arithmetic— hardly, a demanding constraint. not what banking customers want first of all, I do not concede the figures. Second, we exempt very small rural when they talk about modernization of In any event, even if I accept them, it banks from CRA. Why? We exempt very financial services. is 1 billion, not 1 trillion. small rural banks from CRA for a very So I will support the Sarbanes Mr. GRAMM. If it is a billion or a simple reason: amendment. It goes further in answer- Ms. MIKULSKI. Mr. President, I rise trillion, it is a lot of money. ing my concerns. But I hope we will be in support of the Sarbanes substitute Mr. SARBANES. A lot of money, but able to address these concerns more amendment to the Financial Services there is a big difference between a bil- fully as we move forward with this leg- Modernization Act. I salute him for his lion and a trillion. That is one of the leadership in seeking financial services islation. they generally do not have a problems with this debate, I under- reform that prepares us for the new city to serve, much less an inner city. score. Third, in the last 9 years, Federal century. Mr. GRAMM. I have my trusty calcu- I agree that we should reform our fi- regulators have performed 16,380 CRA lator, and I will make the calculation nancial services. There is no doubt that evaluations of these banks—evaluating again. But lest my colleague be cor- changes in law have lagged behind them annually. These banks report rect, let me just restate it in his terms. changes in our banking and financial that it costs them between $60,000 and The term is, does it make sense to services industries. $80,000 a year to comply with CRA. Yet, make little banks spend $1.3 billion to This amendment is a great improve- at the end of 9 years and 16,380 evalua- comply with keeping paperwork when ment over the underlying bill. It would tions, just three small rural banks in 9 years, only three banks out of provide greater protections for con- have been found to be substantially out 16,000 audits have been substantially sumers. It would also maintain the of compliance. One million—excuse me, out of compliance? Is that not overkill? Community Reinvestment Act—which one trillion. Excuse me, let me be sure Is that not bankrupting every small is so important in enabling low income I have my figure here. At the end of bank in America? The answer is yes. communities to help themselves. this process, with small banks having Mr. GRAMM. I move to table the However, I would like to raise a num- spent perhaps $1,310,400,000,000 com- pending substitute, and I ask for the ber of what I call ‘‘flashing yellow plying with paperwork in the name of yeas and nays. lights’’ or warning signals that we evaluating community lending, we The PRESIDING OFFICER. Is there a should be aware of before enacting fi- have found just three banks out of sufficient second? nancial services modernization. We compliance. Not only does the sub- There appears to be a sufficient sec- should proceed with caution to avoid stitute eliminate this provision that ond. irrevocable changes when the savings ends this senseless wasting of small The yeas and nays were ordered. of hard working families and the via- bank resources that cost local commu- The PRESIDING OFFICER. The bility of our communities could be put nities and deny them access to credit, question is on agreeing to the motion in jeopardy. but it imposes confiscatory penalties to table the amendment. The yeas and

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00019 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8413 nays have been ordered. The clerk will The PRESIDING OFFICER. Without ‘‘(E) each insured depository institution af- call the roll. objection, it is so ordered. filiate of the national bank has achieved a The legislative clerk called the roll. Mr. LOTT. Mr. President, for the in- rating of ‘satisfactory record of meeting Mr. FITZGERALD (when his name formation of all Senators, Members community credit needs’, or better, at the was called). Present. should be aware that votes will occur most recent examination of each such insti- Mr. REID. I announce that the Sen- tution under the Community Reinvestment today on the CRA issue and possibly Act of 1977; and ator from North Dakota (Mr. DORGAN), other banking issues. If debate is com- ‘‘(F) the national bank has received the’’. is necessarily absent. pleted before the 7 o’clock hour, there On page 66, line 12, strike ‘‘subparagraph I also announce that the Senator are other amendments that could be (D)’’ and insert ‘‘subparagraphs (D) and (E)’’. from Louisiana (Ms. LANDRIEU), is ab- considered. There will certainly be one On page 66, line 16, insert before the period sent attending a funeral. at 7 o’clock on this CRA issue. ‘‘, except that the Comptroller may not re- I further announce that, if present If the Senate is able to complete this quire a national bank to divest control of or and voting, the Senator from Louisiana otherwise terminate affiliation with a finan- banking bill by the close of business on cial subsidiary based on noncompliance with (Ms. LANDRIEU), would vote ‘‘no.’’ Thursday, then I would be prepared to paragraph (1)(E)’’. The PRESIDING OFFICER (Mr. announce at that time that there On page 96, strike line 23 and all that fol- BURNS). Are there any other Senators would be no votes on Friday. So if we lows through page 98, line 4. in the Chamber desiring to vote? can get this work completed—and it On page 104, strike line 20 and all that fol- The result was announced—yeas 54, looks as if we may be able to; the man- lows through page 105, line 14. nays 43, as follows: Redesignate sections 304 through 307 and agers are working together. And we [Rollcall Vote No. 100 Leg.] sections 309 through 311 as sections 303 have a couple of issues that will have through 309, respectively. YEAS—54 to be debated and considered carefully, Amend the table of contents accordingly. Abraham Frist McConnell plus there are other amendments that Mr. BRYAN. Mr. President, we are Allard Gorton Murkowski Ashcroft Gramm Nickles won’t take as long to be debated. This about ready to debate an important Bennett Grams Roberts could be completed by Thursday night. issue dealing with the Community Re- Bond Grassley Roth If that is the case, we will not have any investment Act. Let me say that I Brownback Gregg Santorum Bunning Hagel Sessions votes on Friday. If we are not able to think there has been considerably more Burns Hatch Shelby finish it Thursday night, we may have heat than light generated in the debate Campbell Helms Smith (NH) to go over until Friday and complete surrounding this issue. I thought it Chafee Hutchinson Smith (OR) it. I wanted Members to be aware of might be helpful to my colleagues to Cochran Hutchison Snowe Collins Inhofe Specter that possibility. explain how the provisions of this act Coverdell Jeffords Stevens I yield the floor. work, what is involved, what is not in- Craig Kyl Thomas Mr. SARBANES. Mr. President, I volved, the provisions that currently Crapo Lott Thompson yield to the distinguished Senator from DeWine Lugar Thurmond exist in the bill we are debating, and Domenici Mack Voinovich Nevada. the contents of the amendment. Enzi McCain Warner The PRESIDING OFFICER. The Sen- The Community Reinvestment Act NAYS—43 ator from Nevada is recognized. has been in operation now for 21 years. AMENDMENT NO. 303 Akaka Feingold Lincoln The act itself is triggered in either of Baucus Feinstein Mikulski (Purpose: To make amendments relating to two circumstances—one, as part of a Bayh Graham Moynihan the Community Reinvestment Act of 1977, periodic review, and that depends upon Biden Harkin Murray and for other purposes) the size of the institution. It applies Bingaman Hollings Reed Mr. BRYAN. Mr. President, I send an only to insured depository institutions, Boxer Inouye Reid Breaux Johnson amendment to the desk and ask for its so we are talking about banks and Robb immediate consideration. Bryan Kennedy Rockefeller thrifts. It also is triggered when a de- Byrd Kerrey Sarbanes The PRESIDING OFFICER. The Cleland Kerry pository institution files an applica- Schumer clerk will report. Conrad Kohl tion for a charter conversion, for merg- Torricelli The legislative assistant read as fol- Daschle Lautenberg er, acquisition, or requesting authority Wellstone lows: Dodd Leahy for additional branches. Durbin Levin Wyden The Senator from Nevada [Mr. BRYAN], for Those applications, then, are re- Edwards Lieberman himself, Mr. DODD, and Mr. KERRY, proposes viewed by the appropriate bank regu- ANSWERED ‘‘PRESENT’’—1 an amendment numbered 303. lator, or the thrift regulator, whether Mr. BRYAN. Mr. President, I ask Fitzgerald that be the OCC, the Federal Reserve, unanimous consent that reading of the NOT VOTING—2 or the OTC. Notice is then given, and amendment be dispensed with. Dorgan Landrieu the community groups have an oppor- The PRESIDING OFFICER. Without tunity to comment on the application. The motion was agreed to. objection, it is so ordered. Mr. LOTT. Mr. President, I ask unan- The amendment is as follows: So you have a periodic review, which may be annually or a longer period of imous consent that notwithstanding On page 14, strike lines 8 and 9 and insert the agreement of May 4, Senator SAR- the following: ‘‘are well managed; time, or you have the circumstances in BANES now be recognized to offer a CRA ‘‘(C) all of the insured depository institu- which an insured depository institu- amendment with all other provisions of tion subsidiaries of the bank holding com- tion seeks either a charter conversion, the previous consent agreement still pany have achieved a rating of ‘satisfactory a merger, an acquisition, or additional intact. record of meeting community credit needs’, branches. I further ask that a vote occur in re- or better, at the most recent examination of Notice is given. Now, 97 percent of all lation to the CRA amendment at 7 p.m. each such institution under the Community depository institutions—banks or Reinvestment Act of 1977; and thrifts—get a satisfactory CRA rating. tonight, and if debate has been com- ‘‘(D) the bank holding company has filed’’. pleted prior to that time, the amend- On page 14, line 20, strike ‘‘and (B)’’ and in- The penalties that can be provided are ment may be laid aside in order for sert ‘‘, (B), and (C)’’. that, No. 1, an application could be de- Senator GRAMM, or his designee, to On page 18, between lines 4 and 5, insert nied, an application could be accepted offer an additional amendment. the following: subject to certain conditions, or the Mr. SARBANES. Mr. President, re- ‘‘(5) LIMITATION.—A bank holding company application can be approved without serving the right to object, I think the shall not be required to divest any company conditions. I think it is important to agreement should be ‘‘or a designee,’’ held, or terminate any activity conducted understand who is making the decision pursuant to, subsection (k) solely because of and Senator BRYAN is going to offer the a failure to comply with subsection (l)(1)(C). here. It is not the community groups amendment. On page 66, strike lines 7 and 8 and insert that have a veto power. These are deci- Mr. LOTT. I modify it to say Senator the following: ‘‘bank is well capitalized and sions that are essentially made by SARBANES or his designee. well managed; bank regulators—regulators that have

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00020 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8414 CONGRESSIONAL RECORD—SENATE May 5, 1999 traditionally evinced no hostility to These loans have financed businesses I will explain shortly how S. 900, the the banking industry. And even an in- which have been critical to revitalizing bill before us, would substantially stitution which gets the lowest rat- the distressed communities. weaken the CRA provisions, and the ing—substantial noncompliance is the Mr. President, it seems to me that position taken by the Home Builders, lowest rating you can get—may still has a desirable result for every mayor and others, is to support the amend- have its application approved. So noth- of every major community in America ment which is presently before the ing in the language of CRA compels a struggling to revitalize the inner core body. regulator to disapprove an application, of his or her State. That is the experi- Mr. President, the distinguished even if the financial institution that is ence in my own State. That is the ex- chairman of the committee and I have applying for the relief sought gets the perience, I suggest, of every State. a difference of opinion. And he will lowest evaluation possible. As a result of CRA, we are seeing have an opportunity, I am sure, to ar- What is the history in the last 21 more money being invested and loaned ticulate his point of view. The chair- years of the act? There have been some in inner cities with minority busi- man—it is entirely appropriate for him 86,000 applications filed over the last 21 nesses. to do so—sent out letters to various years and, of those, only 660 have re- That, it seems to me, makes sense, groups to get their comments. ceived adverse comments. So less than and good public policy. A letter from a small banker dated 1 percent of all of the applications re- Who, then, objects to CRA? March 26 of this year responds to lating to CRA that have been received We are dealing with a piece of legis- that—a copy of which was made avail- have been subject to objections or ad- lation that will substantially trans- able to those of us who serve on the verse comments by any of the regu- form the way in which modern finan- committee—a letter addressed to: lating groups over a period of 21 years. cial institutions will be regulated— Dear Senator Gramm: I received a copy of What has CRA accomplished? Well, it banking, securities and insurance. your letter to Scott Jones— has accomplished a great deal. In point Mr. President, those groups are in Mr. Jones is the President of the of fact, the CRA, over the years, has re- support of CRA, and they are in sup- American Banking Association— sulted in a substantial increase in lend- port of the amendment which I have of- regarding the proposed exemption from CRA ing and other financial activity within fered. requirements for small banks. While I appre- the inner-city and minority groups in Indeed, in the last session of the Con- ciate your efforts on our behalf, I have to say America. CRA encourages banks to gress, H.R. 10, which contains CRA pro- that this exemption ‘‘Don’t mean jack to meet the credit needs of the entire visions virtually identical to the ones me.’’ community, including low- and mod- that are contained in the Bryan That is a quote. That is his language. erate-income areas. amendment, were passed by the House We have two bank charters, and have al- Over the last 21 years, the CRA has of Representatives, and emerged from a ways received an outstanding rating. The been one of the strongest incentives to Senate Banking Committee by a vote burden is not onerous, especially under the encourage investment in low-income of 16 to 2—broad bipartisan support. revised requirements now in effect for the and minority communities. In this Congress, the financial insti- past two or three years. The information I gather to determine in-area versus out-of- Under the law, federally insured fi- tution restructuring bill that is mak- ing its way through the other body was area loans is useful to me outside of the CRA nancial institutions have made billions requirements. I probably spend less than 5 of dollars in profitable market rate approved by a vote of 51 to 8—51 to 8— hours a year on the issue. I don’t think it is loans and investments in underserved and the CRA provisions contained in worth squandering any political capital you urban and rural areas. And it has done that piece of legislation are essentially have to eliminate the CRA. so without creating a large Federal bu- identical to the provisions that the That is the essential text of the let- reaucracy, or jeopardizing the safety Bryan amendment addresses. ter that our distinguished chairman re- and soundness of any financial institu- Banks are supportive, the insurance ceived. That small banker made ref- tion. industry is supportive, and the securi- erence to some provisions in CRA that CRA has been an important tool in ties industry—the major players are were changed in 1996. improving access to credit for minority supportive. Moreover, banks have Mr. President, recognizing that a and low- to moderate-income Ameri- found not only that it is good public small bank has a much smaller staff to cans. policy, but it makes sense financially. deal with compliance issues, substan- The dramatic increase in home own- The National Association of Home tial changes were made in the CRA re- ership rates for minorities is attrib- Builders, which has participated in an quirements for small banks. Essen- utable in large part to increased focus enormous growth in the rate of new tially, we are talking about institu- on banks’ CRA performance. Between housing starts, and has seen a remark- tions under $250 million. 1993 and 1997, the number of conven- able increase in the percentage of home No. 1, with respect to CRA, those tional home mortgage loans extended ownership in America, has this to say small banks have no CRA reporting re- increased for African Americans by 72 about CRA. quirements. percent; for Hispanics, 45 percent; for The National Association of Home Let me reemphasize that. They have Asian Americans, 31 percent; for Native Builders: no CRA reporting requirements. Americans, 30 percent; for low- and Therefore, the NAHB, the National Asso- And the standards which are applied moderate-income census tracks by 45 ciation of Home Builders, supports any to larger banks that are involved in a percent. amendments offered to remove or replace the lending, a service, and an investment Small business owners in low- and provisions in S. 900— criteria are not applicable to small moderate-income communities have That is the bill that we are debat- banks. Indeed, small banks do not have seen a substantial increase in their ac- ing— to compile any data. They don’t have cess to credit under the law. that deals with a much more restrictive and to submit any reports. Under the emphasis of CRA, banks a roll-back provision of CRA. They have to have records available have made loans to African Americans, The Home Builders go on to say: so that when the bank examiner comes Native Americans, Hispanic and Asian While the CRA may not be the perfect so- in pursuant to this periodic request, or Americans, and, according to the Small lution to ensuring housing credit is available if a small bank requests some activity Business Administration, loans to Afri- to all communities, financial institutions of which triggers the application of CRA, can-American-owned firms increased all sizes, through their compliance with they simply say to the bank examiner, by 145 percent between 1992 and 1997. In CRA, have provided crucial community de- ‘‘Our records are contained in the file velopment loans and affordable housing pro- 1997 alone, banks made more than $34 duction loans that have benefited millions of cabinet over there.’’ There is no report- billion in loans to entrepreneurs lo- people across the United States. We see no ing requirement and no affirmative cated in low- and moderate-income public good served by a weakening or a re- burden on their part other than to have areas. duction in the CRA requirements. the records which, as the small banker

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00021 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8415 who wrote the letter to our distin- strikes me that the Senator’s provi- the course of financial modernization guished chairman pointed out, a bank sions impose limitations that do not discussions. This is a Depression-era would want to have for itself inde- currently exist in the law. I know the piece of legislation. I like it. It neatly pendent and separate and apart from able chairman well understands, even if compartmentalizes banking regulation, the CRA requirements. there were a finding under current law insurance regulation, and security reg- So, indeed, there has been an ac- that the particular financial institu- ulation. It makes a lot of sense. In the knowledgment and an attempt to tion has the lowest possible rating— aftermath of the financial collapse of streamline the requirements that small substantial noncompliance—that does the 1920s and the Great Depression that bankers are subject to. And that has not preclude the bank regulator from followed, a number of abuses were been acknowledged by the cor- approving the application. pointed out. This legislation was in re- respondent who wrote to our distin- CRA is not an onerous burden. Under sponse to those abuses. It served the guished chairman. the current law, which would remain in Nation effectively for many decades. What do we have in the current bill? place with the Bryan amendment, a As a result of court decisions and ac- The current bill does a couple of things bank that seeks a merger approval or tions taken by bank regulators, today which, in my view, roll back the provi- charter provision change or a new much of Glass-Steagall has been effec- sions of CRA. branch, even if that bank had a sub- tively emasculated and the market- It says, in effect, that if a financial stantial noncompliance, the lowest rat- place is dictating new products that in- institution has a CRA rating of satis- ing possible in the CRA, under the law, volve combinations of insurance, secu- factory or above for a period of 36 nothing precludes the bank regulator rities, and banking functions. I agree months, 3 years, it would be deemed in from approving that application. with the distinguished chairman that compliance for purposes of CRA, and I understand the concern of the Sen- we need a piece of legislation which ef- for any one of the applications for ei- ator from Texas in terms of balancing fectively deals with that. In effect, ther a merger, an acquisition, or grant the equities here. It strikes me that we what we are doing is establishing that of extension, there would be no oppor- ought not to put that additional bur- modern framework. We have estab- tunity for community groups to com- den of proof on community groups who lished essentially a system of func- ment. may want to file some legitimate con- tional regulation. That would roll back the provisions. cerns they have about a proposed merg- It appears from the testimony we Mr. GRAMM. Will the Senator yield? er, acquisition, or a branch extension. have received from the Banking Com- Mr. BRYAN. I am happy to yield to I think the record reflects, of 86,000 mittee and others who have offered the Senator. applications, we have had fewer than 1 comment that the new financial world Mr. GRAMM. I know the Senator, percent, 660, that have availed them- will deal not so much in terms of merg- and I know he would not want to state selves of this. I respectfully submit, in ers and acquisitions but will seek to something that is incorrect. I will be response to the comments of my friend avail itself of the new financial serv- brief. from Texas, that is not, in my judg- ices that banks will be able to partici- The amendment says if a bank has a ment, unduly burdensome. pate in under the provisions of S. 900, long history of compliance, they have The Senator also provides in his the financial restructuring bill we are been in compliance for 3 years in a row, version of S. 900 a small bank exemp- debating. Those services involve, essen- they are currently in compliance, in tion. The effect of that would be to tially, securities and insurance func- order for the regulator to prevent them eliminate about 37 percent of all of the tions. This is testimony offered before the from taking the action that they are banks in the country from the current House Banking Committee by Treasury allowed to take by being in compli- provisions of CRA. Again, I think it is Secretary Rubin. I think he makes a ance, that a person who protests has to a balance. It is not the purpose of the point far more effectively than I. present some substantial evidence. Senator from Nevada nor of those who Banking industry experts agree that most ‘‘Substantial evidence’’ is defined in support the Bryan amendment to want of the consolidations within the banking the law as more than a scintilla. It to impose an onerous, unreasonable, community have occurred and that the new does not in any way say they are unfair burden upon a financial institu- frontier will involve mergers among banks, deemed to be in compliance, other than tion. However, I must say, I think the securities and insurance firms. that they are innocent until proven track record would indicate that is not As a side point, that is the kind of guilty if they have a good record. Any- the case. activity which the S. 900 restructuring body can protest, anybody can file a Responding to a legitimate concern bill will authorize. complaint, but the regulator can’t stop of small banks, as I pointed out, in 1996 According to Treasury Secretary the process or delay it unless the chal- the rules were changed so that small Rubin, if we wish to preserve the rel- lenging party presents some ‘‘substan- banks do not have a reporting require- evance of CRA at a time when the rel- tial evidence.’’ ment. All they must do is maintain ative importance of bank mergers may This isn’t for everybody. It is only records so that the bank examiner who decline and the establishment of for the banks that have a long history comes in periodically to review, or nonbank financial services will become of compliance. whenever the application is filed that increasingly important, the authority I didn’t want to have any confusion. triggers the CRA review to look at the to engage in newly authorized activi- That is exactly what it says. records, can make sure in effect that ties should be connected to a satisfac- I thank the Senator. the bank is lending in the community. tory CRA rating. Mr. BRYAN. I thank the chairman. It strikes me that is good public policy. That is the philosophical underpin- The chairman states correctly the Indeed, banks have profited from that ning. We will be dealing with a new contents of the bill. However, let me activity. world, a new financial structure, and say in response to the Senator’s posi- Those are the two provisions that the that, we believe, is appropriate in light tion, we have in effect a 97-percent Senator’s version of S. 900 would con- of the changes in market conditions. compliance rate. Mr. President, 97 per- tain. Also, it would eliminate CRA What are the requirements that cent of the financial institutions in the from the new activities which would be would be imposed upon a depository in- country receive satisfactory or better. permitted under the provisions of this stitution under the provisions of this In the entire history of the Community law. amendment which would seek to avail Reinvestment Act, with some 86,000 ap- The thrust of this legislation is to itself of these new activities—insur- plications, we have had fewer than 1 provide a regulatory framework that ance and securities? No. 1, as a condi- percent of those protested in any way. deals with the reality of the market- tion precedent, a depository institution In terms of balance, to give commu- place. Many of those who do not serve would have to have a satisfactory rat- nity groups an opportunity not only to on the Banking Committee have heard ing. That is not, it seems to me, an un- comment but to register concerns, it Glass-Steagall mentioned frequently in reasonable provision.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00022 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8416 CONGRESSIONAL RECORD—SENATE May 5, 1999 What kind of action must the regu- cent—have objections or adverse com- tion, the safe harbor issue, that if we lator consider? If the institution has a ments been made. previously had a satisfactory rating or satisfactory CRA rating and all other I think the amendment is fair. It better, they could not take into ac- regulatory issues nonrelated to CRA strikes a middle ground. It acknowl- count people’s comments, unless they are in place, that application could be edges the concerns of small banks with had substantial, verifying information, approved, it could be subjected to cer- the changes that were made in 1996. I and then we are being told that a lot of tain conditions, or it could be denied. hope my colleagues on both sides of the cases were read that indicated that An agreement could be entered into be- aisle will support this legislation. ‘‘substantial’’ means a scintilla of evi- tween the financial institution and the I see the Senator from Maryland—— dence. regulator if, indeed, there were some Mr. SARBANES. Will the Senator The Senator was a distinguished at- concerns about maintaining the CRA, yield for a question? torney general for the State of Nevada and the regulator would have the abil- Mr. BRYAN. I am happy to yield to for a number of years before he became ity to do several things if there were a the Senator from Maryland. the Governor. Wouldn’t he read the noncompliance with the agreement en- The PRESIDING OFFICER (Mr. phrase ‘‘substantial, verifiable infor- tered into. BUNNING). The Senator from Maryland. mation’’ as a more exacting standard On balance, what we are talking Mr. SARBANES. First of all, I com- than ‘‘scintilla’’ of evidence? about is preserving the relevance of mend the able Senator from Nevada for Mr. BRYAN. The Senator from Mary- CRA in this new financial world we are an extremely fine statement in support land makes a good point. I think any talking about that will deal with merg- of this amendment which I very strong- fair reading, in terms of the standards ers and acquisitions involving broker- ly back. of proof, is that a ‘‘substantial’’ stand- age and insurance type of services The Senator made reference—I think ard is much higher than a scintilla. which are not currently authorized it is an extremely important point—to In effect, what this provision would under the regulatory framework. the fact that the decisions with respect do is raise the bar substantially, I say So I think, just by way of concluding, to complying with CRA are made by to my friend from Maryland, for com- what we are talking about is not a bold the regulators. As I understand it, munity investment groups being able or reckless expansion of CRA. We are community groups or anyone else can to, in effect, make their case for the really talking about, No. 1, maintain- come in and make comments when consideration—the consideration of the ing the status quo with respect to CRA some of these steps are to be taken for regulator. I come back to the point. Even if and its traditional functions as it deals which an institution would have to they make their case that, indeed, the with the mergers and the acquisition meet CRA muster, and some of those bank has not been responsible, has not and charter changes and the new comments, I assume, can be right on point, others may wander about. But done what it ought to do under CRA, branch request, which is the current the regulator may disregard that and whatever the case, it is not the people part of the law. And we are simply say- still grant that approval. So it strikes who comment who make the judgment; ing, with respect to these new services, me that by posing a standard before it is the regulators who make the judg- these new opportunities which finan- they even get into the ball game of ment. So they can take it into account, cial institutions will be allowed to par- ‘‘substantial,’’ you indeed cut off ac- give it some weight, give it no weight— ticipate in, which as Secretary Rubin cess to much of the input the commu- isn’t that correct? points out is where the action is going nity groups ought to have before a reg- Mr. BRYAN. The Senator from Mary- to be, that is where the field of play is. ulator makes a decision. To say that with respect to those new land is absolutely correct. It is the reg- Mr. SARBANES. It is interesting. activities no CRA would be applicable, ulators, whether it is the OTS, or Fed- The current system I think is seen by no requirement would be in place, is, in eral Reserve, or the OCC. most people as working fairly well. In effect, to roll back the application of As the Senator from Maryland fact, many fine financial institutions CRA to the range of financial services knows, because of his longstanding do not complain about it. They are pre- that banks are currently allowed to membership on the committee, much pared to continue to work under the participate in. can be said about bank regulators. I do current system, and many of them In my judgment, this is a reasonable not believe anybody would indicate or have even said they see strong positive and fair amendment. Bankers support suggest the record would indicate that value in it. So it seems to me this is an it. Securities firms support it. Insur- there is a hostility by the regulators to effort to institute an important change ance companies support it. It enjoys a the institutions they regulate. In ef- that would really cut off open com- broad range of support. fect, the regulators have the oppor- ment. Let me emphasize to my colleagues tunity to consider the CRA issues pre- You see, none of this is done, as I un- that, unlike some issues which have sented among a range of other issues— derstand it, in the committee bill with tended to divide us in terms of partisan capital adequacy, a whole host of respect to management or capital or differences, the House of Representa- things that may be unrelated. any of the other issues the regulators tives, in considering banking legisla- As the Senator from Maryland look at when they undertake to con- tion and financial restructuring—the knows—and I think this is something sider one of these mergers or affili- same type of legislation we are debat- that needs to be pointed out—even if ations. It is being applied only to CRA. ing here today—in a vote of 51 to 8 ap- the institution which has the applica- I mean CRA is being singled out for the proved CRA provisions which essen- tion has the lowest possible rating— application of this kind of tially track the Bryan amendment. In substantial noncompliance, which, in prescreening, as it were, of people’s the last Congress, when we came with- effect, means they have done virtually ability to come in and make their com- in a gnat’s eyelash of getting financial nothing—the regulator can still ap- ments. restructuring legislation enacted, it prove the application. They can still Mr. BRYAN. The Senator makes a was approved by a bipartisan majority approve it. So there is no requirement good point. That is absolutely correct. in the House and it cleared the Senate under the existing law with respect to As the Senator knows, as a practical Banking Committee on a vote of 16 the kinds of mergers, acquisitions, matter, although CRA is triggered ge- to 2. charter changes, and branch expan- nerically in two circumstances—one, So this should not be, and I hope it sions that requires a financial institu- part of a periodic review; the other, will not be, a partisan vote. tion to even have a satisfactory rate. when applications are made for charter In the 21 years that CRA has been So this is hardly an onerous provi- changes or new branches or mergers or around, 86,000 applications have been sion, I say to my friend from Maryland. acquisitions—as a practical matter, the received that were triggered by the Mr. SARBANES. The Senator from only opportunity community groups provisions of the existing law. And in Texas interrupted the Senator to make have is in this application process fewer than 1 percent—fewer than 1 per- the point on this ‘‘comments’’ ques- which the Senator has described.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00023 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8417 That is the only opportunity. So if priate, in my judgment, and they are Mr. SARBANES. The Senator’s you foreclose them by a standard that dramatic. amendment, I think, has an extremely is unreasonable and difficult to meet, No small bank under the size of $250 important provision which says that if you have, for all intents and purposes, million has to report CRA. There is no a banking institution wishes to go into foreclosed community groups from reg- reporting requirement for CRA that is securities or into insurance, which istering any effective concerns that incumbent upon a small bank, as de- would be permitted in a comprehensive they have. fined in the provisions. way for the first time by this legisla- Mr. SARBANES. I think that is an The responsibility of the small bank tion, that banking institution must extremely important point. The chair- is simply to make available to the pass the CRA test in order to do that. man has said they have court opinions. bank examiner, when he or she comes It is asserted that this is a, I think the I have not seen these cases that inter- in periodically or when the examiner is language was used by my colleague, pret ‘‘substantial’’ to mean ‘‘a scintilla reviewing the records for an applica- the chairman, a massive expansion of of evidence.’’ tion, the fact that the bank is serving CRA. Mr. GRAMM. More than a scintilla. the community. I take a very different view of that. Mr. SARBANES. The chairman cor- Moreover, the standards which are It seems to me it is only keeping CRA rects me and says ‘‘more than a scin- required for a larger bank dealing with abreast of the developments that are tilla.’’ I don’t know how much more, a lending standard, a service standard taking place with respect to financial but more than a scintilla. and investment standard are inappli- modernization, because heretofore In any event, isn’t it the case that no cable to small banks. banks could not reach out and do—they full hearings have been held on CRA? In trying to balance the inequities did some of those activities within the We come to the floor, and we get all of here, as I know the distinguished Sen- bank of a very limited nature that had these assertions about abuses of one ator from Maryland is interested in been permitted either by regulation or sort or another, sort of radical changes doing and all of us share in a very bi- by court opinion but which were highly in a program that is seen as having partisan way, dealing with the very controversial and contested, and one of been the lifeblood, enabling commu- special concerns of small banks has the things this bill is intended to do is nities to renew themselves. To my been addressed, we have eliminated the to resolve those questions in terms of knowledge, we have not had within the reporting requirement and have simply the structure of the financial services committee any sort of comprehensive said, if I might respond to my friend industry. Both the Senator and I are hearings to examine those questions; is from Maryland, that when the bank ex- supportive of trying to do that. that the Senator’s understanding? aminer comes in, the only obligation It seems to me that if the bank is Mr. BRYAN. That is the under- on the part of the financial institution now going to be permitted to move out standing of the Senator from Nevada, is to direct the bank examiner to the to do these other activities, it is not we have had no hearings at all. file drawer and say, ‘‘Those are our some massive expansion of CRA. That I must tell the Senator from Mary- records.’’ The bank examiner examines CRA requirement would be placed upon land that the financial institutions in those records, and that is the burden the bank before they could move to do my State are supportive of CRA. If we that is imposed. those other activities. Otherwise, it want to take anecdotal evidence, I I must say, in terms of the balance, seems to me, over time, you will erode have to say financial institutions in as the Senator from Maryland knows, CRA, as institutions begin to shift my State have indicated, one, it is coming from a State which has major their assets out from under the bank- good public policy, and, two, they have metropolitan areas that fight urban ing activity into the securities and the financially benefited. But there is no decay, as does every major community insurance activities. record before us, based upon any hear- in America, CRA is one of the most ef- This amendment, the proposal the ings or testimony—and I must say I fective redevelopment tools for the Senator has, does not extend CRA to think that there is opportunity for inner cities in America that we have. It the securities and insurance affiliates; hearings to be held. When we are deal- has poured hundreds of millions of dol- am I correct on that point? ing with some other regulatory relief lars of new investments into the inner Mr. BRYAN. The Senator is correct. issues in the Banking Committee, that cities. That benefits not just the inner Mr. SARBANES. Which in fact has might be an appropriate time to bring cities, but that benefits all of us. been strongly urged by a number of the people in so we can build a record. The tragedy that occurred in Little- community groups that are supportive My understanding is that we have ton, CO, 2 weeks ago occurred in a sub- of CRA. They in effect want to extend had nothing to that effect and, indeed, urban area, but I think it is increas- it out. If that were to be done, I would this Senator has been on the com- ingly apparent to America, whether recognize that as an expansion, and we mittee now for 11 years. Financial in- you live in the inner city or live in the could fight that issue, as it were. But stitutions in my own State are very suburbs, the problems that our inner that is not what is in this amendment. supportive of the provisions. cities have in America spread like a This amendment puts the require- Mr. SARBANES. Isn’t it also the contagion. So it is in the best interest ment only on the bank, if it seeks to go case, I ask the Senator, that in the of every American, wherever he or she out and do those activities. That seems mid-1990s, when a number of banks lives, that those inner cities which face to me to be perfectly reasonable. In were complaining about the regulatory all the problems of urban decay, crime, fact, it seems to me failure to do that burden associated with CRA, Secretary and drugs, that what we can do to help is really a setback or an erosion of Rubin undertook a major effort to ad- to build those inner cities and CRA. dress the question of regulatory burden strengthen the hands of mayors, Demo- I ask the Senator his view on that and made very substantial changes in crats, Republicans, nonpartisan, is im- question. the requirements, which were greeted portant public policy, and CRA has Mr. BRYAN. I share the observation by the various banking associations at done the job. That is why the U.S. Con- and the conclusion reached by the dis- the time as being very forthcoming in ference of Mayors, as the distinguished tinguished ranking member. That is dealing with this question of overregu- ranking member knows, has been so precisely the case. As the Senator from lation? strongly supportive of the provisions in Maryland knows, we are dealing with a Mr. BRYAN. The Senator from Mary- the BRYAN amendment that we offer changing dynamic in the financial land is correct. Recognizing that small today. marketplace. That really is the cata- banks are in a different situation than Mr. SARBANES. The Senator has lyst that brings us into this financial larger banks in terms of staff capa- been very patient. Will he indulge me restructuring debate. bility, the Secretary did precisely that. for one further question? The Senator may have been off the In January 1996, these new provisions Mr. BRYAN. The Senator from Ne- floor when I shared the observation went into effect, and they are appro- vada is happy to do so. that the Treasury Secretary made,

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00024 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8418 CONGRESSIONAL RECORD—SENATE May 5, 1999 which reflects the view that the Sen- The Glass-Steagall Act—which pro- sumer and to ensure that all parties ator has expounded upon. He says, in hibits commercial banks from are playing on a level playing field. effect: affiliating with companies predomi- As part of this system of functional [I]f we wish to preserve the relevance of nantly engaged in the securities regulation, the bill retains the current CRA at a time when the relative importance busines—was passed at a different system of State regulation of insur- of bank mergers may decline and the estab- point in time and in a dramatically dif- ance. While I strongly support State lishment of non-bank financial [services] ferent economy. In response to the nu- regulation of insurance, I believe there will become increasingly important, the au- merous commercial bank failures dur- is a role for some Federal oversight. I thority to engage in newly authorized activi- ing the depression, the Glass-Steagall believe that because Congress dele- ties should be connected to. . .CRA. Act was enacted as part of President gates the authority to regulate the in- He is saying that much better than I. Roosevelt’s economic recovery pack- surance activities of national banks, it He is saying, in effect: Look, this mar- age. One premise leading to the law also has the responsibility to ensure ketplace is shifting, it is moving. From which has since been proven incorrect, that State regulation does not result in what we have seen historically, since by the way—was that commercial bloated, burdensome, and unresponsive CRA has been in effect, with the tradi- banks which were involved in securi- regulation. Also, I will be holding hear- tional consolidation and mergers of one ties underwriting failed at a higher ings this year in the Securities Sub- bank with another, that is not likely rate than other banks due to losses in committee to explore where any flaws to be where the dynamic is in the mar- their securities business when Wall exist and will work hard to address ketplace in the future. We have already Street collapsed. Subsequent studies them with all of the interested parties. seen it. have proven that these very same Another major area of functional reg- What we are going to see are consoli- banks actually fared better than other ulation contained in S. 900 is the regu- dations and mergers with other aspects banks which had not diversified by of- lation of securities activities. The bill of the financial services community— fering broad securities products. Unfor- provides a workable compromise which insurance and securities. And if you tunately, as with most of the flawed eliminates the bank’s existing broker- say that CRA has no reference or appli- legislation on our books, the law was dealer exemption and substitutes a sys- cation to those applications, in effect not sunset and has hindered America’s tem of targeted exemptions which pro- you are relegating CRA to the dustbin financial institutions—banks and secu- tect traditional banking products while of history; by and large, it is no longer rities firms alike—since its enactment requiring other securities activities to as relevant as it is currently. in the 1930s. be offered by a broker-dealer. Also, the So, in effect, what we are trying to Although commercial banks in re- bill requires the SEC and the Federal do is simply keep CRA as relevant in cent years have been able to conduct Reserve Board to work together to de- the new financial world as we have in limited securities underwriting activi- termine how future products will be the old financial world. I do not view ties through Section 20 affiliates, S. 900 regulated. this as an extension of CRA. It simply appropriately repeals the Glass- There has been some talk around reflects a change in the marketplace Steagall prohibitions on common own- Washington that an amendment may that we are likely to see with respect ership of commercial banks and securi- be offered to delete these bank exemp- to the way the financial services are ties firms and will allow these activi- tions and give the SEC complete au- provided to Americans. ties to be conducted without the arbi- thority to determine how future prod- Mr. SARBANES. In fact, unless we do trary restrictions which govern these ucts will be regulated. this, you could have a bank in substan- activities currently. Let me be clear that if this amend- tial noncompliance with respect to the The Bank Holding Company Act also ment is offered, it is done so for only CRA test which would then be able to includes similar restrictions in Section one reason—and that would be to kill reach out and exercise these additional 4(c)(8) which have prevented safe, the bill. If the bank exemptions are powers? sound, and well managed commercial eliminated and traditional activities, Mr. BRYAN. That is precisely the banks from affiliating with insurance such as trust activities, are not statu- case. companies. Although insurance is un- torily protected, the entire banking in- Mr. SARBANES. I thank the Sen- questionably a financial product, banks dustry will unite against this bill. ator. I thank him very much for his have been prohibited from under- Again, I urge my colleagues to oppose strong opening statement on this im- writing insurance, and insurance com- any amendments which significantly portant amendment. panies have been restricted from fully alter the bill’s securities provisions. Mr. BRYAN. I thank the Senator for entering the business of banking. This When repealing current law affili- his comments, which I think helped bill removes the Bank Holding Com- ation restrictions, the question is also elucidate a number of comments which pany Act restrictions and it preempts raised about what activities the new are going to be important in this de- State laws which prohibit these affili- broader bank holding companies will bate. ations. be able to conduct. The bill contains a I yield the floor. I note that the Sen- Although there always seems to be standard—financial in nature—by ator from Minnesota may wish to broad agreement that the time for re- which all activities of a bank holding speak. form is now, every recent effort has company must comply. This provision Mr. GRAMS addressed the Chair. failed because the devil has been in the maintains the current separation of The PRESIDING OFFICER. The Sen- details of how to regulate the new enti- banking and commercial activities, ator from Minnesota. ties. S. 900 successfully incorporates a while providing appropriate flexibility, Mr. GRAMS. I thank the Chair. wide array of negotiated agreements again, subject to Federal Reserve Mr. President, I want to take time between the interested industries to Board oversight. Some have criticized today to first outline my support for provide functional regulation—mean- even the narrow flexibility which is the bill overall, and then also to talk a ing regulation by product and not by provided in this bill. However, without little bit about the current pending the entity offering it. Under the bill’s this flexibility many financial compa- business, and that is the question con- regulatory structure, banking products nies will not be able to take advantage cerning CRA. will be regulated by bank regulators, of the new structure contained in the As a member of the Senate Banking securities activities will be regulated bill and will continue to expand their Committee, I rise in strong support of by the Securities and Exchange Com- activities outside of the bank holding S. 900, the Financial Services Mod- mission, and insurance will continue to company model and, thus, outside the ernization Act of 1999, and urge my col- be regulated by State insurance com- oversight that the structure would en- leagues to take the committee’s rec- missioners. This system will ensure sure. Also, while on the topic of bank- ommendation to pass this very impor- that the experts in each area will over- ing and commerce, I want to briefly tant piece of legislation. see the activities to protect the con- touch on the unitary thrift holding

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00025 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8419 company. There are three thrift related thrifts to also sell to banks, sell to se- shared also proved that CRA is a bot- provisions either in S. 900 or which are curities firms, or insurance companies. tom-line issue, costing small rural expected to be considered as floor Now I want to take a moment to dis- communities precious dollars, a lot of amendments. First, as reported by the cuss the issue which will likely be the money. His bank is Committee, the bill prevents the for- most contentious during the debate on . . .an $18 million bank located in a town mation of any new unitary thrift hold- this bill. That is the Community Rein- of 600 people in southwestern Minnesota. ing companies after February 28, 1999. vestment Act or CRA. During consider- CRA is a requirement that does absolutely This provision will protect any applica- ation of this bill, the Banking Com- nothing to protect the people of my commu- tions which were ‘‘in the pipeline’’ at mittee approved two balanced amend- nity except to cost them money. The last exam we had lasted 3 days and proved what that time, on the date the bill was un- ments designed to bring rationality to a law which has ventured far from we already knew. We service our community. veiled but will prevent any new unitary If we did not, we would not be in business. charters, thus providing a finite uni- what I believe was its original purpose. Mr. SARBANES. Will the Senator verse of unitary charters. CRA was enacted in 1977 to encourage yield on that point? Mr. President, another provision financial institutions to help meet the Mr. GRAMS. I will yield to the Sen- which is included in the base text of credit needs of the local communities ator. the bill extends the assessment dif- in which they were chartered. Al- Mr. SARBANES. I am quite prepared ferential between banks and thrifts on though noble sounding, CRA has drift- to concede that there are a lot of small the payment of interest on bonds that ed far afield from that original pur- banks that do, in fact, service their were issued by the Financing Corpora- pose. S. 900 includes a small bank ex- community, as the Senator has indi- tion as part of the savings and loan cri- emption, approved on a bipartisan vote cated by the quotes. We have never sis. In 1996, Congress enacted legisla- of the committee, which exempts held extended hearings on this issue, tion requiring thrifts to make a one- banks with assets of under $100 million but the material from the Federal De- time assessment into the Saving Asso- and which are outside of a metropoli- posit Insurance Corporation says that ciation Insurance Fund or better tan statistical area for the CRA. 57 percent of small banks and thrifts known as SAIF, to fully capitalize the Although I have received a number of have a loan-to-deposit ratio below 70 then-undercapitalized fund. This as- calls of opposition from constituents in percent and that 17 percent of those sessment was included predominantly urban areas in my State, which will have levels less than 50 percent. Con- because it was scored as a revenue gain not be affected by this exemption, I do ceding that there are small banks who under budget rules, and it could be think it is important to listen to what really pay attention to their commu- used as the offset that Congress needed some of the bankers in rural Minnesota nity, it is obvious that there are also to grant the President added spending are also saying. I am sure this is true small banks which are not doing that. that he was demanding in return for not only in Minnesota but in rural banks across the country. In fact, the Madison Wisconsin Cap- his support of the balanced budget Although these bankers are often ital Times, in an editorial a couple of plan. vilified, I believe that they play a very years ago, said: In order to lighten the blow to thrifts crucial role in ensuring that affordable and to ensure that the FICO bond in- Many rural banks establish a very dif- financial services are widely available ferent pattern than reinvesting in their com- terests payments were made in a time- in the rural America. munities where local lending takes a lower ly and also in a dependable manner, Just take, for example, the com- priority than making more assured invest- Congress for the first time spread the ments of John Schmid of the Security ment like Federal Government securities. assessment for FICO interest to the State Bank in Sebeka, MN. John Thus, such banks drain local resources of the commercial banks. Under that legisla- very localities that support them, making it writes: much harder for local citizens to get credit. tion, banks were to be assessed at a We are a small rural Minnesota bank with rate one-fifth of that which thrifts are assets of $21 million—$21 million, this is not I do not gainsay the examples that assessed until January 1, 2000, at which a large money center bank—and our town the Senator cited. But clearly, there time all institutions would be assessed population is 680 souls. We could not exist if are examples on the other side. And at the same rate. we did not support and reinvest as much as CRA, of course, is directed to get not The bill before us today extends for 3 we could in our town and surrounding area. at the good or the best actors, but the years the period during which there Gregory Morgan of First National ones that are not addressing needs. The will be an assessment differential. Not Bank of Montgomery, MN, also tells a statistics from the regulators seem to surprisingly, the thrift industry ada- similar story. He writes: indicate, and this editorial that we mantly opposed this provision. It is ex- Our bank is 36 years old, founded on the have—and we have other comments to pected that Senator JOHNSON will be of- idea of serving the entire community of the same effect—seems to indicate that fering an amendment, which I intend Montgomery and as such, we have been suc- there is a problem. to support, which strikes the FICO as- cessful. Our efforts of living and breathing Mr. GRAMS. I understand the con- community reinvestment are not driven by cern, and I know those numbers have sessment extension and eliminates the having to be in compliance with some law thrifts’ ability to affiliate with non- written in Washington but rather by listen- been raised in the questions. financial firms. ing and serving our friends and neighbors I also know, if you look at the other Although this amendment presents throughout the Montgomery area. side of the story, I have talked to some an unpopular choice for thrifts, I be- Yet another constituent committed of these small bankers who say they lieve that it is in the best interest of to his hometown is Romane Dold, of live in a town or work in a town of 300 the thrifts in my State because it will Currie State Bank. Romane writes: people. And if you look out in the rural positively impact their bottom line We are a small community bank located in parts of the country today, most of the while only slightly impacting their a town of 300 people. Our assets are $17 mil- population in these small towns is ability to affiliate. lion. Our bank has always adhered to the growing in age. So his concern was, al- I should note that if the Johnson regulations of CRA and, in fact, received an though we make all these loans avail- amendment were approved outside of ‘‘Outstanding’’ rating in our most recent able, there are not many home mort- the underlying modernization bill, it exam. The problem that we have with the gages being sought. There are not would be much more burdensome, be- regulations is that it just is not necessary. Our bank has been in this town since 1931 many automobiles being bought. There cause thrifts would then be limited to and quite honestly, if we hadn’t been rein- are not many washers and dryers for selling only to banks or to other vesting in this community for over 60 years which loans are being asked. There thrifts. However, the bill’s expansion of we wouldn’t be here. CRA has just been an- isn’t the demand for the loan. the ability of bank holding companies other ‘‘little burden’’ that we have to con- You have to expect that these bank- to affiliate with insurance companies tend with to appease some regulator. ers are going to have to put the money and securities firms passes through to Finally, the message Kieth Eitreim to some use, if there is nobody out thrifts and will now permit nonunitary of Jasper State Bank in Jasper, MN, there asking for the loan. The question

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00026 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 8420 CONGRESSIONAL RECORD—SENATE May 5, 1999 I have for the Senator is, how many of needs, not because Washington tells eliminate the competition, regulators those loans have been asked for and them to do so or says they have to, but, would have no incentive to be respon- then denied? again, because it is in their best inter- sive to the institutions they regulate The story I have—and I don’t have est and it is in the best interest of and American banks would have no this information in front of me—is that their community and their town, it where to turn if they are unhappy with he said it is awfully hard to loan proves the need for the small bank ex- their treatment. money to my community when there is emption. Mr. President, in closing I again urge no request for loans. What do I do, let The Committee also included a provi- my colleagues to support this impor- the money sit in the safe overnight? sion which has mistakenly been tant legislation so that we can move No, he has to invest it, maybe in some deemed a ‘‘safe harbor.’’ Unlike a safe the bill through conference and to the of these other government or other fi- harbor, which gives an institution a President for his signature. nancial institutions or financial mech- free ride, the rebuttable presumption I yield the floor. anisms. included in S. 900 simply gives meaning The PRESIDING OFFICER (Mr. I think there are two sides of that to the work of the regulators during VOINOVICH). The Senator from Illinois. story. It is not that these banks are CRA exams. CRA’s stated purpose is to Mr. DURBIN. I thank the Chair. turning down loans. In many cases, in require each appropriate federal bank- Mr. President, the bill which is be- these small communities in rural parts ing regulator to use its authority when fore the Senate, S. 900, is known in the of the country, there is no demand for examining financial institutions to en- shorthand form as the Financial Mod- these loans. The bank is a good, safe courage such institutions to help meet ernization Act. It is a 150-page bill place to keep it, but not always to be the credit needs of the local commu- which has been the subject of debate able to use the bank’s facilities. nities. By providing a rebuttable pre- and deliberation on Capitol Hill for al- Mr. SARBANES. That is a reasonable sumption, the bill gives the regulator most 10 years—a 10-year effort by the point. It ought to be examined in a set the benefit of the doubt that they are House and the Senate to try to mod- of careful hearings, because, in fact, meeting the requirements of CRA by ernize the laws and regulations in the particular institution may con- encouraging action by the institution Washington relative to banks and fi- front that problem, although it may be during the exam. However, the bill pro- nancial services. Of course, anyone who overlooking loan possibilities, which vides a safety that if someone feels has paid any attention understands has frequently been the case and is cer- that the regulator has not properly as- that while we have been debating, tainly the case in many instances in sessed the institution, provided the in- there has been a revolution taking which areas people were neglected in dividual can prove the regulators fail- place. terms of the availability of credit. We ure, it can still protest an action. I am reminded that just a few years have never done those kinds of hear- Thus, this amendment simply protects ago we passed major reform in the area ings. We have never really looked at federal banking regulators against har- of telecommunications—years of hear- this problem in some sort of objective, assment by individuals who simply ings, extraordinary testimony from ex- comprehensive way. want to criticize their work. pert witnesses, the best staff work, the And we hear all these kinds of ad hoc Finally, Mr. President, I regret to best lawyers, the best efforts by the stories, as it were. But, you know, have to include a negative comment in Members of the House and Senate—and there are counter-ad hoc stories. I am this statement about an otherwise out- we delivered the Telecommunications frank to say I don’t think we ought to standing bill. However, I believe that Act modernizing regulation when it be making the kind of significant the operating subsidiary provisions in- came to this industry. changes in the CRA that are in the cluded in S. 900 are inadequate and Now, a few years later, we take a committee bill without having gone should be amended. As the Senator who look at that work product. I was through the sort of process I am talk- worked on a bipartisan basis last year amused to find someone who came to ing about. with Senator REED of Rhode Island to I thank the Senator for yielding. my office and reported to me that they Mr. GRAMS. Mr. President, by put- draft a compromise operating sub- had found in that 1,000-page bill only ting a face on the businesspeople work- sidiary amendment, I have vested a two references to the Internet. Think ing day in and day out trying to help great deal of time studying the pluses of that. We modernized our tele- America’s rural communities strive and minuses of this option. I have come communications law and almost over- and survive, I hope we can eliminate to the conclusion that it is appropriate looked the most amazing phenomena the vilification which is cast upon for national banks to conduct full fi- that is taking place in telecommuni- them. We are talking about banks nancial activities, with the exception cations. under $100 million. As the gentleman of insurance underwriting and real es- I hope we don’t make the same mis- from Sebeka said: 680 people is not a tate development. I enthusiastically take here. I hope in our effort to mod- major financial center, and we have support the op sub amendment of Sen- ernize financial institutions that we done the best we can to meet the re- ator SHELBY which will be offered to are thoughtful, that we modernize quirements. We would not be in exist- this bill. It is identical to the amend- them in a way that is good for every- ence and would not be able to survive ment I authored last year and again one—consumers and families in Amer- in our community if we didn’t reinvest this year in Committee. The amend- ica as well as the owners of those insti- and if we had turned down these loans. ment provides adequate safeguards to tutions. There is a commonsense way to look ensure that the sub poses no greater Twenty-two years ago we took a look at it. According to the stories we have risk to the bank than a holding com- at banking in America. We decided heard and the bankers we have talked pany affiliate. Another benefit of this that we had some interest as a nation to, a lot of times these are banks with amendment is to provide competition in making certain that the banks three or four employees. Many times among regulators. A recent conversa- served the communities where they they are asked to have a full-time em- tion I had with a banking lawyer con- were located. That is not a radical no- ployee just to work on government reg- vinced me that this amendment is pru- tion, is it—to say if you have a bank in ulations, which takes a lot of money dent public policy. The attorney shared a town that is holding the savings and that could be used for loans, et cetera, with me that in his dealings with the checking accounts of individuals and out of the bank, and, as one banker Federal Reserve Board and the Office families and businesses, that when that said, it does absolutely nothing for his of the Comptroller of the Currency, one bank does business it should do busi- community. That is where we have to of the agencies have been cooperative ness in that same community where look at some of this. This is common in helping his client work through the people live, where the businesses sense. issues and find creative ways to deal are located, where the farmers have By using their words to show that with their problems while the other their farms, and where the ranchers they are meeting their communities’ has done nothing to help. If we were to have their ranches.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00027 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8421 We found that some banks were, in as a condition for exercising new finan- lend it back into the communities. effect, in a parasitic capacity. They cial powers. To put it in common They turn around and buy government were drawing out the resources of com- English, if you want to take your bank securities instead of lending it to the munities and regions and not putting and holding company and expand it in businesses and families that need those the money back in. In its worse situa- some direction, we are going to take a assets to make investments in the tion, you would find in some of the look to see if you have been good citi- communities. urban areas redlining, where banks zens in the communities where you are I don’t think the small bank exemp- would take the money out of a commu- located. tion is the way to go. I think the provi- nity and refuse to write mortgages for I think that is a reasonable sugges- sion in the CRA change relating to the people who wanted to build homes, tion. That is the law. But this bill that overlooks the fact that just a few or to modernize their homes. They changes it. This bill removes that re- years ago we put in new regulations to wouldn’t put money into the small quirement and says you can’t take a streamline CRA investigations in businesses in the same communities look at their records and see if they smaller banks, banks of less than $250 where they were drawing the money. have been helping local farmers and million in assets. We exempted many In 1977, we decided there was a need businesspeople, families, with mort- small banks from reporting require- for legislation called the Community gages. ments and eliminated a lot of docu- Reinvestment Act. It speaks for itself— Does that make sense, at a time mentation and paperwork. We need to when bank ownership is becoming fur- that the banks reinvest in the commu- continue to focus on banks of all sizes ther and further removed from the peo- nities where they are located. It is not to make sure they are doing the right ple who bank, that we are going to a radical concept. In fact, I think it is thing. somehow absolve them of responsi- a rational concept. It is one that, After 22 years of the Community Re- bility to the neighborhoods, the com- frankly, has served us very well for 22 investment Act, what do we have to munities, the towns, the counties show for it? Has it worked? I think, years. Now, as part of Senate bill 900, around them? I don’t think that makes quite honestly, it has worked very there is an effort to radically change any sense at all. community reinvestment. The second thing, the so-called safe well. My State of Illinois is very di- I don’t know what the experience of harbor provision. If an institution had verse, with a large city like Chicago other Senators might be. But I can tell a good conduct ribbon for 36 months and many small towns. In the Chicago you what my experience has been in under the Community Reinvestment area, thanks to a strong economy and my hometown of Springfield, IL. I have Act, this bill basically says leave those CRA, the number of home loans to low- lived in that town for about 30 years, banks alone, don’t ask any more ques- income borrowers almost doubled be- practiced law there, and raised a fam- tions. tween 1990 and 1996, enabling 30,000 ily. There was a time when I not only I don’t think that makes sense ei- families to become homeowners. Is it knew the name of every bank down- ther. of value to those families that those town, but I knew the bank presidents. The Community Reinvestment Act banks put the money back into the I might not have socialized with them, examinations take place about once community? I think it obviously is. but I sure knew where they were. I every 18 to 24 months. In fact, for the I want to take a look at some of the knew where they lived, and I knew who smaller institutions, they have been other areas of my State. Voice of the their families were. I had a feeling that streamlined more dramatically. I don’t People, in the Chicago Uptown area, those banks were going to be around think we ought to say that after some has provided quality, affordable hous- for a long time. You could just tick 3 years of good conduct we are no ing for low-income families. The ra- them off: The First National Bank, the longer going to ask basic questions as cially and economically diverse com- Illinois National Bank, The Springfield to whether or not you are making an munity of Uptown Chicago, on the far Marine Bank. investment in your community. north side of town, partnered with the But over a span of 10 or 15 years a The final provision, which the pre- Uptown National Bank of Chicago and dramatic change has taken place. I vious speaker, the Senator from Min- completed the International Homes think a lot of Americans find them- nesota, addressed from his point of project, a development of 28 town selves in the same situation that I am view, was whether or not a bank—rural homes constructed on five vacant lots in. I struggle to remember the latest bank in this instance—with less than within a four-square-block area in Up- names of these latest banks. Which one $100 million in assets should be re- town. This made homeownership pos- is the First National Bank? Which one quired to meet the requirements of the sible for 28 lower-income minority and is the Planters and Growers Bank? I Community Reinvestment Act. An ar- immigrant families. Half of these first- can’t keep up with it. It seems every 6 gument can be made, and has been time homeowners are families earning or 12 months there is a change, and not made by some, that these are smaller under 50 percent of median income. just a change in name, there is a institutions and, as such, should not be At the same time, down in my old change in ownership. The bank that burdened by regulators and paperwork, hometown of East St. Louis is used to be run downtown in Springfield let them do their business, they are Winstanley/Industry Park Neighbor- may be run out of someplace in Ohio, good neighbors, and things will work hood Organization, a new nonprofit New York, or Europe. out. corporation representing 8,000 people. If Members ask whether or not we Yet in the report filed with this bill, For those not familiar with it, my old need this law of 1977, this Community we find the statistics do not bear out hometown has had a tough time for the Reinvestment Act, to make certain that point of view. Let me read: last 20 or 25 years. They struggled to that as these changes are taking place Over 76 percent of rural U.S. banks and keep the community together and to thrifts have assets less than $100 million. in the banking industry—whoever owns survive. The Winstanley/Industry Park them, wherever their home might be— We are talking about more than Neighborhood Organization has been a that they still serve the communities three-fourths of the bank and thrift in- plus. It is a mixed-use area comprised where they draw their money from, I stitutions in the smalltown areas. of residential, commercial, and aban- think is still a very sound concept. It is asserted these small rural banks by doned industrial sites. What they have Yet this bill, S. 900, suggests it is a their nature serve the credit needs of their tried to do is to work with Magna Bank local neighbors. However, small banks have concept that should be largely aban- historically received the lowest Community of Illinois to change the area. They doned, because in three specific areas Reinvestment Act ratings. Institutions with have created a farmers market, com- there are changes in the law. less than $100 million in assets accounted for munity owned and operated, which was First, it eliminates the requirement 92 percent of institutions receiving non- developed by this organization. What that all banks within a holding com- compliance ratings under the CRA. makes the market particularly unique pany have and maintain satisfactory What many do is take the money is 14 of the 16 vendors are local resi- Community Reinvestment Act ratings from the community and then do not dents.

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If your bank were located somewhere The PRESIDING OFFICER (Mr. ROB- within that history I am going to try in Europe and you came into the ERTS). The distinguished Senator from to explain the problems that we are branch in your hometown and said, Texas is recognized. trying to fix in the underlying bill. ‘‘We have some people here who are Mr. GRAMM. Mr. President, I want Then I want to talk at some length struggling to make a living; they are to respond to the amendment that has about those problems and about the low income and they want a chance to been offered. I apologize if anybody has underlying bill. I think I will have cov- start a farmers market,’’ is it more the idea, listening to this debate, that ered the whole waterfront. likely that you are going to get a sym- there is not another side to the argu- Let me remind our colleagues the pathetic response from someone who ment. We had several people who had current Community Reinvestment Act knows the community, has a responsi- time constraints and wanted to speak. basically has two provisions. The first bility to the community, rather than Senator SARBANES and I are being held provision is that bank regulators have someone who is just hammering away hostage here, in managing the bill. So to consider how a bank has been meet- at the bottom line? I think the answer as a courtesy to others, we have let ing local credit needs only when a bank is obvious. them speak first. But I now want to applies to open a new bank, branch or A residential loan counseling pro- give a comprehensive response to this to merge. Second, bank regulators may gram of the same organization has issue. Let me begin. deny application based on a CRA launched a response to the victimiza- Mr. SARBANES. Will the Senator record. So basically, in terms of the ex- tion of over 1,400 lower-income families yield for a minute? isting CRA law, the way it was written, who were being misled by unscrupulous Mr. GRAMM. I am happy to yield. there is no violation for simply failing realtors into home purchase agree- Mr. SARBANES. How long would the to comply. The enforcement mecha- ments known as bond-for-deed. The re- Senator expect to go? nism is that if you apply to open a new altors who engaged in this often held Mr. GRAMM. I think it is going to branch or open a bank or to merge, the title to the properties throughout take me probably a minimum of about then the bank regulator—whichever the length of the contract without re- 30 minutes to go through the entire one you are subject to, based on your cording the transaction and without group of issues. charter—looks to see if you are meet- hazard insurance for the purchaser. Mr. SARBANES. Could we then put ing the needs of your community. And Most of these agreements contain no Senator BAYH and Senator EDWARDS in community reinvestment, I would like terms and have open-end type mort- line to speak after you finish? to remind our colleagues, is focused on gage balances. This organization coun- Mr. GRAMM. I do not know that any lending. The primary focus of commu- seling program helped these same resi- Republican has spoken on this issue. nity reinvestment is lending in the dents, lower-income families, refinance Did Senator ENZI speak? communities where you take deposits. with conventional mortgages on their To this point, if I might say, the dis- A bank regulator can deny an appli- own homes. tinguished Senator from Nevada spoke cation based on your CRA record. at length. You engaged in a lengthy There is no penalty involved other Finally, West Humboldt Park is a colloquy with him. We then had a non- than the denial of the application. low-income, predominantly minority relevant speaker. That is current law in CRA. What the neighborhood on Chicago’s west side. It Mr. SARBANES. Senator GRAMS substitute that has been offered by is plagued by poverty, illiteracy, wel- spoke for you. Senator BRYAN fare dependence, street and domestic would do—I have ‘‘The Mr. GRAMM. By nonrelevant I do not violence, alcohol and substance abuse, Sarbanes Substitute,’’ because Senator mean the Senator was irrelevant on and a lack of job opportunity. In 1989, SARBANES offered this in committee the issue. It had no relevance to this Orr High School and the 12 neighbor- and we assumed he would offer it issue. It was about another issue com- hood elementary schools formed a part- today, but it is the same provision—is pletely. Senator GRAMS really talked nership with Bank of America—then this: about the bill itself. The Bryan substitute would add Continental Bank—establishing a com- So it is my turn to speak. I intend to eight more requirements to CRA than munity network of schools in West speak and answer the points that have the are required under current law. In Humboldt. The partnership has grown been raised. Then I would like to con- fact, this would be a good opportunity to include over 25 programs providing tinue going side to side. We only have to ask unanimous consent to have education and social services. They in- one other person here. I do not know if printed in the RECORD a letter from clude Boys and Girls Clubs, the cre- he is going to speak at any great Chairman Greenspan that outlines ation of the BUILD project, which is a length. what the CRA provisions of this sub- group of parents who are really trying Mr. SARBANES. Then I guess our stitute are, what the CRA provisions of to keep the streets safe for their kids. colleagues know in about 30 minutes the bill are, and exactly what they It amazes me that in our efforts to they could hope to get recognition to would do. Because, as I am sure all of modernize the laws involving banks speak. our colleagues are aware, what tends to and thrift institutions, one of the first I thank the Senator. happen in these debates is people set up casualties proposed in the Republican Mr. GRAMM. Mr. President, I think straw men. In this case the straw man majority bill before the Senate is to it is important for people to step back is that somehow the underlying bill eliminate the Community Reinvest- and look at what is being proposed. I undoes CRA —that is straw man 1. ment Act. A party which dedicates have to break the discussion down into Straw man 2 is that the substitute vir- itself to the premise that local control two parts. No. 1, what it is that Sen- tually leaves CRA as it is. is best is virtually ready to give it ator SARBANES would do with his The reality, as I will paint in some away. To say that when it comes to amendment, and, second, what it is he detail, is that the underlying bill tries local control of banking assets so crit- would undo with his amendment. to deal with two clear abuses in CRA: ical for building and rebuilding a com- Mr. SARBANES. Senator BRYAN. One, an integrity provision; and, two, a munity, it will no longer hold them re- Mr. GRAMM. So let me explain what relevancy provision. It in no way does sponsible, I think that is shortsighted. he would do with his amendment, then violence to the basic idea of CRA. And For 22 years, the Community Rein- explain what he would undo, and then the second reality as compared to the vestment Act has worked. I hope we de- explain why both what he would do and straw man is that this substitute is the feat this provision if we can muster a what he would undo is bad. most massive expansion of CRA in its direct vote on it. If not, defeat the bill First of all, let me begin with current history and would literally impose a if it continues to push the things which law in CRA, then what I am going to do penalty structure that goes far beyond are not in the best interests of con- is go through what the Senator’s anything ever contemplated in CRA sumers and families across America. amendment would do. I am then going when it was adopted in 1977, or that has I yield the floor. to talk about the history of CRA and ever been discussed since. In fact, our

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00029 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.000 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8423 colleague keeps wondering where the would subject the newly established unin- Section 121 of H.R. 10 also would permit a hearings are concerning the two mod- sured wholesale financial institutions to the national bank to control an operating sub- est changes that we have made in the CRA. sidiary engaged in financial activities per- underlying bill, without ever raising 2. The CRA currently requires that the missible for a financial holding company, Federal banking agencies consider the CRA but only if the national bank and its deposi- the question: Where are the hearings performance of an insured depository insti- tory institution affiliates have and maintain on which these massive punitive pen- tution in connection with proposals by the at least a ‘‘satisfactory’’ CRA rating.1 Na- alties would be based? Where is the institution, or the institution’s holding com- tional banks and affiliated depository insti- abuse that they seek to address? The pany, to acquire or establish a deposit-tak- tutions that did not maintain such a rating point is, the rhetoric of Senator SAR- ing facility (e.g., open a branch or acquire or could be subject to the same type of correc- BANES applies more to his substitute merge with another insured depository insti- tive measures as discussed above for finan- than it does the underlying bill. tution). It does not require that an institu- cial holding companies. So let me ask unanimous consent tion’s CRA record of performance be consid- The bill passed by the Senate Banking that the letter from Alan Greenspan ered in connection with proposals to engage Committee does not contain provisions simi- lar to those discussed above. The Senate bill, with regard to the CRA provisions of in, or acquire a company engaged in, non- banking activities. H.R. 10 would allow a fi- however, would exempt from the CRA any the substitute and the CRA provisions nancial holding company to engage in new fi- insured depository institution that has $100 of the underlying bill be printed in the nancial activities only if all of the com- million or less in total assets and that is lo- RECORD. pany’s subsidiary depository institutions cated outside a Metropolitan Statistical There being no objection, the letter have and maintain at least a ‘‘satisfactory’’ Area. Data indicate that approximately 3,871 was ordered to be printed in the CRA rating. Thus, H.R. 10 would link CRA insured banks and thrifts, representing ap- RECORD, as follows: performance to the ability of a banking orga- proximately 37 percent of all insured banks nization to engage in, or acquire a company and thrifts and 2.7 percent of the assets of all BOARD OF GOVERNORS OF THE engaged in, a nonbanking activity. More such institutions, would meet these criteria, FEDERAL RESERVE SYSTEM, as of December 31, 1998. In addition, under Washington, DC, April 7, 1999. than 95 percent of the depository institu- tions examined for CRA compliance in 1997 the Senate bill, an insured depository insti- Hon. PHIL GRAMM, tution would be presumed to be in compli- Chairman, Committee on Banking, Housing, received a ‘‘satisfactory’’ or better CRA rat- ance with the CRA until its next examina- and Urban Affairs, U.S. Senate, Wash- ing. tion if the institution received at least a ington, DC. 3. Current law does not authorize a Federal ‘‘satisfactory’’ rating at its most recent CRA DEAR MR. CHAIRMAN: You have asked for banking agency to take any type of enforce- an analysis of how the financial moderniza- ment action against an insured depository performance examination and at each CRA tion bills recently passed by the House Com- institution that has a less than satisfactory examination in the preceding three years. mittee on Banking and Financial Services CRA rating, other than denying proposals by This presumption would not attach if the ap- (H.R. 10) and the Senate Committee on the institution (or the institution’s holding propriate Federal banking agency receives Banking, Housing, and Urban Affairs affect company) to establish or acquire a deposit- substantial verifiable information, arising the Community Reinvestment Act of 1977 taking facility. Thus, current law does not since the date of the institution’s most re- (CRA). Enclosed is a memorandum from the permit the Federal banking agencies to take cent CRA examination, that demonstrates Board’s General Counsel discussing the im- actions, including enforcement actions or di- the institution is not in compliance with the pact of these bills on the CRA. vestiture proceedings, outside the applica- CRA. That memo indicates that H.R. 10 would tions process if an institution fails to main- Mr. SARBANES. Will the Senator affect the CRA in three principal ways. It tain a ‘‘satisfactory’’ CRA rating on an ongo- yield? I understood the Greenspan let- would require at least a ‘‘satisfactory’’ CRA ing basis. See Memorandum from Walter ter compared the provisions in the performance rating as a precondition for en- Dellinger, Assistant Attorney General, U.S. Department of Justice, to Eugene A. Ludwig, House bill with the committee bill, not gaging in the new financial activities, pro- the provisions of the substitute. vide for the enforcement of this requirement, Comptroller of the Currency, 18 U.S. Op. Of- including through penalties and divestiture, fice of Legal Counsel No. 39 (Dec. 15, 1994). Mr. GRAMM. They are virtually and apply the CRA to uninsured wholesale fi- H.R. 10 would require that the subsidiary identical, but I stand corrected. In fact, nancial institutions. Currently, the CRA depository institutions of a financial holding let me yield to you to tell us the dif- does not require that an institution’s CRA company maintain at least a ‘‘satisfactory’’ ference. record be considered in connection with pro- CRA rating for the holding company to con- Mr. SARBANES. They are not iden- posals to engage in nonbanking activities, tinue to engage in the new financial activi- tical. There are some significant dif- authorize enforcement of the Act outside the ties. If a subsidiary depository institution ferences between the two, and I will de- fails to maintain such a rating, the financial applications process, or apply to uninsured velop them after the Senator finishes depository institutions. holding company and subsidiary depository The bill recently passed by the Senate institution must execute an agreement with his presentation. Committee on Banking, Housing, and Urban the appropriate Federal banking agencies to But as I understand it, your request Affairs does not contain similar provisions. correct the deficiency and such agencies to the Fed and their response was to The Senate bill, however, does contain two could impose limitations on the activities of compare the House bill with the com- CRA-related provisions not contained in H.R. the financial holding company or subsidiary mittee bill. Am I correct in that? 10: an exemption from the CRA for small in- depository institution until the subsidiary’s Mr. GRAMM. I think that is correct. sured depository institutions that are lo- rating is restored. The failure by a financial I stand corrected. I would like it print- holding company or subsidiary depository in- cated outside metropolitan areas and a re- ed in the RECORD, but I would be happy stitution to comply with these requirements buttable presumption regarding an institu- to hear the distinguished Democratic tion’s compliance with the CRA. would constitute a violation of the Bank I hope this information is helpful. Holding Company Act. In such cir- ranking member of the committee ex- Sincerely, cumstances, the appropriate Federal bank- plain to us the differences. I assert that ALAN GREENSPAN, ing agency could take enforcement action there are no significant differences, but Chairman. (e.g., issue a cease and desist order, assess I would like to hear them. Enclosure. civil monetary penalties or, in the case of Let me go over basically what we MEMORANDUM REGARDING THE EFFECT OF RE- the Board, seek criminal sanctions) against have in terms of additions to CRA in CENT LEGISLATIVE PROPOSALS ON THE COM- the financial holding company, the sub- the pending amendment, if the Senate MUNITY REINVESTMENT ACT sidiary depository institution, or an indi- decided to adopt it. Chairman Phil Gramm has asked for an vidual participating in the violation (such as an officer or director of the holding company No. 1, by making noncompliance with analysis of how H.R. 10, as passed by the CRA or falling out of compliance with House Committee on Banking and Financial or depository institution). Finally, if the Services last month, and the bill passed by subsidiary depository institution’s CRA rat- the Senate Committee on Banking, Housing, ing is not restored to at least the ‘‘satisfac- 1 Part 5 of the OCC’s regulations, which purports and Urban Affairs on March 4, 1999, would af- tory’’ level by its next examination (or such to allow subsidiaries of national banks to engage in fect the Community Reinvestment Act of longer period as the Board determines to be activities that national banks are not permitted to appropriate), H.R. 10 would authorize the conduct directly, currently requires that a national 1977 (‘‘CRA’’). bank have and maintain at least a ‘‘satisfactory’’ H.R. 10 would primarily impact the CRA in Board to require that the financial holding CRA rating to control an operating subsidiary en- the following three ways. company divest the subsidiary depository in- gaged in principal activities that the bank cannot 1. The CRA currently applies only to feder- stitution or, alternatively, cease engaging in conduct directly. See 12 C.F.R. §§ 5.34(f)(3)(iii), ally insured depository institutions. H.R. 10 new financial activities. 5.3(g)).

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00030 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8424 CONGRESSIONAL RECORD—SENATE May 5, 1999 CRA a violation of banking law, offi- crease in the potential for fines and penalties quote my colleague from Maryland, cers and directors of banks for the first could provide further disincentive for service never has a hearing been held on this time could be fined up to $1 million a on a bank board. subject. Never has any justification day for CRA noncompliance. I will Here is the point. If a small bank is been given whatsoever for imposing a come back to this in a moment. going to hire somebody to be president million-dollar fine on bank board mem- Under this substitute, banks can be or be an officer or recruit somebody to bers and bank officers in the name of fined up to $1 million a day for falling be on a bank board, they are going to CRA. It is the most gross overkill and out of compliance. have to buy liability insurance to pro- regulatory burden that this Senator Under this substitute, cease and de- tect that person from this potential has seen in the entire time that I have sist authority for CRA noncompliance fine, which would literally put thou- been debating banking legislation. are brought into the system. sands of rural banks in America out of I remind my colleagues that I spent Bank regulators may place any re- compliance. 12 years of my life teaching money and strictions on any banking activities for If there is a problem here that needs banking in college. I have spent too CRA noncompliance. to be fixed, if there is an abuse that long of my life, 21 years, in the House Bank regulators may place any re- should be dealt with, then one might and Senate, and I have been serving on strictions on any insurance activities say that perhaps this is justified. But the Banking Committee every day I for CRA noncompliance. here is the record: There have been have been in the Senate, and I have had Bank regulators may place any re- some 16,380 examinations of small, the privilege this year of serving as strictions on any securities activities rural banks in America since 1990, and chairman. I have never seen such a for CRA noncompliance. of those 16,380 examinations, three massive regulatory overkill as these Bank regulators may place any re- banks and S&Ls have been found to be proposed provisions, and I am confident strictions on any other activities of the out of compliance to a substantial de- that they will be rejected. holding company for CRA noncompli- gree. (Mr. SANTORUM assumed the ance. Our ranking member of the com- Chair.) Any violation by any one bank in the mittee would bring in the potential for Mr. SARBANES. Will the chairman holding company can trigger penalties a million-dollar-a-day fine based on the yield on this point? against any and all activities of the en- fact that in 16,380 audits on CRA since Mr. GRAMM. I will be happy to yield. Mr. SARBANES. I am looking at a tire banking company. 1990—9 years—there have been three table from the Federal Deposit Insur- Insurance sales of bank subsidiaries banks substantially out of compliance. ance Corporation, from 1990 through can be restricted for CRA noncompli- What is the justification for these mas- 1998, that those 320 institutions were ance. sive punitive fines? There is no jus- given a ‘‘needs to improve’’ rating Finally, the provision adds new ex- tification. which, of course, is below compliance, pansions of CRA far beyond the exist- The justification basically is that and 18 institutions were given ‘‘sub- ing law. Under current law, banks sell this is seen as an opportunity to mas- sively expand CRA. That is what the stantial noncompliance.’’ insurance—small banks in cities of less The Senator is using this ‘‘three’’ fig- than 5,000, other banks depending on justification is. The second letter, on exactly the ure, and I don’t know where that comes their State regulation—and they do it same subject, is from the American from. without CRA approval. Bankers Association. Here is what they Mr. GRAMM. I can tell you where it The substitute would expand the de- say: comes from. It comes from looking at cision of banks or ability of banks to the banks and S&Ls that meet two sell insurance to require CRA approval. We would oppose amendments we under- stand may be offered that would contain pro- tests: One, they have less than $100 Some 20 banks now provide some secu- visions not only eliminating the two CRA million of assets; and, two, they oper- rity services. They do it without being provisions currently in the bill, but also add- ate solely outside standard metropoli- required to get CRA approval. The ing additional new CRA requirements. One tan areas. pending substitute would expand CRA strong concern the ABA has is that the po- And my figure is, that those banks approval to that activity. tential for such penalties could discourage have been subjected, since 1990, to The first point I want to make is, directors from serving on community bank 16,380 examinations. And in those 16,380 contrary to the rhetoric being used, we boards and increase the cost of officer and di- examinations, the average of which has are talking about the largest, most sig- rector liability insurance coverage for banks. There has been no justification given cost that little bank about $80,000, ac- nificant expansion of CRA in history— for inserting these new penalties into CRA, cording to some 488 banks which have none of which is based on any assertion particularly given the outstanding record written us on this subject, that these of any abuse—and we are talking about the banking industry has in serving commu- 16,380 examinations—this is from the imposing confiscatory penalties that nities across the country. Federal Financial Institutions Exam- are devastating to our banking indus- I remind my colleagues, this sub- ination Council—that in these 16,380 try. stitute seeks to impose these massive examinations, costing, on average, I want to read pieces of two letters punitive penalties against small banks $80,000 apiece—so this is $1.3 billion on this issue of the potential for a mil- in America when in 16,380 exams, which that has been taken out of these little lion-dollar-a-day fine. One letter is cost those banks cumulatively bitty communities and out of their from the Independent Community $1,310,400,000 to keep the records and banks, where people are paid higher in- Bankers of America. This is a letter comply with the exam—$1,310,400,000; I terest rates and have gotten less cred- from an organization of very, very have the decimal points right this it—the result of that has been that small, generally community banks, time—after all that money, after all three of these banks, over a 9-year pe- often in rural areas that would be af- those exams, three small, rural banks riod, have been found to be in substan- fected by this. Let me read the para- or S&Ls were found substantially out tial noncompliance. graph: of compliance. You do not have to have a Ph.D. in We also have grave concerns about expand- If this is not regulatory overkill that mathematics to figure out, if you have ing CRA enforcement authority to include drives working men and women in done 16,380 exams on these small, rural the levying of heavy fines and penalties America crazy and that threatens little banks, and only three of them have against banks or their officers and directors. banks all over the State of Kansas, the been in substantial noncompliance, you An ongoing challenge for many community State of the Presiding Officer, and all are spending a tremendous amount of banks in small communities is finding will- ing and qualified bank directors. Legislation over Indiana and all over Texas and all their money to find a very, very small following the savings and loan crisis of the over America, that threatens their number of bad actors—in fact, three 1980s and 1990s greatly increased the amount very existence, I don’t know what it is. one-hundredths of 1 percent. of civil money penalties to which bank offi- First of all, this is totally unjusti- What is even more astounding is that cers and directors may be subject. Any in- fied, makes absolutely no sense and, to all of these little banks combined

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00031 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8425 make up only 2.8 percent of the capital ing about the Government regulator; A Democrat Senator raised an objec- of the banking system. They are get- but cost the bank to comply with gath- tion to the provision, worrying about ting 44 percent of the examinations. ering all the information, spending the redtape and paperwork. Interestingly They make up only 2.7 percent of the week in the audit, keeping all the enough, the distinguished chairman at assets of the banking system, and out records, designating a CRA officer—and that time said, ‘‘No problem. The red- of 16,380 exams, only three of them I will later in my presentation read ac- tape and paperwork will be nominal. were out of compliance. tual letters from the banks—these lit- No big deal.’’ We have all heard it mil- Mr. SARBANES. If the Senator—— tle banks and these little communities lions of times when thousands of pro- Mr. GRAMM. What is wrong here? spent $1.3 billion of their money com- grams have become law. There was a What does not make sense here? plying with this law. vote in the Banking Committee to Mr. SARBANES. If the Senator will Of these 16,380 examinations, only strip out this provision. And that vote yield, he simply stated the point all three banks, over a period of 9 years, failed on a 7–7 tie. over again, but it hasn’t squared the only three banks were found to be sub- We then had the bill come to the factual discrepancy. stantially out of compliance. floor of the Senate. There was another According to our data from bank reg- Our colleague has taken a different vote. And I do not have the total here, ulatory agencies, more than 70 small, definition, ‘‘marginally out of compli- but I think it was 41–30. We had some rural banks and thrifts are currently ance,’’ and the number was bigger, huge number of Members of the Senate deemed not in compliance; that is, maybe 70 out of 16,380. The point being, who were absent. So the bill became below a satisfactory rating with CRA my statement is true, that only three law. this year alone. banks, out of all of these that are au- So here is the point I want to make. Since 1990, 338 small, rural banks and dited, have turned out to be substan- In 1977, we started out with a CRA re- thrifts received CRA ratings below sat- tially out of compliance. quirement. And in that year—and these isfactory. On the basis of that, our colleague figures are all from the National Com- Sure, the Senator can make the same would impose a $1 million-a-day fine on munity Reinvestment Coalition—in speech about those numbers, but I just officers and board members. And I that year there were about $50 million want to get those on the RECORD, be- stand by my point that that is the big- of CRA loans or cash payments or com- cause those numbers are very signifi- gest overkill I have seen. mitments to lend. And that number cantly different from the numbers I think I have dealt with the pro- was relatively small, until 1992. which the Senator is putting forward. posals made which would be added by Now, what happened in 1992? Well, Mr. GRAMM. If I might reclaim my the amendment that is pending. two things happened. One, we started time—and I think probably we would These proposals really boil down to having a rash of mergers, so that these be better off to let me go through and punitive, crushing, regulatory burden very large banks and also some small make my presentation and let the Sen- and fines, imposing a $1 million-a-day banks had to get CRA approval to ator do the same—let me go back and fine on bank officers and bank board merge. What happened is this number restate the facts. members, massively expanding CRA. started to grow very rapidly. Last What the Senator has done is basi- The justification in 1977 for CRA was, year, in loans, commitments to lend, cally taken a totally different classi- ‘‘Well, you’ve got deposit insurance. cash payments, the total was $694 bil- fication than I am talking about. I That’s a good subsidy. We ought to be lion. have been very clear in what I am say- able to force these institutions to allo- Now, to put that in perspective, the ing. Here is what I am saying. And it is cate capital for a public purpose.’’ But loans, commitments to lend, and cash devastating, there is no question about for the first time, this substitute would payments, and commitments to pay that. I am glad I am not on the other expand CRA to a noninsured institu- cash—and I am going to talk about side of this argument. I would be try- tion where there is no logic for its ex- cash payments at some great length ing to change the subject, if I were. But pansion. For the first time, CRA ap- here in a moment—totaled $694 billion here are the devastating facts. proval would be necessary for selling last year. That is bigger than the Cana- The devastating facts are, that of the insurance and selling securities within dian economy. That is bigger than the little banks in America—less than $100 a bank or at an affiliate of a bank hold- combined assets of Ford, General Mo- million in deposits; probably have 6 to ing company. tors, and Chrysler. That is bigger than 10 employees—that are outside stand- These are massive expansions of reg- the discretionary budget of the Federal ard metropolitan areas—so these are ulatory burden. They are totally un- Government. Yet our colleagues, who banks that do not have a city to serve, justified based on any facts, no matter will oppose these two very simple much less an inner city. how you read them. I cannot believe amendments, say there is no need to Mr. SARBANES. Those are the banks that a majority of the Senators would look at a potential reform in CRA. we are talking about. Those are the fig- vote to do those things. CRA is now bigger than General Mo- ures I am giving you. Let me talk about what we undo if tors. It has grown from virtually noth- Mr. GRAMM. Look, let me go ahead. we adopt the Senator’s amendment. ing to become larger than the discre- I will explain the difference in what And I want to take some time to go tionary budget of the Federal Govern- you are saying and what I am saying. through this. I have not done this at ment, and yet our Democrat colleagues OK. So let me start at the top. I will go great length. refuse to admit the possibility—or all the way down, make my point, and I want people to understand what is many of them do—that we might need then I want to go on and give my pres- the problem with CRA that we are try- some degree of effort to deal with entation. You all have had many op- ing to deal with in these two very mod- abuses which would naturally occur in portunities to give yours today. And I est amendments which the Banking a program that grew in a very short listened to them faithfully. Committee has written. time from $50 million to $694 billion. But here is the point, if you take First of all, let me talk about what Why do I think this is a relevant every bank in America that has less you can view as good news. In 1977, point? Well, let me give you one fact. than $100 million of deposits, and that there was a rider to a bill that was According to the community groups, $9 is also outside a standard metropolitan written by Senator Proxmire that cre- billion has been paid or committed in area, they make up 38 percent of the fi- ated what we today call CRA. It said cash. Had you gone to that committee nancial institutions in the country. that banks should lend in the commu- hearing in 1977 and said to the then They have 44 percent of the audits. In nities where they collect deposits. chairman of the Banking Committee, fact, they were audited for CRA 16,380 There was no enforcement mechanism. Senator Proxmire, ‘‘Well, what about times from 1990 through 1998. It was simply to be used when evalu- cash payments, what about people lit- In those 16,380 audits, that cost, on ating approval for bank mergers and erally giving community groups and average—cost the bank; I am not talk- branches. individuals money not to testify

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00032 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8426 CONGRESSIONAL RECORD—SENATE May 5, 1999 against their merger or not to oppose munity group involved. We have re- In other words, the community group it or actually paying them to support dacted those names. I just want to give is agreeing that in return for this 2.75 it,’’ what he would think about that? I you a flavor of what these agreements percent of the face value of all loans can tell you: he would have said, ‘‘It is looks like, and I have pieces of three of that are made, not only will they with- not possible.’’ them here. draw the complaint they have already This bill in no way contemplates that This is Bank A: Provide blank—and filed, but they will never make another cash payments would be made, but the this is a community group—with a one. They will never make another one, fact remains that as this program has grant of up to $20,000. Provide blank— no matter what. exploded, $9 billion of cash payments another community group—with a At blank’s request—listen to this and cash commitments have been grant of up to $50,000. Provide blank one. Many of you wonder why you have made. This basically represents an with a grant of up to $25,000 to pay rea- gotten letters from banks, and I got a abuse that needs to be dealt with. In sonable and necessary ‘‘soft costs’’ to letter from a big North Carolina bank, fact, in the one hearing we had on this be incurred by blank. Provide blank might I say, and I was shocked. Then I subject, the spokesman for these rein- with a grant of a reasonable read the letter and it, in essence, said vestment coalitions admitted there amount.... that they are required by a CRA agree- were abuses. He called it ‘‘green mail,’’ That is the quid; now the quo: ment to send me this letter saying and he said that it hurt the program. Blank agrees to withdraw on the date they support CRA. I said, how is it pos- Most people would call it blackmail. hereof the comment letter, dated blank sible that somebody could be required The point is, if these abuses exist—and 28, 19 blank, and any related materials to send me a letter? And this is a dif- no one disputes they do—why shouldn’t collectively, the comment letter filed ferent bank altogether and a different we begin to try to do something about with the Office of the Comptroller of agreement. Here is how it happens: them? the Currency, the Federal Reserve In addition, the bank agrees to send Now, let me turn to a quote, and then Bank, and the board. I don’t have the letters to customers of blank pre- I will get into some of these abuses. second sheet. viously contacted by blank—well, I will The point is, the community groups This is a quote from a Cornell Uni- get to the point on the next sheet. And gets all of these cash grants and then versity law professor, Jonathan Macey, then the community group agrees to agrees to withdraw the complaints who specializes in banking law and is purge their files and database of all in- they have filed, a classic quid pro quo. one of the most respected lawyers in Now, what happened to these com- formation related to this bank’s cus- banking law in the country. Here is plaints? Were they not meritorious or tomers. In other words, they get this what he said about CRA, as it exists in did the community groups suddenly no breakoff; they get these cash pay- 1999: longer care about the people they were ments. They agree to withdraw their You see really weird things when you look protesting against? What did all of objection. They will never do another at the Code of Federal Regulations . . . like those cash grants do that induced them objection. They are even going to de- Federal regulators are encouraged to leave to withdraw their comment? stroy the computer database they used the room and allowing community groups to to do it. negotiate ex parte with bankers in a commu- Bank A, one more thing, blank and blank agree—this is the community Now I think we are getting to the nity reinvestment context . . . Giving jobs thing I mentioned. The community to the top five officials of these communities group and the bank—agree not to dis- or shake-down groups is generally high up on seminate or otherwise make available group agrees to: immediately cease and the list (of demands). to the public copies of this agreement. desist all activities directed against So what we really have is a bit of old world So the community group gets these blank; to maintain the confidentiality Sicily brought into the United States, but le- cash payments and in return agrees to of this agreement, to maintain the con- gitimized and given the patina of govern- withdraw their protests, and then the fidentiality of this agreement and any ment support. bank and group agree that they will other agreements; to cooperate with It has never been stated more clearly keep the agreement secret. them in getting agreements with other than that. Now, let’s look at Bank B: Blank will banks. And then is the thing about Now, let me give you an example, if receive a fee of 2 and three-quarters sending letters. This is called ‘‘public you would give me those agreements. percent of the face amount of each pro- policy partnership.’’ Part of our problem—and this will be gram loan made by blank. This is an In this public policy partnership: discussed later, and I hope people will agreement whereby a community ac- blank will work with the blank to es- listen to this point—part of our prob- tivist and their community group re- tablish a clear written declaratory lem is that community groups, in nego- ceive a rake-off of 2.75 percent of the statement indicating support for the tiating with banks, in virtually every face value of every loan made under Community Reinvestment Act and the case negotiate for and insist on the this agreement. Home Mortgage Disclosure Act, and confidentiality of these agreements. So Do you think people receiving that the party’s opposition to any attempts one of the problems in evaluating this loan know that this individual and this to weaken the law. Blank will send the $9 billion is, we do not have any of the group will get 2.75 percent? In fact, final copy of this statement to the facts as to where this money goes, who they don’t. And, as you will see later, blank, the American Bankers Associa- it goes to, and what they do with it unless we open up this process, they tion, the Federal Reserve Board, the when they get it. never will. No one will ever know what Office of the Comptroller of the Cur- One of the amendments that Senator is happening. Continuing with the rency, the blank Congressional delega- BENNETT or someone else will be offer- Bank B’s agreement: tion, and all Members of the House and ing later in the Senate’s consideration Blank will receive a fee of $200,000 as Senate banking committees. of financial services modernization is a reimbursement; according to blank, So when you have letters from banks sunshine amendment, which says that $100,000 is payable upon execution and telling you what great things CRA is in the future these agreements have to delivery and $100,000 six months later. doing, many of those were dictated by be made public, that they have to go to We have the quid, now the quo. commitments they made as part of the regulator, that the regulator has to The community group or the indi- contracts, secret agreements they require that the information be pro- vidual agrees to withdraw all pending signed with protesters in order to get vided, and that they be made public. protests of blank regulatory applica- them out of the way to do their work. The logic of that is, nothing disinfects tions and related materials and not to Now, I could go into a hundred other like sunshine. sponsor, either directly or indirectly, examples—someone who graduates Now, it so happens that we have the protest or to supply information in from college, goes to graduate school, three of these agreements that we have connection with any protest relating to and goes to work for the Federal Re- obtained on the condition that we not pending or future blank applications serve in acquisitions and mergers, disclose the names of the bank or com- with regulators. quits and goes into business, spends 4

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00033 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8427 years harassing a bank and bank presi- or getting a cash payment is what com- Here is what it means. Here are four dents, and finally the bank craters and munity lending is about. I think it is definitions from Supreme Court rul- gives them $1.4 million, gives them wrong, but I don’t have the votes to do ings. ‘‘Substantial evidence’’ is under- $200,000 to set up their organization; it and I didn’t try to do it. stood to mean: they now have 20 offices, lending $3.5 So, here are the two modest changes No. 1, ‘‘more than a mere scintilla.’’ billion, getting 2.75 percent of every in our bill. Number 1, consider a bank More than a mere scintilla. penny they lend right off the top, that that has been consistently in compli- No. 2, ‘‘such relevant evidence as a nobody knows about, forcing people to ance with CRA. In fact, in its last 3 reasonable mind might accept as ade- participate in their program and pay evaluations it has consistently been in quate to support a claim.’’ $50 a month for 5 years in order to get compliance and is in compliance now. Not that they have to accept it. No- the loan, and the bank actually col- What do we require that Senator SAR- tice that the Court said that substan- lects the money for them as if some- BANES and others so strenuously object tial evidence is ‘‘such relevant evi- how it were part of the loan. I could go to? We require that if a bank has his- dence as a reasonable mind might ac- on and on. But we are not here to de- torically been in compliance, if it has cept.’’ They might not accept it. But bate dramatic reforms in CRA. We are been evaluated for meeting its commu- they might accept it as adequate to only trying to do two things, and here nity lending requirements by its Fed- support a claim. they are; here is the concern. You have eral regulator three times in a row and No. 3, ‘‘real, material, not seeming heard the number. was found to be in compliance, and if it imaginary.’’ Only in 1 percent of the cases is a is currently in compliance, then some- And, finally, ‘‘considerable in protest filed. Well, remember that in body can still protest. They can call amount, value and worth.’’ 90-some-odd percent of the cases, where the bank all the nasty names they I fail to understand why there is an somebody wants to open or close a want to call them. In fact, the regu- objection when a protester wants to branch, regulators generally get no lator is required to hold a hearing if come into a bank which has been in comments. Where the protests come they provide any complaint just saying compliance with the lending laws of are in the big mergers, and in some of ‘‘I oppose it.’’ There is a hearing. this country for three evaluations in a the smaller ones that get contentious. None of that has changed. Anybody row and is currently in compliance, But what happens more often than not can say whatever they want to say. All why anyone would object to saying is that rather than filing a protest, the our amendment says, however, is that that in order to stop the bank from ex- protest group simply goes to the bank before you can stop the action from ercising the right they have earned, and says: I am going to file a protest going forward in the normal time- the protester has to provide some evi- and I am going to say—to quote one of frame, the objector has to present sub- dence. I cannot understand why any- the protesters in what they said about stantial evidence. In other words, a body would object to that. Why is it a bank in New England—I am going to bank that is historically in compli- important? say, A, you are a racist; and, B, you are ance, and is in compliance now, is I have spent a lot of time talking a loan shark. That is my charge. I am deemed to still be innocent until prov- about why it is reasonable. But why is going to make that charge, and you en guilty. And a protester can protest it important? can either reach an agreement with all they want to. But the regulator It is important because it eliminates me, or I am going to do that. can’t stop or delay the process unless the worst abuses where someone comes Now, here is the problem, and I don’t some substantial evidence is presented. in, they have no evidence, they have no think it is that hard to visualize. You Now, I know we have some distin- facts, there is no abuse. They simply have a bank and it has agreed to merge guished attorneys here, and I am not say, ‘‘I will go away if you can give me with another bank. And people don’t going to get into any kind of legal de- some money.’’ In this case, if they know whether the merger is going to bate with distinguished attorneys. can’t provide substantial evidence, be approved or whether it is good or Number 1, I object to duels between they can’t stop the process. But it bad for the bank. So during that pe- armed and unarmed men, especially doesn’t prevent the regulator from say- riod, the stocks of these two banks are when I am the unarmed man. Every ing, ‘‘You have to do a new CRA re- just fluttering. The bank literally has once in a while, I have mercy on other view.’’ hundreds of millions—and sometimes types of issues where I am armed and Our colleague talked about what reg- billions with these big bank mergers— others are not. I don’t shoot down un- ulators could do. Nothing in our at risk. So it doesn’t take a lot of armed men. amendment would prevent the regu- imagination to see that when a pro- But I want to remind those who lator from saying, ‘‘Every time you tester shows up and says, ‘‘Look, I am aren’t legal experts that ‘‘substantial want to merge, we have to have a new going to go to the Comptroller of the evidence’’ is not a trivial phrase. It was CRA evaluation.’’ We don’t stop that. Currency and tell him you are a racist chosen because it is not trivial. It is re- All we are trying to do is to require and that you are a loan shark; I am ferred to 900 times in the United States some substance—and require someone going to file a complaint and I am Code. There have been over 400 in- to have the evidence—before they can going to hold up this merger,’’ the stances in case law where the term stop the application process and cost bank is under immense pressure to act ‘‘substantial evidence’’ has been de- taxpayers and investors hundreds of as quickly as possible. What is hap- fined. Let me give you some definitions millions of dollars. pening in America today is that banks that came from the Supreme Court, It is a strange thing to say in Amer- that are risking hundreds of millions, and they are important because they ica. But I am going to say it, because or billions, of dollars are settling these give examples of the evidence that is I believe it. I will never forget when threats with secret agreements that required to be submitted by a protester the American Airline pilots were get- the public knows nothing about, and in order to stop a bank from doing ting ready to go on strike. I met with they are often paying thousands, or something that they are qualified to do some Members of Congress to talk hundreds of thousands, of dollars in based on their record. about what Congress could do because cash payments. In other words, what do you have to of the disruption that might be caused Now, who ever said CRA had any- have in order to say, ‘‘This person is by the strike. I finally said, ‘‘Look. thing to do with cash? Yet, according not meeting the requirement of law You know, it is no secret that most to the CRA groups, $9 billion of cash and I want him stopped’’? Knowing unions do not love me, but I believe in payments have been made under CRA. that it may cost them hundreds of mil- freedom. And people have a right to I would like to ban cash payments, lions of dollars, even billions of dollars, strike, if they want to strike. And I am quite frankly. I don’t think they are what is the standard you have to meet? not voting for a bill that prevents them what CRA is about. I don’t think some What does ‘‘substantial evidence’’ from striking.’’ One Member of Con- protester getting a rake-off of interest mean? gress, who will go unnamed, said,

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00034 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8428 CONGRESSIONAL RECORD—SENATE May 5, 1999 ‘‘Well, wait a minute. These pilots rural areas, and only three of them CRA question. The only people who make $150,000 a year. I am not worried have been found to be substantially have raised those questions are bank about their rights.’’ noncompliant. But even though three consultants. Let me tell you why that is relevant. bad actors have been found, $1.3 billion The next bank is Copiah Bank from One of the reasons this is so hard to in compliance costs has been imposed Crystal Springs, MS: discuss is that everybody has the idea on these little banks that have only be- Our compliance officer, Gerry Broome, and that these bankers are rich. So we are tween 6 and 10 employees. It is a very his assistant have spent many research not worried about their rights. heavy regulatory burden. hours and reams of paper in their efforts to When do our rights end based on how Let me read just a couple of letters comply with mandated requirement’s paper much money we have? I can understand from the banks that are affected. Our work. We have even had to outsource some of and I accept that you ought not have colleague from Illinois was here. I am its checkpoints to a compliance consultant from time to time. more rights because you have more sorry he left. We probably have more money, but you ought not have less. letters from Illinois than any other * * * * * The idea that we would let someone State. But he won’t get to hear it. But As an $83 million community bank, we feel or some group impose hundreds of mil- an obligation to help you in your efforts to- I am going read three of his letters, ward easing our paper work burden. lions of dollars of costs on other citi- and then the others. zens, many of whom are stockholders— This is a letter from Franklin Bank Lakeside State Bank, New Town, ND: my teacher retirement fund, I am sure, in Franklin, IL. I don’t know how big As a former bank examiner for the Federal is invested in some financial institu- the bank is, but it is small. Their Deposit Insurance Corporation, which in- building looks like a house. Here is cluded consumer compliance experience, and tion, or in a thrift. I don’t know, be- as a banker for over 15 years I believe I have cause I don’t keep up with what they what he says: a good understanding of the intent and the are invested in. But every teacher in Were it not for the time-consuming paper- workings of the CRA. work involved, we in small banks in rural America is invested in stocks of some * * * * * of these companies. America would find CRA laughable. Our community is our business. We wrote this Over the 47 years of our existence we have How is it right to let somebody lit- provided financing to virtually every main erally deprive them of millions of dol- book long before the government did. Offer- ing us exemption from the requirements of street business in our town, our customer lars without providing any evidence? the Community Reinvestment Act would not base includes approximately 80 percent of So that is the substance of the first change the way we do business, but it would the area farmers and for the last several committee provision. I don’t know why relieve us of the mounting paperwork from years over 50 percent of our loans have been it requires so much discussion, but it this examination for one day every other to American Indians. does. I don’t mind discussing it, year. The law [he means the CRA law] is a heavy burden because of the expansiveness of the though, because it is something that I In other words, relief by exempting regulations and the paper requirements of feel strongly about. them—they don’t change their busi- compliance. We spend hours documenting This is about abuse. This is about a ness. They are just not going to have what we have already done, rather than wrong that is going on in America the examination to do and the paper- spending that time more efficiently by doing today, right now. The fact that there work and cost of about $80,000 involved more for our community. are many success stories in CRA, the in it. The Farmers and Merchant Bank of fact that there are probably wonderful This is from Security Bank of Ham- Arnett, OK: people in almost every circumstance, ilton, IL: I am the CEO as well as the chief loan offi- does not justify looking the other way Our experience is that regulators struggle cer, compliance officer and CRA officer. I at the kind of abuses that are occur- to fill out their questionnaires when we are have to wear so many hats because we are ring. We are not trying to fix them being examined as most sections do not small and have a staff of only 7 including here. apply. Then we really have to stretch to myself. CRA compliance, done correctly, We are going to have a lot of hear- imagine our community of 3,000 having the takes a lot of time, which takes me away same problem as Chicago or Los Angeles as ings this summer. We are going to from my primary responsibility of loaning none of the demographic stratifications fit. money to my community. It has almost got- bring a lot of people in and put them This is the First National Bank of ten to the point that lending is a secondary under oath. We are going to have a Nokomis, IL. It doesn’t say how big function. It seems like we have the choice of major GAO study. We are going to look they are: lending to our community or writing up CRA at this thing in great detail. plans showing how we would loan to the We are just trying to deal with two I truly believe we could free up one-half to community if we had time to make loans. one employee in our banking operation to little commonsense things that ought put in positive service thereby expanding our * * * * * to be done in the bill. I talked about service to the community we serve. Large banks can hire full time CRA offi- the first. What is the second? That is what they believe they could cers and other compliance personnel to ad- The second committee provision ex- minister CRA programs but, small banks do if we could reduce the regulatory cannot.... empts little banks in rural areas from burden on them. CRA. Why? Because the regulatory They don’t say in their letter, but my Redlands Centennial Bank: burden on these very small banks in guess is they don’t have even 10 em- We spent approximately $80 thousand of very rural areas is oppressive. ployees. So when they are talking our shareholders’ money last year sup- First of all, these are banks that are about freeing up one half of one em- porting this ill-defined regulation. Even the regulators who examined us were hard not in standard metropolitan areas. ployee, they are talking about a tre- They are by and large serving areas pressed to give us specific definition on how mendous reduction in their cost and we might better implement this regulation. that do not have a city, much less an their regulatory burden. inner city to serve. So making them Let me read a couple of other letters. * * * * * I am urging you to get rid of the nonsen- comply with these laws that are really This is from the Cattle National Bank aimed at inner-city lending makes ab- sical CRA yoke. Keep up the fight because in Seward, NE: there are a lot of us out here who are too solutely no sense. Since the origination of public disclosure busy balancing, making a living with govern- Why is this provision important? Be- of CRA examinations, we have not had one ment regulation in this crazy business. cause these banks—as documented in person from our community ever request the Chemical Bank North is a bank of $74 information. the letters they have written to us—are million in Grayling, MI: spending $60,000 to $80,000 a year com- I remind Members that CRA went plying with CRA. As it is, we must devote disproportionate into effect in 1977 and public disclosure resources to creating and maintaining the I have used the figure before, but it went into effect about a decade after ‘‘paper trail’’ that the current CRA regula- fits here, and I want to use it again. that. tions require. Our board members must at- Since 1990, there have been 16,380 CRA So for about 12 years nobody in this tend time consuming CRA Committee meet- examinations of these little banks in little community has ever raised a ings and our officers and staff members

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00035 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8429 spend significant valuable time preparing re- bad things it does? It is the largest ex- pay the protester cash in return for not ports and keeping records that serve no pur- pansion in the regulatory burden of filing a protest. pose other than to keep us in compliance CRA in American history; it would ex- A lot of rhetoric has been used on with a regulation that attempts to enforce pand CRA to noninsured institutions, this, and I am being redundant because from a regulatory standpoint what we do ev- eryday in the normal course of our busi- violating the very logic of CRA, which when other people say something ness.... I would estimate that we devote is, banks get deposit insurance that is wrong, you have to say it right twice the equivalent of a full time employee to all partly subsidized by the Government, to get people to get it straight. Our aspects of CRA compliance. so it is reasonable for the Government amendment does not prevent people The First National Bank of Wamego, to force them to do things that have a from protesting. They can protest. Our KS—I mispronounced Wamego yester- community benefit. amendment does not prevent people day; the Presiding Officer was from The proposed substitute would ex- from filing complaints. They can file Kansas and I appreciate him correcting pand CRA to institutions that are not complaints whether they have any me. This is a $65 million bank, which insured. It would expand CRA approval facts or whether not. Our amendment means this bank probably has five or as being necessary to sell insurance does not prevent the regulator from six employees. and securities in a bank, something holding a hearing. Under current law, Our bank was listed two years in a row as that is not required today and it is oc- the regulator has to hold a hearing if the ‘‘best’’ bank in Kansas to obtain loans curring every day today without CRA somebody complains. We do not change for small businesses.... [This bank also approval. that. Our amendment does not prevent was rated outstanding on CRA.] The proposed amendment would im- the regulator from forcing an entirely * * * * * pose a potential fine of $1-million-a- new CRA evaluation. [O]ur outstanding grade did not make us a day on bank officers and bank board All our amendment says is: If you better bank. The CRA did not make us make members without any evidence whatso- have a bank that has been in compli- loans we wouldn’t have made. The CRA did ever that abuses occur. In fact, as I ance with CRA over a 3-year period, take a lot of employees’ time to document pointed out over and over again, with and if they are currently in compli- that we were an outstanding bank. small banks in rural areas having 16,380 ance, a protester can still file a pro- This is from Nebraska National in examinations at a cost of about $80,000 test, but in order to stop the bank’s ap- Kearney, NE. This is a very small in annual compliance, where the banks plication from going forward, the pro- bank. In fact, I think this might be one had to pay $1.3 billion to comply with tester has to provide substantial evi- of the smallest banks in America that all this regulation, all this paper- dence. was not a recent start. This bank has work—all of these evaluations, 16,380 of Then I went through and read from $34 million in assets, so we are talking them, found only three banks that Supreme Court cases, how you define about probably four or five employees were substantially out of compliance. ‘‘substantial evidence’’—more than a working in this bank: So, the regulatory overkill already ex- scintilla; enough that a reasonable per- We do not make foreign loans, we don’t ists. Why you would want to come in son might believe that what you are speculate in derivatives, and we don’t siphon and subject small banks and large saying is true. Those are not high deposits from this area to fund loans else- banks, and their officers and board standards. where. Instead, like virtually all the banks members, to a million-dollar-a-day for Why anybody would want to let pro- under $250 million in assets we provide home if their institution fell out of compli- testers potentially impose hundreds of loans, business loans, farm loans, and con- ance with CRA, I cannot understand. In thousands of dollars or millions of dol- struction loans. We don’t do this because of lars in losses on a bank and their the Community Reinvestment Act but be- fact, I have never heard an explanation cause it makes good business sense.... I for this draconian change in law. stockholders, many of whom are mem- bitterly resent every minute of my time and I read earlier, and I will not read bers of teacher retirement programs that of my staff spent to comply with this again, letters from the American Bank- and other broad investment groups, regulation because it takes time away from ers Association and the Independent without providing any evidence what- productive duties. Bankers Association saying how the soever to back up their claim, I don’t I feel the regulation is now being used by pending amendment will make it vir- know. But that is the debate we are consumer activist groups to ‘‘shakedown’’ tually impossible for them to get qual- having. banks seeking regulatory approval for expan- So, that is what the amendment does sion or merger. ity people who will serve on bank boards. They also talk about the cost and does not do. It is not a safe harbor. Finally, from American State Bank, of liability insurance, which will ex- It is not a safe harbor. It is not a safe an independent bank, from Portland, plode if you are going to impose these harbor. The Secretary of the Treasury OR: new potential penalties on banks, their came up with the use of that term and As one of the oldest and most strongly cap- officers and directors, all in the name now all critics use it, even though it is italized African American-owned banks west of abuses that apparently exist at the verifiably false. This is a rebuttable of the Mississippi River, Portland-based presumption. Stated another way, if a American State Bank supports your position extreme level in .03 percent of all CRA on CRA exemption for non-metropolitan examinations. bank has a good record of compliance banks. Those are all the bad things the sub- and it is deemed by the regulator to be We also urge you to explore exempting stitute does. What are the good things in compliance, it is innocent until from CRA requirements minority-owned that it undoes? Is that a word, proven guilty. You have to present commercial banks.... Today, minority- ‘‘undoes’’? I guess so. To try to curb some facts to substantiate your claim owned banks still maintain their focus on some of the abuses—and the abuses are if you are going to stop it from going serving our nation’s minority communities very similar to the strike lawsuit that forward. You don’t have to have any and their citizens. It is redundant, at best, to impose CRA requirements on banks whose we dealt with 2 years ago, and again facts to state your opinion. You don’t sole purpose is to serve minority citizens. At last year. have to have any facts to declare that worst, it compels minority banks to sustain The abuse basically occurs during the there ought to be a hearing. You don’t burdensome expenses and administrative critical moment when a bank is trying have to have any facts to protest. But costs and subjects banks to a bureaucracy to merge with another bank or sell or before the regulator can stop it, you largely unaware of the realities of the inner- engage in some new activity: it’s at have to present some facts. city marketplace. that moment the bank has a lot at The final provision that would be un- I have covered a lot of territory. Let stake and is most vulnerable. Under done here is the eminently reasonable me sum up with the following points. current law, any protester can come in exemption of very, very small, very, The Bryan amendment before us has and threaten to hold the whole thing very rural banks that on average have two parts. It does a whole bunch of bad up. This creates immense pressure on a regulatory burden of about $80,000 a things, and it undoes two little good the bank to settle with that protester year in complying with CRA, even things. What are the whole bunch of and either commit some bank action or though in the last 9 years, with 16,380

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00036 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8430 CONGRESSIONAL RECORD—SENATE May 5, 1999 examinations of these small, rural tail and restrict the Community Rein- note that there is virtually no signifi- banks, only three have been deemed to vestment Act, which the vast majority cant opposition from industry groups. I be substantially out of compliance of evidence has suggested works well, find it to be somewhat ironic that in with CRA. has served the American people well in the past, members of my own party If you were from a small town like I the past, and I believe is critical to have been accused of favoring legisla- am, or you represented a State that equal opportunity for all Americans as tion that would unduly hamstring busi- had a lot of little bitty towns and a few we advance to a new century and a new ness for ideological reasons. Today, the little bitty banks left and you went to millennium. shoe seems to be on the other foot. those banks, you would discover why We are increasingly relying upon the Let me be very clear what this dis- only .03 percent have been found out of use of market forces to create oppor- pute that has brought us to this im- compliance in 9 years. If you are from tunity. We are asking the American passe is not about. It is not about the a small town and you have a bank with people to be self-sufficient, to save, to organization under which future bank- four or five employees, your bank ends work hard, to be personally respon- ing, insurance and security services up lending to everybody in town be- sible, and I support those trends. At will be offered. This is not really a dis- cause they have nobody else to lend to. the same time, we need to ensure that pute about operating subsidiaries That is basically what the debate is the market system works for all Amer- versus the affiliates and holding com- about. icans and that every American, regard- panies, although there is a very serious I wish every person could, in some less of whether that person happens to dispute between the Secretary of the simple form, get all these facts. But it come from the right side of the tracks Treasury and the Chairman of the Fed- takes time to debate them, and I am or the wrong side of the tracks, be he eral Reserve on this issue. I am con- grateful to have the opportunity. I am or she Hispanic, African American, Na- vinced that this can be resolved if we sure we will get some more oppor- tive American or any other race, creed are given a chance. tunity today. But I thank my col- or religion in this society, that they Our dispute in this impasse is really leagues for their patience, and I yield have access to those tools in the mar- not about the unitary thrift and wheth- the floor. ketplace that will allow them to be er commercial entities should be al- The PRESIDING OFFICER (Mr. self-sufficient, to build a better way of lowed to get involved in the financial CRAPO). The Senator from Indiana. life for themselves and their families. services sector. That is a legitimate Mr. BAYH. Mr. President, I rise in It is important that we pass this law, issue and a concern that I am con- strong support of the Bryan amend- as I mentioned. It is one of the areas in vinced that, too, can be resolved if we ment, which contains, in my opinion, a which we are internationally competi- can only deal with the issue currently balanced approach to the Community tive. It is important that we pass legis- before us. No, Mr. President, the dis- Reinvestment Act as well as a bipar- lation that will allow our financial pute that has brought us to this point tisan spirit enjoyed in the last session services industry to provide com- involves the Community Reinvestment of Congress. prehensive services to their customers Act. I also want to say, to my colleague and to compete with our foreign com- I say to my colleagues and those lis- from the State of Texas, how much I petitors. tening and watching us at home that respect his expertise in this area as It is important that consumers be al- the Community Reinvestment Act has well as his dedication to this cause. lowed to have access to these services been good for America and good for But I must also respectfully disagree on a coordinated basis, on a one-stop Americans. It is working. Between 1993 and say to all those who are concerned shopping basis. It is better for con- and 1997—4 years—loans in low- and about this issue that if there are prob- sumers as well. It means jobs for your middle-income areas across our coun- lems with this amendment, in terms of State and my State and the rest of the try for mortgages and building homes the fines that can be imposed or other 48 States across the United States of increased 45 percent, 45 percent in just details, let’s correct them. If, in the America, not just in insurance, which 4 years; up 72 percent for African past, overly zealous advocates have is important to the State of Indiana, or Americans; up 45 percent for Hispanic used CRA as an excuse for extortion, investment banking or in securities or Americans; up 30 percent for Native then let’s prosecute them. If there are on the part of insurance company em- Americans. other problems, let’s correct them. ployees, agents, and brokers across this In the same period of time, actually Let’s throw out the bathwater, not country. It means jobs for small busi- just last year alone, there were 525,000 the baby. At the dawn of the 21st cen- nesses and industries in the State of loans to small business men and tury, let us not turn back the clock Indiana and elsewhere that need access women in low- and moderate-income and deny to thousands of Americans, to low-cost credit, so that they can in- areas, with total capital investments of because of the color of their skin, be- vest, be more competitive, more pro- $34 billion. cause of their race, because of their in- ductive and create good-paying jobs The Community Reinvestment Act come, the right to access one of the across our country. This is an issue not has proven to be a boom for the Amer- basic tools for empowerment and just for Wall Street, but for Main ican dream: families wishing to invest progress, and that is credit and the Street and for all of our streets across in home ownership, entrepreneurs ability to start a business or build a this country. wishing to start small businesses, home. We cannot return to those days. Unfortunately, there has been in- Americans of every race, creed and re- I should also say I am somewhat dis- creasing partisanship. I think that is ligion wanting to participate in the appointed that we have arrived at this very, very important. Just last year American dream of a better way of life impasse, because this is important leg- this measure passed out of the Senate for themselves and for their loved ones. islation. It is my great hope we will ul- Banking Committee on a 16-to-2 vote. The Community Reinvestment Act timately get it enacted, because it is This year, unfortunately, it broke has worked in my own home State of important to the financial services in- down exactly along party lines, 11 to 9. Indiana. I won’t go through all the dustry, insurance, banking, as well as Earlier this year, this provision, very cases here. From Gary, East Chicago, other industries that need access to similar to the amendment I am sup- Indianapolis, South Bend, Lafayette, credit and to consumers across our porting today, passed out of the House Bloomington, from the north to the country. This should not be a partisan of Representatives Banking Committee south, from the east to the west, in debate. In fact, in the very recent past, 52 to 8, with the vast majority of Re- communities large and small across my it has been nonpartisan or even bipar- publicans and Democrats supporting a State, more Hoosiers have opportuni- tisan. Unfortunately, it has become an continuation of a vital CRA and equal ties to make investments, make a de- issue that has broken down more and financial opportunity for all Ameri- cent income through a good job, buy a more along party lines. cans. home, or start a small business. It has I especially regret this has happened The administration strongly supports been good for our country. It has been in large part because of efforts to cur- this point of view. It is important to good for my State.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00037 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8431 Mr. President, I have a letter with trification was in the 1930s. Access to Mr. EDWARDS. That is exactly the me today that I think my colleagues credit today is as important to the fu- response I have had. I thank the Sen- will find to be of some interest. It was ture well-being of all of our citizens as ator. sent to me 2 days ago. It happens to be universal service to telephones was in Mr. President, I seek recognition at from the mayor of the city of Fort the fifties and the sixties. this time. Wayne. The reason this may be of in- That is why I believe very strongly, The PRESIDING OFFICER. The Sen- terest is that Fort Wayne is the second as we ask Americans to be more re- ator from North Carolina is recognized. largest city in the State of Indiana. sponsible, to take charge of their own Mr. DODD. Will the Senator from More than that, Paul Helmke, the lives, as we encourage them to start North Carolina yield? homes and build businesses and to Mr. EDWARDS. Absolutely. mayor of Fort Wayne, happened to be Mr. DODD. I want to say to my col- build for the future, we must give them my opponent in the race for the Senate league from Indiana, before he leaves last year. the tools within the market economy the floor, that was an excellent set of Paul Helmke is a card-carrying mem- to get the job done. That means equal remarks. I think it points out the im- ber of the Republican Party. He also access to credit as we approach the new portance of this issue. I was particu- believes in opportunities for the citi- millennium, not just to the few, not larly taken by the comments of your zens of Fort Wayne, business invest- just to the powerful, but to Americans mayor of—which city was that, I ask? ment expansion, and home ownership. of every race, ethnicity, and those of Mr. BAYH. Fort Wayne. The mayor of Fort Wayne, my oppo- even modest means. That, Mr. Presi- Mr. DODD. Fort Wayne. This was nent in the election last year, has writ- dent, is why I rise in support of the your former opponent, I think, that my ten me asking me to support a vigorous Bryan amendment and urge my col- colleague pointed out. And I just say to and vital Community Reinvestment leagues to vote in the affirmative for my colleague, again, I have had a simi- Act. it. lar reaction from my mayors across my I read from his correspondence: Thank you. I yield the floor. State. I know others have. . . . In Fort Wayne, banks have fulfilled Mr. EDWARDS. Would the Senator We have a tendency to think of these their CRA requirements in creative and from Indiana yield for a question? issues in terms of just what the bank- meaningful ways that have allowed us to le- Mr. BAYH. I would be glad to yield to ing community wants. And that is an verage their resources with public and other my colleague from North Carolina. important consideration for us, as we private influences to help in our urban revi- Mr. EDWARDS. Thank you. certainly deal with financial institu- talization efforts. . . . Perhaps the banking community I am wondering, Senator BAYH, if you tions. But I think—and I would ask my would continue to see their investment in have had the same experience I have colleague from Indiana whether or not urban renewal as beneficial without the CRA had. That is, I come from a State with he would agree with this—that, in addi- requirements. But I do not think that it is many banks, including some of the tion to the banking community, we wise to tempt fate. largest banks in America, Bank of bear a special responsibility, as Mem- Mr. President, neither do I. Involved America being one. And having had bers of the Senate, to also consider mayors, like Mayor Helmke, who was many conversations with representa- what occurs to the customers’ financial the head of the mayors association last tives of banks that are headquartered services. year, and I believe concerned Senators in my State, what I hear from them is, I think sometimes that constituency should rise to vote in favor of a vital in fact, they enjoy participating in the is given a back seat when it comes to and continually vigorous Community Community Reinvestment Act. They considering the implications of deci- Reinvestment Act. On April 22 of this take great pride in the work they do in sions we make. It is the farmer in Wyo- year, the Los Angeles Times wrote: the communities where they are lo- ming; it is the small businessperson in Before Congress voted to establish the CRA cated. They have absolutely no opposi- Connecticut; it is the consumer in Indi- in 1977, many banks wrote off entire areas, tion to the Community Reinvestment ana; it is the minority business in refusing to lend to anyone who lived behind Act and, in fact, do not oppose the North Carolina—all of us have con- the red line. Community Reinvestment Act provi- sumers out here who use these finan- The unfortunate truth is that while sions of the Democratic substitute of- cial institutions. the vast majority of bankers across our fered by Senator SARBANES. I commend my colleague from Indi- country are involved and caring and I am just curious whether the banks ana for a very thoughtful set of re- doing a good job, both before and after- in your State of Indiana have had the marks, pointing out that side of the wards, too often there were bankers same kind of reaction. equation, the consumer side, the user who were willing to accept deposits Mr. BAYH. I say to the Senator, I ap- side, the business side of our financial from some parts of our communities preciate your question. As a matter of services, and I commend him again for and not make loans to those very same fact, one of the things that has been his remarks. parts of our communities. That is what most impressive about this issue has Mrs. BOXER. Before the Senator CRA has established. It is a very strong been the uniformity of opinion among yields, I wonder if I could pose a ques- track record of change. our banks in my State, large and tion for 20 seconds. Mr. EDWARDS. Of course. Unfortunately, the bill, as small. They find that CRA has not been Mrs. BOXER. Thank you. I also want unamended, before us poses a serious a significant impediment to their doing to thank my colleague for his remarks. threat to the continuation of this business, and really the industry I wonder if he was aware of the com- progress we have seen across this coun- groups are not in opposition at all. As ments made —and this gets to the Sen- try and in my State. My understanding a matter of fact, they support the in- ator from North Carolina—by the is it would make 97 percent of all banks tent behind this very, very important President of Bank of America about presumptively exempt from the re- provision. this program. If not, I would like to quirements of CRA, 38 percent entirely So we have a situation here where put them in the RECORD. If he answered exempt from the provisions of CRA, many of our community groups, in- that question—— and would exclude the whole new areas cluding our mayors—as a matter of Mr. ENZI addressed the Chair. banks hope to get into, entirely ex- fact, I should mention for the RECORD I The PRESIDING OFFICER. The Sen- empt, new users entirely exempt from spoke to the mayor or Gary last night, ator from Wyoming. the provisions of CRA. Mr. President, as well, who believes very strongly Mr. ENZI. Mr. President, I believe now is not the time to turn back the that a city like Gary, which has been the Senator from North Carolina has clock. struggling to get back on its feet, the floor. The question was being di- I will summarize before yielding the needs this provision. rected to the Senator from Indiana. floor. Access to credit today is as im- The banks are not opposed and, in The PRESIDING OFFICER. The Sen- portant an opportunity for Americans fact, find it to be a very positive ele- ator from North Carolina does have the of every walk of life as rural elec- ment. floor and may only yield for a question.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00038 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8432 CONGRESSIONAL RECORD—SENATE May 5, 1999 Mrs. BOXER. I would be happy to di- Mrs. BOXER. Absolutely. I think it is also important for them rect this to the Senator from North Mr. EDWARDS. I want to address to understand what exactly Senator Carolina. that in just a moment. I want to say, GRAMM’s bill does to the existence of Mr. EDWARDS. Yes, absolutely. I am first, in relation to the remarks of my the Community Reinvestment Act. I aware, I say to Senator BOXER, of the friend, the Senator from Indiana, who have heard the bill described by him comment by Hugh McColl, who is head has become a very close friend and col- and others as being ‘‘Community Rein- of Bank of America. I think I can quote league of mine during our tenure—we vestment Act neutral,’’ as to the over- him exactly. came to the Senate together—that I all purposes of this legislation. Mrs. BOXER. I would like you to do am proud of what he had to say. I com- I might add parenthetically that I that right now in the RECORD, because pletely agree with everything he had to strongly support the idea that banks it is a very telling comment. say, and his remarks particularly ought to be able to expand services and Mr. EDWARDS. I think it is, too. He about turning back the clock on this affiliate with other financial institu- says, ‘‘My company supports the Com- very, very important piece of legisla- tions. They ought to be able to sell in- munity Reinvestment Act both in spir- tion ring true with me and I think ring surance. They ought to be able to sell it and in fact. We have gone way be- true with most Americans. securities. It is good for banks. We yond its requirements. We have had fun Mr. President, if I may, there is a have a lot of banks in my State that doing it. And we have made a business really critical thing I want Americans, need to do this and want to do it and, out of it.’’ who are listening to this debate, to un- I think, ought to be able to do it. It is Now, here is the head of the largest, derstand. This is not some obscure also good for consumers because it cre- or one of the largest, banks in the piece of banking legislation that has ates competition, and it is a good thing country, headquartered in my home nothing to do with their lives. for consumers to have access to these State. I happen to know that Mr. It is really important for Americans services when they go to their banks. I McColl has, in fact, strongly supported to understand that this bill—I refer strongly support those opportunities. the Community Reinvestment Act. His now to Senator GRAMM’s bill—that this Here is the problem. Under existing bank has gone above and beyond the bill will have, or has the potential to law, when a bank seeks to expand, ei- call of duty in that respect. have, a dramatic effect on the lives of ther by merger or by opening a branch, Mrs. BOXER. One more question be- every American, not just the poor, not then its CRA rating is one of the things fore I yield to my friend. just minorities, not just the elderly, that is taken into consideration. Under I find it very interesting that Sen- the provision that is proposed by Sen- ators would get up and attack this pro- not just those who run a small business or want to get into the family farming ator GRAMM, when a bank seeks to ex- gram as if it were some kind of a give- pand services by affiliating with a com- away program. These bank presidents business, and not just those people who are directly impacted by the Commu- pany that sells insurance, by affiliating have told us that these loans are very with a company that sells securities, profitable. As a matter of fact, I won- nity Reinvestment Act. This bill has the potential to affect CRA, or the Community Reinvestment der if the Senator is aware, at least in Act, plays no role whatsoever. California—and now we do have a tie in every single one of us, every single American. And here is why. Because it Let me say this in the simplest because, as you know, Mr. McColl, al- terms. A bank with a completely un- weakens the Community Reinvestment though headquartered in your fair satisfactory Community Reinvestment Act. Because of CRA, we provide low- State, does a lot of business in my fair Act rating that has been determined by income housing, we provide single-fam- State—they have told us that they are regulators to not be complying with ily housing, we give families a place to doing very well with their CRA ratings. the law, to not be doing what it should live, we give small businessmen and As a matter of fact, they are telling be doing with respect to investing in women, minority and otherwise, a us—and I want to know if the Senator its community, I am talking about a chance to engage in entrepreneurship, was aware of this—that their portfolio totally noncompliant bank, that factor to open their own business. We give the of CRA loans—these are loans that cannot even be taken into consider- people the opportunity, in my home never used to be made in the old days— ation in determining whether that are just as profitable, that portfolio, as State of North Carolina, to start a bank should be allowed to sell insur- their other loans. Is my friend aware of small farm, and expand that farm. ance and whether it should be allowed Every time we provide these kinds of that? to sell securities. economic opportunities to people, Mr. EDWARDS. Yes, I say to Senator This bill, Senator GRAMM’s bill, is every time we give families, core fami- BOXER, I am aware of that, and that is not CRA neutral for one simple reason. what I have been told consistently by lies, a chance to live together, to stay We are, by virtue of this law, expand- the banks located in North Carolina. together, and not be spread out, we do ing what banks can do, allowing them Mrs. BOXER. I thank my friend, and a number of things: No. 1, we reduce to sell insurance, allowing them to sell also my friend from Indiana, because I crime; No. 2, we create pride, an ex- securities. If we don’t take CRA, which think the notion that somehow, if you traordinary amount of self-esteem that presently applies to applications for are for CRA, you are for doing some- may not have existed before; and we branching and mergers, and apply it as thing with social value and yet inter- give people an opportunity to do some- a precondition for these new services fering with business is simply not true. thing they otherwise might not be able they are going to engage in, then we These loans are profitable loans. They to do—own their own home or open have withdrawn from CRA. We will are good for the community. It goes their own business. have cut the underpinnings from CRA. back to the old adage: ‘‘If you do good, I speak to every American when I It is something we shouldn’t do—it is you do good things, you will do well.’’ say, crime, core family values, the fact fundamental—we shouldn’t do. CRA I hope we will stand together in favor that the folks who benefit directly compliance ought to be a consideration of this program that does good things from the Community Reinvestment when banks seek to engage in the ex- for people and does well for the banks. Act are folks that we may otherwise, panded services permitted under this I yield back to my friend. as a Government, have to support, bill in exactly the same way, in exactly Mr. EDWARDS. Thank you, I say to these are things that affect every the same fashion that it presently ap- Senator BOXER. American. This bill is not some obscure plies to their attempts to merge with I will add to what she just said: When banking bill that has nothing to do other banks or to their attempts to you do good things and have the im- with people’s lives. The Community open other branches. pact that the Community Reinvest- Reivestment Act has a dramatic effect Now, I want to show a couple of ex- ment Act has had, it does not just and has had a dramatic effect on every amples with the indulgence of my col- inure to the benefit of the people who single American. I think it is critically leagues. are directly affected, it inures to the important for people to understand I want to show a couple examples of benefit of all of us. that. what the Community Reinvestment

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Act has done in North Carolina. I show GRAMM over the course of the last 45 a result of the Community Reinvest- now a photograph of a neighborhood, minutes to an hour—that the Commu- ment Act; $18.6 billion in community an economically disadvantaged neigh- nity Reinvestment Act places an enor- development, the kind of community borhood, a minority neighborhood in mous regulatory burden on banks, un- development that we saw photographs Durham, NC. This is a house that ex- fairly so. of just a few moments ago; and criti- isted in that neighborhood. Well, I think, unfortunately, with all cally important to my State of North As a result of the Community Rein- due respect to Senator GRAMM, the Carolina—and I suspect Senator BAYH’s vestment Act, and as a result of a bank facts do not bear that argument out. State of Indiana—$11 billion in small partnering with local community What we find is that among CRA-cov- farm loans. That is $11 billion going to groups, this house that we have just ered institutions, when they make an small farmers as a result of the Com- taken a look at was turned into this application, for example, when a bank munity Reinvestment Act. house. decides they are going to merge with Here is what we have. We have a bill If I could hold up the first photo just another bank, when a bank decides that makes a great deal of sense on the a minute, this was a crime-ridden, they are going to expand and open a whole. We want to expand the services drug-infested community. As a result branch, and therefore they file a CRA of banks. We believe—at least I be- of the Community Reinvestment Act, application, 99 percent of those appli- lieve—that banks ought to be able to we went from this to this—a place that cations are never even challenged by engage in those services. But it is criti- the people who occupy this home are community groups. So we start with a cally important that we maintain the proud of; a low-income family was able base of 99 percent where there is no viability and the vitality of the Com- to reside there. They take pride in challenge whatsoever. I would love the munity Reinvestment Act. It is impor- their community. And as Reverend comments of Senator SARBANES on this tant that we maintain it for a lot of Brooks, who was part of this effort, in a moment, if he will. It is my under- reasons: because we need to support said: standing that the banks are not re- minorities; we need to support the el- Before, there were drug dealers sitting on quired to keep additional information derly; we need to support low-income this corner. Now, we have homeowners hop- as a result of this expansion of serv- families; we need to support people who ing to be in these houses. ices. In fact, I think they use exactly need or want to start their own small The Community Reinvestment Act. the same base data that they kept pre- business or their own family farm. It It changes communities. It changes viously. Is that correct, Senator SAR- makes good business economic sense families. It changes people’s lives. It BANES? for the country. also changes the financial obligations Mr. SARBANES. I say to the Sen- But what I want the American people that the rest of us, as Americans, have ator, that is correct. Senator BRYAN to hear from me today, if they hear to support opportunities for people who spoke to that earlier, about the effort nothing else, is that this is not some want to support themselves. They just that was made in the mid-1990s to ease obscure piece of banking legislation need a chance. What the Community the regulatory burden on the banks. that is technical or difficult to under- Reinvestment Act does is, it gives Mr. EDWARDS. That is my under- stand. This legislation can affect their those folks a chance. standing. lives and, in fact, will affect the lives I want to show one last photo. We So we start with this basic idea that of every American every day because have seen one house. This is a neigh- 99 percent of all the CRA-covered appli- to the extent that we keep poor fami- borhood. This is located in Durham, cations are not challenged at all. Then lies together, to the extent that we re- NC. This is a neighborhood that, again, of the ones that are challenged, in only duce crime in this country, to the ex- has gone from a high-crime, drug-deal- 1 percent of those cases are the applica- tent that we give people an oppor- ers-on-the-street-corner neighborhood tions denied. So 1 percent are chal- tunity to seek out good employment, to a model community. Can you imag- lenged versus 99 percent that are not, to get jobs to support their own fami- ine the difference between the way a and of that 1 percent, only 1 percent of lies—all those things that we as Ameri- family feels when they live in a com- those are denied. cans believe in—when we do those munity where right outside their door- I think the facts prove that CRA has things in conjunction, we as a country step people are selling drugs and all the not been an enormous regulatory bur- benefit. And to the extent that we look houses are in terrible shape versus how den and that banks, as has been the ex- at it selfishly, we as individuals benefit they feel when they find themselves in perience of Senator BAYH, as has been because those people will not be sup- a community that looks like this? Now the experience of Senator DODD in Con- ported by the Government. They won’t they take pride in their community. necticut, and as has been my experi- be supported by taxpayers. They will The children growing up in this com- ence in talking to my bankers in North support themselves. And the reality is munity take pride in where they live. Carolina, the reality is they do not op- that is exactly what they want. They It gives them a sense of self-esteem. It pose the Community Reinvestment want the opportunity to support them- allows them an opportunity to have Act. They simply do not. selves and to know the pride of home- pride in themselves and their family As the quote from Hugh McColl indi- ownership. That is what community re- that they otherwise might not have. cated earlier, banks take great pride in investment is all about. That is the Now, there are some simple facts their opportunities to invest in their reason Senators SARBANES, KERRY, that I will speak to briefly that have community. Our banks are good cor- BAYH, DODD, and myself believe in it so emerged from the progress of the Com- porate citizens who do what they do be- deeply. munity Reinvestment Act during the cause they take pride in it. They be- Mr. SARBANES. Will the Senator time it has been in place. If I could lieve in the Community Reinvestment yield for a question? have the appropriate chart, please. Act. They support it. They are not op- Mr. EDWARDS. Yes. First of all, just since 1993, the pri- posed to it. Mr. SARBANES. Let me compliment vate sector lending in low- and mod- Finally, this chart depicts what CRA the Senator from Indiana and the Sen- erate-income areas, which is what we has done in loans to low- and mod- ator from North Carolina for their very have been concerned with, has risen. erate-income communities. This is as strong presentations and their tremen- From 1993, I guess this is the number of of 1997, $34 billion in small business dous contributions to the Banking loans, 185,014 to 268,463 in 1997. Over a loans. I think it is really important Committee. They both came on the period of 4 years, there is an increase of that we understand we are not just committee this year, and we are barely 45 percent, almost a 50-percent increase talking about housing. We are talking a few months into their first session in just 4 years, as a result of the Com- about small businesses, entrepreneurs and they have both made extraordinary munity Reinvestment Act. who want to get started and just need contributions to the work of the com- The argument is made that—and we a leg up, giving them a chance to de- mittee and to the work of the Senate. have heard a lot of it from Senator velop their own business, $34 billion as I simply want to say, as one Senator

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00040 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8434 CONGRESSIONAL RECORD—SENATE May 5, 1999 who has been here for a while, we are I think the fact that the mayors are The PRESIDING OFFICER (Mr. very honored to have them as part of behind it, the fact that the community ABRAHAM). The Senator from Wyoming the Senate and thankful and grateful groups are behind it, the fact that the is recognized. to them for the contributions they banks themselves, the financial insti- Mr. KERRY. Will my colleague yield make. tutions, are behind it, I think all these for a question? I wanted to ask the Senator this: In things in combination go to prove a The PRESIDING OFFICER. The Sen- a letter we received from the U.S. Con- very simple point: The Community Re- ator from Wyoming has the floor. ference of Mayors, which in effect fits investment Act has been good for Mr. KERRY. I would like to ask a in with the point that both Senators America. It is good for the specific question. were making about the importance of groups it directly benefits, and it is Mr. ENZI. The Senator doesn’t even the Community Reinvestment Act—it good for all of us as Americans because know what my statement would be. It is signed by close to 170 mayors from it allows these folks to support them- would be difficult to yield for a ques- all over the country, besides the ones selves, which is what they want to do. tion based on what I haven’t said yet. that are trustees and on the advisory Mr. BAYH. Will the Senator yield for There is a little bit of smoke that board of the U.S. Conference of May- a question? needs to be cleared out of the Chamber ors—it says: Mr. EDWARDS. Yes. before we proceed. . . .As mayors, we recognize that CRA has Mr. BAYH. Mr. President, I echo the Mr. SARBANES. Mr. President, I been an essential tool in revitalizing cities words of the Senator from Maryland in think the Senator was just asking you around this nation. In fact, there is now in- complimenting my friend from North to yield in order to determine the pro- creasing recognition that the strength and Carolina for his eloquence and his in- cedure. economic health of whole regions require Mr. KERRY. I was just going to ask strong and vibrant cities. Creating new eco- sightful presentation on a continued, strong CRA. I observe and I can tell the Senator how long he was going to nomic activity—new businesses, new jobs, speak. new homeowners—is key to the revival of that he has taken his advocacy skills Mr. ENZI. I apologize. I have been lis- urban areas and their surrounding regions, from the courtroom to the floor of the tening to a lot of statements made, and CRA has been a key component to creating Senate, and the American people are I probably reacted in a way that I this new economic activity. better for it. They go on later to say: should not have. I compliment the Senator on his Mr. GRAMM. Will the Senator yield? Prior to the enactment of CRA, banks and statement, which is built upon what Mr. ENZI. I will yield for a question, thrifts routinely redlined low and moderate- the ranking member said in the state- income neighborhoods in our nation’s cities. yes. ment he read from the Conference of Mr. GRAMM. Mr. President, I will The modest requirement in CRA that finan- Mayors. The Senator from North Caro- cial institutions meet the credit needs of make the following point. We go back their communities has led to the successful lina has become a dear friend and and forth to try to keep some balance channeling of billions of dollars into local- someone I have admiration and great in the debate. ities. respect for. I have heard the Senator I think when people have a real ques- Then they note that the bill brought mention on many occasions his dedica- tion that it is a logical thing to do. But out by the committee would severely tion to ensuring that not just big cities when questions used really disrupt the weaken CRA. They say: or large institutions have opportuni- flow of the debate so that you have ties, but that the farmers and small Unless the onerous CRA provisions are ad- long periods of time on one side of the dressed and CRA is preserved and strength- rural areas across North Carolina are aisle, I don’t think it is quite fair. Ob- ened, we would urge strong opposition to the afforded the same opportunities as viously under the rules we can do it, Senate bill. those in the large cities and in the but it can be done on both sides. I raise that with the Senator because large financial institutions. I would like to just suggest—we are it seems to me that it goes to this very My question is this: Very often, this going to vote on this at about 7 point, including the pictures he was financial modernization bill is por- o’clock. We have plenty of time. Every- showing. We are talking about the trayed as something that just Wall body can be heard. I would just like to elected officials who are right on the Street and big institutions are inter- suggest that we go back and forth. Ev- front line, so to speak, trying to deal ested in. The Senator touched on this erybody will get a chance to speak. with the problems of their commu- briefly, and there is one thing I was I urge our colleagues, if you have a nities, trying to bring them back and hoping he can expand on. I wonder if real question on something you don’t achieve revitalization and renewal. his experience in North Carolina is the know—other than, ‘‘Do you realize that They, obviously, have come in feeling same as ours in Indiana, which is that our proposal is a great proposal and very strongly. CRA can be an engine for making sure their proposal is a rotten proposal?’’— Mr. President, does the Senator feel that farmers and small businesses in yes, I realize that—if you have a real that this is another perspective on the rural areas are afforded the same kinds question, I think it makes sense. But very point he was trying to make of of opportunities as the mayors indi- in fairness to what we try to do in the importance of CRA—not just for cated the cities enjoy. going back and forth, I urge people to the people who directly benefit from it Mr. EDWARDS. I thank the Senator wait for their time to speak so we have but for the broader community, for all for his kind comments. He and I share debate on both sides of the aisle. That of us, it seems to me, here is, in a the same feelings about each other. We is my point. sense, an endorsement of the very posi- share a lot of the same beliefs and val- Several Senators addressed the tion the Senator has been enunciating. ues. There is no question that in the Chair. Mr. EDWARDS. I think that is a State of North Carolina we have had The PRESIDING OFFICER. The Sen- wonderful indication, as the Senator the same experience they have had in ator from Wyoming has the floor. put it, of the people on the ground, on Indiana, which is that the Community Mr. ENZI. The answer to the question the spot, seeing what is happening on a Reinvestment Act, in fact, reaches out of the Senator from Massachusetts is, I day-to-day basis, recognizing how criti- into rural, underserved communities, think about 10 minutes. cally important CRA is to this coun- to small farmers, small businesses and Mr. KERRY. I thank the Senator. try. They see what is happening. I communities that are chronically and Mr. SARBANES. I ask unanimous think it goes hand in hand with the economically disadvantaged and so consent that when the Senator from fact that the banks—and I might add, I desperately need its help. I think it is Wyoming concludes that the Senator take great pride in the fact that every another example of how well the CRA from Massachusetts be recognized. bank in North Carolina has a satisfac- has worked. The PRESIDING OFFICER. Is there tory CRA rating, every single one of Several Senators addressed the objection? Without objection, it is so them—are helping make a difference. Chair. ordered.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00041 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8435 The Senator from Wyoming. If these things are really invalid ac- These banks are community banks— Mr. ENZI. Mr. President, I thank you tions by those banks, they ought to be rural banks. In Wyoming, the bank for the recognition. I appreciate this taken to the highest level and the may be 100 miles from another bank. opportunity to speak. highest opportunity to punish. But Who do you think they serve? People There is a certain amount of tension that destroys the value of the com- from other States in the Nation don’t that builds up as you listen to some of pany. So they enter into agreements mail their money there. It is the people the comments. The comments have like this and send letters that say that who live in that community, and they been very good about CRA, the Com- the CRA is OK. expect and they get service, or the munity Reinvestment Act, in general, This bill does not gut CRA. It keeps bank goes out of business. and in general nothing is going to hap- the same program in place. If a bank, We have heard some statistics about pen to that CRA. The Community Re- which is audited regularly, has met the how business has increased because of investment Act will still be in place. criteria for 3 years, and meets it at the the CRA. We have heard statistics There will still be community reinvest- moment, then actual objections have about how loans have increased be- ment. to be lodged. It seems like common cause of the CRA. Take a look at the There are two changes in this bill sense to me. It doesn’t sound like doing timeframe. It wasn’t the CRA that that have been suggested. They make away with the program. It is just com- drove up the number of people buying some changes. They make some impor- mon sense. houses or drove up the opportunity for tant changes that may make CRA Small banks were mentioned. There more people to go into business. It was more viable, more valuable, more pro- is a change for small banks in here, the interest rate. The interest rate ductive, and more useful. too, if they have under $100 million in plummeted. More people could make There has been a tremendous esca- assets. I think if any of you look into house payments. More people bought lation in the number of dollars being banks, you will find that it is a very houses. It wasn’t that the banks were given in CRA commitments. We note small bank that has five or six employ- being forced into this; the banks are al- that in 1995 the annual dollars were 26 ees. You will probably find that one of ready precluded from having to do bad million, almost $27 million. In 1998, the those employees is dedicated to just loans. They are not loaning to just annual dollars were 694 million. doing CRA—doing CRA so they can anybody who comes in the door. They What do you suppose caused the in- prove that they don’t have a problem. are just doing a lot of paperwork to crease? Are banks just discovering It is only rural banks. show that the loans they are granting this? I don’t think so. We have had these letters from Fort are valid loans and the ones they are A while ago you had the opportunity Wayne and some other cities. Those not are not valid loans. to listen to some of the contents of an aren’t rural banks. I don’t care what The economy makes the difference in agreement that was necessary in order their asset base is. They don’t get this whether new businesses start and to move on in a banking arrangement. advantage. whether people buy more houses. The There are a lot of clauses in that which We are talking about the very small exemption for small banks will solve are pretty disturbing to me. communities. I have those in Wyoming. some problems for small banks, and it It has been said that you are not Those very small communities, even if probably ought to be a higher amount hearing from the banks. If that letter they only have one or two employees, than that. Again, if you are looking at auditing has been used by many groups—you have to have somebody dedicated to statistics, you could double or triple can see by the numbers that it is rap- doing the CRA. It is a paperwork expe- that number without affecting the idly escalating—how many groups are rience. They are having to fill out pa- numbers that are out of compliance; being brought into this? There is a perwork to prove that they are not in hardly at all. clause in that which says they cannot violation in a community where there I want to reiterate again that that complain about CRA. That is freedom may not even be minorities. So they amount of extortion to the big banks of speech? You cannot complain about cannot rest as well, because they don’t has gone from $27 billion up to $694 bil- somebody extorting money from you? have a classification they can meet in lion. That is going to be something on When banks are merging, there are a their customer base in their commu- an ever-increasing basis. As more peo- lot of stockholders who are nervous. nity. ple get into the business of taking on There are customers who are nervous. Three-fourths of the banks are rural CRA, taking a base and a commission They do not know whether they want banks. It was said that we had an off of that, none of this goes to the sec- to stay with the bank or not just be- amendment that put that at $2 million. tor of the community we are talking cause of the media turmoil that is I also want to point out a comment about. caused by the merger. that was made about these small CRA is important. CRA is included in Then you have a group coming in to banks. There were over 16,000 of them the bill. CRA only makes two changes. take advantage of that crisis moment, audited for CRA. There were three out It does not gut the bill. There are two that interest moment. They raise an of compliance. According to my record, changes: One for small, rural banks so issue. The bank isn’t found to be out of there were three out of compliance. we don’t have to spend so much annu- compliance; the bank is in compliance. There are some that get lower ratings, ally complying with CRA and they in- Under this bill, they have to have been and I have explained why they are stead can put it into their community, in compliance for 3 years. For 3 years lower ratings. But even if they were which is where they put their money; they have been following this. considerably more out of compliance, the other one is for the big banks so We had some discussion earlier that it is not good auditing to do it under they don’t have to write these required there are audits done on this. They are that basis. letters we heard to their Congressman checked on. It has always been shown I am an accountant. I am the only saying they don’t have any problem that the ones that are most likely to accountant in the Senate. When you with CRA. be involved in this, the bigger banks, have criteria for auditing businesses, This is not an attempt to gut CRA. are also the best respondents. But you come up with higher statistics This is an attempt to make it more there is a clause they have that says, than that kind of a base, or even a valuable, more useful and more appli- first of all, they are not going to com- higher base than that. You have to. cable in the banks. plain about CRA; second, they are Otherwise, you are wasting resources. I yield the floor. going to write this Congress and say What I am saying is that some of The PRESIDING OFFICER. The Sen- what a good deal CRA is. these benefits that are talked about ator from Massachusetts is recognized. Does that sound like a normal busi- may not have been worth it even on Mr. KERRY. Mr. President, I thank ness transaction? Does that sound like the basis of the auditing costs. We are particularly the Senator from Mary- something that businesses ought to be talking about the basis of the business land, the ranking member, for his lead- involved in? cost as well complying with this law. ership on this issue. I regret that the

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00042 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8436 CONGRESSIONAL RECORD—SENATE May 5, 1999 Senate is in the position it is in on this I don’t think Congress can stand here ommendation, have stated that if the particular bill. with a straight face and take entire CRA measure stays as it is, this meas- I have previously supported financial credit for the virtues of the economy ure will be vetoed. Very simple: It is modernization. We have voted on it in that we are living in today. I do think going to be vetoed. several incarnations. Last year I was we take partial credit because I think We have a choice. We can either take among those who happily sent this bill, it was a courageous effort in 1993 to a look at the CRA and make a judg- what was then H.R. 10, to the Senate face up to the realities of the deficit ment about what it accomplishes or we with a very significant vote of support and to come up with a solid deficit re- can go through another Senate exer- in the Banking Committee, because we duction act. In addition to the congres- cise, send the bill out for veto and ac- believed overwhelmingly that we had sional efforts, Alan Greenspan, the cept failure in the end for our capacity the right balance between the interests chairman of the Fed, deserves enor- to be able to recognize the importance of the financial services community, mous credit for his courage during the of the vast changes that I referred to a whom we are all concerned about and banking crisis of the last years of the moment ago. we all understand need the needs of 1980s and the beginning of the 1990s Let me say a few words about the that community; at the same time we when he took bold action to help refi- CRA, if I may. The CRA is now more had what most people thought was a nance the banks, as well as his remark- than 20 years old. It is very straight- very fair and sensible recognition of able stewardship of monetary policy forward in concept. It is imminently the virtues of the CRA. itself. reasonable. It says simply that banks In the waning hours of the last Con- Finally, it seems to me a very signifi- have to provide credit to all the com- gress, all Members remember there was cant amount of the credit goes to the munities in which they take deposits. a single, very adamant voice of opposi- companies themselves and the CEOs In other words, if a bank accepts depos- tion, the now chairman of the com- who saw a change coming down the its from a neighbor, that bank has mittee, who in fairness has deep-rooted road, who responded to the demands of some kind of responsibility to make beliefs about it, but who frankly stood the 1980s when people were writing loans available to creditworthy bor- in a very, very small number last year books about Japan, Inc. and writing off rowers in those neighborhoods. That is who ultimately, because of the timing American enterprise and suggesting we common sense and it is fundamentally of the bill, was able to prevent an en- needed a wholesale adoption of another fair. This statement of reciprocity, of tire bill from passing the Senate. model. Indeed, our model has proven mutual responsibility, says an awful Now we are back here once again re- perhaps at times to be excessive and at lot about the kind of country we want visiting the important imperatives of times even to be insensitive, but never- to be and the kind of country we are as financial modernization. This year theless to be way ahead of any other a consequence of that kind of effort. many of us who want to vote for that capacity or structure in the world in Let me speak for a moment to what financial modernization are put in the the marketplace. the CRA has accomplished. It has very difficult position of having to Increasingly, one of the reasons for helped to make more than $1 trillion in take a position of fundamental prin- that success has been the blurring of good, profitable loans to low-income ciple that because we believe so deeply the lines between banking, insurance, areas, loans that bankers in my State that the CRA provision is so disturbed and securities. We need to do our part. and in States all across the country by this bill that a strong relationship We are way behind the curve, years be- have said would not have been made that has existed and worked with a hind the curve. Were it not for the without the law. It has given low-in- profound, positive impact for people in thoughtful and judicious steps taken come communities of working families this country, is being sufficiently un- by the regulators themselves without access to capital that is absolutely cru- done, even attacked, and requires that congressional impetus we perhaps cial to start a small business or to buy we oppose the bill in its current form. wouldn’t have been able to accomplish a home. And it has created new busi- I am used to going through Pyrrhic some of what we have. ness opportunities for the banks them- exercises in the Senate, regrettably Now is the time to respond by break- selves. with increased frequency. It is a sad ing down the artificial legal barriers of I would say that CRA is a fundamen- commentary on the nature of the legis- an outdated era, the barriers that pre- tally conservative, procapitalist law lative process today that sometimes vented banks, security firms and insur- because it is not a handout; it is not measures move through here in a very ance companies from affiliating. It is something for nothing. It requires re- partisan way and then we ultimately time we take the step to ratify the lib- sponsibility. It broadens the tax base. wind up in the conference committee eration of financial service companies It broadens the capitalization capacity with the administration negotiating so they can provide a broader array of of a community. It brings people into and things are changed. services to consumers and corporate the economic mainstream. It is a law That may or may not happen here. It customers. I don’t think we should that provides that all Americans, low- certainly didn’t have to be this way. hesitate to do it. This is several years and moderate-income Americans, very We could have arrived at some kind of overdue. often African Americans or Hispanic fairminded compromise that reflected It is regrettable that we find our- Americans, with the opportunity to the views of the vast majority of Sen- selves in this position, after the Senate buy a home or build a business if they ators. Instead, we find ourselves with a Banking Committee overwhelmingly are creditworthy. bill that is not just about financial by a 16–2 vote passed legislation. That The law is very clear on the last modernization. It is also about a sig- is a fairly profound statement of the point, about creditworthiness. Loans nificant reduction in the capacity of Senate Banking committee’s willing- have to be made with all of the normal the Community Reinvestment Act to ness to move forward. concerns for safety and for soundness. work. Many Members believe very, Here we are again, notwithstanding The act itself could not have been more very deeply we can do better than that. the challenge of financial moderniza- clear on that. It says that it has to I think we obviously need to recog- tion, with too many Members having help meet the credit needs of the local nize that U.S. financial institutions as to say no to moving forward because of communities from which it is char- a whole are the most efficient pro- the extreme measures being applied to tered, ‘‘consistent with the safe and viders of financial services in the world the CRA itself. sound operation of such institutions.’’ today. There have been remarkable That judgment is not ours alone. The So, when the chairman of the com- changes in the marketplace in the last Treasury Secretary, whose expertise mittee says it is just an extortion pro- years. All Members ought to pay prop- and judgment over the last years, I gram, I think there is such a level of er tribute to the virtues of the entre- think, has been without parallel, and extreme exaggeration and rhetoric in preneurs who have themselves under- the President of the United States, that, measured against what happens taken to put those changes in place. clearly on Secretary Rubin’s rec- —and I will speak for a moment later

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00043 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8437 to the question of extortion—because If ever there was a reason to make all, with communities in which there any bank has the ability to prove that judgments about whether or not people are sets of relationships which every- any particular request was not able to are in compliance, it is when they are body understands. meet the requirement of safe and sound going to go out and engage in new ac- Most of the people within that com- operation of that institution. It is clear tivities that involve a whole series of munity—the political leaders, the there are plenty of ways of doing that. new, larger roles within the economic elected political leaders, the opinion And the balance of the weight is on the community. leaders, the bankers, the business- bank; it is really against the person re- It seems to me it is inconceivable people, the news people—understand questing the credit, based upon the that, when they are going to take on the difference between legitimacy and normal standards by which banks do those new kinds of responsibilities, you extortion. They understand the dif- business. are suddenly going to say: We are not ference between a community that is If you talk to most bankers, they going to apply it; we are going to hold getting its fair share of community in- will tell you the CRA loans perform as it where it is based on the theory of vestment from a bank and a commu- well as the rest of their portfolios. We what CRA is supposed to be. nity that has been starved. are not looking at some enormous drag There is a reason that there is this The fact is, if somebody is walking on banking institutions. In fact, some kind of semi-subtle approach—I would in, in some sort of bald-faced ‘‘extor- banks have begun to sell CRA loans on not call it that subtle in the end. It is tion effort,’’ the bank can tell them no Wall Street in order to acquire more sort of a sledgehammer, but it is hid- way and probably stand there with im- capital to make more CRA loans. den enough in a way that people who punity and justification in doing so. If some banker is complaining about Those are market forces that are being are not completely familiar with it or some illegitimate group coming in and harnessed to expand opportunity and with the process might say there are holding them up, then that banker, to grow our economy. some redeeming factors here. But the frankly, ought to be fired for not hav- Here in the Senate, lately, we have fact is, the reason it is done in this sort ing the courage and the guts to say: heard a lot of talk about the ‘‘oppor- of backdoor approach is that they Look, we are meeting our standards. tunity society.’’ The fact is, the Com- learned they cannot do a frontal as- We have covered all the people who munity Reinvestment Act exemplifies sault. They are not going to strike it have made legitimate requests. Your that notion. Credit is the economic altogether. It does not give people request is not legitimate. It will not lifeblood of every community, whether enough cover. So then you are left sort withstand the scrutiny in the light of it is rich or poor. In our society, I of analyzing: What is it that it is really day, and I am not going to be think it is fair to say that historically going to do? What is going to happen blackmailed, period. we know that credit denied is also op- here, in terms of this effort? Moreover, there are laws in this portunity denied. When you deny hard- I believe the Bryan amendment will country already on the books, Federal working Americans the chance to buy preserve the appropriate relationships laws, State laws and local—within their own homes or start their own by simply requiring that banks have counties—which district attorneys can businesses, you are denying them the and maintain a satisfactory CRA rat- prosecute with respect to those kinds opportunity to share in the American ing as a condition of exercising the new of extortion efforts. promise. affiliations allowed in this bill. The To suggest we are going to hold up This is a country where we have de- Bryan amendment also strikes the safe the financial modernization efforts of manded a lot of our citizens. We expect harbor language and the exemption the United States of America in a glob- them to make the most of their own from CRA regulations for banks with al marketplace over these anecdotal lives, to take responsibility for them- less than $100 million of assets. stories and not be able to find a com- selves and for their families—largely I listened to the chairman in the mon ground where we could fix or ad- because of the kinds of public policy committee and I addressed this di- dress the question of legitimacy—there decisions we have had the privilege of rectly—raised this issue of extortion. I are any number of language changes supporting here in the Senate with re- acknowledged at the time, and I will you could make in the standards or in spect to this kind of economic sharing, acknowledge on the floor, that I know the review process or in the process, all if you will. We say to Americans: If you of instances where people have come of which would be adequate to deal take the effort to live by the rules, to into a bank at the last minute, or at with the questions that the Senator show your creditworthiness, to stand the moment of a merger, feeling the from Texas has raised. But none of up within the economic structure, then iron is hot, and of course when the those is on the table, none of them. we have the ability to help provide bank wants the merger to move—care- What is on the table is an entire ex- some of the tools to build that decent fully and without ruffled feathers. emption for a whole set of banks for life for yourself. CRA was built on When the banks don’t want the regu- whom this has worked very effectively. that. lators suddenly getting their dander up Moreover, what is on the table is an ex- But what we are considering today— at this critical moment of merger. So emption of any consideration at all for and I heard the Senator from Wyoming people take advantage of this oppor- these remarkable new powers that are and I have heard other Senators try to tunity. going to be given to the banks which suggest this is really just a fixing of Let me say, I know of some instances demand that you make some kind of the CRA, that it doesn’t really take it where there have been some marginally judgment about what their commit- apart, it is going to leave it in place; meritorious requests. But the record of ment really is in their community. we are just going to take, whatever, the numbers of challenges—and I will You can talk to most of the bankers about 38 percent of the banks out from address that in a moment—is very in the country right now. under it—those are the banks under clear. It is so de minimis that no one The Wall Street Journal summed it the $100 million mark—and then we are can come to the floor with anything up this way: going to make it a lot more difficult to except pure anecdote, sort of a story Few Republicans share (the Chairman’s) passion for the (CRA) issue. Bankers don’t apply any real measurement because here or there, that suggests that some- love the CRA but have largely made their we are going to change the standard by how there is some massive problem. peace with it. . . . ‘‘CRA is part of the way which we measure a violation; and, we What bank does not deal with commu- we do business—we don’t have any problems are also going to change—according to nity groups, all the time—this is not with it,’’ says Pamela Flaherty, a vice presi- the chairman—we are going to exempt some sort of a last minute thing where dent at Citigroup, Inc. banks from protest based on a 3-year there are a bunch of unknown people It is not industry leaders or commu- satisfactory CRA record no matter sitting at a table who can walk into nity leaders who are driving this effort what. And of course for the new activi- the bank and the newspapers and the to undermine the CRA; it is the tend- ties we are empowering in this bill, it local television are all going to take ency in this Chamber and in our poli- doesn’t apply at all. them seriously. We are dealing, after tics for ideology sometimes to work

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00044 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8438 CONGRESSIONAL RECORD—SENATE May 5, 1999 against the needs of communities and denying private mortgage credit and the assembly line every single day. the interests of good public policy. business lending was literally dev- Thanks to CRA she has now made them When you measure what we are doing astating to the social and economic one of the top selling gourmet snack against the broad-based effort of the growth of Roxbury and other low-in- foods in all of Boston, and she has House of Representatives and the come neighborhoods in the inner city major airlines interested in serving her House Banking Committee to develop a and in rural areas. Over time, property chips to first-class customers. Without more broad-based effort, you have a values and small business activity the CRA, Mr. President, the commu- real confrontation with that approach. plummeted, and then crime and pov- nity of Jamaica Plain would not have If you look at some of the language erty escalated. received those kinds of benefits from we have heard about the CRA—com- We can recreate that cycle if we want economic development that has been paring it to slavery—that is the kind of to go backward in time, Mr. President. generated. In addition, it is also giving statement that just ignores the reality Activities like that are exactly what low-income communities a shot at of what the CRA has accomplished. brought the Congress to pass the Com- home ownership. The CRA, accepted by most bankers munity Reinvestment Act in 1977, to Julie Orlando is a single working in this country, supported by people encourage bank and thrift regulatory mother of three. She wanted to buy a like Alan Greenspan, supported by agencies to help meet the credit needs home for her family in Leominster, major bankers in the country, has in all areas of the communities that MA, which is Northwest of Boston. In brought billions of dollars of credit they serve. the days before CRA, she would not into African communities, Hispanic I don’t think we can afford as a na- have possibly been considered a likely communities, and Asian-American tion to roll ourselves back to those candidate to own a home, but because communities where thousands of banks days when it was more power to the the Fidelity Cooperative Bank was in- have become active partners in cre- powerful, more money to those who al- volved in the CRA coalition, she was ating opportunities for working fami- ready had the money, and less concern able to obtain a $72,000 mortgage with lies so they can become new home- and less effort to try to be the country no points. The city of Leominster pro- owners and by providing the capital to that all the speeches are about and all vided additional assistance to Julie and budding entrepreneurs. our days of celebration are about. her family. Because the Fidelity Coop- Slavery? That is an extraordinary CRA has worked in Massachusetts erative Bank participated in the CRA comment. Too many of our colleagues where there has been more than $1.6 coalition, she and her children can live are willing to forget the redlining and billion in commitments made by finan- with their first home, which is, after the racism that plagued lending in too cial assistance institutions to assist all, Mr. President, not just the Amer- many low-income communities in pre- low-income neighborhoods. These funds ican dream, but it is good for the com- vious years. Before 1977, when the Com- have been invested in home ownership, munity. munity Reinvestment Act became law, affordable housing development, mi- How many times have we heard of many financial institutions believed nority small business development, the problem of crime that comes from they had absolutely no responsibility new banking facilities and services, transient members of the community, to the communities they served. Some and it has made a difference in our people who do not have a stake in the financial institutions accepted racial inner-city neighborhoods from Roxbury community. That is exactly the type of and economic discrimination as part of to Jamaica Plain to the South End. assistance that CRA was designed to their mortgage credit and business Let me give a direct example. provide. lending policy. It is because we found Stacy Andrus, from Jamaica Plain, It is my hope we are not going to that too many banking institutions Massachusetts, was a restaurateur take measures here that deny a whole saw an ease to the profit line by mov- struggling to make ends meet and re- generation of CRA success stories in ing into certain areas and an unwill- tain her clientele in a competitive en- the future. The CRA and the Home ingness to do business and reach out to vironment. She knew she had to be cre- Mortgage Disclosure Act data continue Main Street with access to credit that ative just to keep pace. She began to show that blacks and Hispanics face we put the CRA in place. toasting chips out of pita bread to significantly higher mortgage rejection Studies from that time period show serve as finger food before meals. As rates. that some financial institutions rou- one might expect, those chips soon be- The Boston Federal Reserve showed tinely invested more than 90 percent of came the most popular item on the conclusively that African Americans their deposits that they received from menu. get turned down for a mortgage 1.6 low-income and minority neighbor- Like so many businessowners who times more often than whites, even hoods into other areas. Ninety percent know they have latched on to a great after you control for many of the eco- of the deposits that came from certain idea, she wanted to expand the oper- nomic income and creditworthiness dif- low-income communities went out to ation. She tried to bring the concept to ferences. other areas. We have a fundamental re- scale, but capital and credit were not A New York Newsday study, looking sponsibility not to start segmenting available to her; they were not avail- at 100,000 mortgage applications on and dividing up the financial market- able in Jamaica Plain. Even though Long Island, showed that blacks’ appli- place in a way that is going to allow their deposits went into the bank, they cations were rejected three times as people to turn away from that respon- did not come back into the community. often as whites’, even when they had sibility of inclusion that has benefited She could not find the help she need- the same income. everybody in this country and has ed until finally she started working In a study right here in the Wash- made this country a better place. with the Jamaica Plain Neighborhood ington, DC, area, completed last year, In Roxbury, MA, a low-income mi- Development Corporation. This cor- we found that significant lending dis- nority neighborhood within the city of poration works within a network of crimination exists against blacks and Boston, only 20 percent of home sales small business providers that use CRA Hispanics. were financed by financial institutions programs at local banks to secure fund- Mr. President, the need for the CRA between 1975 and 1976. But in the pros- ing for small businesses. With their remains very much alive in the United perous suburbs of Boston, 83 percent of help, Stacy obtained a $60,000 loan from States. Let’s put the rhetoric aside. home sales were financed by financial BankBoston. As a result, her business Let’s put the ideology aside. Let’s find institutions in the same time period. expanded rapidly: She has leased a pro- the common ground within the Senate The residents of Roxbury who were duction plant in Jamaica Plain; she whereby we can guarantee that we can able to obtain financing were forced to has residents of the low-income com- build a coalition that will support the use private mortgage companies, often munity working for her; she has put best of financial modernization and the at substantially greater expense than former welfare recipients on the pay- best of our effort to broaden the eco- at financial institutions. The cost of roll; she has 900 bags of chips rolling off nomic base of this country.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00045 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8439 I might add, some have suggested Several Senators addressed the So that is all interesting but largely ir- there is sort of a legalized concept to Chair. relevant. what has been called the ‘‘legalized ex- The PRESIDING OFFICER (Mr. SES- One of our colleagues said that I said, tortion.’’ In fact, some people have sug- SIONS). The Senator from Texas. or someone had said, that CRA is just gested that the regulators have as- Mr. GRAMM. Mr. President, you will an extortion program. No one ever sisted that process. hardly know where to begin when you made that statement. What I have said Let me say, Mr. President, I find it have listened to these speeches for a is that CRA has become a vehicle very hard to believe that people would couple hours, and most of them have where a tremendous number of actions suggest that Alan Greenspan, the nothing whatsoever to do with what we occur that certainly look like extor- Chairman of the Federal Reserve, for are talking about on the floor. tion. When you look at contracts that whom we have—all of us—such respect It reminds me of the old Lincoln are being signed, these individuals and for, is complicitous in that process. adage, where Lincoln was engaged in a groups are given large sums of money, This is what he said about the CRA: debate, and the guy debating Lincoln and then they sign a commitment that . . . the CRA process is something that we got up and gave a wonderful speech they will withdraw their objection. clearly have been supportive of and think is that had nothing to do with the subject That is a classic quid pro quo, that is crucial and necessary to the development of being debated; and Lincoln got up and the essence of extortion or bribery or communities. We think that it’s in the inter- said that his colleague had given a kickbacks. There are a lot of names est of the banks. We think that it’s in the in- wonderful speech that would be appro- terest of communities. you can use. But no one has suggested priate for another day and another oc- any of them in this debate. Many, Mr. President, the data from the reg- casion. most, almost all of the people involved ulators—let me just close on this—the I want to go through, roughly, 10 in CRA are conscientious and honest. data from the regulators is clear. The points that have been raised in all We are talking about people here who chairman of the Banking Committee these speeches, and then go back to are abusing the system. And even wants the Senate to fundamentally what we are debating. spokesmen for CRA, even spokesmen weaken CRA. He will stand up and No. 1, we have had a lot of speeches for community groups, say there are argue, this is not taking it away. He is for CRA. And one would get the idea in abuses, that the abuses undercut the going to try to point to the exemption listening to these speeches that some- system. As everybody who is on the for the small banks. And he will come one is proposing to repeal CRA. In fact, Banking Committee knows, when the back to the notion that it somehow is as far as I am aware, no one has ever CRA advocates testified before the still in effect, even though it does not offered an amendment or bill since 1977 Banking Committee, a clear point was apply to the new services that will be proposing repeal of CRA. made that abuses do occur. They called provided, and even though the 3-year Whether the record for CRA is as the abuses ‘‘greenmail.’’ I think the safe harbor provision is included. wonderful as our colleagues have standard term is ‘‘blackmail,’’ but no- But the fact is, that fewer than 1 per- claimed, have we built more houses be- body disputes that they occur. What we cent of bank applications have been re- cause the economy is better or because are trying to do is to deal with them. ceiving an adverse CRA comment. of CRA? Who wants to get into that de- In terms of half the banks being out Fewer than 1 percent of the 660 applica- bate? Because it is not relevant to of compliance, half the banks being af- tions that received the adverse com- what we are talking about, nobody is fected, there isn’t any proposal that ment were denied on CRA grounds—1 talking about repealing CRA. percent of the 1 percent. Not a single No. 2, nobody is talking about ‘‘turn- would let half the banks out of CRA. application receiving adverse com- ing back the clock.’’ What we are talk- Basically, the proposal in the under- ments has been denied since 1994. ing about is dealing with abuses that lying bill is that banks with less than So here we are with the entire regu- exist in the current system, and that $100 million in assets and which are latory structure of our modernization can and should be fixed. One of those also in nonmetropolitan areas, in rural effort of the financial services of our abuses basically has to do with ex- areas, that these banks be exempt from country held hostage to a few people’s traordinary power that protesters and CRA. Now, why? perceptions, based on ideology, of 1 per- protest groups have at critical mo- First of all, since 1990, over a 9-year cent of 1 percent, notwithstanding that ments when banks are trying to make period, there have been 16,380 examina- all of the banks in the country have decisions. The second has to do with tions of these small rural banks; 16,380 learned that this is, in fact, good eco- the relevancy of CRA, and which banks times Federal regulators have gone to nomic policy, good banking policy, and under what circumstances have rel- these rural banks. They have sat down they have accepted the CRA. evant requirements, and what are the for days and weeks, looking through It is my hope that our colleagues will regulatory burdens and costs involved. their records. They have done reports recognize that, even as this country In terms of a point that was made to determine whether these rural has grown strong and the economy and way back so many speeches ago—I for- banks are lending in their community the marketplace has grown, even as the get which one it was—that in 99 per- and meeting their community reinvest- stock market is reaching the extraor- cent of the cases where banks apply to ment requirements. dinary 11,000 level, the fact is that do something that requires CRA eval- After 16,380 examinations, only 3 there are more Americans who are uation, nobody challenges that action, banks have been found to be substan- poor, there are more Americans who that is a very misleading number, real- tially out of compliance. The cost of are living on 1989 wages, there are more ly, for a number of reasons. complying with CRA for these exami- children in poverty today than there First, most of these applications con- nations to the small banks has been were 3 years ago or 4 years ago in this cern the opening or closing branches. roughly $80,000 a year, according to the country, by a figure of about 400,000, They are not very relevant. It is basi- 488 letters we have received from small and the fact that too many families are cally the mergers and acquisitions that banks on this subject. working too hard at the bottom level are relevant to CRS protests. That is $1.3 billion of cost imposed on just to make ends meet. Second, as I have pointed out on small banks. I have read at great For us to backtrack on a funda- many occasions, most of the CRA ac- length letters about how small banks mental commitment about the rela- tion takes place not in the formal com- can’t serve their customers because tionship of financial institutions with- plaint, but basically when the pro- they have to do all this paperwork and in the communities in which they do tester goes to the bank threatening how it is interfering with community business, would be to turn our backs on that unless the bank takes certain ac- lending. I have read some passionate what has made America stronger and tion, often giving that person money, letters on this subject on the floor of better. And I hope my colleagues will that they are going to file a complaint. the Senate in this debate. I am not not do that. I yield the floor. So it never shows up in the statistics. going to reread them now.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00046 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8440 CONGRESSIONAL RECORD—SENATE May 5, 1999 The point is, $1.3 billion later, 16,380 payments that were made under CRA— fund, execution and delivery, $100,000 6 examinations later, crushing paper- something never contemplated; nobody months from now. That is the quid. work, cost burden on very small banks, on the Banking Committee in 1977, I Here is the quo: The group commits to many of them between 6 and 10 employ- don’t believe, thought CRA would ulti- withdraw all pending protests of regu- ees, $1.3 billion of costs banks have mately produce cash payments being latory applications and related mat- paid, and only 3 small rural banks have made to individuals and to groups; ters, but not to sponsor, either directly been found to be substantially out of they thought, as we have heard argu- or indirectly, to protest or supply in- compliance. ments all day, that CRA is about lend- formation in connection with any pro- What does our bill do? It exempts ing—we don’t know where all this test relating to the pending or future from CRA very small, very rural banks. money goes. We don’t know what per- blank applications with bank regu- In total, in terms of the number of centage of rake-offs, for example, these lators. banks, that is about 38 percent of the groups get on loans banks make, be- In other words, it doesn’t matter banks in America. In terms of avail- cause we don’t have the records. These what abuses the bank might do in the able capital, as you can see from this CRA agreements are confidential; they future. They are never going to protest chart, that is 2.7 percent of all the as- are not made public. That is something again because of this. At the request to sets in all the banks and S&Ls in later that we hope to change. send letters to the customers of the America. But let me just say, I have three bank—well, let me go on. Not only do Now, the logical question is this: 44 pieces of CRA agreements. These are they agree never to protest again on percent of our auditing effort is going all private agreements where the par- any issue, but they agree to purge the into banks that have only 2.7 percent ties have agreed not to make them files and data bases of all information of the assets, and they have been found public. We have redacted the names to relating to the bank’s customers. to be substantially out of compliance protect the people who committed not Now, it goes on: to immediately only 3/100 of 1 percent of the time. Is to make them public. cease all activities directed against the this not massive regulatory overkill? The point I am trying to make here bank; to maintain the confidentiality What does this have to do with meeting is how far away from lending, as we of this agreement—they have confiden- community needs for loans? If there conventionally know it, this is. tiality again here—and then: to cooper- has ever been an overreach in regu- This is from Bank A: Provide blank— ate with the community group, to help latory terms, imposing $1.3 billion of this is the CRA group—with a grant of them use this agreement to leverage cost on little banks and little commu- up to $20,000. Provide blank with a other financial institutions to get nities to turn up three banks in 9 years grant of up to $50,000. Provide blank money from them. In other words, not that have been substantially out of with a grant of up to $25,000. And on only are they paying this money, they compliance, this is regulatory overkill. this one they say why: to pay reason- are going to help them get other banks We are trying to fix it. able and necessary soft costs incurred. to pay it. In terms of exemption based on a 3- Provide blank with a grant of a reason- It is funny how little things grab year record, one of my frustrations in able amount. you. Maybe it is just me, but this one debating on the Senate floor—and I And then after they agree to pay that hits me the hardest. I was wondering guess all of us can be accused of doing money, look at this provision: Blank why we were getting these letters from it; I try to, at least within my own agrees to withdraw on the date hereof banks in favor of CRA when the bank mind, be careful about things I say. I the comment letter, dated blank 28, 19 officers were telling me—and in some try to put my argument in the best blank, and any related materials filed cases saying publicly—that CRA was light I can. Everybody else does. I try by blank with the Office of the Comp- blackmail. Yet, I was getting letters not to say things I don’t believe to be troller of the Currency, the Federal Re- from these banks saying CRA is great. true. But we continue to hear these serve Bank, and the board—and it goes Well, here is the reason: things like, if a bank has been in com- on. Blank will work with the blank to es- pliance three times, they are exempt The point is, on one page they give tablish a clear, written declaratory from CRA. That is not what our bill all these grants to groups, and then on statement indicating support for the does. the second page the groups agree to Community Reinvestment Act and the Here is what our bill does. Let me ex- withdraw the complaints they filed Home Mortgage Disclosure Act, and plain the problem. In fact, let me have against the action the banks want to the party’s opposition to any attempts that quote from the law professor at make. to weaken the law. Blank will send the Cornell. This quote is from Cornell law Here is the point: Did the groups file final copy of this statement to the professor Jonathan Macey. Jonathan the complaints to get the money? What blank. Macey is one of our Nation’s premier about the legitimacy of the complaint? In other words, they will let them go experts in banking law and is very Did it go away when they got the over and rewrite the letter they are knowledgeable in this whole area of ap- money? going to send. And they are going to plication of CRA. In evaluating what is It goes on. We are getting more and send the letter to the American Bank- happening, this is basically what he more of these every day. Then, in every ers Association, Federal Reserve says: one of these agreements we have seen, Board, Office of the Comptroller of the You see really weird things when you look there is an agreement by the commu- Currency, the whole congressional del- at the code of Federal regulations . . . like nity group or the individual and the egation of their State, and to all mem- Federal regulators are encouraged to leave bank not to disseminate or otherwise bers of the House and Senate Banking the room and allowing community groups to make available to the public copies of Committees. negotiate ex parte with bankers in a commu- this agreement. So, Senator BENNETT, when you got a nity reinvestment context. . . . Giving jobs Here is a second bank agreement, letter from this bank telling you that to the top five officials of these communities or shake-down groups is generally high up on Bank B: Blank will receive a fee of 2 CRA is the greatest thing that has ever the list (of demands). So, what we really and three quarters percent of the face been, you probably did not know that have is a bit of old world Sicily brought into amount of each program loan made by was the result of a CRA agreement so the U.S., but legitimized and given the pat- blank. that a bank could do business in Amer- ina of government support. Now, I wonder if people in that com- ica. And we are not talking about Hon- Let me see those CRA agreements, if munity realize that this undisclosed in- duras; we are not talking about Thai- you will stack all those back up there dividual, or group, is getting a rake-off land. We are talking about the United one more time. I am going to zip of 2.75 percent of the face value of States of America, and we have through them real quickly. every loan that is being made by this banks—some of the richest and most One of our problems in evaluating bank. Blank will receive a $200,000 fee powerful institutions in America—that what happened to the $9 billion of cash as reimbursement, $100,000 payable are having dictated to them at this

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00047 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8441 very moment that they have to write rency, there has to be a hearing for any Why in the world would we stand by us letters telling us things they do not complaint that is lodged. and allow a bank that has complied believe. How is that happening? How But what our amendment adds is the with the law of the land and been eval- can that be happening in America? I requirement that if this bank has a uated three times in a row as being in ask you, how can it happen? long history of being in compliance, be- compliance to be prevented from exer- Not only is it happening, it is being fore the regulator can stop the action cising a right they have earned unless condoned because, as the law professor that they have earned the right to un- somebody presents credible evidence, from Cornell said, we have given the dertake, the protester must present substantial evidence, to the contrary? I patina of Government support to some- some substantial evidence. In other don’t understand. Why would anybody thing that if it happened to an Amer- words, if you are a good actor and you be against this change? ican bank in Thailand, we would file an have been evaluated 3 years in a row I continue to be stunned that our col- unfair trade practice against them. and were found to be in compliance, leagues talk about CRA and how won- So when you are getting all these let- you are innocent until proven guilty. derful it is. That is not what we are ters telling you how wonderful CRA is Somebody can’t just walk in and say a talking about. from banks, remember this agreement. banker is a racist and a loan shark. Should you have to present some evi- In fact, I received such a letter from a Some protesters have done exactly dence if you are going to try to deny particular bank. Fortunately, to show that. There is a CRA protester who people the rights they earned under the you this is a very good and honorable calls himself an ‘‘urban terrorist,’’ who law? How can that be unfair? How can bank, they say in their letter they used those charges against a bank, har- that be reaching? How can that be bur- have been forced to send this letter as assed them for 4 years, went to a densome? Who could be against that? a result of a CRA agreement. speech of the president of the bank at The second provision of the bill pro- I discovered this letter because there Harvard University, disrupted the vides relief to small banks in rural was an editorial written attacking the speech, made this man’s life miserable areas. I have gone through the figures: bill quoting this bank, or this letter, for 4 long years, until the bank gave $1.3 billion later, in this decade of au- interestingly enough. There was an edi- him $1.4 million and a $200,000 grant dits and costs imposed on the banks, torial written quoting a letter from and set up an organization that now three small rural banks—three one- First Union Corporation, a wonderful, lends $3.5 billion, totally unregulated hundredths of 1 percent—are bad ac- great bank. They were quoted in the by the Federal Government. He gets a tors. Is that not regulatory overkill? editorial as saying how great CRA was 2.75-percent rake-off of each one of We have forced little banks, many and why we should not be making any those loans, and nobody knows what he with just 6 to 10 employees, to pay $1.3 changes to the bill. Well, I said I want does with the money. He is not ac- billion in compliance costs, and in to see this letter. So we got the letter. countable to anybody. 16,380 examinations, only 3 of them Let me read the first paragraph: Now, all we want to do is say if a have been deemed to be substantially As part of a CRA pledge we made during bank has consistently been in compli- out of compliance. Does that make our merger with CoreStates, First Union Na- ance and you want to stop them from sense? Is that crazy? Did I miss some- tional Bank committed to send a written merging with another bank, or opening thing? statement to certain individuals or organiza- a branch, you have to present some evi- I could read to you letter after letter. tions clearly expressing our position on CRA dence. Now, what is the standard we We have had 488 letters from banks and HMDA regulations. We, as an organiza- have used? The Presiding Officer, as a urging the committee to take this ac- tion, are very committed to serving all of distinguished attorney and former tion. I have read them before; I will not our communities, including underserved prosecutor, knows that substantial evi- do so again. areas. We are happy to provide this state- Finally, let me remind my colleagues ment. dence is the most defined term in American law. It is referred to over 900 that the amendment that is pending Then they go on to say that nothing times in the United States Code. doesn’t just strike these two provi- in the letter is meant to be an endorse- There have been 400 court decisions sions—the ‘‘integrity and relevance’’ ment or opposition to any particular that have defined ‘‘substantial evi- provisions—it does far more than that. bill. I know we have one of the most dence.’’ It would create a situation where indi- distinguished former prosecutors in So what standard do we require a vidual officers and directors of a bank America sitting in the Chair. I have to protester to meet if he tries to impose could potentially be fined up to $1 mil- say—not to speak for him, because in potentially hundreds of millions of dol- lion a day for noncompliance. his role as Presiding Officer, he can’t lars in costs on a bank, and to stop a Remember, in these little banks you speak until he comes down here—what bank from doing what it appears to be have 16,380 examinations over the dec- is the difference between this and the qualified to do? They have to present ade, and just 3 banks have been found old protection racket that existed evidence. to be substantially out of compliance. when I was a child? I am proud to say Here are four standards set by the What is the justification for this $1- that my uncles, as sheriffs and police Supreme Court as to what ‘‘substantial million-a-day fine? officers, broke up some of those protec- evidence’’ means: I have letters from the American tion rackets. But the only difference is They have to present evidence that is Bankers Association, and from the that this is Government; this is the understood to mean ‘‘more than a mere Independent Bankers Association, Federal Government that is basically scintilla.’’ pointing out the obvious. allowing this to happen. That is a standard we are setting. This provision that has been offered Now, we are not talking about re- You can’t come in and stop a bank by our colleague from Nevada, and was pealing CRA. We are not talking about with a consistent record of CRA com- offered in committee by Senator SAR- ending a program that obviously has pliance. You can’t automatically stop, BANES, will make it virtually impos- had many successes. We are talking shut down, and delay the process un- sible for small banks to get quality di- about trying to deal with abuse. So less you present evidence that is ‘‘more rectors, because who can afford that what are the two things we do? No. 1, than a mere scintilla.’’ potential liability? It will make it vir- we say that if a bank has a history of Unless you present such relevant evi- tually impossible for small banks, who being in compliance with the law, if dence as a ‘‘reasonable mind might’’— can’t buy the insurance to protect peo- they have been evaluated 3 years in a notice it didn’t say ‘‘would,’’ but ple from liability, to hire quality bank row and been found to be in compliance ‘‘might’’— ‘‘accept as adequate to sup- officials. with CRA, and if they are presently in port a claim.’’ The bill goes on and on and on in the compliance with CRA, then any indi- You have to present evidence that is most massive overkill of expanding vidual or group can protest, file a com- real, material, not ‘‘seeming or imagi- CRA to nonbanking activities. Cur- plaint; and under the existing regula- nary,’’ and considerable in amount, rently, a bank can sell insurance with- tions of the Comptroller of the Cur- value, and worth. out CRA approval. This substitute that

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00048 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8442 CONGRESSIONAL RECORD—SENATE May 5, 1999 is now pending would require CRA ap- will we allow any change whatsoever, Mr. SARBANES. I don’t know any proval for that. Banks can sell securi- no matter how bad the abuse is in CRA. study that validates that figure as the ties without CRA approval. This takes I don’t understand it. I think it is an right figure. CRA out of banking and into other extreme view. I hope that even yet, by Even assuming for the purpose of this areas. the time we get through conference, by Alice-in-Wonderland discussion that What is the justification for that? the time we have had a chance to dis- both the number of exams and the The justification for requiring CRA cuss this over many more times, per- costs which we were then told came to was that banks have a federal subsidy haps there can be a compromise. a $1.3 trillion burden, the fact is, it is through deposit insurance. So that is I yield the floor. $1.3 billion. That is still a lot of money. public insurance, and making banks do Mr. DODD addressed the Chair. I don’t pretend to the contrary, but it things in the public interest could be The PRESIDING OFFICER. The Sen- is a lot different from $1.3 trillion. It justified. But how does expanding that ator from Connecticut. was escalated 1,000 times. requirement outside banking make any PRIVILEGE OF THE FLOOR Let me give one other example. We sense? Are we simply going to keep Mr. DODD. Mr. President, I ask unan- were told the CRA is allocating more writing laws telling people what to do imous consent that Karen Brown of my money each year than the gross domes- with this money? office, a fellow, be granted floor privi- tic product of Canada. The CRA com- Basically we have a choice. The leges during the consideration of S. 900. mitments are over a 10-year period. choice is the following: The PRESIDING OFFICER. Without Those commitments, factored out over Both of these provisions concern objection, it is so ordered. a 10-year period, do not begin to ap- CRA. The bill that was adopted by the Mr. SARBANES. Mr. President, will proach the gross domestic product of Banking Committee has two reforms— the Senator yield to me for 2 minutes Canada. one an integrity provision, and one a without losing his right to the floor? These are only a few examples. We relevancy provision. The amendment Mr. DODD. Fine. could give a lot more. I want to under- that has been offered strikes both of The PRESIDING OFFICER. The Sen- score these figures that come floating those reforms and imposes all of these ator from Maryland. in out of the air, and we hear this long new regulations. Mr. SARBANES. Mr. President, I disquisition. When we start probing So I think it is as clear a choice as have refrained from taking a lot of de- these figures, we discover it is not you can make. bate time this afternoon, because a lot there; it is Alice in Wonderland. Just a couple of other points, and I of our colleagues want to speak. I rec- I thank the distinguished Senator. will stop, because I know that others ognize that. Of course, the temptation Mr. DODD. Mr. President, I rise in want to speak. One of our colleagues is very great to sort of rise every time support of the Bryan amendment. My quoted the Wall Street Journal. The the chairman of the committee speaks. fervent hope is that we can adopt this Wall Street Journal has editorialized He has done that at some length here amendment and move on with passage not once but twice in favor of the posi- this afternoon. So I am not going to do of this bill. There are other out- tion the committee has taken here. it now, because I have colleagues here. standing issues that need to be re- I urge my colleagues again to look at I hope before we get to 7 o’clock I will solved. No issue is as galvanizing or as the debate—not get carried away or be get a chance to have a few minutes to important as this issue of the Commu- confused by people who say the com- make a statement. nity Reinvestment Act and how it is to mittee has gutted CRA, is killing CRA, But I want to say that there is kind be handled. or is repealing CRA. We are not doing of an Alice-in-Wonderland quality to My friend from Texas, the chairman any of those things. But we are dealing this debate. The chairman pulls these of the committee, and I have worked with abuses of CRA. They need to be figures out of the air. I don’t really very closely together over many years. dealt with. They scream out to be dealt know where they come from. I asked We have been each other’s chairman with. him where they come from. He says and ranking minority member, depend- If I could make a plea to the other there have been 16,000 something ex- ing on who was in control of this Au- side, it would be a simple and short aminations of banks under $100 million gust body. We have dealt with securi- plea: If we don’t fix the abuses of CRA, in nonmetropolitan areas. ties matters, we have written legisla- by the time we are through letting peo- I don’t know where he gets that fig- tion together, passed it together here ple know what is happening in terms of ure. The figure from the Federal De- on the floor, carried it through con- these $9 billion of cash payments, and posit Insurance Corporation is 11,445. ference, overrode the President’s veto— by the time we finally do run down and He says only 3 have been found in sub- the only time a veto by this President know where all of this money is going, stantial noncompliance; the figure is has been overridden. and we find that much of it—or some of 18, and another 320 have been found a It is not easy for me to disagree with it—is not being used to benefit people need to improve. This chart is from the a man with whom I have agreed on who are supposed to be benefiting from FDIC. many occasions in dealing with finan- community loans, I think it is going to The Chairman says only three—it is cial issues. However, on this we have a undercut CRA. not only three. I want to make that fundamental disagreement. I listened If I were a strong proponent of CRA, point. for a good part of the chairman’s pres- I would be for these reforms, because Mr. GRAMM. Will the Senator yield? entation, especially the last part of the they clean up a program that clearly Mr. SARBANES. I yield. presentation dealing with the alleged has had an impact. But our col- Mr. GRAMM. These are figures from abuses that have occurred. I know of leagues—as they did on welfare—it was the interagency CRA rating. nothing in the bill violating existing abused and abused and abused and Mr. SARBANES. The Senator said federal laws on extortion. We may do abused and abused. But they would earlier today that the cost this is im- some things in this bill Members do never ever, ever, ever say that it posing on small banks is $1.3 trillion. not want, but to the best of my knowl- should be fixed. Finally, the American I am thinking to myself, $1.3 trillion edge the criminal code is left intact. people rose up and elected a new Con- from these examinations? So I asked Nowhere in this bill do we touch on the gress. We are probably in the majority him, How did you get that figure? He issue of whether or not people are because of their intransigence. So God took the number of examinations— going to be excused from engaging in does provide His services from time to about which we have just disagreed— extortion, blackmail, green mail—call time. And then it was fixed. They prob- and he multiplied it by 80,000. I am not it what you will. ably could have had it closer to what sure where he got the 80,000 figure. The suggestion that there are serious they wanted had they been willing to Someone must have written in and violations of law—State and Federal fix it. said: That is what it costs our bank. that I know of—ought to be brought to But the position we have heard today Mr. GRAMM. That is right, a small the proper authorities. If someone be- over and over is, never ever, ever, ever bank said that. lieves they have been extorted, then we

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00049 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8443 have Federal prosecutors and State ior. Only a small percentage of Ameri- would like to know more about it. A prosecutors to bring those matters to cans violate the law. But that is not an great deal of information was redacted. the light of day and those accused can excuse for not writing laws, because, We do not have the whole agreement. be brought to the bar of justice. unfortunately, some do in fact break But I tell my friend from Texas, I am Second, I have never known the the law. concerned about it, too, and we ought banking community to be terribly shy So when it comes to the Community to take a good look at this. Let us re- about things that they want. They are Reinvestment Act, we seek here not to member, however, that we ought to usually pretty vociferous. They are lay a burden on the overwhelming ma- take a look at the 360 agreements, and never reluctant to tell us how they jority of banks who do a good job. We many of those probably are proper and want us to vote on matters that affect must recognize that there are institu- worthwhile agreements. In fact, many their institutions. They lobby quite ef- tions which have discriminated against lenders also require counseling for cer- fectively. They do a good job. The idea various groups in this country based on tain loan practices because they im- that the banking constituency, the race, religion, ethnicity. So several prove the quality of loans. To meet thousands of banks all across this years ago, we decided to enact the commitments, banks sometimes pro- country, are somehow afraid of some Community Reinvestment Act to re- vide payments to community groups community-based groups, and would quire that lending institutions, deposi- for services provided. It is not some not bring to light their concerns be- tory institutions, pay attention to our outrageous behavior. It goes on all the cause of fear of some retribution, just nation’s underserved, pay attention to time. But, nonetheless, if problems doesn’t hold up when it comes to how our small farmers, and pay attention exist, let’s look at them. the banking community generally to our small businesses. If you are But with all due respect to my good makes its concerns known. going to do business in Alabama or friend from Texas, it appears as though The fact of the matter is, here on business in Connecticut as a depository we were sort of squirrel hunting with a this issue there really is not a con- institution, we do not want you to ne- machine gun here. That is not what his stituency for the provisions in this bill glect the people in your communities, amendment or the language of the bill dealing with CRA. Usually we have a in your States, on any basis. does. All we are saying here is we want litany of organizations that are in So we passed CRA and it has worked to preserve the Community Reinvest- favor of or against a provision, organi- well. My colleague from Texas has said ment Act in a new financial frame- zations and groups which have felt out- that there are extortionate practices work. This modernization bill allows raged or discriminated against in some ongoing. Let me quote him, from a for the consolidation of financial serv- way and will stand up and defend in a statement made last October. The ices. If we are going to do that—and I very loud and clear voice their rights chairman of the committee said: think we should, I am a strong sup- or how their rights are being infringed It has now become common practice in porter of it—then it seems to me we upon. CRA for professional protest groups to pro- should be preserving the Community In the last almost 6 hours of debate, test a bank’s community service record and Reinvestment Act to ensure that we do in turn to use the leverage of those protests I defy anyone to show me a list of orga- to extract bribes, kickbacks, set-asides in not have discrimination in lending. We nizations here across the country that purchases, quotas, hiring and promotion, must ensure that Hispanics, African feel as though the Community Rein- none of which has anything to do with CRA Americans, Asian Americans, and Na- vestment Act is somehow a great in- and the lending practices of banks in the tive Americans, as well as small busi- fringement on their ability to conduct communities that they serve.’’ nesses and small farmers, are not going their business. It is nonexistent. In It is a pretty broad statement. Now, to get short shrift. We are going to fact, the only time we have ever actu- let me give you the facts. Mr. Presi- have a lot of large institutions, a lot of ally voted on these matters prior to dent, four-tenths of 1 percent—let me large banks. We want to make sure the today is when the House Banking Com- repeat that, four-tenths of 1 percent of average citizen is not going to find mittee recently voted—51–8, Democrats applications have resulted in agree- himself or herself denied fair access to and Republicans, voted for provisions ments with community groups; four- credit. That is what the Community we are seeking here contained within tenths of 1 percent have resulted in Reinvestment Act has been able to do the Bryan amendment. The Banking these agreements. We have had them for millions of Americans. Committee last year voted 16–2, Demo- up here on placards and the easel here I listened to my colleague from Mas- crats and Republicans, in favor of the today. A great amount of time has sachusetts and others here today go provisions that we are trying to re- been spent talking about these out- over the statistics of how vastly the insert into this legislation. There is rageous provisions in these agree- availability of credit has increased to overwhelming evidence from the Fed- ments. If one sort of casually tuned groups who in the past were denied eral Reserve Board, the banking regu- into the debate the assumption would those opportunities. We in this country lators, banks all across the country, be, as the Senator from Texas has said: cherish the notion of equal oppor- that the Community Reinvestment Act It is common practice. Common prac- tunity. We have never achieved the is working, and working well. tice? Four-tenths of 1 percent of all the perfection that our Constitution and Let me quickly add I have never met applications? Under any estimation our Founding Fathers sought in cre- any institution which was overly en- that is not a common practice, less ating equal opportunity for every cit- thusiastic about any regulation— than 1 percent of all the applications. izen in this country, regardless of State, local or Federal. They usually During the past 21 years, there have where they come from or the color of do not welcome these and I understand been approximately 360 agreements their skin. We all know, painfully, the why. There is a cost associated with it. reached. How many applications do you discrimination that existed for a long I appreciate that they try to keep their think there have been in the past 21 time in all parts of our country. costs down. years? Mr. President, 86,000; 86,000 ap- Let me reiterate—all parts of our Most banks, certainly in my State, plications and 360 agreements. When country. I could take you to the North- have been active in our community and you stand up here for an hour and a east. You do not have to go to the do a great deal of good. However, as the half or so and list these agreements home of my friends from the South in Presiding Officer who has been identi- that have been reached, you leave our this country to find discrimination in fied as a distinguished scholar of the colleagues and others with the impres- lending. In Connecticut, a year or two legal codes of our country knows, we sion that this has, to quote my friend ago, you could see the redlining that do not write laws for the overwhelming from Texas, ‘‘become common practice went on. People talked about this majority of Americans who obey the in CRA.’’ That is an exaggeration. That being a southern issue. That is untrue. law, who try to do the right thing. is an extreme exaggeration. I could take you to places all across Laws are written for those who try to I do not like what I heard in these this land where redlining occurred, abuse what we believe is proper behav- agreements. It bothers me a bit. I where neighborhoods and communities

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00050 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8444 CONGRESSIONAL RECORD—SENATE May 5, 1999 were denied equal opportunity. If they would like to start a new business, buy percent of all the banks and thrifts in are creditworthy people, they ought to a new home, get a chance to share in the United States. get the credit and financing to buy a the American dream. And the Commu- Again, I can understand if you just home, start a business, and get on their nity Reinvestment Act has been the hate CRA, you just think it is a bad feet. Because of these discriminatory engine for many achieving those de- idea and we ought to get rid of it. Then practices, we passed the Community sired results. I accept that—I disagree with it, but I Reinvestment Act. It has made quite a Again, in the past, we have seen accept your position. But if you believe difference in our country. It is not a votes of support on CRA by our col- CRA makes a difference and it actually perfect condition yet, but we have leagues, Democrats and Republicans. It helps rural people have greater access reached into the communities of people would be a great pity, indeed, for this to fair credit, then you must acknowl- who never had a chance before and bill to fail over this issue. edge that this bill exempts 76 percent they have a chance today. It would be a great pity, indeed. This of rural banks in this country. Vir- Now we are going to allow these in- issue ought not to be the one that tually one out of every three banks in stitutions to affiliate, and engage in causes this bill either to be defeated or the country will be exempt from CRA. new financial activities. With this leg- to be vetoed by a President and sent That seems to me to go too far. islation, are we now going to deny back after all the years we tried to get CRA loans in rural areas assist small them the very benefit that the Commu- this done. farmers in obtaining credit. Small nity Reinvestment Act has afforded We are 240 days away from the next bankers have historically received during the past 22 years? I do not think millennium, the year 2000. The world lower CRA ratings, quite candidly, we ought to deprive them of that. and its financial markets are getting than larger banks and have invested That is what the Bryan amendment more complicated. The United States less in their communities. On average, attempts to address in part. It says we of America has always been a leader in 50 percent of large banks have a loan- ought not to exclude certain credit- financial services. I do not want to see to-deposit ratio below 70 percent. 25 worthy consumers in the process of al- us lag behind because we couldn’t come percent of small banks have a loan-to- lowing banks to expand in these new fi- to terms with what is essentially a fun- deposit ratio of less than 58 percent. nancial areas. To suggest that the ex- damental civil rights issue. I do not The supporters of the small bank ex- tortion of banks by community groups want to see us lose our leadership role emption contend the CRA creates an is somehow a common practice—again, in the global marketplace because we onerous regulatory burden. However, four-tenths of 1 percent, 360 applica- decided we were not going to expand the federal banking regulators specifi- tions out of 86,000, is not legitimate. the equal opportunities that are so cally reduced the regulatory burden on Under anyone’s estimation, that is not much a part of this country’s heritage. banks when the new CRA enforcement justification for weakening the Com- I am concerned that we are willing to rules went into effect 3 years ago. munity Reinvestment Act in the 21st give up all the other things we are try- These efforts streamlined CRA, facili- century. ing to achieve in financial moderniza- tated easier compliance by lenders, and Again, there is no constituency here. tion over CRA provisions that are not reduced paperwork requirements. Most people, I think most of my col- supported by the banks they purport to Addressing the specific point the leagues from all across this country, help. Senator from Texas made that some- believe the Community Reinvestment In fact, Mr. President, I will include times these banks have a few employ- Act is doing a good job. Nobody here in the RECORD, and others have al- ees—and, again, I do not want to over- wants to be on the side of an equation ready, countless statements from many load that small bank—in 1996 we that says: Having made these gains others— the Federal Reserve Chair- streamlined that process considerably now we are going to turn back the man, the Treasury, and major banks in for them. clock. We should not do that. I do not all parts of this country who have said If there are some other ideas that believe the people who have commu- the Community Reinvestment Act is will help achieve that, I think we nicated with us, who write us—bank- working. Sometimes conflicts occur; it ought to listen to them. Again, think ers, consumers—said that. is difficult. Sometimes we have two not only about the 8 or 10 employees of One of the things we need to keep in groups we admire and support, that are that small bank, but think about those mind as we talk about banking legisla- fighting hard for their points of view, small farmers who do not have any tion and financial institutions in gen- and we are asked to make a choice be- other choice but to do business at that eral, is that one of our major respon- tween them. That can be a hard deci- bank. Small communities do not give sibilities is to ensure that our nation’s sion. you much of a choice. Your local farm- financial institutions are going to This is not a hard decision. There is ers in Alabama or Connecticut have work well. So we pay a lot of attention no one on the other side of this equa- one bank to go to. It is not like living to their needs, as we should. But we tion. Yet we are dangerously close to in New York City or Washington, DC, also need to pay attention to the peo- killing an otherwise great bill that where you can walk down the street ple who do business with our financial does a lot of good things. and compare which bank will give you institutions. They are an important As I said a moment ago, we have an the better deal. part of the equation here as well. Let obligation to make sure our financial Under this bill, if you have only one us not forget the people who show up at institutions are strong. We have an ob- bank window to go to, and you are liv- that bank window, who go in nervous ligation as well to see to it that the ing in rural America, you will be told about whether or not they can get a users of these financial institutions are that your bank is exempt from having home loan. Let us not forget the person not going to be adversely affected by to see to it that you are going to be with a good idea to start a business legislation we pass. dealt with fairly. There is something who needs to know if that local banker Let me focus for a second on the seriously wrong here. will take a chance on him, back him, small, rural bank exemption that is in- Streamlining the process for rural give him a chance to get on his feet. cluded in this bill. The bill exempts small banks is something I applaud; it Those are our constituents, too. They rural banks with less than $100 million is something we ought to move ahead are a fundamental part of this equa- in assets from the requirement of CRA. on to make it easier. I do not want peo- tion. This exemption addresses that there is ple to be denied options, denied It is not just the person behind the some undue burden imposed on small choices, and to be discriminated grate; it is the person in front of the banks complying with CRA, and there against when it comes to getting the grate, too, who we have an obligation may be some merit in that. But the credit they need. to watch out for when we pass financial provision in this bill which the Bryan According to Christopher Williston, services modernization legislation. It amendment would take out exempts 76 the president of the Independent Bank- is those people out there tonight who percent of rural banks from CRA, 38 ers Association of Texas:

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00051 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8445 Most small banks are really very accus- I hope at 7 o’clock, when the vote be- CRA matter and examine it at great tomed to complying with CRA. . .. Now they gins and as Members come to the detail. I think that is a salutary thing know exactly what the regulators are look- Chamber to cast their ballots, they will to do. ing for, many of my members would say CRA keep in mind the importance of this But we have an opportunity here in is here and I can live with it. bill. And to a far greater extent, keep this bill to take some steps which I Mr. President, again, if there are spe- in mind those who depend upon us to consider to be relatively modest and cific problems with the implementa- see to it that they are going to have relatively straightforward. The one I tion of CRA, if there are certain activi- equal opportunity in America, a chance want to focus on is the exemption of ties that should be considered that are to participate in the American dream CRA, the CRA requirement for institu- not considered, then the appropriate in the 21st century, and will not be de- tions that have $100 million or less in way to address those specific concerns nied because of an action we take to- aggregate assets. is to work with the regulators or come night by denying the preservation of I want to share with the Senate the up with a specific legislative approach. CRA in a new financial services frame- reaction of banks from my home State The Senator from Texas, our distin- work. that have been contacted about this. guished chairman, should remember The PRESIDING OFFICER (Mr. And this is their information. This is our conversations to address this and SMITH of Oregon). The Senator from not some professor at some university. have some hearings to look into the Utah. This is the everyday banker doing busi- issues he raised. Mr. BENNETT. Mr. President, I have ness in the everyday community. And I Again, don’t exaggerate and turn listened to this debate with some inter- will go beyond simply quoting the let- four-tenths of 1 percent of the applica- est. I have enormous respect for mem- ters because I want to put it in context tions into a common practice, and then bers of the Banking Committee on so you can understand the market. miss the opportunity to include reason- which I have served since I came to the I have said around here before—and able CRA provisions in this consolida- Senate. I know there is good intention undoubtedly in the spirit of the Senate tion of financial services. on both sides of the issue, on both sides where there is no such thing as repeti- I hope there will be enough votes on of the aisle. tion—I will say, again, that if I could the other side to support the Bryan I echo the comments of the chairman control what we engrave in the marble amendment. I am fearful if we do not of the committee in that much of the around here to remind us of our duty— do so, this bill is doomed. I mentioned debate that I have heard has been fo- not to denigrate the marvelous phrases at the outset of my remarks the other cused on the wrong issue; that is, you that are here—I would have engraved day that my colleague from Maryland would think that this was an attempt in stone, at least in our committee and I have been at this together for the on the part of the majority in the com- rooms, the phrase: ‘‘You cannot repeal full 18 years I have served in the Sen- mittee to repeal CRA. I do not condone the law of supply and demand.’’ ate. He has been at it longer than that, redlining. I recognize that the decision We try to do that continually in Con- having served a bit longer than I have which was made by the Congress in 1977 gress. We try to think that markets do in the Senate. Nothing—nothing— to create CRA was motivated by a gen- not matter, that governments are would make me happier than to pass uine abuse that required a genuine smarter than markets, that govern- this bill and expand and consolidate fi- Federal fix. ments can make decisions that inter- nancial services to serve consumers’ At the same time, I recognize also fere with the law of supply and demand needs and keep America in a leadership that under Secretary Rubin’s leader- and produce beneficial results with no position on these issues. ship, attempts have been made to al- side effects. People have been trying to However, I cannot support a bill that leviate the regulatory burden of CRA, do that in government not only for turns its back on my constituents at that there has been a recognition on centuries but for millennia. And they home. I want to help my financial in- the part of this administration—I always fail. stitutions in Connecticut. I want to think belatedly, but nonetheless I will Here are the market realities with help banks across the country. But I accept it whenever I can get it—a rec- respect to CRA. cannot, in doing so, turn the clock ognition that CRA has gotten out of I first quote from a letter of the back on the gains, on the strength- hand and has become, in some in- Cache Valley Bank. No one in this ening of America that we have made stances, a paperwork burden that is Chamber knows where Cache Valley is; with the Community Reinvestment nonproductive and anticompetitive and but I know where Cache Valley is. I Act. puts an undue burden on places where have spent a lot of time there. My fam- Whatever shortcomings it has—and I it should not be. ily has done business there. We have am certain they are there, CRA is not The question is not, Should we abol- owned a business there. The president perfect—let’s fix the shortcomings. ish CRA? The answer to that is clearly of the Cache Valley Bank says in his Let’s deal with those, but do not de- no. The question is not, Should we turn letter: prive people in this country of the in- our backs on those people who have Our community is a middle class farming creased opportunities. We have a CRA been benefited by CRA? The answer to community with a university. Most all of bill on the books that has worked well, that is no. our customers are of modest income, small even by those who must bear the bur- The question is, Can we streamline businesses and small farms. The rich profes- den of implementing these regulations. CRA, as we are going through the proc- sionals have gravitated to the local credit We must no place in jeopardy an other- ess of modernizing our financial insti- unions where they know they can get some- wise fine bill that, in my opinion, de- tutions, in a way that recognizes the thing for nothing. serves broad-based support in this reality of the marketplace? And there That last sentence indicates how he Chamber and the other body. the answer is yes. feels about the competitive impact of I hope that we will stand at 7 p.m. to- One of the criticisms which has been credit unions in Cache Valley. night when the votes are cast, in what made, and I think with some justifica- He says: may be the only civil rights vote of tion, is that a good part of the debate We are chartered to serve our community. this Congress, and the Bryan amend- has been anecdotal; that is, one situa- We have no business going outside our com- ment will be adopted. Maybe other tion has been described, and we ex- munity. We live off the ability to say we are civil rights votes will come along, but trapolate from that, and then another a hometown institution. as of right now, this will be the only has been described, and we extrapolate Let me underscore that last sentence test as to where people stand when it from that. again. ‘‘We live off the ability to say comes to seeing that equal opportunity I agree with those members of the we are a hometown institution.’’ in America is going to be at least pre- committee who have suggested at some In Cache Valley, there are branches served in this Congress and not set point it would be well for the com- of large banks, large banks that are lo- back. mittee to have hearings on the whole cated someplace else. There are, as an

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00052 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8446 CONGRESSIONAL RECORD—SENATE May 5, 1999 earlier somewhat sarcastic comment of this small institution. How does he its purpose to produce a meaningful indicated, credit unions. They happen survive under these competitive condi- impact for those in need in commu- to be very large credit unions. We have tions? He survives by serving the com- nities where they were not getting some of the largest credit unions in the munity. This is what he has to say: served. United States in Utah because of Exempting our institution from CRA re- I am hoping that the reforms estab- Utah’s law. There is competition in quirements would allow bank personnel to lished by Secretary Rubin have begun Cache Valley for the banking cus- spend more time with our customers in de- to lift that burden and change that sit- tomer. veloping new products rather than gathering uation, but I am satisfied now that we How does he deal with that competi- information to satisfy CRA documentation have enough evidence that indicates tion? He says: requirements. Competition is the greatest that the vast majority of small banks enforcer of CRA. The delivery of financial My bank is . . . a $90 million institution services is a highly competitive business. If with capitalization under $100 million operating from one office . . . my institution is not offering free checking are spending their time on CRA, filling One office—so he does not have or mortgage loans, then my competitor down out documents and meeting with regu- branches around the city. The credit the road will be taking advantage of my fi- lators, spending their time performing union does. He does not have the reach nancial institution’s shortcomings. the bureaucratic chores necessary to of advertising that the large banks I think he is absolutely right. In to- file a report, where they could be which are there as his competition do. day’s competitive world, you do not op- spending their time better serving He has one office. And he makes his erate in a vacuum. If he wasn’t doing their communities. living advertising himself as a home- his job, even though he is in a small, Therefore, I will vote to see to it that town institution. rural community, with Internet bank- the language that was adopted in the This, in marketing, is what is known ing and advertising over television, the committee report remains there. I will as a marketing niche. He recognizes large institutions would come in. oppose the Bryan amendment. that he cannot compete with the big It is interesting, again, referring to Mr. LEVIN. Mr. President, I rise to banks throughout the entire city. He Utah’s somewhat unique situation, in speak about the Community Reinvest- recognizes that he has a particular many communities where the local ment Act. The CRA was enacted in 1977 niche in the market that he can fill, bank was perceived as having some- to encourage banks to serve the credit and he goes after it and he fills it. thing of a monopoly or a free ride in needs of the entire community includ- He says: the community because of the physical ing low and middle income areas. The We do what the CRA regulation intended isolation, it was not another bank that obligations that banks owe to the en- us to do because it makes good sense. The came in to offer competition; it was a tire community stem from their char- documentation and time spent telling the credit union, operating under Utah’s ters and the public benefits they re- regulators that that is what we do is just credit union laws. The competition ceive through the Federal Reserve. The wasted by both us and the regulators. I have CRA is a way to encourage banks to never had a customer come in and ask to see produced the kinds of challenges that our CRA file. competition always produces. Once live up to their public obligation. again, you cannot repeal the law of Nationwide the CRA has been recog- Then, with the optimism that comes nized as an effective way to increase from every small businessman, he says: supply and demand. If there was de- mand in that community that was not credit availability in underserved As I will probably [pass] the $100 million being met by the local institution, areas. In his testimony before the proposed limit some day, I can see that not House Banking Committee in Feb- having to comply would give smaller institu- competition came in and met it. tions a slight advantage from costs they Now, a little further down the high- ruary, Federal Reserve Chairman would save. The real issue is if the whole way, I want to refer to the Frontier Greenspan remarked, that the CRA has rule for community oriented institutions Bank of Park City. Here the president ‘‘very significantly increased the makes any sense. It doesn’t and no one has of the bank says: amount of credit in communities’’ and provided any evidence that it does. As president of a nonmetropolitan commu- the changes have been ‘‘quite pro- He is not operating in a vacuum. He nity bank, I am of the opinion that existing found.’’ In 1997 alone, almost 2,000 is not operating in a situation where CRA regulations are largely superfluous for banks and thrifts reported $64 billion in there is no credit available to anybody both my institution and its direct competi- CRA loans, including 525,000 small busi- else if he does not serve his niche. He is tors. The fact remains that we have and will ness loans worth $34 billion; 213,000 operating in a highly competitive situ- continue to lend to all segments of our com- small farm loans totaling $11 billion; ation, and yet he is examined as if he munity because it is good business, not be- and 25,000 community development cause it has been defined by regulation. Ad- is the only institution, and he is looked ditionally, the time spent documenting our loans totaling $19 billion. Those loans at in terms of his lending to his market community lending efforts for regulatory went to affordable housing projects, niche. purposes is in itself counterproductive as we economic development through financ- All right. Let me go down the high- could instead redirect our energies towards ing small businesses or farms, and ac- way a little from Cache Valley to the additional lending and community develop- tivities that revitalize or stabilize low First National Bank of Morgan. This is ment activities. or moderate income areas. CRA has a smaller bank. This is a smaller com- An interesting quote, Mr. President. also encouraged a dramatic increase in munity. The president of this bank He feels that CRA gets in the way of home ownership by low and moderate says that they have $37 million in cur- community developing activities that income individuals. Between 1993 and rent assets. They serve a county, the he would otherwise engage in. 1997, private sector conventional home population of which is approximately When I first went on the Banking mortgage lending in low and moderate 7,000. In Utah, given our family size, a Committee, some 6 years ago, I had income census tracts increased by 45%. total population of 7,000 means that never heard of the CRA. I heard at that And the CRA has done so without there are probably about 2,000 families time institutions coming in and com- forcing a large paperwork burden onto there. I do not know how many of those plaining that the CRA documentation banks and without forcing banks to are borrowers. This is a relatively burden was overwhelming and that make bad loans. During the same small base for him to serve. CRA had become more of a documenta- House hearing, Chairman Greenspan al- Once again, while it is an isolated tion issue than it had been a lending luded to the mutual benefit of the CRA farming community, in today’s modern issue, that if they could fill out the to consumers and banks when he said, world there is competition there. The documents in such a way as to satisfy ‘‘CRA has helped financial institutions big banks can go after his customers on the regulators, it didn’t matter what to discover new markets that may have the Internet if they want. They can their lending practices were. been underserved before.’’ open ATM stations or put branches We had some testimony—I can’t go While there are countless examples there, if they want. There is a big bank back and put my hand on it now—that of the Act’s effectiveness in encour- just down the highway, within 20 miles made it clear that CRA was failing in aging lending in underserved areas all

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00053 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8447 over the country. Here’s some exam- that oversees the nation’s banking sys- backward. I urge my colleagues to sup- ples from Michigan. Lake Osceola tem says its not onerous and has been port the Bryan amendment and ensure State Bank in Baldwin just completed very successful. Therefore, I will not that CRA will remain strong and viable their CRA exam under the reformed support a bill that weakens a program for all American communities, whether 1996 regulations. They said it was not a that has been so important to commu- urban or rural, in the new financial era burden, and they received a rating of nity development efforts in Michigan that we hope to create. outstanding. Under the terms of S. 900, and nationally. Mr. HARKIN. Mr. President, I rise the bill before us today, Lake Osceola Mr. KOHL. Mr. President, I rise in today in strong support for preserving State Bank would qualify for an ex- strong support of the Bryan amend- current law with regard to the Commu- emption from the CRA because of their ment. While my comments today will nity Reinvestment Act (CRA) and size and location, but the bank has told be brief, my conviction on the issue of striking the provisions of S. 900 which my office that they are not seeking a the Community Reinvestment Act will harm this important and worth- CRA exemption. To the contrary, they (CRA) is strong. while program. CRA was enacted in are justifiably proud of the contribu- CRA came into being in 1977 thanks 1977 to help prevent ‘‘redlining’’ of poor tions they are making to community to my Wisconsin colleague, Senator neighborhoods by banks, which denied development in the Baldwin area. Bill Proxmire. While there’s been talk loans to residents and businesses in We Care, Inc. is a small non-profit of CRA as merely an urban concern, in those areas. that rehabilitates a few houses a year fact, it has enriched and addressed in- For more than twenty years, CRA in Detroit’s Van Dyke and 7 Mile area. equities in both urban and rural areas has been a key means of increasing They say the CRA and National City in Wisconsin and across the country. capital and credit to underdeveloped Bank have been their life-line for cred- We are all familiar with the numbers— areas through market based loans. it. more than $1 trillion in community de- CRA has created jobs and contributed Northwest Detroit Neighborhood De- velopment, small business and home to the economic revitalization of many velopment, Inc. is yet another non- mortgage loans—to communities that depressed urban and rural areas. It has profit organization that has contacted were once deemed unworthy. been a force for the capital needed to me in support of the CRA. They praised CRA has been, and remains, vital to increase home ownership and business the National Bank of Detroit and our common efforts of ensuring that development. CRA has contributed Comerica for extending credit to them credit is extended to all Americans greatly toward the revitalization of and supporting their mission of home- without prejudice. But CRA lending many areas, helping to generate an es- building in the Brightmore area of De- has also proven that the ability and timated one trillion dollars in lending troit. willpower of a borrower is often just as over 22 years. Put simply, CRA is good The Local Initiatives Support Cor- important, if not more important, than public policy. poration (LISC), a nationally promi- a loan determination based solely on Mr. President, community groups, nent community development group income or economic history. In other housing groups, farm groups, minority that operates in five Michigan cities, words, new and innovative lending in- groups, civil rights groups, mayors and considers the CRA critical to their ef- spired by CRA has promoted fairness, rural organizations all support a vi- forts. In an effort to boost their CRA but also made good business sense and brant CRA and are opposed to S. 900’s scores, lenders have sought out groups delivered profits to lending institu- CRA provisions. like LISC and the Neighborhood Rein- tions. And, fortunately, we’ve made In my State of Iowa, many rural resi- vestment Corporation to develop substantial progress at making CRA dents remain in desperate need of af- ‘‘shared risk’’ loan pools that offer fi- compliance less burdensome. fordable capital, especially during the nancing to first time home buyers. While impressive, this progress has farm crisis gripping the mid-West. Over the past 5 years, more than 400 not reduced the need for an effective Under S. 900, as it is now written, 276 of mortgages were written in six Michi- CRA. In 1977, Senator Proxmire’s legis- the 325 banks and thrifts in rural Iowa gan cities. This has generated over $16 lation was timely and appropriate, but counties would be exempt from CRA re- million in direct public and private in- in 1999, it has proven timeless and vi- quirements. That’s 85 percent of all the vestment in central city neighbor- sionary. We are contemplating an era rural banks in Iowa. If the provision hoods. According to LISC, without the of more diversified, and potentially exempting banks under 100 million dol- CRA ‘‘these types of programs would bigger, actors in the financial market- lars in assets remains, the benefits of not have been established.’’ Other place—one in which vigilance to ensure CRA would not be available to a large Michigan community development fair lending is all the more important. share of the rural communities in groups like U-SNAP-BAC, SWAN and Overall, with adequate safety and Iowa. New Hope also rely on loans encour- soundness protections and an effective I have here a letter from the Iowa Co- aged by the CRA. CRA, this new financial marketplace alition for Housing and the Homeless, Many Michigan mayors have ex- will yield benefits for consumers—more which describes the importance CRA pressed their support for the CRA. financial products delivered more con- has for our communities. It reads, in They praise the CRA for encouraging veniently and rapidly and at a better part, ‘‘Through increasing the access private business investment and cre- price. to capital and credit, CRA provides a ating new jobs and businesses in their I strongly support financial mod- market-based solution for economic re- communities. In addition, money from ernization and want to help send a vitalization and even job creation. A federal grants is leveraged to obtain signable, bipartisan and well-balanced strong and vibrant CRA has meant that millions of dollars in private invest- piece of legislation to the President’s hundreds of billions worth of new home ment. There are twelve mayors from desk. Last year, we secured a com- mortgage loans and small business all over Michigan on this letter from promise bill that passed out of Com- loans have been made in low and mod- the U.S. Conference of Mayors sup- mittee by a vote of 16 to 2 that would erate income, urban and rural commu- porting the CRA. I oppose the provi- have had my support. It is regrettable nities throughout the country in the sions weakening the CRA included in that this year we find this legislation past several years.’’ S. 900, a bill intended to modernize the and the financial industry held hostage I ask unanimous consent that the financial sector of our economy. Both to a counterproductive agenda to scale text of this letter be printed in the small and large banks in Michigan back CRA. RECORD. have received outstanding CRA rat- Financial modernization is about The PRESIDING OFFICER. Without ings. The community groups and non- moving forward, paving the way for objection, so ordered. profits make great use of the resources marketplace innovation and consumer (See Exhibit 1.) which are made available through the benefits. But Senator GRAMM’s bill and Mr. HARKIN. Mr. President, I would CRA. The federal independent agency his proposed CRA restrictions move us just like to mention briefly the CRA

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00054 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8448 CONGRESSIONAL RECORD—SENATE May 5, 1999 reforms already in place to protect problem: the ability of financial conglom- try could have a profound effect in democra- small and rural banks. In 1995, new reg- erates to offer loans through their holding tizing access to credit and capital accumula- ulations dramatically simplified the company affiliates, without having to con- tion tools in our society. Clearly, that would CRA exam process for small banks form to CRA requirements. Stated simply, be good for America. holding companies will be able to shift assets Sincerely, under 250 million dollars in assets. from CRA-covered banks to mortgage and in- SANDI MURPHY, Under the new rules, small banks are surance companies, securities firms, and Policy Director. not subject to the lending, investment other institutions exempt from CRA-like re- The organizations listed below support the and service tests applied to large insti- quirements. Banks, therefore, will be left position of the Iowa Coalition for Housing tutions. Additionally, for small banks, with fewer resources with which to make af- and the Homeless and strongly encourage examiners look at only five factors: fordable housing economic development, and you to oppose the current financial mod- loan to deposit ratio; percentage of small business loans. If any financial mod- ernization legislation and demand a strong, loans inside bank’s CRA assessment ernization bill fails to extend CRA to the and protected, CRA. area; record of lending to borrowers of lending and bank services activities of mort- John Boyne, United Action for Youth, gage companies and other non-depository af- Street Outreach, Iowa City. different income levels and businesses filiates, CRA will cover an ever-shrinking Crissy Canganelli, Emergency Housing of different sizes; geographic distribu- amount of traditional banking products and Project of Iowa City. tion of loans; and a bank’s record of services. Jan Capaccioli, Domestic Violence Inter- taking action in response to written In addition to the expansion of CRA, finan- vention Program. complaints about its CRA performance. cial modernization could further serve low- Amy Covreia, Iowa City, Iowa. Finally, small banks are not subject to income consumers if it improved upon data Mike Coverdale, Iowa Community Action any data collection requirements for disclosure requirements. Such data disclo- Network. CRA. So, we have already addressed sure requirements help communities identify Bill Holvoet, Southeast Iowa Community these issues. This Senator would cer- missed market opportunities and eliminate Action. discriminatory practices. These require- Greg Jaudon, Iowa Homeless Youth Cen- tainly welcome hearings on the current ments help leverage reinvestment by making ters. state of those reforms and their effec- financial institutions publicly accountable Gene Jones, Des Moines Coalition for the tiveness. In fact, I would ask the Bank- to serve all borrowers in a fair and equitable Homeless. ing Chairman to consider holding such manner. Insurance companies and others Mike Kratz, Veteran Affairs Medical Cen- hearings on CRA before we make affiliating with banks should be required to ter. changes to an important and effective report data on policies and services issued by Lora J. Morgan, Goodwill Industries of program. income and race and small business data S.E. Iowa. Mr. President, CRA has provided should include the race and gender of the Mark Patton, Muscatine Center for Stra- jobs, helped our economy to grow, and borrower as well as the neighborhood in tegic Action. Linda Severson, Johnson County LHCB. ensured all of our citizens are consid- which the business is located. We would also urge you to fight attempts Lisa Wageman, Operation Threshold, Wa- ered for loans based on their financial to directly attack or weaken CRA; specifi- terloo. history, not their address. I urge all cally, proposals such as safe harbors, small my colleagues to support removal of bank exemptions, and ‘‘anti-greenmail’’ bills Mr. REED. Mr. President, I rise in these provisions. or amendments. Mergers and acquisitions strong support of the Bryan CRA EXHIBIT 1 can disrupt the lives of thousands of citizens amendment. This amendment would in a community through job losses, closing IOWA COALITION FOR HOUSING strike the small bank exemption and of offices, decreases in lending, and higher AND THE HOMELESS, the CRA safe harbor provisions in- Des Moines, IA, May 3, 1999. fees. CRA reviews are critical to ensure that lenders involved in mergers can preserve cluded in S. 900 and require banks to Rep. TOM LATHAM, their CRA performance after such enormous have a ‘‘satisfactory’’ CRA rating as a Cannon House Office Building, condition for engaging in the expanded Washington, D.C. institutional changes. Moreover, affected DEAR CONGRESSMAN LATHAM: As organiza- citizens ought to have the right to speak up powers allowed under this bill. tions that work with and on behalf of low-in- and have their concerns addressed before a The language of this amendment is come and homeless individuals, we join merger application is approved, regardless of similar to language that was included today to share our concerns regarding the the pre-merger CRA ratings. in the financial modernization bill proposed financial modernization legislation Small bank exemptions would also be ex- which passed the House and Senate tremely harmful to communities because currently being considered in Congress. By Banking Committee by a vote of 16 to combating discrimination and promoting they eliminate community reinvestment re- bank-community partnerships, the Commu- quirements for most of the banks in the 2 last year and which enjoyed broad in- nity Reinvestment Act (CRA) extends the country. Small towns and rural areas that dustry support. Similar language has American dream of home and small business depend on these banks for home and small also been incorporated in the H.R. 10 ownership to millions of Americans. Without business lending would only suffer a new bill that recently passed the House this sustained access to capital and credit, round of credit and capital flight. as pro- Banking Committee and is pending in our neighborhoods die. We ask that you sup- posed, the current legislation would exempt the House Commerce Committee. port a strong CRA and the benefits it has small rural banks under $100 million in as- In short, the Community Reinvest- sets from CRA altogether. Almost 40% of all brought our communities. ment Act requires financial institu- Through increasing the access to capital lenders in the country will then have no obli- and credit, CRA provides a market-based so- gation to serve minority and working-class tions to meet the credit needs of the lution for economic revitalization and even neighborhoods. Seventy-two percent of all local communities in which they are job creation. A strong and vibrant CRA has rural banks would be exempt from CRA. In chartered, including low- and mod- meant that hundreds of billions worth of new Iowa, this exemption would include 85% of erate-income communities, consistent home mortgage loans and small business the lenders in non-metropolitan areas, many with safe and sound practices. Let me loans have been made in the low- and mod- of whom enjoy a near monopoly in their reiterate, CRA requires banks to make erate-income urban and rural communities service areas. credit-worthy loans. It does not require It would be detrimental to the wealth- throughout the country in the past several banks to make bad loans. years. Any bill that threatens to eviscerate building efforts in this country to pass a fi- the effectiveness and application of CRA will nancial modernization bill that would halt Despite this fact, some have argued only destroy this promotion of wealth cre- community reinvestment progress by failing that CRA is tantamount to govern- ation and entrepreneurial development in to keep CRA on pace with the evolution in ment-mandated credit allocation. minority and working-class neighborhoods. the financial industry. Congress has required Nothing could be further from the While the various versions of financial mod- that banks serve ‘‘the convenience and truth. Neither the Act nor its regula- ernization that have been introduced and needs’’ of the communities in which they are tions specify the number of loans, the contemplated may not directly attack CRA, chartered because of the vital role they play type of loans, or the parties to CRA in our lives. We believe that this same stand- they will eventually undermine the law by loans. To the contrary, CRA relies on preventing its evolution with the rapid ard should be applied to the entire financial changes in the financial industry. industry. A financial modernization bill that market forces and private sector inge- The current versions of financial mod- carefully modernizes the Community Rein- nuity to promote community lending. ernization only demonstrate its fundamental vestment Act to the entire financial indus- This is evidenced by the tremendous

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00055 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8449 flexibility that financial institutions which is more than twice as fast as the CRA, it is likely that many rural com- have in satisfying CRA. For example, rate of growth in all home mortgage munities could become credit-starved. loans to low-income individuals; loans loans. In view of these statistics, it is The bill also includes a provision to nonprofits serving primarily low- clear that CRA has played a tremen- that would provide a safe harbor for and moderate-income housing needs; dous role in the home ownership boom. banks with a ‘‘satisfactory’’ or better loans to financial intermediaries such In addition to increases in home CRA rating. Specifically, institutions as Community Development Financial mortgage lending, CRA has also been receiving a satisfactory CRA rating at Institutions; and loans to local, state, responsible for an increase in commu- their most recent examination would and tribal governments may qualify for nity development lending. In the past be presumptively in compliance with CRA coverage. Moreover, loans to fi- four years, banks have invested four CRA, unless ‘‘substantial verifiable in- nance environmental clean-up or rede- times as much in community develop- formation’’ to the contrary was pre- velop industrial sites in low- and mod- ment projects, as they did in the pre- sented. I am concerned about this pro- erate-income areas also qualify as CRA vious thirty years. vision because it establishes a very dif- loans. This increased investment in commu- ficult-to-satisfy burden of proof for in- In addition to lending, CRA is satis- nity development by banks has also dividuals or groups wishing to protest fied through investments by financial furthered the evolution of a secondary a bank merger on CRA grounds. Indeed, institutions in organizations engaged market for community development I fear this provision will greatly inhibit in affordable housing rehabilitation, loans, which ultimately provides addi- the ability of groups to get the nec- and facilities that promote community tional capital for community develop- essary information from banks to pro- development such as child care centers, ment. For many years, the develop- test a merger. Also, when considering homeless centers, and soup kitchens. ment of a secondary market for com- the fact that 97 percent of institutions Even Federal Reserve Chairman Alan munity development loans had been receive a satisfactory or better CRA Greenspan has weighed in on this issue, limited. This development was limited rating, it is clear that this provision arguing, ‘‘The essential purpose of the for a number of reasons including the will effectively eliminate CRA com- CRA is to try to encourage institutions lack of conformity in the underlying ment on a bank merger. who are not involved in areas where loans, as well as the fact that commu- If these provisions of S. 900 are not their own self-interest is involved, in nity development securities typically eliminated, I fear a return to the days doing so. If you are indicating to an in- do not receive a rating from a nation- prior to CRA’s enactment when access stitution that there is a foregone busi- ally-recognized rating agency. Also, to credit was limited for many minori- ness opportunity in an area X or loan the underlying loans lacked long-term ties and those living in low-income product Y, that is not credit alloca- performance data, making them dif- neighborhoods. In fact, testimony be- tion. That, indeed, is enhancing the ficult to rate. fore the Senate Banking Committee market.’’ However, because of CRA, a sec- during the consideration of CRA in 1977 As illustrated by these examples and ondary market for community develop- revealed how bad things were. Wit- Chairman Greenspan’s comments, it is ment securities is beginning to emerge. nesses recounted stories of financial in- clear that CRA is a far cry from gov- This is happening for two specific rea- stitutions that had previously been ac- ernment-mandated credit allocation. sons: (1) The federal banking regulators tive in urban lending, that disinvested To be sure, CRA is predicated on two have interpreted CRA to allow banks in those same urban neighborhoods as simple assumptions that were well-ar- to get CRA credit for purchasing com- minorities increasingly moved in. Tes- ticulated by the legislative architect of munity development securities, even if timony before the Senate Banking CRA, former Senate Banking Com- they lack ratings or performance data, Committee also brought to light a 1974 mittee Chairman Proxmire, who stat- if the purchases are consistent with study of six Chicago banks. In the ed, ‘‘(1) Government through tax reve- safe and sound banking practices, (2) study, it was found that these banks, nues and public debt cannot and should Also, as banks have increased their which held $144 million in deposits not provide more than a limited part of community development lending, they from low-income and minority commu- the capital required for local housing have been able to draw on this experi- nities, returned one-half cent on the and economic development needs. Fi- ence to improve underwriting stand- dollar in home loans. Such was the de- nancial institutions in our free eco- ards and create greater conformity in plorable state of lending in low-income nomic system must play the leading underwriting, which is important for and minority communities before CRA. role, and (2) A public charter for a bank investors in the secondary market. While certainly we have come a long or savings institution conveys numer- Also, this experience has provided way since CRA’s passage in 1977, lend- ous benefits and it is fair for the public banks with greater empirical data on ing discrimination, unfortunately, per- to ask something in return.’’ loan performance, which is another im- sists. In a study published earlier this In the words of former Comptroller of portant consideration for secondary year by the Fair Housing Council of the Currency Eugene Ludwig, ‘‘CRA is market investors. These are trends Greater Washington, it was revealed in many respects a model statute. It that we should clearly be excited about that Washington area lenders discrimi- requires no public subsidy, no private and should seek to further. nate against two out of five African subsidy, and no massive Washington Instead, S. 900 would undermine this American and Hispanic mortgage ap- bureaucracy.’’ progress. Specifically, one provision of plicants. In one incident cited in the It is this simple concept that has re- S. 900 would exempt rural banks with study, a Rockville lender advised a sulted in more than $1 trillion in loan assets under $100 million from CRA. Al- black tester that the lender did not commitments for low- and moderate- though this exemption is limited to the make loans to first-time home buyers. income borrowers since CRA’s enact- smallest institutions, over 76 percent The same lender later met with a white ment in 1977. Indeed, the record home of rural banks would be covered. This tester, also posing as a first-time home ownership rate that the U.S. is now en- is of great concern since small banks buyer, giving the tester an appoint- joying—66.3 percent of Americans own have historically received the lowest ment and encouraging him to apply for their homes—is in large measure due to CRA ratings. In fact, institutions with a mortgage loan. Lending studies by CRA lending to minorities and low-in- less than $100 million in assets ac- other organizations reveal similar find- come individuals. Minorities have ac- counted for 92 percent of institutions ings. These studies have shown that counted for a disproportionately large receiving ‘‘non-compliance’’ CRA rat- minority borrowers receive fewer bank share of home ownership growth since ings in 1997–1998. loans even when their financial status 1994—roughly 42 percent. I am also concerned about this ex- is the same as or better than white bor- Also, since 1993, home mortgage emption because smaller banks are rowers. loans to low- and moderate-income typically the primary sources of credit By encouraging lenders to extend census tracts have risen by 22 percent, in rural communities. Hence, absent credit to all communities, CRA has

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00056 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 8450 CONGRESSIONAL RECORD—SENATE May 5, 1999 been an important weapon in fighting things, a combination of new and inno- lows. First, as I understand it, there lending discrimination. The Bryan vative products and services, as well as are no enforcement mechanisms or amendment will ensure the potency of technological advances. penalties for failing to maintain a CRA in fighting lending discrimination Regulators must keep pace with ‘‘satisfactory’’ CRA rating. By con- and providing fair access to credit to these innovations, and we, as legisla- trast, the bill passed last year by the low-income and minority communities. tors must set the appropriate param- Senate Banking Committee required In closing, Mr. President, let me reit- eters for this changed financial serv- all banks in a holding company struc- erate how important it is to include ices marketplace. We cannot leave it ture to have a satisfactory CRA rating CRA in any modernization legislation up to piecemeal regulation and legisla- as a condition of affiliation, and main- that passes. It is very likely that if S. tion as, all to often, has been the case. tain a satisfactory CRA rating in order 900 is enacted, we will see increased Our goal should be to create a regu- to continue to engage in new financial consolidation in the financial services latory framework which provides meas- activities. industry. As we know from recent ex- urable benefits to consumers and busi- Second, this bill provides for a CRA perience, this consolidation will likely nesses, enhances competitiveness of ‘‘safe harbor.’’ Under this provision, all lead to layoffs and bank branch clos- the financial services sector on a glob- institutions which received at least a ings. Absent the CRA language in- al basis, and ensures the continued satisfactory CRA rating on their most cluded in the Bryan amendment, I fear safety and soundness of our financial recent examination, and received a sat- that this consolidation could have a institutions. While the bill before us isfactory rating in each of the past 3 significant and adverse impact on ac- goes a long way toward achieving that years, would be deemed to be in com- cess to banking services and credit in goal, unfortunately I believe, it falls pliance with CRA. Such a safe harbor, low-income and minority communities. short. I believe, would often effectively elimi- By adopting the Bryan amendment, we It falls short, principally in my opin- nate the opportunity for public com- will at least ensure that industry con- ion, because it fails to ensure the con- ment. Banks and thrifts are usually ex- solidation will not decrease access to tinued strength of the Community Re- amined every two to three years. CRA credit in these communities. investment Act. CRA has been invalu- performance can change in the interim. In fact, I feel so strongly about these able in helping to assure low and mod- Third, S. 900 exempts those banks provisions that I plan on opposing the erate income consumers, communities with less assets of less than $100 mil- bill if this amendment is not adopted. I and small businesses have sufficient lion, and those that are not located in would hope my colleagues can support access to credit. metropolitan areas, from CRA. While I this amendment. The Community Reinvestment Act think we can all agree that institu- Mrs. BOXER. I have been a long- has been important to both urban and tions with assets of less than $100 mil- standing supporter of financial services rural communities. Every CRA dollar lion are small, the amendment would modernization and affirmed such sup- is a loan—it is the leveraging of cap- exempt more than 75 percent of rural port in a letter to Secretary Rubin ital. Over the past seven years or so, institutions from CRA requirements— about two years ago, and last year, as approximately $400 billion of commu- that is almost 40 percent of all U.S. a member of the Banking Committee, I nity development has been leveraged. banks and thrifts. Ironically, I would voted in support of H.R. 10—the Finan- It has proven to be an effective tool in note, it has traditionally been these cial Services Modernization bill re- my home state of California and in smaller institutions that have had the ported out of the Banking Committee states throughout the country. worst CRA records. Moreover, the new with strong bi-partisan support. CRA encourages federally insured fi- CRA rules, which went into effect in I believe it is important that our fi- nancial institutions to help meet the January 1996, provide a streamlined ex- nancial services sector adapt to con- credit needs of the communities in amination for banks and thrifts with temporary market conditions, market- which they do business. As Senator assets less than $250 million. In fact, place innovations and to growing fi- Proxmire said in 1974, ‘‘CRA is in- pursuant to the changes which took ef- nancial competition from abroad. tended to establish a system of regu- fect in 1996, small banks do not have Moreover, I understand and appreciate latory incentives to encourage banks any data collection or reporting re- the desire of our financial services in- and savings institutions to more effec- quirements. dustries—banks, securities firms, and tively meet the credit needs of the lo- I do not believe the CRA changes en- insurance firms—to further expand calities they are chartered to serve, visioned in S. 900 are appropriate, or their traditional lines of business. consistent with sound lending prac- needed at this time. If there are abuses I joined the Banking Committee in tices.’’ or specific problems, let’s deal with 1993 when I was first elected to the CRA does not, despite many implica- them—let regulators, and, if appro- Senate, and I proudly served on that tions to the contrary, impose any re- priate, law enforcement deal with Committee until this year. So I realize quirement upon banks to make un- them. Such abuses are hurtful to CRA the process of financial services reform sound or unsafe loans. CRA does not re- and to those who can potentially ben- has been long, tedious, and often quite quire banks to engage in risky lending efit from CRA. These abuses, I would contentious. I also realize that many or investments. It does not require suggest however, are extraordinarily financial services firms are looking for- banks to make loans outside of the rare. On the whole, bankers have found ward to the Senate putting an end to lending criteria they have established. CRA to be an extremely minimal intru- that long process by passing a financial I would suggest, in fact, that given how sion at most. services modernization bill. And I well banks are doing these days, one CRA has not been a problem to most would like to see us pass a good bill— would be hard pressed to make a rea- bankers in my home state of Cali- a fair and balanced bill. sonable case that CRA has been detri- fornia. BankAmerica, Wells Fargo and Nonetheless, it is important to re- mental to the bottom line of banks or others have made important CRA com- member that the U.S. already has the to their safety and soundness. mitments in my state. best banking system in the world. It is I think it is wonderful banks are Between 1992 and 1997, BankAmerica the best capitalized, the most trans- doing so well, I appreciate the con- made $3 billion in conventional small parent, has the highest accounting tributions they are making to our business loans and lines of credit for standards, is very innovative and its economy. I remember all too well when less than $50,000. In 1997, it made more safety and soundness is unsurpassed. banks were not doing so well. Thus, I than $1 billion in loans and lines of Therefore, it is appropriate to ask, would not support CRA, or any other credit for $100,000 or less. And ‘‘why is financial services moderniza- requirement, which encouraged banks BankAmerica has often noted their tion necessary?’’ It is necessary be- to engage in unsafe lending practices. CRA loans have performed as well as cause the financial marketplace has My specific concerns as relate to the other more traditional loans made by changed, brought on by, among other CRA provisions in this bill are as fol- the bank. These loans have also been

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00057 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.001 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8451 profitable for the bank. In fact, Hugh access to the Federal Reserve’s dis- throw away our best chance to pass fi- McColl, the Chairman and CEO of count window and payments system. nancial modernization solely to end a BankAmerica Corp. has said, ‘‘My com- And in return, they would have an law that we know is working? pany supports the Community Rein- obligation to ‘‘serve the convenience The President has stated very clearly vestment Act both in spirit and in fact. and needs’’ of their communities. that with these CRA provisions, this We have had fun doing it. We’ve made Over 20 years later, banks still CRA bill will end in veto. His veto letter a business out of it.’’ as an obligation—but as an obligation states: Moreover, in Los Angeles, as a result that a minimum they can live with— We cannot support the ‘‘Financial Services of CRA, loans to African American and in many cases, that they endorse. Modernization Act of 1999’’ * * *. In its cur- owned businesses increased a whopping Does CRA work? rent form, the bill would undermine the ef- 171 percent between 1992 and 1997. How- The answer has been a resounding fectiveness of the Community Reinvestment Act (CRA), a law that has helped to build ever, it is important to note that small yes. homes, create jobs, and restore hope in com- business owners of every race have ob- Since its enactment, CRA has re- munities across America. The CRA is work- tained credit as a result of CRA-related sulted in $1 trillion of investments in ing, and we must preserve its vitality as we programs. For example, in San Diego, underserved communities. It’s been a write the financial constitution for the 21st at least 25 percent of the loans made by driving force for community economic Century. local community development organi- development; one of the best ways to Contrary to what many think, this zations were to white business owners. bring people together, to bring poor amendment does not expand CRA. It So Mr. President, although I am a en- people and people of color upward, simply maintains the status quo. thusiastic supporter of financial serv- which we all want to do. First, it requires that banks have at ices modernization, I cannot support S. It’s also driven a 30 percent increase least a ‘‘satisfactory’’ CRA rating as a 900 if the CRA provisions contained in in home ownership among low-income precondition for affiliation with securi- the bill are maintained. Access to cap- families since 1990, making the Amer- ties and insurance firms. Today our in- ital and economic development, I be- ican Dream of home ownership a more sured depository institutions have this lieve, will potentially be some of the commonplace reality for our minority obligation. And 97 percent of them most important tools available to low communities. meet it. They meet it precisely because and moderate income Americans in the And in 1997, large banks and thrifts it is not a tremendous burden. coming century. Without such access made approximately 525,000 small busi- Second, this amendment would re- to capital, far too many Americans, ness loans totaling $34 billion to entre- move the small bank exemption that particularly those in urban and rural preneurs located in low and moderate narrowly passed the Banking Com- areas, will not be able to share in the communities. mittee. Small banks account for 70 per- economic wealth of our remarkably ex- CRA works. cent of the ‘‘needs improvement’’ rat- uberant economy. And we know it works because banks ings handed out to banks by the regu- Mr. SARBANES addressed the Chair. who have never been shy in fighting lators last year. So the idea that we The PRESIDING OFFICER. The Sen- what they view as burdensome or in- should exempt the institutions that are ator from Maryland. trusive Federal regulation are not most likely to be in noncompliance Mr. SARBANES. Mr. President, I pushing to repeal CRA or even to roll it seems ill-advised. Finally, the amendment eliminates have refrained from speaking all day. I back. the safe harbor provisions in the Com- do need to speak for a brief period of In fact, they’re supporting it. Every mittee print. The safe harbor sets up time, but I want to try to accommo- major bank in my State has contacted an unnecessary burden of proof that is date colleagues as well. If I can inquire me in favor of CRA. Some have been honest enough to simply unnecessary. of Senator SCHUMER, how much time In sum, these provisions would re- admit that because of CRA they are would he need to speak, 5 minutes or store CRA to today’s potency. reaching out to communities that they thereabouts? As I said yesterday, I say, it is my Mr. SCHUMER. Yes, that would be would not otherwise have served. hope that we can set aside our par- And they’re serving them profitably. fine. tisanship for the sake of pragmatism. Mr. SARBANES. And Senator SHEL- Hugh McColl, Jr., Chairman and CEO And set aside confrontation for the BY? of BankAmerica Corp., stated earlier sake of compromise. Mr. SHELBY. About 10. this year; ‘‘My company supports the Mr. President, I strongly support this Mr. SARBANES. I would like to pro- Community Reinvestment Act in spirit amendment, and I urge my colleagues pound a request that Senator SCHUMER and in fact. To be candid, we have gone to support it. be allowed to speak and then Senator way beyond its requirements * * *. A vote for this amendment is a vote SHELBY and then after Senator SHELBY We’re quite happy living with the ex- for modernization. that I would be recognized. isting rules.’’ The PRESIDING OFFICER. The Sen- Mr. GRAMM. Could we add to it that, A Federal Reserve study showed that ator from Alabama is recognized. after the Senator from Maryland, I be banks with higher volumes of loans to Mr. SHELBY. Mr. President, I rise in recognized? low-income communities were on aver- opposition to the Bryan CRA amend- The PRESIDING OFFICER. Without age more profitable than those with a ment. This amendment not only objection, it is so ordered. lower volume. strikes the small rural bank exemption The Senator from New York. And we know that banks have had that we have in the Banking Com- Mr. SCHUMER. Mr. President, I some of their most profitable years mittee bill and that we adopted on a bi- thank my friend, the Senator from even as CRA loans have reached record partisan vote, but it also replaces that Maryland, as well as the Senators from heights. language with a significant expansion Alabama and Texas for their courtesy Finally, our regulators, who are com- in CRA—the same language Chairman here this evening. mitted to ensuring the safety and GRAMM and I vehemently opposed on I also thank Senator SARBANES for soundness of our financial institutions, the Senate floor this past year. his indefatigable efforts to defend the have been very vocal in their support Community banks, as the Presiding Community Reinvestment Act. of CRA. Officer knows, by their very nature, And I’d like to thank my Democratic So there’s more evidence that CRA serve the needs of their communities colleagues as well as Secretary Rubin has been effective in communities’ edi- and do not need a burdensome Govern- for their strong commitment to CRA. fication than in any invidious exploi- ment mandate to force them to allo- In 1977 when CRA was enacted, the tation of banks, as some of its critics cate credit or to originate profitable thinking was that banks—though pri- have been charging. loans. And, contrary to the assertions vately owned—receive public benefits The question is, then, with everyone of critics, there is no evidence whatso- in the form of deposit insurance and in support of CRA, why do we want to ever that the small bank exemption

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00058 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8452 CONGRESSIONAL RECORD—SENATE May 5, 1999 would have ‘‘devastating con- Institution. I know because I have just com- raises the cost of borrowing through sequences’’ for low- and moderate-in- pleted 39 years this month. All this time in higher loan rates and punishes savers come rural communities. There re- small home-owned banks that deliver serv- in the form of lower savings rates. mains no documented evidence to ices that are essential to rural life. Where Critics of the small bank exemption services have been rendered over the years prove such an assertion, just as there is even before we knew anything about CRA. claim that small banks get the worst no tangible evidence that CRA has ever CRA ratings. The truth of the matter is That was from Charles Willmon, helped rural communities in America. that one size does not fit all in any chairman of the First Bank of the What is documented, though—and business. These critics point to lower South in the small town of Rainsville, Chairman GRAMM has worked tirelessly than average loan-to-deposit ratios of AL. small banks as evidence that they are to do so—is the kinds of blackmail I have another letter, from John not serving their communities. That is agreements and extortion practices Mullins, president and CEO of First nonsense. That is like saying the aver- that the Community Reinvestment Act Commercial Bank of Cullman, AL, age male wears a size 42 regular suit enables community groups to engage which says: in. The truth of the matter is that the and that every male in America who Exempting small banks would be a wonder- small bank exemption would exempt ful opportunity for me to spend less time on does not fit in that size suit should be less than 3 percent of bank assets na- unnecessary and nonproductive paperwork reprimanded by the Federal Govern- tionwide. Thus, 97 percent of all bank and more time helping the citizens of my ment. assets would still be subject to the market area improve their financial well- Every community in this great coun- Community Reinvestment Act. being . . . CRA examiners spend many un- try is different. Most of us take pride Just bear with me a minute on this necessary hours examining our loan track in such diversity. That is the founda- chart. We have bank assets of $5.711 record. Banks our size are an integral part of tion on which this country was built. trillion. But banks above $100 million, the local community and we are always sen- However, the Community Reinvest- sitive to the needs of our citizens. They are ment Act punishes banks who do not rural and nonrural, control 97 percent not faceless names, but people whom we of the bank assets in America. The know. We don’t need a law to require us to comport with national averages. In- small banks in America that we are help them with credit, we do it anyway. deed, the loan demand in Prattville, talking about, those under $100 million I have another letter from a small AL, is not the same as in Lafayette, in assets—there are 3,667 of them—con- banker in Clanton, AL. He is Leland LA. Nor is it the same as in Shelby- trol only $165 billion, or 2.9 percent of Howard, Jr., of Peoples Southern Bank. ville, TN. Nonetheless, CRA judges all the banking assets. Can you imag- He says: banks based largely on their loan-to- deposit ratios that the regulators deem ine? BankAmerica, for example, has We in the community banks feel that the $614 billion in assets. And I commend CRA exception for banks with aggregate as- to be appropriate. That, my friends, is them for that. They are a well-run sets of $100 million or less is a very good nothing but a quota. When everything bank. But that is more than all 3,667 start on the road to easing the regulatory is said and done, CRA promotes quotas small rural banks in America put to- burden. and creates a regulatory burden. gether; it is about 4 times more. So I have a letter from John Hughes, As if that is not bad enough, Mr. let’s look at this in a realistic situa- CEO of First National Bank of Hart- President, the Bryan amendment tion, as this chart here depicts. ford, AL, a small town in south Ala- would also expand the reach and the Mr. President, critics will point out bama. He says: scope of the Community Reinvestment that the small rural bank exemption Extra work created by the CRA is tremen- Act. which I and Senator GRAMM have in the dous. Most rural banks know at least 95 per- Specifically his amendment would: bill would exempt 3,700 banks. That is cent of all their customers, their family, and One, increase administrative enforce- true. But to put that into context their situation. The rating system that most ment authority of the regulators to again, and to reiterate, one needs to examiners used is highly subjective and the fine directors and officers up to $1 mil- understand that BankAmerica, as I rural banks have a hard time to achieve a lion a day for CRA noncompliance. grade higher than satisfactory. Again, it have just shown, is four times the size Just think about that. would be a great day in Alabama if you . . . Two, it would make expanded activi- of all small rural banks in America. could get this amendment passed. ties subject to CRA compliance on all Indeed, BankAmerica possesses $614 Those are just a few letters, and they billion in assets, or 10.7 percent of all depository institution affiliates on an come from all over the Nation. ongoing basis. bank assets in this country. If one Mr. President, the Federal Reserve looks at the list of large banks, one And it would give the regulators the Bank of Richmond published its 1994 authority to shut down any affiliate will soon realize that the vast majority annual report on ‘‘Neighborhoods and of bank assets are concentrated in the within the holding company if just one Banking,’’ where it reported its find- subsidiary depository institution falls large, multibillion-dollar banks that ings on the costs of CRA. The report can most easily shoulder the burden of out of CRA compliance. found: The Bryan amendment dramatically CRA. The regulatory burden [of CRA] would fall The assertions of those who oppose expands, Mr. President, CRA enforce- on bank-dependent borrowers in the form of ment authority to allow civil money the small bank exemption that we have higher loan rates and on bank-dependent in the banking legislation also do not savers in the form of lower deposit rates. penalties for bank directors and offi- comport with the comments I have re- And to the extent that lending induced by cers, as I have pointed out. ceived from small banks across the the CRA regulations increases the risk expo- The amendment would require bank country. In fact, I have many letters sure of the deposit insurance funds, tax- holding companies who seek to become from small bankers who complain payers who ultimately back those funds bear financial holding companies to be com- some of the burden as well. about the burden of CRA, as well as the pliant with the Community Reinvest- regulators’ subjective reporting re- The report goes on to say that, basi- ment Act of 1977 just in order to be eli- quirements dealing with CRA. cally, the CRA imposes a tax on banks. gible. If even one subsidiary depository I would like to take a moment to CRA, then, is a tax on community institution ever falls out of compli- read some letters from some small banks and raises the costs of inputs to ance, the holding company, including bankers in Alabama. I believe they banks by increasing their regulatory the nonbank affiliate, would then be have a right to be heard. I will quote burden and compliance costs. Mr. subject to section 8 of the Federal De- from some of these. The first one says: President, in addition, CRA forces posit Insurance Act, which is 12 U.S.C. banks to make loans according to a 1818, which authorizes bank regulators I don’t think, in these small community banks, that we have to be examined by peo- Federal quota, increasing the risks, to invoke cease and desist orders, civil ple who usually don’t understand our pur- and therefore the costs, of borrowing to penalties, and fines. pose, to enforce us to service our community consumers. Make no mistake about it, Regulators would be authorized to * * *. Small community banks are a Service the Community Reinvestment Act fine bank directors and officers up to $1

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00059 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8453 million a day. This, Mr. President, is a CRA, with the bank regulators given The premise of the legislation is simple— dramatic expansion in the enforcement the authority to enforce such law. This to make sure that economic opportunity for authority and reach of bank regu- is the first time CRA has ever been ex- families and communities is available to every American. lators. panded to cover the approval of non-de- Opportunities for home ownership, small Such authority does not exist today. pository activities. business development, and sustaining rural The Clinton Justice Department even I urge my colleagues to vote against communities are critical to the strength of agrees. the Bryan amendment and support this Nation. In late 1994, Comptroller of the Cur- what is in the bill. With CRA our neighborhoods have a rency, Eugene Ludwig, tried to invoke I yield the floor. chance. Without it, they are discriminated the administrative enforcement powers Mr. SARBANES addressed the Chair. against. under Section 8 of FDIA (12 U.S.C. 1818) The PRESIDING OFFICER. The Sen- Just as civil rights legislation enacted a decade ago sought to break down the walls of to enforce CRA. The Justice Depart- ator from Maryland. Mr. SARBANES. Mr. President, discrimination that separated us in schools, ment issued a memorandum stating: restaurants, and places of work by the color [T]o move from an enforcement scheme shortly we will be voting with respect of our skin, the CRA has meant opportunity that relies upon a system of regulatory in- to the Bryan amendment. for everyone, whatever race or color. As a re- centives to a scheme that entails cease-and- I, again, want to underscore the very sult of CRA, millions of minorities across desist orders and potentially substantial strong and powerful statement which I this Nation now have access to the capital monetary penalties is a leap that we do not think Senator BRYAN made shortly that will allow them to build new homes, to believe can be justified on the basis of the after noon at the outset of this debate, create new businesses, and to improve edu- text, purpose, and legislative history of CRA. and I am deeply appreciative to him for cation. We therefore conclude that enforcement the strong leadership he has shown She concluded her introductory re- under 12 U.S.C. 1818 is not authorized by marks at the press conference by say- CRA. with respect to this amendment. We have tried to give all Members a ing: Bank trade associations were very chance to speak. I, in fact, have re- Leaders you see before you represent doz- pleased with the Justice Department frained from doing so in the course of ens of organizations galvanized by an assault decision. The Bankers Roundtable, the the day in order to make sure that our on the Community Reinvestment Act. Those American Bankers Association, the colleagues had a chance to speak. I organizations represent millions of Ameri- cans who have been touched by CRA and mil- Consumer Bankers Association, and would like to take just a few minutes the Savings and Community Bankers lions more who deserve the same oppor- now. tunity. of America, filed joint letters focusing I want to speak in support of the Make no mistake about it, this issue in substantial part on the regulators amendment. But I really do not want is seen by the civil rights community claims of enforcement authority. to repeat a lot of the extensive discus- as a critical civil rights issue. Fair ac- The Bryan amendment also permits sion of the issues which have taken cess to credit is fundamental to hopes regulators to force divestiture since place, both during opening statements for economic progress in our minority banks cannot ‘‘retain shares of any on the bill, and on the alternative company’’ if ever out of CRA compli- communities. amendment, and now on this amend- Another speaker at the press con- ance. This provision also explicitly ment itself, although they may well states that a bank holding company ference was Hugh Price, president of bear repeating. the National Urban League, who said: may not ‘‘engage in any activity’’ un- I want to make sure my colleagues We of the National Urban League strongly less the institution is CRA compliant appreciate the intense feeling and the always and forever. support financial services modernization be- critical importance which civil rights cause we believe it is in tune with the times. Think about it. groups, mayors, rural groups, Hispanic If just one subsidiary depository in- But we staunchly oppose any effort to gut groups, and Native American groups stitution of a financial holding com- the CRA. We at the Urban League work with attach to this issue of CRA. They have the leaders of many financial institutions. pany falls out of compliance with CRA, all sent letters to the committee. Just last week I talked with Kenny Lewis, the substitute authorizes the Federal I ask unanimous consent those let- president of Bank America, who said that his Reserve Board to ‘‘impose such limita- ters be printed in the RECORD at the bank stands strongly behind the renewal of tions on the conduct or activities of conclusion of my remarks. CRA. the company or any affiliate of the The PRESIDING OFFICER. Without I know that belief is echoed by many company as the Board determines to be objection, it is so ordered. leaders in the financial services and appropriate * * * ’’ This, too, is a dra- (See Exhibit 1.) banking community who see it as good matic expansion of enforcement au- Mr. SARBANES. Mr. President, these business for their corporations. thority under CRA. For the first time, letters reflect how CRA has benefited Charles Kamasaki, senior vice presi- regulators will be able to impose re- communities all over this country— dent of the National Council of La strictions on activities throughout the small, urban, and rural. They dem- Raza, stated: entire holding company. This means a onstrate how CRA has expanded eco- The National Council of La Raza is the Na- bank regulator could prohibit a securi- nomic opportunities for people of all tion’s largest Hispanic civil rights organiza- ties affiliate from underwriting securi- races, colors, and ethnic affiliations. tion. We represent more than 200 local com- ties or an insurance affiliate from un- Yesterday morning, the Leadership munity-based organizations who provide a derwriting insurance. range of services, many of them supported by Conference on Civil Rights, our pre- CRA-related funds in over 32 States. Regulators do not have such author- eminent civil rights group, held a press Mr. Kamasaki, the head of the Na- ity today. Currently, CRA only allows conference in support of CRA. I would tional Council of La Raza, introduced regulators to prohibit the merger, ac- like briefly just to quote some of the Richard Farias as president of the quisition or branch expansion of an in- comments made by civil rights leaders Tejano Center for Community Con- stitution that is not compliant with at the press conference, as well as com- cerns in Houston, a member organiza- CRA. ments made by individuals who bene- tion of La Raza. Mr. Farias stated, in Current law does not give bank regu- fited from CRA. lators the authority to prohibit eligible Dr. Dorothy Height, chairman of the speaking of the importance of CRA: activities of a given charter due to Leadership Conference on Civil Rights, Now because of CRA, a number of banks in Houston created a consortium to help us pur- CRA non-compliance. The Bryan president emeritus of the National amendment requires an operating sub- chase a $2.1 million school building. The Council of Negro Women, spoke, and building has 7.5 acres and 80,000 square feet sidiary who wants to engage in agency said: of space, including a gymnasium, a cafeteria, activities to maintain CRA compliance Since its enactment in 1977, the Commu- an auditorium and 25 classrooms. They now on all depository institution affiliates. nity Reinvestment Act has served as one of have a charter school for success that houses Thus, non-banking financial agency the crowning achievements in the civil 400 students and is expected to grow to 650 activities would be held hostage to rights movement. students.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00060 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8454 CONGRESSIONAL RECORD—SENATE May 5, 1999 He goes on to say that it is very im- alition of 19 family farm and rural In a perfect world, lending practices would portant to understand that CRA is not groups, which states: be fair and the Reinvestment Act would be unnecessary. But without Federal pressure just about community development; it Rural areas continue to suffer from a seri- the country would return to the era of red- is about empowerment of the people; it ous shortage of affordable housing. Farmers lining, when communities cut off from cap- are facing the worst financial conditions in is about being able to give low-income ital withered and died. children and families the right that more than a decade due to declining com- they have to not only good housing but modity prices. Rural Americans continue to need the tools of the CRA to ensure account- [From the Washington Post, May 4, 1999] to good education and to good health ability of their local lending institutions. BANKING ON REFORM services. CRA helps to meet the credit demands of Daphne Kwok, executive director of The Senate today is scheduled to begin millions of family farmers, rural residents considering a bill that would remake the fi- the Organization of Chinese Americans, and local businesses. nancial services industry, allowing banks also took part in the press conference. Mr. President, I ask unanimous con- and insurance companies and investment She stated that the Organization of sent to have printed in the RECORD firms to merge and compete. Similar legisla- Chinese Americans supports the Com- other letters from a number of organi- tion is making its way through the House. munity Reinvestment Act because it zations which have written to us in The thrust of both bills is sound. But while has enabled home ownership among mi- very strong support of the CRA, as well the industries have lobbied hard to shape a law satisfactory to them, the current legisla- nority and low- and moderate-income as editorials. individuals: tion doesn’t adequately protect low-income There being no objection, the mate- communities or consumers’ privacy. Finan- Asian Pacific-Americans, especially Chi- rial ordered to be printed in the cial modernization should apply to them, nese-Americans, Korean-Americans, Viet- RECORD, as follows: too. namese-Americans, Asian Indian-Americans MISCHIEF FROM MR. GRAMM Since the Depression, federal law has are small business owners, and many of them Cities that were in drastic decline 20 years sought to keep the banking, insurance and are seeking to open up businesses in low and securities industries separate. The idea, in moderate income areas. ago are experiencing rebirth, thanks to new homeowners who are transforming neighbor- part, was to make sure that federally insured JoAnn Chase, executive director of hoods of transients into places where fami- bank deposits didn’t wind up somewhere the National Congress of American In- lies have a stake in what happens. The ren- risky and unregulated. But in recent years, dians, then spoke and stated: aissance is due in part to the Federal Com- even without a change in the law, that sepa- ration has eroded. Banks have found ways to Founded in 1944, the National Congress of munity Reinvestment Act, which requires offer mutual funds to their customers; in- American Indians is the oldest, largest and banks to reinvest actively in depressed and vestment firms function like deposit institu- most representative national organization minority areas that were historically writ- tions; etc. It makes sense now to bring legis- devoted to promoting and protecting the ten off. Senator Phil Gramm of Texas now lation—and regulation—in line with reality. rights of American Indian tribal govern- wants to weaken the Reinvestment Act, en- Congress has been trying to do so, and fail- ments and their citizens. One of our key mis- couraging a return to the bad old days, when ing, for more than a decade, and may again. sions has been to continuously advocate for banks took everyone’s deposits but lent But on the major issues, the administration, Indian self determination and self suffi- them only to the affluent. Sensible members the Federal Reserve and Congress have pret- ciency, and toward that end from its very in- of Congress need to keep the measure intact. ty well agreed. They would let the financial ception, our communities, our governments, The act was passed in 1977. Until then, pro- services industries meld while for the most our people have supported the Community spective home or business owners in many part keeping them out of other businesses, a Reinvestment Act, which has proven to be an communities had little chance of landing wise decision. They’ve come up with fire effective means of encouraging federally in- loans even from banks where they kept walls and regulatory schemes that, while sured financial institutions to extend pru- money on deposit. But according to the Na- still not entirely agreed upon, have satisfied dent and profitable loans in traditionally un- tional Community Reinvestment Coalition, most concerns about protecting federally in- derserved areas, particularly in Indian coun- banks have committed more than $1 trillion sured deposits. try. to once-neglected neighborhoods since the Specifically, the CRA has helped focus at- act was passed, the vast majority of it in the But there is no consensus yet on safe- tention to the challenges of extending credit last six years. guarding the interests of underserved com- to reservations and has acted as a catalyst to In New York City’s South Bronx neighbor- munities. Since 1977 federally insured banks reservation-based economic development. hood, the money has turned burned-out areas have been subject to the Community Rein- Since the implementation of the CRA, Na- into havens for affordable homes and a new vestment Act, requiring them to seek busi- tive American governments and citizens and middle class. The banks earn less on commu- ness opportunities in poor areas as well as our own banks have negotiated agreements nity-based loans than on corporate business. middle-class and wealthy neighborhoods. The for lending more than $155 million within the But the most civic-minded banks have ac- law, a response originally to clear evidence Indian country which has substantially ad- cepted this reduced revenue as a cost of of bias in lending, has worked well. It doesn’t vanced efforts toward economic self-suffi- doing business—and as a reasonable sacrifice force banks to make unprofitable loans, but ciency. It is a law that has helped build for keeping the surrounding communities it encourages them to look beyond tradi- homes for our people, has inspired hope and strong. tional customers, and it’s had a beneficial ef- has created jobs in many native commu- Federal bank examiners can block mergers fect on home ownership and small-business nities. or expansions for banks that fail to achieve lending. a satisfactory Community Reinvestment Act Sen. Phil Gramm, chairman of the Bank- The final speaker at the press con- rating. The Senate proposal that Mr. Gramm ing Committee, now wants to scale the law ference was Hillary Shelton, Wash- supports would exempt banks with assets of way back. He argues that community groups ington bureau director of the NAACP, less than $100 million from their obligations use it to extort money from banks; there’s who stated: under the act. That would include 65 percent scant evidence for that. The real danger is * * * on behalf of the NAACP * * * we are of all banks. The Senate bill would also dra- that, with financial modernization, banks honored to strongly support and continue to matically curtail the community’s right to will gradually escape their community obli- endorse the Community Reinvestment Act expose what it consider unfair practices. gations by transferring capital to affiliates and consequently oppose any attempts to Without Federal pressure, however, the that aren’t covered by the law. The law weaken it. amount of money flowing to poorer neigh- should be extended and modernized to keep The CRA has been instrumental in the re- borhoods would drop substantially, under- pace with a changing industry. vitalization of literally tens of thousands of mining the urban recovery. Consumer privacy also could be in danger communities nationwide, and continues to Mr. Gramm argues that community groups as barriers among industries break down. An be an important tool in the NAACP’s ongo- are ‘‘extorting’’ money from banks in return example: Should your life insurance medical ing efforts to help people and communities for approval, and describes the required pa- records be shipped over, without your knowl- achieve the goals of community resurrec- perwork as odious. But community organiza- edge, to the loan officer considering your tion, development, and growth, at no cost to tions that build affordable housing in Mr. mortgage application? Sen. Paul Sarbanes of American taxpayers. Gramm’s home state heartily disagree. Maryland and Rep. Ed Markey of Massachu- Mayor Ron Kirk of Dallas disagrees as well, setts, among others, would give consumers Mr. President, there has been printed and told the Dallas Morning News that he more control over the sale and sharing of in the RECORD a letter from the U.S. welcomed the opportunity to explain to Mr. personal data. As the financial industry Conference of Mayors which was Gramm that ‘‘there is no downside to invest- moves into a new era, privacy laws should quoted from earlier, a letter from a co- ing in all parts of our community.’’ also keep pace.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00061 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8455

JESUIT CONFERENCE, THE SOCIETY DEPARTMENT OF SOCIAL multiple funding streams, bringing together OF JESUS IN THE UNITED STATES. DEVELOPMENT the public and private resources required to Washington, DC, March 3, 1999. AND WORLD PEACE stimulate and produce new housing and eco- Hon. PAUL SARBANES, Washington DC, March 4, 1999. nomic development initiatives at the local Seante Committee on Banking, Housing, and Hon. PAUL SARBANES, level. Each of our members can attest to the Urban Affairs, Washington, DC. Banking, Housing, and Urban Affairs Com- necessity of the Community Reinvestment DEAR SENATOR SARBANES: We are writing mittee, U.S. Senate, Washington, DC. Act in putting together the resources re- you on behalf of the Jesuit Conference Board DEAR SENATOR SARBANES: I write to ask quired to do the job we all expect of them. At of the Society of Jesus in the United States. that you oppose any provisions in the Finan- a time when responsibility for solving seri- With the House and Senate Banking Com- cial Services Act of 1999 that may eliminate ous community problems is being devolved mittees scheduled to mark-up financial mod- consumer protections and/or dilute the fair to local organizations, it is mystifying as to ernization legislation this week and vigorous lending laws. why one of their most critical resource de- discussions already underway we call your The United States Catholic Conference has velopment tools would be pulled out from urgent attention to the status of the Com- vigorously supported the disclosure of lend- underneath them. munity Reinvestment Act (CRA) in this de- ing patterns since 1975 and was one of the Especially serious is the provision in the bate. We urge your vocal and unconditional original supporters of the Home Mortgage Senate bill which allows banks not in com- support for safeguarding and effectively ap- Disclosure Act. We believe people must have pliance with CRA to expand their affiliations plying CRA to any proposed financial mod- access to information about the lending and engage in new powers. This would essen- ernization legislation. By maximizing the practices and patterns of the financial insti- tially render the CRA useless in the new capital available to undeserved urban and tutions in their communities that are seek- world of financial modernization. rural areas, CRA has proven to be an excep- ing their business. In the past banks, mort- We also object to the creation of so-called tional means of promoting vital and sustain- gage companies, insurance brokers and other ‘‘safe harbors’’ for institutions with at least able communities. CRA should be allowed to financial institutions have discriminated a satisfactory CRA rating, which in effect continue its invaluable work. eliminates opportunity for public comment There are approximately 4,000 U.S. Jesuit against minority populations, low-income individuals and the communities in which on the community reinvestment activities of priests and brothers working abroad and in the banks, while maintaining opportunity our domestic projects which include: 28 Jes- they live with virtual impunity. The Com- munity Reinvestment Act (CRA) and the ef- for public comment on all other aspects of uit-affiliated universities and colleges, more the institutions’ functioning. than 50 Jesuit high schools and middle fective enforcement of its regulations have proved significant tools in ensuring that fi- Finally, the small bank exemption would schools, nearly 100 Jesuit parishes, and var- mean that rural communities have no op- ious other apostolic programs throughout nancial institutions meet the credit needs of the local communities in which they are lo- tions for acquiring credit, as small banks are the country. We have an overriding commit- often the only source of credit in many rural ment to empower individuals, families and cated, particularly by increasing the flow of credit to low-income and minority commu- parts of the country. communities who are most at-risk in our so- The Community Reinvestment Act is a ciety. In essential ways, CRA enables these nities. Since 1977, CRA has channeled tens of bil- model of the Federal government at its best, marginalized groups to fully integrate into stimulating investment in poor neighbor- society. lions of dollars profitably back into rural and hoods and creating a true partnership among Propelled by a mission of justice and social urban communities. This success of local progress, Jesuit institutions have CRA-type communities gaining access to private cap- the private, for profit sector; the private, not goals of investing in the communities where ital should not be jeopardized. Communities for profit sector, and the public sector. As we they are located. For example, Fordham Uni- and neighborhoods need the investment of move into an era of a bigger and more com- versity is situated in one of the poorest private capital particularly as government prehensive banking system, building on, not urban counties in the nation. In 1983, Ford- curtails its spending on housing and social tearing down, this core element of commu- ham formalized a long-standing partnership services programs and local communities are nity reinvestment should be an essential with the Northwest Bronx Community and being asked to assume more responsibility principle. We urge that the Senate not take this ac- Clergy Coalition to form the University for their own development. Low and mod- tion, and prevent the dire consequences that Neighborhood Housing Corporation (UNHP). erate income families of all races and would result in its wake of its passage. UNHP believes in working aggressively to ethnicities have benefited from CRA with in- Sincerely, develop and preserve innovative, commu- creased opportunities to purchase homes, SHEILA CROWLEY, nity-controlled, affordable housing. With the open small businesses or operate farms. President. strength and leverage of CRA, UNHP, has As Congress seeks to modernize the bank- built a positive, working relationship with ing and financial industry, fair lending laws Mr. SARBANES. Mr. President, as I Chase Manhattan Bank. From the late 1980s, must not be undermined. Once more, we urge draw to a close, let me again say to the this relationship has resulted in millions of you to oppose any efforts to diminish con- distinguished Senator from Nevada we dollars of capital for affordable housing and sumer protections and to weaken fair lend- very much appreciate his very strong economic development in the northwest ing laws. Bronx. Recently, this successful partnership and powerful statement. Sincerely, yielded $25 million in housing rehabilitation CARDINAL ROSER MAHONY, EXHIBIT 1 funding from Fannie Mae. The force of com- Archbishop of Los An- munity leaders working with university, APRIL 8, 1999 geles, Chairman, Do- banking and Fannie Mae representatives is Hon. PAUL S. SARBANES, not merely a lifeline for the northwest mestic Policy Com- Senate Hart Office Building, Bronx; it has added self-sustaining stability mittee. U.S. Senate, Washington, DC. and growth to an historically distressed, DEAR SENATOR SARBANES: The undersigned densely populated neighborhood. This is one NATIONAL LOW INCOME HOUSING organizations write to express strong opposi- example of an estimated $1 trillion in CRA- COALITION/LIHIS tion to the Financial Services Modernization leveraged financial commitments since 1977. Washington, DC, April 6, 1999. Act of 1999 as reported out of the Senate We ask for your continued support for na- Hon. PAUL S. SARBANES, Banking Committee on March 4th. The Act tional economic development policies which United States Senate, Washington, DC. would restructure the financial services in- equip people with the means to lead respect- DEAR SENATOR SARBANES: On behalf of the dustry in the United States by allowing ful and dignified lives. CRA is in the interest National Low Income Housing Coalition, I broad affiliations among banks, insurance of underserved communities; it is in the in- must express in the strongest terms possible companies, and security firms. Currently, terest of our Jesuit institutions; and it is in our objection to the evisceration of the Com- the law strictly limits ownership among dif- our collective, national interest. munity Reinvestment Act in the Financial ferent financial entities and between finan- Thank you for your consideration and ef- Services Modernization Act of 1999 recently cial companies and commercial corporations. forts. reported out of the Senate Banking Com- The Act seeks to ease these restrictions, Sincerely, mittee. without commensurate expansion of the REV. RICHARD RYSCAVAGE, The National Low Income Housing Coali- Community Reinvestment Act (CRA) to S.J., tion represents thousands of local housing cover insurance companies, securities firms, Secretary, Jesuit Social organizations that are doing the hard work mortgage companies, and other financial en- & International at the local level to rebuild neighborhoods tities allowed to affiliate with banks. The Ministries. that have been depleted by disinvestment, Act would undermine one of the most effec- MS. BRITISH ROBINSON, and to produce safe, decent, and affordable tive revitalization vehicles for underserved National Director, Jes- housing for people at the low end of the eco- low-income and minority communities, in- uit Social & Inter- nomic spectrum. These are organizations cluding Hispanic American communities national Ministries. that are masterful at the management of across the country.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00062 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8456 CONGRESSIONAL RECORD—SENATE May 5, 1999 We have found, and research confirms, that ment, not weakening, of CRA is critically oppose the Financial Services Modernization all too often the credit and financial needs of needed. We urge you to support the contin- Act of 1999 until the provisions against the these communities are severely underserved. ued strengthening of America’s communities CRA are removed. Historically, many financial institutions by vigorously opposing the Financial Serv- Sincerely, have avoided investing in these communities ices Modernization Act of 1999 as reported LELAND SWENSON, due to their perceived higher level of risk. out of Committee, and supporting amend- President. Unfortunately, ‘‘perceived higher level of ments that would strengthen the Bill’s CRA risk’’ is often code for ‘‘low-income’’ or ‘‘mi- protections. Thank you. SMALL BUSINESS ADMINISTRATION, nority.’’ But the facts show that low-income Sincerely, Washington, DC, May 3, 1999. and minority communities are not inher- Rick Dovalina, National President, Hon. PAUL S. SARBANES, ently riskier than other communities. In League of United Latin American Citi- Ranking Member, Committee on Banking, Hous- fact, most financial institutions find them to zens; Arturo Vargas, Executive Direc- ing and Urban Affairs, U.S. Senate, Wash- be quite profitable, once they begin invest- tor, NALEO Educational Fund; Ruth ington, DC. ing in them. Unfortunately, without the Pagani, Executive Director, National DEAR SENATOR SARBANES: I am writing to CRA, many financial institutions have not Hispanic Housing Council (NHHC); express my concern with provisions of the and would not be encouraged to do so. Juan Figueroa, President and General Financial Services Modernization legislation As the data show, Hispanics are the fast- Counsel, Puerto Rican Legal Defense that would weaken the Community Rein- est-growing population in the United States. and Education Fund (PRLDEF); Anto- vestment Act (CRA). The President has made We are a growing force in the expansion of nia Hernandez, President and General clear that he would veto legislation that homeownership and small business develop- Counsel, MALDEF; Raul Yzaguirre, weakens CRA, and it is my hope that the ment, two leading indicators of the economic President and Chief Executive Officer, U.S. Senate will not move to undermine this well-being of this country. For example, be- National Council of La Raza (NCLR); important statute. tween 1987 and 1992, Hispanic-owned business Manuel Mirabal, President and Chief The CRA is a vital tool in providing access grew by over 76%, compared to 26% for U.S. Executive Officer, National Puerto to capital in communities traditionally un- businesses overall. According to a 1997 Har- Rican Coalition (NPRC). derserved and once perceived as high-risk vard study, ‘‘the number of Hispanic home- lending areas. Financial institutions have found, through CRA, that creditworthy bor- owners has shown the most spectacular rise’’ NATIONAL FARMERS UNION, rowers and sound investments do exist in in recent years compared to that of Whites Washington, DC, March 24, 1999. these areas. The CRA has resulted in viable and of other minority groups. Population DEAR SENATOR: On behalf of the 300,000 small businesses creating jobs and stimu- projections forecast Hispanics to be the larg- farm and ranch families of the National lating local economies. Without CRA, lend- est minority group in the U.S. by the year Farmers Union, I write to express our strong ing institutions might never realize the max- 2005, causing the U.S. economy to be increas- opposition to the Financial Services Mod- imum potential of these marketplaces, and ingly dependent on the continued prosperity ernization Act of 1999, as reported out of the many communities could lose access to bank of the Hispanic American community. With- Senate Banking Committee earlier this credit, which is so important to small busi- out the CRA, this growth may be impeded. month. Specifically, we are concerned that nesses. As reported out of the Senate Banking the bill would undercut the Community Re- The CRA focus for banks strikes at the Committee, the Financial Services Mod- investment Act (CRA)—a law that has sig- heart of fulfilling the U.S. Small Business ernization Act of 1999 would hinder that nificantly expanded access to credit in rural Administration’s (SBA) mission. SBA is in growth by weakening the CRA in the fol- communities across the nation. the business of providing credit to those who lowing three ways. First, ‘‘satisfactory’’ CRA The Community Reinvestment Act pro- cannot obtain it elsewhere, and we do this rating is not required in order for financial hibits redlining, and encourages banks to largely through our partners—local financial institutions to enjoy the new powers af- make affordable mortgage, small farm and institutions. Everyday, SBA and banks forded to them by the legislation, thereby al- small business loans. Under the impetus of across the country help entire communities lowing banks to exercise their privilege, CRA, banks and thrifts made $11 billion in grow through SBA-backed equity invest- even if they are not meeting the credit needs farm loans in 1997. CRA loans assisted small ments and guaranteed loans, many of which of the communities where they do business. farmers in obtaining credit for operating ex- fall under CRA goals. Additionally, studies Second, banks receiving a ‘‘satisfactory’’ penses, livestock and real estate purchases. analyzing CRA data identify and quantify CRA rating would be given a ‘‘safe harbor’’ Low- and moderate-income residents in rural what would have been only hunches just 4 from public comment on CRA performance. communities also benefited from $2.8 billion years ago, and the result is a more accurate Since over 95% of banks receive a ‘‘satisfac- in small business loans in 1997. depiction of the patterns and gaps of small tory’’ rating, this would undermine the effec- In 1999, access to credit is tighter than business lending across the Nation. The CRA tiveness of the law by restricting a commu- usual, making it critical to maintain the is essential in meeting the credit and invest- nity’s right to voice its experience with CRA. There are three provisions in the pend- ment needs of our America’s small busi- banks. While a ‘‘satisfactory’’ rating pro- ing legislation that jeopardize the CRA. nesses. vides a helpful guide to a bank’s overall per- First, the bill exempts banks and thrifts Weakening CRA could reverse the progress formance, it may not provide an accurate that are located in rural areas and have less we have made in small business lending in picture at the neighborhood level. than $100 million in assets, from CRA re- this country. As you seek to modernize the Third, the Act proposes to exempt all quirements. This provision would exempt 76 financial industry, I urge you to oppose any small rural banks (those with less than $100 percent of all banks and thrifts in rural com- provision that actually moves us back in million in assets) from CRA, thereby releas- munities. A Congressional Research Service time. ing 76% of all rural banks from their CRA study of data from 1997 to mid-1998 found Sincerely, obligations. As with the safe harbor provi- that banks with less than $100 million in as- AIDA ALVAREZ sion, this undermines the spirit and the ef- sets receive 70 percent of the ‘‘below satisfac- Administrator. fectiveness of the law by exempting most tory’’ CRA ratings. rural banks. This would have particularly Second, the banking bill fails to require CHAIRMAN GREENSPAN COMMENTS ON CRA adverse consequences in low-income rural that banks have a satisfactory CRA rating in ‘‘Anecdotal information seems to suggest communities where often the only source of order to affiliate with securities and insur- that loans to low- and moderate-income peo- credit is a small bank. Moreover, researchers ance firms. In the absence of this require- ple perform, with respect to repayment, as have found that small banks have dispropor- ment, banks could ignore local credit needs well as loans to others, though some studies tionately poor CRA records compared to in favor of expanding to other areas. have suggested that delinquency rates on larger banks, thereby highlighting the need Third, the bill has the effect of eliminating some types of affordable mortgage loans are for CRA in rural communities and small the public’s opportunity to comment on a higher. . . . there is little or no evidence towns. bank’s performance pending expansion, if that banks’ safety and soundness have been CRA is one of the strongest incentives to that bank has had a satisfactory CRA rating compromised by such lending, and bankers encourage investment in low-income and mi- during the previous 36 months. often report sound business opportunities.’’— nority communities. Over the last twenty- There is no compelling reason to weaken January 12, 1998. two years, neighborhoods across the country the CRA. In fact, CRA regulations were re- ‘‘When conducted properly by banks who have benefited from CRA-encouraged invest- vised in 1995 to reduce compliance burdens are knowledgeable about their local mar- ments. This has resulted in increases in on small banks and allow for streamlined ex- kets, who use this knowledge to develop suit- homeownership and business development, amination. able products, and have adequately promoted leading to the rebirth of many American The CRA has been extremely successful in those products to the low- and moderate-in- neighborhoods. However, many communities encouraging financial institutions to help come segments of the community, CRA can remain underserved by capital and invest- meet the credit needs of rural communities be a safe, sound and profitable business.’’— ment vehicles. For this reason, reinforce- across the nation. Therefore, we urge you to May 17, 1995.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00063 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8457 Chairman Greenspan noted during testi- ‘‘Let this evil, like slavery in the pre-Civil One example of a CRA success story would mony before the House Banking Committee War period, let it exist, but do not expand be the NAACP’s Community Development on February 11, 1999 that CRA has ‘‘very sig- it.’’—Senate Banking Committee Markup and Resource Centers (CDRCs). The NAACP, nificantly increased the amount of credit in Hearing, September 11, 1998. working together with NationsBank, opened communities’’ that the changes have been ‘‘CRA has since been corrupted into a sys- our first CDRC in 1992 in part to help ‘‘quite profound.’’ tem of legalized extortion, often with the as- NationsBank comply with CRA. Since that ‘‘CRA has helped financial institutions to sistance of regulators. Moreover, it has in- time, NAACP–CDRCs have made mortgage, discover new markets that may have been creasingly replaced market-directed finan- consumer and small business loan referrals underserved before.’’—May 17, 1995 repeated cial activity with politically directed and amounting to over $100 million, and more January 12, 1998. motivated channeling of private sector fi- than 10,000 individuals and businesses have nancial resources. . . . This cronyizing (sic) received counseling or technical assistance CRA ADMINISTRATION AND DEMOCRATIC of the American economy is more typical of through CRDCs. SUPPORTERS a third world economy and will undoubtedly Due to the vital role the banking industry ‘‘We must pass a stronger Community Re- be damaging to our national economic plays in the success or failure of every Amer- investment Act that challenges to lend to growth.’’—Letter to Senate Committee on ican neighborhood, CRA is a necessary tool entrepreneurs and promotes development the Budget, March 5, 1999. for the sustained economic development of projects that reinforce community and our nation. Thus the NAACP urges you, in neighborhood goals.’’—Governor Bill Clinton THE WHITE HOUSE, the strongest terms possible, to oppose any and Senator Al Gore, ‘‘Putting People Washington, March 2, 1999. amendments or bills that would in any way First,’’ 1992. Hon. PAUL S. SARBANES, weaken the effectiveness of CRA. The ‘‘[T]he town banker is doing pretty well U.S. Senate, Washington, DC. NAACP also urges you, again in the strong- where you live—in a big city or a small DEAR PAUL: This Administration has been est terms possible, to support any move to town. And yet, unbelievably enough, when a strong proponent of financial legislation expand or modernize CRA as the financial that would reduce costs and increase access we are proving it is working, the Community services industry is allowed to change and to financial services for consumers, busi- Reinvestment Act is under fire again.’’— grow. By not including CRA in any restruc- nesses and communities. Nevertheless, we President Clinton to the U.S. Conference of turing of the financial services industry, you cannot support the ‘‘Financial Services Mod- Mayors, January 29, 1999. would effectively be denying whole commu- The CRA has ‘‘helped to build homes, cre- ernization Act of 1999,’’ as currently pro- nities access to much-needed mortgages, posed by Chairman Gramm, now pending be- ate jobs, and restore hope in communities consumer or small business loans, or basic fi- fore the Senate Banking Committee. across America.’’—President Clinton, Letter nancial assistance. In its current form, the bill would under- to Senator Paul Sarbanes and Senator Phil I hope that you will feel free to contact me mine the effectiveness of the Community Re- if you have any questions regarding the Gramm, March 2, 1999. investment Act (CRA), a law that has helped ‘‘We must protect the Community Rein- NAACP position on CRA, or if there is any to build homes, create jobs, and restore hope vestment Act, which expands access to cap- way that I can work with you to ensure that in communities across America. The CRA is ital from mainstream financial institutions. CRA is allowed to continue to prosper and working, and we must preserve its vitality as provide assistance to people and commu- We have greatly improved CRA by stream- we write the financial constitution for the nities across the nation. lining its regulations so that they focus on 21st Century. The bill would deny financial Sincerely, performance, not paperwork. CRA has been services firms the freedom to organize them- HILARY O. SHELTON, an enormous success.’’—Treasury Secretary selves in the way that best serves their cus- Director. Robert Rubin, Letter to Senator Phil tomers, and prohibit a structure with proven Gramm, February 1, 1999. advantages for safety and soundness. The bill Mr. BRYAN. I note that the distin- ‘‘It’s very significantly increased the would also provide inadequate consumer pro- guished chairman wants to speak. The amount of credit that’s available in the com- tections. Finally, the bill could expand the Senator from Nevada would like to get munities, and if one looks at the detailed ability of depository institutions and non- 5 to 6 minutes at some point, if that statistics, some of the changes have been financial firms to affiliate, at a time when quite profound.’’—Federal Reserve Chairman can be accommodated. experience around the world suggests the Mr. GRAMM. Mr. President, under Alan Greenspan, Testimony before the House need for caution in this area. Banking and Financial Services Committee, I agree that reform of the laws governing the unanimous consent request, I was February 11, 1999. our nation’s financial services industry to be recognized next. ‘‘[C]redit is the key to the American would promote the public interest. However, I suggest we let Senator MACK speak dream. Without it, people cannot share the I will veto the Financial Services Moderniza- for 4 minutes, have the distinguished tremendous wealth of our free market sys- tion Act if it is presented to me in its cur- Senator from Nevada speak for 4 min- tem—cannot buy a home, own a car, or send rent form. utes, and then I will speak for 4 min- a child to college.’’—Former Rep. Joseph Sincerely, utes and we will be through. Would Kennedy (D–MA), House Floor Statement BILL CLINTON. during the Debate on the Financial Institu- that work? Mr. BRYAN. That is fine. tions Safety and Consumer Choice Act, No- NATIONAL ASSOCIATION FOR THE The PRESIDING OFFICER. Without vember 1, 1991. ADVANCEMENT OF COLORED PEOPLE, WHAT SENATOR GRAMM HAS SAID ABOUT CRA Washington, DC, March 2, 1999. objection, it is so ordered. The Senator from Florida. ‘‘I believe that perhaps the greatest na- Re the Financial Services Modernization Act tional scandal in America . . . is a scandal and the Community Reinvestment Act. Mr. MACK. Mr. President, I thank Senator GRAMM and the other Members where a law is being used in such a way as to Hon. PAUL S. SARBANES, extract bribes and kickbacks and in such a U.S. Senate, Washington, DC. on the floor for this time. I will be way as to mandate the transfer of literally DEAR SENATOR SARBANES: The National As- brief. hundreds of millions of dollars and to sociation for the Advancement of Colored I have spoken on this issue through- misallocate billions and tens of billions of People (NAACP), the nation’s oldest and out my time in the Senate serving on dollars of credit.’’—Senate Floor Statement, largest grassroots civil rights organization, the Banking Committee which now is October 5, 1998. strongly supports the Community Reinvest- into its 11th year. I also make these ‘‘[A]ll over the country banks that have ment Act (CRA) and opposes any attempts to comments from the perspective of an exemplary records in community lending weaken it. The CRA has been instrumental and that have received the highest ratings in the revitalization of literally tens of thou- individual who was president of a small on CRA are routinely shaken down every sands of communities nationwide, and is an bank in southwest Florida for 5 years time they want to open a branch, every time important tool in the NAACP’s efforts to out of a 16-year banking career. they want to start a new bank, every time help people and communities achieve their One would think, listening to the they want to engage in a merger.’’—Senate goals at no cost to the taxpayer. comments that have been made by the Floor Statement, October 5, 1998. Through CRA, financial institutions are distinguished Senator from Maryland, ‘‘[CRA] conjures up in my mind the ‘‘pro- discovering that there are benefits to work- that we were proposing to repeal CRA. tection’’ racket of an earlier era, where the ing in and with low to moderate income and We are not proposing that at all. There little merchant had the gangster come into minority communities. Since its enactment his place of business and say, ‘You know, in 1977, CRA has helped lenders tap into pre- may be Members who want to do that, somebody could come in here and do you viously unchartered areas and consequently but that is not what the issue is about. some real harm, and I am willing to protect they are learning what a viable, profitable The issue is about regulatory overkill. you.’ ’’—Senate Floor Statement, September market the low-moderate and minority com- This little bank that I was president 30, 1998. munities are. of had about $60 million in assets—very

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00064 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8458 CONGRESSIONAL RECORD—SENATE May 5, 1999 small bank—in a community that was provisions which relate to small banks The PRESIDING OFFICER. The Sen- developed, one of these Florida devel- that eliminate their need to even file a ator’s time has expired. The Senator opments, that began in the late 1950s. report. All they have to do is to point from Texas. To suggest that this small community for the bank examiner and say the Mr. GRAMM. Mr. President, this has bank in a very well-defined and con- records are in the file cabinet. They been a long debate and I think a good fined market was not providing re- need do no more. So this is not, in my debate. Rather than trying to go back sources to that market is just absurd. judgment, an onerous burden. and answer specific points that have If we did not lend money into that And with respect to the new services been made, and correct statements, let market, we would, in fact, have gone that we permit banks to participate in, me just try to cut to the heart of this. broke. So all I am suggesting is the if Secretary Rubin and other experts This is not about banks, even though amendment being proposed here is who are looking at the banking field the Independent Bankers, the Amer- being sold as if we were trying to re- are correct, that is the wave of the fu- ican Bankers Association, the Bankers peal CRA. The information I have is ture. If we do not require CRA as the Roundtable oppose this amendment with the committee position: Only 2.8 condition of availing oneself of these and support the underlying bill. percent of the total assets of the bank- new financial services, securities and This is not about insurance compa- ing industry in America are affected by insurance, in effect we marginalize and nies. This is not about securities com- this carve-out, 2.8 percent. There were relegate CRA to a much lesser role. panies. This is about right and wrong. 16,000 banks audited over a 9-year pe- What is accomplished? Hundreds of I have presented today, from redacted riod and only three of those banks—I millions of dollars have been invested agreements, secret agreements that am talking about small banks now— in the inner cities in our country. have been entered into by community only three of those banks were found to Thousands of minority businesses have groups and banks, three examples, the be significantly out of compliance. had an opportunity to participate, only three we have, where over and Small banks in America need some which they would not otherwise have over again community groups are paid regulatory relief. That is all we are gotten, and home ownership opportuni- cash payments in return for them with- suggesting here. Again, my experience ties have expanded for literally mil- drawing objections which they have was this little bank of $60 million in as- lions of Americans. It would seem to made to banks taking specific action, sets had to assign one individual whose me those are the kind of issues we can or where they have agreed not to raise job it was to put pins into a map in our agree on—Democrats, Republicans, an objection. market showing where we had made conservatives and liberals. CRA has ac- So the first thing we are trying to do real estate loans. That is all we had to complished much. is bring integrity to the process by pre- venting people, in essence, from paying do. But I had to assign one person to do We have gone through this before. A witnesses. How do we try to do that? that. She had to put programs into ef- year ago, we nearly got a bill. It passed We try to do it in the following way: If fect in the bank to make sure we were by a bipartisan majority in the House, you are a bank and you have an excel- complying with lending to our commu- with virtually the identical provisions lent CRA record, you have been in com- nity. It was the only place we could that relate to CRA as contained in the pliance for three audits in a row and have loaned. Bryan amendment. It passed 16 to 2 out So the idea that we needed to have you are in compliance now—we do not of the Banking Committee in this ses- the Community Reinvestment Act for in any way limit the ability of anybody sion of Congress; in the House Banking my bank and for small community to object to that bank doing what it Committee by a vote of 51 to 8. This banks is absurd. I ask my colleagues to has a right to do under law—all we are legislation has progressed with, again, reject the amendment and to support saying is you are innocent until proven virtually the identical provisions as it the committee position. guilty if you have a long record of com- relates to CRA that the Bryan amend- I yield the remainder of my time. pliance. If you are going to come in and ment contains. The PRESIDING OFFICER. The Sen- prevent a bank from taking an action ator from Nevada. So why are we going through this? they have earned the right to do based Mr. BRYAN. I thank the chairman The protagonists, the bankers, the in- on audits on community lending, and for accommodating me and allowing surance companies and the securities you come in and say they are racists, me to speak for 4 minutes. industry, do not oppose this legisla- or they are loan sharks, that is not Let me say we had much debate and tion. We are going through this be- enough. What we require is you present much discussion. There are amend- cause our able chairman, whom we all substantial evidence. ments on bills that come and go. They greatly respect, says he needs leverage How is that defined? The Supreme really do not impact the overall out- in dealing with the House. The last Court defines substantial evidence as come. This amendment is the most im- time I looked at the record of the com- ‘‘more than a mere scintilla . . . such portant amendment that will be con- position of the House, the Republican relevant evidence as a reasonable mind sidered in this debate. If the Bryan Party was in the majority. Among its might accept as adequate to support a amendment loses, we convert what can leaders were people such as TOM DELAY claim.’’ be a bipartisan effort to get this legis- and DICK ARMEY, not exactly what you That is not a high standard. That is lation, which I strongly support and would call liberal exponents, bleeding- simply a credibility standard. And all supported in the last Congress—and it heart types. over America—we have professional becomes immediately a partisan vote, It seems to me the argument that we protesters in Boston who are pro- and that legislation has no chance in need leverage makes no sense at all. testing bank mergers in Illinois. What that form of becoming law. Whatever Finally, let me say this may be the do they have to do with community one’s view is on CRA, and I understand only opportunity in this Congress to lending in Illinois? Nothing. But they we have widely different views, I re- vote on a civil rights amendment, a file a protest. The bank is deathly spectfully submit this is not the vehi- process that has worked well and has afraid of being held up in its merger, cle to make this the issue. If, as the served the nation well. It is not ob- for example. Obviously, they do not distinguished chairman and others jected to by those who are struggling want to be called bad names by people have said, CRA needs to be revisited, to reach the compromises on this piece who are professionals at calling people let’s do so in the context of some type of legislation. We should enact the bad names. So they end up paying of other legislation that is presently Bryan amendment and move forward these groups cash. That is not right. before the Banking Committee. We and get this bill over to the House, get This is an issue of right and wrong. have had no hearings at all on this. it to conference and signed into law by The second issue is the issue relating The Bryan amendment does two very the President. We have that oppor- to small banks. Little banks in rural simple things. One, it retains the cur- tunity only if the Bryan amendment communities in total hold only 2 per- rent CRA provisions, including those prevails. cent of the assets of banks, but in 16,300

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00065 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8459 audits of these banks, each one of them and nays have been ordered. The clerk are based on the Glass-Steagall Act, on average cost the bank $80,000 to will call the roll. legislation passed in 1935, over 60 years comply with. They found three banks The legislative clerk called the roll. ago! in 9 years that are substantially out of Mr. FITZGERALD (when his name The world has changed a great deal compliance. They made these little was called). Present. since then, and it is going to change banks pay $1.3 billion to find three bad Mr. REID. I announce that the Sen- further and faster as we move into the actors. And little banks all over Amer- ator from New Jersey (Mr. LAUTEN- 21st century. We need to update our ica are threatened by this regulatory BERG) is necessarily absent. outdated laws to account for this burden. So we exempt them from it. I also announce that the Senator change and to give flexibility to Amer- Mr. President, 44 percent of the en- from Louisiana (Ms. LANDRIEU) is ab- ican companies. forcement effort is going to banks with sent attending a funeral. At the same time, we must make 2.8 percent of the capital. Take that en- I further announce that, if present sure that any bill we pass treats all the forcement effort and put it where the and voting, the Senator from New Jer- segments of the financial industry fair- money is and you will get more com- sey (Mr. LAUTENBERG) and the Senator ly, and that there is a level playing munity lending, not less. from Louisiana (Ms. LANDRIEU) would field for all of the groups involved. Finally, it is not as if the Sarbanes each vote ‘‘no.’’ If history is any indication, any new amendment simply strikes our provi- The result was announced—yeas 52, law we pass will be with us for a long time, so we had better get it right. sions. But the Sarbanes amendment is nays 45, as follows: We’ve been working to get it right the largest expansion of CRA in Amer- [Rollcall Vote No. 101 Leg.] for a long time. Eleven years ago, when ican history. YEAS—52 I was a member of the House Banking It would impose a million-dollar-a- Abraham Frist Murkowski Committee, we were able to report a fi- day fine on bank officers and board Allard Gorton Nickles nancial services modernization bill to Ashcroft Gramm Roberts members if they fell out of compliance. the floor. The American Bankers Association and Bennett Grams Roth Bond Grassley Santorum Last year the House passed a bill and the Independent Bankers Association Brownback Gregg Sessions the Senate was able to pass a bill out have urged us not to do this, because Bunning Hagel Shelby of committee. they will not be able to get board mem- Burns Hatch Smith (NH) Campbell Helms As a Member of the House last year, Smith (OR) bers to serve and they will not be able Chafee Hutchinson I supported the bill that passed by one Snowe to hire officers if they have to buy in- Cochran Hutchison Stevens vote in the House. It wasn’t perfect. surance to potentially pay a million- Collins Inhofe Coverdell Kyl Thomas There were things I would have liked dollar-a-day fine if they fall out of Craig Lott Thompson to change. compliance with this regulation. Crapo Lugar Thurmond But I believed at the time that we What is the justification for this reg- DeWine Mack Voinovich couldn’t allow the search for perfection ulatory overkill when you have had Domenici McCain Warner to block real progress. Enzi McConnell three cases of substantial noncompli- That’s even more true this year. ance out of 16,300 audits over 9 years? NAYS—45 We can talk about banking reform— What is wrong with this picture? Akaka Edwards Lieberman and negotiate issues—for another What is wrong with the picture is, Baucus Feingold Lincoln twelve years—and we won’t ever be Bayh Feinstein Mikulski sadly, that many of our Democrat col- Biden Graham Moynihan able to make everyone totally happy. leagues have decided, even though the Bingaman Harkin Murray There are too many competing inter- spokesman for CRA testifying before Boxer Hollings Reed ests and too much complexity is in- our committee said, yes, there are Breaux Inouye Reid volved in the rapidly changing finan- Bryan Jeffords Robb abuses and, yes, they hurt the process Byrd Johnson Rockefeller cial services industry for us ever to and, yes, there is what they call green Cleland Kennedy Sarbanes find a regulatory framework that will mail. Most people call it blackmail. Conrad Kerrey Schumer completely satisfy all of the players in- Daschle Kerry Specter volved. But our colleagues have taken the ex- Dodd Kohl Torricelli treme position that not only will they Dorgan Leahy Wellstone It’s not going to happen. not address these abuses, they are Durbin Levin Wyden At some point, we just have to do the going to vastly expand this to insur- best we can and move ahead. I’m con- ANSWERED ‘‘PRESENT’’—1 vinced we have reached that point ance, to securities and, with these mil- Fitzgerald lion-dollar-a-day fines, producing a sit- now—we should pass this bill. Fortunately, the bill our committee uation where every abuse we are con- NOT VOTING—2 approved this year is even better than cerned about today is going to be Landrieu Lautenberg the bills we considered last year. Chair- greatly expanded. The motion was agreed to. man GRAMM and his staff did a good I urge our Democrat colleagues, if Mr. GRAMM. Mr. President, I move job—the committee did a good job. you support CRA, to help us bring an to reconsider the vote. It is time to move ahead. end to these abuses. If you support Mr. SARBANES. I move to lay that We should pass a clean bill quickly CRA, end the regulatory paperwork motion on the table. and send a message to the other body burden overkill so we can focus in this The motion to table was agreed to. that we are serious about financial law on the real problem. While groups Mr. BUNNING. Mr. President, I rise services reform. claim we are endangering CRA, it is today in support of S. 900, which will This bill has many important provi- those who will not fix clear wrongs modernize our financial services laws. sions. And I’m not going to talk about that scream out that endanger it. If our financial industries are going them all, but I would like to mention Mr. President, I move to table the to be able to compete in the world mar- one issue in particular. pending amendment and ask for the ket in the next century, we must mod- The one issue my bankers bring up yeas and the nays. ernize our depression-era banking laws. every time they come to visit is Com- The PRESIDING OFFICER (Mr. The next century is almost here. We munity Reinvestment Act or CRA re- BROWNBACK). Is there a sufficient sec- all talk about a Y2K problem. What form. ond? about the antique banking law prob- I am very pleased the chairman has There appears to be a sufficient sec- lem? Entering the new century with agreed to put CRA provisions in the ond. antiquated banking laws would be fool- bill and that we were able to pass Sen- The yeas and nays were ordered. hardy. We have to reform our financial ator SHELBY’s amendment in com- The PRESIDING OFFICER. The service system. mittee that will provide CRA relief, es- question is on agreeing to the motion Most of the financial services and pecially to small banks in my State to table amendment No. 303. The yeas bank laws that are on the books today and across the Nation.

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Senator SHELBY’s amendment will Ten years ago, May 4, 1989, the fed- the people of Mexico. They proved exempt 154 small banks in Kentucky eral debt stood at $2,770,422,000,000 (Two their military mettle to themselves from Federal CRA burdens. trillion, seven hundred seventy billion, and the world, and their government, These banks have always invested in four hundred twenty-two million). led by President Juarez, secured legit- the community. That is where their Fifteen years ago, May 4, 1984, the imacy in the eyes of other nations. business is. A bank in Clinton, Ken- federal debt stood at $1,489,259,000,000 Finally, La Batalla de Puebla as- tucky does not lend in Louisville or (One trillion, four hundred eighty-nine serted the right of people living in Lexington, it lends in Clinton. billion, two hundred fifty-nine million) former European colonies to self deter- I have a letter from Robert Black, which reflects a debt increase of more mination and national sovereignty, and president and CEO of the Clinton Bank. than $4 trillion—$4,073,790,386,516.94 it unified all the citizens of Mexico, Mr. Black says: ‘‘We were using good (Four trillion, seventy-three billion, from landowners to laborers, in a com- CRA practices long before the burden- seven hundred ninety million, three mon cause. It marks the point when some regulation was passed. This regu- hundred eighty-six thousand, five hun- people stopped seeing themselves as lation is now requiring much of our dred sixteen dollars and ninety-four subjects of monarchy in a distant land time preparing documentation and cents) during the past 15 years. or restricted their loyalty to a par- ticular state or region, but instead placing pins in a map just to prove that f we made loans in every community.’’ viewed themselves as citizens of a new I should mention that Clinton, Ken- CINCO DE MAYO nation, a nation united under the tucky was not named after Bill Clin- Mr. DOMENICI. Mr. President, today, green, white and red colors of the Mexi- ton. May 5, or ‘‘Cinco de Mayo,’’ marks an can flag. I would also like to read a passage important holiday for Mexicans and Much has been said in recent years from a letter from E.L. Williams, presi- Mexican-Americans alike, and it will about the ‘‘commercialization’’ of Cino dent of the Citizens Deposit Bank of be observed with celebrations and fes- de Mayo, and it is true that importance Arlington, in Arlington Kentucky. tivities across the United States. Con- of this holiday often has been over- Mr. Williams states: ‘‘In our opinion, trary to a popular misconception, looked. However, to most Mexican- the time and money afforded to CRA Cinco de Mayo does not commemorate Americans, or Chicanos, Cinco de Mayo compliance in small banks could be Mexico’s independence from Spain. has a special meaning. Many scholars used to a much greater advantage, such That holiday is celebrated on Sep- believe La Batalla de Puebla produced as lending and assisting the low to tember 16. Instead, Cinco de Mayo the first military hero from the Amer- moderate income population for which marks the victory in 1862 of the Mexi- ican Southwestern region in General the CRA was originally implemented.’’ can army over a larger, better armed Ignacio Zaragosa, who was born in These small banks will lend in their and better trained invading French Texas. The holiday has long been a les- own communities with or without army at La Batalla de Puebla. son in overcoming great odds through CRA. They don’t need Federal regu- After gaining independence in 1821, determination and unity. Today, Cinco lators breathing down their necks to Mexico endured a series of set backs de Mayo is an occasion for people of Mexican descent to come together to make sure they are doing what they while trying to establish a republic. By express pride in their history, and I en- would be doing anyway. the late 1850s, Mexico was in the grips courage all Americans to enjoy this op- I would personally like to see even of a severe economic crisis, and the portunity to celebrate and appreciate greater reform of CRA—across the treasury was bankrupt. In 1861, Presi- the contributions of Mexican culture. board—but our small banks really need dent Benito Juarez placed a morato- and deserve relief and this bill provides rium halting payments on foreign debt. f it. Since much of Mexico’s debt was owed RUMORS OF NURSING HOME In closing, Mr. President, I repeat to France, Napoleon III responded by BANKRUPTCY that this bill is not perfect. But it is a invading Mexico. After landing in the Mr. GRASSLEY. Mr. President, I dramatic improvement over the an- port of Veracruz, the French army, serve as chairman of the Senate Aging tique financial laws we are operating which was considered the finest mili- Subcommittee and I feel a necessity to under now and it is a dramatic im- tary force of the period, expected to inform my colleagues about the issue provement over the Sarbanes sub- march through the country and easily of rumors about the pending bank- stitute. capture the capital, Mexico City. How- ruptcy of some nursing home chains in We must enter the 21st century ready ever, a small Mexican army, under the the United States. to compete and this bill will make that command of General Ignacio Zaragosa, There are reports in the press, and in possible. mounted a strong defense at the town discussions with my colleagues I have It is a good bill—I urge my colleagues of Pueblo and routed the invading received information, indicating that to support it. force. one and possibly two large nursing f The stunning victory was short-lived, home chains may be facing bankruptcy though. The French returned with rein- THE VERY BAD DEBT BOXSCORE in the near future. That has an eco- forcements and were able to defeat nomic side and it has a human side. I Mr. HELMS. Mr. President, at the Mexican forces the following year. But will speak first about the human side. close of business yesterday, Tuesday, they were only able to control Mexico Should one or both of these nursing May 4, 1999, the federal debt stood at for four years, and President Juarez re- home chains go bankrupt, we would $5,563,049,386,516.94 (Five trillion, five gained power in 1867. have an immediate challenge to ensure hundred sixty-three billion, forty-nine Although, in the end, La Batalla de the continued care of somewhere be- million, three hundred eighty-six thou- Puebla had little lasting military sig- tween 35,000 residents, on the one hand, sand, five hundred sixteen dollars and nificance, it was, culturally, a water- and 70,000, on the other, in these re- ninety-four cents). shed event for the fledging nation, and spective homes where they are cur- One year ago, May 4, 1998, the federal for Latin America as a whole. After rently under care. This would be a sig- debt stood at $5,477,263,000,000 (Five seeing Europe’s best army routed by a nificant task. Nursing home residents trillion, four hundred seventy-seven hastily gathered and largely untrained are frail and are not easily moved. billion, two hundred sixty-three mil- Mexican defense, European leaders be- Moving them runs the risk of causing lion). came more wary of exerting military ‘‘transfer trauma,’’ a condition that Five years ago, May 4, 1994, the fed- force in the Americans. Europe never can result in death. Therefore, it is eral debt stood at $4,572,995,000,000 sent another invading force to the critical that we keep focused on pre- (Four trillion, five hundred seventy- Americas after this episode. venting avoidable harm and take pre- two billion, nine hundred ninety-five The victory at Puebla also instilled a cautions to prevent this from hap- million). great sense of pride and patriotism in pening.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00067 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8461 I have introduced legislation to en- advance, for the daunting challenges not be about CBO’s baselines, it should sure that the quality of patient care is bankruptcies would pose to various fed- be about what is really going on out monitored if there would be bank- eral and state agencies. HCFA briefed there. ruptcy. My legislation requires the ap- the staff of the Aging Committee, as And that is what we need to find out. pointment of an ombudsman to act as well as staff from the Finance Com- Next, questions have been raised by an advocate for the patient. This mittee and Budget Committee. While shareholders, in class action suits change will ensure that bankruptcy the HCFA staff appreciated the sever- against the management of these com- judges are fully aware of all the facts ity and size of the problem of ensuring panies, about the competence and ef- when they guide a health care provider resident safety in the event of a bank- fectiveness of the management of these through the process of bankruptcy. ruptcy, they did not have a plan—or two companies. Did these companies Prior to a chapter 11 filing, or imme- even a plan for a plan. try to grow too large, too fast? Did diately thereafter, the debtor employs I wrote to the HCFA Administrator they take on more debt than they a health care crisis consultant to help urging her to take the effort very seri- could manage? Was their business it in its reorganization effort. The first ously, to keep at the planning and to strategy flawed? A host of questions step is usually cutting costs. Some- stay in touch with my office. Only on need to be answered about the internal times this step may result in a lower April 28th did I hear from her office operation of these companies—to see if quality of care for the patients who that we could expect to see the plan in they were being well run—before we as- live there. The appointment, then, of the next two weeks. That is why I sume that more taxpayer dollars will an ombudsman, should balance the in- wrote to her again on April 29, to tell fix the problem. Otherwise we could terests between the creditor and the her to get on with the effort and to let wind up subsidizing the mistakes of patient. These interests need balancing me and interested Members know of well compensated executives. because the court-appointed officials the plan to ensure that the people in These are serious questions that owe fiduciary duties to creditors and the affected nursing homes will be pro- should be answered by the committees the estate but not necessarily to the tected. of this body. We should make full use patients. Once we are assured that residents of the evaluators who work for Con- There will be occasions which illus- will be safe we can turn to the finan- gress. And the Administration should trate that what may be in the best in- cial part of the bankruptcies. Now I devote some effort to the inquiry as terest of creditors may not always be will address these financial issues. well. We need to understand the prob- consistent with the patients’ best in- Before we take any action involving lem before we propose a solution. terest. The trustee’s interest, for exam- the taxpayers’ hard-earned dollars, we Yet, some solutions are being pre- ple, is to maximize the amount of the should ask, and get solid answers to, sumed, and they are being presumed estate to pay off the creditors. The some critical questions. based on that apples-to-oranges com- more assets the trustee disburses, the The first is this: if the rumors of fi- parison which says there has been $7 more his payment will be. On the other nancial distress are true, how is it that billion more saved from Medicare than hand, the ombudsman for the patient is some providers are in such distress was anticipated in the 1997 balanced designed to ensure continued quality of while others seem not to be? What fac- budget amendment. We should make care at least above some minimum tors have put certain companies at par- haste to get these answers, and not standards. Such quality of care stand- ticular risk? The answer to that ques- rush blindly into what could otherwise ards currently exist throughout the tion will go a long way to help us know be a thoughtless bailout. health care environment, from the what kind of response their situation health care facility itself to State demands. f standards and even Federal standards At this point, I’d like to make an ob- COMMENDING THE EFFORTS OF that were adopted in 1987. servation about the Medicare element THE REVEREND JESSE JACKSON I would like to have my colleagues of this situation. Mr. DORGAN. Mr. President, I would consider the following excerpt from the This is in response to the one excuse like to take this opportunity to join all Los Angeles Times on September 28, you are going to find from some of Americans in expressing my profound 1997, which describes the unconscion- these changes why something ought to relief at the safe return of Sergeant able, pathetic, and traumatizing con- be done in the balanced budget amend- Andrew Ramirez, Sergeant Christopher sequences of a sudden nursing home ment of 1997. Stone, and Specialist Steven Gonzales closing because of bankruptcy: A Prospective Payment System from captivity in the Federal Republic It could not be determined Saturday how (PPS) for Skilled Nursing Facilities of Yugoslavia. many more elderly or chronically ill pa- was mandated by the Balanced Budget I was necessarily absent from the tients may be affected by the health care Act of 1997 (BBA). Some argue that, Senate this morning in order to attend company’s financial problems. Those at the comparing CBO’s 1997 baseline with its Reseda Care Center in the San Fernando Val- a technology conference in my home 1999 baseline, Medicare has saved $7 bil- ley, including a 106-year-old woman, were State of North Dakota. Had I been lion more than originally anticipated, rolled into the streets late Friday in wheel- present, I would have gladly joined 92 and that this pushed these companies chairs and on hospital beds, bundled in blan- of my colleagues in commending the kets as relatives scurried to gather up over the edge. Reverend Jesse Jackson, and the dele- clothes and other personal belongings. But we need to ask whether or not it gation of religious and political leaders The presence of an ombudsman did. he led, for their instrumental efforts in should help prevent a recurrence of in- CBO has recently clarified its base- securing the release of these three stances similar to what I just de- lines, explaining that the alleged dif- Americans. A grateful nation owes scribed, where trustees quickly close ference between the two baselines them its gratitude. health care facilities without notifying comes from an apples-to-oranges com- appropriate state and federal agencies parison: the 1997 baseline included Part f and without notifying the bankruptcy B spending on patients in these facili- MESSAGES FROM THE PRESIDENT court. ties, while the 1999 baseline does not. I began discussions with the Health When apples are compared to apples, Messages from the President of the Care Financing Administration at the CBO tells us, the Medicare Part A base- United States were communicated to beginning of April to urge them to take line for Skilled Nursing Facilities has the Senate by Mr. Williams, one of his seriously the rumors we were hearing decreased by only $200 million over 5 secretaries. about possible nursing home bank- years—not by the $7 billion that we are EXECUTIVE MESSAGES REFERRED ruptcies and to encourage them to hearing. Of course this doesn’t tell us As in executive session the Presiding make preparations. I called for contin- what is going on in the real world—it Officer laid before the Senate messages gency plans that would prepare, well in only tells us that the discussion should from the President of the United

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00068 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8462 CONGRESSIONAL RECORD—SENATE May 5, 1999 States submitting sundry nominations 98–183 and upon the recommendation of Big Horn County, Wyoming, certain land which were referred to the appropriate the Minority Leader, the Speaker ap- comprising the Steffens family property. committees. points the following member to the H.R. 510. An act to direct the Secretary of the Interior to transfer to John R. and Mar- (The nominations received today are Commission on Civil Rights on the part garet J. Lowe of Big Horn County, Wyoming, printed at the end of the Senate pro- of the House, effective May 4, 1999, to certain land so as to correct an error in the ceedings.) fill the existing vacancy thereon: Mr. patent issued to their predecessors in inter- f Christopher F. Edley, Jr. of Cambridge, est. Massachusetts. H.R. 1480. An act to provide for the con- MESSAGES FROM THE HOUSE The message further announced that servation and development of water and re- At 12:35 p.m., a message from the the House has passed the following lated resources, to authorize the United States Army Corps of Engineers to construct House of Representatives, delivered by bills, without amendment: Mr. Hays, one of its reading clerks, an- various projects for improvements to rivers S. 453. An act to designate the Federal and harbors of the United Sates, and for nounced that the House has passed the building located at 709 West 9th Street in Ju- other purposes. following bills, in which it requests the neau, Alaska, as the ‘‘Hurff A. Saunders Fed- f concurrence of the Senate: eral Building.’’ H.R. 118. An act to designate the Federal S. 460. An act to designate the United EXECUTIVE AND OTHER building located at 300 East 8th Street in States courthouse located at 401 Michigan COMMUNICATIONS Austin, Texas, as the ‘‘J.J. ‘Jake’ Pickle Street in South Bend, Indiana, as the ‘‘Rock The following communications were Federal Building.’’ K. Rodibaugh United States Bankruptcy H.R. 459. An act to extend the deadline Courthouse.’’ laid before the Senate, together with under the Federal Power Act for FERC accompanying papers, reports, and doc- f Project No. 9401, the Mt. Hope Waterpower uments, which were referred as indi- Project. MEASURES REFERRED cated: H.R. 509. An act to direct the Secretary of EC–2850. A communication from the Archi- the Interior to transfer to the personal rep- The following bills were read the first tect of the Capitol, transmitting, pursuant resentative of the estate of Fred Steffens of and second times by unanimous con- to law, a report of expenditures for the pe- Big Horn County, Wyoming, certain land sent and referred as indicated: riod April 1, 1998 through September 30, 1998; comprising the Steffens family property. H.R. 118. An act to designate the Federal to the Committee on Appropriations. H.R. 510. An act to direct the Secretary of building located at 300 East 8th Street in EC–2851. A communication from the Chief the Interior to transfer to John R. and Mar- Austin, Texas, as the ‘‘J.J. ‘Jake’ Pickle Financial Officer and Plan Administrator, garet J. Lowe of Big Horn County, Wyoming, Federal Building’’; to the Committee on En- Production Credit Association Retirement certain land so as to correct an error in the vironmental and Public Works. Committee, First South Production Credit patent issued to their predecessors in inter- H.R. 459. An act to extend the deadline Association, transmitting, pursuant to law, est. under the Federal Power Act for FERC the annual pension plan report for calendar H.R. 560. An act to designate the Federal Project No. 9401, the Mt. Hope Waterpower year 1998; to the Committee on Govern- building and United States courthouse lo- Project; to the Committee on Energy and mental Affairs. cated at the intersection of Comercio and Natural Resources. EC–2852. A communication from the Direc- San Justo Streets, in San Juan, Puerto Rico, H.R. 560. An act the Federal building and tor, Office of Personnel Management, trans- as the ‘‘Jose V. Toledo Federal Building and United States courthouse located at the mitting, pursuant to law, the report of a rule United States Courthouse.’’ intersection of Comercio and San Justo entitled ‘‘Prevailing Rate Systems; Change H.R. 686. An act to designate a United Streets, in San Juan, Puerto Rico, as the in Survey Cycle for the Southwestern Michi- States courthouse in Brownsville, Texas, as ‘‘Jose V. Toledo Federal Building and United gan Appropriated Fund Wage Area’’ the ‘‘Garza-Vela United States Courthouse.’’ States Courthouse’’; to the Committee on (RIN3206–A168), received on April 30, 1999; to H.R. 1121. An act to designate the Federal Environment and Public Works. the Committee on Governmental Affairs. building and United States courthouse lo- H.R. 686. An act to designate a United EC–2853. A communication from the Direc- cated at 18 Greenville Street in Newnan, States courthouse in Brownsville, Texas, as tor, Office of Insurance Programs, Office of Georgia, as the ‘‘Lewis R. Morgan Federal the ‘‘Garza-Vela United States Courthouse’’; Personnel Management, transmitting, pursu- Building and United States Courthouse.’’ to the Committee on Environment and Pub- ant to law, the report of a rule entitled H.R. 1162. An act to designate the bridge on ‘‘Federal Employees’ Group Life Insurance United States Route 231 that crosses the lic Works. H.R. 1121. An act to designate the Federal Program; New Premiums’’ (RIN3206–A154), Ohio River between Maceo, Kentucky, and received on April 30, 1999; to the Committee Rockport, Indiana, as the ‘‘William H. Building and United States courthouse lo- cated at 18 Greenville Street in Newnan, on Governmental Affairs. Natcher Bridge.’’ EC–2854. A communication from the Assist- Georgia, as the ‘‘Lewis R. Morgan Federal ant Secretary for Fish and Wildlife and The message also announced that the Building and United States Courthouse’’; to Parks, Department of the Interior, transmit- House has agreed to the following con- the Committee on Environment and Public ting, a draft of proposed legislation relative current resolutions, in which it re- Works. to the Wilderness Battlefield; to the Com- H.R. 1162. An act to designate the bridge on quests the concurrence of the Senate: mittee on Energy and Natural Resources. H. Con. Res. 84. Concurrent resolution urg- United States Route 231 that crosses the EC–2855. A communication from the Direc- ing the Congress and the President to fully Ohio River between Maceo, Kentucky, and tor, Office of Regulations Management, Vet- fund the Federal Government’s obligation Rockport, Indiana as the ‘‘William H. Hatch- erans Benefits Administration, Department under the Individuals with Disabilities Edu- er Bridge’’; to the Committee on Environ- of Veterans Affairs, transmitting, pursuant cation Act. ment and Public Works. to law, the report of a rule entitled ‘‘Claims H. Con. Res. 88. Concurrent resolution urg- The following concurrent resolution and Effective Dates for the Award of Edu- ing the Congress and the President to in- was read and referred as indicated: cational Assistance’’ (RIN2900–AH76), re- crease funding for the Pell Grant Program H. Con. Res. 84. Concurrent resolution urg- ceived on May 3, 1999; to the Committee on and existing Campus-Based Aid Programs. ing the Congress and the President to fully Veterans Affairs. The message further announced that fund the Federal Government’s obligation EC–2856. A communication from the Direc- pursuant to the provisions of section under the Individuals with Disabilities Edu- tor, Policy Directives and Instructions 503(b)(3) of the National Skill Stand- cation Act; to the Committee on Health, Branch, Immigration and Naturalization Education, Labor, and Pensions. Service, Department of Justice, transmit- ards Act of 1994 (20 U.S.C. 5933) and ting, pursuant to law, the report of a rule en- upon the recommendation of the Mi- f titled ‘‘Additional Authorization to Issue nority Leader, the Speaker reappoints Certification for Foreign Health Care Work- the following members to the National MEASURES PLACED ON THE ers’’ (RIN115–AF43), received on May 2, 1999; Skill Standards Board on the part of CALENDAR to the Committee on the Judiciary. the House for a four-year term: Ms. The following bills were read the first EC–2857. A Communication from the Sec- Carolyn Warner of Phoenix, Arizona and second times and placed on the cal- retary of Defense, transmitting, pursuant to law, a report relative to workforce reduc- and Mr. George Bliss of Washington, endar: tions for fiscal year 1999; to the Committee D.C. H.R. 509. An act to direct the Secretary of on Armed Services. The message also announced that the Interior to transfer to the personal rep- EC–2858. A Communication from the Sec- pursuant to section 2(b) of Public Law resentative of the estate of Fred Steffens of retary of Defense, transmitting, pursuant to

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00069 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8463 law, a report relative to a retirement; to the the 1999 annual report; to the Committee on The following named officer for appoint- Committee on Armed Services. Finance. ment as Commander, Atlantic Area, United EC–2859. A communication from the Gen- EC–2872. A communication from the Board States Coast Guard, and to the grade indi- eral Counsel, Department of Defense, trans- of Trustees, Federal Supplementary Medical cated under title 14, U.S.C., section 50: mitting, a draft of proposed legislation rel- Insurance Trust Fund, transmitting, pursu- To be vice admiral ant to law, the 1999 annual report; to the ative to various management concerns; to Rear Adm. John E. Shkor the Committee on Armed Services. Committee on Finance. EC–2860. A communication from the Gen- EC–2873. A communication from the Sec- Captain Evelyn J. Fields, NOAA for ap- eral Counsel, Department of Defense, trans- retary of Health and Human Services, trans- pointment to the grade of Rear Admiral (O– mitting, a draft of proposed legislation rel- mitting, pursuant to law, a report relative to 8), while serving in a position of importance ative to various management concerns; to the Medicare program; to the Committee on and responsibility as Director, Office of the Committee on Armed Services. Finance. NOAA Corp Operations, National Oceanic EC–2861. A communication from the Assist- EC–2874. A communication from the Sec- and Atmospheric Administration, under the ant Secretary of Defense, transmitting, pur- retary of Health and Human Services, trans- provisions of Title 33, United States Code, suant to law, a report relative to the fiscal mitting, pursuant to law, a report relative to Section 853u. Captain Nicholas A. Prahl, NOAA for ap- year 1999 National Defense Authorization the Medicare prospective payment system; pointment to the grade of Rear Admiral (O– Act; to the Committee on Armed Services. to the Committee on Finance. 7), while serving in a position of importance EC–2862. A communication from the Under EC–2875. A communication from the Sec- and responsibility as Director, Atlantic and Secretary of Defense, transmitting, pursuant retary of Health and Human Services, trans- Pacific Marine Centers, National Oceanic to law, a report relative to the Patriot PAC– mitting, pursuant to law, a report entitled and Atmospheric Administration, under the 3 major defense acquisition program; to the ‘‘Chiropractic Services in Medicare HMOs provisions of Title 33, United States Code, Committee on Armed Services. and Medicare+Choice (M+C) Organizations’’; Section 853u. EC–2863. A communication from the Under to the Committee on Finance. Secretary of the Navy, transmitting, pursu- EC–2876. A communication from the Sec- (The above nominations were re- ant to law, a report relative to a decision to retary of Health and Human Services, trans- ported with the recommendation that study certain functions for possible perform- mitting, pursuant to law, a report entitled they be confirmed, subject to the nomi- ance by private contractors; to the Com- ‘‘Medicare Alzheimer’s Disease Demonstra- nees’ commitment to respond to re- tion Evaluation’’; to the Committee on Fi- mittee on Armed Services. quests to appear and testify before any EC–2864. A communication from the Alter- nance. EC–2877. A communication from the Sec- duly constituted committee of the Sen- nate Office of the Secretary of Defense Fed- ate.) eral Register Liaison Officer, Department of retary of Health and Human Services, trans- Defense, transmitting, pursuant to law, the mitting, pursuant to law, a report entitled Mr. MCCAIN. Mr. President, for the report of a rule entitled ‘‘OSD Privacy Pro- ‘‘Early Implementation of the Welfare-to- Committee on Commerce, Science, and gram’’, received April 27, 1999; to the Com- Work Grants Program’’; to the Committee Transportation, I report favorably the mittee on Armed Services. on Finance. following nomination lists which were EC–2878. A communication from the Assist- EC–2865. A communication from the Dep- printed in the RECORDS of March 8, 1999 ant Secretary for Children and Families, De- uty Secretary, Division of Market Regula- and April 15, 1999, at the end of the tion, Securities and Exchange Commission, partment of Health and Human Services, transmitting, pursuant to law, the report of Senate proceedings, and ask unani- transmitting, pursuant to law, the report of mous consent, to save the expense of a rule entitled ‘‘Amendments to Form BDW a rule entitled ‘‘Child Support Enforcement and related rules 15b1–1, 15b3–1, 15b6–1, 15Ba2– Program; Grants to States for Access and reprinting on the Executive Calendar, 2, 15Bc3–1, 15Ca1–1 and 15Cc1–1 under the Se- Visitation Programs: Monitoring, Evalua- that these nominations lie at the Sec- curities and Exchange Act of 1934’’ (RIN3235– tion, and Reporting’’ (RIN0970–AB72); to the retary’s desk for the information of AG69), received May 3, 1999; to the Com- Committee on Finance. Senators. EC–2879. A communication from the Chief, mittee on Banking, Housing, and Urban Af- The PRESIDING OFFICER. Without Regulations Unit, Office of Chief Counsel, fairs. Department of the Treasury, transmitting, objection, it is so ordered. EC–2866. A communication from the Sec- pursuant to law, the report of a rule entitled Coast Guard nomination of James W. Bart- retary of the Interior, transmitting, a draft ‘‘Notice of Significant Reduction in the Rate lett, which was received by the Senate and of proposed legislation relative to a non- of Future Benefit Accrual’’ (RIN1545–AT78), appeared in the CONGRESSIONAL RECORD of profit education foundation; to the Com- received on April 22, 1999; to the Committee March 8, 1999. mittee on Indian Affairs. on Finance. Coast Guard nomination beginning Wil- EC–2867. A communication from the Sec- EC–2880. A communication from the Chief, liam L. Chaney, and ending William E. Shea, retary of Agriculture, transmitting, a draft Regulations Unit, Office of Chief Counsel, which nominations were received by the Sen- of proposed legislation relative to amending Department of the Treasury, transmitting, ate and appeared in the CONGRESSIONAL the Packers and Stockyards Act of 1921; to pursuant to law, the report of a rule entitled RECORD of March 8, 1999. the Committee on Agriculture, Nutrition, ‘‘Announcement 99–40’’, received on April 6, Coast Guard nomination beginning Ashley and Forestry. 1999; to the Committee on Finance. B. Aclin, and ending Michael J. Zeruto, EC–2868. A communication from the Ad- EC–2881. A communication from the Chief, which nominations were received by the Sen- ministrator, Agricultural Marketing Serv- Regulations Unit, Office of Chief Counsel, ate and appeared in the CONGRESSIONAL ice, Marketing and Regulatory Programs, Department of the Treasury, transmitting, RECORD of April 15, 1999. Department of Agriculture, transmitting, pursuant to law, the report of a rule entitled f pursuant to law, the report of a rule entitled ‘‘Revenue Ruling 99–18’’, received on April 9, ‘‘Peanut Production, Research and Informa- 1999; to the Committee on Finance. INTRODUCTION OF BILLS AND tion Order; Referendum Procedures’’ (Docket EC–2882. A communication from the Chief, JOINT RESOLUTIONS No. FV–98–703–FR), received on April 30, 1999; Regulations Unit, Office of Chief Counsel, The following bills and joint resolu- to the Committee on Agriculture, Nutrition, Department of the Treasury, transmitting, and Forestry. tions were introduced, read the first pursuant to law, the report of a rule entitled and second times by unanimous con- EC–2869. A communication from the Dep- ‘‘Revenue Ruling 99–18’’, received on April 6, uty Executive Secretariat, Administration 1999; to the Committee on Finance. sent, and referred as indicated: for Children and Families, Department of EC–2883. A communication from the Chief, By Mr. HOLLINGS (for himself, Mr. Health and Human Services, transmitting, Regulations Unit, Office of Chief Counsel, STEVENS, Mr. KERRY, Mr. INOUYE, Mr. pursuant to law, the report of a rule entitled Department of the Treasury, transmitting, BREAUX, Mr. KENNEDY, Mrs. BOXER, ‘‘Temporary Assistance for Needy Families’’ pursuant to law, the report of a rule entitled Mr. BIDEN, Mr. LAUTENBERG, Mr. (RIN0970–AB77), received on April 22, 1999; to ‘‘Revenue Procedure 99–23’’, received on AKAKA, Mr. MURKOWSKI, Mr. THUR- the Committee on Finance. April 6, 1999; to the Committee on Finance. MOND, Mrs. MURRAY, Mr. CLELAND, EC–2870. A communication from the Board f and Mr. WYDEN): of Trustees, Federal Old-Age and Survivors S. 959. A bill to establish a National Ocean Insurance and Disability Insurance Trust EXECUTIVE REPORTS OF Council, a Commission on Ocean Policy, and Funds, transmitting, pursuant to law, the COMMITTEE for other purposes; to the Committee on 1999 annual report; to the Committee on Fi- Commerce, Science, and Transportation. nance. The following executive reports of By Mr. GRASSLEY (for himself and EC–2871. A communication from the Board committee were submitted: Mr. BREAUX): of Trustees, Federal Hospital Insurance By Mr. MCCAIN, for the Committee on S. 960. A bill to amend the Older Americans Trust Fund, transmitting, pursuant to law, Commerce, Science, and Transportation: Act of 1965 to establish pension counseling

VerDate Sep 11 2014 09:56 Nov 05, 2019 Jkt 000000 PO 00000 Frm 00070 Fmt 0686 Sfmt 0634 C:\SSN-OUT\S05MY9.REC S05MY9 ejoyner on DSK30MW082PROD with BOUND RECORD 8464 CONGRESSIONAL RECORD—SENATE May 5, 1999 programs, and for other purposes; to the MCCONNELL, Mr. MOYNIHAN, and Mr. dential commission to develop a plan Committee on Health, Education, Labor, and KOHL): for national action in the oceans and Pensions. S. Res. 96. A resolution expressing the atmosphere. Dr. Julius A. Stratton, a sense of the Senate regarding a peaceful By Mr. BURNS (for himself, Mr. CRAIG, former president of the Massachusetts Mr. BAUCUS, Mr. DASCHLE, Mr. process of self-determination in East Timor, KERREY, and Mr. JOHNSON): and for other purposes; to the Committee on Institute of Technology and then- S. 961. A bill to amend the Consolidated Foreign Relations. chairman of the Ford Foundation, led Farm And Rural Development Act to im- By Mr. COVERDELL (for himself, Mr. the Commission on an unprecedented, prove shared appreciation arrangements; to FRIST, Mr. GORTON, Mr. LOTT, Mr. and since unrepeated, investigation of the Committee on Agriculture, Nutrition, JEFFORDS, Mr. ABRAHAM, Mr. CRAIG, this nation’s relationship with the and Forestry. Mr. DOMENICI, Mr. COCHRAN, Mr. oceans and the atmosphere. The Strat- MACK, Mr. SMITH of Oregon, Ms. COL- By Mr. LEAHY (for himself and Mr. ton Commission and its congressional DODD): LINS, Mr. HATCH, Mr. LUGAR, Ms. S. 962. A bill to allow a deduction from SNOWE, Mr. GRAMS, Mr. CRAPO, Mr. advisors (including Senators Warren G. gross income for year 2000 computer conver- KENNEDY, and Mr. WELLSTONE): Magnuson and Norris Cotton) worked sion costs of small businesses; to the Com- S. Res. 97. A resolution designating the together in a bipartisan fashion. In mittee on Finance. week of May 2 through 8, 1999, as the 14th fact, the Commission was established By Mr. GREGG: Annual Teacher Appreciation Week, and des- and carried out its mandate in the S. 963. A bill to amend the Internal Rev- ignating Tuesday, May 4, 1999, as National Democratic Administration of Lyndon enue Code of 1986 to preserve family-held for- Teacher Day; considered and agreed to. Johnson and saw its findings imple- est lands, and for other purposes; to the f Committee on Finance. mented by the Republicans under By Mr. DASCHLE: STATEMENTS ON INTRODUCED President Richard Nixon. With a staff S. 964. A bill to provide for equitable com- BILLS AND JOINT RESOLUTIONS of 35 people, the commissioners hear pensation for the Cheyenne River Sioux By Mr. HOLLINGS (for himself, and consulted over 1,000 people, visited Tribe, and for other purposes; to the Com- every coastal area of this country, and mittee on Indian Affairs. Mr. STEVENS, Mr. KERRY, Mr. INOUYE, Mr. BREAUX, Mr. KEN- submitted some 126 recommendations By Mr. JEFFORDS (for himself, Ms. in a 1969 report to Congress entitled SNOWE, Mr. LEAHY, Mrs. MURRAY, and NEDY, Mrs. BOXER, Mr. BIDEN, Mr. DURBIN): Mr. LAUTENBERG, Mr. AKAKA, Our Nation and the Sea. Those rec- S. 965. A bill to restore a United States vol- Mr. MURKOWSKI, Mr. THURMOND, ommendations led directly to the cre- untary contribution to the United Nations Mrs. MURRAY, Mr. CLELAND, ation of the National Oceanic and At- Population Fund; to the Committee on For- and Mr. WYDEN): mospheric Administration in 1970, laid eign Relations. S. 959. A bill to establish a National the groundwork for enactment of the By Mr. REID: Coastal Zone Management Act (CZMA) S. 966. A bill to require medicare providers Ocean Council, a Commission on Ocean to disclose publicly staffing and performance Policy, and for other purposes; to the in 1972, and established priorities for in order to promote improved consumer in- Committee on Commerce, Science, and federal ocean activities that have guid- formation and choice, to protect employees Transportation. ed this Nation for almost thirty years. of medicare providers who report concerns THE OCEANS ACT OF 1999 While the Stratton Commission per- about the safety and quality of services pro- Mr. HOLLINGS. Mr. President, I rise formed its job with vision and integ- vided by medicare providers or who report today to introduce the Oceans Act of violations of Federal or State law by those rity, the world has changed since 1966. providers, and to require review of the im- 1999, legislation that the Senate unani- Today, half of the U.S. population lives pact on public health and safety of proposed mously passed in November 1997. I am within 50 miles of our shores and more mergers and acquisitions of medicare pro- pleased to be joined in this endeavor by than 30 percent of the Gross Domestic viders; to the Committee on Finance. Senators STEVENS, KERRY, BREAUX, Product is generated in the coastal By Mr. LAUTENBERG: INOUYE, KENNEDY, BOXER, BIDEN, LAU- zone. Ocean and coastal resources once S. 967. A bill to provide a uniform national TENBERG, AKAKA, MURKOWSKI, THUR- considered inexhaustible are severely standard to ensure that consealed firearms MOND, MURRAY, CLELAND, and WYDEN. depleted, and wetlands and other ma- are available only to authorized persons for Mr. President, plainly and simply, this lawful purposes; to the Committee on the Ju- rine habitats are threatened by pollu- diciary. bill calls for a plan of action for the tion and human activities. In addition, By Mr. GRAHAM (for himself, Mr. twenty-first century to explore, pro- the U.S. regulatory and legal frame- MACK, Mr. CLELAND, Mrs. LINCOLN, tect, and use our oceans and coasts work has developed over the years with and Mr. ROBB): through the coming millennium. the passage of a number of statutes in S. 968. A bill to authorize the Adminis- This is not the first time we have addition to CZMA. These include the trator of the Environmental Protection faced the need for a national ocean pol- Endangered Species Act, the Marine Agency to make grants to State agencies icy. Three decades ago, our Nation with responsibility for water source develop- Mammal Protection Act, the Marine roared into space, investing tens of bil- Protection, Research, and Sanctuaries ment, for the purposes of maximizing the lions of dollars to investigate the moon available water supply and protecting the Act, the Magnuson-Stevens Fishery environment through the development of al- and the Sea of Tranquility. During Conservation and Management Act, the ternative water sources, and for other pur- that golden era of science, some of us Coastal Barrier Resources Act, and the poses; to the Committee on Environment and also recognized the importance of ex- Oil Pollution Act. It is time to conduct Public Works. ploring the seas on our own planet. In a review that looks at coordination and By Mr. ASHCROFT: 1966, Congress enacted the Marine Re- S. 969. A bill to amend the Individuals with duplication of programs and policies sources and Engineering Development developed under these laws. Disabilities Education Act and the Gun-Free Act in order to define national objec- Schools Act of 1994 to authorize schools to tives and programs with respect to the Today people who work and live on apply appropriate discipline measures in oceans. That legislation laid the foun- the water face a patchwork of con- cases where students have weapons or fusing and sometimes contradictory threaten to harm others, and for other pur- dation for U.S. ocean and coastal pol- poses; to the Committee on Health, Edu- icy and programs and has guided their federal and state regulations. This bill cation, Labor, and Pensions. development for three decades. I was would allow us to reduce conflicts f elected to the Senate just three while maintaining environmental and months after the 1966 Act was enacted health safeguards. One illustration of SUBMISSION OF CONCURRENT AND into law, but I am pleased that both the type of situation that must be cor- SENATE RESOLUTIONS Senators INOUYE and KENNEDY, the two rected is the southeast shrimp trawl The following concurrent resolutions cosponsors of the 1966 Act still serving fishery. Shrimpers are required under and Senate resolutions were read, and in the Senate, have agreed to join me the Endangered Species Act to use pan- referred (or acted upon), as indicated: today in introducing the Oceans Act. els or grates (known as turtle excluder By Mr. LEAHY (for himself, Mr. FEIN- One of the central elements of the devices or TEDs) in their nets to pro- GOLD, Mr. REED, Mr. HARKIN, Mr. 1966 Act was establishment of a presi- tect endangered sea turtles. The panels

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00071 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8465 also reduce catches of small fish (by- cation and research, our view of the ease; increase food supplies through catch), a new requirement of the Mag- oceans thirty years ago was based on a aquaculture; enhance seafood safety nuson-Stevens Act. Unfortunately, remarkably small amount of informa- and quality; provide new types and however, the government has approved tion. When Jack Kennedy was in the sources of industrial materials and one TED for turtle protection and an- White House, we were just beginning to processes; and understand biological other for bycatch reduction—forcing develop the capability for exploring the and geochemical processes in the world the fishermen to use two separate de- oceans, and the driving factor was the ocean. vices, cut two holes in their nets, and military need to hide our submarines In addition to the economic opportu- double their shrimp loss. Anyone who from the Soviets during the Cold War. nities offered by our marine research wonders about public interest in regu- What we knew of the oceans at that investment, traditional marine activi- latory reform has only to talk to a time was based as much on what fisher- ties play an important role in our na- McClellanville, SC shrimper. men brought up in their nets as it was tional economic outlook. Ninety-five The Oceans Act is vital to the contin- on reliable scientific investigation. percent of our international trade is ued health of the oceans and prosperity Nowhere is the need for U.S. leader- shipped on the ocean. In 1996, commer- of our coasts. It is patterned after and ship more evident than in the area of cial fishermen in the United States would replace the 1966 Act. Like that ocean exploration. Today, we still have landed almost 10 billion pounds of fish Act, it is comprised of three major ele- explored only a tiny fraction of the sea, with a value of $3.5 billion. Their fish- ments: but with the use of new technologies ing-related activities contributed over First, the bill calls for development what we have found is truly incredible. $42 billion to the U.S. economy. During and implementation of a coherent na- For example, hydrothermal vents, hot the same period, marine anglers con- tional ocean and coastal policy to con- water geysers on the deep ocean floor, tributed another $20 billion. Travel and serve and sustainably use fisheries and were discovered just 20 years ago by tourism also contribute over $700 bil- other ocean and coastal resources, pro- oceanographers trying to understand lion to our economy, much of which is tect the marine environment and the formation of the earth’s crust. Now generated in coastal areas. With a sound national ocean and coastal pol- human safety, explore ocean frontiers, this discovery had led to the identifica- icy and effective marine resource man- create marine technologies and eco- tion of nearly 300 new types of marine agement, these numbers have nowhere nomic opportunities, and preserve U.S. animals with untold pharmaceutical to go but up. leadership on ocean and coastal issues. and biomedical potential. In recent With respect to public safety, it is Second, the bill would establish a 16- years, scientists from 19 nations have particularly important to develop member Commission, similar to the joined in an international partnership, ocean and coastal priorities that re- Stratton Commission, to examine headed by Admiral Watkins, to explore flect the changes we have seen in re- ocean and coastal activities and report the history and structure of the Earth cent years. Before World War II, most within 18 months on recommendations beneath the oceans basins. Their ship, of the U.S. shoreline was sparsely pop- for a national policy. Commission the Resolution, is the world’s largest ulated. There were long, wild stretches members would be drawn from State scientific research vessel and can drill of coast, dotted with an occasional port and local governments, industry, aca- in water depths of up 8,200 meters. Over city, fishing village, or sleepy resort. demic and technical institutions, and the past 12 years, it has recovered more Most barrier islands had few residents public interest organizations involved than 115 miles of core samples through or were uninhabited. After the war, in ocean and coastal activities. In de- the world oceans. Recently ship sci- people began pouring in, and coastal veloping its recommendations, the entists worked off the coast of South development began a period of explo- Commission would assess federal pro- Carolina collecting new evidence of a sive growth. In my state of South Caro- grams and funding priorities, ocean-re- large meteor that struck the Earth 65 lina, our beaches attract millions of lated infrastructure requirements, con- million years ago, and is thought to visitors every year, and more and more flicts among marine users, and techno- have triggered climate change that people are choosing to move to the logical opportunities. The bill author- may be linked to the disappearance of coast—making the coastal counties the izes appropriations of $6 million over the dinosaurs. fastest growing ones in the state. Sev- two years to support Commission ac- Many of our marine research efforts enteen of the twenty fastest growing tivities; last year’s Omnibus Appro- could have profound impacts on our states in the nation are coastal priations bill included $3.5 million to economic well-being. For example, re- states—which compounds the situation fund such a Commission. search on coastal ocean currents and that the most densely populated re- Third, the bill would create a high- other processes that affect shoreline gions already border the ocean. With level federal interagency Council that erosion is critical to effective manage- population growth comes the demand would include the heads of the Depart- ment of the shoreline. Oceanographers for highways, shopping centers, ments of Commerce, Navy, State, are working with federal, state, and schools, and sewers that permanently Transportation, and the Interior, the local managers to use this new under- alter the landscape. If people are to Environmental Protection Agency, the standing in protecting beachfront prop- continue to live and work on the coast, National Science Foundation, the Of- erty and the lives of those who reside we must do a better job of planning fice of Science and Technology Policy, and work in coastal communities. De- how we impact the very regions in the Office of Management and Budget, velopment of underwater cameras and which we all want to live. the Council on Environmental Quality, sonar, begun in the 1940s for the U.S. There is no better example of how and the National Economic Council. Navy, has led to major strides not only our ocean and coastal policies affect This Council would advise the Presi- for military uses, but for marine ar- public safety, than to look at the ef- dent and serve as a forum for devel- chaeologists and scientists exploring fects of hurricanes. Throughout the oping and implementing an ocean and unknown stretches of sea floor. Con- 1920s, hurricanes killed 2,122 Americans coastal policy, provide for coordination sumers have benefited from the tech- while causing about $1.8 billion in prop- of federal budgets and programs, and nology now used in video cameras. erty damages. By contrast, in the first work with non-federal and inter- Sonar has broad applications in both five years of the 1990s, hurricanes national organizations. the military and commercial sector. killed 111 Americans, and resulted in By establishing an action plan for Finally, marine biotechnology re- damages of about $35 billion. While we ocean and coastal activities, the search is thought to be one of the have made notable advances in early Oceans Act should also contribute sub- greatest remaining technological and warning and evacuation systems to stantially to national goals and objec- industrial frontiers. Among the oppor- protect human lives, the risk of prop- tives in the areas of education and re- tunities which it may offer are to: re- erty loss continues to escalate and search, economic development, and store and protect marine ecosystems; coastal inhabitants are more vulner- public safety. With respect to edu- monitor human health and treat dis- able to major storms than they ever

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00072 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8466 CONGRESSIONAL RECORD—SENATE May 5, 1999 have been. In 1989, Hurricane Hugo islation that ensures the development improved understanding of world climate came ashore in South Carolina, leaving of an integrated national ocean and patterns and forecasts. Important new ad- more than $6 billion in damages. Of coastal policy well into the next mil- vances, including availability of military technology have made feasible the explo- that total from Hugo, the federal gov- lennium. I ask unanimous consent that ration of large areas of the ocean which were ernment paid out more than $2.8 billion the text of the bill be printed in the inaccessible several years ago. In desig- in disaster assistance and more than RECORD. nating 1998 as ‘‘The Year of the Ocean’’, the $400 million from the National Flood There being no objection, the bill was United Nations high-lighted the value of in- Insurance Program. The payments ordered to be printed in the RECORD, as creasing our knowledge of the oceans. from private insurance companies were follows: (7) It has been more than 30 years since the equally staggering. In 1992, Hurricane Commission on Marine Science, Engineering, S. 959 and Resources (known as the Stratton Com- Andrew struck southern Florida and Be it enacted by the Senate and House of Rep- mission) conducted a comprehensive exam- slammed into low lying areas of Lou- resentatives of the United States of America in ination of ocean and coastal activities that isiana, forever changing the lives of Congress assembled, led to enactment of major legislation and more than a quarter of a million people SECTION 1. SHORT TITLE. the establishment of key oceanic and atmos- and causing an estimated $25 to $30 bil- This Act may be cited as the ‘‘Oceans Act pheric institutions. lion dollars in damage. Hurricanes of 1999’’. (8) A review of existing activities is essen- tial to respond to the changes that have oc- demonstrate that the human desire to SEC. 2. CONGRESSIONAL FINDINGS; PURPOSE AND OBJECTIVES. curred over the past three decades and to de- live near the ocean and along the coast velop an effective new policy for the twenty- comes with both a responsibility and a (a) FINDINGS.—The Congress makes the fol- lowing findings: first century to conserve and use, in a sus- cost. tainable manner, ocean and coastal re- (1) Covering more than two-thirds of the sources, protect the marine environment, ex- The oceans are part of our culture, Earth’s surface, the oceans and Great Lakes plore ocean frontiers, protect human safety, part of our heritage, part of our econ- play a critical role in the global water cycle and create marine technologies and eco- omy, and part of our future. Those who and in regulating climate, sustain a large doubt the need for this legislation need nomic opportunities. part of Earth’s biodiversity, provide an im- (9) Changes in United States laws and poli- only pick up a newspaper and they will portant source of food and a wealth of other cies since the Stratton Commission, such as be face to face with pressing ocean and natural products, act as a frontier to sci- the enactment of the Coastal Zone Manage- coastal issues. And while our coastal entific exploration, are critical to national ment Act, have increased the role of the waters are governed by the United security, and provide a vital means of trans- States in the management of ocean and portation. The coasts, transition between coastal resources. States or all of us, beyond our waters land and open ocean, are regions of remark- progress relies primarily on inter- (10) While significant Federal and State able high biological productivity, contribute ocean and coastal programs are underway, national cooperation. There are no more than 30 percent of the Gross Domestic those Federal programs would benefit from a boundaries at sea, no national borders Product, and are of considerable importance coherent national ocean and coastal policy with fences and checkpoints. Deciding for recreation, waste disposal, and mineral that reflects the need for cost-effective allo- how to manage all these problems and exploration. cation of fiscal resources, improved inter- use the seas is one of the most com- (2) Ocean and coastal resources are suscep- agency coordination, and strengthened part- plicated tasks we can tackle. tible to change as a direct and indirect result nerships with State, private, and inter- Therefore, we need to be smart about of human activities, and such changes can national entities engaged in ocean and coast- significantly impact the ability of the ocean policy—we need the best minds al activities. oceans and Great Lakes to provide the bene- (b) PURPOSE AND OBJECTIVES.—The purpose to come together and take a look at fits upon which the Nation depends. Changes of this Act is to develop and maintain, con- what the real challenges are. It is not in ocean and coastal processes could affect sistent with the obligations of the United enough to sit back and assume the role global patterns, marine productivity and bio- States under international law, a coordi- of caretakers. We must be proactive diversity, environmental quality, national nated, comprehensive, and long-range na- and develop a plan for the future. security, economic competitiveness, avail- tional policy with respect to ocean and The United Nations declared 1998 to ability of energy, vulnerability to natural coastal activities that will assist the Nation the be the Year of the Ocean in part to hazards, and transportation safety and effi- in meeting the following objectives: (1) The protection of life and property encourage governments and the pubic ciency. (3) Ocean and coastal resources are not in- against natural and manmade hazards. to pay adequate attention to the need finite, and human pressure on them is in- (2) Responsible stewardship, including use, to protect the marine environment and creasing. One half of the Nation’s population of fishery resources and other ocean and to ensure a healthy ocean. This is an lives within 50 miles of the coast, ocean and coastal resources. unprecedented opportunity to follow up coastal resources once considered inexhaust- (3) The protection of the marine environ- ible are not threatened with depletion, and if ment and prevention of marine pollution. the Year of the Ocean activities by (4) The enhancement of marine-related celebrating and enhancing what has population trends continue as expected, pres- sure on and conflicting demands for ocean commerce and transportation, the resolution been accomplished in understanding of conflicts among users of the marine envi- and managing our oceans. and coastal resources will increase further as will vulnerability to coastal hazards. ronment, and the engagement of the private The Stratton Commission stated in (4) Marine transportation is key to United sector in innovative approaches for sustain- 1969: ‘‘How fully and wisely the United States participation in the global economy able use of living marine resources. (5) The expansion of human knowledge of States uses the sea in the decades and to the wide range of activities carried the marine environment including the role of ahead will affect profoundly its secu- out in ocean and coastal regions. Inland wa- the oceans in climate and global environ- terway and ports are the link between ma- rity, its economy, its ability to meet mental change and the advance of education rine activities in ocean and coastal regions increasing demands for food and raw and training in fields related to ocean and and the supporting transportation infra- materials, its position and influence in coastal activities. the world community, and the quality structure ashore. International trade is ex- (6) The continued investment in and devel- pected to triple by 2020. The increase has the of the environment in which its people opment and improvement of the capabilities, potential to outgrow— performance, use, and efficiency of tech- live.’’ Those words are as true today as (A) the capabilities of the marine transpor- they were 30 years ago. nologies for use in ocean and coastal activi- tation system to ensure safety; and ties. Mr. President, it is time to look to- (B) the existing capacity of ports and wa- (7) Close cooperation among all govern- wards the next 30 years. This bill offers terways. ment agencies and departments to ensure— us the vision and understanding needed (5) Marine technologies hold tremendous (A) coherent regulation of ocean and coast- to establish sound ocean and coastal promise for expanding the range and increas- al activities; policies for the 21st century, and I ing the utility of products from the oceans (B) availability and appropriate allocation thank the cosponsors of the legislation and Great Lakes, improving the stewardship of Federal funding, personnel, facilities, and of ocean and coastal resources, and contrib- equipment for such activities; and for joining with me in recognizing it uting to business and manufacturing innova- (C) cost-effective and efficient operation of significance. We look forward to work- tions and the creation of new jobs. Federal departments, agencies, and pro- ing together in the bipartisan spirit of (6) Research has uncovered the link be- grams involved in ocean and coastal activi- the Stratton Commission to enact leg- tween oceanic and atmospheric processes and ties.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00073 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8467 (8) The enhancement of partnerships with environment, maritime transportation safe- coastal policy and program, taking into con- State and local governments with respect to ty and efficiency, marine recreation and sideration the Commission report; oceans and coastal activities, including the tourism, and marine aspects of weather, cli- (3) improve coordination and cooperation, management of ocean and coastal resources mate, and natural hazards; and eliminate duplication, among Federal and identification of appropriate opportuni- (C) designate responsibility for funding and agencies and departments with respect to ties for policy-making and decision-making conducting ocean and coastal activities; and ocean and coastal activities; and at the State and local level. (D) ensure cooperation and resolve dif- (4) assist the Presdient in the preparation (9) The preservation of the role of the ferences arising from laws and regulations of the first report required by section 7(a). United States as a leader in ocean and coast- applicable to ocean and coastal activities (d) SUNSET.—The Council shall cease to al activities, and, when it is in the national which result in conflicts among participants exist one year after the Commission has sub- interest, the cooperation by the United in such activities. mitted its final report under section 6(h). States with other nations and international (b) COOPERATION AND CONSULTATION.—In (e) SAVINGS PROVISION.— organizations in ocean and coastal activities. carrying out responsibilities under this Act, (1) Council activities are not intended to supersede or interfere with other Executive SEC. 3. DEFINITIONS. the President may use such staff, inter- Branch mechanisms and responsibilities. As used in this Act— agency, and advisory arrangements as the President finds necessary and appropriate (2) Nothing in this Act has any effect on (1) The term ‘‘Commission’’ means the the authority or responsbility of any Federal Commission on Ocean Policy. and shall consult with non-Federal organiza- tions and individuals involved in ocean and officer or agency under any other Federal (2) The term ‘‘Council’’ means the National law. Ocean Council. coastal activities. (3) The term ‘‘marine environment’’ in- SEC. 5. NATIONAL OCEAN COUNCIL. SEC. 6. COMMISSION ON OCEAN POLICY. (A) ESTABLISHMENT.— cludes— (a) ESTABLISHMENT.—The President shall (1) IN GENERAL.—The President shall, with- (A) the oceans, including coastal and off- establish a National Ocean Council and ap- in 90 days after the enactment of this Act, shore waters and the adjacent shore lands; point a Chairman from among it members. establish a Commission on Ocean Policy. The (B) the continental shelf; The Council shall consist of— Commission shall be composed of 16 mem- (C) the Great Lakes; and (1) the Secretary of Commerce; (D) the ocean and coastal resources there- (2) the Secretary of Defense; bers including individuals drawn from State of. (3) the Secretary of State; and local governments, industry, academic (4) The term ‘‘ocean and coastal activities’’ (4) the Secretary of Transportation; and technical institutions, and public inter- includes activities related to oceanography, (5) the Secretary of the Interior; est organizations involved with ocean and fisheries and other ocean and coastal re- (6) the Attorney General; coastal activities. Members shall be ap- source stewardship and use, marine aqua- (7) the Administrator of the Environ- pointed for the life of the Commission as fol- culture, energy and mineral resource extrac- mental Protection Agency; lows: (A) 4 shall be appointed by the President of tion, marine transportation, recreation and (8) the Director of the National Science the United States. tourism, waste management, pollution miti- Foundation; (B) 4 shall be appointed by the President gation and prevention, and natural hazard (9) the Director of the Office of Science and chosen from a list of 8 proposed members reduction. Technology Policy; submitted by the Majority Leader of the (5) The term ‘‘ocean and coastal resource’’ (10) the Chairman of the Council on Envi- Senate in consultation with the Chairman of means, with respect to the oceans, coasts, ronmental Quality; (11) the Chairman of the National Eco- the Senate Committee on Commerce, and Great Lakes, any living or non-living nomic Council; Science, and Transportation. natural resource (including all forms of ani- (12) the Director of the Office of Manage- (C) 4 shall be appointed by the President mal and plant life found in the marine envi- ment and Budget; and chosen from a list of 8 proposed members ronment, habitat, biodiversity, water qual- (13) such other Federal officers and offi- submitted by the Speaker of the House of ity, minerals, oil, and gas) and any signifi- cials as the President considers appropriate. Representatives in consultation with the cant historic, cultural or aesthetic resource. (b) ADMINISTRATION.— Chairman of the House Committee on Re- (6) The term ‘‘oceanography’’ means sci- (1) The President or the Chairman of the sources. entific exploration, including marine sci- Council may from time to time designate (D) 2 shall be appointed by the President entific research, engineering, mapping, sur- one of the members of the Council to preside chosen from a list of 4 proposed members veying, monitoring, assessment, and infor- over meetings of the Council during the ab- submitted by the Minority Leader of the mation management, of the oceans, coasts, sence or unavailability of such Chairman. Senate in consultation with the Ranking and Great Lakes— (2) Each member of the Council may des- Member of the Senate Committee on Com- (A) to describe and advance understanding ignate an officer of his or her agency or de- merce, Science, and Transportation. of— partment appointed with the advice and con- (E) 2 shall be appointed by the President (i) the role of the oceans, coasts and Great sent of the Senate to serve on the Council as chosen from a list of 4 proposed members Lakes in weather and climate, natural haz- an alternate in the event of the unavoidable submitted by the Minority Leader of the ards, and the processes that regulate the ma- absence of such member. House in consultation with the Ranking rine environment; and (3) An executive secretary shall be ap- Member of the House Committee on Re- (ii) the manner in which such role, proc- pointed by the Chairman of the Council, with sources. esses, and environment are affected by the approval of the Council. The executive (2) FIRST MEETING.—The Commission shall human actions; secretary shall be a permanent employee of hold its first meeting within 30 days after it (B) for the conservation, management and one of the agencies or departments rep- is established. stewardship of living and nonliving re- resented on the Council and shall remain in (3) CHAIRMAN.—The President shall select a sources; and the employ of such agency or department. Chairman from among such 16 members. Be- (C) to develop and implement new tech- (4) For the purpose of carrying out the fore selecting the Chairman, the President is nologies related to the environmentally sen- functions of the Council, each Federal agen- requested to consult with the Majority and sitive use of the marine environment. cy or department represented on the Council Minority Leaders of the Senate, the Speaker SEC. 4. NATIONAL OCEAN AND COASTAL POLICY. shall furnish necessary assistance to the of the House of Representatives, and the Mi- (a) EXECUTIVE RESPONSIBILITIES.—The Council. Such assistance may include— nority Leader of the House of Representa- President, with the assistance of the Council (A) detailing employees to the Council to tives. and the advice of the Commission, shall— perform such functions, consistent with the (4) ADVISORY MEMBERS.—In addition, the (1) develop and maintain a coordinated, purposes of this section, as the Chairman of Commission shall have 4 Members of Con- comprehensive, and long-range national pol- the Council may assign to them; and gress, who shall serve as advisory members. icy with respect to ocean and coastal activi- (B) undertaking, upon request of the Chair- One of the advisory members shall be ap- ties consistent with obligations of the man of the Council, such special studies for pointed by the Speaker of the House of Rep- United States under international law; and the Council as are necessary to carry out its resentatives. One of the advisory members (2) with regard to Federal agencies and de- functions. shall be appointed by the minority leader of partments— (5) The Chairman of the Council shall have the House of Representatives. One of the ad- (A) review significant ocean and coastal the authority to make personnel decisions visory members shall be appointed by the activities, including plans, priorities, accom- regarding any employees detailed to the majority leader of the Senate. One of the ad- plishments, and infrastructure requirements; Council. visory members shall be appointed by the (B) plan and implement an integrated and (c) FUNCTIONS.—The Council shall— minority leader of the Senate. The advisory cost-effective program of ocean and coastal (1) assist the Commission in completing its members shall not participate, except in an activities including, but not limited to, report under section 6; advisory capacity, in the formulation of the oceanography, stewardship of ocean and (2) serve as the forum for developing an im- findings and recommendations of the Com- coastal resources, protection of the marine plementation plan for a national ocean and mission.

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(b) FINDINGS AND RECOMMENDATIONS.—The tribal government position, shall be com- subject matter of the meeting. The Commis- Commission shall report to the President pensated at a rate equal to the daily equiva- sion may administer oaths or affirmations to and the Congress on a comprehensive na- lent of the annual rate payable for Level IV any person appearing before it. tional ocean and coastal policy to carry out of the Executive Schedule under section 5315 (2) All open meetings of the Commission the purpose and objectives of this Act. In de- of title 5, United States Code, for each day shall be preceded by timely public notice in veloping the findings and recommendations (including travel time) during which such the Federal Register of the time, place, and of the report, the Commission shall— member is engaged in the performance of the subject of the meeting. (1) review and suggest any necessary modi- duties of the Commission. All members of (3) Minutes of each meeting shall be kept fications to United States laws, regulations, the Commission who are officers or employ- and shall contain a record of the people and practices necessary to define and imple- ees of the United States shall serve without present, a description of the discussion that ment such policy, consistent with the obliga- compensation in addition to that received occurred, and copies of all statements filed. tions of the United States under inter- for their services as officers or employees of Subject to section 552 of title 5, United national law; the United States. States Code, the minutes and records of all (2) assess the condition and adequacy of in- (e) STAFF.— meetings and other documents that were vestment in existing and planned facilities (1) The Chairman of the Commission may, made available to or prepared for the Com- and equipment associated with ocean and without regard to the civil service laws and mission shall be available for public inspec- coastal activities including human re- regulations, appoint and terminate an execu- tion and copying at a single location in the sources, vessels, computers, satellites, and tive director who is knowledgeable in admin- offices of the Commission. other appropriate technologies and plat- istrative management and ocean and coastal (4) The Federal Advisory Committee Act (5 forms; policy and such other additional personnel as U.S.C. App.) does not apply to the Commis- (3) review existing and planned ocean and may be necessary to enable the Commission sion. coastal activities of Federal agencies and de- to perform its duties. The employment and (g) COOPERATION WITH OTHER FEDERAL EN- partments, assess the contribution of such termination of an executive director shall be TITIES.— activities to development of an integrated subject to confirmation by a majority of the (1) The Commission is authorized to secure long-range program for oceanography, ocean members of the Commission. directly from any Federal agency or depart- and coastal resource management, and pro- (2) The executive director shall be com- ment any information it deems necessary to tection of the marine environment, and iden- pensated at a rate not to exceed the rate carry out its functions under this Act. Each tify any such activities in need of reform to payable for Level V of the Executive Sched- such agency or department is authorized to improve efficiency and effectiveness; ule under section 5316 of title 5, United cooperate with the Commission and, to the (4) examine and suggest mechanisms to ad- States Code. The Chairman may fix the com- extent permitted by law, to furnish such in- dress the interrelationships among ocean pensation of other personnel without regard formation to the Commission, upon the re- and coastal activities, the legal and regu- to the provisions of chapter 51 and sub- quest of the Chairman of the Commission. latory framework in which they occur, and chapter III of chapter 53 of title 5, United (2) The Commission may use the United their inter-connected and cumulative effects States Code, relating to classification of po- States mails in the same manner and under on the marine environment, ocean and coast- sitions and General Schedule pay rates, ex- the same conditions as other departments al resources, and marine productivity and cept that the rate of pay for such personnel and agencies of the United States. biodiversity; may not exceed the rate payable for GS–15, (3) The General Services Administration (5) review the known and anticipated de- step 7, of the General Schedule under section shall provide to the Commission on a reim- mands for ocean and coastal resources, in- 5332 of such title. bursable basis the administrative support cluding an examination of opportunities and (3) Upon request of the Chairman of the services that the Commission may request. limitations with respect to the use of ocean Commission, after consulting with the head (4) The Commission may enter into con- and coastal resources within the exclusive of the Federal agency concerned, the head of tracts with Federal and State agencies, pri- economic zone, projected impacts in coastal any Federal Agency shall detail appropriate vate firms, institutions, and individuals to areas, and the adequacy of existing efforts to personnel of the agency to the Commission assist the Commission in carrying out its du- manage such use and minimize user con- to assist the Commission in carrying out its ties. The Commission may purchase and con- flicts; functions under this Act. Federal Govern- tract without regard to sections 303 of the (6) evaluate relationships among Federal, ment employees detailed to the Commission Federal Property and Administration Serv- State, and local governments and the private shall serve without reimbursement from the ices Act of 1949 (41 U.S.C. 253), section 18 of sector for planning and carrying out ocean Commission, and such detailee shall retain the Office of Federal Procurement Policy and coastal activities and address the most the rights, status, and privileges of his or her Act (41 U.S.C. 416), and section 8 of the Small appropriate division of responsibility for regular employment without interruption. Business Act (15 U.S.C. 637), pertaining to such activities; (4) The Commission may accept and use competition and publication requirements, (7) identify opportunities for the develop- the services of volunteers serving without and may arrange for printing without regard ment of or investment in new products, tech- compensation, and to reimburse volunteers to the provisions of title 44, United States nologies, or markets that could contribute for travel expenses, including per diem in Code. The contracting authority of the Com- to the objectives of this Act; lieu of subsistence, as authorized by section mission under this Act is effective only to (8) consider the relationship of the ocean 5703 of title 5, United States Code. Except for the extent that appropriations are available and coastal policy of the United States to the purposes of chapter 81 of title 5, United for contracting purposes. the United Nations Convention on the Law States Code, relating to compensation for (h) REPORT.—The Commission shall submit of the Sea and other international agree- work injuries, and chapter 171 of title 28, to the President, via the Council, and to the ments, and actions available to the United United States Code, relating to tort claims, Congress not later than 18 months after the States to effect collaborations between the a volunteer under this section may not be establishment of the Commission, a final re- United States and other nations, including considered to be an employee of the United port of its findings and recommendations. the development of cooperative inter- States for any purpose. The Commission shall cease to exist 30 days national programs for oceanography, protec- (5) To the extent that funds are available, after it has submitted its final report. tion of the marine environment, and ocean and subject to such rules as may be pre- (i) AUTHORIZATION OF APPROPRIATIONS.— and coastal resource management; and scribed by the Commission, the executive di- There are authorized to be appropriated to (9) engage in any other preparatory work rector of the Commission may procure the support the activities of the Commission a deemed necessary to carry out the duties of temporary and intermittent services of ex- total of up to $6,000,000 for fiscal years 2001 the Commission pursuant to this Act. perts and consultants in accordance with and 2002. Any sums appropriated shall re- (c) DUTIES OF CHAIRMAN.—In carrying out section 3109 of title 5, United States Code, main available without fiscal year limita- the provisions of this subsection, the Chair- but at rates not to exceed the daily rate pay- tion until the Commission ceases to exist. man of the Commission shall be responsible able for GS–15, step 7, of the General Sched- SEC. 7. REPORT AND BUDGET COORDINATION. for— ule under section 5332 of title 5, United (a) BIENNIAL REPORT.—Beginning in Janu- (1) the assignment of duties and respon- States Code. ary, 2000, the President shall transmit to the sibilities among staff personnel and their (f) ADMINISTRATION.— Congress biennially a report, which shall in- continuing supervision; and (1) All meetings of the Commission shall be clude— (2) the use and expenditures of funds avail- open to the public, except that a meeting or (1) a comprehensive description of the able to the Commission. any portion of it may be closed to the public ocean and coastal activities (and budgets) (d) COMPENSATION OF MEMBERS.—Each if it concerns matters or information de- and related accomplishments of all agencies member of the Commission who is not an of- scribed in section 552b(c) of title 5, United and departments of the United States during ficer or employee of the Federal Govern- States Code. Interested persons shall be per- the preceding 2 fiscal years; and ment, or whose compensation is not pre- mitted to appear at open meetings and (2) an evaluation of such activities (and cluded by a State, local, or Native American present oral or written statement on the budgets) and accomplishments in terms of

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00075 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8469 the purpose and objectives of this Act. Re- Workers and retirees need to be may be criminal wrongdoing. An 800 ports made under this section shall contain aware that they are at risk. They can number linking people to assistance such recommendations for legislation as the help themselves by knowing how their will help close that gap. President may consider necessary or desir- benefits are calculated, that they Finally, the legislation would trans- able. (b) BUDGET COORDINATION.— should keep all the documents their fer authority for the demonstration (1) Each year the President shall provide employer gives them, and to start ask- projects to Title VII of the Older Amer- general guidance to each Federal agency or ing questions at a young age—don’t icans Act in order to make them per- department involved in ocean or coastal ac- wait until the eve of retirement. manent in nature. They provide a tivities with respect to the preparation of re- Unfortunately, policing your pension much needed service to workers and re- quests for appropriations. is not easy. Employers are trying to do tirees. These demonstration projects (2) Each agency or department involved in a good job but they are confronted with such activities shall include with its annual have existed since 1992 and have proven request for appropriations a report which— one of the most complex regulatory to be very successful. However, they (A) identifies significant elements of the schemes in the Federal Government. have outgrown their pilot-project be- proposed agency or department budget relat- Pensions operate in a complex universe ginnings and should become a perma- ing to ocean and coastal activities; and of laws, rules, and regulations. Over nent fixture. (B) specifies how each such element con- the last 20 years, 16 laws have been en- I want to thank Senator BREAUX for tributes to the implementation of a national acted that require employers to amend his support of this legislation. Further- ocean and coastal policy. their pension plans and then notify more, I encourage all of my colleagues SEC. 8. REPEAL OF 1966 STATUTE. to support these projects and show The Marine Resources and Engineering De- their workers of changes. It is not a velopment Act of 1966 (33 U.S.C. 1101 et seq.) simple task. If employers have prob- their support by co-sponsoring this leg- is repealed. lems trying to comply with Federal re- islation.∑ quirements, it is understandable that By Mr. GRASSLEY (for himself workers and retirees are having trouble By Mr. BURNS (for himself, Mr. and Mr. BREAUX): getting a grasp on how their pension CRAIG, Mr. BAUCUS, Mr. S. 960. A bill to amend the Older works. DASCHLE, Mr. KERREY, and Mr. Americans Act of 1965 to establish pen- Trying to educate yourself about JOHNSON): sion counseling programs, and for pensions implies that someone is out S. 961. A bill to amend the Consoli- other purposes; to the Committee on there providing information to those dated Farm and Rural Development Health, Education, Labor, and Pen- who need it. That is where the legisla- Act to improve shared appreciation ar- sions. tion that I am introducing today comes rangements; to the Committee on Agri- PENSION ASSISTANCE AND COUNSELING ACT OF in. People who are concerned about culture, Nutrition, and Forestry. 1999 their pensions—whether it’s an unin- CONSOLIDATED FARM AND RURAL DEVELOPMENT ∑ Mr. GRASSLEY. Mr. President, tentional mistake or outright fraud— ACT AMENDMENTS today I rise to introduce legislation to often don’t have anywhere to go for ex- Mr. BURNS. Mr. President, shared achieve one of my primary objectives pert advice. appreciation agreements have the po- as chairman of the Special Committee Fortunately, there is an answer. Al- tential to cause hundreds of farm fore- on Aging: to help workers and retirees ready authorized by the Older Ameri- closures across the nation, and espe- achieve a secure retirement. cans Act, seven pension counseling cially in my home state of Montana. As with any discussion about retire- projects have assisted thousands of Ten years ago, a large number of farm- ment planning, it is the norm to point people around this country with their ers signed these agreements. At that to the ‘‘three-legged stool’’ of retire- pension problems. These projects pro- time they were under the impression ment—Social Security, personal sav- vide information and counseling to re- that they would be required to pay ings, and a pension. Unfortunately, the tirees, and young and old workers in a these back at the end of ten years, at a legs of the stool may be getting very cost-effective manner. reasonable rate of redemption. warped. Each project received $75,000 of Fed- However, that has not proved to be This legislation is the result of a eral assistance over a 17-month period. the case. The appraisals being con- hearing held by the Aging Committee As is normal for other programs under ducted by the Farm Service Agency are in the 105th Congress. The Aging Com- the Older Americans Act, these dollars showing increased values of ridiculous mittee confronted an issue that is af- were supplemented by money raised proportions. By all standards, one fecting hundreds of thousands of work- from private sources. During their op- would expect the value to have de- ers and retirees—miscalculation of eration, the projects recovered nearly creased. Farm prices are the lowest their hard-earned pensions. This hear- $2 million in pension benefits and pay- they have been in years, and there does ing was intended to raise consumer ments. That is a return of $4 for every not seem to be a quick recovery forth- awareness about the need to be pro-ac- $1 spent. coming. Farmers cannot possibly be ex- tive about policing your pension. As My legislation contains three key pected to pay back a value twice the one of our witnesses said, ‘‘never as- provisions: first, it updates the Older amount they originally wrote down. sume your pension is error-free.’’ Americans Act to encourage the cre- Especially in light of the current mar- While it is impossible to know how ation of more pension counseling ket situation, I believe something must many pension payments and lump sum projects. While 10 projects in 15 states be done about the way these appraisals distributions may be miscalculated, we currently exist, they are not enough to are conducted. know the number is on the rise. An reach the 80 million people who are I am aware of one case in which the audit conducted last Congress by the covered by pensions in this country. amount of the shared appreciation Pension Benefit Guaranty Corpora- Hopefully, more counseling projects agreement was estimated at $167,500. tion—focused on plans that were volun- can be established to provide more re- The increased value was estimated at tarily terminated—showed that the gionally comprehensive assistance. $335,000! When agricultural prices are number of people underpaid has in- Second, the legislation would create at nearly an all-time low, farmers can creased from 2.8 to 8.2 percent. Anec- an 800 number that people could call barely keep up with their current pay- dotal evidence suggests that the num- for one-stop advice on where to get as- ment schedules. They certainly cannot ber of people receiving lump sum dis- sistance. Jurisdiction over pension pay twice what they already owe. tributions who end up getting short- issues is spread across three govern- USDA is attempting to fix the prob- changed could be 15 to 20 percent. ment agencies—none of which are fo- lem with proposed rules and regula- Those numbers are very disturbing. cused on helping individuals with indi- tions but farmers need help with these The practical impact is that retirees, vidual problems—especially if the prob- agreements now. I cannot stand idly by and young and old workers alike, are lem does not seem to be a clear fidu- and wait for bureaucratic regulations losing dollars that they have earned. ciary breach or indicate that there to go through the ‘‘process’’ while

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00076 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8470 CONGRESSIONAL RECORD—SENATE May 5, 1999 farmers and ranchers are forced out of (7 U.S.C. 2001(e)) is amended by striking Indeed, the Small Business Adminis- business. paragraph (2) and inserting the following: tration recently warned that 330,000 The USDA has issued an emergency ‘‘(2) TERMS.—A shared appreciation agree- small businesses are at risk of closing rule which will allow people who are ment entered into by a borrower under this down as a result of Y2K problems, and unable to pay their shared appreciation subsection shall— ‘‘(A) have a term not to exceed 10 years; another 370,000 could be temporarily or agreement on time, to extend their ‘‘(B) provide for recapture based on the dif- permanently hobbled. current loan for up to three years. The ference between— Federal and State government agen- interest rate on this extension will be ‘‘(i) the appraised value of the real security cies have entire departments working at the government’s cost of borrowing. property at the time of restructuring; and on this problem. Utilities, financial in- Also, the USDA is allowing farmers to ‘‘(ii) that value at the time of recapture, stitutions, telecommunications compa- take out an additional loan at an inter- except that that value shall not include the nies, and other large companies have value of any capital improvements made to est rate of 9.25% to pay off the amount information technology divisions owed on the shared appreciation agree- the real security property by the borrower; and working to make corrections to keep ment. their systems running. They have ar- There is also consideration being ‘‘(C) be based on appraisals that are con- ducted by persons with a principal place of mies of workers—but small businesses given to decreasing the number of business that is located in the State con- years on shared appreciation agree- do not. taining the real property.’’. Small businesses are the backbone of ments from ten to five. I appreciate the (b) APPLICATION.—The amendment made by efforts by the USDA to alleviate the fi- subsection (a) shall apply to a shared appre- our economy, from the city corner nancial burden these shared apprecia- ciation arrangement entered into under sec- market to the family farm to the tion agreements impose upon farmers, tion 353(e) of the Consolidated Farm and small-town doctor. In my home State and hope that farmers are able to take Rural Development Act (7 U.S.C. 2001(e)) of Vermont, 98 percent of the busi- advantage of them. that is in effect on or after the date of enact- nesses are small businesses with lim- However, as I have stated, time is of ment of this Act. ited resources. That is why it is so im- the essence. Another proposed regula- By Mr. LEAHY (for himself and portant to provide small businesses with the resources to correct their Y2K tion, which will require a public com- Mr. DODD): ment period of 60 days, will exclude S. 962. A bill to allow a deduction problems now. capital investments from the increase from gross income for year 2000 com- A few months ago, I hosted a Y2K in appreciation. However, this proposal puter conversion costs of small busi- conference in Vermont to help small has not yet been published and is not nesses; to the Committee on Finance. businesses prepare for 2000. Hundreds of expected to be for at least another THE SMALL BUSINESS Y2K COMPLIANCE ACT OF small business owners from across month. After that, the comment period 1999 Vermont attended the conference to will further drag out the process and in Mr. LEAHY. Mr. President, I rise learn how to minimize or eliminate the meantime more farmers will be today to introduce the Small Business their Y2K computer problems. forced into foreclosure. Y2K Compliance Act of 1999. I am Vermonters are working hard to iden- To ensure this regulation on exclud- pleased to be joined by Senator DODD, tify their Y2K vulnerabilities and pre- ing capital investments from the in- the ranking member of the Senate Spe- pare action plans to resolve them. crease in value is carried out, I intend cial Committee on the Year 2000 Tech- They should be encouraged and as- to make it mandatory by legislation. nology Problem, as an original cospon- sisted in these important efforts. Farmers should not be penalized for at- sor of this measure. This is the right approach. We have tempting to better their operations. Our legislation would offer small to fix as many of these problems ahead Nor can they be expected to delay cap- businesses a tax deduction of up to of time as we can. Ultimately, the best ital improvements so that they will $40,000 towards the expenses of pur- business policy and the best defense not be penalized. chasing and installing Year 2000 com- against any Y2K-based lawsuits is to be Additionally, my legislation will re- pliant computer hardware and software Y2K compliant. quire the appraisal to be conducted by in 1999. In addition, our bill would re- That is why it is so important to pro- a certified appraiser from the state ward those small businesses that have vide small businesses with the re- where the land is located. This will pre- acted responsibly by allowing an accel- sources to correct their Y2K problems vent out-of-state appraisal businesses erated depreciation of up to $40,000 for from conducting appraisals in land now. Our legislation would provide tar- the purchase and installation of Year geted tax incentives to encourage areas they know nothing about. How 2000 compliant computer hardware and can an appraisal company in Arizona small businesses round the country in software made in 1997 and 1998. These their Y2K remediation efforts. Our bill be expected to do an accurate appraisal tax incentives have been endorsed by on land in Montana? It is not fair to encourages Y2K compliance now to thousands of small business owners at avoid computer problems next year. the producers on that land to have last year’s White House Conference on Moreover, the tax incentives in our their appraisal conducted by outside Small Business, the American Small legislation would have a negligible rev- interests. Business Alliance and the Small Busi- enue cost. Indeed, the Joint Committee I look forward to working with mem- ness Administration. bers in other states to alleviate the fi- Unfortunately, not all small busi- on Taxation has estimated that com- nancial burdens imposed by shared ap- nesses are doing enough to address the panion legislation introduced in the preciation agreements. I hope that we year 2000 issue because of a lack of re- House of Representatives by Represent- may move this through the legislative sources in many cases. They face Y2K ative KAREN THURMAN, H.R. 179, would process quickly to provide help as soon problems both directly and indirectly reduce revenue by $171 million from as possible to our farmers. through their suppliers, customers and 1990–2003, but would increase revenues I ask unanimous consent that the bill financial institutions. As recently as by the same $171 million from 2004–2008. be printed in the RECORD. last October a representative of the Na- Thus, this bill is fiscally prudent as There being no objection, the bill was tional Federation of Independent Busi- well. ordered to be printed in the RECORD, as nesses testified: ‘‘A fifth of them do not I urge my colleagues to cosponsor follows: understand that there is a Y2K prob- and support the ‘‘Small Business Y2K S. 961 lem. . . . They are not aware of it. A Compliance Act of 1999.’’ Be it enacted by the Senate and House of fifth of them are currently taking ac- Mr. President, I ask unanimous con- Representatives of the United States of America tion. A fifth have not taken action but sent that the text of the bill be printed in Congress assembled, plan to take action, and two-fifths are in the RECORD. SECTION 1. SHARED APPRECIATION ARRANGE- MENTS. aware of the problem but do not plan There being no objection, the bill was (a) IN GENERAL.—Section 353(e) of the Con- to take any action prior to the year ordered to be printed in the RECORD, as solidated Farm and Rural Development Act 2000.’’ follows:

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00077 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8471 S. 962 (2) TREATMENT AS DEDUCTION UNDER SEC- that make up the Northern Forest, but Be it enacted by the Senate and House of TION 179.—For purposes of the Internal Rev- also all states with forestland and all Representatives of the United States of America enue Code of 1986, the deduction allowed who enjoy the multiple uses of in Congress assembled, under this section shall be treated in the forestland. I urge my colleagues to sup- same manner as a deduction allowed under SECTION 1. SHORT TITLE. port this bill, which will not only pro- This Act may be cited as the ‘‘Small Busi- section 179 of such Code. ness Y2K Compliance Act of 1999’’. (3) ORDERING RULE.—For purposes of sec- tect the historic current use patterns, SEC. 2. DEDUCTION FOR COSTS OF MAKING COM- tion 179 of such Code, subsection (b)(3)(C) of but also allow the rustic beauty of our PUTERS AND COMPUTER SOFTWARE such section shall be applied without regard forests to be enjoyed by all. YEAR 2000 COMPLIANT. to the deduction allowed under this section. I ask unanimous consent that a copy (a) IN GENERAL.— of the bill be printed in the RECORD. (1) PROPERTY PLACED IN SERVICE IN 1999.—A By Mr. GREGG: There being no objection, the bill was taxpayer may elect to treat the cost of a S. 963, A bill to amend the Internal ordered to be printed in the RECORD, as business Y2K asset placed in service during Revenue Code of 1986 to preserve fam- follows: the taxpayer’s first taxable year beginning ily-held forest lands, and for other pur- in 1999 as an expense which is not chargeable S. 963 to capital account. The cost so treated shall poses; to the Committee on Finance. Be it enacted by the Senate and House of Rep- be allowed as a deduction from gross income FAMILY FOREST LAND PRESERVATION TAX ACT resentatives of the United States of America in for purposes of the Internal Revenue Code of OF 1999 Congress assembled, 1986. Mr. GREGG. Mr. President, I rise SECTION 1. SHORT TITLE; AMENDMENT OF 1986 (2) PROPERTY PLACED IN SERVICE IN 1997 OR today to introduce the Family CODE. 1998.—A taxpayer may elect to deduct from Forestland Preservation Tax Act of (a) SHORT TITLE.—This Act may be cited as gross income an amount equal to the unre- 1999. This bill amends several key tax the ‘‘Family Forest Land Preservation Tax covered basis of a business Y2K asset placed Act of 1999’’. provisions to help landowners keep in service during the 2 taxable years pre- (b) AMENDMENT OF 1986 CODE.—Except as ceding the first taxable year beginning in their lands in long-term private forest otherwise expressly provided, whenever in 1999 and which is otherwise subject to depre- ownership and management. Without this Act an amendment or repeal is ex- ciation under such Code. these changes, many landowners will pressed in terms of an amendment to, or re- (b) LIMITATIONS.— continue to be forced to sell or change peal of, a section or other provision, the ref- (1) IN GENERAL.—The aggregate amount al- the use of their land. erence shall be considered to be made to a lowed as a deduction under subsection (a) This bill derives from four years of section or other provision of the Internal shall not exceed $40,000. Revenue Code of 1986. (2) APPLICATION OF BUSINESS LIMITATIONS work by the Northern Forest Lands TITLE I—ESTATE TAX PROVISIONS OF SECTION 179.—Rules similar to the rules of Council (NFLC). The NFLC was created paragraphs (2), (3), and (4) of section 179(b) of in 1990 to seek ways for Maine, New SEC. 101. EXCLUSION FOR LAND SUBJECT TO A such Code shall apply for purposes of this Hampshire, Vermont, and New York to QUALIFIED CONSERVATION EASE- section. For purposes of the preceding sen- MENT. maintain the ‘‘traditional patterns of (a) IN GENERAL.—Section 2031(c) (relating tence, the cost of property to which the limi- land ownership and use’’ in the forest tation in paragraph (2) of such section 179(b) to estate tax with respect to land subject to applies shall be the sum of— that covers this nation’s Northeast. a qualified conservation easement) is amend- (A) the amounts elected under subsection The Northern Forest is a 26-million- ed to read as follows: (a)(1) with respect to property placed in serv- acre stretch of land, home to one mil- ‘‘(c) ESTATE TAX WITH RESPECT TO LAND ice during the taxpayer’s first taxable year lion residents and within a two-hour SUBJECT TO A QUALIFIED CONSERVATION EASE- beginning in 1999, and drive of 70 million people. Nearly 85% MENT.— (B) the amounts elected under subsection ‘‘(1) IN GENERAL.—If the executor makes of the Forest is privately owned. Times the election described in paragraph (4), then, (a)(2) with respect to the unrecovered basis have changed, however, and social and of business Y2K assets placed in service dur- except as otherwise provided in this sub- ing the 2 taxable years preceding the first economic forces have begun to affect section, there shall be excluded from the taxable year beginning in 1999. the traditional patterns of land use gross estate the value of land subject to a (c) DEFINITIONS.—For purposes of this sec- with more and more land being mar- qualified conservation easement, reduced by tion— keted for development. the amount of any deduction under section (1) BUSINESS Y2K ASSET.—The term ‘‘busi- This bill will help maintain tradi- 2055(f) with respect to such land. ness Y2K asset’’ means an asset acquired by tional patterns and, thus, preserve the ‘‘(2) TREATMENT OF CERTAIN INDEBTED- NESS.— purchase for use in the active conduct of a forest by adjusting several estate tax trade or business which is— ‘‘(A) IN GENERAL.—The exclusion provided (A) any computer acquired to replace a provisions. This bill would allow heirs under paragraph (1) shall not apply to the ex- computer where such replacement is nec- to make postmortem donations of con- tent that the land is debt-financed property. essary because of the year 2000 computer servation easements on undeveloped es- ‘‘(B) DEFINITIONS.—For purposes of this conversion problem, and tate land and allow the valuation of paragraph— (B) any of the following items which are of undeveloped land at current use value ‘‘(i) DEBT-FINANCED PROPERTY.—The term a character subject to the allowance for de- for estate tax purposes if the owner or ‘debt-financed property’ means any property preciation under such Code: heir agrees to maintain the land in its with respect to which there is acquisition in- debtedness (as defined in clause (ii)) on the (i) the modification of computer software current use for a period of twenty-five to address the year 2000 computer conversion date of the decedent’s death. problem, and years. This bill also would establish a ‘‘(ii) ACQUISITION INDEBTEDNESS.—The term (ii) computer software which is year 2000 partial inflation adjustment for timber ‘acquisition indebtedness’ means, with re- compliant acquired to replace computer soft- sales by allowing a tax credit not to ex- spect to any property, the unpaid amount ware which is not so compliant. ceed 50%. This will encourage land- of— (2) COMPUTER.—The term ‘‘computer’’ owners to maintain their timberland ‘‘(I) any indebtedness incurred by the means a computer or peripheral equipment for long-term stewardship, which is donor in acquiring such property, (as defined by section 168(i)(2)(B)) of such both economically and environ- ‘‘(II) any indebtedness incurred before the acquisition of such property if such indebted- Code. mentally desirable. Also, the bill would (3) COMPUTER SOFTWARE.—The term ‘‘com- ness would not have been incurred but for puter software’’ has the meaning given to eliminate the requirement that land- such acquisition, such term by section 167(f) of such Code. owners generally must work 100-hours- ‘‘(III) any indebtedness incurred after the (4) UNRECOVERED BASIS.—The term ‘‘unre- per-year in forest management on their acquisition of such property if such indebted- covered basis’’ means the adjusted basis of forest properties to be allowed to de- ness would not have been incurred but for the business Y2K asset determined as of the duct normal management expenses such acquisition and the incurrence of such close of the last taxable year beginning be- from timber activities against nonpas- indebtedness was reasonably foreseeable at fore January 1, 1999. sive income. Currently, landowners are the time of such acquisition, and (d) SPECIAL RULES.— ‘‘(IV) any indebtedness which constitutes (1) IN GENERAL.—Rules similar to the rules required to capitalize these losses until an extension, renewal, or refinancing of of subsections (c) and (d) (other than para- timber is harvested. This legislation, other indebtedness described in this clause. graph (1) thereof) of section 179 of such Code though prompted by the NFLC’s work, ‘‘(3) TREATMENT OF RETAINED DEVELOPMENT shall apply for purposes of this section. will benefit not only the four states RIGHT.—

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‘‘(A) IN GENERAL.—Paragraph (1) shall not ‘‘(iii) the executor of the decedent’s estate, treated as disposing of timber if the disposal apply to the value of any development right or is done in accordance with any program de- retained by the donor in the conveyance of a ‘‘(iv) the trustee of a trust the corpus of scribed in subsection (e)(13)(E).’’ qualified conservation easement. which includes the land to be subject to the (d) QUALIFIED WOODLAND.—Section ‘‘(B) TERMINATION OF RETAINED DEVELOP- qualified conservation easement. 2032A(e)(13) is amended by adding at the end MENT RIGHT.—If every person in being who ‘‘(D) MEMBER OF THE DECEDENT’S FAMILY.— the following new subparagraph: has an interest (whether or not in posses- The term ‘member of the decedent’s family’ ‘‘(E) OTHER REQUIREMENTS.—Real property sion) in the land executes an agreement to means any member of the family (as defined shall not be treated as qualified woodland extinguish permanently some or all of any in section 2032A(e)(2)) of the decedent. unless such property— development rights retained by the donor on ‘‘(7) TREATMENT OF EASEMENTS GRANTED ‘‘(i) qualifies for a differential use value as- or before the date for filing the return of the AFTER DEATH.—In any case in which the sessment program for forest land in the tax imposed by section 2001, then any tax im- qualified conservation easement is granted State in which the property is located, or posed by section 2001 shall be reduced accord- after the date of the decedent’s death and on ‘‘(ii) if a State has no differential use value ingly. Such agreement shall be filed with the or before the due date (including extensions) assessment program— return of the tax imposed by section 2001. for filing the return of tax imposed by sec- ‘‘(I) is forest land, The agreement shall be in such form as the tion 2001, the deduction under section 2055(f) ‘‘(II) is a minimum of 10 acres, exclusive of Secretary shall prescribe. with respect to such easement shall be al- a dwelling unit or other non-forest related ‘‘(C) ADDITIONAL TAX.—Any failure to im- lowed to the estate but only if no charitable structure and its curtilage, and plement the agreement described in subpara- deduction is allowed under chapter 1 to any ‘‘(III) is subject to a forest management graph (B) not later than the earlier of— person with respect to the grant of such plan.’’ ‘‘(i) the date which is 2 years after the date easement. (e) VALUATION.— of the decedent’s death, or ‘‘(8) APPLICATION OF THIS SECTION TO INTER- (1) IN GENERAL.—Section 2032A(e) is amend- ‘‘(ii) the date of the sale of such land sub- ESTS IN PARTNERSHIPS, CORPORATIONS, AND ed by adding at the end the following new ject to the qualified conservation easement, TRUSTS.—This subsection shall apply to an paragraph: shall result in the imposition of an addi- interest in a partnership, corporation, or ‘‘(15) SPECIAL RULES FOR VALUING FOREST tional tax in the amount of the tax which trust if at least 30 percent of the entity is LAND.—The value of forest land shall be de- would have been due on the retained develop- owned (directly or indirectly) by the dece- termined according to whichever of the fol- ment rights subject to such agreement. Such dent, as determined under the rules de- lowing methods results in the least value: additional tax shall be due and payable on scribed in section 2057(e)(3).’’ ‘‘(A) Assessed land values in a State which the last day of the 6th month following such (b) EFFECTIVE DATE.—The amendments provides a differential or use value assess- earlier date. made by this section shall apply to estates of ment for forest land. ‘‘(D) DEVELOPMENT RIGHT DEFINED.—For decedents dying after December 31, 1999. ‘‘(B) Comparable sales of other forest land purposes of this paragraph, the term ‘devel- SEC. 102. INCREASE IN SPECIAL ESTATE TAX which is in the same geographical area and opment right’ means any right to use the VALUATION; SPECIAL RULES FOR which is far enough removed from a metro- land subject to the qualified conservation FOREST LANDS. politan or resort area so that nonforest use easement in which such right is retained for (a) INCREASE IN LIMIT.— is not a significant factor in the sales price. any commercial purpose which is not subor- (1) IN GENERAL.—Paragraphs (2) and (3) of ‘‘(C) The capitalization of income which dinate to and directly supportive of the use section 2032A(a) (relating to value based on the property can be expected to yield for of such land as a farm for farming purposes use under which property qualifies) are each timber operations over a reasonable period (within the meaning of section 2032A(e)(5)). amended by striking ‘‘$750,000’’ each place it of time under prudent management, deter- ‘‘(4) ELECTION.—The election under this appears and inserting ‘‘$1,000,000’’. mined by using traditional forest manage- subsection shall be made on or before the due (2) INFLATION ADJUSTMENT.—Section ment for the area, and taking into account date (including extensions) for filing the re- 2032A(a)(3) is amended— soil capacity, terrain configuration, and turn of tax imposed by section 2001 and shall (A) by striking ‘‘1998’’ and inserting ‘‘2000’’, similar factors. be made on such return. and ‘‘(D) Any other factor which fairly values ‘‘(5) CALCULATION OF ESTATE TAX DUE.—An (B) by striking ‘‘calendar year 1997’’ and the timber value of the property.’’ executor making the election described in inserting ‘‘calendar year 1999’’. (2) CONFORMING AMENDMENT.—Section paragraph (4) shall, for purposes of calcu- (b) FOREST LAND TREATED AS QUALIFIED 2032A(e)(8) is amended by striking ‘‘para- lating the amount of tax imposed by section REAL PROPERTY.—Section 2032A(b) (defining graph (7)(A)’’ and inserting ‘‘paragraph (7)(A) 2001, include the value of any development qualified real property) is amended by add- or (15)’’. right (as defined in paragraph (3)) retained ing at the end the following new paragraph: (f) EFFECTIVE DATE.—The amendments by the donor in the conveyance of such ‘‘(6) SPECIAL RULE FOR QUALIFIED WOOD- made by this section shall apply to estates of qualified conservation easement. The com- LANDS.—In the case of qualified woodland, decedents dying after December 31, 1999. putation of tax on any retained development paragraph (1) shall be applied without regard TITLE II—INCOME TAX TREATMENT right prescribed in this paragraph shall be to subparagraph (A) or (C)(ii) thereof.’’ SEC. 201. PARTIAL INFLATION ADJUSTMENT FOR done in such manner and on such forms as (c) DEFINITIONS AND FAILURES TO USE FOR TIMBER. the Secretary shall prescribe. QUALIFIED USE.—Section 2032A(c) (relating (a) IN GENERAL.—Part I of subchapter P of ‘‘(6) DEFINITIONS.—For purposes of this sub- to tax treatment of definitions and failures chapter 1 (relating to treatment of capital section— to use for qualified use) is amended by add- gains) is amended by adding at the end the ‘‘(A) LAND SUBJECT TO A QUALIFIED CON- ing at the end the following new paragraph: following new section: SERVATION EASEMENT.—The term ‘land sub- ‘‘(9) SPECIAL RULES FOR QUALIFIED WOOD- ‘‘SEC. 1203. PARTIAL INFLATION ADJUSTMENT ject to a qualified conservation easement’ LAND.—In the case of qualified woodland— FOR TIMBER. means land— ‘‘(A) this subsection shall be applied by ‘‘(a) IN GENERAL.—At the election of any ‘‘(i) which was owned by the decedent or a substituting ‘25 years’ for ‘10 years’ in para- taxpayer who has qualified timber gain for member of the decedent’s family at all times graph (1) and by substituting ‘25-year period’ any taxable year, there shall be allowed as a during the 3-year period ending on the date for ‘10-year period’ in paragraph (7)(A)(ii) and deduction from gross income an amount of the decedent’s death, and subsection (h)(2)(A), equal to the applicable percentage of such ‘‘(ii) with respect to which a qualified con- ‘‘(B) the qualified heir shall not be treated gain. servation easement has been made by an in- as disposing of the property or ceasing to use ‘‘(b) QUALIFIED TIMBER GAIN.—For purposes dividual described in subparagraph (C) as of the property for a qualified use if— of this section, the term ‘qualified timber the date of the election described in para- ‘‘(i) the qualified heir transfers the prop- gain’ means the lesser of— graph (4). erty to another person, and ‘‘(1) the net capital gain for the taxable ‘‘(B) QUALIFIED CONSERVATION EASEMENT.— ‘‘(ii) such other person (or their qualified year, or The term ‘qualified conservation easement’ heir) agrees to continue to use the property ‘‘(2) the net capital gain for the taxable means a qualified conservation contribution for a qualified use and files an agreement de- year determined by taking into account only (as defined in section 170(h)(1)) of a qualified scribed in subsection (d)(2) with respect to gains and losses from the sale or exchange real property interest (as defined in section the property, of— 170(h)(2)(C)), except that clause (iv) of sec- ‘‘(C) the qualified heir shall be treated as ‘‘(A) any standing timber (or the right to tion 170(h)(4)(A) shall not apply. ceasing to use the property for a qualified sever any standing timber), or ‘‘(C) INDIVIDUAL DESCRIBED.—An individual use if any depreciable improvements are ‘‘(B) any qualified woodland (as defined in is described in this subparagraph if such in- made to the property (other than improve- section 2032A(e)(13)(B)) or any interest there- dividual is— ments required for the qualified use), and in. ‘‘(i) the decedent, ‘‘(D) a qualified heir or transferee de- Such term shall not include any gain exclud- ‘‘(ii) a member of the decedent’s family, scribed in subparagraph (B) shall not be able from gross income under section 139.

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‘‘(c) APPLICABLE PERCENTAGE.—For pur- ‘‘(A) the amount of gain from a qualified An interest in a limited partnership shall in poses of this section, the term ‘applicable timber sale described in subsection (a)(2)(B), no event be treated as a closely held activity percentage’ means the percentage (not ex- plus for purposes of this section. ceeding 50 percent) determined by multi- ‘‘(B) $800,000 ($400,000 in the case of a mar- (2) TIMBER ACTIVITY.—The term ‘‘timber plying— ried individual filing a separate return). activity’’ means the planting, cultivating, ‘‘(1) 3 percent, by ‘‘(2) AGGREGATION RULE.—For purposes of caring, cutting, or preparation (other than ‘‘(2) the number of years in the holding pe- paragraph (1)(B), all persons treated as a sin- milling) for market, of trees. riod of the taxpayer with respect to the tim- gle employer under subsection (a) or (b) of (c) EFFECTIVE DATE.—This section shall ber. section 52 shall be treated as one taxpayer. apply to taxable years beginning after De- ‘‘(d) ESTATES AND TRUSTS.—In the case of ‘‘(c) QUALIFIED TIMBER SALE.—For pur- cember 31, 1999. an estate or trust, the deduction under sub- poses of this section— section (a) shall be computed by excluding ‘‘(1) IN GENERAL.—The term ‘qualified tim- By Mr. DASCHLE: the portion (if any) of the gains for the tax- ber sale’ means the sale or exchange of a S. 964. A bill to provide for equitable able year from sales or exchanges of capital qualified real property interest in real prop- compensation for the Cheyenne River assets which, under sections 652 and 662 (re- erty which is used in timber operations to a Sioux Tribe, and for other purposes; to lating to inclusions of amounts in gross in- governmental unit described in section the Committee on Indian Affairs. come of beneficiaries of trusts), is includible 170(c)(1) for conservation purposes. by the income beneficiaries as gain derived ‘‘(2) SPECIAL RULE FOR SALES TO NON- CHEYENNE RIVER SIOUX TRIBE INFRASTRUCTURE from the sale or exchange of capital assets.’’ GOVERNMENTAL ENTITIES.— DEVELOPMENT TRUST FUND ACT (b) COORDINATION WITH EXISTING LIMITA- ‘‘(A) IN GENERAL.—The term ‘qualified tim- Mr. DASCHLE. Mr. President, today TIONS.— ber sale’ shall include a sale or exchange to I am introducing legislation to com- (1) Subsection (h) of section 1 (relating to a qualified organization described in section pensate the Cheyenne River Sioux maximum capital gains rate) is amended by 170(h)(3) if such interest is transferred to a Tribe for losses the tribe suffered when adding at the end the following new para- governmental unit described in section the Oahe dam was constructed in cen- 170(c)(1) during the 2-year period beginning graph: tral South Dakota and over 100,000 ‘‘(14) QUALIFIED TIMBER GAIN.—For pur- on the date of the sale or exchange. poses of this subsection, net capital gain ‘‘(B) TIME FOR EXCLUSION.—If the transfer acres of tribal land was flooded. Its shall be determined without regard to quali- to which paragraph (1) applies occurs in a passage will help the tribe rebuild their fied timber gain with respect to which an taxable year after the taxable year in which infrastructure and their economy, election is made under section 1203.’’ the sale or exchange occurred— which was seriously crippled by the (2) Subsection (a) of section 1201 (relating ‘‘(i) no exclusion shall be allowed under Oahe project during the 1950s. It is ex- to alternative tax for corporations) is subsection (a) for the taxable year of the sale traordinary that it has taken four dec- amended by adding at the end the following or exchange, but ades to reach this point. The impor- ‘‘(ii) the taxpayer’s tax for the taxable flush sentence: tance of passing this long-overdue leg- ‘‘For purposes of this section, net capital year of the transfer shall be reduced by the gain shall be determined without regard to amount of the reduction in the taxpayer’s islation as soon as possible cannot be qualified timber gain with respect to which tax for the taxable year of the sale or ex- stated too strongly. an election is made under section 1203.’’ change which would have occurred if sub- This legislation was developed with (c) ALLOWANCE OF DEDUCTION IN COMPUTING paragraph (A) had not applied. the assistance of Chairman Gregg ADJUSTED GROSS INCOME.—Subsection (a) of ‘‘(d) OTHER DEFINITIONS.—For purposes of Bourland and Council Member Louis section 62 (relating to definition of adjusted this section— Dubray of the Cheyenne River Sioux gross income) is amended by inserting after ‘‘(1) QUALIFIED REAL PROPERTY INTEREST.— Tribe. Both men have worked tirelessly The term ‘qualified real property interest’ paragraph (17) the following new paragraph: to bring us to this point and I am ‘‘(18) PARTIAL INFLATION ADJUSTMENT FOR has the meaning given such term by section TIMBER.—The deduction allowed by section 170(h)(2). grateful for their assistance. This legis- 1203.’’ ‘‘(2) TIMBER OPERATIONS.—The term ‘tim- lation represents one element of their (d) CLERICAL AMENDMENT.—The table of ber operations’ has the meaning given such progressive vision for providing the sections for part I of subchapter P of chapter term by section 2032A(e)(13)(C). members of the Cheyenne River Sioux 1 is amended by adding at the end the fol- ‘‘(3) CONSERVATION PURPOSES.—The term Tribe with greater opportunities for lowing new item: ‘conservation purposes’ has the meaning economic development and to fulfill given such term by section 170(h)(4)(A) (with- the debts owned to the tribe by the fed- ‘‘Sec. 1203. Partial inflation adjustment for out regard to clause (iv) thereof).’’ timber.’’ (b) CLERICAL AMENDMENT.—The table of eral government. (e) EFFECTIVE DATE.—The amendments sections for part III of subchapter B of chap- The Cheyenne River Sioux Tribe Eq- made by this section shall apply to sales or ter 1 is amended by striking the item relat- uitable Compensation Act is the com- exchanges after December 31, 1999. ing to section 139 and inserting the following panion bill to the Lower Brule Sioux SEC. 202. EXCLUSION OF GAIN FROM SALES OF new items: Tribe Infrastructure Development INTERESTS IN FOREST LAND FOR ‘‘Sec. 139. Sales of interests in certain forest Trust Fund Act, which passed by unan- CONSERVATION PURPOSES. land for conservation purposes. imous consent in November of 1997, and (a) IN GENERAL.—Part III of subchapter B ‘‘Sec. 140. Cross references to other Acts.’’ the Crow Creek Sioux Tribe Infrastruc- of chapter 1 (relating to items specifically ture Development Trust Fund Act of excluded from gross income) is amended by (c) EFFECTIVE DATE.—The amendments redesignating section 139 as section 140 and made by this section shall apply to taxable 1996, which passed the Congress unani- by inserting after section 138 the following years beginning after December 31, 1999. mously in 1996. new section: SEC. 203. APPLICATION OF PASSIVE LOSS LIMITA- The bill is based on an extensive ‘‘SEC. 139. SALES OF INTERESTS IN CERTAIN FOR- TIONS TO TIMBER ACTIVITIES. analysis of the imp[act of the Pick- EST LAND FOR CONSERVATION PUR- (a) IN GENERAL.—Treasury regulations sec- Sloan Dam Projects on the Cheyenne POSES. tions 1.469–5T(b)(2) (ii) and (iii) shall not River Sioux Tribe which was performed ‘‘(a) EXCLUSION.— apply to any closely held timber activity if by the Robert McLaughlin Company. ‘‘(1) IN GENERAL.—Gross income shall not the nature of such activity is such that the The McLaughlin report was reviewed include the applicable percentage of any gain aggregate hours devoted to management of from a qualified timber sale. the activity for any year is generally less by the General Accounting Office, ‘‘(2) APPLICABLE PERCENTAGE.—For pur- than 100 hours. which found that the losses suffered by poses of paragraph (1), the term ‘applicable (b) DEFINITIONS.—For purposes of sub- the tribe justify the establishment of a percentage’ means— section (a)— $290 million trust fund, which is the ‘‘(A) 35 percent, or (1) CLOSELY HELD ACTIVITY.—An activity amount called for in this legislation. ‘‘(B) in the case of a qualified timber sale shall be treated as closely held if at least 80 It represents an important step in of a qualified real property interest de- percent of the ownership interests in the ac- our continuing effort to fairly com- scribed in section 170(h)(2)(C), 100 percent. tivity is held— pensate the tribes of South Dakota for ‘‘(b) LIMITATION.— (A) by 5 or fewer individuals, or ‘‘(1) IN GENERAL.—The total amount of gain (B) by individuals who are members of the the sacrifices they made decades ago which may be excluded from gross income same family (within the meaning of section for the construction of the dams along under subsection (a) for any taxable year 2032A(e)(2) of the Internal Revenue Code of the Missouri River and will further the shall not exceed the sum of— 1986). goal of improving the lives of Native

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00080 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8474 CONGRESSIONAL RECORD—SENATE May 5, 1999 Americans living on those reserva- in turn, will enhance opportunities for (5) the Tribe is entitled to receive addi- tions. economic development which will ben- tional financial compensation for the land To fully appreciate the need for this efit all members of the tribe. Perhaps acquisition described in paragraph (3)(A) in a legislation, it is important for the most importantly, it will fulfill part of manner consistent with the determination of our commitment to improve the lives the Comptroller General described in para- committee to understand the historic graph (4); and events that are prologue to its develop- of Native Americans—in this case the (6) the establishment of a trust fund to ment. The Oahe dam was constructed Cheyenne River Sioux. make amounts available to the Tribe under in South Dakota pursuant to the Flood I strongly urge my colleagues to ap- this Act is consistent with the principles of Control Act (58 Stat. 887) of 1944. That prove this legislation this year. Pro- self-governance and self-determination. legislation authorized implementation viding compensation to the Cheyenne (b) PURPOSES.—The purposes of this Act of the Missouri River Basin Pick-Sloan River Sioux Tribe for past harm in- are as follows: Plan for water development and flood flicted by the federal government is (1) To provide for additional financial com- long-overdue and any further delay pensation to the Tribe for the acquisition by control for downstream states. the Federal Government of 104,492 acres of The Oahe dam flooded 104,000 acres of only compounds that harm. I ask unan- imous consent that the bill be printed land of the Tribe for the Oahe Dam and Res- tribal land, forcing the relocation of ervoir project in a manner consistent with roughly 30 percent of the tribe’s popu- in the RECORD. the determinations of the Comptroller Gen- lation, including four entire commu- There being no objection, the bill was eral described in subsection (a)(4). nities. Equally as important, the tribe ordered to be printed in the RECORD, as (2) To provide for the establishment of the lost 80 percent of its fertile river bot- follows: Cheyenne River Sioux Tribal Recovery Fund, tom lands—lands that represented the S. 964 to be managed by the Secretary of the Treas- ury in order to make payments to the Tribe basis for the tribal economy. Prior to Be it enacted by the Senate and House of Rep- resentatives of the United States of America in to carry out projects under a plan prepared the flooding, the tribe relied on these Congress assembled, by the Tribe. lands for firewood and building mate- SECTION 1. SHORT TITLE. SEC. 3. DEFINITIONS. rial, game wild fruits and berries, as This Act may be cited as the ‘‘Cheyenne In this Act: well as cover from the severe storms River Sioux Tribe Equitable Compensation (1) TRIBE.—The term ‘‘Tribe’’ means the that characterize winters in South Da- Act’’. Cheyenne River Sioux Tribe, which is com- kota and shelter from the heat of the SEC. 2. FINDINGS AND PURPOSES. prised of the Itazipco, Siha Sapa, prairie summer. Indian ranchers no (a) FINDINGS.—Congress finds that— Minniconjou, and Oohenumpa bands of the longer had places to shelter their cat- (1) by enacting the Act of December 22, Great Sioux Nation that reside on the Chey- 1944, (58 Stat. 887, chapter 665; 33 U.S.C. 701– tle in the wintertime, causing a signifi- enne Reservation, located in central South 1 et seq.), commonly known as the ‘‘Flood Dakota. cant loss in the value of their oper- Control Act of 1944’’, Congress approved the (2) TRIBAL COUNCIL.—The term ‘‘Tribal ations. Pick-Sloan Missouri River Basin program Council’’ means the governing body of the The loss of these important river bot- (referred to in this section as the ‘‘Pick- Tribe. tom lands can be felt today. During the Sloan program’’)— SEC. 4. CHEYENNE RIVER SIOUX TRIBAL RECOV- extreme winter of 1996–1997, the tribe (A) to promote the general economic devel- ERY TRUST FUND. lost roughly 30,000 head of livestock, opment of the United States; (a) CHEYENNE RIVER SIOUX TRIBAL RECOV- including 25,000 head of cattle. Without (B) to provide for irrigation above Sioux ERY TRUST FUND.—There is established in City, Iowa; adequate natural shelter, the remain- the Treasury of the United States a fund to (C) to protect urban and rural areas from be known as the ‘‘Cheyenne River Sioux ing Indian ranchers along this stretch devastating floods of the Missouri River; and Tribal Recovery Trust Fund’’ (referred to in of river can expect to continue to have (D) for other purposes; this Act as the ‘‘Fund’’). The Fund shall con- difficulty scratching out a living in fu- (2) the Oahe Dam and Reservoir project— sist of any amounts deposited into the Fund ture years when the winter turns par- (A) is a major component of the Pick-Sloan under this Act. ticularly hard. program, and contributes to the economy of (b) FUNDING.—Out of any money in the Mr. President, the damage caused by the United States by generating a substan- Treasury not otherwise appropriated, the the Pick-Sloan projects touched every tial amount of hydropower and impounding a Secretary of the Treasury shall deposit aspect of life on the Cheyenne River substantial quantity of water; $290,722,958 into the Fund not later than 60 (B) overlies the eastern boundary of the days after the date of enactment of this Act. reservation. Ninety percent of the tim- Cheyenne River Sioux Indian Reservation; (c) INVESTMENT OF TRUST FUND.—It shall ber on the reservation was wiped out, and be the duty of the Secretary of the Treasury causing shortages of building material (C) has not only contributed little to the to invest such portion of the Fund as is not, and firewood. Wildlife, once abundant economy of the Tribe, but has severely dam- in the Secretary of Treasury’s judgment, re- in the river bottom, became more aged the economy of the Tribe and members quired to meet current withdrawals. Such in- scarce. The entire lifestyle of the tribe of the Tribe by inundating the fertile, wood- vestments may be made only in interest- changed as it was forced to relocate ed bottom lands of the Tribe along the Mis- bearing obligations of the United States or much of its people from the lush river souri River that constituted the most pro- in obligations guaranteed as to both prin- ductive agricultural and pastoral lands of cipal and interest by the United States. The bottom lands to the windswept prairie. the Tribe and the homeland of the members Secretary of the Treasury shall deposit in- Most Americans, if not all, are famil- of the Tribe; terest resulting from such investments into iar with the many broken promises of (3) the Secretary of the Interior appointed the Fund. the United States Government to Na- a Joint Tribal Advisory Committee that ex- (d) PAYMENT OF INTEREST TO TRIBE.— tive Americans during the 1800’s. For amined the Oahe Dam and Reservoir project (1) IN GENERAL.— Indian tribes located along the Mis- and correctly concluded that— (A) WITHDRAWAL OF INTEREST.—Beginning souri River in the state of South Da- (A) the Federal Government did not jus- at the end of the first fiscal year in which in- kota, the United States Government tify, or fairly compensate the Tribe for, the terest is deposited into the Fund, the Sec- Oahe Dam and Reservoir project when the retary of the Treasury shall withdraw the still has not met its responsibilities for Federal Government acquired 104,492 acres of applicable percentage amount of the aggre- compensation for losses suffered as a land of the Tribe for that project; and gate amount of interest deposited into the result of the construction of the Pick- (B) the Tribe should be adequately com- Fund for that fiscal year (as determined Sloan dams. This proposed legislation pensated for the land acquisition described under subparagraph (B)) and transfer that is intended to correct that situation as in subparagraph (A); amount to the Secretary of the Interior for it applies to the Cheyenne River Sioux (4) after applying the same method of anal- use in accordance with paragraph (2). Each Tribe. ysis as is used for the compensation of simi- amount so transferred shall be available We cannot, of course, remake the lost larly situated Indian tribes, the Comptroller without fiscal year limitation. lands and return the tribe to its former General of the United States (referred to in (B) APPLICABLE PERCENTAGE AMOUNTS.— this Act as the ‘‘Comptroller General’’) de- The applicable percentage amount referred existence. We can, however, help pro- termined that the appropriate amount of to in subparagraph (A) shall be as follows: vide the resources necessary to the compensation to pay the Tribe for the land (i) 10 percent for the first fiscal year for tribe to improve the infrastructure on acquisition described in paragraph (3)(A) which interest is deposited into the Fund. the Cheyenne River reservation. This, would be $290,722,958; (ii) 20 percent for the 2d such fiscal year.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00081 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8475 (iii) 30 percent for the 3rd such fiscal year. dited as part of the annual single-agency lives of millions of mothers all over the (iv) 40 percent for the 4th such fiscal year. audit that the Tribe is required to prepare world every year. But the importance (v) 50 percent for the 5th such fiscal year. pursuant to the Office of Management and of maternal health care to the well- (vi) 60 percent for the 6th such fiscal year. Budget circular numbered A–133. being of women and their families is (vii) 70 percent for the 7th such fiscal year. (B) DETERMINATION BY AUDITORS.—The (viii) 80 percent for the 8th such fiscal auditors that conduct the audit described in clear. We can support mothers in poor- year. subparagraph (A) shall— er countries around the world by re- (ix) 90 percent for the 9th such fiscal year. (i) determine whether funds received by moving the ban on U.S. funding for (x) 100 percent for the 10th such fiscal year, the Tribe under this section for the period UNFPA. UNFPA is currently the lead- and for each such fiscal year thereafter. covered by the audit were expended to carry ing maternal health care provider (2) PAYMENTS TO TRIBE.— out the plan in a manner consistent with around the world. (A) IN GENERAL.—The Secretary of the In- this section; and During the heated debate sur- terior shall use the amounts transferred (ii) include in the written findings of the rounding international family planning under paragraph (1) only for the purpose of audit the determination made under clause making payments to the Tribe, as such pay- (i). and U.S. funding for UNFPA, ‘‘the baby ments are requested by the Tribe pursuant (C) INCLUSION OF FINDINGS WITH PUBLICA- often gets thrown out with the bath to tribal resolution. TION OF PROCEEDINGS OF TRIBAL COUNCIL.—A water.’’ The ‘‘baby’’ in this debate is (B) LIMITATION.—Payments may be made copy of the written findings of the audit de- the vast array of work UNFPA does by the Secretary of the Interior under sub- scribed in subparagraph (A) shall be inserted around the world to improve pre- and paragraph (A) only after the Tribe has adopt- in the published minutes of the Tribal Coun- post-natal mother’s health, access to ed a plan under subsection (f). cil proceedings for the session at which the voluntary family planning programs, (C) USE OF PAYMENTS BY TRIBE.—The Tribe audit is presented to the Tribal Council. STD and HIV education and preven- shall use the payments made under subpara- (g) PROHIBITION ON PER CAPITA PAY- graph (B) only for carrying out projects and MENTS.—No portion of any payment made tion, and programs to end the practice programs under the plan prepared under sub- under this Act may be distributed to any of female genital mutilation. UNFPA section (f). member of the Tribe on a per capita basis. provides couples all over the world ac- (D) PLEDGE OF FUTURE PAYMENTS.— SEC. 5. ELIGIBILITY OF TRIBE FOR CERTAIN PRO- cess to contraception. It seeks to re- (i) IN GENERAL.—Subject to clause (ii), the GRAMS AND SERVICES. duce abortions and related deaths by Tribe may enter into an agreement under No payment made to the Tribe under this improving access to family planning which the Tribe pledges future payments Act shall result in the reduction or denial of under this paragraph as security for a loan and to treatment for complications of any service or program with respect to unsafe abortion. UNFPA’s priorities in- or other financial transaction. which, under Federal law— (ii) LIMITATIONS.—The Tribe— (1) the Tribe is otherwise entitled because clude preventing teen pregnancy. Too (I) may enter into an agreement under of the status of the Tribe as a federally rec- frequently, the bulk of UNFPA’s work clause (i) only in connection with the pur- ognized Indian tribe; or is overlooked in the international fam- chase of land or other capital assets; and (2) any individual who is a member of the ily planning controversy. (II) may not pledge, for any year under an Tribe is entitled because of the status of the Many people do not even realize that agreement referred to in clause (i), an individual as a member of the Tribe. amount greater than 40 percent of any pay- UNFPA also assists women in crisis SEC. 6. AUTHORIZATION OF APPROPRIATIONS. ment under this paragraph for that year. situations. UNFPA recently announced There are authorized to be appropriated (e) TRANSFERS AND WITHDRAWALS.—Except it is sending emergency reproductive as provided in subsections (c) and (d)(1), the such funds as may be necessary to carry out health hits, including equipment for Secretary of the Treasury may not transfer this Act, including such funds as may be nec- essary to cover the administrative expenses safe delivery of babies and emergency or withdraw any amount deposited under contraceptives for rape victims, to Al- subsection (b). of the Fund. (f) PLAN.— bania for thousands of Kosovar Alba- (1) IN GENERAL.—Not later than 18 months By Mr. JEFFORDS (for himself, nian refugee women. after the date of enactment of this Act, the Ms. SNOWE, Mr. LEAHY, Mrs. The lives of pregnant women and governing body of the Tribe shall prepare a MURRAY, and Mr. DURBIN): newborns are at particular risk among plan for the use of the payments to the Tribe S. 965. A bill to restore a United refugees fleeing Kosovo. These kits in- under subsection (d) (referred to in this sub- States voluntary contribution to the clude supplies for women who give section as the ‘‘plan’’). United Nations Population Fund; to birth in areas without medical facili- (2) CONTENTS OF PLAN.—The plan shall pro- the Committee on Foreign Relations. ties, including materials like soap, vide for the manner in which the Tribe shall expend payments to the Tribe under sub- UNITED NATIONS POPULATION FUND (UNFPA) plastic sheeting, pictorial instructions section (d) to promote— FUNDING ACT OF 1999 for delivering a baby, and razor blades (A) economic development; Mr. JEFFORDS. Mr. President, today for cutting the umbilical cord of a new- (B) infrastructure development; I am introducing the ‘‘United Nations born. These are the most basic of (C) the educational, health, recreational, Population Fund Funding Act of 1999.’’ items. But they can mean the dif- and social welfare objectives of the Tribe and Senators CHAFEE, SNOWE, LEAHY, MUR- ference between life and death for its members; or RAY, and DURBIN join me as original co- mothers and their newborn babies. The (D) any combination of the activities de- scribed in subparagraphs (A) through (C). sponsors. U.S. should contribute to this humani- (3) PLAN REVIEW AND REVISION.— I will celebrate the memory of my tarian work. (A) IN GENERAL.—The Tribal Council shall mother this Sunday on Mother’s Day. The whole world has been horrified make available for review and comment by Very sadly, I know that there are mil- by reports released by human rights or- the members of the Tribe a copy of the plan lions of children in the developing ganizations stating that the Serbs are before the plan becomes final, in accordance world who have very few, or even no using rape as a weapon of war. UNFPA with procedures established by the Tribal memories of their mothers. Nearly all has responded and is leading inter- Council. maternal deaths are in developing national efforts to help Kosovar Alba- (B) UPDATING OF PLAN.—The Tribal Council may, on an annual basis, revise the plan to countries. More than 585,000 women, nian women who have been raped by update the plan. In revising the plan under many of them already mothers, die Serb forces. UNFPA provides trauma this subparagraph, the Tribal Council shall each year from causes related to preg- treatment and counseling for other provide the members of the Tribe oppor- nancy, including obstructed labor, mental health consequences of this tunity to review and comment on any pro- hemorrhage and postpartum infection, form of human rights abuse. posed revision to the plan. and ectopic pregnancies caused by a As the legislative year progresses, (C) CONSULTATION.—In preparing the plan sexually transmitted disease. Mothers the controversy over international and any revisions to update the plan, the also die from HIV, malnutrition and family planning programs will inten- Tribal Council shall consult with the Sec- sify. My legislation calling for renewal retary of the Interior and the Secretary of anemina, or complications of an unsafe Health and Human Services. abortion. of the U.S. contribution to UNFPA will (4) AUDIT.— These are only a few examples of how get caught up in the controversy as (A) IN GENERAL.—The activities of the poverty, lack of knowledge, and lack of well. But I will not let one of the most Tribe in carrying out the plan shall be au- basic maternal health care claim the important issues get lost—the health

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00082 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 8476 CONGRESSIONAL RECORD—SENATE May 5, 1999 of mothers in poor countries. In the By Mr. LAUTENBERG: icans have a right to be free from the coming months I will work with the co- S. 967. A bill to provide a uniform na- dangers posed by the carrying of con- sponsors to this bill and many health tional standard to ensure that cealed handguns, regardless of their care organizations to keep the issue of consealed firearms are available only State of residence. And Americans maternal health visible in the inter- to authorized persons for lawful pur- should be able to travel across State national family planning debate. poses; to the Committee on the Judici- lines for business, to visit their fami- ary. lies, or for any other purpose, without By Mr. REID: CONCEALED FIREARMS PROHIBITION ACT having to worry about concealed weap- S. 966. A bill to require Medicare pro- Mr. LAUTENBERG. Mr. President, ons. viders to disclose publicly staffing and today I am introducing legislation, the performance in order to promote im- Besides the strong Federal interest in Concealed Firearms Prohibition Act, proved consumer information and ensuring the safety of our citizens, that would help make our communities choice, to protect employees of Medi- there are other reasons why this area safer. care providers who report concerns requires Congressional intervention. Across the country, citizens are look- Beyond the lives lost and ruined, about the safety and quality of services ing for ways to stop gun violence. They provided by the Medicare providers or crimes committed with handguns im- see their families torn apart, their who report violations of Federal or pose a substantial burden on interstate friends lost forever, and their commu- State law by those providers, and to re- commerce and lead to a reduction in nities shattered. And they wonder what quire review of the impact on public productivity and profitability for busi- has gone wrong in a nation where more health and safety of proposed mergers nesses around the Nation. Moreover, to than 30,000 people are killed by gunfire and acquisitions of Medicare providers; ensure its coverage under the Constitu- each year. to the Committee on Finance. tion’s commerce clause, my bill applies One area of growing concern is con- only to handguns that have been trans- PATIENT SAFETY AT OF 1999 cealed weapons. Recently, the NRA Mr. REID. Mr. President, I rise today ported in interstate or foreign com- tried to push a measure that would merce, or that have parts or compo- to introduce the Patient Safety Act of have allowed more concealed weapons 1999. This legislation focuses on the nents that have been transported in in Missouri. They spent about $4 mil- interstate or foreign commerce. This major safety, quality, and workforce lion trying to pass their referendum. issues for nurses employed by health clearly distinguishes the legislation But the voters responded with a re- care institutions and the patients who from the gun-free school zone statute sounding ‘‘no.’’ They do not want more receive care in these facilities. that was struck down in the Supreme Health care consumers need access to people secretly carrying weapons in Court’s Lopez case. information about health care institu- their schoolyards, malls, stadiums and Mr. President, the bottom line is tions in order to make informed deci- other public places. that more guns equal more death. This Regrettably, there are still too many sions about where they or their loved legislation will help in our struggle to politicians who will not listen to the ones will receive care. My bill would reduce the number of guns on our require health care facilties to make people. They insist on marching in streets, and help prevent our society information publicly available about lockstep with the NRA. They actually from becoming even more violent and staffing levels, patient care outcomes, want to escalate the arms race on our dangerous. streets. They try to suggest that if and specific kinds of errors and avoid- I hope my colleagues will support the able patient care problems—such as more people are carrying guns, our neighborhoods will be safer. That posi- bill, and I ask unanimous consent that bedsores. The Patient Safety Act would the text of the bill be printed in the not require action to correct these tion simply defies common sense. The answer to gun violence is not a new RECORD. problems. This is not a bill to regulate There being no objection, the bill was health care, but one that would provide version of the Wild West, with every- one carrying a gun on his or her hip, ordered to be printed in the RECORD, as individuals with the information they follows: want and need when it comes time to taking the law into their own hands. make important health care choices. Every day people get into arguments S. 967 As our front-line health care work- over everything from traffic accidents Be it enacted by the Senate and House of Rep- ers, nurses are usually the first to rec- to domestic disputes. Maybe these ar- resentatives of the United States of America in ognize dangerous patient care condi- guments lead to yelling, or even fisti- Congress assembled, tions. The Patient Safety Act would cuffs. But if people are carrying guns, SECTION 1. SHORT TITLE. provide nurses and other hospital em- those conflicts are much more likely to This Act may be cited as the ‘‘Concealed ployees with ‘‘whistleblower’’ protec- end in a shooting, and death. And since Firearms Prohibition Act’’. tions it they report problems that some States allow individuals to carry SEC. 2. FINDINGS. concealed weapons with little or no threaten patient safety to their em- Congress finds that— ployers, government agencies, or oth- training in the operation of firearms, (1) crimes committed with firearms threat- ers. there is a greater chance that incom- en the peace and domestic tranquility of the Finally, the Patient Safety Act petent or careless handgun users will United States and reduce the security and would dirct the Department of Health accidentally injure or kill innocent by- general welfare of the people of the United and Human Services to review mergers standers. States; and acqusitions of hospitals to deter- More concealed weapons on our (2) crimes committed with firearms impose mine their long-term effects on the streets will also make the jobs of law a substantial burden on interstate commerce enforcement officers more dangerous and lead to a reduction in productivity and well-being of patients, the community profitability for businesses around the coun- and employees. While these types of and difficult. But you do not need to try whose workers, suppliers, and customers transactions are regularly evaluated take my word for this, Mr. President. are adversely affected by gun violence; from a financial standpoint, little in- Just ask the men and women in law en- (3) the public carrying of firearms in- formation is made available to the pub- forcement. In fact, the Police Execu- creases the level of gun violence by enabling lic about hwo such a change would af- tive Research Forum did just that. In the rapid escalation of otherwise minor con- fect the health care services available their 1996 survey, they found that 92 flicts into deadly shootings; to them. percent of their membership opposed (4) the public carrying of firearms in- The Patient Safety Act is a valuable legislation allowing private citizens to creases the likelihood that incompetent or information resource for consumers. I careless firearm users will accidently injure carry concealed weapons. or kill innocent bystanders; urge you to join my efforts to provide Mr. President, although the regula- (5) the public carrying of firearms poses a consumers with the data necessary to tion of concealed weapons has been left danger to citizens of the United States who make informed decisions about their to States, it is time for Congress to travel across State lines for business or health care providers. step in to protect the public. All Amer- other purposes; and

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00083 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.002 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8477 (6) all Americans have a right to be pro- ALTERNATIVE WATER SOURCES ACT OF 1999 half the cost of the project. This legis- tected from the dangers posed by the car- ∑ Mr. GRAHAM. Mr. President, I rise lation authorizes $75 million per year rying of concealed firearms, regardless of today with my colleagues, Senators over the next five years to fund alter- their State of residence. MACK, CLELAND, LINCOLN, and ROBB, to native water source projects.∑ SEC. 3. UNLAWFUL ACT. discuss an issue of great importance to Section 922 of title 18, United States Code, By Mr. ASHCROFT: is amended by inserting after subsection (y) the people of Florida and the nation: the following: the availability of adequate water sup- S. 969. A bill to amend the Individ- ‘‘(z) FIREARMS.— plies. During the last decade, many uals with Disabilities Education Act ‘‘(1) IN GENERAL.—Except as provided in states have experienced unprecedented and the Gun-Free Schools Act of 1994 paragraph (2), it shall be unlawful for a per- population growth. For example, Flor- to authorize schools to apply appro- son to carry a firearm, any part of which has ida’s population increased by 15 per- priate discipline measures in cases been transported in interstate or foreign cent, or almost 2 million people, over where students have weapons or commerce, on his or her person in public. threaten to harm others, and for other ‘‘(2) EXCEPTIONS.—Paragraph (1) does not the last 8 years. We have directed re- apply to— sources towards improvements in our purposes; to the Committee on Health, ‘‘(A) a person authorized to carry a firearm highway infrastructure to accommo- Education, Labor, and Pensions. under State law who is— date increased use. However, an area SCHOOL SAFETY ACT OF 1999 ‘‘(i) a law enforcement official; that has not received adequate atten- Mr. ASHCROFT. Mr. President, in ‘‘(ii) a retired law enforcement official; tion but has the potential to nega- the past two weeks since the tragedy ‘‘(iii) a duly authorized private security of- tively impact human health and the occurred at Columbine High School in ficer; ‘‘(iv) a person whose employment involves environment as well as limit economic Littleton, Colorado, we have all had the transport of substantial amounts of cash growth is the conservation and devel- time to reflect on a number of issues. or other valuable items; or opment of adequate water supplies. Our thoughts and prayers go to the ‘‘(v) any other person that the Attorney A number of eastern states, including families, friends, and other loved ones General determines should be allowed to Florida, are now experiencing water affected by this incident. We have carry a firearm because of compelling cir- supply problems similar to those in the asked ourselves why this happened. cumstances, under regulations that the At- arid West. We must act now to prevent How it happened. torney General may promulgate; salt water intrusion into our aquifers, The Littleton tragedy requires reflec- ‘‘(B) a person authorized to carry a firearm additional loss of wetlands, and curbs tion, thought and corrective action under a State law that permits a person to carry a firearm based on an individualized on economic development due to inad- within our spheres of influence and re- determination, based on a review of credible equate water supplies. As we prepare sponsibility. Children must learn re- evidence, that the person should be allowed for the 21st century, demand for water spect and responsibility. Parents must to carry a firearm because of compelling cir- for domestic, industrial, and agricul- be responsible for their children, in- cumstances (not including a claim of con- tural uses will continue to increase. cluding what they watch and what they cern about generalized or unspecified risks); In just one of Florida’s regional do. Schools must have firm, fair and or water management districts, the Gov- consistent discipline policies. Schools ‘‘(C) a person authorized to carry a firearm erning Board has committed $10 mil- must be free to expel violence-prone on his or her person under Federal law. lion per year since 1994 to providing fi- ‘‘(3) EFFECT ON OTHER LAWS.— students. State legislators must review ‘‘(A) FEDERAL LAWS.—Nothing in this sub- nancial assistance for local alternative state laws. Congress must review fed- section supersedes or limits any other Fed- water source projects such as conserva- eral laws. eral law (including a regulation) that pro- tion, wastewater reclamation, As a member of the United States hibits or restricts the possession or transpor- stormwater reuse, and desalination. Senate, I have been prompted to stop tation of a firearm. When fully implemented, the 23 cur- and examine our current federal edu- ‘‘(B) STATE AND LOCAL LAWS.—Nothing in rently active or completed projects cation laws involving school safety, this subsection supersedes or limits any law will provide more than 150 million gal- and see if our policies are promoting (including a regulation) of a State or polit- ical subdivision of a State that— lons of water per day to supply existing and encouraging school safety—or are ‘‘(i) grants a right to carry a concealed and future needs. These projects will in some way hindering our teachers, firearm that is more restrictive than a right also reduce groundwater withdrawals, parents, principals, superintendents, granted under this subsection; rehydrate stressed lakes and wetlands, and school boards from maintaining a ‘‘(ii) permits a private person or entity to increase ground water recharge, en- safe place for our children to learn and prohibit or restrict the possession of a con- hanced wildlife habitat, and improve our teachers to teach. cealed firearm on property belonging to the flood control. For much of the past year and before person; We are today introducing legislation the Littleton tragedy, I traveled ‘‘(iii) prohibits or restricts the possession to address this critical public health, through Missouri talking to teachers, of a firearm on any property, installation, building, facility, or park belonging to a environmental, and economic issue. principals, school superintendents and State or political subdivision of a State; or The ‘‘Alternative Water Sources Act of school officials about the issue of ‘‘(iv) permits a person to— 1999’’ establishes a federal grant pro- school safety and school discipline. ‘‘(I) transport a lawfully-owned and law- gram for eastern states that is similar What I heard and learned was dis- fully-secured firearm in a vehicle for hunting to a program already operated by the turbing. After listening to school offi- or sporting purposes; or Bureau of Reclamation for western cials, I have concluded that there is, in ‘‘(II) use a lawfully-owned firearm for states. The program will provide fed- fact, at least one federal law that actu- hunting or sporting purposes.’’. eral matching funds for the design and ally jeopardizes our schools’ efforts to By Mr. GRAHAM (for himself, construction of water reclamation, provide a safe learning environment. Mr. MACK, Mr. CLELAND, Mrs. reuse, and conservation projects. The Today I am introducing legislation, the LINCOLN, and Mr. ROBB): bill authorizes the Environmental Pro- School Safety Act, to amend this law S. 968. A bill to authorize the Admin- tection Agency (EPA) to make grants and give schools the ability to remove istrator of the Environmental Protec- to agencies with responsibility for from the classroom students who pos- tion Agency to make grants to State water resource development, for the sess weapons or threaten to use weap- agencies with responsibility for water purpose of maximizing available water ons in the classroom, so that we can source development, for the purposes of supplies while protecting the environ- keep our children and teachers safe. maximizing the available water supply ment. Under this program, water sup- Once enacted, this legislation will and protecting the environment ply agencies will submit grant pro- help foster a safer environment in through the development of alternative posals to EPA. The proposed projects schools. If this legislation had been en- water sources, and for other purposes; must be part of a long range water re- acted years ago, would it have pre- to the Committee on Environment and source management plan. If approved, vented the Littleton tragedy? It would Public Works. the federal government would provide be wrong to claim for certain that it

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00084 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 8478 CONGRESSIONAL RECORD—SENATE May 5, 1999 would. The truth of the Littleton trag- students with weapons. In fact, the in dealing with violent and dangerous edy is that those involved in the mas- IDEA law makes it very difficult for behavior—often connected with weap- sacre violated at least 13 federal laws. schools to act effectively when a stu- ons. Let me give you a few examples: The existence of those 13 laws did not dent subject to this law has a weapon In one rural Missouri school, a 15- stop the Littleton massacre. Still, we at school. year-old IDEA student had been mak- must examine our current federal edu- While the Gun-Free Schools Act ing numerous threats against both stu- cation laws involving school safety and would require that any other student dents and staff. He said such things as, make necessary changes. be expelled for a year, the ‘‘special ‘‘I’m going to shoot you. I’m going to Across America, parents, teachers, rule’’ for an IDEA student who brings a get a gun and blow you away.’’ School and communities have made it clear gun or knife to school provides that he officials were aware of the threats, but that we want our schools to offer our could be back in the regular classroom the federal law hindered them from students a world-class education that within 45 days. taking steps they thought most appro- boosts student achievement and ele- Here is a federal law that creates priate to deal with the student. Unfor- vates them to excellence. If children dangerous situations by not allowing tunately this student ended up shoot- are to attain high levels of academic school officials to keep those students ing another student off school grounds. performance, our schools must be able who have possessed weapons in school Fortunately, because he remained in to provide safe and secure learning en- out of the classroom. the custody of law enforcement au- vironments free of undue disruption or IDEA also hinders schools from tak- thorities, the student was not returned violence. ing effective action to protect their to the classroom. School officials in When we think of school safety, we students and teachers from students this district told me that had this stu- obviously turn to one element that who make threats to use weapons. dent not been subject to the IDEA poses a threat to a secure environment: School districts have developed poli- laws, they could have—and would weapons in schools. cies to address student weapons have—removed him from the classroom Our general federal policy is com- threats. For example, a superintendent when he made the threats of killing mendable: to have zero tolerance for in my state told my office that under other students and personnel. weapons at schools. The federal Gun- his school district’s policy, he could In an eastern Missouri school dis- Free Schools Act requires states re- suspend a student for up to 180 days for trict, an IDEA student who was under ceiving federal education funds to have threatening to bring a weapon to school suspension was asked to leave a Friday night school dance that he tried a law requiring a one year expulsion of school and shoot another student. to attend in violation of school policy. a student who has a weapon at school. However, if that superintendent is The student tried continually to regain I know that my state of Missouri has dealing with a student under IDEA, the entry into the school and said to the such a law on the books. law makes it very difficult for him to principal, a teacher, and a parent who We would think that the Gun-Free remove the student even if he considers was helping supervise the dance: ‘‘I’m Schools Act settles the issue of weap- the student a serious threat to the going to go home, get my shotgun, ons in schools. But it doesn’t. This law safety of others. In fact, the school come back, and blow your [expletives contains an exception for nearly one in may be unable to remove this child deleted] heads off.’’ The superintendent seven students in my state, and one in from the classroom if he has already says that the federal IDEA law con- eight nationally. This exception is for been suspended for a certain number of strained him to return this potentially students covered by the federal Individ- days during the school year. dangerous student to the classroom uals with Disabilities Education Act. Here is a federal law that creates early the next week. If the student had Hidden among the provisions of the dangerous situations by not allowing not had been under IDEA, the super- Gun-Free Schools Act is section (c), en- school officials to act on early warning intendent could have imposed a far titled ‘‘Special Rule,’’ which says: signs to remove potentially violent longer suspension for threatening ‘‘The provisions of this section shall be students from school. school personnel. construed in a manner consistent with The costs involved with trying to I learned of a Missouri grade the Individuals with Disabilities Edu- keep a dangerous child out of the class- schooler, subject to IDEA law, who an- cation Act.’’ When you turn to the room are astronomical under IDEA. nounced at school, ‘‘I’m going to bring IDEA law, you see a complex and Schools have told me that the ‘‘due a knife and cut the bus driver’s elaborate set of roadblocks and bar- process’’ proceedings a parent can in- throat.’’ Was this an idle threat? This riers that hamstring schools in apply- voke in response to any disciplinary child had transferred from another ing discipline to any IDEA student for action taken toward a child is so ex- school where he had been found with a situations involving weapons posses- pensive and time-consuming that knife and was suspended for 10 days. sions. schools do all they can to avoid these The federal IDEA law prevents this When we talk about students who are proceedings. The easiest, simplest due new school from imposing any more subject to the IDEA law, we are not process hearing costs a school about suspensions upon this child for the rest talking about any small number of $7500 in Missouri! of the school year unless he actually children: In Missouri, over 129,000—or Not only must schools pay their own shows up with a weapon again! nearly 14% of our 893,000 students—are legal fees for a due process hearing Let me emphasize that the vast ma- classified as ‘‘disabled.’’ That’s one in under IDEA, but they also face the jority of disabled students under the seven students. Nationally, there are prospect of being responsible for the IDEA law—just like the vast majority about 12–13% of all students who are parents’ attorneys fees in some cases. of nondisabled students—are good kids under the IDEA law. We have to keep Here is a federal law that discourages who don’t pose discipline problems in this in mind as we talk about this issue safe classrooms because schools cannot school. However, when it comes to of school discipline and safety. afford to take steps they deem essen- something as serious as a student We must also consider which individ- tial to maintaining safety without bringing a weapon to school or threat- uals qualify as ‘‘disabled’’ under IDEA. risking serious financial jeopardy. ening to kill or harm someone with a We are not just talking about blind- The problems created by IDEA are weapon, school officials must have the ness, deafness, orthopedic impair- not simply theoretical. Just three ability to respond in the way they be- ments, or MS. The federal IDEA defini- weeks ago—before the Littleton inci- lieve most appropriate to maintain a tion of disability also includes individ- dent—I traveled around Missouri to safe and stable school for all children. uals with serious emotional disturb- talk to parents, teachers, principals, When I hear these incidents from ances or specific learning disabilities. and administrators about ways to offer Missouri schools, I cannot help but Unlike the Gun-Free Schools Act, the each child a world class education. think that there is something dras- Individuals with Disabilities Education Again and again, I was told that tically wrong with our federal edu- Act does not have a zero tolerance for schools are handcuffed by federal law cation laws. We have a mass tragedy

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00085 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8479 waiting to happen if federal law keeps Association, will repeal the federal law a knife on a school bus. The editorial teachers from getting teenagers with that handcuffs schools from taking pointed out the disparities caused by weapons out of schools. We cannot af- measures they believe appropriate to the federal IDEA laws. It said: ‘‘If the ford to keep laws on the books that maintain a safe and secure learning en- school district really is required by law preclude schools from dealing with vironment for students and teachers. to allow students back into class who early warning signs of danger and A safe and secure setting is vital to carry weapons or otherwise have dem- handcuff them from taking swift action success in the classroom. Any student onstrated intent to harm others, that to prevent violence. We must give who has a weapon at school, or who law is in error and must be changed.’’ schools the power to keep our children threatens to kill or harm someone with I could not agree more with this edi- safe by allowing them to remove all a weapon, should be removed from the torial. It is time to change this erro- students who have weapons or threaten classroom immediately. Whether a stu- neous law, which jeopardizes students to use them. dent is ‘‘disabled’’ under federal law and teachers by forcing school officials Schools all over my state have told should not prevent school administra- to ignore early warning signs of dis- me that they need the authority to dis- tors from dealing appropriately with aster. Maintaining a safe learning envi- cipline all students in a fair and con- weapons in school. We can no longer af- ronment requires that local school offi- sistent manner—for the safety of their ford to keep a federal law that threat- cials have the authority and flexibility schools and for the benefit of disabled ens the safety of the classroom. We can to discipline all students in an equi- children. Here are some examples of no longer afford to tolerate federal pol- table and effective manner, especially what schools have told me: icy that invites a mass tragedy. Under when it comes to weapons. Let’s Maynard Wallace, Superintendent of the School Safety Act, schools will be unshackle our teachers, principals, su- the Ava R-I School District, has writ- empowered with the flexibility and au- perintendents, and school boards from ten: ‘‘The discipline code must be the thority they need to remove any dan- a law that prevents them from keeping same for all if public education is to gerous and violent student from the our children safe and secure. Let’s give survive.’’ He says that treating chil- classroom when weapons are involved. them the power to stop a tragedy be- dren with handicaps differently than This is not the first time I have in- fore it happens. other children in the area of discipline troduced school safety legislation since Mr. President, I ask unanimous con- ‘‘not only undermines the entire dis- I have been in the Senate. I have al- sent that the text of the bill be printed cipline of the school but is a definite ready worked to make improvements in the RECORD. disservice to the handicapped child as in the federal law to create a safer There being no objection, the bill was well.’’ learning environment for students and ordered to be printed in the RECORD, as Betty Chong, Assistant Super- teachers. follows: intendent for Special Services in the I began working on this issue in 1995, S. 969 Cape Girardeau school district, writes: after a young woman was found dead in Be it enacted by the Senate and House of Rep- ‘‘The educators are themselves advo- the restroom of a North St. Louis resentatives of the United States of America in cates for children with disabilities. . . . County high school. The male special Congress assembled, Special educators directors and many education student convicted of mur- SECTION 1. SHORT TITLE. principals were first teachers who were dering the woman had a history of dan- This Act may be cited as the ‘‘School Safe- dedicated (and still are) to the edu- gerous behavior, but his discipline ty Act of 1999’’. cation of students with disabilities.’’ record hadn’t been disclosed to his new SEC. 2. AMENDMENTS TO THE INDIVIDUALS WITH She goes on to say: ‘‘Students with dis- school. In response to this situation, I DISABILITIES EDUCATION ACT. abilities are held to the same standards sought for ways to give schools the (a) PLACEMENT IN ALTERNATIVE EDU- as students without disabilities when crucial information they need to main- CATIONAL SETTING.—Section 615(k) of the In- they are adults. When do they learn tain a secure school environment. I au- dividual with Disabilities Education Act (20 U.S.C. 1415(k)) is amended— how to be law abiding citizens?’’ thored legislation signed into law in (1) in paragraph (1)(A)(ii), by striking ‘‘45 Lyle Laughman, the superintendent June 1997 providing for the transfer of days if—’’ and all that follows through ‘‘(II) of the Lincoln County R-IV school dis- discipline records when students with the child’’ and inserting ‘‘45 days if the trict has written: ‘‘It is in the total dangerous behavior change schools. child’’; best interest of the child and society In the recent ‘‘ed-flex’’ bill signed (2) in paragraph (2), by striking ‘‘A hear- for that [discipline] determination to into law on April 29, 1999, I secured a ing’’ and inserting ‘‘Except as provided in be made on the local, individual case provision that closes a loophole in fed- paragraph (10), a hearing’’; level rather than the Federal law eral law concerning weapons possession (3) by redesignating paragraph (10) as para- which greatly restricts what a school in school. Missouri school board offi- graph (11); (4) by inserting after paragraph (9) the fol- can do in an individual set of cir- cials had alerted me to a federal provi- lowing new section: cumstances.’’ sion that allows a school to discipline a ‘‘(10) EXPULSION OR SUSPENSION WITH RE- Dale Walkup, Board of Education student only for carrying a weapon SPECT TO WEAPONS.— President of the Blue Springs School onto school grounds, but not for pos- ‘‘(A) AUTHORITY OF SCHOOL PERSONNEL WITH District gave me a copy of a letter he sessing a weapon at school. In response RESPECT TO WEAPONS.—Notwithstanding any sent to President Clinton which says, to this concern, I had the law amended other provision of this Act, school personnel ‘‘The reauthorization of IDEA has not to ensure that school officials can re- may suspend or expel a child with a dis- supported impartial and appropriate move a student from the classroom ability who— ‘‘(i) carries or possesses a weapon to or at consequences for those students who whether he possesses—or carries—a a school, on school premises, or to or at a choose drugs and are violent or dan- weapon at school. school function under the jurisdiction of a gerous to others. We hope the IDEA The legislation I am offering today State or a local educational agency; or regulations become more reasonable, builds upon this previous safe schools ‘‘(ii) threatens to carry, possess, or use a appropriate, and considerate of the legislation by giving schools authority weapon to or at a school, on school premises, needs of our total student population.’’ to remove any student from the class- or to or at a school function under the juris- In response to both the incidents and room if he or she brings a weapon to diction of a State or a local educational recommendations that I have heard school or threatens to kill or harm agency; from schools, I am introducing the someone with a weapon. in the same manner in which such personnel School Safety Act, which will allow Mr. President, a little over a year would suspend or expel a child without a dis- schools to remove from the classroom ago, the Senator from Washington, ability. ‘‘(B) DEFINITIONS.—For the purposes of this any student who has a weapon or Senator GORTON, read from an editorial paragraph: threatens to use a weapon at school. in the Seattle Post Intelligencer that ‘‘(i) WEAPON.—The term ‘weapon’ has the This legislation, which has been en- recounted the story of a disabled stu- meaning given the term under applicable dorsed by the Missouri School Boards dent who attacked other students with State law.

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‘‘(ii) THREATENS TO CARRY, POSSESS, OR USE setts (Mr. KENNEDY) was added as a co- (Mr. BRYAN), and the Senator from Ar- A WEAPON.—The term ‘threatens to carry, sponsor of S. 206, a bill to amend title kansas (Mrs. LINCOLN) were added as possess, or use a weapon’ includes behavior XXI of the Social Security Act to pro- cosponsors of S. 514, a bill to improve in which a child verbally threatens to kill vide for improved data collection and the National Writing Project. another person. ‘‘(C) FREE APPROPRIATE PUBLIC EDU- evaluations of State Children’s Health S. 542 CATION.— Insurance Programs, and for other pur- At the request of Mr. ABRAHAM, the ‘‘(i) CEASING TO PROVIDE EDUCATION.—A poses. name of the Senator from Utah (Mr. child expelled or suspended under subpara- S. 285 BENNETT) was added as a cosponsor of graph (A) shall not be entitled to continued At the request of Mr. MCCAIN, the S. 542, a bill to amend the Internal educational services, including, but not lim- name of the Senator from Montana Revenue Code of 1986 to expand the de- ited to a free appropriate public education, duction for computer donations to under this Act, during the term of such ex- (Mr. BURNS) was added as a cosponsor pulsion or suspension, if the State in which of S. 285, a bill to amend title II of the schools and allow a tax credit for do- the local educational agency responsible for Social Security Act to restore the link nated computers. providing educational services to such child between the maximum amount of earn- S. 566 does not require a child without a disability ings by blind individuals permitted At the request of Mr. LUGAR, the to receive educational services after being without demonstrating ability to en- name of the Senator from South Da- suspended or expelled. gage in substantial gainful activity and kota (Mr. DASCHLE) was added as a co- ‘‘(ii) PROVIDING EDUCATION.—Notwith- the exempt amount permitted in deter- sponsor of S. 566, a bill to amend the standing clause (i), the local educational Agricultural Trade Act of 1978 to ex- agency responsible for providing educational mining excess earnings under the earn- services to a child with a disability who is ings test. empt agricultural commodities, live- expelled or suspended under subparagraph S. 343 stock, and value-added products from (A) may choose to continue to provide edu- At the request of Mr. BOND, the name unilateral economic sanctions, to pre- cational services to such child. If the local of the Senator from Michigan (Mr. pare for future bilateral and multilat- educational agency so chooses, then— eral trade negotiations affecting (I) nothing in this Act shall require the ABRAHAM) was added as a cosponsor of S. 343, a bill to amend the Internal United States agriculture, and for local educational agency to provide such other purposes. child with a free appropriate public edu- Revenue Code of 1986 to allow a deduc- S. 600 cation, or any particular level of service; and tion for 100 percent of the health insur- (II) the site where the local educational ance costs of self-employed individuals. At the request of Mrs. MURRAY, her name was added as a cosponsor of S. agency provides the services shall be left to S. 345 the discretion of the local educational agen- 600, a bill to combat the crime of inter- At the request of Mr. ALLARD, the cy. national trafficking and to protect the name of the Senator from New York (5) in paragraph (11) (as redesignated in rights of victims. paragraph (3)), by striking subparagraph (D). (Mr. SCHUMER) was added as a cospon- S. 631 (b) CONFORMING AMENDMENTS.— sor of S. 345, a bill to amend the Ani- (1) Section 612(a)(1)(A) of the Individuals mal Welfare Act to remove the limita- At the request of Mr. DEWINE, the with Disabilities Education Act (20 U.S.C. tion that permits interstate movement name of the Senator from New York 1412(a)(1)(A)) is amended by inserting before of live birds, for the purpose of fight- (Mr. SCHUMER) was added as a cospon- the period ‘‘(except as provided in section sor of S. 631, a bill to amend the Social ing, to States in which animal fighting 615(k)(10))’’. Security Act to eliminate the time is lawful. (2) Section 615(f)(1) of the Individuals with limitation on benefits for immuno- Disabilities Education Act (20 U.S.C. S. 398 1415(f)(1)) is amended by inserting at the be- suppressive drugs under the medicare At the request of Mr. CAMPBELL, the program, to provide continued entitle- ginning of the first sentence ‘‘Except as pro- name of the Senator from California vided in section 615(k)(10),’’. ment for such drugs for certain individ- (Mrs. FEINSTEIN) was added as a co- uals after medicare benefits end, and to SEC. 3. AMENDMENT TO THE GUN-FREE SCHOOLS sponsor of S. 398, a bill to require the ACT OF 1994. extend certain medicare secondary Subsection (c) of section 14601 of the Gun- Secretary of the Treasury to mint payer requirements. coins in commemoration of Native Free Schools Act of 1994 (20 U.S.C. 8921) is S. 659 amended to read as follows: American history and culture. At the request of Mr. LEAHY, his ‘‘(c) SPECIAL RULE.—Notwithstanding any S. 487 other provision of this section, this section name was added as a cosponsor of S. At the request of Mr. GRAMS, the shall be subject to section 615(k)(10) of the 659, a bill to amend the Internal Rev- Individual with Disabilities Education Act name of the Senator from Nebraska enue Code of 1986 to require pension (20 U.S.C. 1415(k)(10)).’’. (Mr. HAGEL) was added as a cosponsor plans to provide adequate notice to in- of S. 487, a bill to amend the Internal f dividuals whose future benefit accruals Revenue Code of 1986 to provide addi- are being significantly reduced, and for ADDITIONAL COSPONSORS tional retirement savings opportunities other purposes. S. 42 for small employers, including self-em- S. 660 At the request of Mr. HELMS, the ployed individuals. At the request of Mr. BINGAMAN, the name of the Senator from Ohio (Mr. S. 512 name of the Senator from Montana DEWINE) was added as a cosponsor of S. At the request of Mr. GORTON, the (Mr. BURNS) was added as a cosponsor 42, a bill to amend title X of the Public names of the Senator from Mississippi of S. 660, a bill to amend title XVIII of Health Service Act to permit family (Mr. LOTT), the Senator from Mis- the Social Security Act to provide for planning projects to offer adoption sissippi (Mr. T4Cochran), the Senator coverage under part B of the medicare services. from Delaware (Mr. BIDEN), the Sen- program of medical nutrition therapy S. 196 ator from Maine (Ms. SNOWE), and the services furnished by registered dieti- At the request of Mrs. BOXER, the Senator from Oregon (Mr. SMITH) were tians and nutrition professionals. name of the Senator from Illinois (Mr. added as cosponsors of S. 512, a bill to S. 697 DURBIN) was added as a cosponsor of S. amend the Public Health Service Act At the request of Mrs. BOXER, the 196, a bill to amend the Internal Rev- to provide for the expansion, inten- name of the Senator from Minnesota enue Code of 1986 to waive in the case sification, and coordination of the ac- (Mr. WELLSTONE) was added as a co- of multiemployer plans the section 415 tivities of the Department of Health sponsor of S. 697, a bill to ensure that limit on benefits to the participant’s and Human Services with respect to re- a woman can designate an obstetrician average compensation for his high 3 search on autism. or gynecologist as her primary care years. S. 514 provider. S. 206 At the request of Mr. COCHRAN, the S. 752 At the request of Mr. MOYNIHAN, the names of the Senator from Utah (Mr. At the request of Mr. MOYNIHAN, the name of the Senator from Massachu- BENNETT), the Senator from Nevada name of the Senator from California

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(Mrs. BOXER) was added as a cosponsor S. 956, a bill to establish programs re- Whereas since January 1999, violence and of S. 752, a bill to facilitate the recruit- garding early detection, diagnosis, and human rights abuses by anti-independence ment of temporary employees to assist interventions for newborns and infants militias has increased dramatically resulting in the displacement of thousands of East in the conduct of the 2000 decennial with hearing loss. Timorese villagers and scores of deaths; census of population, and for other pur- SENATE JOINT RESOLUTION 21 Whereas since March 1999, hundreds of ci- poses. At the request of Ms. SNOWE, the vilians may have been killed, injured or dis- S. 757 names of the Senator from North Da- appeared in separate attacks by anti-inde- pendence militias; At the request of Mr. LUGAR, the kota (Mr. DORGAN), the Senator from Whereas there are also reports of killings name of the Senator from New York Idaho (Mr. CRAIG), the Senator from of anti-independence militia members; (Mr. MOYNIHAN) was added as a cospon- California (Mrs. FEINSTEIN), and the Whereas the killings in East Timor should sor of S. 757, a bill to provide a frame- Senator from Oklahoma (Mr. INHOFE) be fully investigated and the individuals re- work for consideration by the legisla- were added as cosponsors of Senate sponsible brought to justice; tive and executive branches of unilat- Joint Resolution 21, a joint resolution Whereas access to East Timor by inter- eral economic sanctions in order to en- to designate September 29, 1999, as national human rights monitors, humani- tarian organizations is severely limited, and sure coordination of United States pol- ‘‘Veterans of Foreign Wars of the members of the press have been threatened; icy with respect to trade, security, and United States Day.’’ Whereas a stable and secure environment human rights. SENATE CONCURRENT RESOLUTION 9 in East Timor is necessary for a free and fair S. 805 At the request of Ms. SNOWE, the ballot on East Timor’s political status; names of the Senator from Maryland Resolved, That it is the sense of the Senate At the request of Mr. DURBIN, the that— name of the Senator from California (Mr. SARBANES), and the Senator from (1) the United States should promptly con- (Mrs. FEINSTEIN) was added as a co- South Dakota (Mr. JOHNSON) were tribute to the United Nations Trust Fund sponsor of S. 805, a bill to amend title added as cosponsors of Senate Concur- which will provide support for the East V of the Social Security Act to provide rent Resolution 9, a concurrent resolu- Timor ballot process; for the establishment and operation of tion calling for a United States effort (2) the President, Secretary of State and asthma treatment services for chil- to end restrictions on the freedoms and Secretary of Defense should intensify their human rights of the enclaved people in efforts to urge the Indonesian Government dren, and for other purposes. and military to— S. 864 the occupied area of Cyprus. (a) disarm and disband anti-independence At the request of Mr. BINGAMAN, the SENATE CONCURRENT RESOLUTION 11 militias; and names of the Senator from Illinois (Mr. At the request of Mr. CAMPBELL, the (b) grant full access to East Timor by name of the Senator from Alaska (Mr. international human rights monitors, hu- FITZGERALD), the Senator from New manitarian organizations, and the press; York (Mr. MOYNIHAN), the Senator MURKOWSKI) was added as a cosponsor (3) the President, after consultation with from Connecticut (Mr. LIEBERMAN), the of Senate Concurrent Resolution 11, a the United Nations Secretary General, Senator from New Jersey (Mr. concurrent resolution expressing the should report to the Congress not later than TORRICELLI), the Senator from Cali- sense of Congress with respect to the 15 days after passage of this Resolution, on fornia (Mrs. BOXER), and the Senator fair and equitable implementation of steps taken by the Indonesian government and military to ensure a stable and secure from North Dakota (Mr. CONRAD) were the amendments made by the Food Quality Protection Act of 1996. environment in East Timor, including those added as cosponsors of S. 864, a bill to steps described in subparagraphs (2) (a and SENATE RESOLUTION 59 designate April 22 as Earth Day. b); and S. 890 At the request of Mr. LAUTENBERG, (4) any agreement for the sale, transfer, or At the request of Mr. WELLSTONE, the the name of the Senator from West licensing of any military equipment for In- name of the Senator from Rhode Island Virginia (Mr. BYRD) was added as a co- donesia entered into by the United States should state that the equipment will not be (Mr. REED) was added as a cosponsor of sponsor of Senate Resolution 59, a bill used in East Timor. S. 890, a bill to facilitate the natu- designating both July 2, 1999, and July ralization of aliens who served with 2, 2000, as ‘‘National Literacy Day.’’ Mr. LEAHY. Mr. President, today I special guerrilla units or irregular f am submitting a resolution expressing forces in Laos. the sense of the Senate regarding a SENATE RESOLUTION 96—TO EX- peaceful process of self-determination S. 897 PRESS THE SENSE OF THE SEN- in East Timor. I am joined by Senators At the request of Mr. HAGEL, the ATE REGARDING A PEACEFUL FEINGOLD, REED, HARKIN, MCCONNELL, name of the Senator from Montana PROCESS OF SELF-DETERMINA- MOYNIHAN, and KOHL. (Mr. BURNS) was added as a cosponsor TION IN EAST TIMOR, AND FOR A year ago I doubt anyone would of S. 897, a bill to provide matching OTHER PURPOSES have predicted that a settlement of grants for the construction, renovation Mr. LEAHY (for himself, Mr. FEIN- East Timor’s political status would be and repair of school facilities in areas GOLD, Mr. REED, Mr. HARKIN, Mr. in sight. affected by Federal activities, and for MCCONNELL, Mr. MOYNIHAN, and Mr. While there are many obstacles and other purposes. KOHL) submitted the following resolu- dangers ahead, we should take note of S. 901 tion; which was referred to the Com- what has been accomplished. In the At the request of Mr. BINGAMAN, the mittee on Foreign Relations: past year: name of the Senator from West Vir- S. RES. 96 President Suharto relinqushed power. The Indonesian Government endorsed ginia (Mr. ROCKEFELLER) was added as Whereas United Nations-sponsored nego- a cosponsor of S. 901, a bill to provide tiations between the Governments of Indo- a ballot on autonomy, which is planned disadvantaged children with access to nesia and Portugal have resulted in signifi- for August 8th. dental services. cant and encouraging progress toward a reso- The United Nations, Indonesia, and Portugal are to sign an agreement S. 931 lution of East Timor’s political status; Whereas on January 27, 1999, President today on the procedures for that vote. At the request of Mr. MCCONNELL, Habibie expressed a willingness to consider If the East Timorese people reject the name of the Senator from New Jer- independence for East Timor if a majority of autonomy, there is every expectation sey (Mr. TORRICELLI) was added as a co- the East Timorese reject autonomy in a that East Timor will be on the road to sponsor of S. 931, a bill to provide for planned August 8, 1999 ballot organized by independence. the protection of the flag of the United the United Nations; The resolution that I am submitting States, and for other purposes. Whereas despite President Habibie’s efforts to bring about a peaceful resolution of the today recognizes the positive steps S. 956 political status of East Timor, the arming of that have been taken. At the request of Ms. SNOWE, the anti-independence militias by some members But it also expresses our deep con- name of the Senator from Virginia (Mr. of the Indonesian military has contributed cern that since January, when Indo- WARNER) was added as a cosponsor of to increased political tension and violence; nesian President Habibie expressed the

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00088 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 8482 CONGRESSIONAL RECORD—SENATE May 5, 1999 willingness to consider independence New York Times Op Ed article by Mr. litias’ attacks on civilians until mid-April, for East Timor, violence and intimida- Lopez be printed in the RECORD. as the Indonesian military spokesman in tion by anti-independence militias There being no objection, the item East Timor has admitted. was ordered to be printed in the The militias have no other aim than to sow backed by members of the Indonesian chaos and terror. Instead of allowing us to military has increased dramatically. RECORD, as follows: vote on whether to remain within Indonesia, The perpetrators of the violence want [From the New York Times, May 5, 1999] the militia bosses are killing those who op- to sabotage the vote on East Timor’s EAST TIMOR’S BLOODIEST TRADITION pose them and vowing to wreck the United future. (By Aniceto Guterres Lopes) Nations-supervised vote scheduled for Au- gust. Bishop Carlos Ximenes Belo, who won I spoke with one East Timorese man Dili, East Timor—April 6, 1999. Another the Novel Peace Prize in 1996, is on their hit today, Mr. Franciso Da Costa, who wit- massacre. April 17. Another. Two more to list, as are Australian journalists, East nessed the April 6th massacre of scores add to an already lengthy list in East Timor. Timorese students and human rights work- of people in the village of Liquica. Since Indonesia invaded my homeland in 1975 ers (myself included). The militia bosses are and officially annexed it the following year, An Op Ed article in today’s New York even threatening to attack United Nations our history has seemed little more than a Times by East Timorese lawyer officials who will come to administer the succession of massacres, one following the Aniceto guterres Lopez says it all. He vote. wrote: ‘‘With arms, money and a li- other in a depressingly predictable pattern. Sadly, President Habibie and his top mili- Although the recent attacks have many tary commander, Gen. Wiranto, have done cense for reckless rampages, the mili- precedents, they were committed when we nothing to stop the militias. Over the past tia leaders have openly threatened were filled with unprecedented hope. Only five months, the gang leaders have, in public death to anyone opposed to continued four months ago, the Government of Presi- view, committed atrocities and issued death dent B.J. Habibie offered us the chance to Indonesian occupation.’’ threats. Yet they move around with impu- vote on whether to remain in Indonesia or I received a report earlier today that nity. The much-publicized ‘‘peace pact’’ Gen. become independent. Indonesia began work- Mr. Lopez’ house is surrounded and he Wiranto arranged in Dili on April 21 was ing out the logistics of the vote with the has been threatened with death. Bishop nothing more than a public relations stunt. United Nations and Portugal (the former co- Belo, winner of the Nobel Peace Prize The militias continue to attack unarmed ci- lonial power still acknowledged under inter- and one of the most courageous people vilians unilaterally. national law as the administering authority For a free and fair vote to be held, Por- I have ever had the privilege to meet, over East Timor). Today the Foreign Min- has also been threatened. tugal and the United States will have to in- ister, Ali Alatas, is due to sign the final sist on a disarming of the militias and a sub- Hundreds of East Timorese civilians agreement on the vote at the United Na- stantial withdrawal of Indonesia’s all-perva- have been killed, injured or dis- tions. sive troops. The United States, holding con- appeared. Thousands have fled their The recent wave of violence here reveals siderable leverage over bankrupt Indonesia, homes to escape the violence, and are that the Habibie Government is reneging on should take strong action, like cutting off struggling to survive. Food and medi- the promise of a peaceful resolution to East all military aid and training until a valid Timor’s disputed political status. Although vote on independence is held in East Timor. cines are in short supply because the the Habibie Government denies it, the mili- Indonesian Government has severely Every day my staff records more cases of tary, since last December, has organized its torture, disappearances and killings. All restricted access. hardened East Timorese camp followers into East Timorese, except for a few deranged mi- This resolution sounds an alarm. The militias. With arms, money and a license for litia leaders, have experienced enough vio- situation is extremely fragile. The mi- reckless rampages, the dozen or so militia lence in their lives. We are desperate for a litias are sowing chaos and terror. Far leaders have openly threatened death to any- peaceful resolution. Yet the Indonesian mili- stronger steps are needed by the Indo- one opposed to continued Indonesian occupa- tary, by allowing these militias to be de- nesian Government and military to tion. Their spokesman, Basilio Araujo, told ployed, is drowning our hopes in blood. an Australian television crew, ‘‘We will kill rein in the paramilitary groups. as many people as we want.’’ Mr. FEINGOLD. Mr President, I rise The resolution calls on the President The militia bosses boast that they are today to join my distinguished col- and Secretary of State to intensify countering pro-independence guerrillas, but league from Vermont [Senator LEAHY] their efforts to urge the Indonesian they have not fought a single battle with the to offer this resolution to encourage a Government and military to disarm guerrillas. They have only attacked unarmed peaceful process of self-determination the paramilitary groups. This must be civilians and created a refugee crisis. In in East Timor. We are introducing this done. sweeps through the countryside, the militias resolution because of serious obstacles Another recommendation we make is have threatened to kill the families of any male, young or old, who refuses to join their that have appeared en route to a ballot that the United States contribute to ranks. Many ‘‘members’’ of the militias are to determine the future status of East the U.N. Trust Fund which will set up ordinary villagers, some of whom I know per- Timor. polling booths and put people on the sonally. They are forced recruits sullenly Earlier this year it appeared that ground to monitor the vote. I plan to going through the motions and hoping to there was finally some progress in East work with Senator MCCONNELL, who is avoid being hurt and hurting others. Timor. President Habibie announced on a cosponsor of this resolution and The human rights organization I direct has January 27 that the government of In- Chairman of the Foreign Operations been trying to care for those who fled the donesia was finally willing to seek to villages to escape the militia threats. Ac- Subcommittee, to obtain the funding cording to our figures, about 18,000 refugees learn and respect the wishes of the peo- as soon as possible. are now sheltered in the towns. With little ple in that territory. There appears to The resolution says that any agree- food, money and medicine, they are slowly be an agreement between the govern- ment to sell or transfer military equip- succumbing to disease. ments of Indonesia and Portugal to ment to Indonesia should state that By unleashing the militias, the Indonesian hold a vote, currently scheduled for the equipment will not be used in East Government’s apparent strategy is to create August 8, to determine East Timor’s Timor. We would prefer that there be the appearance of a civil war. Indonesia future political status. This latter ac- no military equipment. But at the very falsely claims to be an enlightened and neu- cord is expected to be finalized today tral arbiter between a factious and primitive least, we do not want our equipment people not yet ready for independence. at the United Nations. ending up in the hands of thugs who As is clear to all observers, the militias Despite this positive development, are trying to derail the vote. have not been engaged in any pitched battles excitement and tension over the possi- We know from history how much with pro-independence forces. They at- bility of gaining independence have in blood can be shed in East Timor. No- tacked, with axes and machetes, hundreds of recent months led to an incredible body—not the Indonesian Government, helpless refugees sheltered in a church in level of violence and intimidation. The not the Indonesian military, and cer- Liquica on April 6. My staff has recorded the situation on the ground continues to tainly not the East Timorese people, names of 57 dead, many of them women and worsen as East Timor has been children. Here in East Timor’s capital, they benefits from a return to those days. attacked another group of about 150 refugees wracked by violence throughout the Mr. President, this resolution should on April 17. Meanwhile, the pro-independence last several weeks. Militias, comprised receive overwhelming bipartisan sup- guerrillas, observing a cease-fire since De- of individuals determined to intimidate port. I ask unanimous consent that the cember, refrained from responding to the mi- the East Timorese people into support

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00089 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8483 for continued integration with Indo- militias. As a long time observer of the ment of Indonesia and the people of nesia and widely believed to be sup- situation there, I see the continuation East Timor to create an opportunity ported by the Indonesian military, are of this violence as a threat to the very for a successful ballot process. We can- responsible for a sharp increase in vio- sanctity and legitimacy of the process not forget that the Timorese have been lence. that is underway. It is for this reason living with violence and oppression for Let me recount some of the horror that Senator LEAHY and I have sub- more than 23 years. These many years stories I have heard coming out of East mitted our resolution to encourage the have not dulled the desire of the East Timor in the last few weeks. To cite government in Jakarta to do all it can Timorese for freedom, or quieted their just a few examples, pro-government to seek a peaceful process and a fair demands to have a role in the deter- militias, backed by Indonesian troops, resolution to the situation in East mination of East Timor’s status. We reportedly shot and killed 17 sup- Timor. have to do all we can to support an en- porters of independence on April 5. Mr President, I believe the United vironment that can produce a fair bal- Shortly thereafter, pro-independence States has a responsibility, an obliga- lot in East Timor. Now. And through- groups reported clashes, arrests and tion, to put as much pressure as pos- out the rest of this process. deaths, as well as civilians fleeing vio- sible on the Indonesian government to Mr. President, I ask unanimous con- lence in six cities. One of those cities help encourage an environment condu- sent that the text of a May 3, 1999, edi- was Liquica where at least 25 people cive to a free, fair, peaceful ballot proc- torial from the Wall Street Journal be were brutally murdered by pro-govern- ess for the people of East Timor. Ad- printed in the RECORD at this point. ment militias when up to 2000 civilians ministration officials are saying the There being no objection, the article sought shelter in the local Catholic right things, but perhaps have not fully was ordered to be printed in the church. Later, on April 17, hundreds of used the leverage we have at our dis- RECORD, as follows: East Timorese fled the capital of Dili posal to make things happen. If we are [From the Wall Street Journal, May 3, 1999] as knife-wielding militias attacked ever going to resolve this issue, now is EAST TIMOR’S POISONED CHOICE anyone suspected of supporting inde- the time for us, the whole U.S. govern- For more than two decades, the world has pendence. At least 30 were killed in ment, to act decisively. recoiled in horror at periodic reports of this incident as Indonesian troops In order to further bring pressure on atrocities by Indonesian troops in East made little effort to stop the violence. the government of Indonesia to ensure Timor, the former Portuguese colony that The perpetrators have not all been on the conditions necessary for the ballot Jakarta invaded in 1975 and then annexed the government side. Over the years on a settlement for East Timor, the amid great protest in 1976. Despite the out- there have been atrocities on the pro- Leahy/Feingold resolution would link rage, sympathy with the plight of East Timorese and the repressed desire of many independence side as well. In recent the transfer of defense articles and for independence didn’t stop foreigners from months, however, the overwhelming services to effective measures by the doing business with Jakarta over the years. majority of the violence has come from Indonesian government and military to In fact, East Timor largely appeared on the army elements and militias under their ensure a stable environment in East world’s radar screen only during peaks of effective control. Overall, hundreds of Timor. suffering there—as in 1991 after Indonesian civilians have been killed, wounded or Though non-binding, it is strongly troops fired on a funeral procession and disappeared in separate militia at- worded. Specifically, our resolution killed an estimated 180 people in the capital tacks. recognizes progress in negotiations on of Dili. Unfortunately, Mr. President, there Even so, when President B.J. Habibie an- a settlement proposal for East Timor, nounced in January that East Timor could is no sign that the tension will ease be- and the Indonesian government’s ap- choose between autonomy or independence, a tween now and the August ballot. Pro- parent willingness to seek a peaceful great cheer of moral satisfaction went up integration militia leaders announced resolution to the status of East Timor, around the globe. After all these years and on April 29 that they reject the concept but highlights the resultant increase in all that struggle, liberation was at hand! of the upcoming ballot, or anything violence and human rights abuses by Even in recent weeks, as local antiseparation that could be considered a referendum. anti-independence militias and urges militiamen with ties to the Indonesian army They have further stated that if a bal- the Habibie government to curtail In- went on killing sprees in East Timor, the lot leads to independence, they are pre- independence juggernaut churned on. Rep- donesian military support to the mili- resentatives from Portugal and Indonesia re- pared to fight a guerrilla war for dec- tias. Nevertheless, despite that cently agreed to sign a U.N.-sponsored pro- ades if necessary to defend Indonesian progress and the prospect of today’s fi- posal that could bring a vote to East Timor rule of the territory. Independent ob- nalization of ballot procedures, access by this summer and an end to Indonesian servers fear that neither side will ac- to East Timor by international mon- rule by 2000. cept a loss in the August 8 ballot, thus itors remains restricted, threatening The fact that President Habibie didn’t ac- setting the stage for a prolonged con- the very environment needed to con- tually sign, but requested a delay until early flict in East Timor. This type of rhet- duct a free and fair ballot next month, has led to speculation that he Most importantly, our resolution may be getting cold feet about a proposal oric does not reassure us about the that Indonesia’s powerful military does not prospects for a successful transition for makes positive recommendations support. As ominous as that sounds for all the people of East Timor, regardless of about what the United States can do to who thought the end was in sight, what which form of government they choose. create an environment conducive to a strikes independence enthusiasts as sad may The climate in East Timor today, free election. It states that it is the not be entirely bad. Even before the emer- sadly, may have become too violent for Sense of the Senate that we should gence of East Timorese anti-independence a legitimate poll to take place. Worse urge the U.S. government to contribute militas added to an already volatile mixture yet, the agreement on the ballot proc- to the United Nations Trust Fund to featuring armed separatists, there was evi- provide support for the East Timor bal- dence that the ordinary people of East Timor ess that we hope will be announced might be getting a raw deal on a silver plat- today in New York will be rendered lot process. It also encourages the Ad- ter. Though the entire exercise, vote and all, meaningless if people will fear for their ministration to urge the Indonesian is supposed to be about self-determination, lives if they dare to participate in the government to disarm the militias and in some ways it appears that they are being process. grant full access to East Timor by thrown to the wolves—and not only by Indo- The government of Indonesia must international monitors. nesia. shoulder particular responsibility. Mr. President, it is not in our power Consider the reckless manner in which Mr. Whether Indonesian troops have actu- to guarantee the free, fair exercise of Habibie acknowledged that the cost of main- ally participated in these types of inci- the rights of the people of East Timor taining a grip on the turbulent province was too high for Indonesia. Former colonial dents or not, the authorities certainly to determine their future. It is, how- power Portugal departed from many of its must accept the blame for allowing, ever, in our interest to do all that we possessions in a fit of spiteful destruction, and in some cases, encouraging the can to work with the United Nations, smashing infrastructure and leaving arms in bloody tactics of the pro-integration other concerned countries, the govern- the hands of the baddest locals it could find.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00090 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 8484 CONGRESSIONAL RECORD—SENATE May 5, 1999 Similarly, Mr. Habibie offered East Timor fective manner, I have initiated discus- AMENDMENTS SUBMITTED what was in effect a poisoned choice of im- sions with key congressional members mediate autonomy or immediate independ- to add funds to the supplemental bill to ence. That frightened even separatists support a peacekeeping presence in FINANCIAL SERVICES among the Timorese, some of whom have MODERNIZATION ACT OF 1999 been pleading for a more gradual process East Timor. I understand that the UN that would enable the province to better pre- estimates an election team supported by civilian police observers may cost pare for an orderly transition and successful BRYAN (AND OTHERS) independence. as much as $50 million. I fully expect AMENDMENT NO. 303 But such is the rush to complete the voting our regional partners and Portugal to process that East Timorese expressions of assume a leadership role in meeting Mr. BRYAN (for himself, Mr. DODD, concern about timing have been largely these needs, but we have key interests and Mr. KERRY ) proposed an amend- brushed aside by outsiders who claim to be ment to the bill (S. 900) to enhance on their side. Such concerns have been un- in promoting Indonesian stability and heard, or dismissed as impossible to address security. I would hope we can commit competition in the financial services given Mr. Habibie’s all-or-nothing roughly $10 million to this endeavor. I industry by providing a prudential adamancy. Better to take what you can get, am convinced that our support for an framework for the affiliation of banks, and take it now, the rest of the world has international monitoring initiative ad- securities firms, insurance companies, been telling the Timorese. It’s a shame it has ministered through the United Nations and other financial service providers, to be so hurried, and now so bloody, but Trust Fund will help ease this crisis and for other purposes; as follows: these things do happen. If outsiders are not willing to protect East and offer the citizens of East Timor a On page 14, strike lines 8 and 9 and insert Timorese from the violent consequences of real opportunity for reconciliation, the following: ‘‘are well managed; the process now under way, they should stop peace and democracy. ‘‘(C) all of the insured depository institu- cheering so hard for the process. Having tion subsidiaries of the bank holding com- come so far, nobody likes to think of delay, f pany have achieved a rating of ‘satisfactory record of meeting community credit needs’, not least because that would be seen as a vic- SENATE RESOLUTION 97—DESIG- tory for the dark forces within the Indo- or better, at the most recent examination of nesian military and elsewhere. But standing NATING THE WEEK OF MAY 2 each such institution under the Community idly by while the people of East Timor are THROUGH 8, 1999, AS THE 14TH Reinvestment Act of 1977; and propelled into a situation that is not simply ANNUAL TEACHER APPRECIA- ‘‘(D) the bank holding company has filed). risky but more or less expected to bring TION WEEK, AND DESIGNATING On page 14, line 20, strike ‘‘and (B)’’ and in- death and destruction will be a crime in TUESDAY, MAY 4, 1999, AS NA- sert ‘‘, (B), and (C)’’. itself. On page 18, between lines 4 and 5, insert TIONAL TEACHER DAY the following: Mr. McCONNELL. Mr. President, Mr. COVERDELL (for himself, Mr. ‘‘(5) LIMITATION.—A bank holding company having just returned from Cambodia, FRIST, Mr. GORTON, Mr. LOTT, Mr. JEF- shall not be required to divest any company Indonesia, Australia and New Zealand, held, or terminate any activity conducted FORDS, Mr. ABRAHAM, Mr. CRAIG, Mr. I was impressed by how deeply con- pursuant to, subsection (k) solely because of DOMENICI, Mr. COCHRAN, Mr. MACK, Mr. cerned regional leaders were over the a failure to comply with subsection (l)(1)(C). SMITH of Oregon, Ms. COLLINS, Mr. status and conditions in East Timor. On page 66, strike lines 7 and 8 and insert HATCH, Mr. LUGAR, Ms. SNOWE, Mr. Although the first really democratic the following: ‘‘bank is well capitalized and GRAMS, Mr. CRAPO, Mr. KENNEDY, and elections to be held in Indonesia are well managed; Mr. WELLSTONE) submitted the fol- ‘‘(E) each insured depository institution af- coming up in June, the U.N. autonomy lowing resolution; which was consid- filiate of the national bank has achieved a agreement, which should be announced ered and agreed to: rating of ‘satisfactory record of meeting today, was the focus of most of my dis- community credit needs’, or better, at the S. RES. 97 cussions. While I was in the region, most recent examination of each such insti- there was yet another explosive round Whereas the foundation of American free- tution under the Community Reinvestment of violence which left 17 dead. There is dom and democracy is a strong, effective sys- Act of 1977; and tem of education where every child has the ‘‘(F) the national bank has received the’’. absolutely no question that most of opportunity to learn in a safe and nurturing these attacks are being carried out by On page 66, line 12, strike ‘‘subparagraph environment; (D)’’ and insert ‘‘subparagraphs (D) and (E)’’. militias which enjoy military support Whereas a first rate education system de- On page 66, line 16, insert before the period from the Indonesian armed forces. pends on a partnership between parents, ‘‘, except that the Comptroller may not re- I do not believe these militias are di- principals, teachers, and children; quire a national bank to divest control of or rectly commanded by Indonesian offi- Whereas much of the success of our Nation otherwise terminate affiliation with a finan- cers. However, I do think these militias during the 20th Century (the American Cen- cial subsidiary based on noncompliance with are both encouraged and equipped by tury) is the result of the hard work and dedi- paragraph (1)(E)’’. individuals in the military who oppose cation of teachers across the Nation; On page 96, strike line 23 and all that fol- Whereas in addition to a child’s family, autonomy or independence for East lows through page 98, line 4. knowledgeable and skillful teachers can have On page 104, strike line 20 and all that fol- Timor. There clearly are officers with a profound impact on the child’s early devel- lows through page 105, line 14. a vested interest in controlling the opment and future success; Redesignate sections 304 through 307 and ports and trade through Timor. These Whereas many people spend their lives sections 309 through 311 as sections 303 individuals have put self interest above building careers, teachers spend their careers through 309, respectively. their nation’s interest. building lives; Amend the table of contents accordingly. While in Jakarta I raised these spe- Whereas our Nation’s teachers serve our cific concerns directly with General Nation’s children beyond the call of duty as REID AMENDMENT NO. 304 Wiranto. I believe he recognizes that coaches, mentors, and advisers without re- gard to fame or fortune; and (Ordered to lie on the table.) these events damage Indonesia’s sta- Whereas across our Nation nearly 3,000,000 Mr. REID submitted an amendment bility and stature. I hope he will pur- men and women experience the joys of teach- intended to be proposed by him to the sue a more aggressive course in the ing young minds the virtues of reading, writ- bill (S. 900), supra; as follows: days to come to assure this spiral of vi- ing, and arithmetic: Now, therefore, be it olence ends. Resolved, That the Senate— At the appropriate place, insert the fol- In the meantime, I think we should (1) designates the week of May 2 through 8, lowing: make clear we will not allow US equip- 1999, as the ‘‘14th Annual Teacher Apprecia- SEC. . FEDERAL RESERVE AUDITS. ment to be used to further the violence tion Week’’; (a) IN GENERAL.—The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended by inserting in East Timor. I also believe it is essen- (2) designates Tuesday, May 4, 1999, as ‘‘Na- tional Teacher Day’’; and after section 11A the following: tial to deploy civilian poll watchers (3) calls upon the people of the United ‘‘SEC. 11B. ANNUAL INDEPENDENT AUDITS OF and police to restore calm and credi- States to take a moment out of their busy FEDERAL RESERVE BANKS. bility to the election process. To ac- lives to say thanks and pay tribute to our ‘‘(a) AUDIT REQUIRED.—Each Federal re- complish this goal in a timely and ef- Nation’s teachers. serve bank shall annually obtain an audit of

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00091 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8485 the financial statements of each Federal re- ‘‘(C) the failure to take remedial action is income taxes for each service listed in that serve bank (which shall have been prepared reasonably expected to warrant departure section (in accordance with the criteria spec- in accordance with generally accepted ac- from a standard report of the auditor when ified in section 11A(c)(3)). counting principles) using generally accept- made, or warrant resignation from the audit ‘‘(B) REPORT TO THE BOARD.—The auditor ed auditing standards from an independent engagement. shall report the results of the audit under auditor that meets the requirements of sub- ‘‘(4) RESIGNATION OF AUDITOR.—If an inde- subparagraph (A)(ii) to the Board in written section (b). pendent auditor resigns from its engagement form. ‘‘(b) AUDITOR’S QUALIFICATIONS.—The inde- to audit a Federal reserve bank under para- ‘‘(3) LIMITATION.—The evaluations and au- pendent auditor referred to in subsection (a) graph (3), the auditor shall furnish to the dits required by this subsection shall not in- shall— Committee on Governmental Affairs of the clude deliberations, decisions, or actions on ‘‘(1) be a certified public accountant who is Senate and the Committee on Government monetary policy matters, including discount independent of the Federal Reserve System; Reform of the House of Representatives, not authority under section 13, reserves of na- and later than 1 business day after such resigna- tional banks, securities credit, interest on ‘‘(2) meet any other qualifications that the tion, a copy of the report of the auditor (or deposits, and open market operations. Board may establish. documentation of any oral report given). ‘‘(c) AUDITOR’S QUALIFICATIONS.—An inde- ‘‘(c) CERTIFICATION REQUIRED.—In each ‘‘(f) RECORDKEEPING.—To facilitate compli- pendent auditor referred to in this section audit required under subsection (a), the audi- ance with this section, each Federal reserve shall— tor shall certify to the Federal reserve bank bank shall— ‘‘(1) be a certified public accountant and be and to the Board that the auditor— ‘‘(1) ensure that the books, records, and ac- independent of the Federal Reserve System; ‘‘(1) is a certified public accountant and is counts of the Federal reserve bank are main- and independent of the Federal Reserve System; tained and kept in sufficient detail to accu- ‘‘(2) meet any other qualifications that the and rately and fairly reflect the transactions and Board may establish. ‘‘(2) conducted the audit using generally dispositions of the assets of the bank; ‘‘(d) CERTIFICAITON REQUIRED.—In each accepted auditing standards. ‘‘(2) devise and maintain a system of inter- audit required under this section, the audi- ‘‘(d) CERTIFICATION BY FEDERAL RESERVE nal controls sufficient to provide reasonable tor shall certify to the Board that the audi- BANK.—Not later than 30 days after the com- assurance that transactions are recorded as tor— pletion of each audit required under sub- necessary to permit preparation of financial ‘‘(1) is a certified public accountant and is section (a), the Federal reserve bank shall statements in conformity with generally ac- independent of the Federal Reserve System; provide to the Comptroller General of the cepted accounting principles and to main- and United States— tain accountability for assets; ‘‘(2) conducted the audit using generally ‘‘(1) a certification that— ‘‘(3) ensure that access to assets of the accepted auditing standards. ‘‘(A) the Federal reserve bank has obtained Federal reserve bank is permitted only in ac- ‘‘(e) DETECTION OF ILLEGAL ACTS.— the audit required under subsection (a); cordance with the general or specific author- ‘‘(1) AUDIT PROCEDURES.—Each audit re- ‘‘(B) the Federal reserve bank has received ization of the Board; and quired by this section shall include proce- the certifications of the auditor required ‘‘(4) ensure that— dures designed to provide reasonable assur- under subsection (c); and ‘‘(A) the recorded accountability for assets ance of detecting illegal acts that would ‘‘(C) the audit fully complies with sub- is compared with the existing assets at rea- have a direct and material affect on the de- section (a). sonable intervals; and termination of financial statement amounts. ‘‘(e) DETECTION OF ILLEGAL ACTS.— ‘‘(B) appropriate action is taken with re- ‘‘(2) REPORTING POSSIBLE ILLEGALITIES.—If, ‘‘(1) AUDIT PROCEDURES.—Each audit re- spect to any differences. in the course of conducting an audit of the quired by this section shall include proce- ‘‘(g) REPORTS TO BOARD, CONGRESS.—Not Federal Reserve System or the Board as re- dures designed to provide reasonable assur- later than April 30 of each year, each Federal quired by this section, the independent audi- ance of detecting illegal acts that would reserve bank shall submit a copy of each tor detects or otherwise becomes aware of in- have a direct and material effect on the de- audit conducted under this section to the formation indicating that an illegal act termination of financial statement amounts. Board, and to the Committee on Govern- (whether or not perceived to have an effect ‘‘(2) REPORTING POSSIBLE ILLEGALITIES.—If, mental Affairs of the Senate and the Com- on the financial statements of the Federal in the course of conducting an audit required mittee on Government Reform of the House reserve bank) has or may have occurred, the by this section, the independent auditor de- of Representatives. auditor— tects or otherwise becomes aware of informa- ‘‘SEC. 11C. INDEPENDENT AUDITS OF FEDERAL ‘‘(A) shall determine whether it is likely tion indicating that an illegal act (whether RESERVE SYSTEM AND FEDERAL RE- that the illegal act has occurred; and or not perceived to have an effect on the fi- SERVE BOARD. ‘‘(B) shall, if the auditor determines that nancial statements of the Federal reserve ‘‘(a) AUDIT OF RESERVE SYSTEM.—The the illegal act is likely to have occurred— bank) has or may have occurred, the audi- Board shall annually obtain an audit of the ‘‘(i) determine and consider the possible ef- tor— consolidated financial statements of the fect of the illegal act on the financial state- ‘‘(A) shall determine whether it is likely Federal Reserve System (which shall have ments of the Federal Reserve System or the that the illegal act has occurred; and been prepared in accordance with generally Board, as applicable; and ‘‘(B) shall, if the auditor determines that accepted accounting principles) from an ‘‘(ii) as soon as practicable, inform the the illegal act is likely to have occurred— independent auditor, using generally accept- Board that the illegal act is likely to have ‘‘(i) determine and consider the possible ef- ed auditing standards, based on reports of occurred. fect of the illegal act on the financial state- audits of Federal reserve banks submitted to ‘‘(3) REPORT TO CONGRESS.—An independent ments of the Federal reserve bank; and the Board under section 11B(g) and the audit auditor under this section shall directly re- ‘‘(ii) as soon as practicable, inform the of the Board under subsection (b) of this sec- port, as soon as practicable, its conclusions Board that the illegal act is likely to have tion. to the Committee on Government Affairs of occurred. ‘‘(b) AUDIT OF BOARD.— the Senate and the Committee on Govern- ‘‘(3) REPORT TO CONGRESS.—The inde- ‘‘(1) IN GENERAL.—The Board shall annually ment Reform of the House of Representa- pendent auditor under this section shall, as obtain an audit of the financial statements tives, with regard to any possible illegal act soon as practicable, directly report its con- of the Board (which shall have been prepared that has been detected or has otherwise clusions to the Committee on Governmental in accordance with generally accepted ac- come to the attention of the auditor during Affairs of the Senate and the Committee on counting principles) from an independent the course of an audit of the Federal Reserve Government Reform of the House of Rep- auditor, using generally accepted auditing System or the Board required by this sec- resentatives with regard to any possible ille- standards. tion, if, after determining that the Board is gal act that has been detected or has other- ‘‘(2) PRICED SERVICES AUDIT.— adequately informed with respect to such wise come to the attention of the auditor ‘‘(A) IN GENERAL.—As part of each audit of possible illegal act, the auditor concludes during the course of the audit required by the Board required by this subsection, the that— this section, if, after determining that the auditor shall— ‘‘(A) the possible illegal act has a direct Board is adequately informed with respect to ‘‘(i) audit the calculation of the private and material effect on the financial state- such possible illegal act, the auditor con- sector adjustment factor established by the ments of the Federal Reserve System or the cludes that— Board by regulation pursuant to section Board, as applicable; ‘‘(A) the possible illegal act has a direct 11A(c)(3) for the year that is the subject of ‘‘(B) the Board has not taken timely and and material effect on the financial state- the audit; and appropriate remedial actions with respect to ments of the Federal reserve bank; ‘‘(ii) audit the pro forma balance sheet and the possible illegal act; and ‘‘(B) The Board has not taken timely and income statement for the services described ‘‘(C) the failure to take remedial action is appropriate remedial actions with respect to in section 11A(b), including the determina- reasonably expected to warrant departure the possible illegal act; and tion of revenue, expenses, and income before from a standard report of the auditor when

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00092 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 8486 CONGRESSIONAL RECORD—SENATE May 5, 1999 made, or warrant resignation from the au- due regard to competitive factors and the Human Rights Practices (hereafter ‘‘1998 dits engagement. provision of an adequate level of such serv- State Department Human Rights Report’’), ‘‘(4) RESIGNATION OF AUDITOR.—If an inde- ices nationwide. violence against women in Afghanistan oc- pendent auditor resigns from its engagement ‘‘(C)(i) Not later than 1 year after the date curs frequently, including beatings, rapes, to audit the Federal Reserve System or the of enactment of the Financial Services Mod- forced marriages, disappearances, Board under paragraph (3), the auditor shall ernization Act of 1999, and not less fre- kidnapings, and killings; furnish to the Committee on Governmental quently than once every 3 years thereafter, Whereas women and girls under Taliban Affairs of the Senate and the Committee on the Board shall conduct a comprehensive re- rule are generally barred from working, Government Reform of the House of Rep- view of the methodology used to calculate going to school, leaving their homes without resentatives, not later than 1 business day the private sector adjustment factor pursu- an immediate male family member as chap- after such resignation, a copy of the report ant to section 11A(c)(3), including a public erone, and visiting doctors, hospitals or clin- of the auditor (or documentation of any oral notice and comment period. ics; report given). ‘‘(ii) In conducting the review under clause Whereas according to the 1998 State De- ‘‘(f) RECORDKEEPING.—To facilitate compli- (i), the Board shall publish in the Federal partment Human Rights Report, gender re- ance with this section, the Board shall— Register all elements of the methodology in strictions by the Taliban continue to inter- ‘‘(1) ensure that the books, records, and ac- use by the Board in the calculation of the fere with the delivery of humanitarian as- counts of the Board are maintained and kept private sector adjustment factor pursuant to sistance to women and girls in Afghanistan; in sufficient detail to accurately and fairly section 11A(c)(3) provide notice and solicit Whereas according to the 1998 State De- reflect the transactions and dispositions of public comment on the methodology, re- partment Human Rights Report, under assets; questing commentators to identify areas of Taliban rule women are forced to don a head- ‘‘(2) devise and maintain a system of inter- the methodology that are outdated, inappro- to-toe garment known as a burqa, which has nal controls sufficient to provide reasonable priate, unnecessary, or that contribute to an only a mesh screen for vision, and many assurance that transactions are recorded as inaccurate result in the calculation of the women found in public not wearing a burqa, necessary to permit preparation of financial private sector adjustment factor. or wearing a burqa that does not properly statements in conformity with generally ac- ‘‘(iii) The Board shall— cover the ankles, are beaten by Taliban mili- cepted accounting principles and to main- ‘‘(I) publish in the Federal Register a sum- tiamen; tain accountability for assets; mary of the comments received under this Whereas according to the 1998 State De- ‘‘(3) ensure that access to assets of the subparagraph, identifying significant issues partment Human Rights Report, some poor Board is permitted only in accordance with raised; and women under Taliban rule cannot afford the general or specific authorization of the ‘‘(II) provide comment on such issues and cost of a burqa and thus are forced to remain Board; and make changes to the methodology to the ex- at home or risk beatings if they go outside ‘‘(4) ensure that— tent that the Board considers to be appro- the home without one; ‘‘(A) the recorded accountability for assets priate. Whereas according to the 1998 State De- is compared with the existing assets at rea- ‘‘(iv) Not later than 30 days after the com- partment Human Rights Report, the lack of sonable intervals; and pletion of each review under clause (i), the a burqa has resulted in the inability of some ‘‘(B) appropriate action is taken with re- Board shall submit to Congress a report women under Taliban rule to get necessary spect of any differences. which shall include— medical care because they cannot leave ‘‘(g) REPORTS TO CONGRESS.—Not later than ‘‘(I) a summary of any significant issues home; May 31 of each year, the Board shall make raised by public comments relieved by the Whereas according to the 1998 State De- available all audits and reports required by Board under this subparagraph and the rel- partment Human Rights Report, women this section to the Committee on Govern- ative merits of such issues; and under Taliban rule reportedly have been mental Affairs of the Senate and the Com- ‘‘(II) an analysis of whether the Board is beaten if their shoe heels click when they mittee on Government Reform of the House able to address the concerns raised, or walk; of Representatives.’’. whether such concerns should be addressed Whereas according to the 1998 State De- ‘‘(b) FEDERAL RESERVE REQUIREMENTS.— by legislation.’’. partment Human Rights Report, under ‘‘(1) CLARIFICATION OF FEE SCHEDULE RE- Taliban rule women in homes must not be QUIREMENTS.— f ‘‘(A) IN GENERAL.—Section 11A(b) of the visible from the street, and houses with fe- EXPRESSING THE SENSE OF THE male occupants must have their windows Federal Reserve Act (12 U.S.C. 248a(b)) is SENATE REGARDING THE amended— painted over; ‘‘(i) by redesignating paragraphs (7) and (8) TREATMENT OF WOMEN AND Whereas according to the 1998 State De- as paragraphs (8) and (9), respectively; and GIRLS BY THE TALIBAN IN AF- partment Human Rights Report, under ‘‘(ii) by inserting after paragraph (6) the GHANISTAN Taliban rule women are not allowed to drive, following: and taxi drivers reportedly have been beaten ‘‘(7) transportation of paper checks in the if they take unescorted women as pas- clearing process;’’. BOXER AMENDMENT NO. 305 sengers; (B) PUBLICATION OF REVISED SCHEDULE.— Whereas according to the 1998 State De- Not later than 60 days after the date of en- Mr. GRAMM (for Mrs. BOXER) pro- partment Human Rights Report, women actment of this Act, the Board of Governors posed an amendment to the resolution under Taliban rule are forbidden to enter of the Federal Reserve System shall publish (S. Res. 68) expressing the sense of the mosques or other places of worship; and a revision of the schedule of fees required Senate regarding the treatment of Whereas women and girls of all ages under under section 11A of the Federal Reserve Act women and girls by the Taliban in Af- Taliban rule have suffered needlessly and that reflects the changes made in the sched- ghanistan; as follows: even died from curable illness because they ule in accordance with the amendments have been turned away from health care fa- On page 3, line 4, strike ‘‘the’’ and insert made by subparagraph (A) of this paragraph. cilities because of their gender: Now, there- ‘‘any’’. (2) CLARIFICATION OF APPLICABLE PRICING fore, be it CRITERIA.—Section 11A(c) of the Federal Re- f serve Act (12 U.S.C. 248a(c)) is amended by BOXER AMENDMENT NO. 306 AUTHORITY FOR COMMITTEES TO striking paragraph (3) and inserting the fol- Mr. GRAMM (for Mrs. BOXER) pro- MEET lowing: posed an amendment to the preamble ‘‘(3)(A) In each fiscal year, fees shall be es- COMMITTEE ON AGRICULTURE, NUTRITION, AND tablished for each service provided by the to the resolution, S. Res. 68, supra; as FORESTRY Federal reserve banks on the basis of all di- follows: rect and indirect costs actually incurred (ex- Amend the preamble to read as follows: Mr. LOTT. Mr. President, I ask unan- cluding the effect of any pension cost credit) Whereas millions of women and girls living imous consent that the Committee on in providing each of the services, including under Taliban rule Afghanistan are denied Agriculture, Nutrition, and Forestry, interest on items credited prior to actual their basic human rights; be allowed to meet during the session collection, overhead, and an allocation of Whereas according to the Department of of the Senate on Wednesday May 5, imputed costs, which takes into account the State and international human rights orga- 1999. The purpose of this meeting will taxes that would have been paid and the re- nizations, the Taliban continues to commit be: (1) To consider the nomination of turn on capital that would have been pro- widespread and well-documented human vided had the services been provided by a pri- rights abuses, in gross violation of inter- Thomas J. Erickson to be a Commis- vate business firm. nationally accepted norms; sioner of the Commodity Futures Trad- ‘‘(B) The pricing principles referred to in Whereas, according to the United States ing Commission; and (2) to discuss agri- subparagraph (A) shall be carried out with Department of State Country Report on cultural trade options.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00093 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8487 The PRESIDING OFFICER. Without mental Affairs Committee be per- ated by U.S. citizens and crewed by objection, it is so ordered. mitted to meet on Wednesday, May 5, American seafarers. It also ensures COMMITTEE ON ARMED SERVICES 1999 at 9:00 a.m. for a hearing on the America’s economic competitiveness Mr. LOTT. Mr. President, I ask unan- State of Federalism. and national security. imous consent that the Committee on The PRESIDING OFFICER. Without The Maritime Administration Armed Services be authorized to meet objection, it is so ordered. (MARAD) reauthorization continues on Tuesday, May 4, 1999, at 10:00 a.m. in COMMITTEE ON INDIAN AFFAIRS very important programs, and is a open session, to consider the nomina- Mr. LOTT. Mr. President, I ask unan- much broader piece of legislation than tion of Ms. Carolyn L. Huntoon to be imous consent that the Senate Com- in past years. For example, it provides Assistant Secretary of Energy for En- mittee on Indian Affairs be authorized the funding for the Title XI Loan Guar- vironmental Management. to meet during the session of the Sen- antee Program, a truly national and The PRESIDING OFFICER. Without ate Wednesday May 5, 1999 at 9:30 a.m. international program. Title XI ship- objection, it is so ordered. to conduct an Oversight Hearing on owners, their operation and their sup- COMMITTEE ON COMMERCE, SCIENCE, AND Tribal Priority Allocations. The Hear- plier base, cover almost every state in TRANSPORTATION ing will be held in room 485 of the Rus- this country. Title XI has been vital in Mr. LOTT. Mr. President, I ask unan- sell Senate Office Building. assisting our shipyards in competing imous consent that the Committee on The PRESIDING OFFICER. Without internationally. U.S. shipyards are at- Commerce, Science, and Transpor- objection, it is so ordered. tracting foreign interests and winning orders for many vessel types. The bill tation be allowed to meet on Wednes- COMMITTEE ON THE JUDICIARY also contains technical amendments to day, May 5, 1999, at 9:30 a.m. on pending Mr. LOTT. Mr. President, I ask unan- the Title XI program which will save committee business. imous consent that the Committee on time and money for both the Govern- The PRESIDING OFFICER. Without the Judiciary be authorized to meet ment and those applying for a loan objection, it is so ordered. during the session of the Senate on guarantee. It also provides the funds COMMITTEE ON ENERGY AND NATURAL Wednesday, May 5, 1999, at 9:30 a.m. in for the operation of the U.S. Merchant RESOURCES room 226 of the Senate Dirksen Office Marine Academy at Kings Point, New Mr. LOTT. Mr. President, I ask unan- Building to hold a hearing on: ‘‘Depart- York and continuing assistance to six imous consent that the Committee on ment of Justice Oversight.’’ State maritime academies. These stu- Energy and Natural Resources be The PRESIDING OFFICER. Without dents are the future of country and our granted permission to meet during the objection, it is so ordered. session of the Senate on Wednesday, merchant marine. SELECT COMMITTEE ON INTELLIGENCE This bill also recognizes the impor- May 5, for purposes of conducting a full Mr. LOTT. Mr. President, I ask unan- committee hearing which is scheduled tance of the merchant marine to our imous consent that the Select Com- national security by its support for the to begin at 9:30 a.m. The purpose of mittee on Intelligence be authorized to this oversight hearing is to receive tes- recently-enacted Maritime Security meet during the session of the Senate Program (MSP), a modern commercial timony on damage to the national se- on Wednesday, May 5, 1999, at 3:00 p.m. curity from Chinese espionage at DOE fleet available to provide critical sup- to hold a closed markup. port to the Department of Defense dur- nuclear weapons laboratories. The PRESIDING OFFICER. Without The PRESIDING OFFICER. Without ing war or national emergency. This objection, it is so ordered. objection, it is so ordered. year’s reauthorization also contains SUBCOMMITTEE ON FINANCIAL INSTITUTIONS provisions which aim to strengthen our COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS Mr. LOTT. Mr. President, I ask unan- U.S.-flag fleet through a much needed Mr. LOTT. Mr. President, I ask unan- imous consent that the Subcommittee infusion of new tonnage by eliminating imous consent that the full Committee on Financial Institutions of the Com- the three-year wait that a newly-reg- on Environment and Public Works be mittee on Banking, Housing, and istered bulk or breakbulk vessel must granted permission to conduct a hear- Urban Affairs be authorized to meet currently wait to carry preference ing to receive testimony from Timothy during the session of the Senate on cargo. This opportunity, which would Fields, Jr., nominated by the President Wednesday, May 5, 1999, to conduct a end in one year or upon enactment of to be Assistant Administrator, Office hearing on ‘‘The Financial Institutions the OECD Shipbuilding Agreement, of Solid Waste and Emergency Re- Insolvency Improvement Act of 1999.’’ would not just improve the vessel pro- sponse of the Environmental Protec- The PRESIDING OFFICER. Without file of this fleet, but also add U.S. jobs> tion Agency Wednesday, May 5, 9:00 objection, it is so ordered. Vessels allowed to enter the preference a.m., Hearing Room (SD–406). SUBCOMMITTEE ON SEAPOWER trade would be required to perform The PRESIDING OFFICER. Without Mr. LOTT. Mr. President, I ask unan- shipyard repairs and other work nec- objection, it is so ordered. imous consent that the Subcommittee essary to bring them up to U.S.-flag standards in our own U.S. shipyards. COMMITTEE ON FINANCE on Seapower be authorized to meet on Wednesday, May 5, 1999, at 3:00 p.m., in Funding is also provided for two new Mr. LOTT. Mr. President, The fi- programs, enacted by the last Con- nance Committee requests unanimous closed session, to receive testimony on Submarine Warfare in the 21st century. gress. Under the American Fisheries consent to conduct a hearing on Act, MARAD will determine compli- Wednesday, May 5, 1999 beginning at 10: The PRESIDING OFFICER. Without objection, it is so ordered. ance with citizenship standards for cer- 00 a.m. in room 215 Dirksen. tain fishing vessels, assisting in proper f The PRESIDING OFFICER. Without management and conservation of an objection, it is so ordered. ADDITIONAL STATEMENTS important natural resource of our COMMITTEE ON FOREIGN RELATIONS country. The agency is also developing Mr. LOTT. Mr. President, I ask unan- a uniform process for the administra- imous consent that the Committee on MARITIME ADMINISTRATION tive waiver of the U.S.-built require- Foreign Relations be authorized to AUTHORIZATION ACT ment for participation in the Jones Act meet during the session of the Senate ∑ Mr. HOLLINGS. Mr. President, it is trade for certain small passenger ves- on Wednesday, May 5, 1999 at 10:00 a.m. with pleasure that I join Chairman sels, so that specific legislation need to hold a hearing. MCCAIN and Senators HUTCHISON and not be sought each time such a waiver The PRESIDING OFFICER. Without INOUYE to introduce the Maritime Ad- is needed. objection, it is so ordered. ministration Authorization Act for Mr. President, MARAD’s FY 2000 COMMITTEE ON GOVERNMENTAL AFFAIRS Fiscal Year 2000. This legislation is budget recognizes the importance of Mr. LOTT., Mr. President, I ask critical for the continuation of a mod- sealift readiness and a strong U.S.-flag unanimous consent that the Govern- ern commercial fleet owned and oper- fleet. It acknowledges the need for a

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00094 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 8488 CONGRESSIONAL RECORD—SENATE May 5, 1999 healthy shipbuilding industry and also taxpayer expense, of course. The tax- tion of Letter Carriers for its efforts to provides for the education of our payers are impaled on the horns of a di- combat hunger in America through its youth. I urge my colleagues to support lemma: either pony up or risk losing annual national food drive. this legislation.∑ the team. Each year, on the second Saturday in f This bill will strike an equitable ar- May, letter carriers in more than 10,000 rangement between teams and local cities collect canned food along their 1999 NEW MEXICO HIGH SCHOOL governments to share the costs of sta- postal routes to supply local food SUPERCOMPUTING CHALLENGE dium renovation and construction—en- banks. Last year, over 50 million ∑ Mr. DOMENICI. Mr. President, it is suring that professional sports teams pounds of food were donated to feed the with great pride that I rise today to put up their fair share. The way the hungry, and I am confident that 1999’s recognize the contestants of the 1999 bill would accomplish this is straight- drive will be an even greater success. New Mexico High School Supercom- forward. Team owners owe much of In just seven years of operation, the puting Challenge, an impressive group their wealth to revenue from network National Association of Letter Car- of young people from my home state of telecasts of their games, a boon they rier’s national food drive has grown New Mexico. I want to extend a special receive courtesy of the antitrust ex- into America’s largest one-day food congratulations to the five Albu- emption granted by us—the Congress. collection effort. querque Academy students who won The antitrust exemption contained in To participate, residents in partici- this intellectually demanding contest. the Sports Broadcasting Act permits pating communities need only place a In addition to their normal school teams to pool their television rights, can of non-perishable food near their work and other extra curricular activi- yielding annual revenues of $2.2 billion mailbox—their letter carrier does the ties, these students—Tom Widland, to the National Football League and rest. In addition to making regular Kevin Oishi, Alex Feuchter, Ryan Da- $425 million to Major League Baseball. pick-ups and deliveries, their letter vies and Ryan Duryea—diligently This legislation would require, as a carrier collects donations and trans- worked on their project for nearly a condition for retaining this lucrative ports them to a nearby postal station. year to compete in this competition. antitrust exemption, that Major Food is then sorted and distributed to For the past 9 years, High school stu- League Baseball and the National local charities. dents from around the state have com- Football League place into a trust fund Mr. President, an estimated 30 mil- peted against each other in the Super- 10 percent of the revenues the Leagues lion people go hungry every day in computing Challenge. The student’s receive from network telecasts. Each America. Food shortages hit children projects are done on high-speed super- sport’s trust fund, in turn, would be especially hard in the summer months, computers at the Los Alamos National used to finance up to one half the cost when school lunches are not available Laboratory with the winners of the of constructing a new stadium or park, and many charity pantries run out of competition receiving an award, a or renovating an older one, for any of supplies donated during the Winter hol- $1,000 savings bond, a plaque, several the teams seeking such financing—so iday season. The Letter Carriers’ food boxes of software, and a computer for long as the local government has drive makes a critical contribution at their schools. agreed to provide one dollar for every a time when help is urgently needed. In light of recent events in the news, two furnished by the trust fund. In I commend the National Association it has been easy for us to focus our at- other words, if a pro team in Wil- of Letter Carriers for its leadership in tention on the problems seriously trou- mington wanted to build a $200 million organizing this annual event. The bling our Nation’s youth. That is why, stadium, it could obtain $100 million NALC’s organizing partners—the now, more than ever, I believe it is es- from the trust fund, a government en- United States Postal Service, the AFL- sential that we encourage our kids by tity in Delaware would have to kick in CIO, and the United Way—also deserve recognizing and praising their out- $50 million, and the remaining money our thanks. standing accomplishments. These would have to come from the team Finally, Mr. President, I urge each young Americans exemplify, the char- owner or some other source. In addi- American to leave a can of food by the acter our Nation was founded on and tion to allowing the Leagues to retain mailbox on Saturday. Together, we can set a positive example for their peers their current antitrust exemption, the fight hunger and make a difference in to follow. bill would expand the exemption to the lives of millions of Americans.∑ The participants of the 1999 New give the Leagues the authority to pre- f Mexico High School Supercomputing vent member clubs from moving their ARSON AWARENESS WEEK Challenge, deserve to be recognized, franchises. and I am proud to salute them on this To my mind, this bill strikes just the ∑ Mr. BIDEN. Mr. President, I rise worthy accomplishment.∑ right balance. Let us not saddle cities today to remind the Senate and the f and taxpayers with the exorbitant— American Public that this is Arson sometimes mind-boggling—costs of Awareness Week. It is that time once a STADIUM FINANCING AND building new stadiums while the teams year that we stop to assess how arson FRANCHISE RELOCATION ACT and their owners sit back and wait for affects our lives. Each year hundreds of ∑ Mr. BIDEN. Mr. President, I am the highest bidder. If the Leagues want Americans die because of the arsonist’s pleased to join Senator SPECTER today to keep their antitrust exemption, the match. Mr. President, I am outraged at in introducing legislation that will cre- major source of their millions, they this and the countless firefighters who ate a fund to finance the building and should be willing to do their fair share. are killed every year attempting to ex- renovation of stadiums and ballparks This legislation’s condition that in ex- tinguish intentionally set fires. for major league baseball and profes- change for the exemption, the teams Arsonists should be swiftly brought to sional football sports leagues across set aside 10 percent of their broadcast justice, especially when firefighters America. For too long, baseball and revenues, is a reasonable and much lives are put on the line. football teams have threatened to needed measure to restore some bal- When a fire is intentionally set in the move if state and local governments do ance to a negotiating process that is center of a retail city district the dam- not ante up the money to renovate or out-of-whack.∑ aged property becomes blight on the build new, publicly financed stadiums f entire community. Like cancer, arson for the home teams. The scene is, by degrades the whole area. Jobs are lost, now, a familiar one: multi-millionaire NATIONAL ASSOCIATION OF LET- tax bases are depleted and, most impor- team owners demand new, taxpayer- TER CARRIERS’ ANNUAL FOOD tantly, people are often killed. funded state-of-the-art stadiums, so DRIVE As a member of the Congressional that they and their players can make ∑ Mrs. BOXER. Mr. President, I would Fire Services Caucus, I have long been even more money for themselves—at like to recognize the National Associa- associated with the war against arson.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00095 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8489 I have consistently supported stricter could ever do to capture just how sig- Her own words tell us more about penalties for convicted arsonists. I nificant Elma’s life has been to every- Betty than any tribute ever could. have supported the efforts of the Bu- one with whom she has come in con- After receiving an award for her hu- reau of Alcohol, Tobacco, and Firearms tact. Her legacy is etched in the mem- manitarian work, she once told a crowd that assist our fine state and local fire ory of every fire service professional that ‘‘everybody can be great because investigators. I have also supported the and volunteer in our State and her life everybody can serve.’’ By that meas- United States Fire Administration continues to be an inspiration to all of ure, Betty Franklin-Hammonds was which provides valuable research us. great indeed.∑ grants and public education efforts While many remember Elma for her f geared toward controlling arson. 50 years of preparing turkey dinners for MORNING BUSINESS Mr. President I remind all Americans the Annual Volunteer Fire Conference, that arson is still a serious problem, or her playing Yen Man in the com- Mr. GRAMM. Mr. President, I ask one we must continually work together pany minstrel show, she is most re- unanimous consent that the Senate to solve.∑ membered for her work on the front- now proceed to a period of morning f line, fighting fires under the most dan- business, with Senators permitted to gerous circumstances. The one she speak therein for up to 10 minutes TRIBUTE TO KEVIN L. REICHERT most vividly remembers was during each. ∑ Mr. FEINGOLD. Mr. President, I World War II when she helped put out The PRESIDING OFFICER. Without come to the floor today with a heavy a fire at an old prison farm on Duncan objection, it is so ordered. heart. If it hadn’t happened already, Road in Wilmington during a thunder Mr. BURNS. Mr. President, I suggest the Yugoslav conflict just hit home. and lightning storm. With this same the absence of a quorum. Early yesterday morning, NATO ex- energy and vigor, Elma is as spirited The PRESIDING OFFICER. The perienced its first fatalities in its cam- today, five decades later, as she was clerk will call the roll. paign against Yugoslavia. And Chetek, more than a half-century ago. The legislative clerk proceeded to Wisconsin found its way into the news. I know that there may be someone call the roll. Army Chief Warrant Officer Kevin L. like Elma Brittingham in other States, Mr. GRAMM. Mr. President, I ask Reichert, of Chetek, Wisconsin, was but none can be more important to a unanimous consent that the order for killed aboard an Apache helicopter community than this totally com- the quorum call be rescinded. during a nighttime training mission in mitted, selfless woman that I honor The PRESIDING OFFICER. Without Albania. My thoughts, prayers, and today. She is what we, as Americans, objection, it is so ordered. sympathies go out to the friends and should aspire to be—a loyal public Mr. GRAMM. Mr. President, I have family of Kevin Reichert. We can all be servant, an example of excellence and several unanimous consent requests. proud of Kevin’s service to his country. achievement in everything she has All of them are agreed to on both sides The 28-year old from Wisconsin’s committed to accomplishing, and a of the aisle. Let me just go through Chippewa Valley leaves behind his wife credit to her community and to her them. of eight years, Ridgeley, and 3 kids. I country. I am deeply privileged to f know this woman and proud to call her thank the proud residents of Chetek DESIGNATING THE WEEK OF MAY a heroic Delawarean and an out- and of Barron County, Wisconsin, for 2 THROUGH 8, 1999, AS THE 14TH standing American.∑ helping to raise such a brave and dedi- ANNUAL TEACHER APPRECIA- cated American. I hope the Reichert f TION WEEK, AND DESIGNATING family and the 1,700 people of Chetek TRIBUTE TO BETTY FRANKLIN- TUESDAY, MAY 4, 1999, AS NA- will take solace in the gratitude of our HAMMONDS TIONAL TEACHER DAY Nation. ∑ Mr. FEINGOLD. On April 28th, Madi- Mr. GRAMM. Mr. President, I ask The NATO effort in Yugoslavia has son lost a dedicated advocate and a unanimous consent that the Senate its costs. Kevin’s death, and that of his dear friend: Betty Franklin-Ham- now proceed immediately to the con- co-pilot, David Gibbs, of Ohio, are sad monds. sideration of S. Res. 97, submitted ear- reminders that conflicts like the one in Betty’s life story is a catalogue of re- lier today by Senator COVERDELL for Yugoslavia, while they seem far away, markable achievements. From her ten- himself and others. have a very real impact at home. ure as the executive director of the The PRESIDING OFFICER. The Mr. President, I am sure my col- Madison Urban League, where she clerk will report. leagues join me in paying tribute to spearheaded a study on the gap in The legislative assistant read as fol- Kevin Reichert for his dedicated serv- achievement between black and white lows: ∑ ice to the United States. students in the Madison school system, A resolution (S. Res. 97) designating the f to her leadership at the Madison Times week of May 2 through 8, 1999, as the 14th an- HONORING ELMA F. BRITTINGHAM and the numerous awards she received nual Teacher Appreciation Week, and desig- for her work, there are countless exam- nating Tuesday, May 4, 1999, as National ∑ Mr. BIDEN. Mr. President, it is with ples of Betty’s effectiveness as an advo- Teacher Day. utmost respect and admiration that I cate in the community. There being no objection, the Senate rise today to acknowledge the con- But it was her character, more than proceeded to consider the resolution. tributions of a woman who, at the age any title or award, that defined Betty Mr. GRAMM. Mr. President, I ask of 99, has never tired of giving her all and made her such a powerful presence unanimous consent the resolution be to her country and to the men and in our community. She was a truth agreed to, the preamble be agreed to, women of the Mill Creek Fire Com- teller who never backed down from a and the motion to reconsider be laid pany—Elma F. Brittingham of fight, a woman who led by example and upon the table. Marshallton, Delaware, affectionately wasn’t shy about asking others to The PRESIDING OFFICER. Without known to everyone as ‘‘Mom.’’ On May make the commitment to change she objection, it is so ordered. 8, 1999, Mill Creek will honor her at its demanded from herself. The resolution (S. Res. 97) was agreed 72nd Annual Dinner for 72 years of un- Betty was a unique combination of a to. matched volunteer service to the Mill quiet dignity and a fierce passion for The preamble was agreed to. Creek Fire Company. Yes, Elma is a justice that could only be quenched by The resolution, with its preamble, charter member of the Mill Creek Fire constant motion. She worked tire- reads as follows: Company and she remains an institu- lessly, as a social worker, at the Madi- S. RES. 97 tion in the Fire Hall. son chapter of the NAACP, at the Whereas the foundation of American free- This well-deserved recognition is Urban League, and at the Madison dom and democracy is a strong, effective sys- much less than I or anyone in Delaware Times, to make our city a better place. tem of education where every child has the

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00096 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 8490 CONGRESSIONAL RECORD—SENATE May 5, 1999 opportunity to learn in a safe and nurturing The PRESIDING OFFICER. The throughout the conflict, and in particular its environment; clerk will report. attacks against civilians and its use of chil- Whereas a first rate education system de- The legislative assistant read as fol- dren as combatants; and pends on a partnership between parents, lows: (B) those external actors, including Libe- principals, teachers, and children; ria, Burkina Faso, and Libya, for contrib- Whereas much of the success of our Nation A resolution (S. Res. 54) condemning the uting to the continuing cycle of violence in during the 20th Century (the American Cen- escalating violence, the gross violation of Sierra Leone by providing financial, polit- tury) is the result of the hard work and dedi- human rights and attacks against civilians, ical, and other types of assistance to the cation of teachers across the Nation; and the attempt to overthrow a democrat- AFRC or the RUF, often in direct violation Whereas in addition to a child’s family, ically elected government in Sierra Leone. of the United Nations arms embargo; knowledgeable and skillful teachers can have There being no objection, the Senate (3) supports continued efforts by the re- a profound impact on the child’s early devel- proceeded to consider the resolution. gional peacekeeping force, ECOMOG, to re- opment and future success; Mr. GRAMM. Mr. President, I ask store peace and security and to defend the Whereas many people spend their lives unanimous consent that the resolution democratically elected government of Sierra building careers, teachers spend their careers and preamble be agreed to en bloc, the Leone; building lives; (4) recognizes that basic improvements in Whereas our Nation’s teachers serve our motion to reconsider be laid upon the ECOMOG’s performance with respect to Nation’s children beyond the call of duty as table, and that any statements relating human rights and the management of its coaches, mentors, and advisers without re- thereto be placed in the RECORD at the own personnel would markedly improve its gard to fame or fortune; and appropriate place as if read. effectiveness in achieving its goals and im- Whereas across our Nation nearly 3,000,000 The PRESIDING OFFICER. Without prove the level of international support men and women experience the joys of teach- objection, it is so ordered. needed to meet those goals; ing young minds the virtues of reading, writ- The resolution (S. Res. 54) was agreed (5) supports appropriate United States ing, and arithmetic: Now, therefore, be it to. logistical, medical and political support for Resolved, That the Senate— The preamble was agreed to. ECOMOG and notes the contribution that (1) designates the week of May 2 through 8, The resolution (S. Res. 54), with its such support has made thus far toward 1999, as the ‘‘14th Annual Teacher Apprecia- achieving the goals of peace and stability in tion Week’’; preamble, reads as follows: Sierra Leone; (2) designates Tuesday, May 4, 1999, as ‘‘Na- S. RES. 54 (6) calls for an immediate cessation of hos- tional Teacher Day’’; and Whereas the Armed Forces Revolutionary tilities and respect for human rights, and (3) calls upon the people of the United Council (AFRC) military junta and the rebel urges all members of the armed conflict in States to take a moment out of their busy fighters of the Revolutionary United Front Sierra Leone to engage in dialogue to bring lives to say thanks and pay tribute to our (RUF) in Sierra Leone mounted a campaign about a long-term solution to such conflict; Nation’s teachers. of ‘‘Operation No Living Thing’’ in 1997 and and f have recently renewed the terror; (7) expresses support for the people of Si- Whereas the atrocities and violence erra Leone in their quest for a democratic, THE CALENDAR against the citizens of Sierra Leone, which prosperous, and reconciled society. include forced amputations, raping of women f and children, pillaging farms, and the killing DANTE B. FASCELL NORTH-SOUTH of the civilian population, has continued for EXPRESSING THE SENSE OF THE CENTER ACT OF 1999 more than 8 years; SENATE REGARDING THE Mr. GRAMM. Mr. President, I ask Whereas the AFRC and RUF continue to TREATMENT OF WOMEN AND kidnap children, forcibly train them, and unanimous consent that the Senate GIRLS BY THE TALIBAN IN AF- send them as combatants in the conflict in GHANISTAN now proceed to the consideration of Sierra Leone; Calendar No. 73, H.R. 432. Whereas the Nigerian-led intervention Mr. GRAMM. Mr. President, I ask The PRESIDING OFFICER. The force, Economic Community Monitoring unanimous consent that the Senate clerk will report. Group (ECOMOG), which has deployed nearly proceed to the immediate consider- The legislative assistant read as fol- 15,000 troops to Sierra Leone, has made a ation of Calendar No. 75, S. Res. 68. lows: considerable contribution towards ending The PRESIDING OFFICER. The the cycle of violence there, despite the fact A bill (H.R. 432) to designate the North/ clerk will report. that some of its members have engaged in South Center as the Dante B. Fascell North- The legislative assistant read as fol- violations of humanitarian law; South Center. Whereas the United Nations High Commis- lows: There being no objection, the Senate sioner for Refugees (UNHCR) estimates that A bill (S. Res. 68) expressing the sense of proceeded to consider the bill. in 1998 more than 210,000 refugees fled Sierra the Senate regarding the treatment of Mr. GRAMM. Mr. President, I ask Leone to Guinea, bringing the total number women and girls by the Taliban in Afghani- unanimous consent that the bill be of Sierra Leonean refugees in Guinea to stan. considered read a third time and 350,000, in addition to some 90,000 Sierra There being no objection, the Senate passed, the motion to reconsider be Leonean refugees who sought safe haven in proceeded to consider the resolution. Liberia; Mrs. BOXER. Mr. President, I am so laid upon the table, and that the state- Whereas the refugee camps in Guinea and ments relating to the bill appear in the Liberia are at risk of being used as safe ha- pleased that the Senate will stand up RECORD. vens for rebels and staging areas for attacks for the rights of women and pass S. The PRESIDING OFFICER. Without into Sierra Leone; Res. 68, a resolution condemning the objection, it is so ordered. Whereas the humanitarian crisis in Sierra Taliban’s treatment of women and girls The bill (H.R. 432) was considered Leone has reached epic proportions with peo- in Afghanistan. I especially thank Sen- read a third time and passed. ple dying from lack of food and medicine; ator BROWNBACK in joining me as the and f main cosponsor of this resolution. Whereas the escalating violence in Sierra The Taliban is a militia group that CONDEMNING THE ESCALATING Leone threatens stability in West Africa and has the immediate potential of spreading to now controls between 85–90 percent of VIOLENCE, THE GROSS VIOLA- Afghanistan. People living under its TION OF HUMAN RIGHTS AND neighboring Guinea: Now, therefore, be it Resolved, That the Senate— rule are subjected to an extreme inter- ATTACKS AGAINST CIVILIANS, (1) urges the President and the Secretary pretation of Islam practiced nowhere AND THE ATTEMPT TO OVER- of State to give high priority to aiding in the else in the world. It is especially re- THROW A DEMOCRATICALLY resolution of the conflict in Sierra Leone and pressive on women living in Afghani- ELECTED GOVERNMENT IN SI- to bringing stability to West Africa, includ- stan. ERRA LEONE ing active participation and leadership in Under Taliban rule, women and girls the Sierra Leone Contact Group; Mr. GRAMM. Mr. President, I ask (2) condemns— in Afghanistan are denied even the unanimous consent that the Senate (A) the violent atrocities committed by the most basic human rights. They cannot proceed immediately to the consider- Armed Forces Revolutionary Council (AFRC) work outside the home, attend school, ation of Calendar No. 74, S. Res. 54. and the Revolutionary United Front (RUF) or even wear shoes that make noise

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00097 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—SENATE 8491 when they walk. Women who are in I want to thank the majority and mi- Whereas according to the 1998 State De- their homes are not allowed to be seen nority leaders for allowing this legisla- partment Human Rights Report, women from the street, and houses with fe- tion to come to the floor, and I appre- under Taliban rule reportedly have been male occupants must have their win- ciate the support from the many co- beaten if their shoe heels click when they walk; dows painted over. Parents cannot sponsors of this resolution who are Whereas according to the 1998 State De- teach their daughters to read, or take working to end human rights abuses partment Human Rights Report, under their little girls to be treated by male against women in Afghanistan. Taliban rule women in homes must not be doctors. Mr. GRAMM. Mr. President, I under- visible from the street, and houses with fe- Women are also forced to wear a full stand that Senator BOXER has amend- male occupants must have their windows head-to-toe garment called a burqa. ments to the resolution and the pre- painted over; This restrictive covering allows only a amble at the desk. Whereas according to the 1998 State De- tiny opening to see and breathe I ask unanimous consent that the partment Human Rights Report, under amendments to the resolution be Taliban rule women are not allowed to drive, through. I understand that some and taxi drivers reportedly have been beaten women may choose to wear a burqa for agreed to, that the resolution, as if they take unescorted women as pas- religious reasons—that should be their amended, be agreed to, and the motion sengers; right. However, the requirement that to reconsider be laid upon the table, Whereas according to the 1998 State De- women wear a burqa is a clear viola- that the amendment to the preamble partment Human Rights Report, women tion of human rights. And further, the be agreed to, and the preamble, as under Taliban rule are forbidden to enter rules surrounding this requirement are amended, be agreed to with no inter- mosques or other places of worship; and frightening. vening action. Whereas women and girls of all ages under Women found in public who are not The PRESIDING OFFICER. Without Taliban rule have suffered needlessly and even died from curable illness because they wearing a burqa are beaten by Taliban objection, it is so ordered. have been turned away from health care fa- militiamen. If they wear a burqa and The amendments (Nos. 305 and 306) cilities because of their gender: Now, there- their ankles are showing, they are were agreed to as follows: fore, be it beaten as well. Poor women who can- AMENDMENT NO. 305 The resolution (S. Res. 68), as amend- not afford a burqa are forced to stay at (Purpose: To improve the resolution) ed, was agreed to. home, preventing them from receiving On page 3, line 4, strike ‘‘the’’ and insert The preamble, as amended, was medical care. ‘‘any’’. agreed to. The Physicians for Human Rights re- AMENDMENT NO. 306 The resolution, as amended, with its cently conducted a study of 160 women (Purpose: To improve the preamble) preamble, as amended, reads as follows: in Afghanistan and their findings are Amend the preamble to read as follows: [The resolution was not available for horrific. Whereas millions of women and girls living printing. It will appear in a future edi- The study found that 77 percent of under Taliban rule Afghanistan are denied tion of the RECORD.] women had poor access to health care their basic human rights; in Kabul, while another 20 percent re- Whereas according to the Department of f ported no access at all. Of the partici- State and international human rights orga- ORDERS FOR THURSDAY, MAY 6, nizations, the Taliban continues to commit pants, 81 percent reported a decline in 1999 their mental condition; 97 percent met widespread and well-documented human rights abuses, in gross violation of inter- Mr. GRAMM. Mr. President, I ask the diagnostic criteria for depression; nationally accepted norms; unanimous consent that when the Sen- 42 percent met the diagnostic criteria Whereas, according to the United States ate completes its business today, it for post-traumatic stress disorder; and Department of State Country Report on stand in adjournment until the hour of 21 percent reported having suicidal Human Rights Practices (hereafter ‘‘1998 9:30 a.m. on Thursday, May 6. I further thoughts ‘‘extremely often’’ or ‘‘quite State Department Human Rights Report’’), ask consent that on Thursday imme- often.’’ In addition, 53 percent of violence against women in Afghanistan oc- diately following the prayer the rou- women described occasions in which curs frequently, including beatings, rapes, forced marriages, disappearances, tine requests through the morning they were seriously ill and unable to kidnapings, and killings; hour be granted, the time for the two seek medical care. Whereas women and girls under Taliban leaders be reserved for their use later The resolution passed today calls on rule are generally barred from working, the President of the United States to in the day, that the Senate then re- going to school, leaving their homes without sume consideration of S. 900, and Sen- prevent a Taliban-led government of an immediate male family member as chap- Afghanistan from taking a seat in the erone, and visiting doctors, hospitals or clin- ator GRAMM be recognized in order to United Nations General Assembly, as ics; offer an amendment as under the origi- long as these gross violations of human Whereas according to the 1998 State De- nal consent agreement. rights persist. partment Human Rights Report, gender re- The PRESIDING OFFICER. Without strictions by the Taliban continue to inter- objection, it is so ordered. My resolution also urges the Admin- fere with the delivery of humanitarian as- istration not to recognize any govern- sistance to women and girls in Afghanistan; f ment in Afghanistan which does not Whereas according to the 1998 State De- PROGRAM take actions to achieve the following partment Human Rights Report, under goals: effective participation of women Taliban rule women are forced to don a head- Mr. GRAMM. For the information of in all civil, economic, and social life; to-toe garment known as a burqa, which has all Senators, tomorrow the Senate will the right of women to work; the right only a mesh screen for vision, and many resume consideration of the Financial of women and girls to an education women found in public not wearing a burqa, Services Modernization Act, with Sen- or wearing a burqa that does not properly without discrimination and the reopen- ator GRAMM immediately recognized to cover the ankles, are beaten by Taliban mili- offer his amendment. ing of schools to women and girls at all tiamen; levels of education; the freedom of Whereas according to the 1998 State De- It is hoped that the bill will be com- movement of women and girls; equal partment Human Rights Report, some poor pleted during Thursday’s session of the access of women and girls to health women under Taliban rule cannot afford the Senate. Therefore, rollcall votes will care; equal access of women and girls cost of a burqa and thus are forced to remain occur throughout tomorrow’s session to humanitarian aid. at home or risk beatings if they go outside of the Senate. the home without one; It is shocking that women and girls f in Afghanistan are suffering under Whereas according to the 1998 State De- partment Human Rights Report, the lack of these conditions as we approach the ADJOURNMENT UNTIL 9:30 A.M. a burqa has resulted in the inability of some TOMORROW 21st century. The United States has an women under Taliban rule to get necessary obligation to take the lead in con- medical care because they cannot leave Mr. GRAMM. Mr. President, if there demning these abuses. home; is no further business to come before

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00098 Fmt 0686 Sfmt 0634 E:\BR99\S05MY9.003 S05MY9 8492 CONGRESSIONAL RECORD—SENATE May 5, 1999 the Senate, I now ask unanimous con- NOMINATIONS DEPARTMENT OF STATE sent the Senate stand in adjournment Executive nominations received by DAVID B. DUNN, OF CALIFORNIA, A CAREER MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF COUN- under the previous order. the Senate May 5, 1999: SELOR, TO BE AMBASSADOR EXTRAORDINARY AND There being no objection, the Senate, DEPARTMENT OF LABOR PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA TO THE REPUBLIC OF ZAMBIA. at 7:45 p.m., adjourned until Thursday, EDWARD B. MONTGOMERY, OF MARYLAND, TO BE AN ASSISTANT SECRETARY OF LABOR, VICE RICHARD M. May 6, 1999, at 9:30 a.m. MCGAHEY.

VerDate Aug 04 2004 13:32 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00099 Fmt 0686 Sfmt 9801 E:\BR99\S05MY9.003 S05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8493 HOUSE OF REPRESENTATIVES—Wednesday, May 5, 1999

The House met at 10 a.m. NEVADANS STAND READY TO AS- Also, small businesses are particu- The Chaplain, Reverend James David SIST THEIR NEIGHBORS VICTIM- larly devastated by bankruptcies. In Ford, D.D., offered the following pray- IZED BY POWERFUL TORNADOES many small businesses, one or two cli- er: IN OKLAHOMA, KANSAS, AND ents not paying can be the difference We recognize, O God, that we are buf- TEXAS between being in business and out of feted by the sound of so many words (Mr. GIBBONS asked and was given business, and when they go bankrupt that come our way, words of advice and permission to address the House for 1 and do not pay, those small businesses counsel, words that express joy or sad- minute and to revise and extend his re- suffer. ness and words that recommend ac- marks.) This bill does not eliminate bank- tions or promote ideas. We pause this Mr. GIBBONS. Mr. Speaker, today I ruptcy, it is out there as an option, but moment to hear Your still small voice would like to pay my condolences to it makes changes to hold people ac- that beckons us to do what is good, to the people and the families that suf- countable and responsible for their own be what is good, that encourages us in fered from the powerful tornadoes in financial decisions to make sure that, the way of truth and points us to a Oklahoma, Kansas and Texas in the if they can pay, they do pay. We should healthy and whole understanding of last few days. The thoughts and pray- not have a situation where people can our lives. May we take Your words of ers of all Nevadans are with the vic- declare bankruptcy, run out on their justice and peace, of righteousness and tims of this tragedy. Fire, police and obligations to others, drive up costs for integrity and transpose those good emergency services and the National everybody else and still live a life bet- words into deeds of caring and concern Guard’s personnel worked alongside of ter than 95 percent of the rest of the for others. This is our earnest prayer. heroic neighbors in working through world. Amen. the night to help people affected by We need this bankruptcy reform bill. this tragic act of Mother Nature. f Mr. Speaker, it will take some time f to rebuild the damage to the houses, THE JOURNAL and homes, and buildings and the fami- SO LONG, JOHN lies. The Federal Government will now The SPEAKER. The Chair has exam- do its part in assisting with this effort, (Mr. HEFLEY asked and was given ined the Journal of the last day’s pro- helping to rebuild the communities and permission to address the House for 1 ceedings and announces to the House the lives of those who were affected by minute.) his approval thereof. these devastating tornadoes. Mr. HEFLEY. First it was Jordan, Pursuant to clause 1, rule I, the Jour- Mr. Speaker, I applaud the Presi- then it was Gretzky, now it is Elway. nal stands approved. dent’s announcement to declare these On Sunday afternoon, the whole Mr. SCHAFFER. Mr. Speaker, pursu- States national disaster areas, allow- State of Colorado turned on their tele- ant to clause 1, rule I, I demand a vote ing the Federal Government to offer vision sets to watch a press conference. on agreeing to the Speaker’s approval speedy financial aid and support. The man whose name has become syn- of the Journal. Mr. Speaker, I and the State of Ne- onymous with the Denver Broncos, The SPEAKER. The question is on vada also stand ready to assist our John Elway, announced his retirement the Chair’s approval of the Journal. friends and families as a Nation, and from football. The question was taken; and the we must join together and persevere in The statistics books will show that Speaker announced that the ayes ap- this tragedy. John Elway had 16 great seasons as a peared to have it. f Denver Bronco. He had 148 victories Mr. SCHAFFER. Mr. Speaker, I ob- THE NEED FOR BANKRUPTCY and 47 come-from-behind wins, both ject to the vote on the ground that a REFORM National Football League records. He quorum is not present and make the passed for over 50,000 yards, rushed for point of order that a quorum is not (Mr. SMITH of Washington asked and another 3,000 and played in 234 games, present. was given permission to address the and through it all he only missed 15 ca- The SPEAKER. Pursuant to clause 8 House for 1 minute.) reer starts. Not the least of his Mr. SMITH of Washington. Mr. rule XX, further proceedings on this achievements, he led the Broncos to Speaker, today the House will vote on question will be postponed. five Superbowls and two Superbowl bankruptcy reform, and I rise today to The point of no quorum is considered wins. withdrawn. urge all Members to support this bill. The bill ultimately is about personal What the stat books will not show us responsibility. It is about holding peo- is what John Elway has meant to the f ple accountable for their own actions. State of Colorado. He gave us joy and Worse, the current bankruptcy situa- excitement every week. His career be- PLEDGE OF ALLEGIANCE tion puts us in a position where others came a true profile in courage of perse- verance and was a testimony to all The SPEAKER. Will the gentleman are held accountable for those actions. that dreams can really come true. from Colorado (Mr. SCHAFFER) come They are the ones that have to bear the forward and lead the House in the price of other people’s choices. Worst, Most importantly, in a time when Pledge of Allegiance. it basically spreads out from the mid- Colorado and this Nation is in such Mr. SCHAFFER led the Pledge of Al- dle class to the poorest of the poor. desperate need of role models, John legiance as follows: Those are the ones that have to pay Elway was that, too. John, from the State of Colorado and I pledge allegiance to the Flag of the more for retail items and for a variety United States of America, and to the Repub- of items because some people run up from a grateful Nation and from this lic for which it stands, one nation under God, obligations that they either have no in- Bronco fan: indivisible, with liberty and justice for all. tention of meeting or do not meet. ‘‘Thank you.’’

b This symbol represents the time of day during the House proceedings, e.g., b 1407 is 2:07 p.m. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00001 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8494 CONGRESSIONAL RECORD—HOUSE May 5, 1999 REASONS TO CELEBRATE WIC’S RUSSIA OPPOSES NATO, SUP- minute and to revise and extend her re- 25TH ANNIVERSARY PORTS MILOSEVIC, DUMPS marks.) STEEL ILLEGALLY INTO THE Ms. SANCHEZ. Mr. Speaker, I am (Mr. STUPAK asked and was given UNITED STATES AND STILL EX- proud to salute America’s educators permission to address the House for 1 PECTS US TO LOAN THEM AN- during Teacher Appreciation Week. It minute and to revise and extend his re- OTHER $23 BILLION is essential in these trying times at our marks.) schools that we pay tribute to the pro- (Mr. TRAFICANT asked and was fessionals who give so much to their Mr. STUPAK. Mr. Speaker, I would given permission to address the House work with our communities’ children. like to say a few words today about the for 1 minute and to revise and extend WIC program, a program dedicated to Every day 3 million American teach- his remarks.) ers go to work. They arrive early in the improving the nutrition and health Mr. TRAFICANT. Mr. Speaker, Uncle morning and often stay late at night. care needs of low-income women, in- Sam and the International Monetary Their dedication under supremely dif- Fund have loaned Russia billions and fants and children. ficult circumstances cannot be ade- billions of dollars, and with each loan WIC is celebrating 25 years of service, quately described, but through all this Russia promised to repay. Guess what? Mr. Speaker. The value of these 25 hard work they open a world of oppor- Russia says, and I quote, they cannot years is illustrated by a few key facts tunity for our children and bring end- repay their loans this year, next year, expressed in terms of dollars. less possibilities to our communities not even in 10 years. and to the future of our country. Every Every dollar spent on pregnant How is that to fund the KGB, Con- day they work their miracles in the women in WIC produces between $1.92 gress? classrooms. We entrust them with our and $4.21 in Medicaid savings for Russia says though, and I quote, Rus- most precious resource, our young peo- newborns and their mothers. Medicaid sia still expects America to loan them ple. another $23 billion to carry on with costs were reduced on average by Tragically, Mr. Speaker, some pay $12,000 to $15,000 per infant for every their reforms. the ultimate sacrifice. Teachers like Beam me up here. I say, ‘‘Expect low-birth-weight birth prevented be- Dave Sanders of Littleton, Colorado, or this.’’ cause the mother was involved in the Shannon Wright of Jonesboro, Arkan- WIC program during her pregnancy. Mr. Speaker, I yield back the facts that Russia opposes NATO, supports sas, and astronaut Christa MacAuliffe There is a lot more, Mr. Speaker, in Milosevic and dumps steel illegally in are American heroes. We salute their memory and their colleagues this terms of dollars saved and common the United States of America. sense, but there is a more important week. f savings, a human savings. WIC children f WE MUST NOT FUND THIS get a better start in life, they do better THIS IS TEACHER APPRECIATION SENSELESS BOMBING in school, and they lead healthier lives. WEEK All this translates into an overall bet- (Mr. PAUL asked and was given per- (Mr. SCHAFFER asked and was given ter quality of life, and that is the real mission to address the House for 1 permission to address the House for 1 reason for celebrating WIC’s 25th anni- minute and to revise and extend his re- minute and to revise and extend his re- versary. marks.) Mr. PAUL. Mr. Speaker, how many marks.) Mr. SCHAFFER. Mr. Speaker, this is innocent civilians must die before we f Teacher Appreciation Week. Almost stop bombing Serbia? We rightfully every Member of this body can think of cherish the lives of our three service- INFORMATION, PLEASE a special teacher who has touched his men and rejoice in their return, but life in ways that have never been for- how many Serbs will never rejoice be- (Mr. EWING asked and was given per- gotten, can never be repaid and can mission to address the House for 1 cause of all the death and destruction only be appreciated by those who have minute and to revise and extend his re- we have rained down upon them by cas- benefited from such good fortune. marks.) ually dismissing as necessary mistakes There are special teachers with ex- of war a war that is not real to us yet traordinary talents in every kind of Mr. EWING. Mr. Speaker, this week only too real to those who are need- we will be voting on the supplemental school in America, in rich and poor, lessly killed. urban and rural, public and private. appropriation to provide funds for the Serb victims are people, too, who Kosovo operation. Unfortunately, the Great teachers give something of them- love their families and hate the war, selves that we take with us for the rest administration has done little to in- yet become the victims of this ill-con- of our lives. It is one of the most re- form Members of Congress. It is ceived policy of NATO aggression. It is warding aspects of being a teacher. strange that people like former Sen- a strange argument, indeed, that the But great teachers do not get the rec- ator Bob Dole, former Ambassador capture of our three soldiers was illegal ognition they deserve. Their contribu- Jean Kirkpatrick have been more and yet our bombing of civilians is not. tions are so great, they ought to have vocal, more available to Members of Violence, when not in one’s own self- an entire week devoted to their Congress to explain their position on defense, can never be justified, no mat- achievement, and so they have. This is the need for U.S. involvement than we ter how noble the explanation. It only their week, and I join with my col- have received from this administra- makes things worse. leagues in paying tribute to the won- tion. The goal of peace and harmony can derful gifts teachers have brought to I am yet not convinced of the wisdom never be achieved by bombs and intimi- all of us during their teaching careers. of this operation or what the national dation. That goal can only be achieved Teaching is a noble profession, and it interest is for Americans. I question, by honest friendship and trade when is an honor for me to salute all those too, whether we need to be paying 90 permissible and neutrality when armed great teachers who are proud to have percent or 85 percent or even 70 percent conflict prevents it. We must not fund made teaching their passion and their of the cost. Remember, in other oper- this senseless bombing. life’s work. ations such as this our allies have in- f f deed contributed. TEACHERS LIKE DAVE SANDERS, WIC—MORE THAN JUST FOR Why have we not sought their con- SHANNON WRIGHT AND CHRISTA WOMEN AND CHILDREN, IT IS tributions? Why have we not had more MACAULIFFE ARE AMERICAN HE- GOOD FOR AMERICA information? Why do we not know the ROES (Mr. FILNER asked and was given true need for our involvement in (Ms. SANCHEZ asked and was given permission to address the House for 1 Kosovo? permission to address the House for 1 minute.)

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00002 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8495 Mr. FILNER. Mr. Speaker, I rise Ms. WOOLSEY. Mr. Speaker, chil- metastatic brain tumor. Brain tumors today to commemorate 25 years of the dren are 25 percent of this country’s are the second leading cause of cancer Special Supplemental Nutrition Pro- population but they are 10,000 percent death for children under 19, and the gram for Women, Infants and Children, of our future. There is no better way to third leading cause of cancer death for what is widely known as WIC. WIC is invest in our future than to make sure young adults ages 20 to 39. not just a program that makes a lot of that every child gets good nutrition Brain tumors attack the essence of sense, it saves millions of dollars, too. and health care, right from the very the individual. They attack the control Every WIC dollar spent for pregnant start. That is what the WIC program center for thought, emotion and move- women results in the savings to the does, and that is what they have been Medicaid program of anywhere between doing for 25 years. ment. There are over 100 different $2 and $4. Well-fed mothers and chil- At WIC clinics, low income, at-risk types of brain tumors, making effec- dren are healthier people. Children who pregnant women get healthy foods, nu- tive treatment very complicated. Cur- eat a nutritious diet grow up to be trition, education and access to health rently, there is no cure for most malig- stronger, better-adjusted adults. WIC services. The outcome is strong, nant brain tumors. Only 37 percent of allows high-risk young families to healthy babies. WIC stays with the new men and 52 percent of women survive 5 properly feed their children during mother after her baby is born, helping years following the diagnosis of a pri- their critical months of growth and de- to form good eating habits, health hab- mary benign or malignant brain tumor. velopment. WIC helps to assure normal its and a lifetime of good habits. For Congress needs to appropriate in- childhood growth, reduces early child- every $1.00 we spend on WIC, we save creased funding for the National Insti- hood anemia, increases immunization $3.50 in future costs for medical care, tutes of Health and advocate for a rates, improves access to pediatric income support and special education. strong investment in brain tumor re- health care and prepares children for Talk about a good investment in our search. We also need Federal legisla- learning. future, talk about WIC. Congratula- tion that gives patients access to clin- tions, WIC, on this anniversary of 25 b 1015 ical trials and other therapies that are years, and thanks for strengthening not approved yet by the Food and Drug What more can we ask for? It truly America’s future. Administration. I urge more research proves the maxim that an ounce of pre- f vention is worth a pound of cure. WIC, for brain tumors and more funding for it is a good program for America. THE POLICY OF NOT USING FOOD the NIH. AS A WEAPON IS GOOD POLICY f (Mr. NETHERCUTT asked and was f HOLBROOKE’S HONORARIA given permission to address the House (Mr. STEARNS asked and was given for 1 minute and to revise and extend SUPPORT BANKRUPTCY REFORM permission to address the House for 1 his remarks.) ACT AND ITS EMPHASIS ON PER- minute and to revise and extend his re- Mr. NETHERCUTT. Mr. Speaker, SONAL RESPONSIBILITY marks.) there is no more fundamental need of Mr. STEARNS. Mr. Speaker, I rise human beings than the need for food (Mr. DOOLEY of California asked and today to draw my colleagues’ attention and medicine. For years, our country was given permission to address the to what President Clinton promised has had a policy of imposing unilateral House for 1 minute and to revise and would be the most ethical administra- economic sanctions on nations of the extend his remarks.) tion in the history of our Nation. world with which we disagree, nations Mr. DOOLEY of California. Mr. The Washington Times lead story like Iran and Libya and North Korea Speaker, today we are going to be con- today details how special envoy to the and many others. sidering bankruptcy reform legislation, President, Richard Holbrooke, in the If one is a farmer in America, this and I rise in strong support of it. In middle of critical negotiations with policy has hurt American agricultural 1998 we had studies that showed that at Yugoslav President Milosevic in 1998, exports, especially if other nations of least $3 billion was written off in bank- broke off those talks to deliver two the world do not impose such sanctions ruptcy by wealthy debtors who could speeches in which he was paid $40,000. and are free to trade with such enemy have afforded to pay it back. Now, there is a pesky Federal ethics nations. rule that says for government employ- Earlier this year, I introduced H.R. More and more wealthy Americans ees, including unpaid presidential ap- 212, a bill which lifts sanctions on food are using the bankruptcy system to pointees, they are barred from accept- and medicine so that we can sell our buy a throwaway lifestyle that they ing side compensation that relates to commodities to these nations, subject cannot afford, then expecting hard- the employee’s official duties. to the President reinstating those working Americans who pay their bills Quote, just as his talks reached what sanctions if doing so is in the national each month to pick up the tab. That is Mr. Holbrooke said was a dangerous security interest. not right, and Congress needs to do moment, he flew to Athens to give a Last week, the President, by admin- something about it. speech about Kosovo, picking up $16,000 istrative order, lifted sanctions on food I also want to address some informa- in payment. A few months later, Mr. and medicine to Iran, Libya and Sudan. tion that I think is not true by some of Holbrooke did the same thing, aban- This can result in the likely sale of $500 the opponents of this legislation, deal- doning diplomatic efforts in the middle million in wheat sales to American ag- ing with child support payments. of an air-strike deadline to deliver a riculture. The policy of not using food Under the current system, child sup- speech in New York for $24,000. as a weapon is good policy, and I urge port and alimony payments rank sev- Mr. President, honestly, based upon my colleagues to support H.R. 212. enth on the list of priority payments in past comments, he would be the perfect f a bankruptcy proceeding, behind such candidate to be Ambassador to the things as attorney fees; seventh. United Nations. BRAIN TUMOR AWARENESS WEEK This legislation moves those critical f (Mr. ROTHMAN asked and was given permission to address the House for 1 family obligations up to the top of the CONGRATULATIONS TO WIC ON 25 minute and to revise and extend his re- list. Women and children come first YEARS marks.) under H.R. 833, the bankruptcy protec- (Ms. WOOLSEY asked and was given Mr. ROTHMAN. Mr. Speaker, this is tion reform bill that we are going to be permission to address the House for 1 Brain Tumor Awareness Week. Each considering today. It is time to require minute and to revise and extend her re- year 100,000 people in the United States personal responsibility. Support H.R. marks.) will be diagnosed with a primary or 833.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00003 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8496 CONGRESSIONAL RECORD—HOUSE May 5, 1999 RIVERSIDE NATIONAL CEMETERY, I encourage my colleagues on both House for 1 minute and to revise and THE IDEAL LOCATION FOR THE sides of the aisle to support the Payday extend his remarks.) NATIONAL MEDAL OF HONOR Borrower Protection Act of 1999. Mr. SMITH of Michigan. Mr. Speak- MEMORIAL f er, I see a lot of students in our gallery (Mr. CALVERT asked and was given today. Mr. Speaker, I would like to re- WITH THE PROSPECT OF MULTI- port that our Social Security task permission to address the House for 1 TRILLION DOLLAR BUDGET SUR- minute and to revise and extend his re- force meeting yesterday that examined PLUSES, WE SHOULD PASS A the consequences of doing nothing with marks.) TAX CUT AS SOON AS POSSIBLE Mr. CALVERT. Mr. Speaker, I rise Social Security resulted in the head- (Mr. CHABOT asked and was given today to praise the 3,417 men and line that antipoverty programs for sen- permission to address the House for 1 women who have placed their lives on iors result in poverty for future Amer- minute and to revise and extend his re- ican workers. We need to stop spending the line for their country, have taken marks.) risks above and beyond the call of duty the Social Security Trust Fund for Mr. CHABOT. Mr. Speaker, Congress other government programs. and, because of their extraordinary faces the prospect of multitrillion dol- Our taxes today are higher than they bravery and action during crisis, have lar surpluses, budget surpluses, over have ever been in most of our history, been awarded the Medal of Honor. the next 15 years. That is good news. even through World War II. We have Yesterday I introduced the National As one might expect, the response to heard a lot of good government spend- Medal of Honor Memorial Act. This bill this good news has been sharply di- ing programs from the speakers this designates the memorial being built at vided. morning that would mean raiding the the Riverside National Cemetery as a Liberals, and President Clinton, have Social Security Trust Fund or increas- national memorial. Since this will be come forward with new Washington ing taxes. the only publicly accessible memorial spending programs. Republicans, on I just plead with my colleagues that honoring all 3,417 recipients of the the other hand, have called for saving if there are other good programs, they Medal of Honor at a single location, I Social Security, cutting taxes and pay- need to be justified on the basis of in- think it is only fitting to identify it as ing down the national debt. creasing taxes to pay for those pro- a national memorial. It is almost the law of nature that grams or cutting other government Riverside National Cemetery is the money left in Washington will be spending to pay for those programs, ideal location for this memorial. There spent. Therefore, I think we should but stop raiding the Social Security are two Medal of Honor recipients bur- pass a tax cut as soon as possible, be- trust fund. We are already facing a $71⁄2 fore the big spenders here in Wash- ied there; 102 recipients are originally trillion unfunded liability to maintain from the State of California. At its ca- ington get their hands on it. Let us hope that Congress and the Social Security. We can’t afford to con- pacity, the cemetery will inter ap- tinue to make the situation worse. proximately 1,400,000 persons, making President get it right. Work together it the largest national cemetery in the and save Social Security, cut taxes and f United States. pay down the national debt. It is very, CONSTRUCTIVE OWNERSHIP Mr. Speaker, I am proud of the very important for America’s future to TRANSACTIONS do that. strong support from my colleagues. (Mr. NEAL of Massachusetts asked Seventy of my colleagues have decided f and was given permission to address to be original cosponsors of this; 100 SALUTE TO WIC ON 25TH the House for 1 minute and to revise percent of the California delegation, ANNIVERSARY and extend his remarks.) and the chairman and the ranking Mr. NEAL of Massachusetts. Mr. member of the Committee on Veterans’ (Ms. BROWN of Florida asked and was given permission to address the Speaker, today I am introducing legis- Affairs. I look forward to its passage. House for 1 minute and to revise and lation to shut down a tax avoidance f extend her remarks.) scheme available only to a few wealthy PAYDAY BORROWER PROTECTION Ms. BROWN of Florida. Mr. Speaker, and sophisticated investors. Under cur- ACT OF 1999 I rise in support of one of our Nation’s rent law, if one invests in a hedge fund most valuable programs, Women, In- they pay tax every year and those prof- (Mr. RUSH asked and was given per- fants and Children, more popularly its are taxed at a higher short-term mission to address the House for 1 known as WIC. capital gains rate, but if one places minute and to revise and extend his re- The WIC program has been serving that same money in a derivative marks.) women and children across America for wrapped around a hedge fund, they pay Mr. RUSH. Mr. Speaker, today I am 25 years. The valuable service provided tax only at the end of the contract and here to introduce the Payday Borrower by WIC includes nutritional coun- are taxed at a lower long-term capital Protection Act of 1999. seling, the supply of supplemental nu- gains rate. Payday loan companies are springing tritional foods to children and an ex- My bill states that if an investor in- up all over the country. Payday loan cellent health referral system. directly owns a financial asset like a companies are cannibalistic. They are WIC continues to be effective in im- hedge fund through a derivative, he akin to loansharking. These companies proving the health of pregnant women, cannot get more long-term capital gain provide short-term loans with min- new mothers and infants. Studies show than if he owned the investment di- imum credit checks to consumers who that WIC participants are more likely rectly. In addition, there is an interest are in desperate need of cash. to have full term pregnancy, lower charge to offset the additional benefit The interest on these loans are un- medical costs, higher birth weight ba- of deferral. conscionably high, usually running bies and lower infant mortality rates. from 261 percent to 913 percent annu- On this anniversary of 25 years, I sa- b 1030 ally. It is not uncommon for a con- lute WIC for providing such out- This tax shelter is not available to sumer to have borrowed, say, $100 and standing service. We must all remem- average workers or even to average in- within a year to be forced to repay $900 ber a healthy start is a great start. vestors. It is available only to the very to a payday loan company. f wealthy, so that they can avoid paying My bill regulates and imposes some taxes. rational criteria on these loans. My bill ANTIPOVERTY PROGRAMS FOR It is important to shut down these caps annual interest fees at 36 percent SENIORS RESULT IN POVERTY tax shelters as we uncover them. Oth- and prohibits any payday lender from FOR FUTURE AMERICAN WORK- erwise, we undermine the faith people refinancing or rolling over any loans. ERS have in our voluntary tax system. The My bill also sets a minimum national (Mr. SMITH of Michigan asked and Committee on Ways and Means is look- standard for State payday loan laws. was given permission to address the ing at tax shelters this year. This

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00004 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8497 should be the number one issue on our Asthma is the leading chronic illness in chil- Duncan Larson Reyes list. Dunn Latham Reynolds dren and it is the leading cause of school ab- Edwards LaTourette Riley f senteeism. Hospitalizations due to asthma are Ehlers Lazio Rivers disproportionately high for inner-city children, Ehrlich Leach Rodriguez A FOCUS ON CHILDREN particularly for children of color. Each year, Emerson Levin Roemer (Ms. JACKSON-LEE of Texas asked Eshoo Lewis (CA) Rogan 600 children die from asthma and 150,000 are Etheridge Linder Rogers and was given permission to address hospitalized. Evans Lipinski Rohrabacher the House for 1 minute and to revise Today, there will be screenings for asthma Everett Lofgren Ros-Lehtinen and extend her remarks.) and allergies and I urge everyone to get test- Ewing Lowey Rothman Ms. JACKSON-LEE of Texas. Mr. Fletcher Lucas (KY) Roukema ed. As it is now allergy season, this is the time Foley Lucas (OK) Roybal-Allard Speaker, it is important that we focus to find out how serious your allergies may be Forbes Luther Royce on our children. I am delighted to con- and also how to relieve your symptoms. Fossella Maloney (CT) Ryan (WI) Fowler Maloney (NY) gratulate the WIC program on its 25th Ryun (KS) Finally, today there will be a hearing spon- Frank (MA) Manzullo Salmon anniversary, a program that has pro- Franks (NJ) Markey sored by the Congressional Children’s Caucus Sanchez Frelinghuysen Martinez vided nourishment for women and chil- on the issue of school violence. We have a Sandlin Frost Mascara dren and infants, a program that has Sanford panel of mental health experts who will dis- Gallegly Matsui helped so many to be able to have the cuss the need for mental health services in Ganske McCarthy (MO) Sawyer basic nourishment that allows them to schools. We will also have a panel of students Gejdenson McCarthy (NY) Saxton Gekas McCollum Schakowsky go to schools and then be educated. Our who will discuss their fears about violence in Sensenbrenner children are our greatest asset. Gilchrest McCrery school. I look foward to seeing many of you Gillmor McHugh Serrano Then I would like to note that this is there. Gilman McInnis Sessions Asthma Awareness Day and Month. I Gonzalez McIntosh Shadegg hope that we realize the importance of f Goode McIntyre Shaw Goodlatte McKeon Shays more research to help cure asthma. So THE JOURNAL Goodling McKinney Sherman many of our children and, yes, so many Sherwood The SPEAKER pro tempore (Mr. MIL- Gordon McNulty of our citizens are impacted by that. Goss Meehan Shimkus LER of Florida). Pursuant to clause 8 of Likewise, Mr. Speaker, I would like Graham Meek (FL) Shows rule XX, the pending business is the Green (TX) Meeks (NY) Shuster to invite and acknowledge that the question of agreeing to the Speaker’s Hall (OH) Menendez Sisisky Congressional Children’s Caucus will be Hall (TX) Metcalf Skeen approval of the Journal of the last Hansen Mica Skelton holding a hearing this afternoon at 2154 day’s proceedings. Rayburn on the crisis of school vio- Hastings (WA) Millender- Smith (MI) The question is on the Speaker’s ap- Hayes McDonald Smith (TX) lence, how do we help our children. We proval of the Journal. Hayworth Miller (FL) Smith (WA) Herger Miller, Gary want solutions and not accusations. The question was taken; and the Snyder We hope to develop a mental health Hill (IN) Minge Souder Speaker pro tempore announced that Hill (MT) Mink system for children, where children can Spence the ayes appeared to have it. Hilleary Moakley Spratt be referred and helped and rehabili- Hinchey Mollohan Mr. SCHAFFER. Mr. Speaker, I ob- Stabenow tated, because in fact they are our pre- Hinojosa Moore Stark ject to the vote on the ground that a cious resource. We will be listening to Hobson Moran (VA) Stearns quorum is not present and make the Hoeffel Morella children today, we will be listening to Stenholm point of order that a quorum is not Hoekstra Murtha Strickland mental health experts on the crisis of Holden Myrick Stump present. Hooley Nadler school violence and how do we help our Sununu Horn Napolitano The SPEAKER pro tempore. Evi- Talent children. We hope the children will Hostettler Neal dently a quorum is not present. Tancredo come and let us hear them today. Houghton Nethercutt Tanner The Sergeant at Arms will notify ab- Hoyer Ney Mr. Speaker, today is a special day for sev- Tauscher sent Members. Hulshof Northup Tauzin eral reasons. Today is the 25th Anniversary of Hunter Norwood The vote was taken by electronic de- Taylor (NC) the WIC Program and it is also Asthma vice, and there were—yeas 359, nays 41, Inslee Nussle Awareness Day. Also today, the Congres- Isakson Obey Terry not voting 33, as follows: Thomas sional Children’s Caucus, which I am the Jackson (IL) Olver [Roll No. 108] Jackson-Lee Ortiz Thornberry chair, will have a hearing today on the psy- (TX) Ose Thune YEAS—359 chology of school violence. I hope My Col- Jefferson Owens Thurman leagues will join me for the hearing. Abercrombie Bonilla Combest Jenkins Oxley Toomey Ackerman Bonior Condit John Packard Towns The WIC Program, or the Women, Infant Allen Bono Conyers Johnson (CT) Pallone Traficant and Children’s Supplemental Nutrition Pro- Andrews Boswell Cook Johnson, Sam Pascrell Turner gram, has been providing nutrition education Archer Boucher Cooksey Jones (NC) Pastor Udall (CO) and diet counseling since 1972. It is a feder- Armey Boyd Cox Jones (OH) Paul Udall (NM) Bachus Brady (PA) Coyne Kanjorski Payne Upton ally funded program designed for low-income Baird Brady (TX) Cramer Kaptur Pease Vela´ zquez pregnant women, mothers and their children Baker Brown (FL) Crane Kasich Pelosi Vento who face nutritional risk. Baldacci Brown (OH) Crowley Kelly Peterson (MN) Walden Walsh WIC helps mothers make infant feeding Baldwin Bryant Cummings Kennedy Peterson (PA) Ballenger Burr Cunningham Kildee Petri Wamp choices and provides breastfeeding support, Barcia Burton Danner Kilpatrick Phelps Watt (NC) children’s growth checkups and referrals for Barr Buyer Davis (FL) Kind (WI) Pickering Waxman other health services. WIC also gives mothers Barrett (NE) Callahan Davis (IL) King (NY) Pitts Weiner Barrett (WI) Calvert Davis (VA) Kingston Pombo Weldon (FL) one-on-one instructions for making healthy Bartlett Camp Deal Kleczka Pomeroy Weldon (PA) meals for their families. Bass Campbell DeGette Knollenberg Porter Wexler Families on WIC receive monthly supplies Bateman Canady Delahunt Kolbe Portman Weygand for food like milk, eggs, cereal and juice. This Bentsen Cannon DeLauro Kuykendall Price (NC) Whitfield Bereuter Capps DeLay LaFalce Pryce (OH) Wicker is an important program for mothers and chil- Berkley Capuano DeMint LaHood Quinn Wilson dren in need, and I am happy to salute them Berry Cardin Deutsch Lampson Radanovich Wise today on their 25th Anniversary. Biggert Castle Diaz-Balart Lantos Rahall Wolf Bilbray Chabot Dicks Largent Regula Woolsey Today is also Asthma Awareness Day. Bilirakis Chambliss Dingell Asthma is a serious condition that causes dif- Blagojevich Chenoweth Dixon NAYS—41 ficulty in breathing and it affects children and Bliley Clayton Doggett Aderholt Costello Ford adults. An estimated 4.8 million children under Blumenauer Clement Dooley Borski DeFazio Gephardt Blunt Coble Doolittle Clay English Gibbons 18 have asthma and many more have Boehlert Coburn Doyle Clyburn Filner Gutknecht undiagnosed asthma. Boehner Collins Dreier

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00005 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8498 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Hastings (FL) McDermott Stupak the Whole may: (1) postpone until a time ment and shall not be subject to a de- Hefley McGovern Sweeney during further consideration in the Com- mand for division of the question in the Hilliard Miller, George Taylor (MS) mittee of the Whole a request for a recorded House or in the Committee of the Holt Moran (KS) Thompson (CA) vote on any amendment; and (2) reduce to Johnson, E. B. Oberstar Thompson (MS) Whole. Klink Pickett five minutes the minimum time for elec- Visclosky tronic voting on any postponed question that The rule allows for the Chairman of Kucinich Ramstad Waters follows another electronic vote without in- the Committee of the Whole to post- Lee Rush Weller Lewis (GA) Sabo pone votes during consideration of the Wu tervening business, provided that the min- LoBiondo Schaffer imum time for electronic voting on the first bill and to reduce voting time to 5 min- NOT VOTING—33 in any series of questions shall be 15 min- utes on a proposed question if the vote utes. At the conclusion of consideration of follows a 15-minute vote. Barton Granger Scott the bill for amendment the Committee shall Becerra Green (WI) Simpson Finally, the rule provides one motion rise and report the bill to the House with Berman Greenwood Slaughter to recommit with or without instruc- Bishop Gutierrez Smith (NJ) such amendments as may have been adopted. Brown (CA) Hutchinson Tiahrt Any Member may demand a separate vote in tions. Carson Hyde Tierney the House on any amendment adopted in the Mr. Speaker, H.R. 833, the Bank- Cubin Istook Watkins Committee of the Whole to the bill or to the ruptcy Reform Act of 1999, will fun- Dickey Lewis (KY) Watts (OK) committee amendment in the nature of a damentally reform the existing bank- Engel Rangel Wynn substitute. The previous question shall be ruptcy system into a needs-based sys- Farr Sanders Young (AK) considered as ordered on the bill and amend- Fattah Scarborough Young (FL) tem. I am proud of the tireless efforts ments thereto to final passage without inter- of the House Committee on the Judici- b 1052 vening motion except one motion to recom- mit with or without instructions. ary to address this issue and ensure So the Journal was approved. that our bankruptcy laws operate fair- The SPEAKER pro tempore (Mr. MIL- The result of the vote was announced ly, efficiently, and free of abuse. LER of Florida). The gentleman from as above recorded. This should not be a controversial Texas (Mr. SESSIONS) is recognized for 1 f issue because Congress has spoken on hour. this issue before. Both the House and PROVIDING FOR CONSIDERATION Mr. SESSIONS. Mr. Speaker, for pur- the Senate overwhelmingly approved OF H.R. 833, BANKRUPTCY RE- poses of debate only, I yield the cus- bankruptcy reform legislation last FORM ACT OF 1999 tomary 30 minutes to the gentleman year on a bipartisan basis. Although from Texas (Mr. FROST), pending which Mr. SESSIONS. Mr. Speaker, by di- the measure fell short in the waning I yield myself such time as I may con- rection of the Committee on Rules, I days of the 105th Congress because the sume. During consideration of this res- call up House Resolution 158 and ask Senate failed to act on the conference olution, all time yielded is for the pur- for its immediate consideration. report, the House voted by a veto-proof The Clerk read the resolution, as fol- pose of debate only. majority of 300 to 125 to pass very simi- lows: H. Res. 158 is a fair, structured rule providing 1 hour of general debate di- lar legislation last year. H. RES. 158 There is great need for this bill now. Resolved, That at any time after the adop- vided equally between the chairman and ranking member of the Committee A record 1.42 million personal bank- tion of this resolution the Speaker may, pur- ruptcy filings were recorded in 1998. suant to clause 2(b) of rule XVIII, declare the on the Judiciary. House resolved into the Committee of the The rule waives points of order This is a stunning increase of 500 per- Whole House on the state of the Union for against consideration of the bill for cent since 1980. Despite an unprece- consideration of the bill (H.R. 833) to amend failure to comply with section 302 of dented time of economic prosperity, title 11 of the United States Code, and for the Congressional Budget Act which unemployment, and rising disposable other purposes. The first reading of the bill prohibits consideration of legislation income, personal bankruptcies are ris- shall be dispensed with. Points of order which exceeds a committee’s allocation ing, costing over $40 billion in the past against consideration of the bill for failure year. to comply with section 302 or section 311 of of new spending authority, or section 311 of the Congressional Budget Act Without serious reform of our bank- the Congressional Budget Act of 1974 are ruptcy laws, these trends promise to waived. General debate shall be confined to which prohibits consideration of legis- the bill and shall not exceed one hour equal- lation that would cause the total level grow each year, costing businesses and ly divided and controlled by the chairman of new budget authority or outlays in consumers even more in the form of and ranking minority member of the Com- the most recent budget resolution to be losses and higher costs of credit. mittee on the Judiciary. After general de- exceeded or cause revenues to be less. As we debate and vote today, we bate the bill shall be considered for amend- should keep in mind two important te- ment under the five-minute rule. It shall be b 1100 nets of bankruptcy reform. in order to consider as an original bill for the The rule provides that it shall be in First, the bankruptcy system should purpose of amendment under the five-minute order to consider as an original bill for provide the amount of debt relief need- rule the amendment in the nature of a sub- stitute recommended by the Committee on the purpose of amendment under the 5- ed that an individual needs, no more the Judiciary now printed in the bill. The minute rule the amendment in the na- and no less. Second, bankruptcy should committee amendment in the nature of a ture of a substitute recommended by be a last resort and not a first response substitute shall be considered as read. All the Committee on the Judiciary now to a financial crisis. points of order against the committee printed in the bill. The rule waives all As a businessman with over 16 years’ amendment in the nature of a substitute are points of order against the committee experience in the private sector and be- waived. No amendment to the committee amendment in the nature of a sub- cause of many conversations that I amendment in the nature of a substitute stitute and amendments thereto. have had with leaders, consumers and shall be in order except those printed in the The rule makes in order only those others who are associated with loan de- report of the Committee on Rules accom- panying this resolution. Each amendment amendments printed in the Committee faults, I am well aware of the problems may be offered only in the order printed in on Rules report accompanying the res- that are associated with the abuse of the report, may be offered only by a Member olution. The rule provides that amend- our bankruptcy laws. designated in the report, shall be considered ments made in order may be offered A record 1.4 million personal bank- as read, shall be debatable for the time speci- only in the order printed in the report ruptcies were filed last year. That is fied in the report equally divided and con- and may be offered only by a Member one out of every 75 households in trolled by the proponent and an opponent, designated in the report. These amend- America. The debts that remained un- shall not be subject to amendment, and shall ments shall be considered as read and paid as a result of those bankruptcies not be subject to a demand for division of the question in the House or in the Committee of be debatable for the time specified in each year cost American families that the Whole. All points of order against the the report equally divided and con- do pay their bills on time $550 a year in amendments printed in the report are trolled by the proponent and opponent. the form of higher cost for credit, waived. The chairman of the Committee of They shall not be subject to amend- goods and services.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00006 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8499 Unfortunately, much of the debt that fact that this bill as well as the De- on the rule, let me note for the record was eventually passed on to the con- fense Supplemental are the only major two of the amendments which the Re- sumers last year was debt that bank- pieces of business this week, I do think publican majority voted to exclude ruptcy filers could have avoided by that the Republican leadership should from consideration: first, an amend- simply repaying those bills because have afforded more Members the oppor- ment offered by the subcommittee they had the ability. That is why it is tunity to offer amendments to this im- ranking member which would have sig- so important to pass real bankruptcy portant and far-reaching legislation. nificantly altered the bill’s treatment reform. Madam Speaker, reform of the bank- of child support payments; and, second, Opponents of this bill have tried to ruptcy system in this country is indeed an amendment by the gentleman from divert the discussion away from the a major initiative. In this decade, the Massachusetts (Mr. DELAHUNT), a mem- merits of the bill and claim that it number of personal bankruptcy filings ber of the Committee on the Judiciary, would make it more difficult for di- has skyrocketed, more than doubling relating to claims on credit card debt vorced women to obtain child support in the past 8 years and increasing by an in those cases where the debtor had not and alimony payments. However, noth- astonishing 400 percent since 1980. been informed of the terms of the ac- ing could be further from the truth. Last year, more than 1.43 million count agreement. This bankruptcy reform protects the fi- Americans filed for personal bank- These are not insignificant amend- nancial security of women and children ruptcy. This is indeed an alarming ments, Madam Speaker, and I believe by giving them a higher priority than trend, and it is especially alarming in the House should have the opportunity under current law. light of the fact that the U.S. economy to discuss these issues. As such, I The legislation closes loopholes that is booming and personal incomes are would urge Members to vote no on the allow some debtors to use the current rising. previous question so that these two system to delay or even evade child While there are certainly more indi- amendments might be added to the list support and alimony payments. The viduals among these numbers who are of amendments that the House will bill recognizes that no obligation is seeking Chapter 7 bankruptcy relief as consider today. I cannot buy the argu- more important than that of a parent a last resort, there are also many in ment that just because the House will to his or her children. this number who are using the bank- have 6 hours and some odd minutes of Currently, child support payments ruptcy system to escape debts they are debate on this bill, we do not have time are the seventh priority, behind such capable of paying. to consider additional amendments. things as attorney’s fees. Make no mis- As the gentleman from Illinois (Mr. Madam Speaker, my colleague from take about this, H.R. 833 puts women HYDE) said yesterday in the Committee Texas (Mr. SESSIONS) has noted that and children first, at the head of the on Rules, this bill is an attempt to the bill does contain a provision which list. We should provide greater protec- achieve an appropriate balance be- would allow States to opt out of the tion to families who are owed child tween debtor and creditor rights. By homestead exemption cap imposed by support, and this bill will do just that. establishing needs-based bankruptcy the bill. I realize this is a matter of The bill also address other problems, standards, this legislation seeks to en- some controversy; but, for the State of including needs-based bankruptcy. The sure that those who need a fresh start Texas, this is an issue of major and heart of this legislation is a needs- will be given one but that those con- fundamental importance. This matter based formula that separates filers into sumers who can afford to repay their is far from resolved, but I am pleased Chapter 7 or Chapter 13 based upon debts from future income must do so. that two amendments relating to the their ability to pay. While many fami- While similar legislation was passed effective date of the cap, which were lies may face job loss, divorce or med- overwhelmingly by the House last imposed by my colleague from Texas ical bills, and therefore legitimately year, there is still controversy sur- (Mr. BENTSEN), were included in the need the protection provided by the rounding this bill. The Committee on manager’s amendment. Bankruptcy Code, research has shown the Judiciary held 5 days of hearings Madam Speaker, while it is impor- that some Chapter 7 filers actually and markup on this bill and took 28 re- tant that the House proceed to the con- have the capacity to repay some of corded votes on amendments. In addi- sideration of this important legislative what they owe. tion, 37 amendments were filed with proposal early in the session, it is still The formula directs into Chapter 13 the Committee on Rules. early enough for the House to have a those filers who earn more than the na- Yet, this rule only makes in order 11 complete debate on this matter. I am a tional median income which is roughly amendments, including a manager’s strong supporter of this bill, as are $51,000 for a family of four, if they can amendment and an amendment in the many of my colleagues here in this pay all secured debt and at least 20 per- nature of a substitute to be offered by body. Consideration of a few additional cent of unsecured non-priority debt. the ranking member of the Sub- amendments would have only added This bill recognizes the need for con- committee on Commercial and Admin- time to this debate, time which would sumer education and protection. It in- istrative Law, the gentleman from New have given the House the opportunity cludes education provisions that will York (Mr. NADLER). to fully air the issues that affect con- ensure that debtors are made aware of The Nadler substitute retains much sumers across the country. their options before they file for bank- of the work of the committee but dif- Madam Speaker, I reserve the bal- ruptcy, including alternatives to bank- fers significantly from H.R. 833 by ance of my time. ruptcy such as credit counseling. And granting local judicial discretion in the Mr. SESSIONS. Madam Speaker, I the bill cracks down on ‘‘bankruptcy determination about whether a debtor yield such time as she may consume to mills,’’ law firms and other entities appropriately belongs in Chapter 7 or the gentlewoman from Ohio (Ms. that push debtors into bankruptcy Chapter 13 bankruptcy. The Nadler PRYCE). without fully explaining the con- substitute eliminates the provisions in Ms. PRYCE of Ohio. Madam Speaker, sequences. the committee bill which establish new I thank my friend from Texas for yield- I urge my colleagues to support this grounds for making credit card debt ing me this time. rule and the underlying legislation. non-dischargeable and offers signifi- I rise in support of this fair and bal- Madam Speaker, I reserve the bal- cantly different child support and ali- anced rule, which governs consider- ance of my time. mony payment provisions. ation of the Bankruptcy Reform Act of Mr. FROST. Madam Speaker, I yield Now, before my Republican col- 1999. myself such time as I may consume. leagues jump in and say that this rule This rule is very generous to the mi- Madam Speaker, as an original co- provide for 41⁄2 hours of debate on nority. Madam Speaker, out of 11 sponsor of H.R. 833, I am pleased that amendments, including 1 hour on the amendments the House will have the this legislation has come to the floor in Nadler substitute, as well as 1 hour of opportunity to debate and vote upon a timely manner. However, given the general debate in addition to this hour today, seven are offered by Democrats,

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00007 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8500 CONGRESSIONAL RECORD—HOUSE May 5, 1999 one is bipartisan, and only three are of- mony and child support at the very top million in bankruptcy claims while fered by Republicans. All told, the of the list. This bill recognizes that a keeping his multimillion dollar ranch House will have 61⁄2 hours to debate parent’s financial responsibility to his in Florida. Or with the convicted Wall their bill, which is very similar to leg- or her child takes priority above all Street financier who filed bankruptcy islation that passed the House last other obligations, and I am pleased to while owing billions of dollars in debts year by an overwhelming margin of 300 report that Ohio’s Attorney General and fines but still kept his $3 million to 125. supports the child support provisions of beach front mansion. Or the movie Madam Speaker, bankruptcy law is the bill, as do many other attorneys actor, Burt Reynolds, who was more nothing if not complex, but the goals of general throughout this Nation who than $10 million in debt but kept his bankruptcy reform are fairly simple are on the front lines, in the trenches, $2.5 million home while his creditors and straightforward. Today, we are of child support enforcement and col- received 20 cents on the dollar. seeking to restore the values of per- lection. Now, I do not suggest that these sonal responsibility and integrity to an Decreasing the number of bank- abuses happen every day. But every abused bankruptcy system. ruptcies in America requires more than time they occur, they bring the fair- The unfortunate fact is that bank- new standards to guide repayments. We ness and rationality of the bankruptcy ruptcy is no longer a rare occurrence also must address the factors that lead system into disrepute. That is why the among many American consumers who to bad spending decisions in the first National Bankruptcy Review Commis- today are becoming dangerously com- place. This act helps to educate con- sion urged Congress to place a uniform fortable with the concept of credit and sumers by requiring credit card compa- national cap on the amount of equity debt. nies to disclose the long-term costs of that could be claimed under the home- Last year, more than 1.4 million paying only the minimum balance each stead exemption. bankruptcy cases were filed. That is a month. At subcommittee I offered an amend- 500 percent increase since 1980. And the The bill also directs the Federal Re- ment to cap the exemption at $250,000. case load is growing, even as our coun- serve Board to study whether con- My amendment was adopted by an try enjoys economic prosperity and low sumers indeed have adequate informa- overwhelming vote but it was not al- unemployment. tion about the consequences of bor- lowed to stand. When the full com- Madam Speaker, we all understand rowing beyond their means. Further, mittee took up the bill, the provision that sometimes unforeseen cir- the bill will direct the General Ac- was amended to permit individual cumstances, often out of our control, counting Office to examine whether ex- States to opt out, in effect returning us can lead to the financial ruin of an in- tending credit to college students is to the current law. contributing to a large extent to the Supporters of the opt-out provision dividual, a family or a business. Our bankruptcy rate. argued that a Federal cap on the home- bankruptcy laws are designed to help By combining these consumer protec- stead exemption would violate States the truly needy, honest citizen when he tions with requirements that demand rights. This is certainly ironic, Madam finds himself in an impossible situa- personal responsibility, the Bank- Speaker, because by setting the cap at tion. We all see a societal good in that. ruptcy Reform Act strikes a balance $250,000, we had expressly left in place That is one of the things that makes between the rights of debtors and the lower thresholds in effect in every this Nation great. creditors. At the same time this bill one of the 45 States that have estab- However, when intelligent citizens keeps the safety net in place for honest lished a cap of their own. In other ignore basic common sense by spending individuals who are in a hole of debt words, those 45 States, in effect, will be outside of their means, we need to es- that they cannot climb out of without subsidizing deadbeats in the remaining tablish a reasonable level of account- a helping hand. five States if this bill passes. ability and demand some personal re- Madam Speaker, I urge my col- To say the Congress should set no cap sponsibility to protect those who have leagues to support this fair rule and at all is to say we must stand by while extended credit to them in good faith. the underlying legislation which will a handful of States undermine the uni- That is not to say that creditors do restore some integrity to our bank- form enforcement of a Federal statu- not have some lessons to make about ruptcy laws. tory scheme. That is like legislating a poor decision-making and high-risk Mr. FROST. Madam Speaker, I yield Federal income tax and leaving it to lending; and there are some steps we 5 minutes to the gentleman from Mas- the State legislatures to determine take to urge responsible behavior sachusetts (Mr. DELAHUNT). what will count as a business deduc- among creditors. Mr. DELAHUNT. Madam Speaker, I tion. b 1115 rise in opposition to the rule. Those By refusing to fix this problem, the who support the so-called means test authors of this bill have revealed the Madam Speaker, through this legisla- principle and other provisions of this double standards by which they have tion we are asking individuals who bill say they wish to end the use of the gone about these so-called reforms. apply for bankruptcy if at all possible Bankruptcy Code as a financial plan- They ask us to perpetuate the current to repay their debts to the extent that ning tool for those who would scam the inequities in the treatment of debtors they are able. The bill sets up a needs- system. Yet they have denied the who live in different States, and they based mechanism to determine how House the opportunity to end once and ask us to create new inequities in the much debtors can reasonably be ex- for all the most flagrant and notorious treatment of debtors of different finan- pected to pay. abuse of the Bankruptcy Code. cial means. This needs-based approach, based on The bill would subject middle-income This is unfair, Madam Speaker, and current IRS standards, strengthens ex- debtors to elaborate new restrictions. it is poor public policy. I urge my col- isting law to weed out abusers of the Yet it leaves in place a loophole that leagues to oppose this rule. system who want all their debts dis- allows wealthy debtors to buy expen- Mr. SESSIONS. Madam Speaker, I missed but actually have the means to sive homes in one of the handful of yield such time as he may consume to pay some of them. These individuals States such as Texas or Florida with the gentleman from Ohio (Mr. CHABOT), will be directed to a repayment plan so an unlimited homestead exemption, de- a member of the Committee on the Ju- their creditors can collect at least clare bankruptcy and continue to enjoy diciary. some of what they are owed. a life of luxury while their creditors Mr. CHABOT. I thank the gentleman This is a fair approach that will not get little or nothing. If we are truly se- for yielding me this time. excuse reckless spending but offers rious about curtailing abuse of the Madam Speaker, despite some of the needed relief for those who are in a bankruptcy system, this is the place to rhetoric on the other side of the aisle, hopeless situation and need a fresh start: H.R. 833 is a pro-consumer piece of leg- start to get back on their feet. And I With the owner of the failed Ohio islation. That is, pro-responsible con- am happy to say that the bill puts ali- S&L who paid off only a fraction of $300 sumer. H.R. 833 protects individuals

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00008 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8501 and businesses from having to pick up our current system. For instance, the we could at least have a vote on mak- the tab for irresponsible debtors, some substitute would strike from the bill ing debts of clinic bombers non- of whom are capable of paying off a sig- key provisions that prevent debtors dischargeable. nificant portion of their debts. from loading up on credit card debt Madam Speaker, the gentleman from This legislation establishes a clear just before declaring bankruptcy and Massachusetts (Mr. DELAHUNT) spoke causal link between a debtor’s ability obtaining a complete discharge of that of the fact that this bill allows the to pay and the availability of Chapter debt upon filing. These opponents actu- homestead exemption in essence to 7 bankruptcy remedies. In other words, ally think that individuals should not continue, in some States unlimited. I it makes those who can afford to pay be held responsible for taking huge think it is unfair but that is what the their debts pay. cash advances and purchasing luxury bill does. There are, of course, some people who goods just prior to filing bankruptcy. But we will not have a vote on my truly have a legitimate need to declare Unfortunately, this practice has be- amendment that would have said, well, bankruptcy. At times, hardworking come far too common as more and if you are going to allow States to have people come up against extraordinary more individuals have begun using an unlimited homestead exemption for circumstances. Family illness, dis- bankruptcy as a financial planning the rich, how about requiring that you ability, or the loss of spouse may ne- tool. have at least a limited homestead ex- cessitate the need to seek relief. H.R. Madam Speaker, I fully support H.R. emption for the poor? In my own State 833 protects these individuals. 833 and urge my colleagues to do the of New York, the homestead exemption Too frequently, however, people who same and vote ‘‘yes’’ for fair and bal- is $9,500. Try to buy a house for $9,500. have the financial ability or earnings anced bankruptcy reform. b 1130 potential to repay their debts are seek- Mr. FROST. Madam Speaker, I yield ing an easy way out. While this may 6 minutes to the gentleman from New The Federal homestead exemption is prove convenient for the debtor, it is York (Mr. NADLER). 16,150, not exactly princely, but we are not fair to their friends and neighbors Mr. NADLER. Madam Speaker, I rise not going to have a debate or a vote on who are stuck with their bills. The av- in opposition to this closed rule. Al- the amendment that would have said, erage American family pays $550 per though for the second Congress in a ‘‘If you’re going to allow millionaires year in a bad debt tax in the form of row, the gentleman from Illinois (Mr. to have unlimited homestead exemp- higher prices and increased interest HYDE), the chairman of the Committee tions in some States, at least require rates to cover the economic cost asso- on the Judiciary, has promised to seek that all States allow the use of the ciated with excessive bankruptcy fil- the most open rule possible, this cer- Federal minimum homestead exemp- ings. tainly is not it. Of the 37 amendments tion of $16,000.’’ I am so concerned about the shifting filed, only 11 were made in order. Of We have to be fair to the rich, but we of financial obligations from neighbor those only four, including the Hyde- cannot be fair to the middle income to neighbor that I introduced language Conyers bipartisan amendment, can be and the poor. at the subcommittee level that will re- said to come from Members who have Madam Speaker, this bill hurts fami- lieve at least some of the burden for expressed problems with the bill. Four lies, it hurts businesses, it will increase the 42 million Americans who live in out of 37. costs to the system, and it is opposed our Nation’s cooperatives and con- We will not have a real debate on by most of the Nation’s bankruptcy ex- dominiums and homeowner associa- consumer protection or on requiring perts. tions. With all too much regularity, creditor as well as debtor responsi- We will not have a vote on the bankrupt individuals have been aban- bility because the Delahunt-LaFalce amendment to stop the provisions of doning their homes to avoid paying amendment was not made in order. We this bill from killing small businesses. their share of community assessments. will not have a real debate on child and That amendment was not made in Vacant or occupied, the unit continues family support—which this bill mur- order. to receive a wide spectrum of benefits ders—because my amendment, which Many small businesses today, Madam that enhance the inherent value of the was written with the help of the Na- Speaker, go bankrupt, they go into a property while neighbors are left to tional Women’s Law Center and which Chapter 11 reorganization, they are en- pick up the tab through an increase in would have placed debts to the family titled to try to be protected from their association fees. higher than debts to the government, debts for a while while they work Nationally, consumer bankruptcies and would have prevented the govern- things out, and then they are saved, reached a record 1.4 million filings in ment from blocking a Chapter 13 reor- and they get on with it, they pay their 1997 and are projected to be even higher ganization plan if it provided for pay- debts, and a business and jobs are this year. What makes these numbers ments to family and other creditors saved. significant and particularly alarming but not payment in full in arrears to Some businesses do not make it. is the fact that this trend began in 1994, the government, was not made in They are liquidated. during a time of solid economic order. This bill puts so many new restric- growth, low inflation and low unem- We cannot debate those issues. We tions and burdens on small businesses, ployment. will not be allowed to vote on whether not big businesses, small businesses in The primary culprit for this dramatic people who terrorize and murder bankruptcy proceedings, that we are increase is a system that allows con- women and their doctors should be al- told by the Small Business Administra- sumers to evade personal responsibility lowed to discharge their civil debts as tion and by others that it will result in for their debts too easily. People who a result of such terrorist actions. Their a lot of small businesses that could make above the national median in- civil penalties, should they be able to have been saved going bankrupt. come and can afford to pay off a sig- discharge their penalties in bank- We had an amendment in committee nificant portion of their debt should ruptcy? We had such an amendment, defeated on a party line vote, an not be allowed to file under Chapter 7 but evidently clinic bombers and peo- amendment in the committee that said bankruptcy. This bill puts those indi- ple who harass women seeking health that if the judge makes a finding of viduals where they belong, in Chapter care services and who violate the law fact that imposing those restrictions 13, where they will be given a generous to push their political agenda have would cost five or more jobs, the judge 5 years to establish a fair repayment more influence at the Committee on would have the discretion not to have plan and get their financial house in Rules than the bipartisan supporters of these new restrictions on the small order. this amendment. The gentlewoman business so that the jobs could be saved Opponents of H.R. 833 are offering a from Maryland (Mrs. MORELLA) and I and the business could be saved. That substitute today that will do little or had asked that in a bill which makes was voted down. The Committee on nothing to curb the abuses prevalent in drunk boating debts nondischargeable, Rules thinks we should not have a

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00009 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8502 CONGRESSIONAL RECORD—HOUSE May 5, 1999 chance to debate and vote on that pro- The Committee on Rules has done its Mr. FROST. Madam Speaker, I yield vision on the floor. best to accommodate Members who 3 minutes to the gentleman from North Should tractors and other farm im- filed amendments with the committee. Carolina (Mr. WATT). plements in a family farm going bank- As has been stated, we have been more Mr. WATT of North Carolina. Madam rupt, should those tractors and farm than fair in permitting seven Democrat Speaker, I thank the gentleman for implements be saved to help keep the amendments, three Republican amend- yielding time. farm in running order, or must they be ments and one bipartisan amendment. I rise in opposition to the rule. I have surrendered to the government for pay- We faced numerous amendments in the concerns about the bill, but I will re- ment of back taxes? Committee on Rules, and we did our serve a discussion of those concerns for Madam Speaker, we are not going to best to allow an open debate on most the debate on the bill. But my concerns have a vote or a discussion of that ei- key issues in dispute. are about the rule itself and the terms ther because, apparently, the Com- On the substance of the bill, the sta- under which we will conduct this de- mittee on Rules does not think saving tistics on U.S. bankruptcy filings are bate. family farms is important, or allowing frightening. Bankruptcies have in- Here is the copy of the bill that we the farmer in bankruptcy to keep his creased more than 400 percent since are considering today. It is 314 pages tractor, or his hoe, or whatever else it 1980. In the past, it was possible to long. may be. blame many bankruptcies on reces- Here is a list of the amendments that The government’s claim comes first, sions or poor economic situation. have been offered to this bill that and to heck with the farmers. Today, however, we face record num- Members of this House would like to This bill, as I said, hurts families, it bers of bankruptcy filings at a time of offer as amendments to this major im- hurts small businesses, it hurts farm- economic growth and low unemploy- portant piece of legislation. There are ers, it hurts child support collectors, it ment. 37 amendments, proposed amendments, hurts children, it will increase costs to If we take these factors into account, on this list. The Committee on Rules the system, and it is opposed by most we can realistically come to only one decided that it would make in order of the Nation’s bankruptcy experts. conclusion: bankruptcies of conven- only 11 of those amendments. The administration will veto the bill ience have provided a loophole for Now one of those 11 is an amendment unless it is moderated, and we should those who are financially able to pay by the manager who has had this bill support the administration’s efforts to their debts but simply have found a under his control from the very day it negotiate a good bill. That can only way to avoid personal responsibility was filed. So for all practical purposes happen if we deny the sponsors of this and escape their financial responsibil- the Committee on Rules has seen fit to bill the supermajority they need to roll ities. allow only 10 other Members to offer the special interest legislation through This bill is a continuation of our ef- amendments on this important bill, unmodified. They have crafted this rule forts to advance the values of personal and so we cannot have a full and fair to avoid the really tough issues, so we responsibility. In the welfare bill, we and democratic debate and allow our must insist that those issues be consid- thought that helping the poor escape constituents to bring their concerns ered today by rejecting the previous the welfare trap, restoring the dignity about the content of this bill to the question. of work and reviving individual respon- floor of the House. If the previous question is rejected, sibility would help people rise from Madam Speaker, that is really what the minority will ask the two amend- generation after generation of despair. this rules debate is about. Some of the ments be made in order, one which will This bankruptcy bill is the Congress’ amendments that were not made in protect child and spousal support, next step in cultivating personal re- order by the Committee on Rules were which the gentlewoman from Texas sponsibility and accountability. amendments that were voted on in the (Ms. JACKSON-LEE) and I had hoped to I expect that we will hear more hol- Committee on the Judiciary, on which offer, and one which would hold credit low charges that we are being heartless I sit, and the Committee on the Judici- card lenders accountable and put an and cruel. Nonetheless, the abusers of ary divided half and half. There are end to some of the most abusive prac- the bankruptcy laws need to receive a three of those amendments on the list, tices which would have been offered by message that Federal bankruptcy laws and we did not even have an affirma- the gentleman from Massachusetts are not a haven for personal fiscal irre- tive opinion of the Committee on the (Mr. DELAHUNT) and the gentleman sponsibility. If a debtor has the ability Judiciary members about whether from New York (Mr. LAFALCE). We to pay the debts that have been accu- those were good or bad amendments, must defeat the previous question or mulated, then they must be held ac- and now we cannot bring those amend- we will not have an opportunity to con- countable. ments to the floor of the House and sider placing some balance in this bill. Under this bill, effective and compas- have a full and fair debate among our So, Madam Speaker, I urge a no vote sionate bankruptcy relief will continue colleagues to allow all of the members on the previous question, on the rule to be available for Americans who need to work their will on those amend- and on the bill. it. But we cannot condone, however, ments. Madam Speaker, this rule is part of a those who file for bankruptcy relief So in a sense this debate on the rule pattern of silencing debate, of rushing under Chapter 7 and have the capacity is about what rights we have as Mem- through a bad bill with no serious con- to pay at least some of their debts. In bers of this House to have our voices sideration, a bill which will have impli- order to ensure that those who can pay heard and have the voices of our con- cations for many, many years, and this actually do pay, this legislation set in stituents heard on important legisla- rule deserves to be defeated. motion a needs-based mechanism. tion. Mr. SESSIONS. Madam Speaker, I The gentleman from Pennsylvania Three hundred and some pages long; yield such time as he may consume to (Mr. GEKAS) and the Committee on the only 10 amendments. the gentleman from Georgia (Mr. LIN- Judiciary have done their legislative Mr. SESSIONS. Madam Speaker, I DER), who is subcommittee chairman of duty in crafting a bill that ensures the yield 3 minutes to the gentleman from the Subcommittee on Rules and Orga- debtor’s rights to a fresh start and pro- Pennsylvania (Mr. GEKAS), the sub- nization of the House. tects the system from flagrant abuses committee chairman of the Sub- Mr. LINDER. Madam Speaker, I from those who can pay their bills. committee on Commercial and Admin- thank the gentleman for yielding this This is a great opportunity to equalize istrative Law. time to me. the needs of the debtor and the rights Mr. GEKAS. Madam Speaker, we say Madam Speaker, I rise in strong sup- of the creditor. that we are happy with the crafting by port of H. Res. 158, a fair, structured Madam Speaker, I urge my col- the Committee on Rules of the proce- rule for consideration of the Bank- leagues to support this rule so that we dure by which this debate will go for- ruptcy Reform Act of 1999. may pass this important legislation. ward. We should all be happy with it

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00010 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8503 because it reflects in a grand way the going to consider later today if the rule Bush, our current Lieutenant Governor bipartisan manner in which this entire is adopted, the bill includes section 147, Perry and the Speaker of the House issue was promulgated from the start. which would establish a new Federal Pete Laney. In the last term the cosponsorship standard for homestead exemptions, I encourage my colleagues to vote to alone of a vehicle in that stage of these which I believe is both unnecessary and adopt the rule and the manager’s proceedings was substantially bipar- unfair. amendment. tisan. The votes that were undertaken, It includes two provisions, one which Mr. SESSIONS. Madam Speaker, I both in the House and in the general would require a resident to reside in yield 3 minutes to the gentleman from debate and then later in the conference their homestead for 2 years before they Tennessee (Mr. BRYANT), who is the report, reflected a gigantic bipartisan can enjoy protections afforded by State vice chairman of the Subcommittee on vote, 300 votes plus. By any measure, law, and it would prohibit them from Commercial and Administrative Law. that turns out to be bipartisan. transferring assets into their home- Mr. BRYANT. Madam Speaker, I Now when we reintroduced the bill stead during that period. want to just add an echo to what our this year, it has, still does have, sub- Additionally, the bill, during consid- chairman, the gentleman from Penn- stantial numbers of the minority as eration of the bill in the full com- sylvania (Mr. GEKAS), said about the part of the cosponsorship. It is, indeed, mittee two more amendments were a bipartisan vehicle in this term that rule. I think it is a very good rule in added, one which would supersede this case. This bill itself, H.R. 833, is a we are visiting. State homestead laws and overturn On top of that, in the hearings that product of a number of years of work, more than 200 years of precedent of al- including last session up to the point of were held, some eight of them by the lowing States the right to make deter- subcommittee and with over 70 wit- actually getting a conference report, minations about what property can be an agreement on a bankruptcy bill, to- nesses to supplement the some 50 or 60 exempted under bankruptcy filings. witnesses that we had last term, all of gether with the renewed debate this The first amendment added a new year in this Congress in the full com- them gave testimony from which was provision that would cap the amount of drawn here and there special features mittee, something like 5 or 6 days of equity that a consumer can protect debate, healthy debate on the merits which we put into the bill showing not during a bankruptcy at $250,000. This just bipartisanship thus far but non- and some would say lack of merits of would affect the States of Texas, Flor- this bankruptcy reform bill. partisanship; that is, drawing from the ida, Kansas, Minnesota, Oklahoma and H.R. 833 is a necessary bill, and this witnesses’ actual phraseology and sug- South Dakota. is a good rule to support to move that gestions that became part of this bill. Now, the second amendment, which bill forward. H.R. 833 restores fairness That makes it a balanced, well-appor- was a compromise, would allow States and common sense and personal re- tioned bill from a policy standpoint to opt out of this new Federal stand- sponsibility to a bankruptcy code that, and from a partisan standpoint, if we ard. While I appreciate that this provi- in many ways, is out of control. Cur- want to allow it to be described as sion will provide States with an oppor- rent bankruptcy filings are about tri- that. tunity to preserve their State home- ple the level of the early 1980s, when On top of that, in the subcommittee stead laws, I am concerned that the the rates of interest and unemploy- we adopted proposals made by the mi- opt-out provision raises new problems. ment were significantly higher than nority. We did so in the full committee In particular, those States where the today. on the basis of assertions and offerings legislatures meet only periodically, made by the minority. homeowners would be subject to this In other words, even in the robust So some of the provisions that are in new cap until the next legislative ses- economy that we are living in today, this bill already are born of the oppo- sion. For instance, in the State of bankruptcies are more than triple what site view side that expressed itself dur- Texas our session ends on May 30 this they were in past times. To make the ing the subcommittee and the full com- year and does not meet again until situation worse, many of the peti- mittee markups. January of 2001. tioners who file under Chapter 7, which This is a balanced bill in many, many The Committee on Rules yesterday is the straight bankruptcy, doing away respects, in most all respects. What the agreed to accept the second Bentsen with all the debts provision, many of Committee on Rules did in crafting amendment which would make the these are simply walking away without this particular rule was to patiently re- date of enactment of the cap at the end any responsibility for any of their flect that bipartisanship, that balanced of the next legislative session of the debts. This, despite the fact that many approach. Our colleagues’ voices have State, and for that I am appreciative. have the ability to repay at least a por- been heard already in subcommittee The third amendment that I offered, tion of the debts they owe. and full committee in many different which the committee accepted and put It is because of these figures and ways. They have been heard through in the manager’s amendment, would trends that this reform is needed to their cohorts who have cosponsored allow States to prospectively opt out of handle the increasing number of peti- this bill, and the final outcome will be the homestead cap prior to the bill tions. a bipartisan one. being enacted in law. This bill also creates a way to deter- Mr. FROST. Madam Speaker, I yield I want to commend the Members of mine the amount of relief a debtor 3 minutes to the gentleman from Texas the committee for accepting these needs, and requires individuals to (Mr. BENTSEN). amendments. I think it is appropriate. repay what they can. There is a for- Mr. BENTSEN. Madam Speaker, I mula it establishes there. rise today in support of H. Res. 158, the Again, there is no empirical evidence Under the compromise between the rule providing for consideration of H.R. of abuse or any problem, substantial House and Senate versions of this bill 833, the bankruptcy reform legislation. problems, with the homestead laws as While I am supportive of the rule, I the States have designed them. This is last year, this legislation combines the want to compliment my colleague from something that has been left up to the best aspects of both the approaches of this means testing, a bright line stand- Texas (Mr. FROST) and my colleague States. It is their prerogative and we ard for measuring the repayment ca- from Texas (Mr. SESSIONS) for their as- ought to continue it that way. sistance in allowing the manager’s I would just say in the State of Texas pacity and preserving the right of a amendment to include two amend- our homestead laws go back prior to debtor in bankruptcy to have a judge ments which I had brought before the Texas becoming part of the Union, review its case if there are unique cir- Committee on Rules yesterday. when we were a Republic. It has been cumstances that can be taken into ac- in the State constitution since we have count. b 1145 been a State. It is something that The bill also establishes child sup- I am concerned that this bill in par- ought to be left up to the State of port and alimony priorities. The bill ticular, the underlying bill that we are Texas. This is supported by Governor significantly improves current law by

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00011 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8504 CONGRESSIONAL RECORD—HOUSE May 5, 1999 raising child support and alimony pay- where at least we have the ability to omitted a great number of important amend- ments to the first priority in a bank- opt out. I certainly join in the fact ments that were presented to the Rules Com- ruptcy proceeding, thus putting the that that has helped the State of Texas mittee yesterday. Those include amendments needs of the family and children where by the Bentsen amendments, in that that would have allowed the exclusion of so- they belong, ahead of others. now they can opt out as opposed to cial security from ‘‘current monthly income’’, In addition, after bankruptcy, the waiting until the bill’s enactment. thereby making bankruptcy less onerous to bill requires all child support and ali- But we would have done better if we our seniors, and one which would have kept mony obligations to be paid before un- had allowed this bill to be an open rule, tobacco companies from manipulating the secured debt. There is also a debtor’s because even with some of the amend- bankruptcy system. bill of rights. This protects consumers ments we have not yet answered the Other very good and important amendments from law firms and other entities that full question dealing with the child were also left at the table, such as the Nadler- might inappropriately steer consumers support, which really still raises its Morella Amendment that would have gone into filing bankruptcy petitions with- ugly head inasmuch as we still have after those terrorists that intentionally utilize out adequately informing them of the the custodial parent, male or female, the bankruptcy system to protect them from li- other options that may be available to fighting the government in order to get ability when they bomb women’s health clinics. them. child support payments. We will also not get to discuss any of the This is sound legislation. It offers I think this rule could have been im- amendments that would have removed the protection to both the debtors and proved. I think we should vote ‘‘no’’ on new protections available to credit card com- creditors. I very much appreciate the this rule, and I wish we had committed panies under this bill when they engaged in efforts of our chairman, the gentleman ourselves to an open discussion by hav- reckless lending. This is not the way that we from Pennsylvania (Mr. GEKAS), and ing an open rule. should proceed on this bill, and therefore, I other colleagues who are helping move Madam Speaker, I rise today to speak urge my colleagues to vote against this rule. this bill along. Again, I would urge my against this rule, which frames the debate on Debate on this bill should be focused colleagues to vote for this rule and H.R. 833, the Bankruptcy Reform Act of 1999. squarely on the issues that hurt it the most, so later on for the bill as it moves for- In my estimation, the modified closed rule that that it can be improved to a level where we ward. has been recommended by the Committee can all vote for it. As reported by the Congres- Mr. FROST. Madam Speaker, I yield merely gives us another instance in which sional Research Service, this bill is opposed 2 minutes to the gentlewoman from House leadership has steam-rolled a bill, filled by Public Citizen, the Consumer’s Union, the Texas (Ms. JACKSON-LEE). with perks for corporate America, through the AFL–CIO, the Consumer Federation of Amer- Ms. JACKSON-LEE of Texas. Madam House in the name of ‘‘reform’’. I would like to ica, UAW, UNITE, the National Partnership, Speaker, this legislation and the un- tell you, this bill in no way reforms bankruptcy, the American Association of Retired Persons derlying rule, the rule that we are ad- rather, it merely changes the rules of the (AARP), and the National Women’s Law Cen- dressing right now, have the capacity game so that consumers will be even more ter. How can we move forward without ad- of being a bipartisan piece of legisla- helpless to defend themselves from multi-mil- dressing any of the issues that these groups tion. lion dollar creditors practicing unhealthy and are clamoring about? How can we ignore I remind my colleagues that when we reckless lending practices. amendments aimed squarely at improving the reformed the Bankruptcy Code in the As a Member of the Judiciary Committee, I way this bill handles domestic support, or so- 1970s we took 5 years, and I think we have been privileged enough to watch the de- cial security, or credit counseling? had a legislative initiative that lasted velopment of this bill from its inception. I have Thankfully, the rule does provide for a until this time, 1999. I am concerned seen the bill undergo no substantial changes Democratic Substitute to this bill being offered about this rule because I think we after a week and a half of markups. I have by Congressmen CONYERS, NADLER, and MEE- would have been better off if we had seen meaningful amendments promoted by HAN. This will give many of us the opportunity maintained or had an open rule to an- the Chairman of the Committee rebuffed by to vote for a bill that truly reforms bankruptcy swer some of the concerns that many the Members of his own party. I have seen the without destroying its very principles. That of us have expressed. good work of many of my Democratic col- substitute provides a realistic means test that I am delighted to see the Hyde-Con- leagues be summarily dismissed. takes into account the debtor’s actual income yers amendment that alters the very Having just come out of Committee just this and expenses; modifies the child support pro- mean-spirited means test, which the Tuesday, I remember the votes well. I remem- visions in this bill to take away the new special Bankruptcy Review Commission did ber the Republicans saying no to an amend- rights given to credit-card companies; requires not support itself, because the means ment I offered to protect the recipients of fed- credit card lenders to provide the necessary test provides a difficult hurdle for eral disaster assistance. A vote saying no to information to its customers that they need to debtors who are truly suffering from the recipients of Social Security. A vote saying make informed decisions about their finances; catastrophic illnesses and other unfor- no to children who receive child support. A and eliminates the new grounds for making tunate times that would result in them vote saying no to veterans. And all the while, credit card debts nondischargeable. We ought filing for bankruptcy. It is an enor- the Republicans were quick to cast their votes to pass this substitute if we are going to have mous hurdle for them to overcome. to protect tobacco companies that are poi- a real bankruptcy reform, and I ask each of In addition, the Committee on Rules soning our children. They voted to protect you to support it when it comes to a vote later did not allow an amendment that I pro- credit card companies from reasonable report- this afternoon. posed that would take out Social Secu- ing requirements that would have been re- rity income in the accounting for cur- quired under an amendment offered by Con- Even then, I hope that every Member will rent monthly income. So that means, gressman DELAHUNT. They moved the bill vote against this rule, and send it back to the for example, Madam Speaker, that in along despite an amendment I would have of- Rules Committee so that we can have a fact one would have the Social Secu- fered that would have held HMOs and other meaningful debate on the issues that will rity as a part of determining whether managed care entities responsible in cases make this a bill worthy of being signed into or not they would move from Chapter where they have committed fraud. law. 13 to Chapter 7. At the same time, they Even worse, this bill has been moved along Mr. SESSIONS. Madam Speaker, I did not protect those individuals who without its inspection by the Banking and Fi- yield 2 minutes to the gentleman from would sue HMOs for fraudulent activi- nancial Services Committee. This is true even Orlando, Florida (Mr. MCCOLLUM), the ties, to protect against the HMOs filing though this bill touches and concerns issues chairman of the Subcommittee on for bankruptcy. that directly relate to the practices employed Crime. The other portion, Madam Speaker, by lenders and creditors of all sorts. Mr. MCCOLLUM. Madam Speaker, I that I think is extremely important, I And now here we are today debating the thank the gentleman from Texas (Mr. am grateful for the amendment we had rule of debate for this bill. It is a bill that limits SESSIONS) for yielding me this time. in committee that dealt with the amendments, which is unacceptable for a bill Madam Speaker, I rise today to sup- homestead issue in the State of Texas, this far-reaching. Furthermore, it is a rule that port the rule and the underlying bill. I

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00012 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8505 think what is important for us to un- Mr. FROST. Madam Speaker, I yield not apply to such irresponsible cor- derstand as we consider this bank- 21⁄2 minutes to the gentleman from porate citizens. I would urge a vote ruptcy bill today is that the heart of Texas (Mr. DOGGETT). against the rule. this bill is needs-based reform. It needs Mr. DOGGETT. Madam Speaker, I Mr. FROST. Madam Speaker, I yield to be kept as strong as possible. have supported this bankruptcy legis- myself such time as I may consume. What is needs-based reform? It is lation in the past. I believe that it is Madam Speaker, I urge Members to simple. If someone can reasonably important to exercise personal respon- vote no on the previous question. If the repay some of their debts, they should. sibility. There have been some abuses previous question is defeated, I will Does this mean the debtor cannot de- of the system. While the bill was not offer an amendment to the rule that clare bankruptcy? Not at all. It only perfect and needed further perfection, I will make in order two amendments. means that the debtor has to use Chap- thought it was generally in the right The first amendment would be the ter 13 to repay some debt if he can af- direction. Nadler/Jackson-Lee amendment, that ford to do it, rather than Chapter 7. I am troubled about the bill, how- addresses treatment of child support Let me make it clear. If someone is payments in bankruptcy. ever, in its form today, because while The second amendment would be in Chapter 13, they are in bankruptcy. most of the focus has been on individ- the Delahunt/LaFalce/Watt/Roybal- The needs-based test does not affect uals who did not engage in personal re- Allard amendment, which would dis- their ability to declare bankruptcy. sponsibility, there have also been in- allow bankruptcy claims for consumer The needs-based test asks can a person stances in this country of corporate credit card debt if, at the time of solic- reasonably repay some of their debts citizens who did not demonstrate any itation to open an account, the debtor while they are in bankruptcy. sense of responsibility. Indeed, since was not informed in writing of certain How does the test determine what is the consideration of this bill in the last disclosure factors. reasonable? We do the obvious and session, I was particularly troubled by These amendments were offered in compare the debtor’s income with the problem of Dorothy Doyle. the Committee on Rules last night and, other debts and living expenses, and if I do not know Dorothy but I have unfortunately, were defeated on a the debtor has a little income and a lot read some of her plight. I know that party-line vote. Madam Speaker, these of debt the needs-based test will not af- she is not the only one who suffered are important amendments and deserve fect them. from this situation. Dorothy is an 87- to be considered by the entire House. For those who suffer catastrophic ill- year-old widow, a retired Pentagon sec- Madam Speaker, this vote, the vote on ness or lose their jobs or experience retary, who required about $240 a day whether to order the previous question on a other catastrophic events, this reform in nursing care because of her physical special rule, is not merely a procedural vote. will not affect them, but those who can condition. Fortunately for her, her A vote against ordering the previous question afford to pay back their debt, it will af- younger sister decided that there was a is a vote against the Republican majority fect them. solution to her problems and that to- agenda and a vote to allow the opposition, at Many, unfortunately, are using the gether they would purchase a con- least for the moment, to offer an alternative Bankruptcy Code for financial planning tinuing care living arrangement, and plan. It is a vote about what the House should or mere convenience. It will affect they did that. be debating. upper-income individuals who declare They moved into the Park Regency Mr. Clarence Cannon’s Precedents of the bankruptcy not because they have to Retirement Center out in Scottsdale, House of Representatives, (VI, 308–311) de- but because they want to. Even for Arizona, and they invested a substan- scribes the vote on the previous question on these folks, they will still be able to tial amount of their life savings and re- the rule as ‘‘a motion to direct or control the declare bankruptcy but they will have ceived, in turn, a lifetime guarantee. consideration of the subject before the House to repay some of their debt, what they Within 9 months of paying their en- being made by the Member in charge.’’ To de- can. trance fees, they were faced with a feat the previous question is to give the oppo- This is such common sense that meeting in the dining room at the Park sition a chance to decide the subject before many Americans think this is already Regency where the owner declared that the House. Cannon cites the Speaker’s ruling the way the bankruptcy system works, he had lost a lot of money in his off- of January 13, 1920, to the effect that ‘‘the re- but it does not work that way and that shore investments and that he was fil- fusal of the House to sustain the demand for is why we are here today, to restore in- ing for bankruptcy. the previous question passes the control of the resolution to the opposition’’ in order to tegrity and responsibility and common Well, Dorothy and her sister Creta, offer an amendment. On March 15, 1909, a sense to the system. like a number of other seniors who member of the majority party offered a rule Why should Americans care? Because have invested their lifetime savings in resolution. The House defeated the previous bankruptcy will cost our Nation more these facilities, of which there are question and a member of the opposition rose than $50 billion in 1998 alone. That some 2,700 across the country, found translates into over $550 for every to a parliamentary inquiry, asking who was en- themselves in a situation where they titled to recognition. Speaker Joseph G. Can- household in higher costs for goods and had no good remedy. services and credit. It hurts responsible non (R-Illinois) said: ‘‘The previous question consumers who pay the price in the b 1200 having been refused, the gentleman from New form of higher costs for goods, services They had advanced this money as an York, Mr. Fitzgerald, who had asked the gen- tleman to yield to him for an amendment, is and credit. interest-free loan to get into the facil- entitled to the first recognition.’’ Bankruptcies have increased about ity, their life’s savings, and they were Because the vote today may look bad for unsecured creditors. 400 percent since 1980. Last year there the Republican majority they will say ‘‘the vote So to address the plight of Dorothy were more than 1.4 million filings. on the previous question is simply a vote on That is more than one bankruptcy in and Creta and other seniors across the whether to proceed to an immediate vote on every 100 American households. This country, I advanced an amendment adopting the resolution . . . [and] has no sub- rate of increase is occurring not in the that simply says, let us treat them as stantive legislative or policy implications what- midst of a recession but during what priority creditors. Let us recognize soever.’’ But that is not what they have always are by all accounts great economic that if someone has invested their life’s said. Listen to the Republican Leadership times. From 1986 to the present time, savings in an effort to try to get the Manual on the Legislative Process in the real per capita annual disposable in- health care and the nursing care that United States House of Representatives, (6th come grew by over 13 percent but per- they need in our society, that they de- edition, page 135). Here’s how the Repub- sonal bankruptcies more than doubled. serve some protection also. licans describe the previous question vote in We need to have this bankruptcy re- Unfortunately, the Committee on their own manual: form. We need the needs-based reform. Rules decided to not make that amend- Although it is generally not possible to We need to adopt this rule and get on ment in order. Apparently responsi- amend the rule because the majority Mem- with the bill today. bility does not apply to everyone, does ber controlling the time will not yield for

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00013 Fmt 0688 Sfmt 9920 E:\BR99\H05MY9.000 H05MY9 8506 CONGRESSIONAL RECORD—HOUSE May 5, 1999 the purpose of offering an amendment, the (1) by striking paragraph (12A); and (1) amending paragraph (2) to read as fol- same result may be achieved by voting down (2) by inserting after paragraph (14) the fol- lows: the previous question on the rule . . . When lowing: ‘‘(2) under subsection (a)— the motion for the previous question is de- (14A) ‘domestic support obligation’ means a ‘‘(A) of the commencement or continuation feated, control of the time passes to the debt that accrues before or after the entry of of an action or proceeding for— Member who led the opposition to ordering an order for relief under this title that is— ‘‘(i) the establishment of paternity as a the previous question. That Member, because ‘‘(A) owed to or recoverable by— part of an effort to collect domestic support he then controls the time, may offer an ‘‘(i) a spouse, former spouse, or child of the obligations; or amendment to the rule, or yield for the pur- debtor or that child’s legal guardian; or ‘‘(ii) the establishment or modification of pose of amendment.’’ ‘‘(ii) a governmental unit; an order for domestic support obligations; or Deschler’s Procedure in the U.S. House of ‘‘(B) in the nature of alimony, mainte- ‘‘(B) the collection of a domestic support Representatives, the subchapter titled nance, or support (including assistance pro- obligation from property that is not prop- vided by a governmental unit) of such erty of the estate; or ‘‘Amending Special Rules’’ states: ‘‘a refusal to ‘‘(C) under subsection (a) of— order the previous question on such a rule [a spouse, former spouse, or child, without re- gard to whether such debt is expressly so ‘‘(i) the withholding of income for payment special rule reported from the Committee on designated; of a domestic support obligation pursuant to Rules] opens the resolution to amendment ‘‘(C) established or subject to establish- a judicial or administrative order or statute and further debate.’’ (Chapter 21, section ment before or after entry of an order for re- for such obligation that first becomes pay- 21.2) Section 21.3 continues: lief under this title, by reason of applicable able after the date on which the petition is Upon rejection of the motion for the pre- provisions of— filed; or vious question on a resolution reported from ‘‘(i) a separation agreement, divorce de- ‘‘(ii) the withholding of income for pay- the Committee on Rules, control shifts to cree, or property settlement agreement; ment of a domestic support obligation owed the Member leading the opposition to the ‘‘(ii) an order of a court of record; or directly to the spouse, former spouse or child previous question, who may offer a proper ‘‘(iii) a determination made in accordance of the debtor or the parent of such child, pur- amendment or motion and who controls the with applicable nonbankruptcy law by a gov- suant to a judicial or administrative order or time for debate thereon.’’ ernmental unit; and statute for such obligation that becomes ‘‘(D) not assigned to a nongovernmental payable before the date on which the peti- The vote on the previous question on a rule tion is filed unless the court finds, after no- does have substantive policy implications. It is entity, unless that obligation is assigned vol- untarily by the spouse, former spouse, child, tice and hearing, that such withholding one of the only available tools for those who or parent solely for the purpose of collecting would render the plan infeasible;’’; oppose the Republican majority’s agenda to the debt.’’. (2) in paragraph (19), by striking ‘‘or’’ at offer an alternative plan. SEC. 141. REQUIREMENTS TO OBTAIN CONFIRMA- the end; Madam Speaker, I include for the TION AND DISCHARGE IN CASES IN- (3) in paragraph (20), by striking the period RECORD the text of the amendment and VOLVING DOMESTIC SUPPORT OBLI- at the end and inserting a semicolon; and extraneous materials. GATIONS. (4) by inserting after paragraph (20) the fol- The material referred to is as follows: Title 11, United States Code, is amended— lowing: (1) in section 1129(a), by adding at the end ‘‘(21) under subsection (a) with respect to— PREVIOUS QUESTION ON H. RES. 158—H.R. the following: ‘‘(A) the withholding, suspension, or re- 833—BANKRUPTCY REFORM ACT ‘‘(14) If the debtor is required by a judicial striction of drivers’ licenses, professional At the end of the resolution add the fol- or administrative order or statute to pay a and occupational licenses, and recreational lowing new sections: domestic support obligation, the debtor has licenses pursuant to State law, as specified ‘‘Sec. 2. Notwithstanding any other provi- paid all amounts payable under such order or in section 466(a)(16) of the Social Security sion of this resolution, it shall be in order to statute for such obligation that first become Act (42 U.S.C. 666(a)(16)) or with respect to consider the amendments specified in section payable after the date on which the petition the reporting of overdue support owed by an 3 of this resolution as though they were after is filed.’’; absent parent to any consumer reporting the amendment numbered 11 in House Report (2) in section 1325(a)— agency as specified in section 466(a)(7) of the 106–126. The amendment numbered 12 may be (A) in paragraph (5), by striking ‘‘and’’ at Social Security Act (42 U.S.C. 666(a)(7)) if offered only by Representative Nadler or the end; such debt is payable solely to a spouse, Representative Jackson-Lee or a designee (B) in paragraph (6), by striking the period former spouse or child of the debtor or the and shall be debatable for 30 minutes. The at the end and inserting ‘‘; and’’; and parent of such child pursuant to a judicial or amendment numbered 13 may be offered only (C) by adding at the end the following: administrative order or statute, unless the be Representative Delahunt or Representa- ‘‘(7) if the debtor is required by a judicial holder of such claim agrees to waive such tive LaFalce or Representative Watt or Rep- or administrative order or statute to pay a withholding, suspension or restriction; resentative Roybal-Allard or a designee and domestic support obligation, the debtor has ‘‘(B) the interception of tax refunds, as shall be debatable for 40 minutes. paid all amounts payable under such order specified in sections 464 and 466(a)(3) of the ‘‘Sec. 3. The amendments described in sec- for such obligation that become payable Social Security Act (42 U.S.C. 664 and tion 2 are as follows: after the date on which the petition is 666(a)(3)) if such tax refund is payable solely AMENDMENT TO H.R. 833, AS REPORTED; filed.’’; and to a spouse, former spouse or child of the OFFERED BY MR. NADLER OF NEW YORK (3) in section 1328(a) in the matter pre- debtor or the parent of such child pursuant Page 15, strike lines 18 and 19, and insert ceding paragraph (1), by inserting ‘‘, after a to a judicial or administrative order or stat- the following (and make such technical and debtor who is required by a judicial or ad- ute; or conforming changes as may be appropriate): ministrative order to pay a domestic support ‘‘(C) the enforcement of medical obliga- not otherwise a dependent, but excludes— obligation certifies that all amounts payable tions as specified under title IV of the Social ‘‘(A) payments to victims of war crimes or under such order that are due on or after the Security Act (42 U.S.C. 601 et seq.).’’. crimes against humanity; and date the petition was filed have been paid, SEC. 143. EXEMPTION FOR RIGHT TO RECEIVE ‘‘(B) payments received in satisfaction of a and after a debtor who is required by a judi- CERTAIN ALIMONY, MAINTENANCE, domestic support obligation;’’; cial or administrative order to pay a domes- OR SUPPORT. Beginning on page 81, strike line 15 and all tic support obligation, certifies that all Section 522(b)(3) of title 11, United States that follows through line 10 on page 82 (and amounts payable under such order that are Code, as so redesignated and amended by sec- make such technical and conforming due before the date on which the petition tions 115 and 203, is amended— changes as may be appropriate). was filed if such amounts are due solely to a (1) in subparagraph (C) by striking ‘‘and’’ Beginning on page 83, strike line 1 and all spouse, former spouse or child of the debtor at the end, that follows through line 7 on page 84 (and or the parent of such child pursuant to a ju- (2) in subparagraph (D) by striking the pe- make such technical and conforming dicial or administrative order, unless the riod at the end and inserting ‘‘; and’’, and changes as may be appropriate). holder of such claim agrees to a different (3) by inserting after subparagraph (D) the Beginning on page 86, strike line 1 and all treatment of such claim’’ after ‘‘completion following: that follows through line 7 on page 90, and by the debtor of all payments under the ‘‘(E) the right to receive— insert the following (and make such tech- plan’’. ‘‘(i) alimony, maintenance , support, or nical and conforming changes as may be ap- SEC. 142. EXCEPTIONS TO AUTOMATIC STAY IN property traceable to alimony, maintenance propriate): DOMESTIC SUPPORT OBLIGATION , support; or SEC. 140. DEFINITION OF DOMESTIC SUPPORT PROCEEDINGS. ‘‘(ii) amounts payable as a result of a prop- OBLIGATION. Section 362(b) of title 11, United States erty settlement agreement with the debtor’s Section 101 of title 11, United States Code, Code, as amended by sections 104 and 606, is spouse or former spouse; or of an interlocu- is amended— amended— tory or final divorce decree;

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00014 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8507 to the extent reasonably necessary for the ‘‘(B) of repayment information that would ‘‘(i) the signature of the parent or guardian support of the debtor or a dependent of the apply to the outstanding balance of the con- of such individual indicating joint liability debtor.’’. sumer under the credit plan, including— for debts incurred by such individual in con- SEC. 144. AUTOMATIC STAY INAPPLICABLE TO ‘‘(i) the required minimum monthly pay- nection with the account before such indi- CERTAIN PROCEEDINGS AGAINST ment on that balance, represented as both a vidual reaches the age of 21; or THE DEBTOR. dollar figure and a percentage of that bal- ‘‘(ii) a submission by such individual of fi- Section 362(b)(2) of title 11, United States ance; nancial information indicating an inde- Code, as amended by section 144, is amend- ‘‘(ii) the number of months (rounded to the pendent means of repaying any obligation ed— nearest month) that it would take to pay the arising from the proposed extension of credit (1) in subparagraph (A) by striking ‘‘or’’ at entire amount of that current balance if the in connection with the account; the end; consumer pays only the required minimum ‘‘(H) that no creditor may cancel an ac- (2) by inserting after subparagraph (B) the monthly payments and if no further ad- count, impose a minimum finance charge for following: vances are made; any period (including any annual period), ‘‘(C) the commencement or continuation of ‘‘(iii) the total cost to the consumer, in- impose any fee in lieu of a minimum finance a proceeding concerning a child custody or cluding interest and principal payments, of charge, or impose any other charge or pen- visitation; paying that balance in full if the consumer alty with regard to such account or credit ‘‘(D) the commencement or continuation of pays only the required minimum monthly extended under such account solely on the a proceeding alleging domestic violence; or payments and if no further advances are basis that any credit extended has been re- ‘‘(E) the commencement or continuation of made; and paid in full before the end of any grace pe- a proceeding seeking a dissolution of mar- (iv) the following statement: ‘If your cur- riod applicable with respect to the extension riage, except to the extent the proceeding rent rate is a temporary introductory rate, of credit, but may impose a flat annual fee concerns property of the estate;’’. your total costs may be higher.’ ; which may be imposed on the consumer in SEC. 145. CERTAIN POSTDISCHARGE PAYMENTS ‘‘(C) of the method for determining the re- advance of any annual period to cover the HELD IN TRUST. quired minimum payment amount to be paid cost of maintaining a credit card account Section 523 of title 11, United States Code, for each billing cycle, and the charge or pen- during such annual period without regard to is amended by adding at the end the fol- alty, if any, to be imposed for any failure by whether any credit is actually extended lowing: the obligor to pay the required minimum under such account during such period, or ‘‘(f) A creditor that receives a payment, or payment amount; the actual finance charge applicable with re- collects money or property, in satisfaction of ‘‘(D) of any charge that may be imposed spect to any credit extended under such ac- all or part of any debt excepted from dis- due to the failure of the obligor to make pay- count during such annual period at the an- charge under paragraphs (2) and (14A) of sec- tion 523(a) of this title shall hold such pay- ment on or before a required payment due nual percentage rate disclosed to the con- ment, such money, or such property in trust date, the date that payment is due or, if dif- sumer in accordance with this title for the and, not later than 20 days after receiving ferent, the date on which a late payment fee period of time any such credit is out- such payment or collecting such money or will be charged, and that the terms and con- standing; property, shall distribute such payment, ditions of such charge will be stated promi- ‘‘(I) that no increase in any annual per- such money, or such property ratably to in- nently in a conspicuous location on each centage rate of interest (other than an in- dividuals who then hold debts in the nature billing statement, together with the amount crease due to the expiration of any introduc- of a domestic support obligation. Not later of the charge to be imposed if payment is tory percentage rate of interest or due solely than 5 years after receiving such payment or made after such date; to a change in another rate of interest to collecting such money or property, such ‘‘(E) in any application or solicitation for a which such rate is indexed) applicable to any creditor shall make the distribution required credit card issued under such plan that of- outstanding balance of credit under such by this section to all individuals whose iden- fers, during an introductory period of less plan may take effect before the beginning of tity is known to such creditor, or is reason- than 1 year, an annual percentage rate of in- the billing cycle which begins not less than ably ascertainable by such creditor, at the terest that— 15 days after the obligor receives notice of time of distribution.’’. ‘‘(i) is less than the annual percentage rate such increase; of interest which will apply after the end of ‘‘(J) that if an obligor referred to in sub- AMENDMENT TO H.R. 833, AS REPORTED; OF- such introductory period, of such rate in a paragraph (I) cancels the credit card account FERED BY MR. DELAHUNT OF MASSACHU- statement that includes the following: ‘The before the beginning of the billing cycle re- SETTS, MR. LAFALCE OF NEW YORK, MR. annual percentage rate of interest applicable ferred to in such paragraph— WATT OF NORTH CAROLINA, AND MS. ROY- during the introductory period is not the an- ‘‘(i) an annual percentage rate of interest BAL-ALLARD OF CALIFORNIA nual percentage rate which will apply after applicable after the cancellation with re- Page 101, after line 9, insert the following the end of the introductory period. The per- spect to such outstanding balance on such (and make such technical and conforming manent annual percentage rate will apply account as of the date of cancellation may changes as may be appropriate): after [insert applicable date] and will be [in- not exceed any annual percentage rate of in- SEC. 154. DISCOURAGING RECKLESS LENDING sert applicable percentage rate].’ ; or terest applicable with respect to such bal- PRACTICES. ‘‘(ii) varies in accordance with an index, ance under the terms and conditions in effect (a) LIMITING CLAIMS ARISING FROM IRRE- which is less than the current annual per- before the increase referred to in subpara- SPONSIBLE LENDING PRACTICES.—Section centage rate under the index which will graph (I); and 502(b) of title 11, United States Code, is apply after the end of such period, of such ‘‘(ii) the repayment of such outstanding amended— rate in a statement that includes the fol- balance after the cancellation shall be sub- (1) in paragraph (8) by striking ‘‘or’’ at the lowing: ‘The annual percentage rate of inter- ject to all other terms and conditions appli- end, est applicable during the introductory period cable with respect to such account before the (2) in paragraph (9) by striking the period is not the annual percentage rate which will increase referred to in such paragraph; at the end and inserting ‘‘; or’’; and apply after the end of the introductory pe- ‘‘(K) that obligor has the right— (3) by adding at the end the following: riod. The permanent annual percentage rate ‘‘(i) to cancel the account before the effec- ‘‘(10) the claim is for a consumer debt will be determined by an index and will tive date of the increase; and under an open end credit plan (as defined in apply after [insert date]. If the index which ‘‘(ii) after such cancellation, to pay any section 103 of the Truth in Lending Act) and will apply after such date were applied to balance outstanding on such account at the before incurring such debt under such plan your account today, the annual percentage time of cancellation in accordance with the the debtor was not informed in writing in a rate would be [insert applicable percentage terms and conditions in effect before the clear and conspicuous manner (or in the case rate].’ ; cancellation; of a worldwide web-based solicitation to ‘‘(F) in the case of any credit card account ‘‘(L) that a creditor may not provide the open a credit card account under such plan, issued under such plan, that a creditor may obligor with any negotiable or transferable at the time of solicitation by the person not impose a fee based on inactivity for the instrument for use in making an extension of making the solicitation to open such ac- account during any period in which no ad- credit to the obligor for the purpose of mak- count)— vances are made if the obligor maintains any ing a transfer to a third party, unless the ‘‘(A) of the method of determining the re- outstanding balance and is charged a finance creditor has with respect to such instrument quired minimum payment amount, if a min- charge applicable to such balance; provided to an obligor, at the same time any imum payment is required that is different ‘‘(G) that a credit card may not be issued such instrument is provided, a notice which from the amount of any finance charge, and to or on behalf of, any individual who has prominently and specifically describes— the charges or penalties, if any, which may not attained 21 years of age except in re- ‘‘(i) the amount of any transaction fee be imposed for failure by the obligor to pay sponse to a written request or application to which may be imposed for making an exten- the required finance charge or minimum the card issuer to open a credit card account sion of credit through the use of such instru- payment amount; containing— ment, including the exact percentage rate to

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00015 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8508 CONGRESSIONAL RECORD—HOUSE May 5, 1999 be used in determining such amount if the tion to reorganize so that their credi- Kelly Ose Shays amount of the transaction fee is expressed as tors are protected. King (NY) Oxley Sherwood a percentage of the amount of the credit ex- Kingston Packard Shimkus Enactment of the bill will greatly re- Kleczka Paul tended; and Shuster Knollenberg Pease Skeen ‘‘(ii) any annual percentage rate of interest duce abuses of the bankruptcy system. By providing predictable standards to Kolbe Peterson (PA) Smith (MI) applicable in determining the finance charge Kuykendall Petri Smith (NJ) for any such extension of credit, if different be used in bankruptcy proceedings, it LaHood Pickering Smith (TX) from the finance charge applicable to other will be reducing frivolous litigation in Largent Pitts Souder extensions of credit under such account; and which debtors gamble on the uncer- Latham Pombo Spence ‘‘(M) that a creditor may not impose any LaTourette Porter Stearns tainty in the current system. This will Lazio Portman fees on the obligor for any extension of cred- Stump dramatically reduce the cost of credit Leach Pryce (OH) Sununu it in excess of the amount of credit author- for all Americans. Lewis (CA) Quinn ized to be extended with respect to such ac- Sweeney Lewis (KY) Radanovich Talent It is a very good rule, fair to every- Linder Ramstad count if the extension of credit is made in Tancredo one concerned, and I believe the meas- LoBiondo Regula connection with a credit transaction which Tauzin Lucas (OK) Reynolds the creditor approves in advance or at the ure itself is worthy of a very strong bi- Taylor (NC) Manzullo Riley time of the transaction.’’. partisan vote of support. I look forward Terry McCollum Rogan (b) DEFINITION.—Section 101 of title 11, Thomas to consideration of that. McCrery Rogers United States Code, is amended by inserting Mr. SESSIONS. Madam Speaker, I McHugh Rohrabacher Thornberry Thune after paragraph (9) the following: move the previous question on the res- McInnis Ros-Lehtinen ‘‘(9A) ‘credit card’ includes any dual pur- McIntosh Rothman Toomey pose or multifunction card, including a olution. McKeon Roukema Traficant stored-value card, debit card, check card, The SPEAKER pro tempore (Mrs. Metcalf Royce Upton Vela´ zquez EMERSON). The question is on ordering Mica Ryan (WI) check guarantee card, or purchase-price dis- Walden count card, that is connected with an open Miller (FL) Ryun (KS) the previous question. Miller, Gary Salmon Walsh end credit plan (as defined in section 103 of The question was taken; and the Moran (KS) Sanford Wamp the Truth in Lending Act) and can be used, Speaker pro tempore announced that Moran (VA) Saxton Weldon (FL) either on issuance or upon later activation, the noes appeared to have it. Morella Scarborough Weldon (PA) to obtain credit directly or indirectly;’’. Myrick Schaffer Weller Mr. SESSIONS. Madam Speaker, I Nethercutt Schakowsky Whitfield Madam Speaker, I urge Members to object to the vote on the ground that a Ney Sensenbrenner Wicker vote no on the previous question so we quorum is not present and make the Northup Sessions Wilson may add these amendments, and I yield Norwood Shadegg Wolf point of order that a quorum is not Nussle Shaw Young (AK) back the balance of my time. present. Mr. SESSIONS. Madam Speaker, I The SPEAKER pro tempore. Evi- NAYS—190 yield the balance of my time to the dently a quorum is not present. Abercrombie Frost McGovern gentleman from California (Mr. Ackerman Gejdenson McIntyre The Sergeant at Arms will notify ab- DREIER), the chairman of the Com- Allen Gephardt McKinney sent Members. Andrews Gonzalez McNulty mittee on Rules, to close debate. The SPEAKER pro tempore. Pursu- Baird Gordon Meehan The SPEAKER pro tempore (Mrs. Baldacci Green (TX) Meek (FL) ant to clause 9 of rule XX, the Chair EMERSON). The gentleman from Cali- Baldwin Gutierrez Meeks (NY) will reduce to five minutes the time for Barrett (WI) Hall (OH) Menendez fornia (Mr. DREIER) is recognized for electronic voting, if ordered, on the Bentsen Hall (TX) Millender- 11⁄2 minutes. question of agreeing to the resolution. Berkley Hastings (FL) McDonald Mr. DREIER. Madam Speaker, I Berry Hill (IN) Miller, George thank my friend, the gentleman from The vote was taken by electronic de- Bishop Hilliard Minge Texas, for yielding time to me. I want vice, and there were—yeas 227, nays Blagojevich Hinchey Mink 190, not voting 16, as follows: Blumenauer Hinojosa Moakley to congratulate him on the fine job Bonior Hoeffel Moore that he has done in working out this [Roll No. 109] Borski Holden Murtha rule, which, as he said and as others YEAS—227 Boswell Holt Nadler Brady (PA) Hooley Napolitano have said, is a very fair and balanced Aderholt Chenoweth Gekas Brown (FL) Hoyer Neal rule dealing with the minority’s con- Archer Coble Gibbons Brown (OH) Inslee Oberstar cerns. Armey Coburn Gilchrest Capps Jackson (IL) Obey I look at my friend, the gentleman Bachus Collins Gillmor Capuano Jackson-Lee Olver Baker Combest Gilman Cardin (TX) Ortiz from Michigan (Mr. CONYERS) here, and Ballenger Cook Goode Clay Jefferson Owens I was pleased we were able to make one Barcia Cooksey Goodlatte Clayton Johnson, E. B. Pallone of his amendments in order. It is Barr Cox Goodling Clement Jones (OH) Pascrell Barrett (NE) Cramer Goss Clyburn Kanjorski Pastor among the seven Democratic amend- Bartlett Crane Graham Condit Kaptur Payne ments, including an amendment in the Barton Cubin Granger Conyers Kennedy Pelosi nature of a substitute to be offered by Bass Cunningham Green (WI) Costello Kildee Peterson (MN) the gentleman from New York (Mr. Bateman Davis (VA) Greenwood Coyne Kilpatrick Phelps Bereuter Deal Gutknecht Crowley Kind (WI) Pickett NADLER), and it is basically a 7-to-3 Biggert DeLay Hansen Cummings Klink Pomeroy ratio. Bilbray DeMint Hastings (WA) Danner Kucinich Price (NC) And then there is a bipartisan Bilirakis Diaz-Balart Hayes Davis (IL) LaFalce Rahall Blunt Dickey Hayworth DeFazio Lampson Rangel amendment that will be offered by the Boehlert Doolittle Hefley DeGette Lantos Reyes chairman and ranking minority mem- Boehner Dreier Herger Delahunt Larson Rivers ber of the Committee on the Judiciary, Bonilla Duncan Hill (MT) DeLauro Lee Rodriguez and two additional Democratic amend- Bono Dunn Hilleary Deutsch Levin Roemer Boucher Ehlers Hobson Dicks Lewis (GA) Roybal-Allard ments submitted were accommodated Boyd Ehrlich Hoekstra Dingell Lipinski Rush in the manager’s amendment. So that Brady (TX) Emerson Horn Dixon Lofgren Sabo stresses the fairness of it. Bryant English Hostettler Doggett Lowey Sanchez Burr Eshoo Houghton Dooley Lucas (KY) Sanders What we tried to do, and I believe Burton Everett Hulshof Doyle Luther Sandlin have done successfully in crafting this Buyer Ewing Hunter Edwards Maloney (CT) Sawyer rule, is we have not made in order Callahan Fletcher Hutchinson Engel Maloney (NY) Scott amendments that are singling out one Calvert Foley Hyde Etheridge Markey Serrano Camp Forbes Isakson Evans Martinez Sherman or two industries or interest groups Campbell Fossella Jenkins Farr Mascara Shows simply to score political points. Basi- Canady Fowler John Fattah Matsui Sisisky cally, the bill provides comprehensive Cannon Franks (NJ) Johnson (CT) Filner McCarthy (MO) Skelton Castle Frelinghuysen Johnson, Sam Ford McCarthy (NY) Smith (WA) bankruptcy reform, and allows individ- Chabot Gallegly Jones (NC) Frank (MA) McDermott Snyder uals and businesses very broad protec- Chambliss Ganske Kasich

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00016 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8509 Spratt Thompson (CA) Visclosky Ms. KAPTUR. Madam Speaker, I debt that there is no other way except Stabenow Thompson (MS) Waters ECORD Stark Thurman Watt (NC) wish to state for the R my sin- for the Government to discharge their Stenholm Tierney Weiner cere appreciation to the gentleman obligations and to allow them to start Strickland Towns Wexler from Pennsylvania (Mr. BORSKI) for the all over again. We guarantee that in Stupak Turner Weygand enormous assistance he provided our this bill. Tanner Udall (CO) Wise Tauscher Udall (NM) Woolsey community during the consideration of But to balance that situation, we Taylor (MS) Vento Wu the water resources bill last week. also provide in this bill a mechanism When we were on the floor, I did not NOT VOTING—16 whereby if those individuals who file have an opportunity to place it for- Becerra Istook Watts (OK) for bankruptcy can, after a careful mally in the RECORD, but I would say Berman Mollohan Waxman screening, be placed in a situation that without his help, Northwestern Bliley Simpson Wynn where they could repay some of the Brown (CA) Slaughter Ohio would not have received the con- Young (FL) debt over a period of years, then this Carson Tiahrt sideration that was placed in that bill, Davis (FL) Watkins bill accommodates that and allows peo- and I wish to acknowledge and deeply ple to be moved from Chapter 7, where b 1222 thank him for the help that he gave us. they would have gotten that fresh start Messrs. HALL of Ohio, HOLDEN and Without his assistance, our watersheds automatically, to Chapter 13, where BALDACCI changed their vote from would have been given no attention, they must work through a plan for re- ‘‘yea’’ to ‘‘nay.’’ and I thank him very much. Mr. ROTHMAN changed his vote payment of some of the debt over a pe- f from ‘‘nay’’ to ‘‘yea.’’ riod of time. So the previous question was ordered. b 1230 Now, here is the thing that we must The result of the vote was announced BANKRUPTCY REFORM ACT OF 1999 make clear to the opponents of bank- as above recorded. The SPEAKER pro tempore (Mrs. The SPEAKER pro tempore (Mrs. ruptcy reform and to the people of our EMERSON). The question is on the reso- EMERSON). Pursuant to House Resolu- country. We are talking about a divid- lution. tion 158 and rule XVIII, the Chair de- ing line caused by the median income. The resolution was agreed to. clares the House in the Committee of We provide that the median income A motion to reconsider was laid on the Whole House on the State of the shall be the dividing line. the table. Union for the consideration of the bill, In other words, people under the me- f H.R. 833. dian income in our country who apply PERMISSION FOR COMMITTEE ON b 1230 for bankruptcy almost certainly will be THE JUDICIARY TO HAVE UNTIL accorded almost automatically the MIDNIGHT FRIDAY, MAY 7, 1999, IN THE COMMITTEE OF THE WHOLE fresh start which their financial cir- TO FILE REPORT ON H.R. 775, Accordingly, the House resolved cumstances dictate. But we also said YEAR 2000 READINESS AND RE- itself into the Committee of the Whole that if the income is over the median SPONSIBILITY ACT House on the State of the Union for the income, then that set of financial cir- consideration of the bill (H.R. 833) to Mr. GEKAS. Madam Speaker, I ask cumstances should be more closely amend title 11 of the United States unanimous consent that the Com- scrutinized to determine if any money mittee on the Judiciary have until Code, and for further purposes, with can be repaid to this debt that has been midnight Friday, May 7, 1999, to file Mr. NETHERCUTT in the chair. accumulated. That is a very balanced The Clerk read the title of the bill. the report on the bill, H.R. 775, to es- and a fair way to approach the eco- The CHAIRMAN. Pursuant to the nomic system of our Nation. tablish certain procedures for civil ac- rule, the bill is considered as having tions brought for damages relating to been read the first time. And what is that median income? We the failure of any device or system to Under the rule, the gentleman from are talking about a median income of process or otherwise deal with the Pennsylvania (Mr. GEKAS) and the gen- $51,000 for a family of four is the start- transition from the year 1999 to the tleman from Michigan (Mr. CONYERS) ing point. So if an individual with four year 2000, and for other purposes. each will control 30 minutes. people in the family is earning $30,000 The minority has agreed. or $40,000 or $50,000, that fresh start is The SPEAKER pro tempore. Is there The Chair recognizes the gentleman guaranteed. But if they are earning objection to the request of the gen- from Pennsylvania (Mr. GEKAS). $55,000, $60,000, $80,000, $100,000 or be- tleman from Pennsylvania? Mr. GEKAS. Mr. Chairman, I yield There was no objection. myself such time as I may consume. yond, then that set of finances has to f Mr. Chairman, the Constitution of be looked at more closely under the the United States guarantees that provisions of our bill to see if anything GENERAL LEAVE bankruptcy shall be available to the should be used for repayment of some Mr. GEKAS. Madam Speaker, I ask citizens of our Nation. Accordingly, of the debt. That is fair. That is proper. unanimous consent that all Members Congresses, ever since the first mo- The more we do that, the less burden may have 5 legislative days within ment of our new land, have incor- the rest of the taxpayers have to bear. which to revise and extend their re- porated into their work special provi- Because the taxpayers have to pick up marks, and that I may be permitted to sions to accommodate those individ- the slack. Consumers at the retail out- include extraneous material on the uals who find themselves totally en- lets, at the supermarkets, have to pay bill, H.R. 833. gulfed by debt rather than to submit The SPEAKER pro tempore. Is there more. Interest rates go up, etc. The them to the prison dungeons that were more we are able to recoup some of the objection to the request of the gen- the plight of people previously prior to tleman from Pennsylvania? debt from the high-income people, the There was no objection. the United States. less the burden will be on the rest of We, our enlightened forefathers, saw the public. f fit to allow the Congress to evolve in a NORTHWEST OHIO WATERSHEDS situation in which a fresh start would That is what the clear message is of GIVEN HELP THROUGH ASSIST- be accorded to an ordinary citizen who the bankruptcy reform legislation ANCE OF CONGRESSMAN ROBERT cannot meet his obligations; and that which we have before the House today. BORSKI is where we are here today. I ask for an overwhelming vote in sup- (Ms. KAPTUR asked and was given We, in a long line of congressional ac- port of the underlying bill. permission to address the House for 1 tion, re-guarantee the fresh start to in- Mr. Chairman, I include for the minute.) dividuals who become so engulfed in RECORD the following letters:

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HOUSE OF REPRESENTATIVES, in moving the bill to the House floor expedi- H.R. 833 contains an intergovernmental COMMITTEE ON COMMERCE, tiously. I agree that your decision to forgo mandate as defined in the Unfunded Man- Washington, DC, May 3, 1999. further action on the bill will not prejudice dates Reform Act (UMRA), but its costs Hon. HENRY HYDE, the Commerce Committee with respect to its would be insignificant and would not exceed Chairman, Committee on the Judiciary, Ray- jurisdictional prerogatives on this or similar the threshold established in that act ($50 burn House Office Building, Washington, provisions, and will support your request for million in 1996, adjusted annually for infla- DC. conferees on those provisions within the tion). Overall, CBO expects that enacting DEAR HENRY: I am writing with regard to Committee on the Commerce’s jurisdiction this bill would benefit state and local gov- H.R. 833, the Bankruptcy Reform Act of 1999. should they be the subject of a House-Senate ernments by enhancing their ability to col- As you know, the regulation of securities conference. I will also include a copy of your lect outstanding obligations in bankruptcy and exchanges is a matter committed to the letter and this response in the CONGRES- cases. SIONAL RECORD when the legislation is con- jurisdiction of the Committee on Commerce H.R. 833 would impose new private-sector sidered by the House. pursuant to Rule X of the Rules of the House mandates, as defined in UMRA, on bank- of Representatives. Thank you again for your cooperation. Sincerely, ruptcy attorneys, creditors, and credit and Section 1011 of H.R. 833, as ordered re- charge-card companies. CBO estimates that ported (‘‘SIPC Stay’’), amends the Securities HENRY J. HYDE, Chairman. the costs of these mandates would exceed the Investor Protection Act of 1970 (P.L. 91–598), $100 million (in 1996 dollars) threshold estab- a statute within the jurisdiction of the Com- lished in UMRA. mittee on Commerce. As you will recall, this U.S. CONGRESS, provision was originally contained in the Fi- CONGRESSIONAL BUDGET OFFICE, DESCRIPTION OF THE BILL’S MAJOR PROVISIONS nancial Contract Netting Improvement Act Washington, DC, May 5, 1999. Hon. HENRY J. HYDE, In addition to establishing means-testing of 1998, introduced in the 105th Congress as for determining eligibility for chapter 7 H.R. 4393 and on which the Committee on Chairman, Committee on the Judiciary, House of Representatives, Washington, DC. bankruptcy relief, H.R. 833 would: Require Commerce received an additional referral of the Executive Office for the United States the bill upon its introduction, as did the DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost Trustees (U.S. Trustees) to establish a test Committee on the Judiciary. program to educate debtors on financial Because of the importance of this legisla- estimate for H.R. 833, the Bankruptcy Re- management; authorize 18 new temporary tion, I recognize your desire to bring it be- form Act of 1999. If you wish further details on this esti- judgeships and extend five existing judge- fore the House in an expeditious manner, and mate, we will be pleased to provide them. ships in 19 federal districts; permit courts to I will not exercise the Committee’s right to The CBO staff contacts are Susanne S. waive chapter 7 filing fees and other fees for a sequential referral. By agreeing to waive Mehlman (for federal costs), who can be debtors who could not pay such fees in in- its consideration of the bill, however, the reached at 226–2860, Lisa Cash Driskill (for stallments; require that at least one out of Commerce Committee does not waive its ju- the state and local impact), who can be every 250 bankruptcy cases under chapter 13 risdiction over H.R. 833. In addition, the reached at 225–3220, and John Harris (for the or chapter 7 be audited by an independent Commerce Committee reserves its authority private-sector impact), who can be reached certified public accountant; exempt chapter to seek conferees on any provisions of the at 226–6910. 11 debtors from having to pay certain fees in bill that are within its jurisdiction during Sincerely, connection with their bankruptcy cases; re- any House-Senate conference that may be BARRY B. ANDERSON quire the Administrative Office of the United convened on this legislation. I ask for your (For Dan L. Crippen, Director). States Courts (AOUSC) to receive and main- commitment to support any request by the Enclosure. tain tax returns for all chapter 7 and chapter Commerce Committee for conferees on H.R. CONGRESSIONAL BUDGET OFFICE COST 13 debtors; and require the AOUSC and the 833 or similar legislation. ESTIMATE, MAY 5, 1999 U.S. Trustees to collect and publish certain I request that you include this letter and H.R. 833: BANKRUPTCY REFORM ACT OF 1999 statistics on bankruptcy cases. your response as part of the RECORD during consideration of the legislation on the House (As reported by the House Committee on the Other provisions would make various floor. Judiciary on April 28, 1999) changes affecting the bankruptcy provisions Thank you for your attention to these SUMMARY for municipalities and the treatment of tax matters. I remain, H.R. 833 would make many changes and ad- liabilities in bankruptcy cases. Sincerely, ditions to the laws relating to bankruptcy, ESTIMATED COST TO THE FEDERAL GOVERNMENT TOM BLILEY, including establishing a system of means- Chairman. testing for determining eligibility for relief As shown in the following table, CBO esti- under chapter 7 of the U.S. bankruptcy code. mates that implementing H.R. 833 would cost HOUSE OF REPRESENTATIVES, CBO estimates that implementing H.R. 833 the courts, the AOUSC, and the U.S. Trust- COMMITTEE ON THE JUDICIARY, would cost $333 million over the 2000–2004 pe- ees $24 million in fiscal year 2000 and $322 Washington, DC, May 3, 1999. riod—$322 million in discretionary spending, million over the 2000–2004 period, subject to Hon. TOM BLILEY, subject to appropriation of the necessary appropriation of the necessary funds. In ad- Chairman, Committee on Commerce, House of funds, and $11 million in mandatory spend- dition, we estimate that mandatory spending Representatives, Rayburn House Office ing. CBO also estimates that enacting this for the salaries and benefits of bankruptcy Building, Washington, DC. bill would decrease receipts by about $4 mil- judges would increase by less than $500,000 in DEAR TOM: Thank you for your letter re- lion over the next five years. Because the bill 2000 and $11 million over the 2000–2004 period. garding your Committee’s jurisdictional in- would affect direct spending and govern- Enacting the means-testing and fee waiver terest in H.R. 833, the Bankruptcy Reform mental receipts, pay-as-you-go procedures provisions in title I would result in a net loss Act of 1999. would apply. Provisions in title VIII also in revenues of about $4 million over the next I acknowledge your committee’s jurisdic- would affect receipts, but the Joint Com- five years. The costs of this legislation fall tion over section 1011 (‘‘SIPC Stay’’) of this mittee on Taxation (JCT) has not completed within budget function 750 (administration legislation and appreciate your cooperation an estimate of such changes at this time. of justice).

By fiscal year, in millions of dollars— 2000 2001 2002 2003 2004

CHANGES IN SPENDING SUBJECT TO APPROPRIATION Means-Testing (Section 102): Estimated Authorization Level ...... 4 8 8 8 7 Estimated Outlays ...... 4 8 8 8 7 Debtor Financial Management Training (Section 104): Estimated Authorization Level ...... 4 0 0 0 0 Estimated Outlays ...... 1 3 0 0 0 Additional Judgeships—Support Costs (Section 128): Estimated Authorization Level ...... (1) 6 11 11 12 Estimated Outlays ...... (1) 6 11 11 12 Chapter 7 Filing Fee Waivers (Section 148): Estimated Authorization Level ...... 2 5 8 13 13 Estimated Outlays ...... 2 5 8 13 13 Credit Counseling Certification (Section 302): Estimated Authorization Level ...... 4 3 3 4 4 Estimated Outlays ...... 2 4 3 4 4 U.S. Trustee Site Visits (Section 410): Estimated Authorization Level ...... 3 2 2 2 3 Estimated Outlays ...... 1 4 2 2 3

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By fiscal year, in millions of dollars— 2000 2001 2002 2003 2004

Audit Procedures (Section 602): Estimated Authorization Level ...... 0 6 15 18 19 Estimated Outlays ...... 0 6 15 18 19 Maintenance of Tax Returns (Section 603): Estimated Authorization Level ...... 3 6 7 9 9 Estimated Outlays ...... 3 6 7 9 9 Elimination of Quarterly Filing Fees (Section 608): Estimated Authorization Level ...... 10 10 10 10 10 Estimated Outlays ...... 10 10 10 10 10 GAO and SBA Studies (Sections 609, 613, 414): Estimated Authorization Level ...... 1 (1) 0 0 0 Estimated Outlays ...... 1 (1) 0 0 0 Compiling and Publishing Data (Sections 701–702): Estimated Authorization Level ...... 0 5 9 8 8 Estimated Outlays ...... 0 5 9 8 8 Total Discretionary Changes: Estimated Authorization Level ...... 31 51 73 83 85 Estimated Outlays ...... 24 57 73 83 85 CHANGES IN DIRECT SPENDING Additional Judgeships (Section 128): Estimated Budget Authority ...... (1) 2 3 3 3 Estimated Outlays ...... (1) 2 3 3 3 CHANGES IN REVENUES 2 Changes in Filing Fees (Section 102): Estimated Revenues ...... 0 0 (1) 1 1 Chapter 7 Filing Fee Waivers (Section 148): Estimated Revenues ...... (1) ¥1 ¥1 ¥2 ¥2

Total Revenue Changes: Estimated Revenues ...... (1) ¥1 ¥1 ¥1 ¥1 1 Less than $500,000. 2 The Joint Committee on Taxation has not yet completed its review of tax provisions in title VIII.

BASIS OF ESTIMATE could be significant, as parties test the new centage waived would gradually increase to For purposes of this estimate, CBO as- law’s standards. In subsequent years, litiga- about 10 percent by fiscal year 2003. The fil- sumes that H.R. 833 will be enacted by Octo- tion could begin to subside as precedents are ing fee for a chapter 7 case is $130, and in- ber 1, 1999, and that all estimated authoriza- established. Based on information from the come from this fee appears in two different tion amounts will be appropriated for each U.S. Trustees, CBO estimates that the U.S. places in the budget. Of the $130, $70 is re- fiscal year. Trustees would require about 60 additional corded as part of the offsetting collections to Spending Subject to Appropriation. Most of attorneys and analysts to address the in- the U.S. Trustee System Fund and to the the estimated increases in discretionary creased workload. As a result, CBO estimates AOUSC, and $15 is recorded as governmental spending would be required to fund the addi- that appropriations of $35 million would be receipts (i.e., revenues). the remaining $45 is tional workload that would be imposed on required over the next five years. paid to the private trustee assigned to the the U.S. Trustees. Currently, the U.S. Trust- Debtor Financial Management Test Training case and does not affect the federal budget. ees are funded through the bankruptcy-re- Program (Section 104). This section would re- The AOUSC also collects an additional $30 lated fees collected by the courts. Without quire the U.S. Trustees to establish a test million in miscellaneous fees with each additional statutory authority, these fees training program to educate debtors on fi- chapter 7 filing. Taking into account how cannot be increased to cover any expendi- nancial management. Based on information means-testing would reduce filing rates tures or loss of offsetting collections that from the U.S. Trustees, CBO estimates that under chapter 7, CBO estimates that imple- would occur under the bill. Because the leg- about 90,000 debtors would participate if such menting this section would result in a loss in islation does not provide for such increases a program were administered by the U.S. offsetting collections totaling $41 million in fees, any additional costs would be subject Trustees in fiscal year 2001. At a projected over the 2000-2004 period. The loss of offset- to the availability of appropriated funds. cost of about $40 per debtor, CBO estimates ting collections would reduce the amount Means-Testing (Section 102). This section that the U.S. Trustees would require an ap- available for spending by the U.S. Trustees would establish a system of means-testing propriation of about $4 million in 2000 to ad- and the AOUSC. Because this loss of fees for determining a debtor’s eligibility for re- minister the program. would not be matched by a reduction in lief under chapter 7. Only those debtors Addtional Judgeships—Support Costs (Section workload, additional appropriations would whose income exceeds the regional median 128). This provision would extend five tem- be required to replaced this projected loss. Credit Counseling Certification (Section 302). household income with certain adjustments porary bankruptcy judgeships and authorize This section would require the U.S. Trustees would be subject to the means test. Under 18 new temporary bankruptcy judgeships for to certify, on an annual basis, that certain the means test, if the debtor is expected to 19 federal judicial districts. Based on infor- credit counseling services could provide ade- have at least $6,000 over five years (after the mation from the AOUSC, CBO assumes that quate services to potential debtors. Based on one-half of the 18 new positions would be deduction of certain allowable expenses) information from the U.S. Trustees, CBO es- filled by the beginning of fiscal year 2001 and available to pay nonpriority unsecured timates that the U.S. Trustees would require the other half would be filled by the start of claims, then the debtor would be presumed additional attorneys and analysts to handle fiscal year 2002. Also, we anticipate that all ineligible for chapter 7 relief. A debtor who the additional workload associated with cer- five temporary judgeships would be filled by could not demonstrate ‘‘extraordinary cir- tification. CBO estimates that enacting this cumstances,’’ which would cause the ex- fiscal year 2002. We expect that discretionary provision would require appropriations of $18 pected disposable income to fall below the expenditures associated with each judgeship million over the next five years. threshold, could file under other chapters of would average about $450,000 (in 2000 dollars), U.S. Trustee Site Visits in Chapter 11 Cases the bankruptcy code. after initial costs of about $50,000. Therefore, (Section 410). This section would expand the Although the private trustees would be re- CBO estimates that the administrative sup- responsibilities of the U.S. Trustees in small sponsible for conducting the initial review of port of additional bankruptcy judges would business bankruptcy cases to include site a debtor’s income and expenses and filing the require an appropriation of less than $500,000 visits to inspect the debtor’s premises, re- majority of motions for dismissal or conver- in fiscal year 2000 and about $40 million over view records, and verify that the debtor has sion, CBO expects that the workload of the the 2000-2004 period. (Salaries and benefits filed tax returns. Based on information from U.S. Trustees would increase under the for the judges are classified as mandatory the U.S. Trustees, CBO estimates that imple- means-testing provisions. The U.S. Trustees spending, and those costs are described menting section 410 would require about 20 would provide increased oversight of the below.) additional analysts to conduct over 2,300 site work performed by the private trustees, file Chapter 7 Filing Fee Waivers (Section 148). visits each year. CBO estimates that the U.S. additional motions for dismissal or conver- This section would permit a bankruptcy Trustees would require appropriations of sions, and take part in additional litigation court or district court to waive the chapter about $12 million over the next five years for that is expected to occur as the courts and 7 filing fee and other fees for a debtor who is the salaries, benefits, and travel expenses as- debtors debate allowable expenses and other unable to pay such fees in installments. sociated with these additional personnel. related issues. Although CBO cannot predict Based on information from the AOUSC, CBO Audit Procedures (Section 602). Beginning 18 the amount of such litigation, we expect expects that in fiscal year 2000 chapter 7 fil- months after enactment, H.R. 833 would re- that, during the first few years following en- ing fees would be waived for about 3.5 per- quire that at least one out of every 250 bank- actment of the bill, the amount of litigation cent of all chapter 7 filers and that the per- ruptcy cases under chapter 7 and chapter 13,

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00019 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8512 CONGRESSIONAL RECORD—HOUSE May 5, 1999 plus other selected cases under those chap- ing rates. Section 613 would require GAO to CBO estimates that there would be no sig- ters, be audited by an independent certified conduct a study regarding the feasibility of nificant effect on the federal budget because public accountant. Based on information requiring trustees to provide the Office of there is no fee for converting a case from from the U.S. Trustees, CBO estimates that Child Support Enforcement information chapter 7 to chapter 13, and filing fees are about 1.3 million cases would be subject to about outstanding child support obligations not refunded to debtors who withdraw their audits in fiscal year 2001, increasing to about of debtors. Section 414 would require the Ad- petitions for bankruptcy relief. Over the long 1.8 million in fiscal year 2004. CBO assumes ministrator of SBA, in consultation with the term, CBO estimates that the federal govern- that about 0.8 percent of all cases would be Attorney General, the U.S. Trustees, and the ment could collect additional revenues as audited and that each audit would cost about AOUSC, to conduct a study on small busi- more debtors file directly under chapter 13. $1,000 (in 2000 dollars.) CBO also expects that ness bankruptcy issues. Based on informa- (The government collects an additional $45 the U.S. Trustees would need about 10 addi- tion from GAO and SBA, CBO estimates that for each case filed under chapter 13 instead tional analysts and attorneys to support the completing the necessary studies would cost of chapter 7.) This increase could be partly follow-up work associated with the audits. between $500,000 and $1 million in 2000, and offset by those debtors who might refrain Thus, we estimate that implementing this less than $500,000 in 2001. from filing for any type of bankruptcy relief. provision would require appropriations of $6 Compilation and Publication of Bankruptcy On balance, CBO estimates that the means- million in fiscal year 2001 and $58 million Data and Statistics (Sections 701–702). H.R. 833 testing provision would increase revenues by over the 2000–2004 period. would require the AOUSC to collect data on about $1 million beginning in 2003. This pro- Maintenance of Tax Returns (Section 603). chapter 7, chapter 11, and chapter 13 cases vision would have no effect on offsetting col- This section would require the AOUSC to re- and the U.S. Trustees to make such informa- lections because there is no difference in the ceive and retain tax returns for the three tion available to the public. CBO estimates amount of offsetting collections collected most recent years preceding the commence- that appropriations of about $30 million under either chapter 7 or chapter 13, and any ment of the bankruptcy case for all chapter would be required over the 2000–2004 period to loss in collections would be matched by a re- 7 and chapter 13 debtors (about 8 million meet these requirements. Of the total esti- duction in workload. debtors over the 2004–2004 period). CBO esti- mated cost, about $24 million would be re- Chapter 7 Filing Fee Waivers (Section 148). As mates that appropriations of $34 million over quired for additional legal clerks, analysts, mentioned above, this section would permit the next five years would be required to and data base support. The remainder would a bankruptcy court or the district court to store and provide access to over 20 million be incurred by the U.S. Trustees for com- waiver the chapter 7 filing fee and other fees tax returns. piling data and providing Internet access to for a debtor who is unable to pay such fees in Elimination of Quarterly Filing Fees (Section records pertaining to bankruptcy cases. installments. For each chapter 7 case filed, 608). This section would require chapter 11 Direct Spending and Revenues the federal government collects $15. Taking debtors whose disbursements are less than Additional Judgeships (Section 128). CBO es- into account the means-testing provision $300,000 to pay quarterly fees only until their timates that enacting the means-testing pro- and the amount of expected waivers, CBO es- case is converted or their plan is confirmed vision (section 102) would impose some addi- timates that implementing this section (whichever occurs first), beginning on Octo- tional workload on the courts. Section 128 would result in a loss in revenues of $1 mil- ber 1, 1999. Currently, these debtors pay would authorize 18 new temporary bank- lion to $2 million a year beginning in fiscal quarterly fees even after their plan has been ruptcy judgeships and extend five existing year 2001. confirmed. These fees are recorded as offset- temporary judgeships. Based on information CBO estimates that the net effect on reve- ting collections to the U.S. Trustee System from the AOUSC and other bankruptcy ex- nues of implementing the meanstesting and Fund and are available for spending from perts, CBO expects that the increase in the fee waiver provisions would be a loss of that account. According to the U.S. Trust- number of bankruptcy judges would be suffi- about $1 million annually beginning in fiscal ees, about 4,000 cases would be affected by cient to meet the increased workload. As- year 2001. this provision each year and, on average, the suming that the salary and benefits of a Tax Provisions (Title VIII). The provisions in government collects about $650 per quarter bankruptcy judge would average about title VIII of the bill are currently under re- per case each year. Thus, by shortening the $150,000 a year, CBO estimates that the man- view by the Joint Committee on Taxation, period during which fees are paid, the bill datory costs associated with the salaries and and estimates of their effects on revenues would reduce annual fee collections by about benefits of these additional judgeships would will be provided when they are completed. $10 million annually. Because this loss of off- be less than $500,000 in fiscal year 2000 and setting collections would reduce the amount about $11 million over the 2000–2004 period. PAY-AS-YOU-GO CONSIDERATIONS available for spending by the U.S. Trustees Changes in Filing Fees (Section 102). The The Balanced Budget and Emergency Def- (for overall supervision and administration means-testing provision also could affect the icit Control Act sets up pay-as-you-go proce- of bankruptcy cases), CBO estimates that government’s income from bankruptcy filing dures for legislation affecting direct spend- the U.S. Trustees would require an appro- fees because it would cause changes in the ing or receipts. Both the means-testing and priation of $10 million in fiscal year 2000 and number and type of bankruptcy filings. CBO waiver of fees would affect receipts; hence, $50 million over the next five years to com- projects that about 5 to 10 percent of all pay-as-you-go procedures would apply. The pensate for the loss of quarterly filing fees. chapter 7 debtors (about 50,000 to 100,000 net changes in outlays and governmental re- General Accounting Office (GAO) and Small cases each year) could be subject to the ceipts are show in the following table. (JCT Business Administration (SBA) Studies (Sections means test proposed under this bill. CBO ex- is reviewing title VIII and has not yet com- 609, 613, and 414). Section 609 would require pects that those debtors who are not success- pleted an estimate of its effects on receipts.) GAO to conduct a study regarding the im- ful in proving ‘‘extraordinary circumstance’’ For the purposes of enforcing pay-as-you-go pact that the extension of credit to depend- will either convert their cases to chapter 13 procedures, only the effects in the current ents who are enrolled in postsecondary edu- cases or withdraw their petitions for bank- year, the budget year, and the succeeding cational institutions has on bankruptcy fil- ruptcy relief. Under either of these options, four years are counted.

By fiscal year, in million of dollars— 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Changes in outlays ...... 0 0 2 3 3 3 3 3 3 2 2 Changes in receipts1 ...... 0 0 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 1 Estimated impact of means-testing and waiver of fees. JCT has not completed an estimate of changes in receipts for title VIII.

ESTIMATED IMPACT ON STATE, LOCAL, AND preemptions are mandates as defined in sets are protected from creditors in a bank- TRIBAL GOVERNMENTS UMRA. Because the preemption would not ruptcy proceeding. require states to change their laws, CBO es- In 1996, a survey of the 50 states conducted H.R. 833 contains an intergovernmental by the Federation of Tax Administrators and mandate as defined in UMRA. Overall, CBO timates the costs to states of complying with that mandate would not be significant the States’ Association of Bankruptcy Attor- expects that enacting this bill would benefit neys indicated that more than 360,000 tax- state and local governments by enhancing and would not exceed the threshold estab- lished in UMRA. payers in bankruptcy owed claims to states their ability to collect outstanding obliga- totaling about $4 billion. Of these claims, tions in bankruptcy cases. Other Impacts. The changes to bankruptcy states reported collecting only about $234 Mandates. Section 106 of the bill would pre- law in the bill would affect state and local million. While CBO cannot predict how much empt state laws governing contracts between governments primarily as creditors and hold- more money might be collected, it is likely a debt relief agency and a debtor, to the ex- ers of claims for taxes or child support. In that states and local governments would col- tent that they are inconsistent with the fed- addition, it would change some of the state lect a greater share of future claims than eral requirements set forth in this bill. Such statutes that govern which of a debtor’s as- they would have under current law.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00020 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8513 Exemptions. Although bankruptcy is regu- penses to a limited number of circumstances, million for fiscal year 2004. CBO expects lated according to federal statute, states are thereby making it more likely that funds bankruptcy attorneys to pass increased costs allowed to provide debtors with certain ex- would remain available to cover tax obliga- on to debtors, reducing the pool of funds emptions for property, insurance, and other tions. available to creditors. items that are different from those allowed Tax Return Filing and Government Notifica- H.R. 833 would require a creditor with an under the federal bankruptcy code. (Exempt tion. A number of provisions in the bill would unsecured consumer debt seeking a reaffir- property remains in possession of the debtor require debtors to have filed tax returns, and mation agreement with a debtor to notify and is not available to pay off creditors.) In in some cases to be current in their tax pay- the debtor of his right to a hearing to deter- some states debtors can choose the federal or ments, before a bankruptcy case may con- mine whether the agreement is an undue state exemption; other states require a debt- tinue. Also, debtors would be required to pro- hardship, is in the debtor’s best interest, or or to use only the state exemptions. This bill vide notice to state authorities in a specific is the result of an illegal threat by the cred- would place a ceiling of $250,000 on the ex- manner when they pursue relief under bank- itor. The bill also would require creditors to emptions for homesteads and create a new ruptcy law. These provisions would help specify to the court and to the debtor the exemption for certain retirement funds and states identify potential claims in bank- person designated to receive notices. Be- education savings plans. These exemption ruptcy cases where they may be owed delin- cause the required disclosure could be incor- porated into existing standard reaffirmation standards would apply regardless of the state quent taxes. agreements, and the notice to the court and policy on exemptions. The new homestead Priority of Payments. In some cir- the debtor would require only minimal ef- exemption would make more money avail- cumstances, debtors have borrowed money or fort, the costs of this requirement would be able to creditors in some cases, while the ex- incurred some new obligation that is dis- chargeable (able to be written-off at the end relatively small. emptions on retirement and education sav- The costs of the mandate for credit and of bankruptcy) to pay for an obligation ings generally would make less money avail- charge-card companies are also expected to would not be dischargeable. This bill would able. States would be allowed to set the be small. H.R. 833 would require credit and homestead exemption above the federal ceil- give the new debt the same priority as the charge-card companies to add a brief state- ing if they specifically enacted legislation underlying debt. If the underlying debt had a ment regarding the function of the minimum doing so. priority higher than that of state or local payment option and disadvantages of mak- Domestic Support Obligations. The bill would tax liabilities, state and local governments ing only the minimum payment each month significantly enhance a state’s ability to col- could lose access to some funds. However, it to the materials provided to consumers open- lect domestic support obligations, including is possible that the underlying debt could be ing new accounts and to all customers’ child support. Domestic support obligations for a tax claim, in which case the taxing au- monthly statements. Credit and charge-card owed to state or local governments would be thority would face no loss. Because it is un- companies also would have to provide cus- given priority over all other claims, except clear what types of nondischargeable are tomers with an illustration of the length of those same obligations owned to individuals. covered by new debt and the degree to which time required to pay off a $500 balance if The bill also would require that filers under this new provision would discourage such ac- they make only the minimum required pay- chapters 11 and 13 pay in full all domestic tivity, CBO can estimate neither the direc- ment. Firms would be able to add this infor- support obligations owed to government tion nor the magnitude of the provision’s im- mation to the materials they currently give agencies or individuals in order to receive a pact on states and localities. to customers. discharge of outstanding debts. In addition, Single Asset Cases. One provision of the bill Estimate prepared by: Federal Costs: Su- the automatic stay that is triggered by filing would allow expedited bankruptcy pro- sanne S. Mehlman (226–2860); Impact on bankruptcy would not apply to domestic sup- ceeding in certain single asset cases (usually State, Local, and Tribal Governments: Lisa port obligations. Last, the bill would require involving a large office building). State and Cash Driskill (225–3220); Impact on the Pri- bankruptcy trustees to notify individuals local governments could benefit to the ex- vate Sector: John Harris (226–6910). with domestic support claims of their right tent that real property is returned to the tax Estimate approved by: Paul N. Van de to use the services of a state child support rolls earlier as a result of this provision. Water, Assistant Director for Budget Anal- enforcement agency and notify the agency Municipal Bankruptcy. The bill would clar- ysis. that they have done so. The last known ad- ify regulations governing municipal bank- Mr. Chairman, I reserve the balance dress of the debtors would be a part of the ruptcy actions and allow municipalities that of my time. notification. have filed for bankruptcy to liquidate cer- Mr. CONYERS. Mr. Chairman, I yield Tax Payment Plans. The bill would require tain financial contracts. myself such time as I may consume. that payment plans for tax liabilities be lim- ESTIMATED IMPACT ON THE PRIVATE SECTOR Mr. Chairman, I am delighted to ited to six years and that payment amounts H.R. 833 would impose new private-sector begin immediately by talking about be regular and proportionate to payments for mandates on bankruptcy attorneys, credi- the means test and other consumer other obligations. Under current law, taxing tors, and credit and charge-card companies. provisions that will harm middle-in- authorities sometimes face payment plans Bankruptcy attorneys would be required to come and low-income people. that include a series of small payments fol- make reasonable inquiries to confirm that Because contrary to the assertion of lowed by a large balloon payment near the the information in documents they submit my friend, the gentleman from Penn- end of the planned payment stream. At that to the court or the bankruptcy trustee is sylvania (Mr. GEKAS), that this is going point, the debtors often fail to complete wellgrounded in fact. Creditors would be re- to make it better, the means test is their payments. This provision would require quired to make disclosures in their agree- that taxes be paid at a rate proportionate to ments with debtors and provide certain no- going to make it worse. It is incorrect those of other debts. It also would establish tices to courts and to debtors. Credit and to assume that the effect of this bill’s interest rates to be applied to outstanding charge-card companies would be required to harmful provisions would be limited to tax liabilities. Under current law, any inter- disclose minimum-payment plans in new ac- individuals seeking bankruptcy relief est charges on outstanding tax liabilities are count materials and monthly statements. who earned more than the regional me- determined at the discretion of the bank- CBO estimates that the costs of these man- dian income. ruptcy judge. dates would exceed the $100 million (in 1996 First, there are numerous significant Time Limits on Tax Collection. Under some dollars) threshold established in the UMRA. flaws in the manner in which the me- circumstances, a tax claim can qualify for Sections 102 and 607 would make bank- dian income is calculated. For exam- priority status, and thus a state and local ruptcy attorneys liable for misleading state- ple, the median income figure required government would be more likely to collect ments and inaccuracies in schedules and doc- the debt. However, this status is granted uments submitted to the court or to the under this bill will be outdated and un- only if tax is assessed within a specific pe- trustee. To avoid sanctions and potential derstated. This is because the bill riod of time from the date of the filing for civil penalties, attorneys would need to states that the household income is to bankruptcy. If that filing is subsequently verify the information given to them by be based on the most recent census fig- dismissed and a new filing is made, the tax their clients regarding the list of creditors, ures available as of January 1. But as claim may lose its priority status. The bill assets and liabilities, and income and ex- of January 1, the census has informa- would allow more time to pass in some cir- penditures. Based on 1,286,000 projected fil- tion available for only the second year cumstances, thus increasing the likelihood ings under chapter 7 and chapter 13 and an prior to the date. that state or local tax claims would main- estimated increase in attorneys’ costs of $150 Accordingly, during this year, 1999, tain their priority status. to $500 per case, CBO estimates that the Taxes and Administrative Expenses. Under costs to attorneys of complying with this re- census figures will be available only for current law, certain expenses can be paid out quirement would be between $190 million and 1997. At times of inflation, this 2-year of funds that would otherwise be available to $640 million in fiscal year 2000. With the rise lag could result, obviously, in a signifi- pay tax liens on property. The bill would re- in projected filings over the next five years, cant increase in the number of individ- strict the use of funds for administrative ex- annual costs would be $280 million to $940 uals who are subject to the motions to

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00021 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8514 CONGRESSIONAL RECORD—HOUSE May 5, 1999 dismiss or convert and who may earn of the bill will impose harsh new time Mr. Chairman, this is a consumer more than the outdated median-income deadlines and massive new legal and protection measure. The typical Amer- figure. paperwork requirements on small busi- ican family pays a hidden tax of $550 Another flaw in the median-income nesses and real estate concerns and, by every year arising from the increased formula is that the test measures a design, will lead to premature liquida- costs of credit and the increases in debtor’s income based on how much the tion of job loss. prices for goods and services occa- debtor earned 6 months prior to bank- This is why the largest collective sioned by the discharge in bankruptcy ruptcy. If the debtor lost a good job in bargaining organization in America of $50 billion in consumer debt on an month three and has been working at a has asserted that the legislation will annual basis. By requiring that people low-wage job ever since, the income restrict the workings of bankruptcy who can repay a substantial part of the from that good job and the help from cases for small businesses and place nu- debt they owe do so in Chapter 13 family members would be counted as if merous jobs at risk. plans, we can greatly lessen that hid- that is what his future income would Now, the bill conveniently ignores den tax, and this bill will accomplish be. the real problem of what has caused that result. In addition, this bill, unlike current more bankruptcies, namely, the prob- Another key point needs to be made law, will permit creditors and other lem of credit card abuse. And is there about the legislation. The alimony or parties and interests to bring motions any colleague here that does not get child support recipient is clearly better to dismiss more aggressively; and well- credit card applications monthly, off under the terms of this bill than she funded creditors will have extremely weekly, occasionally daily? And, at the is under present law. At the present wide latitude to use such motions as a same time, the legislation responds to time she stands seventh in the rank of tool for making bankruptcy an expen- every conceivable debtor excess, real or priority for the payment of claims in sive, protracted, contentious process imagined. It gives a complete pass to bankruptcy. She is behind farmers for honest debtors, their families and the transgressions of the credit card in- making claims against warehouses and other creditors. dustry. grain elevators. She is behind fisher- Now, the bill is opposed by a growing My colleagues should be on the alert. men who make claims against their number of Members of the House of This Bankruptcy Reform Act legisla- warehouses. Representatives for the simple reason tion of the 106th Congress will worsen Under this bill, the child support or this bill is worse than the bill we voted the conditions of those few people in alimony recipient will be elevated to on in the last Congress; and it is bad their district, working people, honest the first priority. She will now stand for women, children, working Ameri- people, who may need to access this number one in line for the payment of cans. But the good news, if this is good important court. Please remember, bankruptcy claims. And other provi- news for them in the credit card indus- this bill is worse than the bill we had sions of the bill also make it easier for try, it is good for the credit card indus- last year. the bankrupt’s assets to be paid to her. The gentleman from Virginia (Mr. try. Mr. Chairman, I reserve the balance This means test is fatally flawed. The of my time. MORAN) will be offering amendments today that I will support and I encour- legislation attempts to impose a one- Mr. GEKAS. Mr. Chairman, I yield 4 age other Members to support, that size-fits-all income and expense test minutes to the gentleman from Vir- will require greater disclosures on based on IRS standards to determine ginia (Mr. BOUCHER). Mr. BOUCHER. Mr. Chairman, I want credit card statements of the costs of who is eligible for bankruptcy relief to express thanks to the gentleman making the minimum monthly pay- and how much they may be required to from Pennsylvania for yielding me this ment. Credit card statements would pay their creditors. time. have to indicate that the ordinary fi- The problem is that the formula fails I am pleased to rise in strong support nance charge on the outstanding bal- to take into account such important of the adoption of this much-needed re- ance would continue to accrue. items as child care payments, health form to our Nation’s bankruptcy laws. The Moran amendment supplements care costs, and the costs of taking care In an era in which disposable incomes other new consumer protection meas- of ill parents, to name but a few of the are growing, unemployment rates are ures that are already a part of this bill. glaring loopholes. The IRS standards low, and the economy is strong, con- For example, credit card companies are so extreme that they have been re- sumer bankruptcy filings should be will be prohibited from terminating a jected by the Congress and abandoned rare. Contrary, however, to this expec- customer’s account simply because by the IRS; and, yet, the credit card tation, in 1998, there were 1.4 million that customer pays his bills on time companies would have them apply personal bankruptcy files, a 40 percent and therefore does not accrue finance them in bankruptcy. increase from the 1996 figure. In 1996, charges. That is a very appropriate Now, the denials have been pouring that figure reached one million for the change to make and is one of many in pretty fast here so far; and there is first time. And, in 1998, there was a full consumer protection measures con- going to be a lot of discussion about 95 percent increase in the number of tained in the bill. how the bill is devastating to children personal bankruptcy files from 1990. This is a balanced, bipartisan meas- and women reliant on child care and al- Bankruptcies of mere convenience ure which contains new consumer pro- imony payments. Repeat: The bill is are often driving this increase. Bank- tections and requires greater debt re- devastating to children and women re- ruptcy was never meant to be used as a payment by those who can afford to liant on child care and alimony pay- financial planning tool, but it is in- make that repayment. This measure, ments. creasingly becoming a first stop rather when considered on the floor of the On the debtor’s side, the legislation than a last resort, as many filers who House as a conference report last year, makes it far more difficult for single could repay a substantial part of what obtained the votes of 300 of the Mem- mothers to access the bankruptcy simi- they owe elect to use the complete liq- bers, clearly demonstrating the broad lar. On the creditor’s side, the bill pits uidation provisions of Chapter 7 of the bipartisan base for enacting this re- sophisticated credit card creditors in bankruptcy law, wipe out all of their form. direct competition with alimony and debt, even that portion they could I am pleased to be coauthoring this child support. The attempts to fix this repay, and seek an entire fresh start. measure with the gentleman from incorporated into the legislation are Pennsylvania, and I want to commend not effective and are largely redun- b 1245 him for his leadership in bringing this dant. Our legislation will direct more filers balanced and bipartisan bill to the And, third, but not finally, but I am into Chapter 13 plans and make sure floor. I am pleased to join with him in going to stop here, the bill will also that those who can afford to repay a urging its passage by the House. lead to a loss of jobs and collective bar- substantial part of their debt are re- Mr. CONYERS. Mr. Chairman, I yield gaining rights. The business provisions quired to do so. myself 11⁄4 minutes.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00022 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8515 I think it is very important that we lost your job, and that calculation is This study by the GAO that we are begin to deal with the alimony and obviously not effective. You may be requiring in this legislation, we in the child support measure head-on. It has forced to pay more than in fact you Congress will use this study to close been suggested that this is not a prob- have as income. It includes as income any remaining loopholes that may re- lem or that it has been improved upon. disability benefits or veterans benefits main that are permitting people to But actually for women whose average which if you have another job you will avoid their legal child support. It will income was at the median during the essentially lose in the future, and it make it criminal, but at the same time last 100 days before the support checks forces spouses to compete with sophis- we must remember that it is the chil- stopped or women whose child care ex- ticated creditors for their child sup- dren who are being abused and de- penses exceeded IRS standards, they port. prived. I lend my strong support to this may be denied access to Chapter 7 and But fundamentally it violates cen- and look forward to continuing to work forced into a restrictive Chapter 13 re- turies of laws that provide for a fresh on the basis of the GAO study. payment plan. start. I ask that this not happen in a Mr. Chairman, I rise in strong support of Secondly, the bill does not exempt haphazardly drawn bill that has tech- H.R. 833—the Bankruptcy Reform Act of child support or foster care payments nical problems and which is opposed by 1999. from the means test definition of dis- virtually every group of experts in INTRODUCTION posable income, and does not exclude bankruptcy law. Mr. Chairman, I would Consumer bankruptcy reform is an impor- alimony and child support payments ask that we defeat this bill. tant issue that needs to be addressed now. In received within 6 months after filing Mr. GEKAS. Mr. Chairman, I am 1997 Americans filed a record of 1.33 million 1 for bankruptcy from the property of pleased to yield 2 ⁄2 minutes to the gen- consumer bankruptcy petitions representing an the estate. tlewoman from New Jersey (Mrs. ROU- over 650 percent increase since 1978. Those How can we talk about women and KEMA). who entered into bankruptcy erased an esti- children are okay? This bill is pres- Mrs. ROUKEMA. I thank the gen- mated $40 billion in consumer debt. This re- ently a disaster for single mothers and tleman for yielding me this time. sulted in a hidden tax of almost $400 per Mr. Chairman, I want to offer my their children, which number in the al- household for families who have to pay strong support for this legislation. It imony and child support area an esti- monthly bills including mortgages, student goes a long way to correct the prob- mated 243,000 to 325,000 bankruptcy loans, and insurance. It is important to note lems of bankruptcy. But right now I cases each year. The National Partner- want to focus on the issue of child sup- that this surge in bankruptcies in the last few ship for Women and Families have told port. I have been a pioneer in the ef- years occurred at a time when the national us that the child support enforcement forts at reforming child support, and I economy has grown at a strong rate. In fact, provision in the bill would not ade- served on the U.S. Commission for between 1986 and 1996, real per capita an- quately protect parents and children. nual disposable income grew by over 13 per- 1 Interstate Child Support Enforcement. Mr. Chairman, I yield 2 ⁄2 minutes to Over the last 10 years we have done a cent while personal bankruptcies more than the gentleman from Virginia (Mr. great deal to enforce child support and doubled. SCOTT) a distinguished member of the require the legal obligations, to close Bankruptcy is fast becoming the first stop fi- Committee on the Judiciary. that enforcement gap. But in recent nancial planning tool rather than a last resort. Mr. SCOTT. I thank the gentleman years we have learned that bankruptcy The purpose of reform is to improve bank- for yielding me this time. is one of the loopholes that has been ruptcy law and practice by restoring personal Mr. Chairman, this bill overturns used. Contrary to what we have heard responsibility and integrity in the bankruptcy centuries of well-established laws in- before, as I view this legislation, it is system but also ensuring that the safety net of volving bankruptcy and the principle strong and goes a long way toward the bankruptcy code is intact for those who that those who are in financial ruin closing the enforcement gap as it re- need it most. I am a strong supporter of the can get a fresh start if they pay all lates to the child support component. consumer bankruptcy reforms contained in the they have, with certain exceptions, to This bill really deals with the issue bill. their creditors. Instead, they will be re- in a substantive way. It includes child CHILD SUPPORT quired for those affected to essentially support payments that are moved up to What I really want to focus on in today’s de- be in debtor’s prison for 5 years. Those number one when determining which bate is child support. I have a long history of who find themselves financially over- debts are paid first in a bankruptcy standing up for child support enforcement, whelmed because of a loss of a job, ill- case. It gives confirmation and dis- having been a pioneer on child support re- ness, business failure, will not get a charge of Chapter 13 plans and makes forms and having served on the U.S. Commis- fresh start. They will have to pay every them conditional upon the debtor’s sion for Inter-State Child Support Enforce- dime they have, after food and rent and complete payment of child support. ment. It’s a national disgrace that our child a few other expenses, to their creditors. And there are other issues in here that support enforcement system continues to Now, that is not a fresh start. That is deal directly with child support. allow so many parents who can afford to pay a guarantee that at the end of 5 years But I want to particularly distin- for their children’s support to shirk these obli- they will be worse off than they start- guish the reform measure that was led gations. And despite the reforms the so-called ed. So if someone is stuck with bills, by the gentleman from Florida (Mr. ‘enforcement gap’—the difference between maybe a spouse had a business rever- SHAW) and also joined by the gentle- how much child support could be collected sal, got sick, a spouse had joint debts woman from Texas (Ms. JACKSON-LEE), and how much child support is collected—has and their other spouse leaves or dies, so that there was bipartisan support been estimated at $34 billion! they will not get a fresh start. They for this reform that will require the This legal abuse is a criminal violation as will get no relief for 5 years. trustee to notify a claimant parent of well as neglect of our children’s most basic Now, let us not get misled by this the bankruptcy proceedings. needs. In addition, the taxpayers are abused means test where only certain people I will not go into a lot more detail, because billions of tax dollars are paid out be- are affected by this legislation. All but it is a strong bill as far as closing cause these families are falling onto the wel- that means is that it is not a bad bill those enforcement gaps. But I do want fare roles at alarming rates. for everybody, it is just a bad bill for to commend the gentleman from Penn- I want to commend the Committee for their some people. That does not make it a sylvania (Mr. GEKAS) and thank him attention to child support components of this good bill. for including my amendment on child problem. I am very pleased that H.R. 833—the Now, there are some technical prob- support during the markup. That Bankruptcy Reform Act of 1999 strengthens lems with the legislation. First of all, amendment requires the GAO to study child support enforcement. I thank Chairman the salary calculation in what you the feasibility of having bankruptcy GEKAS and the Committee for all their hard have to pay is based on the last 6 court trustees report the names of indi- work and their reaching out to diverse groups months. Part of the bankruptcy prob- viduals filing bankruptcy to the Office to form a consensus that the payment of child lem may be caused by the fact that you of Child Support Enforcement. support should be protected.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00023 Fmt 0688 Sfmt 9920 E:\BR99\H05MY9.000 H05MY9 8516 CONGRESSIONAL RECORD—HOUSE May 5, 1999 H.R. 833 stregthens Child Support Enforce- It is important to remember that failure to It further concludes, and again I am ment by: pay child support is not a victimless crime. quoting: Child support payments are moved to NUM- The children are the first and most important Available research on the behavior of per- BER ONE when determining which debts are victims. We must ensure that these children sonal filings over time does not paint a clear paid first in a bankruptcy case. Currently, child are taken care of and I applaud the work of picture of whether filings respond to incen- support payments rank seventh behind such the Committee to this end and will continue tives in the bankruptcy law. ‘‘priorities’’ as attorney’s fees. my work on this issue. I urge support for this In other words, we know very little Confirmation and discharge of Chapter 13 important legislation. about the likely consequences of what plans are made conditional upon the debtor’s Mr. CONYERS. Mr. Chairman, I yield we are doing here today. Yet we are complete payment of child support. This will myself 45 seconds. proceeding as if the evidence was clear help further ensure that child support receives I want to address the gentlewoman and compelling. the priority it deserves. from New Jersey, whose concern about But do not be misled. This bill will Providing that the automatic stay DOES bankruptcy is well-known and remem- not reduce the number of bankruptcy NOT apply to a state child support collection bered from the last Congress. I read to filings. Colleagues will not see a sub- agency that is trying to recover child support her the first paragraph of the National stantial difference in terms of the 1.4 payments. I know from speaking with child Women’s Law Center letter sent to me million annual filings. support advocates in New Jersey, that this But there is an issue of responsi- only 2 weeks ago which says that ‘‘The change is a top priority for them to ensure bility, corporate responsibility, and I bankruptcy bill, H.R. 833, puts eco- continued payment of important child support. submit that if we insist on responsible nomically vulnerable women and chil- I also want to associate myself with an addi- lending by the credit card industry, we dren at greater risk. By increasing the tional provision, that was added in full Com- will reduce the number of bankruptcy rights of certain debtors, including mittee, that will require the trustee to notify a filings. Because while we do not know claimant parent of the bankruptcy proceeding. credit card companies and secured the cause of the increase in bankruptcy This reform measure was led by Rep. Clay creditors, the bill would set up a com- filings, no one, no one can legitimately Shaw and me. This will ensure that claimant petition for scarce resources between dispute that irresponsible lending prac- parents are not left out when a debtor parent parents and children owed child sup- tices are at the very least a contrib- enters into bankruptcy. It is important to note port and commercial creditors both uting factor. that this was dropped from the Conference re- during and after bankruptcy. And sin- Instead of encouraging responsible port last year. Fortunately with Representative gle parents facing financial crises— use of credit cards and reduction of SHAW’s leadership and with Representative often caused by divorce, nonpayment of credit card debt, many credit card JACKSON-LEE—Republicans and Democrats support, loss of job, uninsured medical lenders have encouraged card holders providing bi partisan support. expenses or domestic violence—would to take on an increasing amount of There are important reforms for any state of find it harder to access the bankruptcy debts when they can ill afford it. They New Jersey and for states across the nation. process and harder, if they got there, have increased interest rates, they In fact these provisions are welcomed im- to save their homes, cars and essential have increased fees on current ac- provements that will help make real and posi- household items.’’ counts, they have imposed penalties on tive change. This is a nonpartisan organization. I consumers who pay off credit card bal- The current child support obligation for this urge the Members to carefully consider ances without incurring any interest year in New Jersey is $767 million. The total what we are doing to our women and charges, and we have all experienced, child support payments in arrears is $1.3 Bil- children. everyone has experienced, the aggres- lion. Yes, I said $1.3 Billion, of which about Mr. Chairman, I yield such time as he sive marketing tactics of the credit $800 million is still collectible. Bergen county may consume to the distinguished gen- card industry. Last year alone they in my district, along with six other New Jersey tleman from Massachusetts (Mr. sent out more than 4 billion, that is 4 counties, make up 53 percent of the total col- DELAHUNT). billion, solicitations, many of them to lections. Mr. DELAHUNT. I thank the gen- students with no credit history whatso- MY AMENDMENT tleman for yielding me this time. ever and consumers already in debt. In addition, I am grateful to Chairman GEKAS Mr. Chairman, we have heard much The first exhibit to my right shows and the Committee for including my amend- about personal responsibility during one of those solicitations which went ment on child support during mark-up. My the course of this debate. We have to my own college-aged daughter. It is amendment requires the GAO to study the heard over and over again from mem- what is known as a live loan. I do not feasibility of having Bankruptcy Court trustees bers of the credit card industry that in- know why it is a live loan, but it is report the names of individuals filing bank- dividuals must be held accountable for called a live loan, which invited her to ruptcy to the Office of Child Support Enforce- their behavior and that no longer is cash a negotiable check for $2,875 at ment. The names could then be checked there any stigma attached to bank- 18.9 percent interest. The offer said: against a national list of court orders for child ruptcy. Use the money for whatever you like. No support. Those found to have support obliga- No one disagrees with the principles limits, no restrictions, no questions asked— tions would have the support obligation listed of personal accountability and personal and I am quoting from the solicitation. among the debts before the Bankruptcy Court responsibility. The problem is that the If my colleagues question the link and be used to better facilitate communication rhetoric does not withstand scrutiny in between these kinds of aggressive mar- between claimant parents, state agencies and terms of the evidence supporting a keting practices and the rising bank- the trustee. linkage, to establish a link between the ruptcy rate, I invite them to examine The GAO would have 10 months from the increase in personal bankruptcy filings the second exhibit to my right. The enactment of the legislation to conduct the and the change we are told has taken first panel displays a credit card offer study and report to Congress. The study is in- place in people’s attitudes about bank- by First Consumers National Bank, a tended to lead to effective legislation ensuring ruptcy simply does not exist. nationally chartered credit card bank that debtor parents cannot use bankruptcy to b 1300 owned by Spiegel and Eddie Bauer. It escape their child support obligations. In other says, and I am quoting: words, we want to use this study to close any On the eve of the committee markup If you filed a bankruptcy, you can get a remaining loopholes that avoid child support I finally received from the Congres- fresh start with this First Consumers Na- legal obligations. sional Budget Office a draft of a report tional Bank Visa Card today. Your filed CONCLUSION which I and other minority members of bankruptcy, your filed bankruptcy, qualifies These are important and significant im- the committee requested more than a you. No need to wait for bankruptcy dis- provements that ensure that child support en- year ago. It concludes, and I quote: charge. forcement is strengthened. I supported these At this point, we do not have a clear idea That is a quotation. provisions last year and plan to support them of the benefit of a needs-based bankruptcy The second panel also shows a letter this year. requirement. sent to bankruptcy attorneys, and I

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00024 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8517 think it is the third panel, it is the Mr. GEKAS. Mr. Chairman, I yield 3 Mr. CONYERS. Mr. Chairman, I yield third panel. The third panel shows a minutes to the gentlewoman from New 30 seconds to the gentleman from Mas- letter to bankruptcy attorneys by a York (Mrs. KELLY). sachusetts (Mr. DELAHUNT). Minnesota company that calls itself Mrs. KELLY. Mr. Chairman, I thank Mr. DELAHUNT. Mr. Chairman, I American Bankruptcy Service. The let- the gentleman from Pennsylvania (Mr. thank my friend and colleague for ter seeks to enlist these attorneys as GEKAS) for yielding me the time to yielding me 30 seconds. distributors. Must be like an Amway, clarify some very important provisions Let us be very, very clear, and I an Amway of bankruptcy services who in this legislation. know that most members of the com- will market the fresh start card to Mr. Chairman, I rise today in strong mittee were aware of this, but for the their clients. It actually goes so far as support for H.R. 833, the Bankruptcy rest of our colleagues: to offer them a commission. For each Reform Act, because it boils down to During one of our hearings there was credit card issued, it promises they will two words: personal responsibility. If a panel of nine witnesses, including receive $10, 10 bucks if they can get out one assumes a debt, they should do ev- representatives of the credit card in- there and peddle that card. erything in their power to pay it off. dustry and minority witnesses. I asked a question and polled each of them, and Now a balanced bankruptcy bill However, a safety net has to remain for all nine unanimously stated that this would address this kind of egregious those who legitimately cannot pay their debts. Creditors should be made bill would not lower interest rates. conduct. It would demand responsible So that is a red herring, I suggest. behavior not only of debtors but of whole, if possible. Some of my colleagues here today The bill should be defeated. credit card lenders themselves and par- are trying to paint the word creditors Mr. CONYERS. Mr. Chairman, I yield ticularly those creditors whose own to mean faceless financial institutions 5 minutes to the gentleman from New reckless lending practices have done so who are tricking consumers into as- York (Mr. NADLER). much to drive people into bankruptcy. suming debt. They specifically speak of Mr. NADLER. Mr. Chairman, I want- But this is not a balanced bill. H.R. credit card debt. They unfortunately ed to discuss a few things about this 833 does nothing, nothing to encourage failed to note that credit card debt in bill: first, the alleged need for it. And I corporate responsibility. In fact, it the United States amounts to only 3.7 want to stress that even though I am would reward irresponsible lending by percent of all consumer debt. Further- going to say there is no necessity for enhancing the position of credit card more, only 1 percent of credit card ac- this bill, the Democratic substitute an- companies relative to other creditors. counts end up in bankruptcy. Of that 1 swers the nonexisting problem which It would create a vast new system of percent it is estimated that 15 percent they posit. means testing that would be imple- of those accounts can afford to repay We are told the need for this bill is mented at taxpayer expense. In effect, some or all of their debt. that the American people, especially the bill would turn the bankruptcy sys- The people who are truly being hurt the American middle class, are a bunch tem into a public funded with our tax by our current bankruptcy system are of deadbeats, that there is a huge in- dollars collection agency to increase Americans who play by the rules and crease in bankruptcy filings, which the profitability of the credit card in- pay their debts. Bankruptcy costs the there is, and that the reason for this dustry. average American family an average huge increase in bankruptcy filings is And what would this all cost the tax- per year of $400. that we have changed social mores. payer? According to the CBO, last Needs-based bankruptcy reform is There is no more stigma associated year’s bill would have cost $214 million well overdue, and that is what H.R. 833 with bankruptcy. People used to be over a 5-year period, but that does not delivers. It is the people who game the very reluctant to declare bankruptcy. include some $225 million in adminis- system that we have to stop. Now they do it as a financial planning trative costs required to cover the ad- I have heard from my colleague from instrument, and they are deadbeats, ditional duties assigned to the U.S. Virginia (Mr. MORAN). He stated last and, therefore, we have got to crack trustees under H.R. 833. In other words, year more people filed for bankruptcy down on it because the credit card almost a half a billion dollars so that than graduated from college. That is a companies are not making enough the credit card industry can enhance staggering fact. money. their bottom line. I am pleased to support H.R. 833’s What is the truth of the matter? The This bill is nothing more than a pub- provisions which strengthen the Bank- truth is that is nonsense. Sure there lic subsidy for the credit card industry, ruptcy Code protections for ex-spouses are a lot more bankruptcy filings, but Mr. Chairman, and it deserves to be de- and children. They have to be sup- why? The figures tell a very different feated. ported. story. In the current bankruptcy law, child First of all, if it were true that the Mr. GEKAS. Mr. Chairman, I yield 30 support and alimony are placed sev- reason for the increase in bankruptcy seconds to the gentleman from Michi- enth behind attorney fees as debt obli- filings were a change in social mores gan (Mr. SMITH). gations. If enacted, this bill would where people are more easily going to Mr. SMITH of Michigan. Mr. Chair- move child support and alimony pay- bankruptcies, then people would be man, I thank the gentleman for yield- ments to first on the list of debt obli- going bankrupt when they are less in ing this time to me, and thank him for gations. debt, when they are less in trouble. The his leadership and those on his com- Also under current law, some debtors figures say differently. mittee for bringing a bill before Con- use the automatic stay to avoid paying In 1983, before the surge in bank- gress that is going to have the effect of child support payments after they file ruptcy filings started, the average per- lowering interest rates and making for bankruptcy. H.R. 833 exempts State son who filed for bankruptcy had debts credit more available. This bill encour- child support authorities from the equal to 74 percent of his income. If one ages competition by reducing uncer- automatic stay, thus insuring less has that much debt compared to in- tainty. delay in the proper payment of child come, they file for bankruptcy. Right now, all those credit card com- support. Today, the average bankruptcy filer panies jack up their interest rates be- I vehemently oppose any legislation has debts equal to 125 percent of his in- cause their competition is forced to that would reduce the ability of women come; so people are 50 percent more impose high interest rates to cover the and children to receive support pay- desperate before they go into bank- ease of declaring bankruptcy. ments. ruptcy. They are less eager to file, they Also let me just say that the farm H.R. 833 is a good bill that moves us are more reluctant to file, they are fur- provisions in this bill that extend in- in the right direction, and I ask my ther in the hole before they file. definitely the provisions of chapter 12 colleagues from both sides of the aisle So why then do we have such an in- in title 11 for farmers is very good for to join me in support of this reasonable crease in bankruptcy filings? Here is the agricultural community. reform. the answer:

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00025 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8518 CONGRESSIONAL RECORD—HOUSE May 5, 1999 If we look at society at large, not at management at IBM or some other big government, so if the means test in just bankruptcy filings but at society company, laid off. Now he is making Chapter 13 says he can pay enough at large, we can find two things. We $25,000 at McDonald’s or as a consult- money to pay the child support to the find the bankruptcy filings rising, but ant. That is the new underemployment custodial parent but not enough to pay we also find the household debt burden for the middle class, a consultant. the debt he owes to the government, as a percentage of income rising right Well, he is making $25,000. He con- not enough, cannot do it, cannot con- along with it. Look how those two tracted debts based on an income of firm a plan, too rich to go bankrupt in lines match. $75,000. Now he goes bankrupt. This bill Chapter 7, too poor to go bankrupt in Mr. Chairman, credit card companies, does not look at his new income, which Chapter 13, cannot go bankrupt at all, used to be when I was in college it was is $25,000, or his prospective income and she is out there competing with hard to get credit. Today they shove it which is $25,000. They look at what his every other debt collector in the world. at high school kids. Today they shove income used to be, $75,000. What chance does she have? credit cards at people who are already Is that fair or rational? Does it make This bill also hurts farmers. There is 80 percent of their income in debt, of sense? No. no reason for such a harsh, one-sided their annual income. The other half of the means test, bill. The Democratic substitute is a what are your expenses? Well, what is very harsh bill. I personally would not b 1315 your rent? What is your mortgage pay- vote for it if it were a freestanding bill. That is the real problem, irrespon- ment? Does this means test look at I think it is too harsh, but it does ev- sible lending by the credit card compa- this? No. It looks at what the IRS erything reasonably that should be nies. More and more credit is being thinks in its guidelines the average done and does not do some of these ter- given to people. People are getting mortgage or rent ought to be in the rible things of prohibiting class ac- more and more in debt. Just as the Northeast or the southwestern United tions, murdering child support, having debt-to-income ratio rises, the bank- States, in guidelines so harsh the Con- an unfair means test, hurting small ruptcy filing rate rises right in tan- gress told IRS to junk them last year, businesses. That is why the administration will dem. but for bankrupts we are going to do By the way, we are told that in 1978 veto the bill. That is why every union the same. is opposed to it, every consumer group, Congress made the bankruptcy laws So we have to really crack down on every professional bankruptcy group. easier, and in the early eighties we the debtors. What about the dishonest started seeing an increase in bank- Anybody who knows anything about creditor? Sears Roebuck was adjudged bankruptcy in the profession is opposed ruptcy because the laws are too easy; to have defrauded bankrupt people, to this bill, except for the credit card now we have to crack down. debtors, $168 million in a class action issuers and the banks. Look at Canada. Canada has very suit last year. We cannot let that hap- So I urge a ‘‘yes’’ vote on the Demo- harsh bankruptcy laws, harsher even pen again. Big business crooks have to cratic substitute and a ‘‘no’’ vote on than they want to make our laws in be protected, so this bill says no more the bill. this bill. It has always been very harsh, class action suits. Someone wants to Mr. GEKAS. Mr. Chairman, I yield 1 and yet they have had the same in- sue the big malefactor, the big guy who minute to the gentlewoman from Cali- crease in bankruptcies. We can date it. is cheating people of millions of dol- fornia (Mrs. TAUSCHER). When did it start in Canada, the in- lars, they better have a few hundred Mrs. TAUSCHER. Mr. Chairman, I crease in bankruptcies? In 1968. Why thousand dollars in legal fees. One per- rise in support of the Bankruptcy Re- 1968? That is the year when the Visa son cannot bring that lawsuit and it form Act because it is based upon a card went into Canada, and they have cannot be done for a class. No class ac- simple principle of personal responsi- had the same problems we have had tion lawsuits; only in bankruptcy and bility. Those who buy on credit should with very harsh bankruptcy laws. only against creditors. be required to pay their bills. So this is a myth. The myth that the Small businesses, this bill murders Our current bankruptcy system does American middle class are deadbeats small businesses. Many small busi- not hold people to that standard. In and that we have to crack down and nesses reorganize in bankruptcy. They 1998, a record 1.4 million Americans squeeze a little bit more money out of get protections from their creditors. went to court to have their debts them when they go bankrupt, it is a They manage to reorganize, get out of erased. Some were hard-working Amer- myth. debt, and go on. This bill imposes such icans who could not afford to pay their The Democratic substitute does rigid requirements and such time lines bills and needed bankruptcy protec- squeeze it, but it squeezes it in a more on them that they will liquidate and tion, but many others took advantage rational way. kill jobs in businesses that could have of a failed bankruptcy system that en- Let us talk about four things that survived. courages people to avoid paying their this bill does. We are told that we Finally, child support, they claim debts. ought to have a means test, needs- that this bill saves child support. No, it When people who cannot pay their debts do not, middle class Americans based bankruptcy. People should not does not. It kills child support enforce- pick up the tab because companies simply get a discharge of their debts; ment. How? Two ways. Chapter 7, it charge higher prices to make up for the they should have to repay if they can. says that not only are child support losses. Working families in America I will agree to that. We all agree to payments nondischargeable, so is cred- have a hard enough time paying their that. If people can repay, they should it card debt nondischargeable, so there own bills. They should not have to do so, and there should be a means test is more to compete with mom. needlessly pay someone else’s. to see if they can repay, but a means Who is going to collect the debt, The Bankruptcy Reform Act makes test should mean a means test. What is mom or the credit card attorney? They the right changes to the law by requir- your income? What are your unavoid- say we will give priority to mom; we ing those who can reasonably pay at able expenses? The difference is how will give priority to child support. Pri- least 25 percent of their debt to do so. much can afford to be repaid. orities are irrelevant after the dis- Lower income Americans who truly What does this bill do? Does it look charge. cannot get out from mountains of debt at current income, at anticipated in- When someone is not in bankruptcy will continue to have an escape hatch. come? No. It looks back at income for court anymore, priorities do not apply, Mr. Chairman, I urge my colleagues 6 months before one files bankruptcy and in Chapter 13 they say a person to again stand for the reasonable prin- and assumes that is going to be the in- cannot have a Chapter 13 repayment ciple of personal responsibility and come. plan accepted by the court unless all pass this important legislation. It is pretty common in this country the child support is paid, there is a Mr. GEKAS. Mr. Chairman, I yield today for someone to be making plan to pay all the child support. They 21⁄2 minutes to the gentleman from New $50,000, $75,000, $80,000 a year as middle count as child support debts owed the Jersey (Mr. MENENDEZ).

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00026 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8519 Mr. MENENDEZ. Mr. Chairman, I justice, some standards, some protec- Nevertheless, I support H.R. 833 and thank the gentleman from Pennsyl- tion for our children and some sense to wish to make four points today. First, vania (Mr. GEKAS) for yielding me this our Bankruptcy Code. I believe that there is an urgent need time and for his work on this bill, Mr. GEKAS. Mr. Chairman, I yield 1 for meaningful reform. It is just com- along with the gentleman from Vir- minute to the gentlewoman from Or- mon sense, if someone borrows money ginia (Mr. BOUCHER) and others. egon (Ms. HOOLEY). from somebody else or they encourage Mr. Chairman, our bankruptcy sys- Ms. HOOLEY of Oregon. Mr. Chair- them to perform some services and tem should be a safety net for those in man, I thank the gentleman from they consume the money or get the need, not a financial planning tool for Pennsylvania (Mr. GEKAS) for his work benefit of the services, they should pay the well-to-do. It is not fair for the and for yielding me this time. it back if they can, because if they do large majority of working men and Mr. Chairman, I am an original co- not, everyone else in America pays for women who pay their bills and play by sponsor of H.R. 833, a bill that provides being a deadbeat. the rules to continue footing the bill common sense bankruptcy reform. It Now, this bill says we do not want and paying the price for those who has been said that over the last 7 years the rest of American families to pick abuse the bankruptcy system. It is just we have had unparalleled economic up the tab for those who have avoided not right. prosperity and yet the bankruptcy fil- paying their just obligations, even This bill makes sure that those who ings have hit an all-time high. The though they could afford to repay all truly need the safety net of bankruptcy thing that has happened is we have had or a portion of it. get it, like those who lose their job or a lot of studies that have also said Next, there is a need to create Fed- have a medical emergency or a sick some of those people that are filing eral standards. More than 70 percent of child. This bill protects those people, bankruptcies can afford to pay back the all-time 1.4 million bankruptcies but it also makes sure that those high- some of that debt. were filed in Chapter 7, which means er income people, who can still repay I am supporting this bill because it all their debts are forgiven, even with- some of their bills, do so. In my view, ensures those with the ability to pay out regards to income. This says, let us that is just basic personal responsi- that they pay, and those who legiti- take a look at the regional median in- bility. mately need protection from creditors come. So in New Jersey, the State that Under the bill, if the debtor earns get it. I come from and represent, if someone less than the median household month- I hope Members will keep in mind, makes $67,000, less than $67,000 for a ly income, they can file Chapter 7, have and we have heard this number of family of four, they can discharge all almost all of their debts erased and be $51,000 for a family of four, which is the their debts. totally unaffected by the needs-based median income, they are not even af- b 1330 formula. If they make above the me- fected by this legislation. If they are dian and their monthly income is great making $51,000, they are not affected It is only if you make more than enough to pay at least $6,000 of the un- by this legislation. For those above $67,000 that the questions start to be secured debt after subtracting actual that threshold, there is a sensible asked: Can you afford to repay a por- priority debts, after subtracting se- means testing that determines whether tion of your debt? cured debts like their mortgage, after a debtor should be able to walk away There is discretion involved. There subtracting actual school tuition for and not pay anything or at least pay are presumptions that you can afford their kids, after subtracting allowable part of their debt. to repay, but after child support and living expenses based on IRS guide- Mr. Chairman, this bill encourages other legitimate, important deductions lines, then, yes, they have a Chapter 13 personal responsibility, meets its obli- are made, the bankruptcy trustee can repayment plan. still use his or her judgment to take Now, that is allowing for a lot of lee- gation for children and families and into account extraordinary cir- way and a lot of protection before we saves American consumers money. I cumstances, such as a decline in in- ask someone to pay back the people urge support for this bill. come or unexpected medical expenses. they owe. Mr. GEKAS. Mr. Chairman, I yield 1 Our colleagues, the gentleman from 3 ⁄2 minutes to the gentleman from New The bill still truly allows those who need a fresh start to get one, but says Illinois (Mr. HYDE) and the gentleman Jersey (Mr. ROTHMAN), a member of the in New Jersey if you make over $67,000 from Michigan (Mr. CONYERS), who I committee. have a great deal of respect for, have Mr. ROTHMAN. Mr. Chairman, I a year and can afford to repay a por- an amendment to take the IRS living thank the gentleman from Pennsyl- tion of your debt, you should. standards out of the bill and give more vania (Mr. GEKAS) for yielding me the This bill improves the current law discretion to the judges. In my mind, time. also in several ways. It strengthens that is a mistake because it is the un- Mr. Chairman, I rise today in favor of protections for vital family support ob- fettered discretion that has made the H.R. 833. I believe that this legislation ligations. It completely protects retire- bankruptcy laws so unfair. is important in order to restore integ- ment plan assets from the claims of Under our current rules, a wealthy rity to our Nation’s bankruptcy sys- creditors, and completely protects sav- person can be subject to one standard tem. ings accounts for post-secondary col- for living expenses while the working While I believe in the fresh start that lege savings accounts, up to $50,000 per man or woman is subjected to another bankruptcy provides, and agree that child. It adds a whole host of other new one. I believe our Bankruptcy Code there are people who legitimately need consumer protections. should treat everyone equally. That is and deserve its protections, I am con- Therefore, as an original cosponsor of what the formula does. cerned that this last resort is currently this bill, I urge my colleagues to vote Worst of all, under our current sys- being abused by many people. That is in favor of this important bankruptcy tem children are often the ones who unfair to consumers, to creditors and reform legislation. get shortchanged because their support to the people who truly need the sys- Mr. GEKAS. Mr. Chairman, I yield 3 payments can be stayed during bank- tem. minutes to the gentleman from Vir- ruptcy proceedings, all while their non- Also, while I support the bill, I be- ginia (Mr. MORAN), a Member who has custodial parents continue to enjoy lieve that it could have been made bet- been a bulwark in this effort and a co- their current standard of living. So ter had we been allowed a floor vote to sponsor right from the beginning. this bill ends that practice and puts eliminate the provision which allows Mr. MORAN of Virginia. Mr. Chair- child support at the very top priority States to opt out of the homestead ex- man, I rise in support of the Bank- during bankruptcy, where it should emption contained in the bill, and I ruptcy Reform Act. I am a lead sponsor have been all along. hope that the various State legisla- of the measure because the current sys- I urge my colleagues to vote for this tures who have been given this discre- tem is broken. What was once the op- bill. Let us bring some fairness, some tion will do so wisely. tion of last resort has too often become

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00027 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 8520 CONGRESSIONAL RECORD—HOUSE May 5, 1999 the preferred option of choice. A legis- Mr. Chairman, it is estimated that $100,000 a year marketer to somebody lative fix is necessary to distinguish the majority who do make good on working for $5 an hour at McDonald’s, between those who truly need a fresh their debts are having to pay about an you can go to the judge and have that start and those capable of assuming average of $400 a year to make up for taken into consideration. greater responsibility and making good the bad debt of those who do not make It is just a misstatement of the facts on at least some of what they owe. It’s good on their debts. That is why this to say that somehow those special cir- the fair thing to do. legislation addresses the process. It en- cumstances are not considered in this Mr. Chairman, unless we take the ables those who truly need relief to get bill. They are, just like they are in cal- steps now to reform the bankruptcy the relief. It is fair, it is a bipartisan culating child support. I do not think system while the economic times are bill, and it should be passed. anybody on the other side of this de- good, we will not have the political re- Mr. GEKAS. Mr. Chairman, I yield 2 bate would say that we should only solve to fix it when the economy is not minutes to the gentleman from Wash- base child support payments on pro- so strong. ington (Mr. ADAM SMITH), because if jected future incomes, as offered by the Despite this country’s remarkably there is anyone who knows about the person who has to meet the obligation. strong economy, wages are up, unem- economic impact of the bill before us, The means testing system works, and ployment is down, interest rates and it is he. so does the bill. inflation are low—despite the unparal- Mr. SMITH of Washington. Mr. Mr. GEKAS. Mr. Chairman, I yield 2 leled times that we are currently expe- Chairman, this issue is all about per- minutes to the gentleman from Penn- riencing, the rate of personal bank- sonal responsibility, taking responsi- sylvania (Mr. PETERSON). ruptcy filings has increased dramati- bility for one’s own actions. In this Mr. PETERSON of Pennsylvania. Mr. cally. That does not make sense, unless case, when people do not take responsi- Chairman, I thank the gentleman for the explanation is that the system is bility for their own actions, others yielding time to me. broken. have to pay. Mr. Chairman, I would also like to Mr. Chairman, last year bankruptcy We all pay more for everything that congratulate him and all those who filings reached a record high of more we buy because of the costs companies have worked on this legislation. This is than 1.4 million. That is more than the have to incur to cover those who do not one of the most needed pieces of legis- number of people who graduated from pay their bills, and in particular, small lation in the economics of this coun- college last year. businesses can be killed by this. If just try. Now we can vilify creditors and lend- a couple of critical creditors do not At a time when we are at an all-time ers, banks and mortgage companies meet their obligations, small busi- high economically, when our economy and credit card companies, particularly nesses can go out of business. is growing faster than it has ever credit card companies, and some of We have a responsibility to honor our grown, we end up with the highest that vilification is deserved. All that commitments. I think the worst mes- number of bankruptcies, 1.42 million, unsolicited marketing, particularly of sage that I have heard in this whole de- costing consumers over $40 billion in college students, is too aggressive, it is bate is that what is really to blame is the past year. In 1998, more people de- inappropriately deceptive, and it is im- the marketing, that we should blame clared bankruptcy than graduated from prudent, and we should not be people for advertising credit, and it is college. That is inconceivable in a condoning it. But while many would like to blame their fault, it is not the fault of the country like this. the credit card industry for the sharp person who fell for the marketing cam- Why is that the case? It is because it increase in bankruptcy filings, it is paign, who accepted the obligation, ac- is so easy. It is because we have cur- very important to understand that the cepted the money. It is somebody else’s rent laws that allow people to choose, statistics indicate that the credit card fault. well, I guess it would be easier to go industry is not the impetus for the cur- When someone gets a credit card and bankrupt, so I will do that. That is not rent bankruptcy crisis. charges it, they are responsible for what made this country strong. When The vast majority of Americans rec- paying it. Who does not know that? Ev- we owe money, when we have debts, it ognize the personal responsibility they erybody knows that. To say that it is is the responsibility of each and every take in using a credit card. More than not the individual’s fault who has in- one of us to pay those debts, however 96 percent of credit card holders pay curred the debt, but the person who long we have to work, how many hours their bills as agreed to, and only 1 per- gave them the credit, sends a terrible per day, how many days per week, how cent ever end up in bankruptcy. Bank message to our country, that you do much effort is needed to pay our debts. credit cards represent less than 16 per- not have to be responsible for your own I was a businessman, a supermarket cent of total debt on average bank- actions. operator for 26 years. When I am out in ruptcy petitions. Second, it hurts those who can re- my district, I always say to business- Mr. Chairman, according to a recent sponsibly use credit. I got one of those men, and business is what makes this Federal Reserve Board survey, credit credit card applications, 10 or 15 of country go, that is what makes our cards account for a mere 3.7 percent of them, when I was in college. I used one employment base; to independent busi- consumer debt, hardly large enough to of them and got a credit card and I paid nessmen I will say, how is business? cause a bankruptcy crisis. it off every month. Because of that, it And they will say, it is good. But I so Regardless of how one feels about helped me with some financial spend- often hear the complaint, if it was not creditors, the key issue before us now ing ability, and helped me establish for bankruptcies, I would have had a is that many borrowers capable of re- credit. I would hate to think that peo- good year. I had seven bankruptcies paying some or all of their obligations ple who can use credit responsibly this year and wiped out my total profit are not acting responsibly. Somewhere would be denied it because of those who picture. over the past decade, since 1990, the in- cannot. That is happening to small busi- tegrity of the bankruptcy process has One final point on the means testing nesses all over the country because been corrupted and an important moral issue. It is criticized that the means people choose to go bankrupt rather principle has been eviscerated. The testing is based on your income from than stay and fight and pay their bills, time-honored principle of moral re- the past. First of all, what else can you as they should have. The American sponsibility and personal obligation to base it on, really, except the existing economy is built on financial responsi- pay one’s debts has been eroded by the record? But secondly, that is exactly bility. That is what is different about convenience and ease with which one the way we calculate child support this country. When we owe something, can discharge his or her obligations. It payments, by your past income. we pay it. is unacceptable and unfair to those Just like with child support, in this Currently, child support and alimony who do pay their bills to have to foot bill if there is an extenuating cir- are only accorded seventh priority. the bill for those who do not. cumstance, if you go from being a They are going to go to the top of the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00028 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.000 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8521 list in this bill. That is why H.R. 833 is Reform Act of 1999’’), and reported the legis- I am optimistics that the results of my Com- so well-designed. It put responsibility lation favorably. mittee’s work and our actions on the Floor back, that when you owe money, you We are on the Floor today—relatively early today will be to provide for bankruptcy proc- have to pay it. You have to make your in the 106th Congress—debating this omnibus esses that increase creditor recoveries and very best effort. Bankruptcy should bill, because bankruptcy is an important issue operate fairly. If so, we will be able to point to only be the very last extreme, where on the national agenda. With this auspicious an important legislative achievement on a sub- you just cannot physically do it. It is beginning, I am hopeful the effort to enact ject of great economic significance to the not something that you choose, it is major improvements in our bankruptcy law will American people. not a choice you make. Bankruptcy reach fruition this session. Consumer bank- I urge my colleagues, after giving careful should not be easy, and this bill ruptcy reform is the centerpiece of H.R. 833, consideration to the amendments we will be changes that. but the bill also addresses business bank- debating today, to support passage of H.R. Mr. CONYERS. Mr. Chairman, I yield ruptcy, tax-related issues in bankruptcy, 833. myself the balance of my time. transnational bankruptcy, and the treatment of SHIPPING ANTITRUST HEARING WEDNESDAY; Mr. Chairman, the distinguished mi- financial contracts. JUDICIARY TO STUDY COMPETITION IN DE- nority leader, the gentleman from Mis- Bankruptcy reform was a major activity of REGULATED INDUSTRY souri (Mr. RICHARD GEPHARDT) has said the Committee on the Judiciary in the last What: Oversight Hearing on ‘‘Antitrust As- that, ‘‘While I support a balanced ap- Congress. In September 1997, our colleague, pects of the Ocean Shipping Reform Act of proach to bankruptcy reform that the gentleman from Florida [Mr. MCCOLLUM], 1998.’’ Committee on the Judiciary. places equal responsibility on both introduced H.R. 2500, the ‘‘Responsible Bor- When: Wednesday, May 5, 1999, at 10:00 a.m. Where: 2141 Rayburn House Office Building. debtors and creditors, I must oppose rower Protection Bankruptcy Act,’’ a bill de- signed in part to implement the concept of On May 1, legislation deregulating the H.R. 833 because it fails to strike such ocean shipping industry went into effect, a balance.’’ needs based bankruptcy. In February 1998, even as new issues regarding competitive In addition, the administration has the chairman of the Subcommittee on Com- practices in the industry have arisen. The said repeatedly that they will veto this mercial and Administrative Law—the gen- justification for the industry’s antitrust ex- bill in its current form. The legislation tleman from Pennsylvania [Mr. GEKAS]—built emption has been called into question as it is opposed by the National Bankruptcy on this approach by introducing H.R. 3150, the primarily benefits foreign carriers at the ex- Conference, the Commercial Law ‘‘Bankruptcy Reform Act of 1998.’’ H.R. 3150 pense of American shippers, while a new in- incorporated—with modifications and addi- vestigation has unearthed alleged anti-com- League, the National Association of petitive activity of some carriers. Consumer Bankruptcy Attorneys, the tions—most of H.R. 2500’s consumer bank- ruptcy provisions while also addressing other Shipping’s continued antitrust exemption poses National Association of Bankruptcy the questions . . . Trustees, and the National Association bankruptcy related subjects. Although the House passed an amended version of H.R. Did the 1998 Ocean Shipping Reform Act of Chapter 13 Trustees, the AFL, the strike the right balance between carriers and UAW, AFCSME, UNITE, the Leader- 3150 and later acted favorably on the work product of a Committee of Conference, the non-vessel owning common carriers (NVOs) ship Conference on Civil Rights, the in allowing ocean carriers to use confidential National Partnership for Women and other body did not have time before adjourn- service contracts, but not the NVOs? Families. ment to take action on the Conference Report. Is antitrust immunity still justified in This year my Committee again devoted Please, let us make certain that we light of the new environment and the star- much attention to bankruptcy reform. The gen- do not move bankruptcy into the dark tling findings of anti-competitive activity tleman from Pennsylvania [Mr. GEKAS], who made in a recent investigative report on the ages. Let us reject this bill, send it conducted important hearings on bankruptcy industry? back to the committee, and I hope that reform in his Subcommittee last year, de- Does it make sense to continue antitrust Members will consider favorably some serves commendation for the scope of the tes- immunity when it largely benefits foreign amendments that could hopefully im- timony his Subcommittee elicited during four carriers at the expense of American ship- prove the bill. pers? days of hearings this March. Witnesses rep- Mr. GEKAS. Mr. Chairman, I yield Does the Federal Maritime Commission resented a wide range of viewpoints. myself the balance of my time. have adequate authority to deal with the These hearings were followed by two days kinds of practices detailed in the new report, Mr. Chairman, the lines of debate are of markup in the Subcommittee on Commer- fairly clear now. We have insisted all and what, if any, role can the Justice De- cial and Administrative Law and five days of partment play? along that our bill is a balanced ap- markup in the Full Committee on the Judiciary. These hearings will . . . proach, contrary to what the gen- The positive aspect of returning to a familiar Allow a complete airing of the issues tleman from Michigan (Mr. CONYERS) subject was the opportunity to fashion some raised in the investigation by its author, has implied, or is the implication or improvements as a result of benefitting from FMC Commissioner Delmond Won. the inference gained by the minority the thoughtful insights of knowledgeable indi- Further discuss the competitive issues sur- leader. viduals who analyzed earlier versions of the rounding the newly deregulated shipping in- When we consider the fact that we legislation. dustry. have a safe harbor for low-income and The major objective consumer bankruptcy Mr. CROWLEY. Mr. Chairman, I rise today moderate-income and no-income indi- reform is to achieve an appropriate balance in support of H.R. 833, the ‘‘Bankruptcy Re- viduals seeking the benefits of bank- between debtor and creditor rights that will in- form Act of 1999.’’ ruptcy, on the one side, and on the crease creditor recoveries while offering relief Mr. Chairman, a record 1.42 million per- other side we have the approach that to deserving debtors. Those who need an im- sonal bankruptcy filings were recorded in those individuals in the higher-income mediate fresh start should get it—but those 1998, rising a staggering 500 percent since brackets, from $50,000 and up who who can afford to make significant payments 1980. Despite strong economic growth, low might have an ability to repay are ac- out of future income should be required to do unemployment and rising disposable income, corded a mechanism for recoupment of so. personal bankruptcies are soaring, costing some of that debt, then we can see that Under H.R. 833 as reported, individuals or over $40 billion in the past year alone. Without the balance is what we begin the de- couples with income levels exceeding adjusted serious reform, these trends promise to con- bate with here in this Chamber. regional median figures that take into account tinue growing every year, costing consumers So when it comes down to the final household size generally will not be able to re- and businesses even more money. vote, what the individuals who are sup- main in Chapter 7 if they can make payments The Bankruptcy Reform Act of 1999 is an porting this bill will be finding is a bill of at least $100.00 per month out of future in- important piece of legislation that will start to that fixes the loose machinery that come to general unsecured creditors. Chapter end the abuse and restore responsibility to the now exists in bankruptcy. 7 offers a financial fresh start—without encum- bankruptcy system. H.R. 833 closes loopholes Mr. HYDE. Mr. Chairman, I am pleased that bering future income—to debtors who are pre- in current law that encourages debtors to take the Committee on the Judiciary, after thorough pared to give up all of their nonexempt assets. advantage of the system and avoid paying hearings and markups, completed its consider- Those who penses of debtors who will be their debts. Too many times debts are wiped ation last week of H.R. 833 (the ‘‘Bankruptcy channeled into five-year repayment plans. out, instead of worked out.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00029 Fmt 0688 Sfmt 9920 E:\BR99\H05MY9.001 H05MY9 8522 CONGRESSIONAL RECORD—HOUSE May 5, 1999 This legislation provides a fair needs based many people who have filed for Chapter 7 into non-dischargeable debt. This puts women system that takes debtors’ special cir- Bankruptcy successfully, Chapter 7 has pro- and children expecting domestic support on cumstances into account while assuring that vided a ‘‘fresh start’’ and eventually helped the same footing as credit card companies— those who can afford to pay are required to do them get them and their families on the road and when both must fight to get the monies so. to recovery. But it is not a free ride. Chapter that they deserve, who do you think can afford Additionally, this bill puts the needs of 7 involves liquidation of assets—surely a trau- to pay the better lawyers? Who do you think women and children first. Under current law, matizing and unpleasant situation in any per- will get to those funds first? The credit card child support and alimony payments rank sev- son’s life. companies, of course. That is why this bill is enth on the priority lists of payments. Under Chapter 13 is a less dramatic form of bank- strongly opposed by the National Women’s H.R. 833, child support payments are raised ruptcy that allows structured repayment. It is Law Center. from seventh to first giving them the long over- an important option for those who have an in- But families and children are not the only due priority that they need and deserve. In ad- come sufficient to eventually pay back debt ones hurt by this bill. It muddies the structure dition, this bill closes various loopholes in over an extended period of time and maintain of the bankruptcy system. It replaces our cur- bankruptcy so that filers seeking to delay or their current assets. rent mechanism used to determine whether a evade their important family obligations, will Chapter 11 bankruptcy is also important. It debtor may file for Chapter 7 or Chapter 13 not be able to do so. is the form of bankruptcy that allows commer- with an IRS ‘‘means test’’ that was developed Mr. Chairman, I strongly urge my colleagues cial entities to reorganize so that they can sat- for an entirely different purpose—collecting isfy their creditors. support for this legislation which strikes the taxes. It is this section that has drawn the ire The increase in the number of bankruptcies appropriate balance between the interests of of consumer groups, women’s and children’s over the past few years tells Congress that we consumers, debtors and creditors and will help organizations, and the Democratic Members of are in desperate need of bankruptcy reform. restore personal responsibility and fairness to our Committee—and rightfully so. It is a provi- Or does it? Perhaps—as many of us Demo- our bankruptcy system. sion that was never recommended by the Na- crats have argued, we ought to be taking a Mr. PACKARD. Mr. Chairman, I rise in sup- tional Bankruptcy Commission, who has been closer look at banking and lending practices. port in H.R. 833, the Bankruptcy Reform Act the primary group studying the bankruptcy Perhaps the problems, on the consumer side, of 1999. It is time we revitalize our weak bank- system and the need for bankruptcy reform. is not that people have found bankruptcy laws, ruptcy system, which is supposed to benefit Sure, the IRS-developed ‘‘means test’’ is those who need it most. As the sponsor of but rather that credit card companies and other creditors have flooded our constituency easy to use, but does that make it right? Is it bankruptcy reform legislation during the 105th a bright line or a rubber stamp? Is it not our Congress which protected churches and char- with undeserved credit lines. Will we ever find out if this is the case? No, because the Com- responsibility to look at where the bright line ities, I strongly endorse the efforts of my col- lies, rather than on the fact that it is a bright leagues in crafting the bill we are debating mittee on Banking and Financial Services did not look at this bill. line? Are we allowing form to rule over sub- today. stance? The truth is, our bankruptcy system is seri- So already, we are working under the as- At committee and at rules I offered several ously flawed. This system allows individuals sumption that bankruptcy reform is needed be- amendments that would have made this a bet- who have the ability to pay back a portion of cause consumers are abusing the system. ter bill, a bill that would be more responsive to their debts to declare bankruptcy so American This premise is a dangerous one, and it the needs of all Americans, and not just those taxpayers can foot the bill for them. This costs shows, because this bill is pockmarked with that work in glass towers. I offered amend- Americans an average of $550 a year in the provisions that give power to credit card com- ments that would have protected victims of form of higher interest rates and increased panies and collection agencies—and it does managed care disasters and tobacco compa- product prices. nothing to make creditors responsible for their nies. I offered amendments that would have The original reason for people to file bank- own actions. It gives them carte blanche to protected our seniors that rely on social secu- ruptcy was as a last resort, for those in a dire lend without fear of reprisal, and creates an rity as their primary source of income. I of- situation. Unfortunately, bankruptcy has be- atmosphere strikingly similar to the one sur- fered amendments that would have allowed come a way for some reckless spenders to rounding the savings and loan industry in the recipients of federal disaster assistance to not escape their debts. There are more people de- mid-1980s (following deregulation). be penalized by the bankruptcy system. How claring bankruptcy in America each year than The Chairman said it himself during our these reasonable amendments were not ac- what are graduating from college. This is ab- markup of this bill in the Judiciary Committee cepted I cannot say—but I can say that this surd! H.R. 833 will give this country a need- when defending an amendment that he had bill does not do right by the American people. based bankruptcy system, not an easy way passed. He said out for those who choose to not repay their I have been told with great sincerity that The bill raises more questions than it an- [my amendment] is a deal breaker. That it is swers, especially for America’s families. I urge debts. I firmly believe this legislation will re- a killer. That some of the credit card folks store a sense of fairness and personal obliga- each of you to vote against it, and work with will walk away from the bill if it is passed. us to provide meaningful bankruptcy reform tion to our bankruptcy system. I found that a bit much. I asked my staff to Finally, I would like to thank Chairman give me a list of what the creditors are get- that eschews personal and financial responsi- GEKAS for his hard work on this legislation and ting out of this bill. I have pages and pages bility from both debtors and creditors. for working with me to ensure the enforcement and pages of advantages the creditor commu- Mr. CRAMER. Mr. Chairman, I rise in sup- of my legislation, H.R. 2604 from the 105th nity is getting out of this bill. . . . I was port of H.R. 833, the Bankruptcy Reform Act. Congress. The Religious Liberty and Chari- going to read a list of what the creditors are H.R. 833, is a common sense piece of legis- getting out of this bill. I won’t do it. I as- lation that reforms our deeply flawed bank- table Donation Protection Act restored the sume you know. But there are, I don’t know, right of debtors to tithe and give charitably 12 or 13 pages of single-spaced print of ruptcy system. Under our current bankruptcy after declaring bankruptcy. changes that benefit the creditors. . . . system, we have seen an increase in bank- Mr. Chairman, what kind of system are we There ought to be a little give on the part of ruptcy filings by more than 400 percent since encouraging if we do not require people who the creditor community[,] there doesn’t 1980. Last year alone, during booming eco- can pay back even a portion of their debts to seem to be. nomic times with historic lows in unemploy- do so? I urge my colleagues to support H.R. Even the Chair’s cry for a ‘‘little flexibility’’ ment, more than 1.4 million Americans filed for 833, and restore a sense of responsibility to could not be heeded by the Members of his bankruptcy. This is a 3.6 percent increase our bankruptcy laws. own party on the Committee. Does that tell us over the number of individuals filing for per- Ms. JACKSON-LEE of Texas. Mr. Chair- anything about what is pushing this bill sonal bankruptcy in 1997 and an increase of man, I rise in opposition to the passage of through Congress? Are these reforms guided 94.7 percent over 1990 levels. Moreover, 70 H.R. 833, which restructures, I believe in a by reason, or by solidarity with big lenders? percent of these 1.4 million bankruptcies were negative way, the way bankruptcy is handled Who does this bill hurt? Small business- filed under Chapter 7, the most permissive in the United States today. owners, bankruptcy trustees, women and chil- and lenient form of bankruptcy. Under Chapter At the outset let me say, bankruptcy is an dren. Why women and children? Because it 7, individuals can simply erase most of their important mechanism for many families and contains provisions which allow credit card accumulated debt. In effect, the permissive- business-owners around the country. For companies to transform their ‘‘investments’’ ness of the current system, while allowing

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00030 Fmt 0688 Sfmt 9920 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8523 some consumers to escape their debts, ulti- lowed family farmers to reorganize their assets the dramatic rise in consumer debt this bill al- mately harms all consumers by forcing indus- in a manner which balances the interests of lows misleading and coercive practices to con- try to charge higher prices and impose tighter creditors and the future success of the in- tinue. credit. volved farmer. My staff collected credit card solicitations Clearly, Mr. Chairman, something is wrong If Chapter 12 bankruptcy provisions are not they receive in the mail. In a matter of weeks, with our current bankruptcy system. Our cur- permanently extended for family farmers, this we amassed dozens of solicitations, offering rent system makes it too easy for individuals will have a drastic impact on an agricultural free cookbooks, calling cards, sweatshirts, and to compile huge amounts of debt and then es- sector already reeling from low commodity frequent flyer miles. All promoted low teaser cape responsibility for repaying those debts. prices. Not only will many family farmers have rates in giant print. But you need a magnifying For far too many individuals, bankruptcy has to end their operations, but also land values glass to see the permanent rate, which can become an easy and convenient way to skirt will likely plunge downward. Such a decrease jump to 25%. their financial obligations rather than an instru- in land values will affect both the ability of With these aggressive marketing tech- ment of last resort. family farmers to earn a living and the manner niques, fundamental bankruptcy reform must H.R. 833 reforms this flawed system. H.R. in which banks, making agricultural loans, con- include reasonable consumer protections. 833 simply says that those consumers who duct their lending activities. This Member has Without them, H.R. 833 is a lost opportunity can afford to pay back their debt should be re- received many contacts from his constituents for this House. quired to do so. This bill does this by insti- regarding the extension of Chapter 12 bank- I urge my colleagues to oppose the bill. tuting a means test that requires those individ- ruptcy because of the situation now being The CHAIRMAN pro tempore (Mr. uals making more than the regional median in- faced by our nation’s farm families—although LAHOOD). All time for general debate come, and who can pay more than $6,000 in the U.S. economy is generally healthy, it is has expired. debts over five years to file for Chapter 13 clear that agricultural sector is hurting. Pursuant to the rule, the committee bankruptcy, as opposed to Chapter 7. By Second, this Member supports the provision amendment in the nature of a sub- doing this, the bill prevents individuals with in H.R. 833 which provides for a means test- stitute printed in the bill is considered high incomes from walking away from their ing (needs-based) formula when determining as an original bill for the purpose of debts. At the same time, the bill continues to whether an individual should file for Chapter 7 amendment under the 5-minute rule provide those individuals in need of bank- or Chapter 13 bankruptcy. The vast majority of and is considered as read. ruptcy protection with the opportunity to file for bankruptcy filers—approximately 70%— The text of the committee amend- the more lenient Chapter 7 bankruptcy. The choose Chapter 7 of the Bankruptcy Code, ment in the nature of a substitute is as bill also attempts to discourage individuals which erases all debts. Some Chapter 7 filers follows: from repeatedly filing for bankruptcy protection actually have the capacity to repay some of H.R. 833 by terminating the automatic stay against col- what they owe, but they choose Chapter 7 Be it enacted by the Senate and House of lection of debts for an individual who files for bankruptcy and are able to walk away from Representatives of the United States of America bankruptcy within one year of clearing up an these debts. For example, the stories in which in Congress assembled, earlier bankruptcy. an individual filed for Chapter 7 bankruptcy SECTION 1. SHORT TITLE; TABLE OF CONTENTS. Mr. Chairman, H.R. 833 is a good bill that and then goes out takes a nice vacation and/ (a) SHORT TITLE.—This Act may be cited as cuts down on the blatant abuse of the current or buys a new car are too common. Moreover, the ‘‘Bankruptcy Reform Act of 1999’’. system by instituting several much needed re- the status quo is costing the average Amer- (b) TABLE OF CONTENTS.—The table of con- tents of this Act is as follows: forms. This bill restores balance, account- ican individual and family in increased costs ability, and common sense to our deeply for consumer goods and credit because of the Sec. 1. Short title; table of contents. flawed system. Some, I know will argue that amount of debt which is never repaid to credi- TITLE I—CONSUMER BANKRUPTCY the bill is extreme and will end up harming tors. PROVISIONS families who are in desperate need of bank- As a response to these concerns, the Subtitle A—Needs based bankruptcy ruptcy relief. But, Mr. Chairman, I believe this means test of H.R. 833 will help ensure that Sec. 101. Conversion. bill strikes the right balance between seeking high income filers, who could repay some of Sec. 102. Dismissal or conversion. Sec. 103. Notice of alternatives. to protect those in most dire need, while re- what they owe, are required to file Chapter 13 Sec. 104. Debtor financial management training storing personal responsibility to our bank- bankruptcy as compared to Chapter 7. This test program. ruptcy system. needs-based system takes a debtor’s income, Subtitle B—Consumer Bankruptcy Protections Therefore, Mr. Chairman, I urge my col- expenses, obligations and any special cir- Sec. 105. Definitions. leagues to support H.R. 833. cumstances into account when determining Sec. 106. Enforcement. Mr. BEREUTER. Mr. Chairman, this Mem- whether he or she has the capacity to repay Sec. 107. Sense of the congress. ber rises today to express his support for H.R. a portion of their debts. However, this bill still Sec. 108. Discouraging abusive reaffirmation 833, the Bankruptcy Reform Act, of which he preserves the right to file bankruptcy, for an practices. is an original cosponsor. individual or family who legitimately need a Sec. 109. Promotion of alternative dispute reso- First, this Member would thank the distin- ‘‘fresh start’’, which was the original intent be- lution. guished gentleman from Pennsylvania [Mr. hind bankruptcy legislation. Sec. 110. Enhanced disclosure for credit exten- sions secured by a dwelling. GEKAS], Chairman of the Judiciary Sub- Third, this Member also supports the posi- Sec. 111. Dual use debit card. committee on Commercial and Administrative tive steps that H.R. 833 takes in ensuring that Sec. 112. Enhanced disclosures under an open- Law, for introducing this bill. This Member those who owe child support and alimony pay- end credit plan. would also like to express his appreciation to ments are not allowed to evade this vital, fa- Sec. 113. Protection of savings earmarked for the distinguished gentleman from Illinois [Mr. milial responsibility by filing bankruptcy. The the postsecondary education of HYDE], the Chairman of the Judiciary Com- bill moves child support payments and alimony children. mittee, for his efforts in getting this measure to into the highest payment priority. Sec. 114. Effect of discharge. the House Floor for consideration. Sec. 115. Limiting trustee liability. In closing, this Member would encourage Sec. 116. Reinforce the fresh start. This Member supports the Bankruptcy Re- his colleagues to support H.R. 833, the Bank- Sec. 117. Discouraging bad faith repeat filings. form Act for numerous reasons; however, the ruptcy Reform Act. Sec. 118. Curbing abusive filings. most important reasons include the following: Ms. ROYBAL-ALLARD. Mr. Chairman, I rise Sec. 119. Debtor retention of personal property First, and of preeminent importance to the in opposition to this bill. security. nation’s agriculture sector, this Member sup- I would gladly vote for H.R. 833 if it were a Sec. 120. Relief from the automatic stay when ports the provision in H.R. 833 which perma- ‘‘balanced and sensible’’ bankruptcy reform the debtor does not complete in- nently extends Chapter 12 of the Bankruptcy bill. Unfortunately, H.R. 833 fails to include tended surrender of consumer debt Code for family farmers. Chapter 12 bank- collateral. reasonable consumer protections. Sec. 121. Giving secured creditors fair treatment ruptcy allows family farmers to reorganize their Because the closed rule prevented Mr. in chapter 13. debts as compared to liquidating their assets. DELAHUNT, Mr. WATT, Mr. LAFALCE and I from Sec. 122. Restraining abusive purchases on se- Chapter 12 bankruptcy has been a viable op- offering an amendment to ensure that the cured credit. tion for family farmers nationwide. It has al- credit industry assumes its responsibility for Sec. 123. Fair valuation of collateral.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00031 Fmt 0688 Sfmt 6343 E:\BR99\H05MY9.001 H05MY9 8524 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Sec. 124. Domiciliary requirements for exemp- Sec. 216. Defaults based on nonmonetary obli- Sec. 803. Notice of request for a determination tions. gations. of taxes. Sec. 125. Restrictions on certain exempt prop- Sec. 217. Sharing of compensation. Sec. 804. Rate of interest on tax claims. erty obtained through fraud. Sec. 218. Priority for administrative expenses. Sec. 805. Tolling of priority of tax claim time Sec. 126. Rolling stock equipment. TITLE III—GENERAL BUSINESS periods. Sec. 127. Discharge under chapter 13. BANKRUPTCY PROVISIONS Sec. 806. Priority property taxes incurred. Sec. 128. Bankruptcy judgeships. Sec. 807. Chapter 13 discharge of fraudulent Sec. 301. Definition of disinterested person. Sec. 129. Additional amendments to title 11, and other taxes. Sec. 302. Miscellaneous improvements. United States Code. Sec. 808. Chapter 11 discharge of fraudulent Sec. 303. Extensions. Sec. 130. Amendment to section 1325 of title 11, taxes. United States Code. Sec. 304. Local filing of bankruptcy cases. Sec. 809. Stay of tax proceedings. Sec. 131. Application of the codebtor stay only Sec. 305. Permitting assumption of contracts. Sec. 810. Periodic payment of taxes in chapter when the stay protects the debtor. TITLE IV SMALL BUSINESS BANKRUPTCY 11 cases. Sec. 132. Adequate protection for investors. PROVISIONS Sec. 811. Avoidance of statutory tax liens pro- Sec. 133. Limitation on luxury goods. hibited. Sec. 134. Giving debtors the ability to keep Sec. 401. Flexible rules for disclosure Statement Sec. 812. Payment of taxes in the conduct of leased personal property by as- and plan. business. sumption. Sec. 402. Definitions. Sec. 135. Adequate protection of lessors and Sec. 403. Standard form disclosure Statement Sec. 813. Tardily filed priority tax claims. Sec. 814. Income tax returns prepared by tax purchase money secured creditors. and plan. Sec. 136. Automatic stay. Sec. 404. Uniform national reporting require- authorities. Sec. 137. Extend period between bankruptcy ments. Sec. 815. Discharge of the estate’s liability for discharges. Sec. 405. Uniform reporting rules and forms for unpaid taxes. Sec. 138. Definition of domestic support obliga- small business cases. Sec. 816. Requirement to file tax returns to con- tion. Sec. 406. Duties in small business cases. firm chapter 13 plans. Sec. 139. Priorities for claims for domestic sup- Sec. 407. Plan filing and confirmation dead- Sec. 817. Standards for tax disclosure. port obligations. lines. Sec. 818. Setoff of tax refunds. Sec. 140. Requirements to obtain confirmation Sec. 408. Plan confirmation deadline. TITLE IX—ANCILLARY AND OTHER CROSS- and discharge in cases involving Sec. 409. Prohibition against extension of time. BORDER CASES domestic support obligations. Sec. 410. Duties of the United States trustee. Sec. 901. Amendment to add chapter 15 to title Sec. 141. Exceptions to automatic stay in do- Sec. 411. Scheduling conferences. 11, United States Code. mestic support obligation pro- Sec. 412. Serial filer provisions. Sec. 902. Amendments to other chapters in title ceedings. Sec. 413. Expanded grounds for dismissal or 11, United States Code. Sec. 142. Nondischargeability of certain debts conversion and appointment of TITLE X—FINANCIAL CONTRACT for alimony, maintenance, and trustee or examiner. PROVISIONS support. Sec. 414. Study of operation of title 11 of the Sec. 143. Continued liability of property. United States Code with respect to Sec. 1001. Treatment of certain agreements by Sec. 144. Protection of domestic support claims small businesses. conservators or ––receivers of in- against preferential transfer mo- Sec. 415. Payment of interest. sured depository institutions. tions. Sec. 1002. Authority of the corporation with re- TITLE V—MUNICIPAL BANKRUPTCY Sec. 145. Clarification of meaning of household spect to failed and failing institu- PROVISIONS goods. tions. Sec. 146. Nondischargeable debts. Sec. 501. Petition and proceedings related to pe- Sec. 1003. Amendments relating to transfers of Sec. 147. Monetary limitation on certain exempt tition. qualified financial contracts. property. Sec. 502. Applicability of other sections to chap- Sec. 1004. Amendments relating to Sec. 148. Bankruptcy fees. ter 9. disaffirmance or repudiation of Sec. 149. Collection of child support. TITLE VI—STREAMLINING THE qualified financial contracts. Sec. 150. Excluding employee benefit plan par- BANKRUPTCY SYSTEM Sec. 1005. Clarifying amendment relating to ticipant contributions and other Sec. 601. Creditor representation at first meet- master agreements. property from the estate. Sec. 1006. Federal Deposit Insurance Corpora- Sec. 151. Clarification of postpetition wages and ing of creditors. Sec. 602. Audit procedures. tion Improvement Act of 1991. benefits. Sec. 1007. Bankruptcy Code amendments. Sec. 152. Exceptions to automatic stay in do- Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases. Sec. 1008. Recordkeeping requirements. mestic support obligation pro- Sec. 1009. Exemptions from contemporaneous ceedings. Sec. 604. Dismissal for failure to timely file schedules or provide required in- execution –––requirement. Sec. 153. Automatic stay inapplicable to certain Sec. 1010. Damage measure. proceedings against the debtor. formation. Sec. 605. Adequate time to prepare for hearing Sec. 1011. Sipc stay. TITLE II—DISCOURAGING BANKRUPTCY on confirmation of the plan. Sec. 1012. Asset-backed securitizations. ABUSE Sec. 606. Chapter 13 plans to have a 5-year du- Sec. 1013. Federal Reserve collateral require- Sec. 201. Reenactment of chapter 12. ration in certain cases. ments. Sec. 202. Meetings of creditors and equity secu- Sec. 607. Sense of the Congress regarding ex- Sec. 1014. Effective date; application of ––– rity holders. pansion of rule 9011 of the Fed- amendments. Sec. 203. Protection of retirement savings in eral Rules of Bankruptcy Proce- TITLE XI—TECHNICAL CORRECTIONS bankruptcy. dure. Sec. 1101. Definitions. Sec. 204. Protection of refinance of security in- Sec. 608. Elimination of certain fees payable in Sec. 1102. Adjustment of dollar amounts. terest. chapter 11 bankruptcy cases. Sec. 1103. Extension of time. Sec. 205. Executory contracts and unexpired Sec. 609. Study of bankruptcy impact of credit Sec. 1104. Technical amendments. leases. extended to dependent students. Sec. 206. Creditors and equity security holders Sec. 1105. Penalty for persons who negligently Sec. 610. Prompt relief from stay in individual committees. or fraudulently prepare bank- Sec. 207. Amendment to section 546 of title 11, cases. ruptcy petitions. United States Code. Sec. 611. Stopping abusive conversions from Sec. 1106. Limitation on compensation of pro- Sec. 208. Limitation. chapter 13. fessional persons. Sec. 209. Amendment to section 330(a) of title Sec. 612. Bankruptcy appeals. Sec. 1107. Special tax provisions. 11, United States Code. Sec. 613. GAO study. Sec. 1108. Effect of conversion. Sec. 210. Postpetition disclosure and solicita- TITLE VII—BANKRUPTCY DATA Sec. 1109. Allowance of administrative ex- penses. tion. Sec. 701. Improved bankruptcy statistics. Sec. 1110. Priorities. Sec. 211. Preferences. Sec. 702. Uniform rules for the collection of Sec. 1111. Exemptions. Sec. 212. Venue of certain proceedings. bankruptcy data. Sec. 1112. Exceptions to discharge. Sec. 213. Period for filing plan under chapter Sec. 703. Sense of the Congress regarding avail- Sec. 1113. Effect of discharge. 11. ability of bankruptcy data. Sec. 214. Fees arising from certain ownership Sec. 1114. Protection against discriminatory interests. TITLE VIII—BANKRUPTCY TAX treatment. Sec. 215. Claims relating to insurance deposits PROVISIONS Sec. 1115. Property of the estate. in cases ancillary to foreign pro- Sec. 801. Treatment of certain liens. Sec. 1116. Preferences. ceedings. Sec. 802. Effective notice to government. Sec. 1117. Postpetition transactions.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00032 Fmt 0688 Sfmt 6343 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8525 Sec. 1118. Disposition of property of the estate. the Internal Revenue Service. Notwithstanding sion under this subsection and the court grants Sec. 1119. General provisions. any other provision of this clause, the debtor’s that motion and finds that the action of the Sec. 1120. Appointment of elected trustee. monthly expenses shall not include any pay- counsel for the debtor in filing under this chap- Sec. 1121. Abandonment of railroad line. ments for debts. ter violated Rule 9011, the court shall assess Sec. 1122. Contents of plan. ‘‘(iii) The debtor’s average monthly payments damages which may include ordering: Sec. 1123. Discharge under chapter 12. on account of secured debts shall be calculated ‘‘(i) the counsel for the debtor to reimburse the Sec. 1124. Bankruptcy cases and proceedings. as the total of all amounts scheduled as contrac- trustee for all reasonable costs in prosecuting Sec. 1125. Knowing disregard of bankruptcy tually due to secured creditors in each month of the motion, including reasonable attorneys’ fees. law or rule. the 60 months following the date of the petition, ‘‘(ii) the assessment of an appropriate civil Sec. 1126. Transfers made by nonprofit chari- and dividing that total by 60 months. penalty against the counsel for the debtor; and table corporations. ‘‘(iv) The debtor’s monthly unsecured priority ‘‘(iii) the payment of the civil penalty to the Sec. 1127. Prohibition on certain actions for debt payments (including payments for priority panel trustee, bankruptcy administrator or the failure to incur finance charges. child support and alimony claims) shall be cal- United States trustee. Sec. 1128. Protection of valid purchase money culated as the total amount of unsecured debts ‘‘(B) In the case of a petition filed under sec- security interests. entitled to priority, and dividing the total by 60 tions 301, 302, or 303 of this title and supporting Sec. 1129. Trustees. months. lists, schedules and documents filed under sec- TITLE XII—GENERAL EFFECTIVE DATE; ‘‘(v) For the purposes of this subsection, a tion 521(a)(1) of this title, the signature of an APPLICATION OF AMENDMENTS family or household shall consist of the debtor, attorney on the petition shall constitute a cer- the debtor’s spouse, and the debtor’s depend- tificate that the attorney has— Sec. 1201. Effective date; application of amend- ‘‘(i) performed a reasonable investigation into ments. ents, but not a legally separated spouse unless the spouse files a joint case with the debtor. the circumstances that gave rise to the petition; TITLE I—CONSUMER BANKRUPTCY ‘‘(B) In any proceeding brought under this and PROVISIONS subsection, the presumption of abuse may be re- ‘‘(ii) determined that the petition, lists, sched- Subtitle A—Needs based bankruptcy butted only by demonstrating extraordinary cir- ules, and documents— cumstances that require additional expenses or ‘‘(I) are well grounded in fact; and SEC. 101. CONVERSION. ‘‘(II) are warranted by existing law or a good adjustment of current monthly income. In order Section 706(c) of title 11, United States Code, faith argument for the extension, modification, to establish extraordinary circumstances, the is amended by inserting ‘‘or consents to’’ after or reversal of existing law and do not constitute debtor must itemize each additional expense or ‘‘requests’’. an abuse under paragraph (1) of this subsection. adjustment of income and provide documenta- SEC. 102. DISMISSAL OR CONVERSION. ‘‘(5) The court may award a debtor all reason- tion for such expenses or adjustment of income (a) IN GENERAL.—Section 707 of title 11, able costs in contesting a motion filed by a party and a detailed explanation of the extraordinary United States Code, is amended— in interest (not including a trustee or the United circumstances which make such expenses or ad- (1) by striking the section heading and insert- States trustee) under this subsection (including justment of income necessary and reasonable. ing the following: reasonable attorneys’ fees) if— The debtor shall attest under oath to the accu- ‘‘§ 707. Dismissal of a case or conversion to a ‘‘(A) the court does not grant the motion; and racy of any information provided to demonstrate ‘‘(B) the court finds that— case under chapter 13’’; that additional expenses or adjustment to in- ‘‘(i) the position of the party that brought the and come are required. The presumption of abuse motion was not substantially justified; or (2) in subsection (b)— may be rebutted only if such additional ex- ‘‘(ii) the party brought the motion solely for (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and penses or adjustments to income cause the debt- the purpose of coercing a debtor into waiving a (B) in paragraph (1), as redesignated by sub- or’s current monthly income less estimated ad- right guaranteed to the debtor under this title. paragraph (A) of this paragraph— ministrative expenses and reasonable attorneys’ ‘‘(6) However, only the court, the United (i) in the first sentence— fees, and the amounts set forth in clauses (ii), States trustee, or the trustee may file a motion (I) by striking ‘‘but not at the request or sug- (iii), and (iv) of subparagraph (A) when multi- to dismiss or convert a case under this sub- gestion of’’ and inserting ‘‘the trustee, or’’; plied by 60 to be less than $6,000. section if the current monthly income of the (II) by inserting ‘‘, or, with the debtor’s con- ‘‘(C) As part of the schedule of current income debtor and the debtor’s spouse combined, as of sent, convert such a case to a case under chap- and expenditures required under section 521 of the date of the order for relief, when multiplied ter 13 of this title,’’ after ‘‘consumer debts’’; and this title, the debtor shall include a statement of by 12, is less than the highest national median (III) by striking ‘‘substantial abuse’’ and in- the debtor’s current monthly income, and the family income last reported by the Bureau of the serting ‘‘abuse’’; and calculations which determine whether a pre- Census for a family of equal or lesser size, or in (ii) by striking the second and third sentences sumption arises under subparagraph (A)(i), the case of a household of 1 person, the national and inserting the following: showing how each amount is calculated. The median household income for 1 earner. Notwith- ‘‘(2)(A)(i) In considering under paragraph (1) bankruptcy rules promulgated under section standing the foregoing, the national median whether the granting of relief would be an 2075 of title 28, United States Code, shall pre- family income for a family of more than 4 indi- abuse of the provisions of this chapter, the court scribe a form for such statement and may pro- viduals shall be the national median family in- shall presume abuse exists if the debtor’s current vide general rules on its content. come last reported by the Bureau of the Census monthly income less estimated administrative ‘‘(D) No judge, United States trustee, panel for a family of 4 individuals plus $583 for each expenses and reasonable attorneys’ fees, and trustee, bankruptcy administrator or other additional member of the family. amounts set forth in clauses (ii) for monthly ex- party in interest shall bring a motion under this ‘‘(7) In making a determination whether to penses (which shall include, if applicable, the paragraph if the debtor and the debtor’s spouse dismiss a case under this section, the court may continuation of actual expenses of a dependent combined, as of the date of the order for relief, not take into consideration whether a debtor child under the age of 18 for tuition, books, and have current monthly total income equal to or has made, or continues to make, charitable con- required fees at a private elementary or sec- less than the regional median household month- tributions (that meet the definition of ‘chari- ondary school, not exceeding $10,000 per year, ly income calculated on a semiannual basis for table contribution’ under section 548(d)(3)) to which amount shall be adjusted pursuant to a household of equal size. However, for a house- any qualified religious or charitable entity or section 104(b)), (iii) for monthly payments on ac- hold of more than 4 individuals, the median in- organization (as that term is defined in section count of secured debts, and (iv) for monthly un- come shall be that of a household of 4 individ- 548(d)(4)). secured priority debt payments, and multiplied uals plus $583 for each additional member of ‘‘(8) Not later than 3 years after the date of by 60 months is not less than $6,000. that household. enactment of the Bankruptcy Reform Act of ‘‘(ii) The debtor’s monthly expenses shall be ‘‘(3) In considering under paragraph (1) 1999, the Director of the Executive Office for the debtor’s applicable monthly expense whether the granting of relief would be an United States Trustees shall submit a report, to amounts specified under the National Standards abuse of the provisions of this chapter in a case the Committee on the Judiciary of the House of and Local Standards, and the debtor’s applica- in which the presumption in paragraph (2)(A)(i) Representatives and the Committee on the Judi- ble monthly expenses for the categories specifi- does not apply or has been rebutted, the court ciary of the Senate, containing its findings re- cally listed as Other Necessary Expenses issued shall consider— garding the utilization of the Internal Revenue by the Internal Revenue Service for the area in ‘‘(A) whether the debtor filed the petition in Service standards for determining the current which the debtor resides, as in effect on the date bad faith; or monthly expenses under section 707(b)(1)(A)(ii) of the entry of the order for relief, for the debt- ‘‘(B) the totality of the circumstances (includ- of title 11, United States Code, of debtors and or, the dependents of the debtor, and the spouse ing whether the debtor seeks to reject a personal the impact that the application of such stand- of the debtor in a joint case, if the spouse is not services contract and the financial need for ards has had on debtors and on the bankruptcy otherwise a dependent. In addition, if it is dem- such rejection as sought by the debtor) of the courts. Such report may include recommenda- onstrated that it is reasonable and necessary, debtor’s financial situation demonstrates abuse. tions for amendments to such title, consistent the debtor may also subtract an allowance of up ‘‘(4)(A) If a panel trustee appointed under with the Director’s findings.’’. to 5% of the food and clothing categories as section 586(a)(1) of title 28 or bankruptcy admin- (b) DEFINITIONS.—Section 101 of title 11, specified by the National Standards issued by istrator brings a motion for dismissal or conver- United States Code, is amended—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00033 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8526 CONGRESSIONAL RECORD—HOUSE May 5, 1999 (1) by inserting after paragraph (10) the fol- ‘‘(2) statements specifying that— assisted person in return for the payment of lowing: ‘‘(A) a person who knowingly and fraudu- money or other valuable consideration, or who ‘‘(10A) ‘current monthly income’ means the lently conceals assets or makes a false oath or is a bankruptcy petition preparer pursuant to average monthly income from all sources derived statement under penalty of perjury in connec- section 110 of this title, but does not include any which the debtor, or in a joint case, the debtor tion with a bankruptcy case shall be subject to person that is any of the following or an officer, and the debtor’s spouse, receive without regard fine, imprisonment, or both; and director, employee or agent thereof— to whether it is taxable income, in the 180 days ‘‘(B) all information supplied by a debtor in ‘‘(A) any nonprofit organization which is ex- preceding the date of determination, and in- connection with a bankruptcy case is subject to empt from taxation under section 501(c)(3) of the cludes any amount paid by anyone other than examination by the Attorney General.’’. Internal Revenue Code of 1986; the debtor or, in a joint case, the debtor and the SEC. 104. DEBTOR FINANCIAL MANAGEMENT ‘‘(B) any creditor of the person to the extent debtor’s spouse, on a regular basis to the house- TRAINING TEST PROGRAM. the creditor is assisting the person to restructure hold expenses of the debtor or the debtor’s de- (a) DEVELOPMENT OF FINANCIAL MANAGEMENT any debt owed by the person to the creditor; or pendents and, in a joint case, the debtor’s AND TRAINING CURRICULUM AND MATERIALS.— ‘‘(C) any depository institution (as defined in spouse if not otherwise a dependent, but ex- The Director of the Executive Office for United section 3 of the Federal Deposit Insurance Act) cludes payments to victims of war crimes or States Trustees (in this section referred to as the or any Federal credit union or State credit crimes against humanity;’’; and ‘‘Director’’) shall consult with a wide range of union (as those terms are defined in section 101 (2) by inserting after paragraph (17) the fol- individuals who are experts in the field of debt- of the Federal Credit Union Act), or any affil- lowing: or education, including trustees who are ap- iate or subsidiary of such a depository institu- ‘‘(17A) ‘estimated administrative expenses and pointed under chapter 13 of title 11 of the tion or credit union;’’. reasonable attorneys’ fees’ means 10 percent of United States Code and who operate financial (b) CONFORMING AMENDMENT.—In section projected payments under a chapter 13 plan;’’. management education programs for debtors, 104(b)(1) by inserting ‘‘101(3),’’ after ‘‘sections’’. (c) ADMINISTRATIVE PROVISIONS.—Section 704 and shall develop a financial management SEC. 106. ENFORCEMENT. of title 11, United States Code, is amended— training curriculum and materials that can be (a) ENFORCEMENT.—Subchapter II of chapter (1) in paragraph (8) by striking ‘‘and’’ at the used to educate individual debtors on how to 5 of title 11, United States Code, is amended by end; better manage their finances. adding at the end the following: (2) in paragraph (9) by striking the period at (b) TEST—(1) The Director shall select 6 judi- ‘‘§ 526. Debt relief agency enforcement the end and inserting ‘‘; and’’; and cial districts of the United States in which to ‘‘(a) A debt relief agency shall not— (3) by adding at the end the following: test the effectiveness of the financial manage- ‘‘(1) fail to perform any service which the debt ‘‘(10)(A) With respect to an individual debtor, ment training curriculum and materials devel- relief agency has told the assisted person or pro- the trustee shall review all materials filed by the oped under subsection (a). spective assisted person the agency would pro- debtor, consider all information presented at the (2) For a 18-month period beginning not later vide that person in connection with the prepa- first meeting of creditors, and within 10 days than 270 days after the date of the enactment of ration for or activities during a proceeding after the first meeting of creditors file with the this Act, such curriculum and materials shall under this title; court a statement as to whether the debtor’s be, for the 6 judicial districts selected under ‘‘(2) make any statement, or counsel or advise case should be presumed to be an abuse under paragraph (1), used as the instructional course any assisted person to make any statement in section 707(b) of this title. The court shall pro- concerning personal financial management for any document filed in a proceeding under this vide a copy of such statement to all creditors purposes of section 111 of this title. title, which is untrue and misleading or which within 5 days after such statement is filed. If, (c) EVALUATION.—(1) During the 1-year period upon the exercise of reasonable care, should be based on the filing of such statement with the referred to in subsection (b), the Director shall known by the debt relief agency to be untrue or court, the trustee determines that the debtor’s evaluate the effectiveness of— misleading; (A) the financial management training cur- case should be presumed to be an abuse under ‘‘(3) misrepresent to any assisted person or riculum and materials developed under sub- section 707(b) of this title and if the current prospective assisted person, directly or indi- section (a); and monthly income of the debtor and the debtor’s rectly, affirmatively or by material omission, (B) a sample of existing consumer education spouse combined, as of the date of the order for what services the debt relief agency can reason- programs such as those described in the Report relief, when multiplied by 12, is not less than the ably expect to provide that person, or the bene- of the National Bankruptcy Review Commission highest national median family income reported fits an assisted person may obtain or the dif- (October 20, 1997) that are representative of con- for a family of equal or lesser size, or in the case ficulties the person may experience if the person sumer education programs carried out by the of a household of 1 person, the national median seeks relief in a proceeding pursuant to this credit industry, by trustees serving under chap- household income for 1 earner, then the trustee title; or ter 13 of title 11 of the United States Code, and shall within 30 days of the filing of such state- ‘‘(4) advise an assisted person or prospective by consumer counselling groups. assisted person to incur more debt in contempla- ment, either— (2) Not later than 3 months after concluding ‘‘(i) file a motion to dismiss or convert under tion of that person filing a proceeding under such evaluation, the Director shall submit a re- this title or in order to pay an attorney or bank- section 707(b) of this title; or port to the Speaker of the House of Representa- ‘‘(ii) file a statement setting forth the reasons ruptcy petition preparer fee or charge for serv- tives and the President pro tempore of the Sen- ices performed as part of preparing for or rep- the trustee or bankruptcy administrator does ate, for referral to the appropriate committees of not believe that such a motion would be appro- resenting a debtor in a proceeding under this the Congress, containing the findings of the Di- title.’’. priate. rector regarding the effectiveness of such cur- ‘‘(B) Notwithstanding subparagraph (A), for ‘‘(b) ASSISTED PERSON WAIVERS INVALID.— riculum, such materials, and such programs and purposes of this paragraph the national family Any waiver by any assisted person of any pro- their costs. income for a family of more than 4 individuals tection or right provided by or under this section shall be the national median family income last Subtitle B—Consumer Bankruptcy Protections shall not be enforceable against the debtor by reported by the Bureau of the Census for a fam- SEC. 105. DEFINITIONS. any Federal or State court or any other person, ily of 4 individuals plus $583 for each additional (a) DEFINITIONS.—Section 101 of title 11, but may be enforced against a debt relief agen- member of the family.’’. United States Code, is amended— cy. (d) CLERICAL AMENDMENT.—The table of sec- (1) by inserting after paragraph (2) the fol- ‘‘(c) NONCOMPLIANCE.— tions at the beginning of chapter 7 of title 11, lowing: ‘‘(1) Any contract between a debt relief agen- United States Code, is amended by striking the ‘‘(3) ‘assisted person’ means any person whose cy and an assisted person for bankruptcy assist- item relating to section 707 and inserting the fol- debts consist primarily of consumer debts and ance which does not comply with the material lowing: whose non-exempt assets are less than requirements of this section shall be treated as $150,000;’’; void and may not be enforced by any Federal or ‘‘707. Dismissal of a case or conversion to a case (2) by inserting after paragraph (4) the fol- State court or by any other person. under chapter 13.’’. lowing: ‘‘(2) Any debt relief agency shall be liable to SEC. 103. NOTICE OF ALTERNATIVES. ‘‘(4A) ‘bankruptcy assistance’ means any an assisted person in the amount of any fees or Section 342(b) of title 11, United States Code, goods or services sold or otherwise provided to charges in connection with providing bank- is amended to read as follows: an assisted person with the express or implied ruptcy assistance to such person which the debt ‘‘(b) Before the commencement of a case under purpose of providing information, advice, coun- relief agency has received, for actual damages, this title by an individual whose debts are pri- sel, document preparation or filing, or attend- and for reasonable attorneys’ fees and costs if marily consumer debts, the clerk shall give to ance at a creditors’ meeting or appearing in a the debt relief agency is found, after notice and such individual written notice containing— proceeding on behalf of another or providing hearing, to have— ‘‘(1) a brief description of— legal representation with respect to a proceeding ‘‘(A) intentionally or negligently failed to ‘‘(A) chapters 7, 11, 12, and 13 and the general under this title;’’; and comply with any provision of this section with purpose, benefits, and costs of proceeding under (3) by inserting after paragraph (12A) the fol- respect to a bankruptcy case or related pro- each of those chapters; and lowing: ceeding of the assisted person; ‘‘(B) the types of services available from credit ‘‘(12B) ‘debt relief agency’ means any person ‘‘(B) provided bankruptcy assistance to an as- counseling agencies; and who provides any bankruptcy assistance to an sisted person in a case or related proceeding

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00034 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8527 which is dismissed or converted because of the the hearing, stating that the debtor is rep- cluding under section 127A of the Truth in debt relief agency’s intentional or negligent fail- resented by counsel, and identifying such coun- Lending Act, regarding the tax deductibility of ure to file bankruptcy papers, including papers sel;’’; and interest paid on such transaction; and specified in section 521 of this title; or (B) in paragraph (6)(A)— (2) whether a consumer engaging in a closed- ‘‘(C) intentionally or negligently disregarded (i) by striking ‘‘and’’ at the end of clause (i); end credit transaction (as defined pursuant to the material requirements of this title or the (ii) by striking the period at the end of clause section 103 of the Truth in Lending Act) secured Federal Rules of Bankruptcy Procedure applica- (ii) and inserting ‘‘; and’’; and by the consumer’s principal dwelling is provided ble to such debt relief agency. (iii) by adding at the end thereof the fol- adequate information regarding the tax deduct- ‘‘(3) In addition to such other remedies as are lowing: ibility of interest paid on such transaction. provided under State law, whenever the chief ‘‘(iii) not entered into by the debtor as the re- In conducting such study, the Board shall spe- law enforcement officer of a State, or an official sult of a threat by the creditor to take any ac- cifically consider whether additional disclosures or agency designated by a State, has reason to tion that cannot be legally taken or that is not are necessary with respect to such open-end or believe that any person has violated or is vio- intended to be taken.’’; and closed-end credit transactions in which the lating this section, the State— (2) in the 3d sentence of subsection (d)— amount of the credit extended exceeds the fair ‘‘(A) may bring an action to enjoin such viola- (A) by striking ‘‘of this section’’ and inserting market value of the dwelling. tion; a comma; and (b) REGULATIONS.—If the Board determines ‘‘(B) may bring an action on behalf of its resi- (B) by inserting after ‘‘such agreement’’ the that additional disclosures are necessary in con- dents to recover the actual damages of assisted following: nection with transactions described in sub- persons arising from such violation, including ‘‘or if the consideration for such agreement is section (a), the Board, pursuant to its authority any liability under paragraph (2); and based on a wholly unsecured consumer debt (ex- under the Truth in Lending Act, may promul- ‘‘(C) in the case of any successful action cept for debts owed to creditors defined in sec- gate regulations that would require such addi- under subparagraph (A) or (B), shall be award- tion 461(b)(1)(A)(iv) of title 12, United States tional disclosures. Any such regulations promul- ed the costs of the action and reasonable attor- Code) and the debtor has not waived the debt- gated by the Board under this section shall not ney fees as determined by the court. or’s right to a hearing on the agreement in ac- take effect before the end of the 36-month period ‘‘(4) The United States District Court for any cordance with subsection (c)(2)(C) of this sec- after the date of the enactment of this Act. district located in the State shall have concur- tion’’. SEC. 111. DUAL USE DEBIT CARD. rent jurisdiction of any action under subpara- SEC. 109. PROMOTION OF ALTERNATIVE DISPUTE (a) STUDY REQUIRED.—The Board of Gov- graph (A) or (B) of paragraph (3). RESOLUTION. ernors of the Federal Reserve System (in this ‘‘(5) Notwithstanding any other provision of (a) REDUCTION OF CLAIM.—Section 502 of title section referred to as the ‘‘Board’’) shall con- Federal law and in addition to any other rem- 11, United States Code, is amended by adding at duct a study of existing protections provided to edy provided under Federal or State law, if the the end the following: consumers to limit their liability for unauthor- court, on its own motion or on the motion of the ‘‘(k)(1) The court, on the motion of the debtor ized use of a debit card or similar access device. United States trustee or the debtor, finds that a and after a hearing, may reduce a claim filed (b) SPECIFIC CONSIDERATIONS.—In conducting person intentionally violated this section, or en- under this section based wholly on unsecured the study required by subsection (a), the Board gaged in a clear and consistent pattern or prac- consumer debts by not more than 20 percent, if shall specifically consider the following— (1) the extent to which existing provisions of tice of violating this section, the court may— the debtor can prove by clear and convincing section 909 of the Electronic Fund Transfer Act ‘‘(A) enjoin the violation of such section; or evidence that the claim was filed by a creditor and the Board’s implementing regulations pro- ‘‘(B) impose an appropriate civil penalty who unreasonably refused to negotiate a rea- vide adequate unauthorized use liability protec- against such person. sonable alternative repayment schedule pro- tion for consumers; ‘‘(c) RELATION TO STATE LAW.—This section posed by an approved credit counseling agency (2) the extent to which any voluntary indus- shall not annul, alter, affect or exempt any per- acting on behalf of the debtor, and if— try rules have enhanced the level of protection son subject to those sections from complying ‘‘(A) such offer was made within the period afforded consumers in connection with such un- with any law of any State except to the extent beginning 60 days before the filing of the peti- that such law is inconsistent with those sec- authorized use liability; and tion; (3) whether amendments to the Electronic tions, and then only to the extent of the incon- ‘‘(B) such offer provided for payment of at sistency.’’. Funds Transfer Act or the Board’s implementing least 60 percent of the amount of the debt over regulations thereto are necessary to provide ade- (b) CONFORMING AMENDMENT.—The table of a period not to exceed the repayment period of sections for chapter 5 of title 11, United States quate protection for consumers in this area. the loan, or a reasonable extension thereof; and (c) REPORT AND REGULATIONS.—Not later than Code, is amended by inserting after the item re- ‘‘(C) no part of the debt under the alternative lating to section 527, the following: 2 years after the date of the enactment of this repayment schedule is nondischargeable, is enti- Act, the Board shall make public a report on its ‘‘526. Debt relief agency enforcement.’’. tled to priority under section 507 of this title, or findings with respect to the adequacy of existing SEC. 107. SENSE OF THE CONGRESS. would be paid a greater percentage in a chapter protections afforded consumers with respect to It is the sense of the Congress that States 13 proceeding than offered by the debtor. unauthorized-use liability for debit cards and should develop curricula relating to the subject ‘‘(2) The debtor shall have the burden of prov- similar access devices. If the Board determines of personal finance, designed for use in elemen- ing that the proposed alternative repayment that such protections are inadequate, the tary and secondary schools. schedule was made in the 60-day period speci- Board, pursuant to its authority under the Elec- SEC. 108. DISCOURAGING ABUSIVE REAFFIRMA- fied in subparagraph (A) and that the creditor tronic Funds Transfer Act, may issue regula- TION PRACTICES. unreasonably refused to consider the debtor’s tions to address such inadequacy. Any regula- Section 524 of title 11, United States Code, is proposal.’’. tions issued by the Board shall not be effective amended— (b) LIMITATION ON AVOIDABILITY.—Section 547 before 36 months after the date of the enactment (1) in subsection (c)— of title 11, United States Code, is amended by of this Act. (A) in paragraph (2)— adding at the end the following: SEC. 112. ENHANCED DISCLOSURES UNDER AN (i) in subparagraph (A) by striking ‘‘and’’ at ‘‘(h) The trustee may not avoid a transfer if OPEN-END CREDIT PLAN. the end; such transfer was made as a part of an alter- (a) INITIAL AND ANNUAL MINIMUM PAYMENT (ii) in subparagraph (B) by adding ‘‘and’’ at native repayment plan between the debtor and DISCLOSURE.—Section 127(a) of the Truth in the end; and any creditor of the debtor created by an ap- Lending Act (15 U.S.C. 1637(a)) is amended by (iii) by adding at the end the following: proved credit counseling agency.’’. adding at the end the following: ‘‘(C) if the consideration for such agreement is SEC. 110. ENHANCED DISCLOSURE FOR CREDIT ‘‘(9) In the case of any credit or charge card based on a wholly unsecured consumer debt (ex- EXTENSIONS SECURED BY A DWELL- account under an open-end consumer credit cept for debts owed to creditors defined in sec- ING. plan on which a minimum monthly or periodic tion 461(b)(1)(A)(iv) of title 12, United States (a) STUDY REQUIRED.—During the period be- payment will be required, other than an account Code), such agreement contains a clear and con- ginning 180 days after the date of enactment of described in paragraph (8)— spicuous statement which advises the debtor— this Act and ending 18 months after the date of ‘‘(A) the following statement: ‘The minimum ‘‘(i) that the debtor is entitled to a hearing be- the enactment, the Board of Governors of the payment amount shown on your billing state- fore the court at which the debtor shall appear Federal Reserve System (in this section referred ment is the smallest payment which you can in person and at which the court will decide to as the ‘‘Board’’) shall conduct a study and make in order to keep the account in good whether the agreement is an undue hardship, submit to Congress a report (including rec- standing. This payment option is offered as a not in the debtor’s best interest, and not the re- ommendations for any appropriate legislation) convenience and you may make larger payments sult of a threat by the creditor to take any ac- regarding— at any time. Making only the minimum payment tion that cannot be legally taken or that is not (1) whether a consumer engaging in an open- each month will increase the amount of interest intended to be taken; and end credit transaction (as defined pursuant to you pay and the length of time it takes to repay ‘‘(ii) that if the debtor is represented by coun- section 103 of the Truth in lending Act) secured your outstanding balance.’; sel, the debtor may waive the debtor’s right to by the consumer’s principal dwelling is provided ‘‘(B) if the plan provides that the consumer such a hearing by signing a statement waiving adequate information under Federal law, in- will be permitted to forgo making a minimum

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00035 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8528 CONGRESSIONAL RECORD—HOUSE May 5, 1999 payment during a specified billing cycle, a state- (5) the availability of low minimum payment (1) in subsection (a) by adding at the end the ment, if applicable, that if the consumer chooses options is a cause of consumers experiencing fi- following: to forgo making the minimum payment, finance nancial difficulty. ‘‘The trustee in a case under this title is not lia- charges will continue to accrue; and (f) REPORT TO CONGRESS.—Before the end of ble personally or on such trustee’s bond for acts ‘‘(C) an example, based on an annual percent- the 2-year period beginning on the date of the taken within the scope of the trustee’s duties or age rate and method for determining minimum enactment of this Act, the Board shall submit to authority as delineated by other sections of this periodic payments recently in effect for that Congress a report containing the findings of the title or by order of the court, except to the ex- creditor, and a $500 outstanding balance, show- Board in connection with the study required tent that the trustee acted with gross neg- ing the estimated minimum periodic payment, under subsection (e). ligence. Gross negligence shall be defined as and the estimated period of time it would take to (g) REGULATIONS.—The Board shall, by regu- reckless indifference or deliberate disregard of repay the $500 outstanding balance if the con- lation promulgated pursuant to its authority the trustee’s fiduciary duty.’’; and sumer paid only the minimum periodic payment under the Truth in Lending Act, require addi- (2) in subsection (c) by inserting ‘‘for any acts on each monthly or periodic statement and ob- tional disclosures to consumers regarding min- within the scope of the trustee’s authority de- tained no additional extensions of credit. imum payment features, including periodic fined in subsection (a)’’ before the period at the ‘‘(10) With respect to one billing cycle per cal- statement disclosures, if the Board determines end. endar year, the creditor shall transmit the infor- that such disclosures are necessary based on its (b) ROLE AND CAPACITY OF TRUSTEE.—Section mation required under paragraph (9) to each findings. Any such regulations promulgated by 323 of title 11, United States Code, is amended— consumer to whom the creditor is required to the Board shall not take effect earlier than Jan- (1) in subsection (b) by inserting at the end transit a statement pursuant to subsection (b) uary 1, 2002. the following: ‘‘in the trustee’s official capacity for such billing cycle. The creditor shall also SEC. 113. PROTECTION OF SAVINGS EARMARKED as representative of the estate’’ before the period transmit to such consumer for such cycle a FOR THE POSTSECONDARY EDU- at the end; and worksheet prescribed by the Board to assist the CATION OF CHILDREN. (2) by adding at the end the following: consumer in determining the consumer’s house- Section 522 of title 11, United States Code, is ‘‘(c) The trustee in a case under this title may hold income and debt obligations.’’. amended— not be sued, either personally, in a representa- (b) PERIODIC MINIMUM PAYMENT DISCLO- (1) in subsection (b)(2)— tive capacity, or against the trustee’s bond in SURES.—Section 127(b) of the Truth in Lending (A) in subparagraph (A) by striking ‘‘and’’ at favor of the United States— Act (15 U.S.C. 1637(b)) is amended by adding at the end; ‘‘(1) for acts taken in furtherance of the trust- the end the following: (B) in subparagraph (B) by striking the period ee’s duties or authority in a case in which the ‘‘(11) The following statement: ‘The minimum at the end and inserting ‘‘; and’’; and debtor is subsequently determined to be ineli- payment amount shown on your billing state- (C) by adding at the end the following: gible for relief under the chapter in which the ment is the smallest payment which you can ‘‘(C) except as provided in paragraph (n), trustee was appointed; or make in order to keep the account in good funds placed in an education individual retire- ‘‘(2) for the dissemination of statistics and standing. This payment option is offered as a ment account (as defined in section 530(b)(1) of other information regarding a case or cases, un- convenience and you may make larger payments the Internal Revenue Code of 1986) not less than less the trustee has actual knowledge that the at any time. Making only the minimum payment 365 days before the date of entry of the order of information is false. each month will increase the amount of interest relief but only to the extent such funds— ‘‘(d) The trustee in a case under this title may you pay and the length of time it takes to repay ‘‘(i) are not pledged or promised to any entity not be sued in a personal capacity without leave your outstanding balance.’ ’’. in connection with any extension of credit; and of the bankruptcy court in which the case is (c) ENFORCEMENT.—Section 127 of the Truth ‘‘(ii) are not excess contributions (as described pending.’’. in Lending Act (15 U.S.C. 1637) is amended by in section 4973(e) of the Internal Revenue Code SEC. 116. REINFORCE THE FRESH START. adding at the end the following: of 1986).’’; and (a) RESTORATION OF AN EFFECTIVE DIS- ‘‘(h) In promulgating regulations to implement (2) by adding at the end the following: CHARGE.—Section 523(a)(17) of title 11, United the disclosure of an example required under sub- ‘‘(n) For purposes of subsection (b)(3)(C), States Code, is amended— section (a)(9)(C) and (a)(10), the Board shall set funds placed in an education individual retire- (1) by striking ‘‘by a court’’ and inserting ‘‘by forth a model disclosure to accompany the ex- ment account shall not be exempt under this any court’’, ample stating that the credit features shown are subsection— (2) by striking ‘‘section 1915(b) or (f)’’ and in- only an example which does not obligate the ‘‘(1) unless the designated beneficiary of such serting ‘‘subsection (b) or (f)(2) of section 1915’’, creditor, but is intended to illustrate the approx- account was a dependent child of the debtor for and imate length of time it could take to repay using the taxable year for which the funds were (3) by inserting ‘‘(or a similar non-Federal the assumptions set forth in subsection (a)(9)(C) placed in such account; and law)’’ after ‘‘title 28’’ each place it appears. without regard to any other factors that could ‘‘(2) to the extent such funds exceed— SEC. 117. DISCOURAGING BAD FAITH REPEAT FIL- impact an approximate repayment period, in- ‘‘(A) $50,000 in the aggregate in all such ac- INGS. cluding other credit features or the consumer’s counts having the same designated beneficiary; Section 362(c) of title 11, United States Code, payment or other behavior with respect to the or is amended— account. Compliance with the disclosures re- ‘‘(B) $100,000 in the aggregate in all such ac- (1) in paragraph (1) by striking ‘‘and’’ at the quired under subsection (a)(9)(C) and (a)(10) counts attributable to all such dependent chil- end; shall be enforced exclusively by the Federal dren of the debtor.’’. (2) in paragraph (2) by striking the period at agencies set forth in section 108.’’. SEC. 114. EFFECT OF DISCHARGE. the end and inserting a semicolon; and (d) REGULATORY IMPLEMENTATION.—The Section 524 of title 11, United States Code, is (3) by adding at the end the following new Board of Governors of the Federal Reserve Sys- amended by adding at the end the following: paragraphs: tem (in this section referred to as the ‘‘Board’’) ‘‘(i) The willful failure of a creditor to credit ‘‘(3) If a single or joint case is filed by or shall promulgate regulations implementing the payments received under a plan confirmed against an individual debtor under chapter 7, amendments made by subsections (a) and (b). under this title (including a plan of reorganiza- 11, or 13 (other than a case refiled under a Such regulations shall take effect no earlier tion confirmed under chapter 11 of this title) in chapter other than chapter 7 after dismisssal than the end of the 36-month period beginning the manner required by the plan (including under section 707(b) of this title), and if a single on the date of the enactment of this Act. or joint case of the debtor was pending within (e) STUDY REQUIRED.—The Board shall con- crediting the amounts required under the plan) the previous 1-year period but was dismissed, duct a study to determine whether consumers shall constitute a violation of any injunction the stay under subsection (a) with respect to have adequate information about borrowing ac- under subsection (a)(2) which has arisen at the tivities which may result in financial problems. time of the failure. any action taken with respect to a debt or prop- In studying this issue, the Board shall consider ‘‘(j)(1) An individual who is injured by the erty securing such debt or with respect to any the extent to which— willful failure of a creditor to comply with the lease will terminate with respect to the debtor (1) consumers, in establishing new credit ar- requirements for a reaffirmation agreement on the 30th day after the filing of the later case. rangements, are aware of their existing payment under subsections (c) and (d), or by any willful Upon motion by a party in interest for continu- obligations, the need to consider those obliga- violation of the injunction under subsection ation of the automatic stay and upon notice and tions in deciding to take on new credit, and how (a)(2), shall be entitled to recover— a hearing, the court may extend the stay in par- taking on excessive credit can result in financial ‘‘(A) the greater of— ticular cases as to any or all creditors (subject difficulty; ‘‘(i) the amount of actual damages; or to such conditions or limitations as the court (2) minimum periodic payment features offered ‘‘(ii) $1,000; and may then impose) after notice and a hearing in connection with open-end credit plans impact ‘‘(B) costs and attorneys’ fees. completed before the expiration of the 30-day pe- consumer default rates; ‘‘(2) An action to recover for a violation speci- riod only if the party in interest demonstrates (3) consumers always make only the minimum fied in paragraph (1) may not be brought as a that the filing of the later case is in good faith payment throughout the life of the plan; class action.’’. as to the creditors to be stayed. A case is pre- (4) consumers are aware that making only SEC. 115. LIMITING TRUSTEE LIABILITY. sumptively filed not in good faith (but such pre- minimum payments will increase the cost and (a) QUALIFICATION OF TRUSTEE.—Section 322 sumption may be rebutted by clear and con- repayment period of an open-end loan; and of title 11, United States Code, is amended— vincing evidence to the contrary)—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00036 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8529 ‘‘(A) as to all creditors if— which the individual was a debtor if, as of the debtor takes 1 of the following actions within 45 ‘‘(i) more than 1 previous case under any of date of dismissal of such case, such action was days after the first meeting of creditors under chapter 7, 11, or 13 in which the individual was still pending or had been resolved by termi- section 341(a)— a debtor was pending within such 1-year period; nating, conditioning, or limiting the stay as to ‘‘(A) enters into an agreement with the cred- ‘‘(ii) a previous case under any of chapters 7, action of such creditor.’’. itor pursuant to section 524(c) of this title with 11, or 13 in which the individual was a debtor SEC. 118. CURBING ABUSIVE FILINGS. respect to the claim secured by such property; or was dismissed within such 1-year period, after (a) IN GENERAL.—Section 362(d) of title 11, ‘‘(B) redeems such property from the security the debtor failed to file or amend the petition or United States Code, is amended— interest pursuant to section 722 of this title. other documents as required by this title or the (1) in paragraph (2), by striking ‘‘or’’ at the ‘‘If the debtor fails to so act within the 45-day court without substantial excuse (but mere inad- end; period, the stay under section 362(a) of this title vertence or negligence shall not be substantial (2) in paragraph (3), by striking the period at is terminated with respect to the personal prop- excuse unless the dismissal was caused by the the end and inserting ‘‘; or’’; and erty of the estate or of the debtor which is af- negligence of the debtor’s attorney), failed to (3) by adding at the end the following: fected, such property shall no longer be property provide adequate protection as ordered by the ‘‘(4) with respect to a stay of an act against of the estate, and the creditor may take what- court, or failed to perform the terms of a plan real property under subsection (a), by a creditor ever action as to such property as is permitted confirmed by the court; or whose claim is secured by an interest in such by applicable nonbankruptcy law, unless the ‘‘(iii) there has not been a substantial change real estate, if the court finds that the filing of court determines on the motion of the trustee in the financial or personal affairs of the debtor the bankruptcy petition was part of a scheme to brought before the expiration of such 45-day pe- since the dismissal of the next most previous delay, hinder, and defraud creditors that in- riod, and after notice and a hearing, that such case under any of chapters 7, 11, or 13 of this volved either— property is of consequential value or benefit to title, or there is not any other reason to con- ‘‘(A) transfer of all or part ownership of, or the estate, orders appropriate adequate protec- clude that the later case will be concluded, if a other interest in, the real property without the tion of the creditor’s interest, and orders the case under chapter 7 of this title, with a dis- consent of the secured creditor or court ap- debtor to deliver any collateral in the debtor’s charge, and if a chapter 11 or 13 case, a con- proval; or possession to the trustee.’’; and firmed plan which will be fully performed; ‘‘(B) multiple bankruptcy filings affecting the (2) in section 722 by inserting ‘‘in full at the ‘‘(B) as to any creditor that commenced an ac- real property. time of redemption’’ before the period at the tion under subsection (d) in a previous case in If recorded in compliance with applicable State end. which the individual was a debtor if, as of the laws governing notices of interests or liens in SEC. 120. RELIEF FROM THE AUTOMATIC STAY date of dismissal of such case, that action was real property, an order entered pursuant to this WHEN THE DEBTOR DOES NOT COM- still pending or had been resolved by termi- subsection shall be binding in any other case PLETE INTENDED SURRENDER OF nating, conditioning, or limiting the stay as to under this title purporting to affect the real CONSUMER DEBT COLLATERAL. actions of such creditor. property filed not later than 2 years after that Title 11, United States Code, is amended as ‘‘(4) If a single or joint case is filed by or recording, except that a debtor in a subsequent follows— against an individual debtor under this title case may move for relief from such order based (1) in section 362— (other than a case refiled under a chapter other upon changed circumstances or for good cause (A) by striking ‘‘(e), and (f)’’ in subsection (c) than chapter 7 after a dismissal under section shown, after notice and a hearing. Any Federal, and inserting in lieu thereof ‘‘(e), (f), and (h)’’; 707(b) of this title), and if 2 or more single or State, or local governmental unit which accepts and joint cases of the debtor were pending within notices of interests or liens in real property shall (B) by redesignating subsection (h) as sub- the previous year but were dismissed, the stay accept any certified copy of an order described section (i) and by inserting after subsection (g) under subsection (a) will not go into effect upon in this subsection for indexing and recording.’’. the following: the filing of the later case. On request of a party (b) AUTOMATIC STAY.—Section 362(b) of title ‘‘(h) In an individual case pursuant to chap- in interest, the court shall promptly enter an 11, United States Code, is amended— ter 7, 11, or 13 the stay provided by subsection order confirming that no stay is in effect. If a (1) in paragraph (17), by striking ‘‘or’’ at the (a) is terminated with respect to personal prop- party in interest requests within 30 days of the end; erty of the estate or of the debtor securing in filing of the later case, the court may order the (2) in paragraph (18) by striking the period at whole or in part a claim, or subject to an unex- stay to take effect in the case as to any or all the end and inserting a semicolon; and pired lease, and such personal property shall no creditors (subject to such conditions or limita- (3) by inserting after paragraph (18) the fol- longer be property of the estate if the debtor tions as the court may impose), after notice and lowing: fails within the applicable time set by section hearing, only if the party in interest dem- ‘‘(19) under subsection (a), of any act to en- 521(a)(2) of this title— onstrates that the filing of the later case is in force any lien against or security interest in real ‘‘(1) to file timely any statement of intention good faith as to the creditors to be stayed. A property following the entry of an order under required under section 521(a)(2) of this title with stay imposed pursuant to the preceding sentence section 362(d)(4) of this title as to that property respect to that property or to indicate therein will be effective on the date of entry of the order in any prior bankruptcy case for a period of 2 that the debtor will either surrender the prop- allowing the stay to go into effect. A case is pre- years after entry of such an order. The debtor in erty or retain it and, if retaining it, either re- sumptively not filed in good faith (but such pre- a subsequent case, however, may move the court deem the property pursuant to section 722 of sumption may be rebutted by clear and con- for relief from such order based upon changed this title, reaffirm the debt it secures pursuant vincing evidence to the contrary)— circumstances or for other good cause shown to section 524(c) of this title, or assume the un- ‘‘(A) as to all creditors if— (consistent with the standards for good faith in expired lease pursuant to section 365(p) of this ‘‘(i) 2 or more previous cases under this title in subsection (c)), after notice and a hearing; or title if the trustee does not do so, as applicable; which the individual was a debtor were pending ‘‘(20) under subsection (a), of any act to en- or within the 1-year period; force any lien against or security interest in real ‘‘(2) to take timely the action specified in that ‘‘(ii) a previous case under this title in which property— statement of intention, as it may be amended be- the individual was a debtor was dismissed with- ‘‘(A) if the debtor is ineligible under section fore expiration of the period for taking action, in the time period stated in this paragraph after 109(g) of this title to be a debtor in a bankruptcy unless the statement of intention specifies reaf- the debtor failed to file or amend the petition or case; or firmation and the creditor refuses to reaffirm on other documents as required by this title or the ‘‘(B) if the bankruptcy case was filed in viola- the original contract terms; court without substantial excuse (but mere inad- tion of a bankruptcy court order in a prior unless the court determines on the motion of the vertence or negligence shall not be substantial bankruptcy case prohibiting the debtor from trustee filed before the expiration of the applica- excuse unless the dismissal was caused by the being a debtor in another bankruptcy case.’’. ble time set by section 521(a)(2), and after notice negligence of the debtor’s attorney), failed to SEC. 119. DEBTOR RETENTION OF PERSONAL and a hearing, that such property is of con- provide adequate protection as ordered by the PROPERTY SECURITY. sequential value or benefit to the estate, orders court, or failed to perform the terms of a plan Title 11, United States Code, is amended— appropriate adequate protection of the creditor’s confirmed by the court; or (1) in section 521— interest, and orders the debtor to deliver any ‘‘(iii) there has not been a substantial change (A) in paragraph (4) by striking ‘‘, and’’ at collateral in the debtor’s possession to the trust- in the financial or personal affairs of the debtor the end and inserting a semicolon; ee. If the court does not so determine an order, since the dismissal of the next most previous (B) in paragraph (5) by striking the period at the stay shall terminate upon the conclusion of case under this title, or there is not any other the end and inserting ‘‘; and’’; and the proceeding on the motion.’’; and reason to conclude that the later case will be (C) by adding at the end the following: (2) in section 521, as amended by sections 603 concluded, if a case under chapter 7, with a dis- ‘‘(6) in an individual case under chapter 7 of and 604— charge, and if a case under chapter 11 or 13, this title, not retain possession of personal prop- (A) in paragraph (2) by striking ‘‘consumer’’; with a confirmed plan that will be fully per- erty as to which a creditor has an allowed claim (B) in paragraph (2)(B)— formed; or for the purchase price secured in whole or in (i) by striking ‘‘forty-five days after the filing ‘‘(B) as to any creditor that commenced an ac- part by an interest in that personal property of a notice of intent under this section’’ and in- tion under subsection (d) in a previous case in unless, in the case of an individual debtor, the serting ‘‘30 days after the first date set for the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00037 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8530 CONGRESSIONAL RECORD—HOUSE May 5, 1999 meeting of creditors under section 341(a) of this personal property securing an allowed claim therewith is cured before the expiration of such title’’; and shall be determined based on the replacement 60-day period; (ii) by striking ‘‘forty-five day’’ the second value of such property as of the date of filing ‘‘(ii) that occurs or becomes an event of de- place it appears and inserting ‘‘30-day’’; the petition without deduction for costs of sale fault after the date of commencement of the case (C) in paragraph (2)(C) by inserting ‘‘except or marketing. With respect to property acquired and before the expiration of such 60-day period as provided in section 362(h) of this title’’ before for personal, family, or household purpose, re- is cured before the later of— the semicolon; and placement value shall mean the price a retail ‘‘(I) the date that is 30 days after the date of (D) by inserting after subsection (b) the fol- merchant would charge for property of that the default or event of the default; or lowing: kind considering the age and condition of the ‘‘(II) the expiration of such 60-day period; ‘‘(c) If the debtor fails timely to take the ac- property at the time value is determined.’’. and tion specified in subsection (a)(6) of this section, SEC. 124. DOMICILIARY REQUIREMENTS FOR EX- ‘‘(iii) that occurs on or after the expiration of or in paragraphs (1) and (2) of section 362(h) of EMPTIONS. such 60-day period is cured in accordance with this title, with respect to property which a lessor Section 522(b)(2)(A) of title 11, United States the terms of such security agreement, lease, or or bailor owns and has leased, rented, or bailed Code, is amended— conditional sale contract, if cure is permitted to the debtor or as to which a creditor holds a (1) by striking ‘‘180’’ and inserting ‘‘730’’; and under that agreement, lease, or conditional sale security interest not otherwise voidable under (2) by striking ‘‘, or for a longer portion of contract. section 522(f), 544, 545, 547, 548, or 549 of this such 180-day period than in any other place’’ ‘‘(2) The equipment described in this para- title, nothing in this title shall prevent or limit and inserting ‘‘or if the debtor’s domicile has graph— the operation of a provision in the underlying not been located at a single State for such 730- ‘‘(A) is rolling stock equipment or accessories lease or agreement which has the effect of plac- day period, the place in which the debtor’s used on rolling stock equipment, including su- ing the debtor in default under such lease or domicile was located for 180 days immediately perstructures or racks, that is subject to a secu- agreement by reason of the occurrence, pend- preceding the 730-day period or for a longer por- rity interest granted by, leased to, or condi- ency, or existence of a proceeding under this tion of such 180-day period than in any other tionally sold to a debtor; and title or the insolvency of the debtor. Nothing in place’’. ‘‘(B) includes all records and documents relat- this subsection shall be deemed to justify lim- SEC. 125. RESTRICTIONS ON CERTAIN EXEMPT ing to such equipment that are required, under iting such a provision in any other cir- PROPERTY OBTAINED THROUGH the terms of the security agreement, lease, or cumstance.’’. FRAUD. conditional sale contract, that is to be surren- SEC. 121. GIVING SECURED CREDITORS FAIR Section 522 of title 11, United States Code, as dered or returned by the debtor in connection TREATMENT IN CHAPTER 13. amended by section 113, is amended— with the surrender or return of such equipment. Section 1325(a)(5)(B)(i) of title 11, United (1) in subsection (b)(2)(A) by inserting ‘‘sub- ‘‘(3) Paragraph (1) applies to a secured party, States Code, is amended to read as follows: ject to subsection (o),’’ before ‘‘any property’’; lessor, or conditional vendor acting in its own ‘‘(i) the plan provides that the holder of such and behalf or acting as trustee or otherwise in behalf claim retain the lien securing such claim until (2) by adding at the end the following: of another party. the earlier of payment of the underlying debt ‘‘(o) For purposes of subsection (b)(3)(A) and ‘‘(b) The trustee and the secured party, lessor, determined under nonbankruptcy law or dis- notwithstanding subsection (a), the value of an or conditional vendor whose right to take pos- charge under section 1328 of this title, and that interest in— session is protected under subsection (a) may if the case under this chapter is dismissed or ‘‘(1) real or personal property that the debtor agree, subject to the court’s approval, to extend converted without completion of the plan, such or a dependent of the debtor uses as a residence; the 60-day period specified in subsection (a)(1). lien shall also be retained by such holder to the ‘‘(2) a cooperative that owns property that the ‘‘(c)(1) In any case under this chapter, the extent recognized by applicable nonbankruptcy debtor or a dependent of the debtor uses as a trustee shall immediately surrender and return law; and’’. residence; or to a secured party, lessor, or conditional vendor, SEC. 122. RESTRAINING ABUSIVE PURCHASES ON ‘‘(3) a burial plot for the debtor or a depend- described in subsection (a)(1), equipment de- SECURED CREDIT. ent of the debtor; scribed in subsection (a)(2), if at any time after Section 506 of title 11, United States Code, is shall be reduced to the extent such value is at- the date of commencement of the case under this amended by adding at the end the following: tributable to any portion of any property that chapter such secured party, lessor, or condi- ‘‘(e) In an individual case under chapter 7, 11, the debtor disposed of in the 730-day period end- tional vendor is entitled pursuant to subsection 12, or 13— ing of the date of the filing of the petition, with (a)(1) to take possession of such equipment and ‘‘(1) subsection (a) shall not apply to an al- the intent to hinder, delay, or defraud a creditor makes a written demand for such possession of lowed claim to the extent attributable in whole and that the debtor could not exempt, or that the trustee. or in part to the purchase price of personal portion that the debtor could not exempt, under ‘‘(2) At such time as the trustee is required property acquired by the debtor within 5 years subsection (b) if on such date the debtor had under paragraph (1) to surrender and return of the filing of the petition, except for the pur- held the property so disposed of.’’. equipment described in subsection (a)(2), any pose of applying paragraph (3) of this sub- SEC. 126. ROLLING STOCK EQUIPMENT. lease of such equipment, and any security section; (a) IN GENERAL.—Section 1168 of title 11, agreement or conditional sale contract relating ‘‘(2) if such allowed claim attributable to the United States Code, is amended to read as fol- to such equipment, if such security agreement or purchase price is secured only by the personal lows: conditional sale contract is an executory con- property so acquired, the value of the personal tract, shall be deemed rejected. property and the amount of the allowed secured ‘‘§ 1168. Rolling stock equipment ‘‘(d) With respect to equipment first placed in claim shall be the sum of the unpaid principal ‘‘(a)(1) The right of a secured party with a se- service on or prior to October 22, 1994, for pur- balance of the purchase price and accrued and curity interest in or of a lessor or conditional poses of this section— unpaid interest and charges at the contract vendor of equipment described in paragraph (2) ‘‘(1) the term ‘lease’ includes any written rate; to take possession of such equipment in compli- agreement with respect to which the lessor and ‘‘(3) if such allowed claim attributable to the ance with an equipment security agreement, the debtor, as lessee, have expressed in the purchase price is secured by the personal prop- lease, or conditional sale contract, and to en- agreement or in a substantially contempora- erty so acquired and other property, the value force any of its other rights or remedies under neous writing that the agreement is to be treated of the security may be determined under sub- such security agreement, lease, or conditional as a lease for Federal income tax purposes; and section (a), but the value of the security and the sale contract, to sell, lease, or otherwise retain ‘‘(2) the term ‘security interest’ means a pur- amount of the allowed secured claim shall be or dispose of such equipment, is not limited or chase-money equipment security interest. not less than the unpaid principal balance of otherwise affected by any other provision of this ‘‘(e) With respect to equipment first placed in the purchase price of the personal property ac- title or by any power of the court, except that service after October 22, 1994, for purposes of quired and unpaid interest and charges at the the right to take possession and enforce those this section, the term ‘rolling stock equipment’ contract rate; and other rights and remedies shall be subject to sec- ‘‘(4) in any subsequent case under this title includes rolling stock equipment that is substan- tion 362 of this title, if— tially rebuilt and accessories used on such that is filed by or against the debtor in the 2- ‘‘(A) before the date that is 60 days after the equipment.’’. year period beginning on the date the petition is date of commencement of a case under this (b) AIRCRAFT EQUIPMENT AND VESSELS.—Sec- filed in the original case, the value of the per- chapter, the trustee, subject to the court’s ap- tion 1110 of title 11, United States Code, is sonal property and the amount of the allowed proval, agrees to perform all obligations of the amended to read as follows: secured claim shall be deemed to be not less than debtor under such security agreement, lease, or the amount provided under paragraphs (2) and conditional sale contract; and ‘‘§ 1110. Aircraft equipment and vessels (3) less any payments actually received.’’. ‘‘(B) any default, other than a default of a ‘‘(a)(1) Except as provided in paragraph (2) SEC. 123. FAIR VALUATION OF COLLATERAL. kind described in section 365(b)(2) of this title, and subject to subsection (b), the right of a se- Section 506(a) of title 11, United States Code, under such security agreement, lease, or condi- cured party with a security interest in equip- is amended by adding at the end the following: tional sale contract— ment described in paragraph (3), or of a lessor ‘‘In the case of an individual debtor under ‘‘(i) that occurs before the date of commence- or conditional vendor of such equipment, to take chapters 7 and 13, such value with respect to ment of the case and is an event of default possession of such equipment in compliance with

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a security agreement, lease, or conditional sale ‘‘(2) At such time as the trustee is required (1) IN GENERAL.—The temporary bankruptcy contract, and to enforce any of its other rights under paragraph (1) to surrender and return judgeship positions authorized for the northern or remedies, under such security agreement, equipment described in subsection (a)(3), any district of Alabama, the district of Delaware, the lease, or conditional sale contract, to sell, lease, lease of such equipment, and any security district of Puerto Rico, the district of South or otherwise retain or dispose of such equip- agreement or conditional sale contract relating Carolina, and the eastern district of Tennessee ment, is not limited or otherwise affected by any to such equipment, if such security agreement or under section 3(a) (1), (3), (7), (8), and (9) of the other provision of this title or by any power of conditional sale contract is an executory con- Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 the court. tract, shall be deemed rejected. note) are extended until the first vacancy occur- ‘‘(2) The right to take possession and to en- ‘‘(d) With respect to equipment first placed in ring in the office of a bankruptcy judge in the force the other rights and remedies described in service on or before October 22, 1994, for pur- applicable district resulting from the death, re- paragraph (1) shall be subject to section 362 of poses of this section— tirement, resignation, or removal of a bank- this title if— ‘‘(1) the term ‘lease’ includes any written ruptcy judge and occurring— ‘‘(A) before the date that is 60 days after the agreement with respect to which the lessor and (A) 8 years or more after November 8, 1993, date of the order for relief under this chapter, the debtor, as lessee, have expressed in the with respect to the northern district of Alabama; the trustee, subject to the approval of the court, agreement or in a substantially contempora- (B) 10 years or more after October 28, 1993, agrees to perform all obligations of the debtor neous writing that the agreement is to be treated with respect to the district of Delaware; under such security agreement, lease, or condi- as a lease for Federal income tax purposes; and (C) 8 years or more after August 29, 1994, with tional sale contract; and ‘‘(2) the term ‘security interest’ means a pur- respect to the district of Puerto Rico; ‘‘(B) any default, other than a default of a chase-money equipment security interest.’’. (D) 8 years or more after June 27, 1994, with kind specified in section 365(b)(2) of this title, SEC. 127. DISCHARGE UNDER CHAPTER 13. respect to the district of South Carolina; and under such security agreement, lease, or condi- Section 1328(a) of title 11, United States Code, (E) 8 years or more after November 23, 1993, tional sale contract— is amended by striking paragraphs (1) through with respect to the eastern district of Tennessee. ‘‘(i) that occurs before the date of the order is (3) and inserting the following: (2) APPLICABILITY OF OTHER PROVISIONS.—All cured before the expiration of such 60-day pe- ‘‘(1) provided for under section 1322(b)(5) of other provisions of section 3 of the Bankruptcy riod; this title; Judgeship Act of 1992 remain applicable to such ‘‘(ii) that occurs after the date of the order ‘‘(2) of the kind specified in paragraph (2), temporary judgeship position. and before the expiration of such 60-day period (4), (3)(B), (5), (8), or (9) of section 523(a) of this (d) TECHNICAL AMENDMENT.—The first sen- is cured before the later of— title; tence of section 152(a)(1) of title 28, United ‘‘(I) the date that is 30 days after the date of ‘‘(3) for restitution, or a criminal fine, in- States Code, is amended to read as follows: the default; or cluded in a sentence on the debtor’s conviction ‘‘Each bankruptcy judge to be appointed for a ‘‘(II) the expiration of such 60-day period; of a crime; or judicial district as provided in paragraph (2) and ‘‘(4) for restitution, or damages, awarded in a shall be appointed by the United States court of ‘‘(iii) that occurs on or after the expiration of civil action against the debtor as a result of appeals for the circuit in which such district is such 60-day period is cured in compliance with willful or malicious injury by the debtor that located.’’. the terms of such security agreement, lease, or caused personal injury to an individual or the (e) TRAVEL EXPENSES OF BANKRUPTCY conditional sale contract, if a cure is permitted death of an individual.’’. JUDGES.—Section 156 of title 28, United States under that agreement, lease, or contract. Code, is amended by adding at the end the fol- ‘‘(3) The equipment described in this para- SEC. 128. BANKRUPTCY JUDGESHIPS. lowing new subsection: graph— (a) SHORT TITLE.—This section may be cited ‘‘(A) is— as the ‘‘Bankruptcy Judgeship Act of 1999’’. ‘‘(g)(1) In this subsection, the term ‘travel ex- ‘‘(i) an aircraft, aircraft engine, propeller, ap- (b) TEMPORARY JUDGESHIPS.— penses’— pliance, or spare part (as defined in section (1) APPOINTMENTS.—The following judgeship ‘‘(A) means the expenses incurred by a bank- 40102 of title 49) that is subject to a security in- positions shall be filled in the manner prescribed ruptcy judge for travel that is not directly re- terest granted by, leased to, or conditionally in section 152(a)(1) of title 28, United States lated to any case assigned to such bankruptcy sold to a debtor that, at the time such trans- Code, for the appointment of bankruptcy judges judge; and action is entered into, holds an air carrier oper- provided for in section 152(a)(2) of such title: ‘‘(B) shall not include the travel expenses of a ating certificate issued pursuant to chapter 447 (A) One additional bankruptcy judgeship for bankruptcy judge if— of title 49 for aircraft capable of carrying 10 or the eastern district of California. ‘‘(i) the payment for the travel expenses is more individuals or 6,000 pounds or more of (B) Four additional bankruptcy judgeships for paid by such bankruptcy judge from the per- cargo; or the central district of California. sonal funds of such bankruptcy judge; and ‘‘(ii) a documented vessel (as defined in sec- (C) One additional bankruptcy judgeship for ‘‘(ii) such bankruptcy judge does not receive tion 30101(1) of title 46) that is subject to a secu- the southern district of Florida. funds (including reimbursement) from the rity interest granted by, leased to, or condi- (D) Two additional bankruptcy judgeships for United States or any other person or entity for tionally sold to a debtor that is a water carrier the district of Maryland. the payment of such travel expenses. that, at the time such transaction is entered (E) One additional bankruptcy judgeship for ‘‘(2) Each bankruptcy judge shall annually into, holds a certificate of public convenience the eastern district of Michigan. submit the information required under para- and necessity or permit issued by the Depart- (F) One additional bankruptcy judgeship for graph (3) to the chief bankruptcy judge for the ment of Transportation; and the southern district of Mississippi. district in which the bankruptcy judge is as- ‘‘(B) includes all records and documents relat- (G) One additional bankruptcy judgeship for signed. ing to such equipment that are required, under the district of New Jersey. ‘‘(3)(A) Each chief bankruptcy judge shall the terms of the security agreement, lease, or (H) One additional bankruptcy judgeship for submit an annual report to the Director of the conditional sale contract, to be surrendered or the eastern district of New York. Administrative Office of the United States returned by the debtor in connection with the (I) One additional bankruptcy judgeship for Courts on the travel expenses of each bank- surrender or return of such equipment. the northern district of New York. ruptcy judge assigned to the applicable district ‘‘(4) Paragraph (1) applies to a secured party, (J) One additional bankruptcy judgeship for (including the travel expenses of the chief bank- lessor, or conditional vendor acting in its own the southern district of New York. ruptcy judge of such district). behalf or acting as trustee or otherwise in behalf (K) One additional bankruptcy judgeship for ‘‘(B) The annual report under this paragraph of another party. the eastern district of Pennsylvania. shall include— ‘‘(b) The trustee and the secured party, lessor, (L) One additional bankruptcy judgeship for ‘‘(i) the travel expenses of each bankruptcy or conditional vendor whose right to take pos- the middle district of Pennsylvania. judge, with the name of the bankruptcy judge to session is protected under subsection (a) may (M) One additional bankruptcy judgeship for whom the travel expenses apply; agree, subject to the approval of the court, to the western district of Tennessee. ‘‘(ii) a description of the subject matter and extend the 60-day period specified in subsection (N) One additional bankruptcy judgeship for purpose of the travel relating to each travel ex- (a)(1). the eastern district of Virginia. pense identified under clause (i), with the name ‘‘(c)(1) In any case under this chapter, the (2) VACANCIES.—The first vacancy occurring of the bankruptcy judge to whom the travel ap- trustee shall immediately surrender and return in the office of a bankruptcy judge in each of plies; and to a secured party, lessor, or conditional vendor, the judicial districts set forth in paragraph (1) ‘‘(iii) the number of days of each travel de- described in subsection (a)(1), equipment de- that— scribed under clause (ii), with the name of the scribed in subsection (a)(3), if at any time after (A) results from the death, retirement, res- bankruptcy judge to whom the travel applies. the date of the order for relief under this chap- ignation, or removal of a bankruptcy judge; and ‘‘(4)(A) The Director of the Administrative Of- ter such secured party, lessor, or conditional (B) occurs 5 years or more after the appoint- fice of the United States Courts shall— vendor is entitled pursuant to subsection (a)(1) ment date of a bankruptcy judge appointed ‘‘(i) consolidate the reports submitted under to take possession of such equipment and makes under paragraph (1); paragraph (3) into a single report; and a written demand for such possession to the shall not be filled. ‘‘(ii) annually submit such consolidated report trustee. (c) EXTENSIONS.— to Congress.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00039 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8532 CONGRESSIONAL RECORD—HOUSE May 5, 1999 ‘‘(B) The consolidated report submitted under with the Securities and Exchange Commission lease is not assumed in the plan confirmed by this paragraph shall include the specific infor- pursuant to section 15A of the Securities Ex- the court, the lease is deemed rejected as of the mation required under paragraph (3)(B), includ- change Act of 1934 or a national securities ex- conclusion of the hearing on confirmation. If ing the name of each bankruptcy judge with re- change registered with the Securities and Ex- the lease is rejected, the stay under section 362 spect to clauses (i), (ii), and (iii) of paragraph change Commission pursuant to section 6 of the of this title and any stay under section 1301 is (3)(B).’’. Securities Exchange Act of 1934;’’. automatically terminated with respect to the SEC. 129. ADDITIONAL AMENDMENTS TO TITLE 11, (b) AUTOMATIC STAY.—Section 362(b) of title property subject to the lease.’’. UNITED STATES CODE. 11, United States Code, as amended by section SEC. 135. ADEQUATE PROTECTION OF LESSORS Section 507(a) of title 11, United States Code, 118, is amended— AND PURCHASE MONEY SECURED is amended by inserting after paragraph (9) the (1) in paragraph (19) by striking ‘‘or’’ at the CREDITORS. following: end; (a) IN GENERAL.—Chapter 13 of title 11, ‘‘(10) Tenth, allowed claims for death or per- (2) in paragraph (20) by striking the period at United States Code, is amended by adding after sonal injuries resulting from the operation of a the end and a inserting ‘‘; or’’; and section 1307 the following: motor vehicle or vessel if such operation was un- (3) by inserting after paragraph (20) the fol- ‘‘§ 1307A. Adequate protection in chapter 13 lawful because the debtor was intoxicated from lowing: cases using alcohol, a drug or another substance.’’. ‘‘(21) under subsection (a), of the commence- ‘‘(a)(1)(A) On or before the date that is 30 ment or continuation of an investigation or ac- SEC. 130. AMENDMENT TO SECTION 1325 OF TITLE days after the filing of a case under this chap- 11, UNITED STATES CODE. tion by a securities self regulatory organization ter, the debtor shall make cash payments in an Section 1325(b) of title 11, United States Code, to enforce such organization’s regulatory power; amount determined under paragraph (2), to— is amended— of the enforcement of an order or decision, other ‘‘(i) any lessor of personal property; and (1) in paragraph (1), by inserting ‘‘to unse- than for monetary sanctions, obtained in an ac- ‘‘(ii) any creditor holding a claim secured by cured creditors’’ after ‘‘to make payments’’; tion by the securities self regulatory organiza- personal property to the extent that the claim is (2) in paragraph (2)— tion to enforce such organization’s regulatory attributable to the purchase of that property by (A) by inserting ‘‘current monthly’’ before power; or of any act taken by the securities self the debtor. ‘‘income’’; regulatory organization to delist, delete, or (B) by striking ‘‘and which is not’’ and insert- ‘‘(B) The debtor or the plan shall continue refuse to permit quotation of any stock that does making the adequate protection payments re- ing ‘‘less amounts’’; not meet applicable regulatory requirements.’’. (C) by inserting after ‘‘received by the debt- quired under subparagraph (A) until the earlier SEC. 133. LIMITATION ON LUXURY GOODS. or’’, ‘‘(other than child support payments, foster of the date on which— Section 523(a)(2)(C) of title 11, United States care payments, or disability payments for a de- ‘‘(i) the creditor begins to receive actual pay- Code, is amended to read as follows: pendent child made in accordance with applica- ments under the plan; or ‘‘(C)(i) for purposes of subparagraph (A), con- ble nonbankruptcy law and which is reasonably ‘‘(ii) the debtor relinquishes possession of the sumer debts owed to a single creditor and aggre- necessary to be expended)’’; and property referred to in subparagraph (A) to— gating more than $250 for ‘luxury goods or serv- (D) in subparagraph (A) by inserting after ‘‘(I) the lessor or creditor; or ices’ incurred by an individual debtor on or ‘‘dependent of the debtor’’ the following: ‘‘, as ‘‘(II) any third party acting under claim of within 90 days before the order for relief under determined in accordance with section right, as applicable. this title, or cash advances aggregating more 707(b)(2)(A) and if applicable 707(b)(2)(B)’’. ‘‘(2) The payments referred to in paragraph than $250 that are extensions of consumer credit (1)(A) shall be the contract amount and shall re- SEC. 131. APPLICATION OF THE CODEBTOR STAY under an open end credit plan obtained by an ONLY WHEN THE STAY PROTECTS duce any amount payable under section 1326(a) THE DEBTOR. individual debtor on or within 90 days before of the title. Section 1301(b) of title 11, United States Code, the order for relief under this title, are presumed ‘‘(b)(1) Subject to the limitations under para- is amended— to be nondischargeable; and graph (2), the court may, after notice and hear- (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and ‘‘(ii) for purposes of this subparagraph— ing, change the amount and timing of the dates (2) by adding at the end the following: ‘‘(I) the term ‘luxury goods or services’ does of payment of payments made under subsection ‘‘(2)(A) Notwithstanding subsection (c) and not include goods or services reasonably nec- (a). except as provided in subparagraph (B), in any essary for the support or maintenance of the ‘‘(2)(A) The payments referred to in para- case in which the debtor did not receive the con- debtor or a dependent of the debtor; and graph (1) shall be payable not less frequently sideration for the claim held by a creditor, the ‘‘(II) the term ‘an extension of consumer cred- than monthly. stay provided by subsection (a) shall apply to it under an open end credit plan’ has the same ‘‘(B) The amount of payments referred to in that creditor for a period not to exceed 30 days meaning such term has for purposes of the Con- paragraph (1) shall not be less than the amount beginning on the date of the order for relief, to sumer Credit Protection Act;’’. of any weekly, biweekly, monthly, or other peri- the extent the creditor proceeds against— SEC. 134. GIVING DEBTORS THE ABILITY TO KEEP odic payment scheduled as payable under the ‘‘(i) the individual that received that consider- LEASED PERSONAL PROPERTY BY contract between the debtor and creditor. ation; or ASSUMPTION. ‘‘(c) Notwithstanding section 1326(b), the pay- ‘‘(ii) property not in the possession of the Section 365 of title 11, United States Code, is ments referred to in subsection (a)(1)(A) shall be debtor that secures that claim. amended by adding at the end the following: continued in addition to plan payments under a ‘‘(B) Notwithstanding subparagraph (A), the ‘‘(p)(1) If a lease of personal property is re- confirmed plan until actual payments to the stay provided by subsection (a) shall apply in jected or not timely assumed by the trustee creditor begin under that plan, if the confirmed any case in which the debtor is primarily obli- under subsection (d), the leased property is no plan provides— gated to pay the creditor in whole or in part longer property of the estate and the stay under ‘‘(1) for payments to a creditor or lessor de- with respect to a claim described in subpara- section 362(a) of this title is automatically termi- scribed in subsection (a)(1); and graph (A) under a legally binding separation or nated. ‘‘(2) for the deferral of payments to such cred- property settlement agreement or divorce or dis- ‘‘(2) In the case of an individual under chap- itor or lessor under the plan until the payment solution decree with respect to— ter 7, the debtor may notify the creditor in writ- of amounts described in section 1326(b). ‘‘(i) an individual described in subparagraph ing that the debtor desires to assume the lease. ‘‘(d) Notwithstanding sections 362, 542, and (A)(i); or Upon being so notified, the creditor may, at its 543, a lessor or creditor described in subsection ‘‘(ii) property described in subparagraph option, notify the debtor that it is willing to (a) may retain possession of property described (A)(ii). have the lease assumed by the debtor and may, in that subsection that was obtained in accord- ‘‘(3) Notwithstanding subsection (c), the stay at its option, condition such assumption on cure ance with applicable law before the date of fil- provided by subsection (a) shall terminate as of of any outstanding default on terms set by the ing of the petition until the first payment under the date of confirmation of the plan, in any case contract. If within 30 days of the notice from subsection (a)(1)(A) is received by the lessor or in which the plan of the debtor provides that the creditor the debtor notifies the lessor in writ- creditor. the debtor’s interest in personal property subject ing that the lease is assumed, the liability under ‘‘(e) On or before 60 days after the filling of to a lease with respect to which the debtor is the the lease will be assumed by the debtor and not a case under this chapter, a debtor retaining lessee will be surrendered or abandoned or no by the estate. The stay under section 362 of this possession of personal property subject to a payments will be made under the plan on ac- title and the injunction under section 524(a) of lease or securing a claim attributable in whole count of the debtor’s obligations under the this title shall not be violated by notification of or in part to the purchase price of such property lease.’’. the debtor and negotiation of cure under this shall provide each creditor or lessor reasonable SEC. 132. ADEQUATE PROTECTION FOR INVES- subsection. Nothing in this paragraph shall re- evidence of the maintenance of any required in- TORS. quire a debtor to assume a lease, or a creditor to surance coverage with respect to the use or own- (a) DEFINITION.—Section 101 of title 11, United permit assumption. ership of such property and continue to do so States Code, is amended by inserting after para- ‘‘(3) In a case under chapter 11 of this title in for so long as the debtor retains possession of graph (48) the following: which the debtor is an individual and in a case such property.’’. ‘‘(48A) ‘securities self regulatory organization’ under chapter 13 of this title, if the debtor is the (b) CLERICAL AMENDMENT.—The table of sec- means either a securities association registered lessee with respect to personal property and the tions at the beginning of chapter 13 of title 11,

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00040 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8533 United States Code, is amended by inserting ‘‘(D) not assigned to a nongovernmental enti- (1) by striking paragraph (2) and inserting the after the item relating to section 1307 the fol- ty, unless that obligation is assigned voluntarily following: lowing: by the spouse, former spouse, child, or parent ‘‘(2) under subsection (a)— ‘‘1307A. Adequate protection in chapter 13 solely for the purpose of collecting the debt.’’. ‘‘(A) of the commencement or continuation of cases.’’. SEC. 139. PRIORITIES FOR CLAIMS FOR DOMESTIC an action or proceeding for— SEC. 136. AUTOMATIC STAY. SUPPORT OBLIGATIONS. ‘‘(i) the establishment of paternity; or Section 362(b) of title 11, United States Code, Section 507(a) of title 11, United States Code, ‘‘(ii) the establishment or modification of an as amended by sections 118 and 132, is amend- is amended— order for domestic support obligations; or ed— (1) by striking paragraph (7); ‘‘(B) the collection of a domestic support obli- (1) in paragraph (20), by striking ‘‘or’’ at the (2) by redesignating paragraphs (1) through gation from property that is not property of the end; (6) as paragraphs (2) through (7), respectively; estate;’’; (2) in paragraph (21), by striking the period at (3) in paragraph (2), as redesignated, by strik- (2) in paragraph (25), by striking ‘‘or’’ at the the end and inserting a semicolon; and ing ‘‘First’’ and inserting ‘‘Second’’; end; (3) by inserting after paragraph (21) the fol- (4) in paragraph (3), as redesignated, by strik- (3) in paragraph (26), by striking the period at lowing: ing ‘‘Second’’ and inserting ‘‘Third’’; the end and inserting a semicolon; and ‘‘(22) under subsection (a) of any transfer that (5) in paragraph (4), as redesignated, by strik- (4) by inserting after paragraph (26) the fol- is not avoidable under section 544 of this title ing ‘‘Third’’ and inserting ‘‘Fourth’’; lowing: and that is not avoidable under section 549 of (6) in paragraph (5), as redesignated, by strik- ‘‘(27) under subsection (a) with respect to the this title; ing ‘‘Fourth’’ and inserting ‘‘Fifth’’; withholding of income pursuant to an order as ‘‘(23) under subsection (a)(3), of the continu- (7) in paragraph (6), as redesignated, by strik- specified in section 466(b) of the Social Security ation of any eviction, unlawful detainer action, ing ‘‘Fifth’’ and inserting ‘‘Sixth’’; Act (42 U.S.C. 666(b)); or or similar proceeding by a lessor against a debt- (8) in paragraph (7), as redesignated, by strik- ‘‘(28) under subsection (a) with respect to— or involving residential real property in which ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; and ‘‘(A) the withholding, suspension, or restric- the debtor resides as a tenant under a rental (9) by inserting before paragraph (2), as redes- tion of drivers’ licenses, professional and occu- agreement and the debtor has not paid rent to ignated, the following: pational licenses, and recreational licenses pur- the lessor pursuant to the terms of the lease ‘‘(1) First, allowed claims for domestic support suant to State law, as specified in section agreement or applicable State law after the com- obligations to be paid in the following order on 466(a)(16) of the Social Security Act (42 U.S.C. mencement and during the course of the case; the condition that funds received under this 666(a)(16)) or with respect to the reporting of ‘‘(24) under subsection (a)(3), of the com- paragraph by a governmental unit in a case overdue support owed by an absent parent to mencement or continuation of any eviction, un- under this title be applied: any consumer reporting agency as specified in lawful detainer action, or similar proceeding by ‘‘(A) Claims that, as of the date of entry of section 466(a)(7) of the Social Security Act (42 a lessor against a debtor involving residential the order for relief, are owed directly to a U.S.C. 666(a)(7)); real property in which the debtor resides as a spouse, former spouse, or child of the debtor, or ‘‘(B) the interception of tax refunds, as speci- tenant under a rental agreement that has termi- the parent of such child, without regard to fied in sections 464 and 466(a)(3) of the Social nated pursuant to the lease agreement or appli- whether the claim is filed by the spouse, former Security Act (42 U.S.C. 664 and 666(a)(3)); or cable State law; spouse, child, or parent, or is filed by a govern- ‘‘(C) the enforcement of medical obligations as ‘‘(25) under subsection (a)(3), of any eviction, mental unit on behalf of that person. specified under title IV of the Social Security unlawful detainer action, or similar proceeding, ‘‘(B) Claims that, as of the date of entry of Act (42 U.S.C. 601 et seq.).’’. if the debtor has previously filed within the last the order for relief, are assigned by a spouse, SEC. 142. NONDISCHARGEABILITY OF CERTAIN year and failed to pay post-petition rent during former spouse, child of the debtor, or the parent DEBTS FOR ALIMONY, MAINTE- the course of that case; or of that child to a governmental unit or are owed NANCE, AND SUPPORT. ‘‘(26) under subsection (a)(3), of eviction ac- directly to a governmental unit under applicable Section 523 of title 11, United States Code, is tions based on endangerment to property or per- nonbankruptcy law.’’. amended— son or the use of illegal drugs.’’. SEC. 140. REQUIREMENTS TO OBTAIN CONFIRMA- (1) in subsection (a), by striking paragraph (5) SEC. 137. EXTEND PERIOD BETWEEN BANK- TION AND DISCHARGE IN CASES IN- and inserting the following: RUPTCY DISCHARGES. VOLVING DOMESTIC SUPPORT OBLI- ‘‘(5) for a domestic support obligation;’’; Title 11, United States Code, is amended— GATIONS. (2) in subsection (a)(15)— (1) in section 727(a)(8) by striking ‘‘six’’ and Title 11, United States Code, is amended— (A) by inserting ‘‘or’’ after ‘‘court of record,’’; inserting ‘‘8’’; and (1) in section 1129(a), by adding at the end the (2) in section 1328 by adding at the end the (B) by striking ‘‘unless—’’ and all that follows following: through ‘‘debtor’’ the last place it appears; and following: ‘‘(14) If the debtor is required by a judicial or (3) in subsection (c), by striking ‘‘(6), or (15)’’ ‘‘(f) Notwithstanding subsections (a) and (b), administrative order or statute to pay a domestic each place it appears and inserting ‘‘or (6)’’. the court shall not grant a discharge of all debts support obligation, the debtor has paid all provided for by the plan or disallowed under amounts payable under such order or statute for SEC. 143. CONTINUED LIABILITY OF PROPERTY. section 502 of this title if the debtor has received such obligation that become payable after the Section 522 of title 11, United States Code, is a discharge in any case filed under this title date on which the petition is filed.’’; amended— within 5 years of the order for relief under this (2) in section 1325(a)— (1) in subsection (c), by striking paragraph (1) chapter.’’. (A) in paragraph (5), by striking ‘‘and’’ at the and inserting the following: SEC. 138. DEFINITION OF DOMESTIC SUPPORT end; ‘‘(1) a debt of a kind specified in paragraph OBLIGATION. (B) in paragraph (6), by striking the period at (1) or (5) of section 523(a) (in which case, not- Section 101 of title 11, United States Code, is the end and inserting ‘‘; and’’; and withstanding any provision of applicable non- amended— (C) by adding at the end the following: bankruptcy law to the contrary, such property (1) by striking paragraph (12A); and ‘‘(7) if the debtor is required by a judicial or shall be liable for a debt of a kind specified in (2) by inserting after paragraph (14) the fol- administrative order or statute to pay a domestic section 523(a)(5);’’; and lowing: support obligation, the debtor has paid all (2) in subsection (f)(1)(A), by striking the dash ‘‘(14A) ‘domestic support obligation’ means a amounts payable under such order for such obli- and all that follows through the end of the sub- debt that accrues before or after the entry of an gation that become payable after the date on paragraph and inserting ‘‘of a kind that is spec- order for relief under this title that is— which the petition is filed.’’; and ified in section 523(a)(5); or’’. ‘‘(A) owed to or recoverable by— (3) in section 1328(a), as amended by section SEC. 144. PROTECTION OF DOMESTIC SUPPORT ‘‘(i) a spouse, former spouse, or child of the 127, in the matter preceding paragraph (1), by CLAIMS AGAINST PREFERENTIAL debtor or that child’s legal guardian; or TRANSFER MOTIONS. ‘‘(ii) a governmental unit; inserting ‘‘, and with respect to a debtor who is Section 547(c)(7) of title 11, United States ‘‘(B) in the nature of alimony, maintenance, required by a judicial or administrative order to Code, is amended to read as follows: or support (including assistance provided by a pay a domestic support obligation, certifies that ‘‘(7) to the extent such transfer was a bona governmental unit) of such spouse, former all amounts payable under such order or statute fide payment of a debt for a domestic support spouse, or child, without regard to whether such that are due on or before the date of the certifi- obligation; or’’. debt is expressly so designated; cation (including amounts due before or after ‘‘(C) established or subject to establishment the petition was filed) have been paid’’ after SEC. 145. CLARIFICATION OF MEANING OF before or after entry of an order for relief under ‘‘completion by the debtor of all payments under HOUSEHOLD GOODS. this title, by reason of applicable provisions of— the plan’’. Section 101 of title 11, United States Code, is ‘‘(i) a separation agreement, divorce decree, or SEC. 141. EXCEPTIONS TO AUTOMATIC STAY IN amended by inserting after paragraph (27) the property settlement agreement; DOMESTIC SUPPORT OBLIGATION following: ‘‘(ii) an order of a court of record; or PROCEEDINGS. ‘‘(27A) ‘household goods’ includes tangible ‘‘(iii) a determination made in accordance Section 362(b) of title 11, United States Code, personal property normally found in or around with applicable nonbankruptcy law by a gov- as amended by sections 118, 132, and 136, is a residence, but does not include motorized vehi- ernmental unit; and amended— cles used for transportation purposes;’’.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00041 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8534 CONGRESSIONAL RECORD—HOUSE May 5, 1999 SEC. 146. NONDISCHARGEABLE DEBTS. tled to receive priority under section 507(a)(1) of ‘‘(I) the granting of the discharge; Section 523(a) of title 11, United States Code, this title, provide the applicable notification ‘‘(II) the last recent known address of the is amended by inserting after paragraph (14) the specified in subsection (b). debtor; and following: ‘‘(b)(1) In any case described in subsection ‘‘(III) with respect to the debtor’s case, the ‘‘(14A) incurred to pay a debt that is non- (a)(11), the trustee shall— name of each creditor that holds a claim that is dischargeable by reason of section 727, 1141, ‘‘(A)(i) notify in writing the holder of the not discharged under paragraph (2), (4), or 1228(a), 1228(b), or 1328(c), or any other provi- claim of the right of such holder to use the serv- (14A) of section 523(a) of this title or that was sion of this subsection, if the debtor incurred the ices of a State child support enforcement agency reaffirmed by the debtor under section 524(c) of debt to pay such a nondischargeable debt with established under sections 464 and 466 of the So- this title. the intent to discharge in bankruptcy the cial Security Act for the State in which the ‘‘(2)(A) If, after receiving a notice under para- newly-created debt, except that all debts in- holder resides; and graph (1)(B)(iii), a holder of a claim or a State curred to pay nondischargeable debts, without ‘‘(ii) include in the notice under this para- child support agency is unable to locate the regard to intent, are nondischargeable if in- graph the address and telephone number of the debtor that is the subject of the notice, such curred within 90 days of the filing of the peti- child support enforcement agency; and holder or such agency may request from a cred- tion;’’. ‘‘(B)(i) notify in writing the State child sup- itor described in paragraph (1)(B)(iii) the last SEC. 147. MONETARY LIMITATION ON CERTAIN port agency of the State in which the holder of known address of the debtor. EXEMPT PROPERTY. the claim resides of the claim; ‘‘(B) Notwithstanding any other provision of Section 522 of title 11, United States Code, as ‘‘(ii) include in the notice under this para- law, a creditor that makes a disclosure of a last amended by section 125, is amended— graph the name, address, and telephone number known address of a debtor in connection with a (1) in subsection (b)(2)(A) by striking ‘‘sub- of the holder of the claim; and request made under subparagraph (A) shall not section (o)’’ and inserting ‘‘subsections (o) and ‘‘(iii) at such time as the debtor is granted a be liable to the debtor or any other person by (p)’’ before ‘‘any property’’; and discharge under section 727 of this title, notify reason of making such disclosure.’’. (2) by adding at the end the following: the holder of such claim and the State child SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN ‘‘(p)(1) Except as provided in paragraphs (2) support agency of the State in which such hold- PARTICIPANT CONTRIBUTIONS AND and (3), as a result of electing under subsection er resides of— OTHER PROPERTY FROM THE ES- (b)(3)(A) to exempt property under State or local ‘‘(I) the granting of the discharge; TATE. law, a debtor may not exempt any interest that ‘‘(II) the last recent known address of the (a) IN GENERAL.—Section 541(b) of title 11 of exceeds $250,000 in value, in the aggregate, in— debtor; and the United States Code is amended— ‘‘(A) real or personal property that the debtor ‘‘(III) with respect to the debtor’s case, the (1) by striking ‘‘or’’ at the end of paragraph or a dependent of the debtor uses as a residence; name of each creditor that holds a claim that is (4)(B)(ii); ‘‘(B) a cooperative that owns property that not discharged under paragraph (2), (4), or (2) by striking the period at the end of para- the debtor or a dependent of the debtor uses as (14A) of section 523(a) of this title or that was graph (5) and inserting ‘‘; or’’; and (3) by inserting after paragraph (5) the fol- a residence; or reaffirmed by the debtor under section 524(c) of lowing: ‘‘(C) a burial plot for the debtor or a depend- this title. ‘‘(7) any amount or interest in property to the ent of the debtor. ‘‘(2)(A) If, after receiving a notice under para- extent that an employer has withheld amounts ‘‘(2) The limitation under paragraph (1) shall graph (1)(B)(iii), a holder of a claim or a State from the wages of employees for contribution to not apply to an exemption claimed under sub- child support agency is unable to locate the an employee benefit plan subject to title I of the section (b)(3)(A) by a family farmer for the prin- debtor that is the subject of the notice, such Employee Retirement Income Security Act of cipal residence of that farmer. holder or such agency may request from a cred- 1974, or to the extent that the employer has re- ‘‘(3) Paragraph (1) shall not apply to debtors itor described in paragraph (1)(B)(iii)(III) the ceived amounts as a result of payments by par- if applicable State law expressly provides by a last known address of the debtor. ticipants or beneficiaries to an employer for con- statute enacted after the effective date of this ‘‘(B) Notwithstanding any other provision of tribution to an employee benefit plan subject to paragraph that such paragraph shall not apply law, a creditor that makes a disclosure of a last title I of the Employee Retirement Income Secu- to debtors.’’. known address of a debtor in connection with a request made under subparagraph (A) shall not rity Act of 1974.’’. SEC. 148. BANKRUPTCY FEES. be liable to the debtor or any other person by (b) APPLICATION OF AMENDMENT.—The Section 1930 of title 28, United States Code, is reason of making such disclosure.’’. amendment made by this section shall not apply amended— (b) DUTIES OF TRUSTEE UNDER CHAPTER 13.— to cases commenced under title 11 of the United (1) in subsection (a) by striking ‘‘Notwith- Section 1302 of title 11, United States Code, is States Code before the expiration of the 180-day standing section 1915 of this title, the’’ and in- amended— period beginning on the date of the enactment serting ‘‘The’’; and (1) in subsection (b)— of this Act. (2) by adding at the end the following: (A) in paragraph (4) by striking ‘‘and’’ at the SEC. 151. CLARIFICATION OF POSTPETITION ‘‘(f)(1) Pursuant to procedures prescribed by end, WAGES AND BENEFITS. the Judicial Conference of the United States, the (B) in paragraph (5) by striking the period Section 503(b)(1)(A) of title 11, United States district court or the bankruptcy court may and inserting ‘‘; and’’, and Code, is amended to read as follows: waive the filing fee in a case under chapter 7 of (C) by adding at the end the following: ‘‘(A) the actual, necessary costs and expenses title 11 for an individual debtor who is unable to ‘‘(6) if, with respect to an individual debtor, of preserving the estate, including wages, sala- pay such fee in installments. For purposes of there is a claim for support of a child of the ries, or commissions for services rendered after this paragraph, the term ‘filing fee’ means the debtor or a custodial parent of such child enti- the commencement of the case, and wages and filing fee required by subsection (a), or any tled to receive priority under section 507(a)(1) of benefits attributable to any period of time after other fee prescribed by the Judicial Conference this title, provide the applicable notification commencement of the case as a result of the under subsections (b) and (c) that is payable to specified in subsection (d).’’, and debtor’s violation of Federal law, without re- the clerk upon the commencement of a case (2) by adding at the end the following: gard to when the original unlawful act occurred under chapter 7 of title 11. ‘‘(d)(1) In any case described in subsection or to whether any services were rendered;’’. ‘‘(2) The district court or the bankruptcy (b)(6), the trustee shall— SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN court may also waive for such debtors other fees ‘‘(A)(i) notify in writing the holder of the DOMESTIC SUPPORT OBLIGATION prescribed pursuant to subsections (b) and (c). claim of the right of such holder to use the serv- PROCEEDINGS. ‘‘(3) This subsection does not restrict the dis- ices of a State child support enforcement agency Section 362(b)(2) of title 11, United States trict court or the bankruptcy court from established under sections 464 and 466 of the So- Code, is amended— waiving, in accordance with Judicial Conference cial Security Act for the State in which the (1) in subparagraph (A) by striking ‘‘or’’ at policy, fees prescribed pursuant to such sub- holder resides; and the end; sections for other debtors and creditors.’’. ‘‘(ii) include in the notice under this para- (2) in subparagraph (B) by adding ‘‘or’’ at the SEC. 149. COLLECTION OF CHILD SUPPORT. graph the address and telephone number of the end; and (a) DUTIES OF TRUSTEE UNDER CHAPTER 7.— child support enforcement agency; and (3) by adding at the end the following: Section 704 of title 11, United States Code, as ‘‘(B)(i) notify in writing the State child sup- ‘‘(C) under subsection (a) of— amended by section 102, is amended— port agency of the State in which the holder of ‘‘(i) the withholding of income for payment of (1) by inserting ‘‘(a)’’ before ‘‘The trustee’’, the claim resides of the claim; and a domestic support obligation pursuant to a ju- (2) in paragraph (9) by striking ‘‘and’’ at the ‘‘(ii) include in the notice under this para- dicial or administrative order or statute for such end, graph the name, address, and telephone number obligation that first becomes payable after the (3) in paragraph (10) by striking the period of the holder of the claim; date on which the petition is filed; or and inserting ‘‘; and’’, and ‘‘(iii) at such time as the debtor is granted a ‘‘(ii) the withholding of income for payment of (4) by adding at the end the following: discharge under section 1328 of this title, notify a domestic support obligation owed directly to ‘‘(11) if, with respect to an individual debtor, the holder of the claim and the State child sup- the spouse, former spouse or child of the debtor there is a claim for support of a child of the port agency of the State in which such holder or the parent of such child, pursuant to a judi- debtor or a custodial parent of such child enti- resides of— cial or administrative order or statute for such

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00042 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8535 obligation that becomes payable before the date tion is in effect as of the date of the commence- to a plan referred to in that paragraph that is on which the petition is filed unless the court ment of the case under section 301, 302, or 303 of incurred under a loan made during the 1-year finds, after notice and hearing, that such with- this title, those funds shall be presumed to be period preceding the filing of a petition. Nothing holding would render the plan infeasible;’’. exempt from the estate. in paragraph (29) may be construed to provide SEC. 153. AUTOMATIC STAY INAPPLICABLE TO ‘‘(B) If the retirement funds are in a retire- that any loan made under a governmental plan CERTAIN PROCEEDINGS AGAINST ment fund that has not received a favorable de- under section 414(d), or a contract or account THE DEBTOR. termination pursuant to such section 7805, those under section 403(b), of the Internal Revenue Section 362(b)(2) of title 11, United States funds are exempt from the estate if the debtor Code of 1986 constitutes a claim or a debt under Code, as amended by section 153, is amended— demonstrates that— this title.’’. (1) in subparagraph (B) by striking ‘‘or’’ at ‘‘(i) no prior determination to the contrary (c) EXCEPTIONS TO DISCHARGE.—Section 523(a) the end; has been made by a court or the Internal Rev- of title 11, United States Code, is amended— (2) by inserting after subparagraph (C) the enue Service; and (1) by striking ‘‘or’’ at the end of paragraph following: ‘‘(ii) the retirement fund is in substantial com- (17); ‘‘(D) the commencement or continuation of a pliance with the applicable requirements of the (2) by striking the period at the end of para- proceeding concerning a child custody or visita- Internal Revenue Code of 1986. graph (18) and inserting ‘‘; or’’; and tion; ‘‘(C) A direct transfer of retirement funds from (3) by adding at the end the following: ‘‘(E) the commencement or continuation of a 1 fund or account that is exempt from taxation ‘‘(19) owed to a pension, profit-sharing, stock proceeding alleging domestic violence; or under section 401, 403, 408, 408A, 414, 457, or bonus, or other plan established under section ‘‘(F) the commencement or continuation of a 501(a) of the Internal Revenue Code of 1986, 401, 403, 408, 408A, 414, 457, or 501(c) of the In- proceeding seeking a dissolution of marriage, ex- pursuant to section 401(a)(31) of the Internal ternal Revenue Code of 1986, pursuant to— ‘‘(A) a loan permitted under section 408(b)(1) cept to the extent the proceeding concerns prop- Revenue Code of 1986, or otherwise, shall not of the Employee Retirement Income Security Act erty of the estate;’’. cease to qualify for exemption under paragraph of 1974) or subject to section 72(p) of the Inter- (3)(D) or subsection (d)(12) by reason of that di- TITLE II—DISCOURAGING BANKRUPTCY nal Revenue Code of 1986; or ABUSE rect transfer. ‘‘(B) a loan from the thrift savings plan de- SEC. 201. REENACTMENT OF CHAPTER 12. ‘‘(D)(i) Any distribution that qualifies as an scribed in subchapter III of title 5, that satisfies eligible rollover distribution within the meaning (a) REENACTMENT.—Chapter 12 of title 11 of the requirements of section 8433(g) of such title. the United States Code, as in effect on March of section 402(c) of the Internal Revenue Code of 1986 or that is described in clause (ii) shall not Paragraph (19) does not apply to any amount 31, 1999, is hereby reenacted. owed to a plan referred to in that paragraph (b) EFFECTIVE DATE.—The amendment made cease to qualify for exemption under paragraph (3)(D) or subsection (d)(12) by reason of that that is incurred under a loan made during the by subsection (a) shall take effect on March 31, 1-year period preceding the filing of a petition. 1999. distribution. ‘‘(ii) A distribution described in this clause is Nothing in paragraph (19) may be construed to SEC. 202. MEETINGS OF CREDITORS AND EQUITY an amount that— provide that any loan made under a govern- SECURITY HOLDERS. mental plan under section 414(d), or a contract Section 341 of title 11, United States Code, is ‘‘(I) has been distributed from a fund or ac- count that is exempt from taxation under sec- or account under section 403(b), of the Internal amended by adding at the end the following: Revenue Code of 1986 constitutes a claim or a ‘‘(e) Notwithstanding subsections (a) and (b), tion 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986; and debt under this title.’’. the court, on the request of a party in interest (d) PLAN CONTENTS.—Section 1322 of title 11, ‘‘(II) to the extent allowed by law, is deposited and after notice and a hearing, for cause may United States Code, is amended by adding at the in such a fund or account not later than 60 days order that the United States trustee not convene end the following: after the distribution of that amount.’’; and a meeting of creditors or equity security holders ‘‘(f) A plan may not materially alter the terms (2) in subsection (d)— if the debtor has filed a plan as to which the of a loan described in section 362(b)(29) of this (A) in the matter preceding paragraph (1), by debtor solicited acceptances prior to the com- title.’’. mencement of the case.’’. striking ‘‘subsection (b)(1)’’ and inserting ‘‘sub- section (b)(2)’’; and SEC. 204. PROTECTION OF REFINANCE OF SECU- RITY INTEREST. SEC. 203. PROTECTION OF RETIREMENT SAVINGS (B) by adding at the end the following: IN BANKRUPTCY. Subparagraphs (A), (B), and (C) of section ‘‘(12) Retirement funds to the extent that (a) IN GENERAL.—Section 522 of title 11, 547(e)(2) of title 11, United States Code, are those funds are in a fund or account that is ex- United States Code, as amended by sections 113, amended by striking ‘‘10’’ each place it appears empt from taxation under section 401, 403, 408, 125, and 147 is amended— and inserting ‘‘30’’. 408A, 414, 457, or 501(a) of the Internal Revenue (1) in subsection (b)— SEC. 205. EXECUTORY CONTRACTS AND UNEX- Code of 1986.’’. (A) in paragraph (2)— PIRED LEASES. (i) by striking ‘‘(2)(A)’’ and inserting: (b) AUTOMATIC STAY.—Section 362(b) of title Section 365(d)(4) of title 11, United States ‘‘(3) Property listed in this paragraph is— 11, United States Code, as amended by sections Code, is amended to read as follows: ‘‘(A) subject to subsections (o) and (p),’’; 118, 132, 136, and 141 is amended— ‘‘(4)(A) Subject to subparagraph (B), in any (ii) in subparagraph (B), by striking ‘‘and’’ at (1) in paragraph (27), by striking ‘‘or’’ at the case under any chapter in this title, an unex- the end; end; pired lease of nonresidential real property under (iii) in subparagraph (C), by striking the pe- (2) in paragraph (28), by striking the period which the debtor is the lessee shall be deemed riod at the end and inserting ‘‘; and’’; and and inserting ‘‘; or’’; rejected, and the trustee shall immediately sur- (iv) by adding at the end the following: (3) by inserting after paragraph (28) the fol- render such property to the lessor, if the trustee ‘‘(D) retirement funds to the extent that those lowing: does not assume or reject the unexpired lease by funds are in a fund or account that is exempt ‘‘(29) under subsection (a), of withholding of the earlier of— from taxation under section 401, 403, 408, 408A, income from a debtor’s wages and collection of ‘‘(i) the date that is 120 days after the date of 414, 457, or 501(a) of the Internal Revenue Code amounts withheld, pursuant to the debtor’s the order for relief; or of 1986.’’; agreement authorizing that withholding and ‘‘(ii) the date of the entry of an order con- (B) by striking paragraph (1) and inserting: collection for the benefit of a pension, profit- firming a plan. ‘‘(2) Property listed in this paragraph is prop- sharing, stock bonus, or other plan established ‘‘(B)(i) The court may extend the period deter- erty that is specified under subsection (d), un- under section 401, 403, 408, 408A, 414, 457, or mined under subparagraph (A) for 120 days less the State law that is applicable to the debt- 501(a) of the Internal Revenue Code of 1986 that upon motion of the trustee or the lessor for or under paragraph (3)(A) specifically does not is sponsored by the employer of the debtor, or an cause. so authorize.’’; affiliate, successor, or predecessor of such em- ‘‘(ii) If the court grants an extension under (C) in the matter preceding paragraph (2)— ployer— clause (i), the court may grant a subsequent ex- (i) by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’; ‘‘(A) to the extent that the amounts withheld tension only upon prior written consent of the (ii) by striking ‘‘paragraph (2)’’ both places it and collected are used solely for payments relat- lessor.’’. appears and inserting ‘‘paragraph (3)’’; ing to a loan from a plan that satisfies the re- SEC. 206. CREDITORS AND EQUITY SECURITY (iii) by striking ‘‘paragraph (1)’’ each place it quirements of section 408(b)(1) of the Employee HOLDERS COMMITTEES. appears and inserting ‘‘paragraph (2)’’; and Retirement Income Security Act of 1974 or is Section 1102(a)(2) of title 11, United States (iv) by striking ‘‘Such property is—’’; and subject to section 72(p) of the Internal Revenue Code, is amended by inserting before the first (D) by adding at the end of the subsection the Code of 1986; or sentence the following: ‘‘On its own motion or following: ‘‘(B) in the case of a loan from a thrift sav- on request of a party in interest, and after no- ‘‘(4) For purposes of paragraph (3)(D) and ings plan described in subchapter III of title 5, tice and hearing, the court may order a change subsection (d)(12), the following shall apply: that satisfies the requirements of section 8433(g) in the membership of a committee appointed ‘‘(A) If the retirement funds are in a retire- of such title.’’; and under this subsection, if the court determines ment fund that has received a favorable deter- (4) by adding at the end of the flush material that the change is necessary to ensure adequate mination pursuant to section 7805 of the Inter- following paragraph (29) the following: ‘‘Para- representation of creditors or equity security nal Revenue Code of 1986, and that determina- graph (29) does not apply to any amount owed holders.’’.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00043 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8536 CONGRESSIONAL RECORD—HOUSE May 5, 1999 SEC. 207. AMENDMENT TO SECTION 546 OF TITLE SEC. 214. FEES ARISING FROM CERTAIN OWNER- ecutory contracts that transfer a right or inter- 11, UNITED STATES CODE. SHIP INTERESTS. est under a filed or issued patent, copyright, Section 546 of title 11, United States Code, is Section 523(a)(16) of title 11, United States trademark, trade dress, or trade secret) or under amended by inserting at the end thereof: Code, is amended— an unexpired lease of real or personal prop- ‘‘(i) Notwithstanding section 545 (2) and (3) of (1) by striking ‘‘dwelling’’ the first place it ap- erty.’’; this title, the trustee may not avoid a pears; (2) in subsection (c)— warehouseman’s lien for storage, transportation (2) by striking ‘‘ownership or’’ and inserting (A) in paragraph (2) by adding ‘‘or’’ at the or other costs incidental to the storage and han- ‘‘ownership,’’; end; dling of goods, as provided by section 7–209 of (3) by striking ‘‘housing’’ the first place it ap- (B) in paragraph (3) by striking ‘‘; or’’ at the the Uniform Commercial Code.’’. pears; and end and inserting a period; and SEC. 208. LIMITATION. (4) by striking ‘‘but only’’ and all that follows (C) by striking paragraph (4); Section 546(c)(1)(B) of title 11, United States through ‘‘such period,’’, and inserting ‘‘or a lot (3) in subsection (d)— Code, is amended by striking ‘‘20’’ and inserting in a homeowners association, for as long as the (A) by striking paragraphs (5) through (9); ‘‘45’’. debtor or the trustee has a legal, equitable, or and possessory ownership interest in such unit, such (B) by redesignating paragraph (10) as para- SEC. 209. AMENDMENT TO SECTION 330(a) OF corporation, or such lot,’’. graph (5); and TITLE 11, UNITED STATES CODE. (4) in subsection (f)(1) by striking ‘‘; except Section 330(a) of title 11, United States Code, SEC. 215. CLAIMS RELATING TO INSURANCE DE- POSITS IN CASES ANCILLARY TO that’’ and all that follows through the end of is amended— FOREIGN PROCEEDINGS. the paragraph and inserting a period. (1) in paragraph (3)— Section 304 of title 11, United States Code, is (b) IMPAIRMENT OF CLAIMS OR INTERESTS.— (A) in subparagraph (A) after ‘‘awarded’’, by amended to read as follows: Section 1124(2) of title 11, United States Code, is inserting ‘‘to an examiner, chapter 11 trustee, or ‘‘§ 304. Cases ancillary to foreign proceedings amended— professional person’’; and (1) in subparagraph (A) by inserting ‘‘or of a ‘‘(a) For purposes of this section— (B) by redesignating subdivisions (A) through kind that section 365(b)(1)(A) of this title ex- ‘‘(1) the term ‘domestic insurance company’ (E) as clauses (i) through (iv), respectively; and pressly does not require to be cured’’ before the means a domestic insurance company, as such (2) by adding at the the following: semicolon at the end; term is used in section 109(b)(2); ‘‘(B) In determining the amount of reasonable (2) in subparagraph (C) by striking ‘‘and’’ at ‘‘(2) the term ‘foreign insurance company’ compensation to be awarded a trustee, the court the end; means a foreign insurance company, as such shall treat such compensation as a commission (3) by redesignating subparagraph (D) as sub- term is used in section 109(b)(3); based on the results achieved.’’. paragraph (E); and ‘‘(3) the term ‘United States claimant’ means a SEC. 210. POSTPETITION DISCLOSURE AND SO- (4) by inserting after subparagraph (C) the beneficiary of any deposit referred to in sub- LICITATION. following: Section 1125 of title 11, United States Code, is section (b) or any multibeneficiary trust referred ‘‘(D) if such claim or such interest arises from amended by adding at the end the following: to in subsection (b); any failure to perform a nonmonetary obliga- ‘‘(4) the term ‘United States creditor’ means, ‘‘(g) Notwithstanding subsection (b), an ac- tion, compensates the holder of such claim or with respect to a foreign insurance company— ceptance or rejection of the plan may be solic- such interest (other than the debtor or an in- ‘‘(A) a United States claimant; or ited from a holder of a claim or interest if such sider) for any actual pecuniary loss incurred by ‘‘(B) any business entity that operates in the solicitation complies with applicable nonbank- such holder as a result of such failure; and’’. United States and that is a creditor; and ruptcy law and if such holder was solicited be- SEC. 217. SHARING OF COMPENSATION. fore the commencement of the case in a manner ‘‘(5) the term ‘United States policyholder’ means a holder of an insurance policy issued in Section 504 of title 11, United States Code, is complying with applicable nonbankruptcy amended by adding at the end the following: law.’’. the United States. ‘‘(b) The court may not grant relief under ‘‘(c) This section shall not apply with respect SEC. 211. PREFERENCES. chapter 15 of this title with respect to any de- to sharing, or agreeing to share, compensation Section 547(c) of title 11, United States Code, posit, escrow, trust fund, or other security re- with a bona fide public service attorney referral is amended— quired or permitted under any applicable State program that operates in accordance with non- (1) by amending paragraph (2) to read as fol- insurance law or regulation for the benefit of Federal law regulating attorney referral services lows: claim holders in the United States.’’. and with rules of professional responsibility ap- ‘‘(2) to the extent that such transfer was in plicable to attorney acceptance of referrals.’’. SEC. 216. DEFAULTS BASED ON NONMONETARY payment of a debt incurred by the debtor in the OBLIGATIONS. SEC. 218. PRIORITY FOR ADMINISTRATIVE EX- ordinary course of business or financial affairs PENSES. (a) EXECUTORY CONTRACTS AND UNEXPIRED of the debtor and the transferee, and such LEASES.—Section 365 of title 11, United States Section 503(b) of title 11, United States Code, transfer was— Code, is amended— is amended— ‘‘(A) made in the ordinary course of business (1) in subsection (b)— (1) by deleting ‘‘and’’ at the end of paragraph or financial affairs of the debtor and the trans- (A) in paragraph (1)(A) by striking the semi- (5); feree; or colon at the end and inserting the following: (2) by striking the period at the end of para- ‘‘(B) made according to ordinary business ‘‘other than a default that is a breach of a pro- graph (6) and inserting ‘‘; and’’; terms;’’; vision relating to— (3) by inserting the following after paragraph (2) in paragraph (7) by striking ‘‘or’’ at the ‘‘(i) the satisfaction of any provision (other (6): end; than a penalty rate or penalty provision) relat- ‘‘(7) with respect to a nonresidential real (3) in paragraph (8) by striking the period at ing to a default arising from any failure to per- property lease previously assumed under section the end and inserting ‘‘; or’’; and form nonmonetary obligations under an unex- 365, and subsequently rejected, a sum equal to (4) by adding at the end the following: pired lease of real property (excluding executory all monetary obligations due, excluding those ‘‘(9) if, in a case filed by a debtor whose debts contracts that transfer a right or interest under arising from or relating to a failure to operate or are not primarily consumer debts, the aggregate a filed or issued patent, copyright, trademark, penalty provisions, for the period of one year value of all property that constitutes or is af- trade dress, or trade secret), if it is impossible following the later of the rejection date or date fected by such transfer is less than $5,000.’’. for the trustee to cure such default by per- of actual turnover of the premises, without re- SEC. 212. VENUE OF CERTAIN PROCEEDINGS. forming nonmonetary acts at and after the time duction or setoff for any reason whatsoever ex- Section 1409(b) of title 28, United States Code, of assumption; or cept for sums actually received or to be received is amended by inserting ‘‘, or a nonconsumer ‘‘(ii) the satisfaction of any provision (other from a nondebtor; and the claim for remaining debt against a noninsider of less than $10,000,’’ than a penalty rate or penalty provision) relat- sums due for the balance of the term of the lease after ‘‘$5,000’’. ing to a default arising from any failure to per- shall be a claim under section 502(b)(6).’’. SEC. 213. PERIOD FOR FILING PLAN UNDER CHAP- form nonmonetary obligations under an execu- TITLE III—GENERAL BUSINESS TER 11. tory contract, if it is impossible for the trustee to BANKRUPTCY PROVISIONS Section 1121(d) of title 11, United States Code, cure such default by performing nonmonetary SEC. 301. DEFINITION OF DISINTERESTED PER- is amended— acts at and after the time of assumption and if SON. (1) by striking ‘‘On’’ and inserting ‘‘(1) Sub- the court determines, based on the equities of Section 101(14) of title 11, United States Code, ject to paragraph (1), on’’; and the case, that this subparagraph should not is amended to read as follows: (2) by adding at the end the following: apply with respect to such default;’’; and ‘‘(14) ‘disinterested person’ means a person ‘‘(2)(A) Such 120-day period may not be ex- (B) by amending paragraph (2)(D) to read as that— tended beyond a date that is 18 months after the follows: ‘‘(A) is not a creditor, an equity security hold- date of the order for relief under this chapter. ‘‘(D) the satisfaction of any penalty rate or er, or an insider; ‘‘(B) Such 180-day period may not be extended penalty provision relating to a default arising ‘‘(B) is not and was not, within 2 years before beyond a date that is 20 months after the date from a failure to perform nonmonetary obliga- the date of the filing of the petition, a director, of the order for relief under this chapter.’’. tions under an executory contract (excluding ex- officer, or employee of the debtor; and

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00044 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8537 ‘‘(C) does not have an interest materially ad- mination, and not less frequently than every (A) in paragraph (28) by striking ‘‘or’’ at the verse to the interest of the estate or of any class year thereafter.’’. end thereof; of creditors or equity security holders, by reason (c) CHAPTER 13 DISCHARGE.—Section 1328 of (B) in paragraph (29) by striking the period at of any direct or indirect relationship to, connec- title 11, United States Code, as amended by sec- the end and inserting ‘‘; or’’; and tion with, or interest in, the debtor, or for any tion 137, is amended by adding at the end the (C) by inserting after paragraph (29) the fol- other reason;’’. following: lowing: SEC. 302. MISCELLANEOUS IMPROVEMENTS. ‘‘(g) The court shall not grant a discharge ‘‘(30) under subsection (a), until a prepetition (a) WHO MAY BEADEBTOR.—Section 109 of under this section to a debtor, unless after filing default is cured fully in a case under chapter 13 title 11, United States Code, is amended by add- a petition the debtor has completed an instruc- of this title by actual payment of all arrears as ing at the end the following: tional course concerning personal financial required by the plan, of the postponement, con- ‘‘(h)(1) Subject to paragraphs (2) and (3) and management described in section 111. tinuation or other similar delay of a prepetition notwithstanding any other provision of this sec- ‘‘(h) Subsection (g) shall not apply with re- foreclosure proceeding or sale in accordance tion, an individual may not be a debtor under spect to a debtor who resides in a district for with applicable nonbankruptcy law, but noth- this title unless that individual has, during the which the United States trustee or bankruptcy ing herein shall imply that such postponement, 90-day period preceding the date of filing of the administrator of the bankruptcy court of that continuation or other similar delay is a viola- petition of that individual, received credit coun- district determines that the approved instruc- tion of the stay under subsection (a).’’; and seling, including, at a minimum, participation tional courses are not adequate to provide serv- (4) by amending section 1322(b)(2) to read as in an individual or group briefing that outlined ice to the additional individuals who would be follows: the opportunities for available credit counseling required to complete the instructional course by ‘‘(2) modify the rights of holders of secured and assisted that individual in performing an reason of the requirements of this section. claims, other than a claim secured primarily by ‘‘(i) Each United States trustee or bankruptcy initial budget analysis, through a credit coun- a security interest in property used as the debt- administrator that makes a determination de- seling program (offered through an approved or’s principal residence at any time during 180 scribed in subsection (h) shall review that deter- credit counseling service described in section days prior to the filing of the petition, or of mination not later than 1 year after the date of 111(a)). holders of unsecured claims, or leave unaffected that determination, and not less frequently than ‘‘(2)(A) Paragraph (1) shall not apply with re- the rights of holders of any class of claims;’’. every year thereafter.’’. spect to a debtor who resides in a district for (f) LIMITATION.—Section 362 of title 11, United (d) DEBTOR’S DUTIES.—Section 521 of title 11, States Code, is amended by adding at the end which the United States trustee or bankruptcy United States Code, as amended by sections 604 administrator of the bankruptcy court of that the following: and 120, is amended by adding at the end the ‘‘(j) If one case commenced under chapter 7, district determines that the approved credit following: counseling services for that district are not rea- 11, or 13 of this title is dismissed due to the cre- ‘‘(d) In addition to the requirements under ation of a debt repayment plan administered by sonably able to provide adequate services to the subsection (a), an individual debtor shall file additional individuals who would otherwise a credit counseling agency approved pursuant with the court— to section 111 of this title, then for purposes of seek credit counseling from those programs by ‘‘(1) a certificate from the credit counseling section 362(c)(3) of this title the subsequent case reason of the requirements of paragraph (1). service that provided the debtor services under commenced under any such chapter shall not be ‘‘(B) Each United States trustee or bank- section 109(h); and presumed to be filed not in good faith.’’. ruptcy administrator that makes a determina- ‘‘(2) a copy of the debt repayment plan, if (g) RETURN OF GOODS SHIPPED.—Section tion described in subparagraph (A) shall review any, developed under section 109(h) through the 546(g) of title 11, United States Code, as added that determination not later than one year after credit counseling service referred to in para- by section 222(a) of Public Law 103–394, is the date of that determination, and not less fre- graph (1).’’. amended to read as follows: quently than every year thereafter. (e) GENERAL PROVISIONS.— ‘‘(3)(A) Subject to subparagraph (B), the re- (1) IN GENERAL.—Chapter 1 of title 11, United ‘‘(h) Notwithstanding the rights and powers quirements of paragraph (1) shall not apply States Code, is amended by adding at the end of a trustee under sections 544(a), 545, 547, 549, with respect to a debtor who submits to the the following: and 553 of this title, if the court determines on court a certification that— a motion by the trustee made not later than 120 ‘‘§ 111. Credit counseling services; financial days after the date of the order for relief in a ‘‘(i) describes exigent circumstances that merit management instructional courses a waiver of the requirements of paragraph (1); case under chapter 11 of this title and after no- ‘‘The clerk of each district shall maintain a tice and hearing, that a return is in the best in- ‘‘(ii) states that the debtor requested credit list of credit counseling services that provide 1 counseling services from an approved credit terests of the estate, the debtor, with the consent or more programs described in section 109(h) and of the creditor, and subject to the prior rights, counseling service, but was unable to obtain the a list of instructional courses concerning per- services referred to in paragraph (1) during the if any, of third parties in such goods, may re- sonal financial management that have been ap- turn goods shipped to the debtor by the creditor 5-day period beginning on the date on which the proved by— debtor made that request or that the exigent cir- before the commencement of the case, and the ‘‘(1) the United States trustee; or creditor may offset the purchase price of such cumstances require filing before such 5-day pe- ‘‘(2) the bankruptcy administrator for the dis- riod expires; and goods against any claim of the creditor against trict.’’. the debtor that arose before the commencement ‘‘(iii) is satisfactory to the court. (2) CLERICAL AMENDMENT.—The table of sec- of the case.’’. ‘‘(B) With respect to a debtor, an exemption tions at the beginning of chapter 1 of title 11, under subparagraph (A) shall cease to apply to United States Code, is amended by adding at the SEC. 303. EXTENSIONS. that debtor on the date on which the debtor end the following: Section 302(d)(3) of the Bankruptcy, Judges, United States Trustees, and Family Farmer meets the requirements of paragraph (1), but in ‘‘111. Credit counseling services; financial man- Bankruptcy Act of 1986 (28 U.S.C. 581 note) is no case may the exemption apply to that debtor agement instructional courses.’’. amended— after the date that is 30 days after the debtor (e) DEFINITIONS.—Section 101 of title 11, files a petition.’’. United States Code, is amended— (1) in subparagraph (A), in the matter fol- (b) CHAPTER 7 DISCHARGE.—Section 727(a) of (1) by inserting after paragraph (13) the fol- lowing clause (ii), by striking ‘‘or October 1, title 11, United States Code, is amended— lowing: 2002, whichever occurs first’’; and (1) in paragraph (9), by striking ‘‘or’’ at the ‘‘(13A) ‘debtor’s principal residence’ means a (2) in subparagraph (F)— end; residential structure including incidental prop- (A) in clause (i)— (2) in paragraph (10), by striking the period erty when the structure contains 1 to 4 units, (i) in subclause (II), by striking ‘‘or October 1, and inserting ‘‘; or’’; and whether or not that structure is attached to real 2002, whichever occurs first’’; and (3) by adding at the end the following: property, and includes, without limitation, an (ii) in the matter following subclause (II), by ‘‘(11) after the filing of the petition, the debtor individual condominium or cooperative unit or striking ‘‘October 1, 2003, or’’; and failed to complete an instructional course con- mobile or manufactured home or trailer;’’; (B) in clause (ii), in the matter following sub- cerning personal financial management de- (2) by inserting after paragraph (27A), as clause (II)— scribed in section 111 unless the debtor resides in added by section 318 of this Act, the following: (i) by striking ‘‘before October 1, 2003, or’’; a district for which the United States trustee or ‘‘(27B) ‘incidental property’ means property and bankruptcy administrator of the bankruptcy incidental to such residence including, without (ii) by striking ‘‘, whichever occurs first’’. court of that district determines that the ap- limitation, property commonly conveyed with a SEC. 304. LOCAL FILING OF BANKRUPTCY CASES. proved instructional courses are not adequate to principal residence where the real estate is lo- Section 1408 of title 28, United States Code, is provide service to the additional individuals cated, window treatments, carpets, appliances amended— who would be required to compete the instruc- and equipment located in the residence, and (1) by striking ‘‘Except’’ and inserting ‘‘(a) tional course by reason of the requirements of easements, appurtenances, fixtures, rents, royal- Except’’; and this section. Each United States trustee or bank- ties, mineral rights, oil and gas rights, escrow (2) by adding at the end the following: ruptcy administrator that makes such a deter- funds and insurance proceeds;’’; ‘‘(b) For the purposes of subsection (a), if the mination shall review that determination not (3) in section 362(b), as amended by sections debtor is a corporation, the domicile and resi- later than 1 year after the date of that deter- 117, 118, 132, 136, 141 203, 818, and 1007,— dence of the debtor are conclusively presumed to

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00045 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8538 CONGRESSIONAL RECORD—HOUSE May 5, 1999 be where the debtor’s principal place of business ‘‘(f) Notwithstanding subsection (b)— ‘‘(4) whether the debtor is— in the United States is located.’’. ‘‘(1) the court may determine that the plan ‘‘(A) in compliance in all material respects SEC. 305. PERMITTING ASSUMPTION OF CON- itself provides adequate information and that a with postpetition requirements imposed by this TRACTS. separate disclosure statement is not necessary; title and the Federal Rules of Bankruptcy Pro- (a) Section 365(c) of title 11, United States ‘‘(2) the court may approve a disclosure state- cedure; and Code, is amended to read as follows: ment submitted on standard forms approved by ‘‘(B) timely filing tax returns and paying ‘‘(c)(1) The trustee may not assume or assign the court or adopted pursuant to section 2075 of taxes and other administrative claims when due, an executory contract or unexpired lease of the title 28; and and, if not, what the failures are and how, at debtor, whether or not the contract or lease pro- ‘‘(3)(A) the court may conditionally approve a what cost, and when the debtor intends to rem- hibits or restricts assignment of rights or delega- disclosure statement subject to final approval edy such failures; and tion of duties, if— after notice and a hearing; ‘‘(5) such other matters as are in the best in- ‘‘(A)(i) applicable law excuses a party to the ‘‘(B) acceptances and rejections of a plan may terests of the debtor and creditors, and in the contract or lease from accepting performance be solicited based on a conditionally approved public interest in fair and efficient procedures from or rendering performance to an assignee of disclosure statement if the debtor provides ade- under chapter 11 of this title.’’. the contract or lease, whether or not the con- quate information to each holder of a claim or (2) The table of sections of chapter 3 of title tract or lease prohibits or restricts assignment of interest that is solicited, but a conditionally ap- 11, United States Code, is amended by inserting rights or delegation of duties; and proved disclosure statement shall be mailed not after the item relating to section 307 the fol- ‘‘(ii) the party does not consent to the as- less than 20 days before the date of the hearing lowing: sumption or assignment; or on confirmation of the plan; and ‘‘308. Debtor reporting requirements.’’. ‘‘(B) the contract is a contract to make a loan, ‘‘(C) the hearing on the disclosure statement FFECTIVE DATE.—The amendments made or extend other debt financing or financial ac- (b) E may be combined with the hearing on confirma- by subsection (a) shall take effect 60 days after commodations, to or for the benefit of the debt- tion of a plan.’’. the date on which rules are prescribed pursuant or, or to issue a security of the debtor. ‘‘(2) Notwithstanding paragraph (1)(A) and SEC. 402. DEFINITIONS. to section 2075, title 28, United States Code to es- applicable nonbankruptcy law, in a case under (a) DEFINITIONS. Section 101 of title 11, United tablish forms to be used to comply with section chapter 11 of this title, a trustee in a case in States Code, is amended by striking paragraph 308 of title 11, United States Code, as added by which a debtor is a corporation, or a debtor in (51C) and inserting the following: subsection (a). possession, may assume an executory contract ‘‘(51C) ‘small business case’ means a case filed SEC. 405. UNIFORM REPORTING RULES AND or unexpired lease of the debtor, whether or not under chapter 11 of this title in which the debtor FORMS FOR SMALL BUSINESS CASES. the contract or lease prohibits or restricts as- is a small business debtor; and (a) PROPOSAL OF RULES AND FORMS.—The Ad- signment of rights or delegation of duties. ‘‘(51D) ‘small business debtor’ means (A) a visory Committee on Bankruptcy Rules of the ‘‘(3) The trustee may not assume or assign an person (including affiliates of such person that Judicial Conference of the United States shall unexpired lease of the debtor of nonresidential are also debtors under this title) that has aggre- propose for adoption amended Federal Rules of real property, whether or not the contract or gate noncontingent, liquidated secured and un- Bankruptcy Procedure and Official Bankruptcy lease prohibits or restricts assignment of rights secured debts as of the date of the petition or Forms to be used by small business debtors to or delegation of duties, if the lease has been ter- the order for relief in an amount not more than file periodic financial and other reports con- minated under applicable nonbankruptcy law $4,000,000 (excluding debts owed to 1 or more af- taining information, including information re- before the order for relief.’’. filiates or insiders), except that if a group of af- lating to— (b) Section 365(d) of title 11, United States filiated debtors has aggregate noncontingent liq- (1) the debtor’s profitability; Code, is amended by striking paragraphs (5), uidated secured and unsecured debts greater (2) the debtor’s cash receipts and disburse- (6), (7), (8), and (9), and redesignating para- than $4,000,000 (excluding debt owed to 1 or ments; and graph (10) as paragraph (5). more affiliates or insiders), then no member of (3) whether the debtor is timely filing tax re- (c) Section 365(e) of title 11, United States such group is a small business debtor;’’. turns and paying taxes and other administrative Code, is amended to read as follows: (b) CONFORMING AMENDMENT.—Section claims when due. ‘‘(e)(1) Notwithstanding a provision in an ex- 1102(a)(3) of title 11, United States Code, is (b) PURPOSE.—The rules and forms proposed ecutory contract or unexpired lease, or in appli- amended by inserting ‘‘debtor’’ after ‘‘small under subsection (a) shall be designed to cable law, an executory contract or unexpired business’’ . achieve a practical balance between— lease of the debtor may not be terminated or (1) the reasonable needs of the bankruptcy SEC. 403. STANDARD FORM DISCLOSURE STATE- court, the United States trustee, creditors, and modified, and any right or obligation under MENT AND PLAN. other parties in interest for reasonably complete such contract or lease may not be terminated or The Advisory Committee on Bankruptcy Rules modified, at any time after the commencement of information; of the Judicial Conference of the United States (2) the small business debtor’s interest that re- the case solely because of a provision in such shall, within a reasonable period of time after contract or lease that is conditioned on— quired reports be easy and inexpensive to com- the date of the enactment of this Act, propose plete; and ‘‘(A) the insolvency or financial condition of for adoption standard form disclosure state- the debtor at any time before the closing of the (3) the interest of all parties that the required ments and plans of reorganization for small reports help the small business debtor to under- case; business debtors (as defined in section 101 of ‘‘(B) the commencement of a case under this stand its financial condition and plan its fu- title 11, United States Code, as amended by this ture. title; or Act), designed to achieve a practical balance be- ‘‘(C) the appointment of or taking possession SEC. 406. DUTIES IN SMALL BUSINESS CASES. tween— by a trustee in a case under this title or a custo- (a) DUTIES IN CHAPTER 11 CASES.—Title 11 of (1) the reasonable needs of the courts, the dian before such commencement. the United States Code is amended by inserting United States trustee, creditors, and other par- ‘‘(2) Paragraph (1) does not apply to an exec- after section 1114 the following: utory contract or unexpired lease of the debtor ties in interest for reasonably complete informa- tion; and ‘‘§ 1115. Duties of trustee or debtor in posses- if the trustee may not assume or assign, and the sion in small business cases debtor in possession may not assume, the con- (2) economy and simplicity for debtors. ‘‘(a) In a small business case, a trustee or the tract or lease by reason of the provisions of sub- SEC. 404. UNIFORM NATIONAL REPORTING RE- debtor in possession, in addition to the duties section (c) of this section.’’. QUIREMENTS. provided in this title and as otherwise required (d) Section 365(f)(1) of title 11, United States (a) REPORTING REQUIRED.— by law, shall— Code, is amended by striking the semicolon and (1) Title 11 of the United States Code is ‘‘(1) append to the voluntary petition or, in all that follows through ‘‘event’’. amended by inserting after section 307 the fol- lowing: an involuntary case, file within 3 days after the TITLE IV SMALL BUSINESS BANKRUPTCY date of the order for relief— PROVISIONS ‘‘§ 308. Debtor reporting requirements ‘‘(A) its most recent balance sheet, statement SEC. 401. FLEXIBLE RULES FOR DISCLOSURE ‘‘A small business debtor shall file periodic fi- of operations, cash-flow statement, Federal in- STATEMENT AND PLAN. nancial and other reports containing informa- come tax return; or (a) Section 1125(a)(1) of title 11, United States tion including— ‘‘(B) a statement made under penalty of per- Code, is amended by inserting before the semi- ‘‘(1) the debtor’s profitability, that is, approxi- jury that no balance sheet, statement of oper- colon following: mately how much money the debtor has been ations, or cash-flow statement has been pre- ‘‘and in determining whether a disclosure state- earning or losing during current and recent fis- pared and no Federal tax return has been filed; ment provides adequate information, the court cal periods; ‘‘(2) attend, through its responsible indi- shall consider the complexity of the case, the ‘‘(2) reasonable approximations of the debtor’s vidual, meetings scheduled by the court or the benefit of additional information to creditors projected cash receipts and cash disbursements United States trustee, including initial debtor and other parties in interest, and the cost of over a reasonable period; interviews and meetings of creditors convened providing additional information’’. ‘‘(3) comparisons of actual cash receipts and under section 341 of this title; (b) Section 1125(f) of title 11, United States disbursements with projections in prior reports; ‘‘(3) timely file all schedules and statements of Code, is amended to read as follows: and financial affairs, unless the court, after notice

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00046 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8539 and a hearing, grants an extension, which shall subparagraphs (A) (I) of section 1112(b)(3) of (2) by amending paragraph (1) to read as fol- not extend such time period to a date later than this title; and lows: 30 days after the date of the order for relief, ab- ‘‘(ii) that it is more likely than not that the ‘‘(1) shall hold such status conferences as are sent extraordinary and compelling cir- court will confirm a plan within a reasonable necessary to further the expeditious and eco- cumstances; time; and nomical resolution of the case; and’’; and ‘‘(4) file all postpetition financial and other ‘‘(C) a new deadline shall be imposed when- (3) in paragraph (2) by striking ‘‘unless incon- reports required by the Federal Rules of Bank- ever an extension is granted.’’. sistent with another provision of this title or ruptcy Procedure or by local rule of the district SEC. 408. PLAN CONFIRMATION DEADLINE. with applicable Federal Rules of Bankruptcy court; Section 1129 of title 11, United States Code, is Procedure’’, and inserting ‘‘may’’. ‘‘(5) subject to section 363(c)(2) of this title, amended by adding at the end the following: SEC. 412. SERIAL FILER PROVISIONS. maintain insurance customary and appropriate ‘‘(e) In a small business case, the debtor shall Section 362 of title 11, United States Code, as to the industry; confirm a plan not later than 150 days after the amended by section 302, is amended— ‘‘(6)(A) timely file tax returns; date of the order for relief unless— (1) in subsection (i) as so redesignated by sec- ‘‘(B) subject to section 363(c)(2) of this title, ‘‘(1) the United States Trustee has appointed, tion 122— timely pay all administrative expense tax claims, under section 1102(a)(1) of this title, a committee (A) by striking ‘‘An’’ and inserting ‘‘(1) Ex- except those being contested by appropriate pro- of unsecured creditors that the court has deter- cept as provided in paragraph (2), an’’; and ceedings being diligently prosecuted; and mined, before the 150 days has expired, is suffi- (B) by adding at the end the following: ‘‘(C) subject to section 363(c)(2) of this title, ciently active and representative to provide ef- ‘‘(2) If such violation is based on an action establish 1 or more separate deposit accounts fective oversight of the debtor; or taken by an entity in the good-faith belief that not later than 10 business days after the date of ‘‘(2) such 150-day period is extended as pro- subsection (h) applies to the debtor, then recov- order for relief (or as soon thereafter as possible vided in section 1121(e)(3) of this title.’’. ery under paragraph (1) against such entity if all banks contacted decline the business) and SEC. 409. PROHIBITION AGAINST EXTENSION OF shall be limited to actual damages.’’; and deposit therein, not later than 1 business day TIME. (2) by inserting after subsection (j), as added after receipt thereof or a responsible time set by Section 105(d) of title 11, United States Code, by section 302, the following: the court, all taxes payable for periods begin- is amended— ‘‘(k)(1) Except as provided in paragraph (2) of ning after the date the case is commenced that (1) in paragraph (2)(B)(vi) by striking the pe- this subsection, the provisions of subsection (a) are collected or withheld by the debtor for gov- riod at the end and inserting ‘‘; and’’; and of thissection shall not apply in a case in which ernmental units unless the court waives this re- (2) by adding at the end the following: the debtor— quirement after notice and hearing; and ‘‘(3) in a small business case, not extend the ‘‘(A) is a debtor in a case under this title ‘‘(7) allow the United States trustee, or its des- time periods specified in sections 1121(e) and pending at the time the petition is filed; ignated representative, to inspect the debtor’s 1129(e) of this title except as provided in section ‘‘(B) was a debtor in a case under this title business premises, books, and records at reason- 1121(e)(3) of this title.’’. which was dismissed for any reason by an order able times, after reasonable prior written notice, SEC. 410. DUTIES OF THE UNITED STATES TRUST- that became final in the 2-year period ending on unless notice is waived by the debtor.’’. EE. the date of the order for relief entered with re- (b) TECHNICAL AMENDMENT.—The table of sec- (a) DUTIES OF THE UNITED STATES TRUSTEE.— spect to the petition; tions of chapter 11, United States Code, is Section 586(a) of title 28, United States Code, is ‘‘(C) was a debtor in a case under this title in amended by inserting after the item relating to amended— which a chapter 11, 12, or 13 plan was confirmed section 1114 the following: (1) in paragraph (3)— in the 2-year period ending on the date of the ‘‘1115. Duties of trustee or debtor in possession (A) in subparagraph (G) by striking ‘‘and at order for relief entered with respect to the peti- in small business cases.’’. the end’’; tion; or SEC. 407. PLAN FILING AND CONFIRMATION (B) by redesignating subparagraph (H) as sub- ‘‘(D) is an entity that has succeeded to sub- DEADLINES. paragraph (I); and stantially all of the assets or business of a debt- Section 1121(e) of title 11, United States Code, (C) by inserting after subparagraph (G) the or described in subparagraph (A), (B), or (C). is amended to read as follows: following: ‘‘(2) This subsection shall not apply— ‘‘(e) In a small business case— ‘‘(H) in small business cases (as defined in sec- ‘‘(A) to a case initiated by an involuntary pe- ‘‘(1) only the debtor may file a plan until after tion 101 of title 11), performing the additional tition filed by a creditor that is not an insider 90 days after the date of the order for relief, un- duties specified in title 11 pertaining to such or affiliate of the debtor; or less a trustee has been appointed under this cases’’; ‘‘(B) after such time as the debtor, after notice chapter, or unless the court, on request of a (2) in paragraph (5) by striking ‘‘and at the and a hearing, demonstrates by a preponder- party in interest and after notice and hearing, end’’; ance of the evidence, that the filing of such peti- shortens such time; (3) in paragraph (6) by striking the period at tion resulted from circumstances beyond the ‘‘(2) the debtor shall file a plan, and any nec- the end and inserting ‘‘; and’’; and control of the debtor and not foreseeable at the essary disclosure statement, not later than 90 (4) by inserting after paragraph (7) the fol- time the earlier case was filed; and that it is days after the date of the order for relief, unless lowing: more likely than not that the court will confirm the United States Trustee has appointed under ‘‘(7) in each of such small business cases— a plan, other than a liquidating plan, within a section 1102(a)(1) of this title a committee of un- ‘‘(A) conduct an initial debtor interview as reasonable time.’’. secured creditors that the court has determined, soon as practicable after the entry of order for SEC. 413. EXPANDED GROUNDS FOR DISMISSAL before the 90 days has expired, is sufficiently ac- relief but before the first meeting scheduled OR CONVERSION AND APPOINTMENT tive and representative to provide effective over- under section 341(a) of title 11 at which time the OF TRUSTEE OR EXAMINER. sight of the debtor; and United States trustee shall begin to investigate (a) EXPANDED GROUNDS FOR DISMISSAL OR ‘‘(3) the time periods specified in paragraphs the debtor’s viability, inquire about the debtor’s CONVERSION.—Section 1112(b) of title 11, United (1) and (2) of this subsection and the time fixed business plan, explain the debtor’s obligations to States Code, is amended to read as follows: in section 1129(e) of this title for confirmation of file monthly operating reports and other re- ‘‘(b)(1) Except as provided in paragraphs (2) a plan, may be extended only as follows: quired reports, attempt to develop an agreed and (4) of this subsection, and in subsection (c) ‘‘(A) On request of a party in interest made scheduling order, and inform the debtor of other of this section, on request of a party in interest, within the respective periods, and after notice obligations; and after notice and a hearing, the court shall and hearing, the court may for cause grant one ‘‘(B) when determined to be appropriate and convert a case under this chapter to a case or more extensions, cumulatively not to exceed advisable, visit the appropriate business prem- under chapter 7 of this title or dismiss a case 60 days, if the movant establishes— ises of the debtor and ascertain the state of the under this chapter, or appoint a trustee or ex- ‘‘(i) that no cause exists to dismiss or convert debtor’s books and records and verify that the aminer under section 1104(e) of this title, which- the case or appoint a trustee or examiner under debtor has filed its tax returns; and ever is in the best interest of creditors and the subparagraphs (A) (I) of section 1112(b) of this ‘‘(C) review and monitor diligently the debt- estate, if the movant establishes cause. title; and or’s activities, to identify as promptly as possible ‘‘(2) The court may decline to grant the relief ‘‘(ii) that there is a reasonable possibility the whether the debtor will be unable to confirm a specified in paragraph (1) of this subsection if court will confirm a plan within a reasonable plan; and the debtor or another party in interest objects time; ‘‘(8) in cases in which the United States trust- and establishes by a preponderance of the evi- ‘‘(B) On request of a party in interest made ee finds material grounds for any relief under dence that— within the respective periods, and after notice section 1112 of title 11, the United States trustee ‘‘(A) it is more likely than not that a plan will and hearing, the court may for cause grant one shall apply promptly to the court for relief.’’. be confirmed within a time as fixed by this title or more extensions in excess of those authorized SEC. 411. SCHEDULING CONFERENCES. or by order of the court entered pursuant to sec- under subparagraph (A) of this paragraph, if Section 105(d) of title 11, United States Code, tion 1121(e)(3), or within a reasonable time if no the movant establishes: is amended— time has been fixed; and ‘‘(i) that no cause exists to dismiss or convert (1) in the matter preceding paragraph (1) by ‘‘(B) if the cause is an act or omission of the the case or appoint a trustee or examiner under striking ‘‘, may’’; debtor that—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00047 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8540 CONGRESSIONAL RECORD—HOUSE May 5, 1999 ‘‘(i) there exists a reasonable justification for 11 of the United States Code and that cause cer- ‘‘(6) make such reports as the Attorney Gen- the act or omission; and tain small businesses to successfully complete eral directs, including the results of audits per- ‘‘(ii) the act or omission will be cured within cases under chapter 11 of such title; and formed under subsection (f); and’’; and a reasonable time fixed by the court not to ex- (B) how Federal laws relating to bankruptcy (2) by adding at the end the following: ceed 30 days after the court decides the motion, may be made more effective and efficient in as- ‘‘(f)(1)(A) The Attorney General shall estab- unless the movant expressly consents to a con- sisting small businesses to remain viable; and lish procedures to determine the accuracy, ve- tinuance for a specific period of time, or compel- (2) submit to the President pro tempore of the racity, and completeness of petitions, schedules, ling circumstances beyond the control of the Senate and the Speaker of the House of Rep- and other information which the debtor is re- debtor justify an extension. resentatives a report summarizing that study. quired to provide under sections 521 and 1322 of ‘‘(3) For purposes of this subsection, cause in- SEC. 415. PAYMENT OF INTEREST. title 11, and, if applicable, section 111 of title 11, cludes— Section 362(d)(3) of title 11, United States in individual cases filed under chapter 7 or 13 of ‘‘(A) substantial or continuing loss to or dimi- Code, is amended— such title. Such audits shall be in accordance nution of the estate; (1) by inserting ‘‘or 30 days after the court de- with generally accepted auditing standards and ‘‘(B) gross mismanagement of the estate; termines that the debtor is subject to this para- performed by independent certified public ac- ‘‘(C) failure to maintain insurance that poses graph, whichever is later’’ after ‘‘90-day pe- countants or independent licensed public ac- a material risk to the estate or the public; riod)’’; and countants. ‘‘(D) unauthorized use of cash collateral (2) by amending subparagraph (B) to read as ‘‘(B) Those procedures shall— harmful to 1 or more creditors; follows: ‘‘(i) establish a method of selecting appro- ‘‘(E) failure to comply with an order of the ‘‘(B) the debtor has commenced monthly pay- priate qualified persons to contract to perform court; ments (which payments may, in the debtor’s sole those audits; ‘‘(F) failure timely to satisfy any filing or re- discretion, notwithstanding section 363(c)(2) of ‘‘(ii) establish a method of randomly selecting porting requirement established by this title or this title, be made from rents or other income cases to be audited, except that not less than 1 by any rule applicable to a case under this generated before or after the commencement of out of every 250 cases in each Federal judicial chapter; the case by or from the property) to each cred- district shall be selected for audit; ‘‘(G) failure to attend the meeting of creditors itor whose claim is secured by such real estate ‘‘(iii) require audits for schedules of income convened under section 341(a) of this title; (other than a claim secured by a judgment lien and expenses which reflect greater than average ‘‘(H) failure timely to provide information or or by an unmatured statutory lien), which pay- variances from the statistical norm of the dis- attend meetings reasonably requested by the ments are in an amount equal to interest at the trict in which the schedules were filed; and United States trustee or bankruptcy adminis- then-applicable nondefault contract rate of in- ‘‘(iv) establish procedures for providing, not trator; terest on the value of the creditor’s interest in less frequently than annually, public informa- ‘‘(I) failure timely to pay taxes due after the the real estate; or’’. tion concerning the aggregate results of such date of the order for relief or to file tax returns TITLE V—MUNICIPAL BANKRUPTCY audits including the percentage of cases, by dis- due after the order for relief; PROVISIONS trict, in which a material misstatement of in- come or expenditures is reported. ‘‘(J) failure to file a disclosure statement, or to SEC. 501. PETITION AND PROCEEDINGS RELATED ‘‘(2) The United States trustee for each district file or confirm a plan, within the time fixed by TO PETITION. is authorized to contract with auditors to per- this title or by order of the court; (a) TECHNICAL AMENDMENT RELATING TO MU- form audits in cases designated by the United ‘‘(K) failure to pay any fees or charges re- NICIPALITIES.—Section 921(d) of title 11, United quired under chapter 123 of title 28; States Code, is amended by inserting ‘‘notwith- States trustee according to the procedures estab- ‘‘(L) revocation of an order of confirmation standing section 301(b)’’ before the period at the lished under paragraph (1). ‘‘(3)(A) The report of each audit conducted under section 1144 of this title; end. under this subsection shall be filed with the ‘‘(M) inability to effectuate substantial con- (b) CONFORMING AMENDMENT.—Section 301 of court and transmitted to the United States trust- summation of a confirmed plan; title 11, United States Code, is amended— ee. Each report shall clearly and conspicuously ‘‘(N) material default by the debtor with re- (1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’; specify any material misstatement of income or spect to a confirmed plan; and and expenditures or of assets identified by the per- ‘‘(O) termination of a plan by reason of the (2) by amending the last sentence to read as son performing the audit. In any case where a occurrence of a condition specified in the plan. follows: material misstatement of income or expenditures ‘‘(4) The court may grant relief under this ‘‘(b) The commencement of a voluntary case or of assets has been reported, the clerk of the subsection for cause as defined in subpara- under a chapter of this title constitutes an order bankruptcy court shall give notice of the graphs C, F, G, H, or K of paragraph 3 of this for relief under such chapter.’’. misstatement to the creditors in the case. subsection only upon motion of the United SEC. 502. APPLICABILITY OF OTHER SECTIONS TO ‘‘(B) If a material misstatement of income or States trustee or bankruptcy administrator or CHAPTER 9. expenditures or of assets is reported, the United upon the court s own motion. Section 901(a) of title 11, United States Code, States trustee shall— ‘‘(5) The court shall commence the hearing on is amended— ‘‘(i) report the material misstatement, if ap- any motion under this subsection not later than (1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and propriate, to the United States Attorney pursu- 30 days after filing of the motion, and shall de- (2) by inserting ‘‘559, 560, 561, 562’’ after ant to section 3057 of title 18, United States cide the motion within 15 days after commence- ‘‘557,’’. TITLE VI—STREAMLINING THE Code; and ment of the hearing, unless the movant ex- ‘‘(ii) if advisable, take appropriate action, in- BANKRUPTCY SYSTEM pressly consents to a continuance for a specific cluding but not limited to commencing an adver- period of time or compelling circumstances pre- SEC. 601. CREDITOR REPRESENTATION AT FIRST sary proceeding to revoke the debtor’s discharge MEETING OF CREDITORS. vent the court from meeting the time limits es- pursuant to section 727(d) of title 11, United Section 341(c) of title 11, United States Code, tablished by this paragraph.’’. States Code.’’. is amended by inserting after the first sentence (b) ADDITIONAL GROUNDS FOR APPOINTMENT (b) AMENDMENTS TO SECTION 521 OF TITLE 11, OF TRUSTEE OR EXAMINER.—Section 1104 of title the following: ‘‘Notwithstanding any local court U.S.C.—Section 521(a) of title 11, United States 11, United States Code, is amended by adding at rule, provision of a State constitution, any other Code, as amended by section 603, is amended in the end the following: Federal or State law that is not a bankruptcy paragraphs (3) and (4) by adding ‘‘or an auditor ‘‘(e) If grounds exist to convert or dismiss the law, or other requirement that representation at appointed pursuant to section 586 of title 28, case under section 1112 of this title, the court the meeting of creditors under subsection (a) be United States Code’’ after ‘‘serving in the case’’. may instead appoint a trustee or examiner, if it by an attorney, a creditor holding a consumer (c) AMENDMENTS TO SECTION 727 OF TITLE 11, determines that such appointment is in the best debt or any representative of the creditor (which U.S.C.—Section 727(d) of title 11, United States interests of creditors and the estate.’’. may include an entity or an employee of an en- Code, is amended— SEC. 414. STUDY OF OPERATION OF TITLE 11 OF tity and may be a representative for more than (1) by deleting ‘‘or’’ at the end of paragraph THE UNITED STATES CODE WITH RE- one creditor) shall be permitted to appear at and (2); SPECT TO SMALL BUSINESSES. participate in the meeting of creditors and ac- (2) by substituting ‘‘; or’’ for the period at the Not later than 2 years after the date of the en- tivities related thereto in a case under chapter 7 end of paragraph (3); and actment of this Act, the Administrator of the or 13, either alone or in conjunction with an at- (3) by adding the following at the end the fol- Small Business Administration, in consultation torney for the creditor. Nothing in this sub- lowing: with the Attorney General, the Director of the section shall be construed to require any cred- ‘‘(4) the debtor has failed to explain satisfac- Administrative Office of United States Trustees, itor to be represented by an attorney at any torily— and the Director of the Administrative Office of meeting of creditors.’’. ‘‘(A) a material misstatement in an audit per- the United States Courts, shall— SEC. 602. AUDIT PROCEDURES. formed pursuant to section 586(f) of title 28, (1) conduct a study to determine— (a) AMENDMENTS.—Section 586 of title 28, United States Code; or (A) the internal and external factors that United States Code, is amended— ‘‘(B) a failure to make available for inspection cause small businesses, especially sole propri- (1) in subsection (a) by amending striking all necessary accounts, papers, documents, fi- etorships, to become debtors in cases under title paragraph (6) to read as follows: nancial records, files, and all other papers,

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00048 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8541 things, or property belonging to the debtor that ‘‘(A) a list of creditors; and ‘‘(B) the identity of any persons responsible are requested for an audit conducted pursuant ‘‘(B) unless the court orders otherwise— with the debtor for the support of any depend- to section 586(f) of title 28, United States Code.’’. ‘‘(i) a schedule of assets and liabilities; ents of the debtor; and (d) EFFECTIVE DATE.—The amendments made ‘‘(ii) a schedule of current monthly income ‘‘(C) the identity of any persons who contrib- by this section shall take effect 18 months after and current expenditures prepared in accord- uted, and the amount contributed, to the house- the date of enactment of this Act. ance with section 707(b)(2); hold in which the debtor resides. SEC. 603. GIVING CREDITORS FAIR NOTICE IN ‘‘(iii) a statement of the debtor’s financial af- ‘‘(2) The tax returns, amendments, and state- CHAPTER 7 AND 13 CASES. fairs and, if applicable, a certificate— ment of income and expenditures described in (a) NOTICE.—Section 342 of title 11, United ‘‘(I) of an attorney whose name is on the peti- paragraph (1) shall be available to the United States Code, is amended— tion as the attorney for the debtor or any bank- States trustee, any bankruptcy administrator, (1) in subsection (c)— ruptcy petition preparer signing the petition any trustee, and any party in interest for in- (A) by striking ‘‘, but the failure of such no- pursuant to section 110(b)(1) of this title indi- spection and copying, subject to the require- tice to contain such information shall not inval- cating that such attorney or bankruptcy peti- ments of subsection (h). idate the legal effect of such notice’’; and tion preparer delivered to the debtor any notice ‘‘(h)(1) Not later than 30 days after the date (B) by adding the following at the end: required by section 342(b) of this title; or of enactment of the Consumer Bankruptcy Re- ‘‘(II) if no attorney for the debtor is indicated form Act of 1999, the Director of the Administra- ‘‘If the credit agreement between the debtor and tive Office of the United States Courts shall es- the creditor or the last communication before and no bankruptcy petition preparer signed the petition, of the debtor that such notice was ob- tablish procedures for safeguarding the con- the filing of the petition in a voluntary case fidentiality of any tax information required to from the creditor to a debtor who is an indi- tained and read by the debtor; ‘‘(iv) copies of any Federal tax returns, in- be provided under this section. vidual states an account number of the debtor ‘‘(2) The procedures under paragraph (1) shall cluding any schedules or attachments, filed by which is the current account number of the include reasonable restrictions on creditor ac- the debtor for the 3-year period preceding the debtor with respect to any debt held by the cred- cess to tax information that is required to be order for relief; itor against the debtor, the debtor shall include provided under this section to verify creditor ‘‘(v) copies of all payment advices or other such account number in any notice to the cred- identity and to restrict use of the information evidence of payment, if any, received by the itor required to be given under this title. If the except with respect to the case. creditor has specified to the debtor an address at debtor from any employer of the debtor in the ‘‘(3) Not later than 1 year after the date of en- which the creditor wishes to receive correspond- period 60 days prior to the filing of the petition; actment of the Consumer Bankruptcy Reform ence regarding the debtor’s account, any notice and Act of 1999, the Director of the Administrative to the creditor required to be given by the debtor ‘‘(vi) a statement disclosing any reasonably Office of the United States Courts shall prepare, under this title shall be given at such address. anticipated increase in income or expenditures and submit to Congress a report that— For the purposes of this section, ‘notice’ shall over the 12-month period following the date of ‘‘(A) assesses the effectiveness of the proce- include, but shall not be limited to, any cor- filing;’’; dures under paragraph (1) to provide timely and respondence from the debtor to the creditor after (3) by adding at the end the following: sufficient information to creditors concerning the commencement of the case, any statement of ‘‘(e)(1) At any time, a creditor, in the case of the case; and the debtor’s intention under section 521(a)(2) of an individual under chapter 7 or 13, may file ‘‘(B) if appropriate, includes proposed legisla- this title, notice of the commencement of any with the court notice that the creditor requests tion— proceeding in the case to which the creditor is a the petition, schedules, and a statement of af- ‘‘(i) to further protect the confidentiality of party, and any notice of the hearing under sec- fairs filed by the debtor in the case and the tax information or to make it better available to tion 1324 of this title.’’; court shall make those documents available to creditors; and (2) by adding at the end the following: the creditor who requests those documents at a ‘‘(ii) to provide penalties for the improper use ‘‘(d) At any time, a creditor in a case of an in- reasonable cost within 5 business days after by any person of the tax information required to dividual debtor under chapter 7 or 13 may file such request. be provided under this section. with the court and serve on the debtor a notice ‘‘(2) At any time, a creditor in a case under ‘‘(i) If requested by the United States trustee of the address to be used to notify the creditor chapter 13 may file with the court notice that or a trustee serving in the case, the debtor pro- in that case. After 5 days following receipt of the creditor requests the plan filed by the debtor vide a document that establishes the identity of such notice, any notice the court or the debtor in the case, and the court shall make such plan the debtor, including a driver’s license, pass- is required to give the creditor shall be given at available to the creditor who requests such plan port, or other document that contains a photo- that address. at a reasonable cost and not later than 5 days graph of the debtor and such other personal ‘‘(e) An entity may file with the court a notice after such request. identifying information relating to the debtor stating its address for notice in cases under ‘‘(f) An individual debtor in a case under that establishes the identity of the debtor.’’. chapters 7 and 13. After 30 days following the chapter 7 or 13 shall file with the court— (c) Section 1324 of title 11, United States Code, filing of such notice, any notice in any case ‘‘(1) at the time filed with the taxing author- is amended— filed under chapter 7 or 13 given by the court ity, all tax returns, including any schedules or (1) by inserting ‘‘(a)’’ before ‘‘After’’; and attachments, with respect to the period from the (2) by inserting at the end thereof— shall be to that address unless specific notice is ‘‘(c) Whenever a party in interest is given no- commencement of the case until such time as the given under subsection (d) with respect to a par- tice of a hearing on the confirmation or modi- case is closed; ticular case. fication of a plan under this chapter, such no- ‘‘(2) at the time filed with the taxing author- ‘‘(f) Notice given to a creditor other than as tice shall include the information provided by ity, all tax returns, including any schedules or provided in this section shall not be effective no- the debtor on the most recent statement filed attachments, that were not filed with the taxing tice until it has been brought to the attention of with the court pursuant to section authority when the schedules under subsection the creditor. If the creditor has designated a 521(a)(1)(B)(ii) or (f)(4) of this title.’’. person or department to be responsible for re- (a)(1) were filed with respect to the period that is 3 years before the order for relief; SEC. 604. DISMISSAL FOR FAILURE TO TIMELY ceiving notices concerning bankruptcy cases FILE SCHEDULES OR PROVIDE RE- and has established reasonable procedures so ‘‘(3) any amendments to any of the tax re- QUIRED INFORMATION. that bankruptcy notices received by the creditor turns, including schedules or attachments, de- Section 521 of title 11, United States Code, as will be delivered to such department or person, scribed in paragraph (1) or (2); and amended by section 603 is amended by inserting notice will not be brought to the attention of the ‘‘(4) in a case under chapter 13, a statement after subsection (a) the following: creditor until received by such person or depart- subject to the penalties of perjury by the debtor ‘‘(b)(1) Notwithstanding section 707(a) of this ment. No sanction under section 362(h) of this of the debtor’s current monthly income and ex- title, and subject to paragraph (2), if an indi- title or any other sanction which a court may penditures in the preceding tax year and cur- vidual debtor in a voluntary case under chapter impose on account of violations of the stay rent monthly income less expenditures for the 7 or 13 fails to file all of the information re- under section 362(a) of this title or failure to month preceding the statement prepared in ac- quired under subsection (a)(1) within 45 days comply with section 542 or 543 of this title may cordance with section 707(b)(2) that shows how after the filing of the petition commencing the be imposed on any action of the creditor unless the amounts are calculated— case, the case shall be automatically dismissed the action takes place after the creditor has re- ‘‘(A) beginning on the date that is the later of effective on the 46th day after the filing of the ceived notice of the commencement of the case 90 days after the close of the debtor’s tax year petition. effective under this section.’’. or 1 year after the order for relief, unless a plan ‘‘(2) With respect to a case described in para- (b) DEBTOR’S DUTIES.—Section 521 of title 11, has been confirmed; and graph (1), any party in interest may request the United States Code, as amended by sections 604, ‘‘(B) thereafter, on or before the date that is court to enter an order dismissing the case. The 120, and 302, is amended— 45 days before each anniversary of the con- court shall, if so requested, enter an order of (1) by inserting ‘‘(a)’’ before ‘‘The debtor firmation of the plan until the case is closed. dismissal not later than 5 days after such re- shall—’’; ‘‘(g)(1) A statement referred to in subsection quest. (2) by striking paragraph (1) and inserting the (f)(4) shall disclose— ‘‘(3) Upon request of the debtor made within following: ‘‘(A) the amount and sources of income of the 45 days after the filing of the petition com- ‘‘(1) file— debtor; mencing a case described in paragraph (1), the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00049 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8542 CONGRESSIONAL RECORD—HOUSE May 5, 1999 court may allow the debtor an additional period date of the modification and shall be 3 years if ‘‘(B) that 60-day period is extended— not to exceed 45 days to file the information re- the current monthly total income of the debtor ‘‘(i) by agreement of all parties in interest; or quired under subsection (a)(1) if the court finds and the debtor’s spouse combined, when multi- ‘‘(ii) by the court for such specific period of justification for extending the period for the fil- plied by 12, is less than the highest national me- time as the court finds is required by for good ing.’’. dian family income last reported by the Bureau cause as described in findings made by the SEC. 605. ADEQUATE TIME TO PREPARE FOR of the Census for a family of equal or lesser size court.’’. HEARING ON CONFIRMATION OF or, in the case of a household of 1 person, less SEC. 611. STOPPING ABUSIVE CONVERSIONS THE PLAN. than the national median household income for FROM CHAPTER 13. (a) HEARING.—Section 1324 of title 11, United 1 earner as of the date of the modification. Not- Section 348(f)(1) of title 11, United States States Code, is amended— withstanding the foregoing, the national median Code, is amended— (1) in subparagraph (A), by striking ‘‘and’’ at (1) by striking ‘‘After’’ and inserting the fol- family income for a family of more than 4 indi- the end; lowing: viduals shall be the national median family in- (2) in subparagraph (B)— ‘‘(a) Except as provided in subsection (b) and come last reported by the Bureau of the Census (A) by striking ‘‘in the converted case, with after’’; and for a family of 4 individuals plus $583 for each allowed secured claims’’ and inserting ‘‘only in (2) by adding at the end the following: additional member of the family.’’. a case converted to chapter 11 or 12 but not in ‘‘(b) The hearing on confirmation of the plan SEC. 607. SENSE OF THE CONGRESS REGARDING a case converted to chapter 7, with allowed se- may be held not earlier than 20 days, and not EXPANSION OF RULE 9011 OF THE cured claims in cases under chapters 11 and 12’’; later than 45 days, after the meeting of creditors FEDERAL RULES OF BANKRUPTCY and under section 341(a) of this title.’’. PROCEDURE. (B) by striking the period and inserting ‘‘; SEC. 606. CHAPTER 13 PLANS TO HAVE A 5-YEAR It is the sense of the Congress that rule 9011 and’’; and DURATION IN CERTAIN CASES. of the Federal Rules of Bankruptcy Procedure (3) by adding at the end the following: Title 11, United States Code, is amended— (11 U.S.C. App) should be modified to include a ‘‘(C) with respect to cases converted from (1) by amending section 1322(d) to read as fol- requirement that all documents (including chapter 13— lows: schedules), signed and unsigned, submitted to ‘‘(i) the claim of any creditor holding security ‘‘(d) If the current monthly income of the the court or to a trustee by debtors who rep- as of the date of the petition shall continue to debtor and the debtor’s spouse combined, when resent themselves and debtors who are rep- be secured by that security unless the full multiplied by 12, is not less than the highest na- resented by an attorney be submitted only after amount of such claim determined under applica- tional median family income last reported by the the debtor or the debtor’s attorney has made ble nonbankruptcy law has been paid in full as Bureau of the Census for a family of equal or reasonable inquiry to verify that the informa- of the date of conversion, notwithstanding any lesser size or, in the case of a household of 1 tion contained in such documents is well valuation or determination of the amount of an person, not less than the national median grounded in fact, and is warranted by existing allowed secured claim made for the purposes of household income for 1 earner, the plan may not law or a good-faith argument for the extension, the chapter 13 proceeding; and provide for payments over a period that is modification, or reversal of existing law. ‘‘(ii) unless a prebankruptcy default has been longer than 5 years. If the current monthly in- SEC. 608. ELIMINATION OF CERTAIN FEES PAY- fully cured pursuant to the plan at the time of come of the debtor and the debtor’s spouse com- ABLE IN CHAPTER 11 BANKRUPTCY conversion, in any proceeding under this title or bined, when multiplied by 12, is less than the CASES. otherwise, the default shall have the effect highest national median family income for a (a) AMENDMENTS.—Section 1930(a)(6) of title given under applicable nonbankruptcy law.’’. family of equal or lesser size, or in the case of 28, United States Code, is amended— SEC. 612. BANKRUPTCY APPEALS. a household of 1 person, the national median (1) in the 1st sentence by striking ‘‘until the Title 28 of the United States Code is amended household income for 1 earner, the plan may not case is converted or dismissed, whichever occurs by inserting after section 1292 the following: provide for payments over a period that is first’’; and ‘‘§ 1293. Bankruptcy appeals longer than 3 years, unless the court, for cause, (2) in the 2d sentence— ‘‘(a) The courts of appeals (other than the approves a longer period, but the court may not (A) by striking ‘‘The’’ and inserting ‘‘Until United States Court of Appeals for the Federal approve a period that is longer than 5 years. the plan is confirmed or the case is converted Circuit) shall have jurisdiction of appeals from Notwithstanding the foregoing, the national me- (whichever occurs first) the’’; and the following: dian family income for a family of more than 4 (B) by striking ‘‘less than $300,000;’’ and in- ‘‘(1) Final orders and judgments entered by individuals shall be the national median family serting ‘‘less than $300,000. Until the case is con- bankruptcy courts and district courts in cases income last reported by the Bureau of the Cen- verted, dismissed, or closed (whichever occurs under title 11, in proceedings arising under title sus for a family of 4 individuals plus $583 for first and without regard to confirmation of the 11, and in proceedings arising in or related to a each additional member of the family.’’; plan) the fee shall be’’. case under title 11, including final orders in pro- (2) in section 1325(b)(1)(B) as amended by sec- (b) DELAYED EFFECTIVE DATE.—The amend- ceedings regarding the automatic stay of section tion 130— ments made by subsection (a) shall take effect 362 of title 11. (A) by striking ‘‘three year period’’ and in- on October 1, 1999. ‘‘(2) Interlocutory orders entered by bank- serting ‘‘applicable commitment period’’; and SEC. 609. STUDY OF BANKRUPTCY IMPACT OF ruptcy courts and district courts granting, con- (B) by inserting at the end of subparagraph CREDIT EXTENDED TO DEPENDENT tinuing, modifying, refusing or dissolving in- STUDENTS. (B) the following: ‘‘The ‘applicable commitment junctions, or refusing to dissolve or modify in- Not later than 1 year after the date of the en- period’ shall be not less than 5 years if the cur- junctions in cases under title 11, in proceedings actment of this Act, the Comptroller General of rent monthly income of the debtor and the debt- arising under title 11, and in proceedings arising the United States shall— or’s spouse combined, when multiplied by 12, is in or related to a case under title 11, other than (1) conduct a study regarding the impact that not less than the highest national median fam- interlocutory orders in proceedings regarding the extension of credit to individuals who are— ily income last reported by the Bureau of the the automatic stay of section 362 of title 11. (A) claimed as dependents for purposes of the ‘‘(3) Interlocutory orders of bankruptcy courts Census for a family of equal or lesser size, or in Internal Revenue Code of 1986; and the case of a household of 1 person, the national and district courts entered under section 1104(a) (B) enrolled in post-secondary educational in- or 1121(d) of title 11, or the refusal to enter an median household income for 1 earner. Notwith- stitutions, standing the foregoing, the national median order under such section. has on the rate of cases filed under title 11 of ‘‘(4) An interlocutory order of a bankruptcy family income for a family of more than 4 indi- the United States Code; and court or district court entered in a case under viduals shall be the national median family in- (2) submit to the Speaker of the House of Rep- title 11, in a proceeding arising under title 11, or come last reported by the Bureau of the Census resentatives and the President pro tempore of in a proceeding arising in or related to a case for a family of 4 individuals plus $583 for each the Senate a report summarizing such study. under title 11, if the court of appeals that would additional member of the family.’’; and SEC. 610. PROMPT RELIEF FROM STAY IN INDI- have jurisdiction of an appeal of a final order (3) in section 1329— VIDUAL CASES. entered in such case or such proceeding permits, (A) by striking in subsection (c) ‘‘three years’’ Section 362(e) of title 11, United States Code, in its discretion, appeal to be taken from such and inserting ‘‘the applicable commitment pe- is amended— interlocutory order. riod under section 1325(b)(1)(B)’’; and (1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and ‘‘(b) Final decisions, judgments, orders, and (B) by inserting at the end of subsection (c) (2) by adding at the end the following: decrees entered by a bankruptcy appellate panel the following: ‘‘(2) Notwithstanding paragraph (1), in the under subsection (b) of this section. ‘‘The duration period shall be 5 years if the cur- case of an individual filing under chapter 7, 11, ‘‘(c)(1) The judicial council of a circuit may rent monthly income of the debtor and the debt- or 13, the stay under subsection (a) shall termi- establish a bankruptcy appellate panel com- or’s spouse combined, when multiplied by 12, is nate on the date that is 60 days after a request posed of bankruptcy judges in the circuit who not less than the highest national median fam- is made by a party in interest under subsection are appointed by the judicial council, which ily income last reported by the Bureau of the (d), unless— panel shall exercise the jurisdiction to review or- Census for a family of equal or lesser size or, in ‘‘(A) a final decision is rendered by the court ders and judgments of bankruptcy courts de- the case of a household of 1 person, the national during the 60-day period beginning on the date scribed in paragraphs (1)–(4) of subsection (a) of median household income for 1 earner, as of the of the request; or this section unless—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00050 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8543 ‘‘(A) the appellant elects at the time of filing ference between the total amount of debt and information to evaluate the efficiency and prac- the appeal; or obligations of a debtor reported on the schedules ticality of the Federal bankruptcy system. In ‘‘(B) any other party elects, not later than 10 and the amount of such debt reported in cat- issuing rules proposing the forms referred to in days after service of the notice of the appeal; egories which are predominantly nondischarge- subsection (a), the Attorney General shall strike to have such jurisdiction exercised by the court able; the best achievable practical balance between— of appeals. ‘‘(D) the average period of time between the ‘‘(1) the reasonable needs of the public for in- ‘‘(2) An appeal to be heard by a bankruptcy filing of the petition and the closing of the case; formation about the operational results of the appellate panel under this subsection (b) shall ‘‘(E) for the reporting period— Federal bankruptcy system; and be heard by 3 members of the bankruptcy appel- ‘‘(i) the number of cases in which a reaffirma- ‘‘(2) economy, simplicity, and lack of undue late panel, provided that a member of such tion was filed; and burden on persons with a duty to file reports. panel may not hear an appeal originating in the ‘‘(ii)(I) the total number of reaffirmations ‘‘(d) FINAL REPORTS.—Final reports proposed district for which such member is appointed or filed; for adoption by trustees under chapters 7, 12, designated under section 152 of this title. ‘‘(II) of those cases in which a reaffirmation and 13 of title 11 shall, in addition to such other ‘‘(3) If authorized by the Judicial Conference was filed, the number in which the debtor was matters as are required by law or as the Attor- of the United States, the judicial councils of 2 or not represented by an attorney; and ney General in the discretion of the Attorney more circuits may establish a joint bankruptcy ‘‘(III) of those cases, the number of cases in General, shall propose, include with respect to a appellate panel.’’. which the reaffirmation was approved by the case under such title— court; SEC. 613. GAO STUDY. ‘‘(1) information about the length of time the ‘‘(F) with respect to cases filed under chapter case was pending; (a) STUDY.—Not later than 270 days after the 13 of title 11, for the reporting period— date of the enactment of this Act, the Comp- ‘‘(2) assets abandoned; ‘‘(i)(I) the number of cases in which a final ‘‘(3) assets exempted; troller General of the United States shall con- order was entered determining the value of ‘‘(4) receipts and disbursements of the estate; duct a study of the feasibility, effectiveness, and property securing a claim in an amount less ‘‘(5) expenses of administration; cost of requiring trustees appointed under title than the amount of the claim; and ‘‘(6) claims asserted; 11 of the United States Code, or the bankruptcy ‘‘(II) the number of final orders determining ‘‘(7) claims allowed; and courts, to provide to the Office of Child Support the value of property securing a claim issued; ‘‘(8) distributions to claimants and claims dis- Enforcement promptly after the commencement ‘‘(ii) the number of cases dismissed, the num- charged without payment, of cases by individual debtors under such title, ber of cases dismissed for failure to make pay- the names and social security numbers of such in each case by appropriate category and, in ments under the plan, the number of cases cases under chapters 12 and 13 of title 11, date debtors for the purposes of allowing such Office refiled after dismissal, and the number of cases to determine whether such debtors have out- of confirmation of the plan, each modification in which the plan was completed, separately thereto, and defaults by the debtor in perform- standing obligations for child support (as deter- itemized with respect to the number of modifica- mined on the basis of information in the Federal ance under the plan. tions made before completion of the plan, if any; ‘‘(e) PERIODIC REPORTS.—Periodic reports pro- Case Registry or other national database). and (b) REPORT.—Not later than 300 days after the posed for adoption by trustees or debtors in pos- ‘‘(iii) the number of cases in which the debtor session under chapter 11 of title 11 shall, in ad- date of the enactment of this Act, the Comp- filed another case within the 6 years previous to troller General shall submit to the Speaker of dition to such other matters as are required by the filing; law or as the Attorney General, in the discretion the House of Representatives and the President ‘‘(G) the number of cases in which creditors pro tempore of the Senate, a report containing of the Attorney General, shall propose, in- were fined for misconduct and any amount of clude— the results of the study required by subsection punitive damages awarded by the court for cred- (a). ‘‘(1) information about the standard industry itor misconduct; and classification, published by the Department of TITLE VII—BANKRUPTCY DATA ‘‘(H) the number of cases in which sanctions Commerce, for the businesses conducted by the SEC. 701. IMPROVED BANKRUPTCY STATISTICS. under rule 9011 of the Federal Rules of Bank- debtor; (a) AMENDMENT.—Chapter 6 of part I of title ruptcy Procedure were imposed against debtor’s ‘‘(2) length of time the case has been pending; 28, United States Code, is amended by adding at counsel and damages awarded under such ‘‘(3) number of full-time employees as at the the end the following: Rule.’’. date of the order for relief and at end of each (b) CLERICAL AMENDMENT.—The table of sec- reporting period since the case was filed; ‘‘§ 159. Bankruptcy statistics tions at the beginning of chapter 6 of title 28, ‘‘(a) The clerk of each district shall compile ‘‘(4) cash receipts, cash disbursements and United States Code, is amended by adding at the profitability of the debtor for the most recent pe- statistics regarding individual debtors with pri- end the following: marily consumer debts seeking relief under riod and cumulatively since the date of the ‘‘159. Bankruptcy statistics.’’. order for relief; chapters 7, 11, and 13 of title 11. Those statistics (c) EFFECTIVE DATE.—The amendments made shall be in a form prescribed by the Director of ‘‘(5) compliance with title 11, whether or not by this section shall take effect 18 months after tax returns and tax payments since the date of the Administrative Office of the United States the date of enactment of this Act. Courts (referred to in this section as the ‘Of- the order for relief have been timely filed and SEC. 702. UNIFORM RULES FOR THE COLLECTION made; fice’). OF BANKRUPTCY DATA. ‘‘(b) The Director shall— ‘‘(6) all professional fees approved by the (a) AMENDMENT.—Title 28 of the United States ‘‘(1) compile the statistics referred to in sub- court in the case for the most recent period and Code is amended by inserting after section 589a section (a); cumulatively since the date of the order for re- the following: ‘‘(2) make the statistics available to the pub- lief (separately reported, in for the professional lic; and ‘‘§ 589b. Bankruptcy data fees incurred by or on behalf of the debtor, be- ‘‘(3) not later than October 31, 2000, and an- ‘‘(a) RULES.—The Attorney General shall, tween those that would have been incurred ab- nually thereafter, prepare, and submit to Con- within a reasonable time after the effective date sent a bankruptcy case and those not); and gress a report concerning the information col- of this section, issue rules requiring uniform ‘‘(7) plans of reorganization filed and con- lected under subsection (a) that contains an forms for (and from time to time thereafter to firmed and, with respect thereto, by class, the analysis of the information. appropriately modify and approve)— recoveries of the holders, expressed in aggregate ‘‘(c) The compilation required under sub- ‘‘(1) final reports by trustees in cases under dollar values and, in the case of claims, as a section (b) shall— chapters 7, 12, and 13 of title 11; and percentage of total claims of the class allowed.’’. ‘‘(1) be itemized, by chapter, with respect to ‘‘(2) periodic reports by debtors in possession (b) TECHNICAL AMENDMENT.—The table of sec- title 11; or trustees, as the case may be, in cases under tions of chapter 39 of title 28, United States ‘‘(2) be presented in the aggregate and for chapter 11 of title 11. Code, is amended by adding at the end the fol- each district; and ‘‘(b) REPORTS.—All reports referred to in sub- lowing: ‘‘(3) include information concerning— section (a) shall be designed (and the require- ‘‘589b. Bankruptcy data.’’. ‘‘(A) the total assets and total liabilities of the ments as to place and manner of filing shall be SEC. 703. SENSE OF THE CONGRESS REGARDING debtors described in subsection (a), and in each established) so as to facilitate compilation of AVAILABILITY OF BANKRUPTCY category of assets and liabilities, as reported in data and maximum possible access of the public, DATA. the schedules prescribed pursuant to section both by physical inspection at 1 or more central It is the sense of the Congress that— 2075 of this title and filed by those debtors; filing locations, and by electronic access (1) the national policy of the United States ‘‘(B) the current monthly income, and average through the Internet or other appropriate should be that all data held by bankruptcy income and average expenses of those debtors as media. clerks in electronic form, to the extent such data reported on the schedules and statements that ‘‘(c) REQUIRED INFORMATION.—The informa- reflects only public records (as defined in sec- each such debtor files under sections 521 and tion required to be filed in the reports referred tion 107 of title 11 of the United States Code), 1322 of title 11; to in subsection (b) shall be that which is in the should be released in a usable electronic form in ‘‘(C) the aggregate amount of debt discharged best interests of debtors and creditors, and in bulk to the public subject to such appropriate in the reporting period, determined as the dif- the public interest in reasonable and adequate privacy concerns and safeguards as the Judicial

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00051 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 8544 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Conference of the United States may determine; debtor shall identify such individual, entity, or- receive the present value of the allowed amount and ganization, or name. of a tax claim, the rate of interest shall be as (2) there should be established a bankruptcy ‘‘(h) The clerk shall keep and update quar- follows: data system in which— terly, in the form and manner as the Director of ‘‘(1) In the case of ad valorem tax claims, (A) a single set of data definitions and forms the Administrative Office of the United States whether secured or unsecured, other unsecured are used to collect data nationwide; and Courts prescribes, and make available to debt- tax claims where interest is required to be paid (B) data for any particular bankruptcy case ors, a register in which a governmental unit under section 726(a)(5) of this title, secured tax are aggregated in the same electronic record. may designate a safe harbor mailing address for claims, and administrative tax claims paid TITLE VIII—BANKRUPTCY TAX service of notice in cases pending in the district. under section 503(b)(1) of this title, the rate PROVISIONS A governmental unit may file a statement with shall be determined under applicable nonbank- the clerk designating a safe harbor address to ruptcy law. SEC. 801. TREATMENT OF CERTAIN LIENS. which notices are to be sent, unless such govern- ‘‘(2) In the case of all other tax claims, the (a) TREATMENT OF CERTAIN LIENS.—Section mental unit files a notice of change of ad- minimum rate of interest shall be the Federal 724 of title 11, United States Code, is amended— dress.’’. short-term rate rounded to the nearest full per- (1) in subsection (b), in the matter preceding (b) ADOPTION OF RULES PROVIDING NOTICE.— cent, determined under section 1274(d) of the In- paragraph (1), by inserting ‘‘(other than to the The Advisory Committee on Bankruptcy Rules ternal Revenue Code of 1986, plus 3 percentage extent that there is a properly perfected un- of the Judicial Conference shall, within a rea- points. avoidable tax lien arising in connection with an sonable period of time after the date of the en- ‘‘(A) In the case of claims for Federal income ad valorem tax on real or personal property of actment of this Act, propose for adoption en- taxes, such rate shall be subject to any adjust- the estate)’’ after ‘‘under this title’’; hanced rules for providing notice to State, Fed- ment that may be required under section 6621(d) (2) in subsection (b)(2), after ‘‘507(a)(1)’’, in- eral, and local government units that have regu- of the Internal Revenue Code of 1986. sert ‘‘(except that such expenses, other than latory authority over the debtor or which may ‘‘(B) In the case of taxes paid under a con- claims for wages, salaries, or commissions which be creditors in the debtor’s case. Such rules shall firmed plan or reorganization, such rate shall be arise after the filing of a petition, shall be lim- be reasonably calculated to ensure that notice determined as of the calendar month in which ited to expenses incurred under chapter 7 of this will reach the representatives of the govern- the plan is confirmed.’’. title and shall not include expenses incurred mental unit, or subdivision thereof, who will be (b) CONFORMING AMENDMENT.—The table of under chapter 11 of this title)’’; and the proper persons authorized to act upon the sections of chapter 5 of title 11, United States (3) by adding at the end the following: notice. At a minimum, the rules should require Code, is amended by inserting after the item re- ‘‘(e) Before subordinating a tax lien on real or that the debtor— lating to section 510 the following: personal property of the estate, the trustee (1) identify in the schedules and the notice, ‘‘511. Rate of interest on tax claims.’’. shall— the subdivision, agency, or entity in respect of ‘‘(1) exhaust the unencumbered assets of the SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM which such notice should be received; TIME PERIODS. estate; and (2) provide sufficient information (such as Section 507(a)(8)(A) of title 11, United States ‘‘(2) in a manner consistent with section 506(c) case captions, permit numbers, taxpayer identi- Code, as so redesignated, is amended— of this title, recover from property securing an fication numbers, or similar identifying informa- (1) in clause (i) by inserting after ‘‘petition’’ allowed secured claim the reasonable, necessary tion) to permit the governmental unit or subdivi- and before the semicolon ‘‘, plus any time, plus costs and expenses of preserving or disposing of sion thereof, entitled to receive such notice, to 6 months, during which the stay of proceedings that property. identify the debtor or the person or entity on be- was in effect in a prior case under this title’’; ‘‘(f) Notwithstanding the exclusion of ad valo- half of which the debtor is providing notice and rem tax liens set forth in this section and subject where the debtor may be a successor in interest (2) amend clause (ii) to read as follows: to the requirements of subsection (e)— or may not be the same as the person or entity ‘‘(ii) assessed within 240 days before the date ‘‘(1) claims for wages, salaries, and commis- which incurred the debt or obligation; and of the filing of the petition, exclusive of— sions that are entitled to priority under section (3) identify, in appropriate schedules, served ‘‘(I) any time plus 30 days during which an 507(a)(3) of this title; or together with the notice, the property in respect offer in compromise with respect of such tax, ‘‘(2) claims for contributions to an employee of which the claim or regulatory obligation may was pending or in effect during such 240-day pe- benefit plan entitled to priority under section have arisen, if any, the nature of such claim or riod; 507(a)(4) of this title, regulatory obligation and the purpose for which ‘‘(II) any time plus 30 days during which an may be paid from property of the estate which notice is being given. installment agreement with respect of such tax secures a tax lien, or the proceeds of such prop- (c) EFFECT OF FAILURE OF NOTICE.—Section was pending or in effect during such 240-day pe- erty.’’. 342 of title 11, United States Code, as amended riod, up to 1 year; and (b) DETERMINATION OF TAX LIABILITY.—Sec- by section 603 and subsection (a), is amended by ‘‘(III) any time plus 6 months during which a tion 505(a)(2) of title 11, United States Code, is adding at the end the following: stay of proceedings against collections was in amended— ‘‘(i) A notice that does not comply with sub- effect in a prior case under this title during such (1) in subparagraph (A), by striking ‘‘or’’ at sections (d) and (e) shall not be effective unless 240-day period.’’. the end; the debtor demonstrates, by clear and con- SEC. 806. PRIORITY PROPERTY TAXES INCURRED. (2) in subparagraph (B), by striking the period vincing evidence, that timely notice was given in Section 507(a)(8)(B) of title 11, United States at the end and inserting ‘‘; or’’; and a manner reasonably calculated to satisfy the Code, is amended by striking ‘‘assessed’’ and in- (3) by adding at the end the following: requirements of this section was given, and serting ‘‘incurred’’. ‘‘(C) the amount or legality of any amount that— SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDU- arising in connection with an ad valorem tax on ‘‘(1) either the notice was timely sent to the LENT AND OTHER TAXES. real or personal property of the estate, if the ap- safe harbor address provided in the register Section 1328(a)(2) of title 11, United States plicable period for contesting or redetermining maintained by the clerk of the district in which Code, is amended by inserting ‘‘(1),’’ after that amount under any law (other than a bank- the case was pending for such purposes; or ‘‘paragraph’’. ruptcy law) has expired.’’. ‘‘(2) no safe harbor address was provided in such list for the governmental unit and that an SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDU- SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT. LENT TAXES. officer of the governmental unit who is respon- (a) EFFECTIVE NOTICE TO GOVERNMENTAL Section 1141(d) of title 11, United States Code, sible for the matter or claim had actual knowl- UNITS.—Section 342 of title 11, United States is amended by adding at the end the following: edge of the case in sufficient time to act.’’. Code, as amended by section 603, is amended by ‘‘(6) Notwithstanding the provisions of para- adding at the end the following: SEC. 803. NOTICE OF REQUEST FOR A DETER- graph (1), the confirmation of a plan does not MINATION OF TAXES. ‘‘(g) If a debtor lists a governmental unit as a discharge a debtor which is a corporation from Section 505(b) of title 11, United States Code, creditor in a list or schedule, any notice re- any debt for a tax or customs duty with respect is amended by striking ‘‘Unless’’ at the begin- quired to be given by the debtor under this title, to which the debtor made a fraudulent return or ning of the second sentence thereof and insert- any rule, any applicable law, or any order of willfully attempted in any manner to evade or ing ‘‘If the request is made substantially in the the court, shall identify the department, agency, defeat such tax.’’. manner designated by the governmental unit or instrumentality through which the debtor is SEC. 809. STAY OF TAX PROCEEDINGS. and unless’’. indebted. The debtor shall identify (with infor- (a) SECTION 362 STAY LIMITED TO PREPETITION SEC. 804. RATE OF INTEREST ON TAX CLAIMS. mation such as a taxpayer identification num- TAXES.—Section 362(a)(8) of title 11, United (a) AMENDMENT.—Chapter 5 of title 11, United ber, loan, account or contract number, or real States Code, is amended by striking the period States Code, is amended by adding at the end estate parcel number, where applicable), and de- at the end and inserting ‘‘, in respect of a tax the following: scribe the underlying basis for the governmental liability for a taxable period ending before the unit’s claim. If the debtor’s liability to a govern- ‘‘§ 511. Rate of interest on tax claims order for relief.’’. mental unit arises from a debt or obligation ‘‘If any provision of this title requires the (b) APPEAL OF TAX COURT DECISIONS PER- owed or incurred by another individual, entity, payment of interest on a tax claim or requires MITTED.—Section 362(b)(9) of title 11, United or organization, or under a different name, the the payment of interest to enable a creditor to States Code, is amended—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00052 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.001 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8545 (1) in subparagraph (C) by striking ‘‘or’’ at ‘‘(D) notwithstanding the requirements of sub- first meeting of creditors is convened under sec- the end; section (a) of this section, a governmental unit tion 341(a) of this title, the trustee may continue (2) in subparagraph (D) by striking the period shall not be required to file a request for the such meeting for a reasonable period of time, to at the end and inserting ‘‘; or’’; and payment of a claim described in subparagraph allow the debtor additional time to file any (3) by adding at the end the following: (B) or (C);’’. unfiled returns, but such additional time shall ‘‘(E) the appeal of a decision by a court or ad- (d) PAYMENT OF TAXES AND FEES AS SECURED be no more than— ministrative tribunal which determines a tax li- CLAIMS.—Section 506 of title 11, United States ‘‘(1) for returns that are past due as of the ability of the debtor without regard to whether Code, is amended— date of the filing of the petition, 120 days from such determination was made prepetition or (1) in subsection (b) by inserting ‘‘or State such date; postpetition.’’. statute’’ after ‘‘agreement’’; and ‘‘(2) for returns which are not past due as of SEC. 810. PERIODIC PAYMENT OF TAXES IN CHAP- (2) in subsection (c) by inserting ‘‘, including the date of the filing of the petition, the later of TER 11 CASES. the payment of all ad valorem property taxes in 120 days from such date or the due date for such Section 1129(a)(9) of title 11, United States respect of the property’’ before the period at the returns under the last automatic extension of Code, is amended— end. time for filing such returns to which the debtor (1) in subparagraph (B) by striking ‘‘and’’ at SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS. is entitled, and for which request has been time- the end; and Section 726(a)(1) of title 11, United States ly made, according to applicable nonbankruptcy (2) in subparagraph (C)— Code, is amended by striking ‘‘before the date law; and (A) by striking ‘‘deferred cash payments, over on which the trustee commences distribution ‘‘(3) upon notice and hearing, and order en- a period not exceeding six years after the date under this section’’ and inserting ‘‘on or before tered before the lapse of any deadline fixed ac- of assessment of such claim,’’ and inserting the earlier of 10 days after the mailing to credi- cording to this subsection, where the debtor ‘‘regular installment payments in cash, but in tors of the summary of the trustee’s final report demonstrates, by clear and convincing evidence, no case with a balloon provision, and no more or the date on which the trustee commences that the failure to file the returns as required is than three months apart, beginning no later final distribution under this section’’. because of circumstances beyond the control of the debtor, the court may extend the deadlines than the effective date of the plan and ending SEC. 814. INCOME TAX RETURNS PREPARED BY on the earlier of five years after the petition TAX AUTHORITIES. set by the trustee as provided in this subsection date or the last date payments are to be made Section 523(a)(1)(B) of title 11, United States for— under the plan to unsecured creditors,’’; Code, is amended— ‘‘(A) a period of no more than 30 days for re- (B) by striking the period at the end and in- (1) by inserting ‘‘or equivalent report or no- turns described in paragraph (1) of this sub- serting ‘‘; and’’; and tice,’’ after ‘‘a return,’’; section; and (3) by adding at the end the following: (2) in clause (i)— ‘‘(B) for no more than the period of time end- ‘‘(D) with respect to a secured claim which (A) by inserting ‘‘or given’’ after ‘‘filed’’; and ing on the applicable extended due date for the would be described in section 507(a)(8) of this (B) by striking ‘‘or’’ at the end; returns described in paragraph (2). title but for its secured status, the holder of (3) in clause (ii)— ‘‘(c) For purposes of this section only, a re- such claim will receive on account of such claim (A) by inserting ‘‘or given’’ after ‘‘filed’’; and turn includes a return prepared pursuant to sec- cash payments of not less than is required in (B) by inserting ‘‘, report, or notice’’ after tion 6020 (a) or (b) of the Internal Revenue Code subparagraph (C) and over a period no greater ‘‘return’’; and of 1986 or similar State or local law, or a written than is required in such subparagraph.’’. (4) by adding at the end the following: stipulation to a judgment entered by a nonbank- SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS ‘‘(iii) for purposes of this subsection, a re- ruptcy tribunal.’’. PROHIBITED. turn— (2) The table of sections of chapter 13 of title Section 545(2) of title 11, United States Code, ‘‘(I) must satisfy the requirements of applica- 11, United States Code, is amended by inserting is amended by striking the semicolon at the end ble nonbankruptcy law, and includes a return after the item relating to section 1307 the fol- and inserting ‘‘, except where such purchaser is prepared pursuant to section 6020(a) of the In- lowing: a purchaser described in section 6323 of the In- ternal Revenue Code of 1986, or similar State or ‘‘1308. Filing of prepetition tax returns.’’. ternal Revenue Code of 1986 or similar provision local law, or a written stipulation to a judgment (c) DISMISSAL OR CONVERSION ON FAILURE TO of State or local law;’’. entered by a nonbankruptcy tribunal, but does COMPLY.—Section 1307 of title 11, United States SEC. 812. PAYMENT OF TAXES IN THE CONDUCT not include a return made pursuant to section Code, is amended— OF BUSINESS. 6020(b) of the Internal Revenue Code of 1986, or (1) by redesignating subsections (e) and (f) as (a) PAYMENT OF TAXES REQUIRED.—Section similar State or local law; and subsections (f) and (g), respectively; and 960 of title 28, United States Code, is amended— ‘‘(II) must have been filed in a manner per- (2) by inserting after subsection (d) the fol- (1) by inserting ‘‘(a)’’ before ‘‘Any’’; and mitted by applicable nonbankruptcy law; or’’. lowing: (2) by adding at the end the following: SEC. 815. DISCHARGE OF THE ESTATE’S LIABILITY ‘‘(e) Upon the failure of the debtor to file tax ‘‘(b) Such taxes shall be paid when due in the FOR UNPAID TAXES. returns under section 1308 of this title, on re- conduct of such business unless— Section 505(b) of title 11, United States Code, quest of a party in interest or the United States ‘‘(1) the tax is a property tax secured by a lien is amended in the second sentence by inserting trustee and after notice and a hearing, the court against property that is abandoned within a ‘‘the estate,’’ after ‘‘misrepresentation,’’. shall dismiss a case or convert a case under this reasonable time after the lien attaches, by the chapter to a case under chapter 7 of this title, SEC. 816. REQUIREMENT TO FILE TAX RETURNS trustee of a bankruptcy estate, pursuant to sec- TO CONFIRM CHAPTER 13 PLANS. whichever is in the best interests of creditors tion 554 of title 11; or and the estate.’’. (a) FILING OF PREPETITION TAX RETURNS RE- ‘‘(2) payment of the tax is excused under a (d) TIMELY FILED CLAIMS.—Section 502(b)(9) QUIRED FOR PLAN CONFIRMATION.—Section of title 11, United States Code, is amended by specific provision of title 11. 1325(a) of title 11, United States Code, as ‘‘(c) In a case pending under chapter 7 of title striking the period at the end and inserting ‘‘, amended by section 140, is amended— 11, payment of a tax may be deferred until final and except that in a case under chapter 13 of (1) in paragraph (6) by striking ‘‘and’’ at the distribution is made under section 726 of title 11 this title, a claim of a governmental unit for a end; if— tax in respect of a return filed under section (2) in paragraph (7) by striking the period at ‘‘(1) the tax was not incurred by a trustee 1308 of this title shall be timely if it is filed on the end and inserting ‘‘; and’’; and duly appointed under chapter 7 of title 11; or or before 60 days after such return or returns (3) by adding at the end the following: ‘‘(2) before the due date of the tax, the court were filed as required.’’. ‘‘(8) if the debtor has filed all Federal, State, has made a finding of probable insufficiency of (e) RULES FOR OBJECTIONS TO CLAIMS AND TO and local tax returns as required by section 1308 funds of the estate to pay in full the administra- CONFIRMATION.—It is the sense of the Congress of this title.’’. tive expenses allowed under section 503(b) of that the Advisory Committee on Bankruptcy (b) ADDITIONAL TIME PERMITTED FOR FILING title 11 that have the same priority in distribu- Rules of the Judicial Conference should, within TAX RETURNS.—(1) Chapter 13 of title 11, United tion under section 726(b) of title 11 as such a reasonable period of time after the date of the States Code, as amended by section 135, is tax.’’. enactment of this Act, propose for adoption amended by adding at the end the following: (b) PAYMENT OF AD VALOREM TAXES RE- amended Federal Rules of Bankruptcy Proce- QUIRED.—Section 503(b)(1)(B) of title 11, United ‘‘§ 1308. Filing of prepetition tax returns dure which provide that— States Code, is amended in clause (i) by insert- ‘‘(a) On or before the day prior to the day on (1) notwithstanding the provisions of Rule ing after ‘‘estate,’’ and before ‘‘except’’ the fol- which the first meeting of the creditors is con- 3015(f), in cases under chapter 13 of title 11, lowing: ‘‘whether secured or unsecured, includ- vened under section 341(a) of this title, the debt- United States Code, a governmental unit may ing property taxes for which liability is in rem or shall have filed with appropriate tax authori- object to the confirmation of a plan on or before only, in personam or both,’’. ties all tax returns for all taxable periods ending 60 days after the debtor files all tax returns re- (c) REQUEST FOR PAYMENT OF ADMINISTRA- in the 3-year period ending on the date of filing quired under sections 1308 and 1325(a)(7) of title TIVE EXPENSE TAXES ELIMINATED.—Section of the petition. 11, United States Code; and 503(b)(1) of title 11, United States Code, is ‘‘(b) If the tax returns required by subsection (2) in addition to the provisions of Rule 3007, amended by adding at the end the following: (a) have not been filed by the date on which the in a case under chapter 13 of title 11, United

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00053 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 8546 CONGRESSIONAL RECORD—HOUSE May 5, 1999 States Code, no objection to a tax in respect of ‘‘1517. Order recognizing a foreign proceeding. ‘‘(3) an entity subject to a proceeding under a return required to be filed under such section ‘‘1518. Subsequent information. the Securities Investor Protection Act, a stock- 1308 shall be filed until such return has been ‘‘1519. Relief that may be granted upon petition broker subject to subchapter III of chapter 7 of filed as required. for recognition of a foreign pro- this title, or a commodity broker subject to sub- SEC. 817. STANDARDS FOR TAX DISCLOSURE. ceeding. chapter IV of chapter 7 of this title. Section 1125(a) of title 11, United States Code, ‘‘1520. Effects of recognition of a foreign main ‘‘SUBCHAPTER I—GENERAL PROVISIONS is amended in paragraph (1)— proceeding. ‘‘1521. Relief that may be granted upon recogni- ‘‘§ 1502. Definitions (1) by inserting after ‘‘records,’’ the following: tion of a foreign proceeding. ‘‘For the purposes of this chapter, the term— ‘‘including a full discussion of the potential ma- ‘‘1522. Protection of creditors and other inter- ‘‘(1) ‘debtor’ means an entity that is the sub- terial Federal, State, and local tax consequences ested persons. ject of a foreign proceeding; of the plan to the debtor, any successor to the ‘‘1523. Actions to avoid acts detrimental to ‘‘(2) ‘establishment’ means any place of oper- debtor, and a hypothetical investor domiciled in creditors. ations where the debtor carries out a nontransi- the State in which the debtor resides or has its ‘‘1524. Intervention by a foreign representative. tory economic activity; principal place of business typical of the holders ‘‘(3) ‘foreign court’ means a judicial or other ‘‘SUBCHAPTER IV—COOPERATION WITH of claims or interests in the case,’’; authority competent to control or supervise a FOREIGN COURTS AND FOREIGN REP- (2) by inserting ‘‘such’’ after ‘‘enable’’; and foreign proceeding; RESENTATIVES (3) by striking ‘‘reasonable’’ where it appears ‘‘(4) ‘foreign main proceeding’ means a foreign after ‘‘hypothetical’’ and by striking ‘‘typical of ‘‘1525. Cooperation and direct communication proceeding taking place in the country where holders of claims or interests’’ after ‘‘investor’’. between the court and foreign the debtor has the center of its main interests; SEC. 818. SETOFF OF TAX REFUNDS. courts or foreign representatives. ‘‘(5) ‘foreign nonmain proceeding’ means a ‘‘1526. Cooperation and direct communication Section 362(b) of title 11, United States Code, foreign proceeding, other than a foreign main between the trustee and foreign as amended by sections 118, 132, 136, and 203, is proceeding, taking place in a country where the courts or foreign representatives. amended— debtor has an establishment; ‘‘1527. Forms of cooperation. (1) in paragraph (29) by striking ‘‘or’’; ‘‘(6) ‘trustee’ includes a trustee, a debtor in (2) in paragraph (30) by striking the period at ‘‘SUBCHAPTER V—CONCURRENT possession in a case under any chapter of this the end and inserting ‘‘; or’’; and PROCEEDINGS title, or a debtor under chapter 9 of this title; (3) by inserting after paragraph (30) the fol- ‘‘1528. Commencement of a case under this title and lowing: after recognition of a foreign ‘‘(7) ‘within the territorial jurisdiction of the ‘‘(31) under subsection (a) of the setoff of an main proceeding. United States’ when used with reference to income tax refund, by a governmental unit, in ‘‘1529. Coordination of a case under this title property of a debtor refers to tangible property respect of a taxable period which ended before and a foreign proceeding. located within the territory of the United States the order for relief against an income tax liabil- ‘‘1530. Coordination of more than 1 foreign pro- and intangible property deemed under applica- ity for a taxable period which also ended before ceeding. ble nonbankruptcy law to be located within that the order for relief, unless— ‘‘1531. Presumption of insolvency based on rec- territory, including any property subject to at- ‘‘(A) prior to such setoff, an action to deter- ognition of a foreign main pro- tachment or garnishment that may properly be mine the amount or legality of such tax liability ceeding. seized or garnished by an action in a Federal or under section 505(a) was commenced; or ‘‘1532. Rule of payment in concurrent pro- State court in the United States. ‘‘(B) where the setoff of an income tax refund ceedings. ‘‘§ 1503. International obligations of the is not permitted because of a pending action to ‘‘§ 1501. Purpose and scope of application United States determine the amount or legality of a tax liabil- ‘‘(a) The purpose of this chapter is to incor- ‘‘To the extent that this chapter conflicts with ity, the governmental unit may hold the refund porate the Model Law on Cross-Border Insol- an obligation of the United States arising out of pending the resolution of the action.’’. vency so as to provide effective mechanisms for any treaty or other form of agreement to which TITLE IX—ANCILLARY AND OTHER CROSS- dealing with cases of cross-border insolvency it is a party with 1 or more other countries, the BORDER CASES with the objectives of— requirements of the treaty or agreement prevail. ‘‘(1) cooperation between— ‘‘§ 1504. Commencement of ancillary case SEC. 901. AMENDMENT TO ADD CHAPTER 15 TO ‘‘(A) United States courts, United States trust- TITLE 11, UNITED STATES CODE. ‘‘A case under this chapter is commenced by ees, trustees, examiners, debtors, and debtors in (a) IN GENERAL.—Title 11, United States Code, the filing of a petition for recognition of a for- possession; and is amended by inserting after chapter 13 the fol- eign proceeding under section 1515. ‘‘(B) the courts and other competent authori- lowing: ties of foreign countries involved in cross-border ‘‘§ 1505. Authorization to act in a foreign ‘‘CHAPTER 15—ANCILLARY AND OTHER insolvency cases; country CROSS-BORDER CASES ‘‘(2) greater legal certainty for trade and in- ‘‘A trustee or another entity (including an ex- ‘‘Sec. vestment; aminer) may be authorized by the court to act in ‘‘1501. Purpose and scope of application. ‘‘(3) fair and efficient administration of cross- a foreign country on behalf of an estate created ‘‘SUBCHAPTER I—GENERAL PROVISIONS border insolvencies that protects the interests of under section 541. An entity authorized to act all creditors, and other interested entities, in- under this section may act in any way permitted ‘‘1502. Definitions. cluding the debtor; by the applicable foreign law. ‘‘1503. International obligations of the United ‘‘(4) protection and maximization of the value ‘‘§ 1506. Public policy exception States. of the debtor’s assets; and ‘‘Nothing in this chapter prevents the court ‘‘1504. Commencement of ancillary case. ‘‘(5) facilitation of the rescue of financially from refusing to take an action governed by this ‘‘1505. Authorization to act in a foreign coun- troubled businesses, thereby protecting invest- chapter if the action would be manifestly con- try. ment and preserving employment. trary to the public policy of the United States. ‘‘1506. Public policy exception. ‘‘(b) This chapter applies where— ‘‘1507. Additional assistance. ‘‘(1) assistance is sought in the United States ‘‘§ 1507. Additional assistance ‘‘1508. Interpretation. by a foreign court or a foreign representative in ‘‘(a) Subject to the specific limitations stated ‘‘SUBCHAPTER II—ACCESS OF FOREIGN connection with a foreign proceeding; elsewhere in this chapter the court, upon rec- REPRESENTATIVES AND CREDITORS TO ‘‘(2) assistance is sought in a foreign country ognition of a foreign proceeding, the court may THE COURT in connection with a case under this title; provide additional assistance to a foreign rep- ‘‘1509. Right of direct access. ‘‘(3) a foreign proceeding and a case under resentative under this title or under other laws ‘‘1510. Limited jurisdiction. this title with respect to the same debtor are tak- of the United States. ‘‘1511. Commencement of case under section 301 ing place concurrently; or ‘‘(b) In determining whether to provide addi- or 303. ‘‘(4) creditors or other interested persons in a tional assistance under this title or under other ‘‘1512. Participation of a foreign representative foreign country have an interest in requesting laws of the United States, the court shall con- in a case under this title. the commencement of, or participating in, a case sider whether such additional assistance, con- ‘‘1513. Access of foreign creditors to a case or proceeding under this title. sistent with the principles of comity, will rea- under this title. ‘‘(c) This chapter does not apply to— sonably assure— ‘‘(1) a proceeding concerning an entity identi- ‘‘1514. Notification to foreign creditors con- ‘‘(1) just treatment of all holders of claims fied by exclusion in subsection 109(b); cerning a case under this title. against or interests in the debtor’s property; ‘‘(2) an individual, or to an individual and ‘‘(2) protection of claim holders in the United ‘‘SUBCHAPTER III—RECOGNITION OF A such individual’s spouse, who have debts within States against prejudice and inconvenience in FOREIGN PROCEEDING AND RELIEF the limits specified in section 109(e) and who are the processing of claims in such foreign pro- ‘‘1515. Application for recognition of a foreign citizens of the United States or aliens lawfully ceeding; proceeding. admitted for permanent residence in the United ‘‘(3) prevention of preferential or fraudulent ‘‘1516. Presumptions concerning recognition. States; or dispositions of property of the debtor;

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00054 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8547 ‘‘(4) distribution of proceeds of the debtor’s ‘‘§ 1513. Access of foreign creditors to a case into English. The court may require a trans- property substantially in accordance with the under this title lation into English of additional documents. order prescribed by this title; and ‘‘(a) Foreign creditors have the same rights re- ‘‘§ 1516. Presumptions concerning recognition ‘‘(5) if appropriate, the provision of an oppor- garding the commencement of, and participation ‘‘(a) If the decision or certificate referred to in tunity for a fresh start for the individual that in, a case under this title as domestic creditors. section 1515(b) indicates that the foreign pro- such foreign proceeding concerns. ‘‘(b)(1) Subsection (a) does not change or cod- ceeding is a foreign proceeding as defined in ‘‘§ 1508. Interpretation ify present law as to the priority of claims under section 101 and that the person or body is a for- ‘‘In interpreting this chapter, the court shall section 507 or 726 of this title, except that the eign representative as defined in section 101, the consider its international origin, and the need claim of a foreign creditor under those sections court is entitled to so presume. to promote an application of this chapter that is shall not be given a lower priority than that of ‘‘(b) The court is entitled to presume that doc- consistent with the application of similar stat- general unsecured claims without priority solely uments submitted in support of the petition for utes adopted by foreign jurisdictions. because the holder of such claim is a foreign recognition are authentic, whether or not they creditor. have been legalized. ‘‘SUBCHAPTER II—ACCESS OF FOREIGN ‘‘(2)(A) Subsection (a) and paragraph (1) do ‘‘(c) In the absence of evidence to the con- REPRESENTATIVES AND CREDITORS TO not change or codify present law as to the al- trary, the debtor’s registered office, or habitual THE COURT lowability of foreign revenue claims or other for- residence in the case of an individual, is pre- ‘‘§ 1509. Right of direct access eign public law claims in a proceeding under sumed to be the center of the debtor’s main in- ‘‘(a) A foreign representative may commence a this title. terests. case under section 1504 of this title by filing ‘‘(B) Allowance and priority as to a foreign with the court a petition for recognition of a tax claim or other foreign public law claim shall ‘‘§ 1517. Order recognizing a foreign pro- foreign proceeding under section 1515 of this be governed by any applicable tax treaty of the ceeding title. United States, under the conditions and cir- ‘‘(a) Subject to section 1506, after notice and ‘‘(b) If the court grants recognition under sec- cumstances specified therein. a hearing an order recognizing a foreign pro- tion 1515 of this title, and subject to any limita- ‘‘§ 1514. Notification to foreign creditors con- ceeding shall be entered if— tions that the court may impose consistent with cerning a case under this title ‘‘(1) the foreign proceeding is a foreign main the policy of this chapter— ‘‘(a) Whenever in a case under this title notice proceeding or foreign nonmain proceeding with- ‘‘(1) the foreign representative has the capac- is to be given to creditors generally or to any in the meaning of section 1502; ity to sue and be sued in a court in the United class or category of creditors, such notice shall ‘‘(2) the foreign representative applying for States; also be given to the known creditors generally, recognition is a person or body as defined in ‘‘(2) the foreign representative may apply di- or to creditors in the notified class or category, section 101; and rectly to a court in the United States for appro- that do not have addresses in the United States. ‘‘(3) the petition meets the requirements of sec- priate relief in that court; and The court may order that appropriate steps be tion 1515. ‘‘(3) a court in the United States shall grant taken with a view to notifying any creditor ‘‘(b) The foreign proceeding shall be recog- comity or cooperation to the foreign representa- whose address is not yet known. nized— tive. ‘‘(b) Such notification to creditors with for- ‘‘(1) as a foreign main proceeding if it is tak- ‘‘(c) A request for comity or cooperation by a eign addresses described in subsection (a) shall ing place in the country where the debtor has foreign representative in a court in the United be given individually, unless the court considers the center of its main interests; or States shall be accompanied by a certified copy that, under the circumstances, some other form ‘‘(2) as a foreign nonmain proceeding if the of an order granting recognition under section of notification would be more appropriate. No debtor has an establishment within the meaning 1517 of this title. letters rogatory or other similar formality is re- of section 1502 in the foreign country where the ‘‘(d) If the court denies recognition under this quired. proceeding is pending. chapter, the court may issue any appropriate ‘‘(c) When a notification of commencement of ‘‘(c) A petition for recognition of a foreign order necessary to prevent the foreign represent- a case is to be given to foreign creditors, the no- proceeding shall be decided upon at the earliest ative from obtaining comity or cooperation from tification shall— possible time. Entry of an order recognizing a courts in the United States. ‘‘(1) indicate the time period for filing proofs foreign proceeding constitutes recognition under ‘‘(e) Whether or not the court grants recogni- of claim and specify the place for their filing; this chapter. tion, and subject to sections 306 and 1510 of this ‘‘(2) indicate whether secured creditors need ‘‘(d) The provisions of this subchapter do not title, a foreign representative is subject to appli- to file their proofs of claim; and prevent modification or termination of recogni- cable nonbankruptcy law. ‘‘(3) contain any other information required to tion if it is shown that the grounds for granting ‘‘(f) Notwithstanding any other provision of be included in such a notification to creditors it were fully or partially lacking or have ceased this section, the failure of a foreign representa- under this title and the orders of the court. to exist, but in considering such action the court tive to commence a case or to obtain recognition ‘‘(d) Any rule of procedure or order of the shall give due weight to possible prejudice to under this chapter does not affect any right the court as to notice or the filing of a claim shall parties that have relied upon the granting of foreign representative may have to sue in a provide such additional time to creditors with recognition. The case under this chapter may be court in the United State to collect or recover a foreign addresses as is reasonable under the cir- closed in the manner prescribed under section claim which is the property of the debtor.’’. cumstances. 350. ‘‘§ 1510. Limited jurisdiction ‘‘SUBCHAPTER III—RECOGNITION OF A ‘‘§ 1518. Subsequent information FOREIGN PROCEEDING AND RELIEF ‘‘The sole fact that a foreign representative ‘‘From the time of filing the petition for rec- files a petition under section 1515 does not sub- ‘‘§ 1515. Application for recognition of a for- ognition of the foreign proceeding, the foreign ject the foreign representative to the jurisdiction eign proceeding representative shall file with the court promptly of any court in the United States for any other ‘‘(a) A foreign representative applies to the a notice of change of status concerning— purpose. court for recognition of the foreign proceeding ‘‘(1) any substantial change in the status of ‘‘§ 1511. Commencement of case under section in which the foreign representative has been ap- the foreign proceeding or the status of the for- 301 or 303 pointed by filing a petition for recognition. eign representative’s appointment; and ‘‘(a) Upon recognition, a foreign representa- ‘‘(b) A petition for recognition shall be accom- ‘‘(2) any other foreign proceeding regarding tive may commence— panied by— the debtor that becomes known to the foreign ‘‘(1) an involuntary case under section 303; or ‘‘(1) a certified copy of the decision com- representative. mencing the foreign proceeding and appointing ‘‘(2) a voluntary case under section 301 or 302, ‘‘§ 1519. Relief that may be granted upon peti- if the foreign proceeding is a foreign main pro- the foreign representative; ‘‘(2) a certificate from the foreign court af- tion for recognition of a foreign proceeding ceeding. ‘‘(a) From the time of filing a petition for rec- ‘‘(b) The petition commencing a case under firming the existence of the foreign proceeding ognition until the court rules on the petition, subsection (a) must be accompanied by certified and of the appointment of the foreign represent- the court may, at the request of the foreign rep- copy of an order granting recognition. The court ative; or resentative, where relief is urgently needed to where the petition for recognition has been filed ‘‘(3) in the absence of evidence referred to in protect the assets of the debtor or the interests must be advised of the foreign representative’s paragraphs (1) and (2), any other evidence ac- of the creditors, grant relief of a provisional na- intent to commence a case under subsection (a) ceptable to the court of the existence of the for- ture, including— prior to such commencement. eign proceeding and of the appointment of the foreign representative. ‘‘(1) staying execution against the debtor’s as- ‘‘§ 1512. Participation of a foreign representa- ‘‘(c) A petition for recognition shall also be sets; tive in a case under this title accompanied by a statement identifying all for- ‘‘(2) entrusting the administration or realiza- ‘‘Upon recognition of a foreign proceeding, eign proceedings with respect to the debtor that tion of all or part of the debtor’s assets located the foreign representative in that proceeding is are known to the foreign representative. in the United States to the foreign representa- entitled to participate as a party in interest in ‘‘(d) The documents referred to in paragraphs tive or another person authorized by the court, a case regarding the debtor under this title. (1) and (2) of subsection (b) must be translated including an examiner, in order to protect and

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00055 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 8548 CONGRESSIONAL RECORD—HOUSE May 5, 1999 preserve the value of assets that, by their nature ‘‘(7) granting any additional relief that may resentatives, subject to the rights of parties in or because of other circumstances, are perish- be available to a trustee, except for relief avail- interest to notice and participation. able, susceptible to devaluation or otherwise in able under sections 522, 544, 545, 547, 548, 550, ‘‘§ 1526. Cooperation and direct communica- jeopardy; and and 724(a). tion between the trustee and foreign courts ‘‘(3) any relief referred to in paragraph (3), ‘‘(b) Upon recognition of a foreign proceeding, or foreign representatives (4), or (7) of section 1521(a). whether main or nonmain, the court may, at the ‘‘(a) Consistent with section 1501, the trustee ‘‘(b) Unless extended under section 1521(a)(6), request of the foreign representative, entrust the or other person, including an examiner, author- the relief granted under this section terminates distribution of all or part of the debtor’s assets ized by the court, shall, subject to the super- when the petition for recognition is decided located in the United States to the foreign rep- vision of the court, cooperate to the maximum upon. resentative or another person, including an ex- extent possible with foreign courts or foreign ‘‘(c) It is a ground for denial of relief under aminer, authorized by the court, provided that representatives. this section that such relief would interfere with the court is satisfied that the interests of credi- ‘‘(b) The trustee or other person, including an the administration of a foreign main proceeding. tors in the United States are sufficiently pro- examiner, authorized by the court is entitled, ‘‘(d) The court may not enjoin a police or reg- tected. subject to the supervision of the court, to com- ulatory act of a governmental unit, including a ‘‘(c) In granting relief under this section to a municate directly with foreign courts or foreign criminal action or proceeding, under this sec- representative of a foreign nonmain proceeding, representatives. tion. the court must be satisfied that the relief relates ‘‘§ 1527. Forms of cooperation ‘‘(e) The standards, procedures, and limita- to assets that, under the law of the United tions applicable to an injunction shall apply to States, should be administered in the foreign ‘‘Cooperation referred to in sections 1525 and relief under this section. nonmain proceeding or concerns information re- 1526 may be implemented by any appropriate quired in that proceeding. means, including— ‘‘§ 1520. Effects of recognition of a foreign ‘‘(1) appointment of a person or body, includ- main proceeding ‘‘(d) The court may not enjoin a police or reg- ulatory act of a governmental unit, including a ing an examiner, to act at the direction of the ‘‘(a) Upon recognition of a foreign proceeding criminal action or proceeding, under this sec- court; that is a foreign main proceeding— tion. ‘‘(2) communication of information by any ‘‘(1) sections 361 and 362 with respect to the ‘‘(e) The standards, procedures, and limita- means considered appropriate by the court; debtor and that property of the debtor that is tions applicable to an injunction shall apply to ‘‘(3) coordination of the administration and within the territorial jurisdiction of the United relief under paragraphs (1), (2), (3), and (6) of supervision of the debtor’s assets and affairs; ‘‘(4) approval or implementation of agreements States; subsection (a). ‘‘(2) sections 363, 549, and 552 of this title concerning the coordination of proceedings; and apply to a transfer of an interest of the debtor ‘‘§ 1522. Protection of creditors and other in- ‘‘(5) coordination of concurrent proceedings in property that is within the territorial juris- terested persons regarding the same debtor. diction of the United States to the same extent ‘‘(a) The court may grant relief under section ‘‘SUBCHAPTER V—CONCURRENT that the sections would apply to property of an 1519 or 1521, or may modify or terminate relief PROCEEDINGS estate; under subsection (c), only if the interests of the ‘‘§ 1528. Commencement of a case under this ‘‘(3) unless the court orders otherwise, the for- creditors and other interested entities, including title after recognition of a foreign main pro- eign representative may operate the debtor’s the debtor, are sufficiently protected. ceeding business and may exercise the rights and powers ‘‘(b) The court may subject relief granted ‘‘After recognition of a foreign main pro- of a trustee under and to the extent provided by under section 1519 or 1521, or the operation of ceeding, a case under another chapter of this sections 363 and 552; and the debtor’s business under section 1520(a)(3) of title may be commenced only if the debtor has ‘‘(4) section 552 applies to property of the this title, to conditions it considers appropriate, assets in the United States. The effects of such debtor that is within the territorial jurisdiction including the giving of security or the filing of case shall be restricted to the assets of the debt- of the United States.’’. a bond. or that are within the territorial jurisdiction of ‘‘(b) Subsection (a) does not affect the right to ‘‘(c) The court may, at the request of the for- the United States and, to the extent necessary to commence an individual action or proceeding in eign representative or an entity affected by re- implement cooperation and coordination under a foreign country to the extent necessary to pre- lief granted under section 1519 or 1521, or at its sections 1525, 1526, and 1527, to other assets of serve a claim against the debtor. own motion, modify or terminate such relief. the debtor that are within the jurisdiction of the ‘‘(c) Subsection (a) does not affect the right of ‘‘(d) Section 1104(d) shall apply to the ap- court under sections 541(a) of this title, and a foreign representative or an entity to file a pe- pointment of an examiner under this chapter. 1334(e) of title 28, to the extent that such other tition commencing a case under this title or the Any examiner shall comply with the qualifica- assets are not subject to the jurisdiction and right of any party to file claims or take other tion requirements imposed on a trustee by sec- control of a foreign proceeding that has been proper actions in such a case. tion 322. recognized under this chapter. ‘‘§ 1523. Actions to avoid acts detrimental to ‘‘§ 1521. Relief that may be granted upon rec- ‘‘§ 1529. Coordination of a case under this title creditors ognition of a foreign proceeding and a foreign proceeding ‘‘(a) Upon recognition of a foreign proceeding, ‘‘(a) Upon recognition of a foreign proceeding, ‘‘Where a foreign proceeding and a case under the foreign representative has standing in a case whether main or nonmain, where necessary to another chapter of this title are taking place concerning the debtor pending under another effectuate the purpose of this chapter and to concurrently regarding the same debtor, the chapter of this title to initiate actions under sec- protect the assets of the debtor or the interests court shall seek cooperation and coordination tions 522, 544, 545, 547, 548, 550, and 724(a). of the creditors, the court may, at the request of under sections 1525, 1526, and 1527, and the fol- ‘‘(b) When the foreign proceeding is a foreign the foreign representative, grant any appro- lowing shall apply: nonmain proceeding, the court must be satisfied priate relief, including— ‘‘(1) When the case in the United States is that an action under subsection (a) relates to ‘‘(1) staying the commencement or continu- taking place at the time the petition for recogni- assets that, under United States law, should be ation of an individual action or proceeding con- tion of the foreign proceeding is filed— cerning the debtor’s assets, rights, obligations or administered in the foreign nonmain proceeding. ‘‘(A) any relief granted under sections 1519 or liabilities to the extent they have not been ‘‘§ 1524. Intervention by a foreign representa- 1521 must be consistent with the relief granted stayed under section 1520(a); tive in the case in the United States; and ‘‘(2) staying execution against the debtor’s as- ‘‘Upon recognition of a foreign proceeding, ‘‘(B) even if the foreign proceeding is recog- sets to the extent it has not been stayed under the foreign representative may intervene in any nized as a foreign main proceeding, section 1520 section 1520(a); proceedings in a State or Federal court in the does not apply. ‘‘(3) suspending the right to transfer, encum- United States in which the debtor is a party. ‘‘(2) When a case in the United States under ber or otherwise dispose of any assets of the ‘‘SUBCHAPTER IV—COOPERATION WITH this title commences after recognition, or after debtor to the extent this right has not been sus- FOREIGN COURTS AND FOREIGN REP- the filing of the petition for recognition, of the pended under section 1520(a); RESENTATIVES foreign proceeding— ‘‘(4) providing for the examination of wit- ‘‘(A) any relief in effect under sections 1519 or nesses, the taking of evidence or the delivery of ‘‘§ 1525. Cooperation and direct communica- 1521 shall be reviewed by the court and shall be information concerning the debtor’s assets, af- tion between the court and foreign courts or modified or terminated if inconsistent with the fairs, rights, obligations or liabilities; foreign representatives case in the United States; and ‘‘(5) entrusting the administration or realiza- ‘‘(a) Consistent with section 1501, the court ‘‘(B) if the foreign proceeding is a foreign tion of all or part of the debtor’s assets within shall cooperate to the maximum extent possible main proceeding, the stay and suspension re- the territorial jurisdiction of the United States with foreign courts or foreign representatives, ferred to in section 1520(a) shall be modified or to the foreign representative or another person, either directly or through the trustee. terminated if inconsistent with the relief grant- including an examiner, authorized by the court; ‘‘(b) The court is entitled to communicate di- ed in the case in the United States. ‘‘(6) extending relief granted under section rectly with, or to request information or assist- ‘‘(3) In granting, extending, or modifying re- 1519(a); and ance directly from, foreign courts or foreign rep- lief granted to a representative of a foreign

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00056 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8549 nonmain proceeding, the court must be satisfied ‘‘(24) ‘foreign representative’ means a person or sell any such security, certificate of deposit, that the relief relates to assets that, under the or body, including a person or body appointed loan, interest, group or index or option; law of the United States, should be administered on an interim basis, authorized in a foreign pro- ‘‘(V) means any margin loan; in the foreign nonmain proceeding or concerns ceeding to administer the reorganization or the ‘‘(VI) means any other agreement or trans- information required in that proceeding. liquidation of the debtor’s assets or affairs or to action that is similar to any agreement or trans- ‘‘(4) In achieving cooperation and coordina- act as a representative of the foreign pro- action referred to in this clause; tion under sections 1528 and 1529, the court may ceeding;’’. ‘‘(VII) means any combination of the agree- grant any of the relief authorized under section (c) AMENDMENTS TO TITLE 28, UNITED STATES ments or transactions referred to in this clause; 305. CODE.— ‘‘(VIII) means any option to enter into any ‘‘§ 1530. Coordination of more than 1 foreign (1) PROCEDURES.—Section 157(b)(2) of title 28, agreement or transaction referred to in this proceeding United States Code, is amended— clause; ‘‘In matters referred to in section 1501, with (A) in subparagraph (N), by striking ‘‘and’’ at ‘‘(IX) means a master agreement that provides respect to more than 1 foreign proceeding re- the end; for an agreement or transaction referred to in garding the debtor, the court shall seek coopera- (B) in subparagraph (O), by striking the pe- subclause (I), (III), (IV), (V), (VI), (VII), or tion and coordination under sections 1525, 1526, riod at the end and inserting ‘‘; and’’; and (VIII), together with all supplements to any and 1527, and the following shall apply: (C) by adding at the end the following: such master agreement, without regard to ‘‘(1) Any relief granted under section 1519 or ‘‘(P) recognition of foreign proceedings and whether the master agreement provides for an 1521 to a representative of a foreign nonmain other matters under chapter 15 of title 11.’’. agreement or transaction that is not a securities proceeding after recognition of a foreign main (2) BANKRUPTCY CASES AND PROCEEDINGS.— contract under this clause, except that the mas- proceeding must be consistent with the foreign Section 1334(c) of title 28, United States Code, is ter agreement shall be considered to be a securi- main proceeding. amended by striking ‘‘Nothing in’’ and inserting ties contract under this clause only with respect ‘‘(2) If a foreign main proceeding is recognized ‘‘Except with respect to a case under chapter 15 to each agreement or transaction under the mas- after recognition, or after the filing of a petition of title 11, nothing in’’. ter agreement that is referred to in subclause (I), for recognition, of a foreign nonmain pro- (3) DUTIES OF TRUSTEES.—Section 586(a)(3) of (III), (IV), (V), (VI), (VII), or (VIII); and ceeding, any relief in effect under section 1519 title 28, United States Code, is amended by strik- ‘‘(X) means any security agreement or ar- or 1521 shall be reviewed by the court and shall ing ‘‘or 13’’ and inserting ‘‘13, or 15,’’ after rangement or other credit enhancement related be modified or terminated if inconsistent with ‘‘chapter’’. to any agreement or transaction referred to in the foreign main proceeding. (4) Section 305(a)(2) of title 11, United States this clause.’’. ‘‘(3) If, after recognition of a foreign nonmain Code, is amended to read: (c) DEFINITION OF COMMODITY CONTRACT.— proceeding, another foreign nonmain proceeding ‘‘(2)(A) a petition under section 1515 of this Section 11(e)(8)(D)(iii) of the Federal Deposit In- is recognized, the court shall grant, modify, or title for recognition of a foreign proceeding has surance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is terminate relief for the purpose of facilitating been granted; and amended to read as follows: coordination of the proceedings. ‘‘(B) the purposes of chapter 15 of this title ‘‘(iii) COMMODITY CONTRACT.—The term ‘com- ‘‘§ 1531. Presumption of insolvency based on would be best served by such dismissal or sus- modity contract’ means— recognition of a foreign main proceeding pension.’’. ‘‘(I) with respect to a futures commission mer- ‘‘In the absence of evidence to the contrary, (5) Section 508 of title 11, United States Code, chant, a contract for the purchase or sale of a recognition of a foreign main proceeding is for is amended by striking subsection (a) and by commodity for future delivery on, or subject to the purpose of commencing a proceeding under striking out the letter ‘‘(b)’’ at the beginning of the rules of, a contract market or board of trade; section 303, proof that the debtor is generally the second paragraph. ‘‘(II) with respect to a foreign futures commis- not paying its debts as such debts become due. TITLE X—FINANCIAL CONTRACT sion merchant, a foreign future; ‘‘(III) with respect to a leverage transaction ‘‘§ 1532. Rule of payment in concurrent pro- PROVISIONS merchant, a leverage transaction; ceedings SEC. 1001. TREATMENT OF CERTAIN AGREE- MENTS BY CONSERVATORS OR ––RE- ‘‘(IV) with respect to a clearing organization, ‘‘Without prejudice to secured claims or rights a contract for the purchase or sale of a com- in rem, a creditor who has received payment CEIVERS OF INSURED DEPOSITORY INSTITUTIONS. modity for future delivery on, or subject to the with respect to its claim in a foreign proceeding (a) DEFINITION OF QUALIFIED FINANCIAL CON- rules of, a contract market or board of trade pursuant to a law relating to insolvency may TRACT.—Section 11(e)(8)(D)(i) of the Federal De- that is cleared by such clearing organization, or not receive a payment for the same claim in a posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(i)) commodity option traded on, or subject to the case under any other chapter of this title re- is amended by inserting ‘‘, resolution or order’’ rules of, a contract market or board of trade garding the debtor, so long as the payment to after ‘‘any similar agreement that the Corpora- that is cleared by such clearing organization; other creditors of the same class is proportion- tion determines by regulation’’. ‘‘(V) with respect to a commodity options ately less than the payment the creditor has al- (b) DEFINITION OF SECURITIES CONTRACT.— dealer, a commodity option; ready received.’’. Section 11(e)(8)(D)(ii) of the Federal Deposit In- ‘‘(VI) any other agreement or transaction that (b) CLERICAL AMENDMENT.—The table of surance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is is similar to any agreement or transaction re- chapters for title 11, United States Code, is amended to read as follows: ferred to in this clause; amended by inserting after the item relating to ‘‘(ii) SECURITIES CONTRACT.—The term ‘securi- ‘‘(VII) any combination of the agreements or chapter 13 the following: ties contract’— transactions referred to in this clause; ‘‘15. Ancillary and Other Cross-Border ‘‘(I) means a contract for the purchase, sale, ‘‘(VIII) any option to enter into any agree- Cases ...... 1501’’. or loan of a security, a certificate of deposit, a ment or transaction referred to in this clause; SEC. 902. AMENDMENTS TO OTHER CHAPTERS IN mortgage loan, or any interest in a mortgage ‘‘(IX) a master agreement that provides for an TITLE 11, UNITED STATES CODE. loan, a group or index of securities, certificates agreement or transaction referred to in sub- (a) APPLICABILITY OF CHAPTERS.—Section 103 of deposit, or mortgage loans or interests therein clause (I), (II), (III), (IV), (V), (VI), (VII), or of title 11, United States Code, is amended— (including any interest therein or based on the (VIII), together with all supplements to any (1) in subsection (a), by inserting before the value thereof) or any option on any of the fore- such master agreement, without regard to period the following: ‘‘, and this chapter, sec- going, including any option to purchase or sell whether the master agreement provides for an tions 307, 304, 555 through 557, 559, and 560 any such security, certificate of deposit, loan, agreement or transaction that is not a com- apply in a case under chapter 15’’; and (2) by adding at the end the following: interest, group or index, or option; modity contract under this clause, except that ‘‘(j) Chapter 15 applies only in a case under ‘‘(II) does not include any purchase, sale, or the master agreement shall be considered to be a such chapter, except that— repurchase obligation under a participation in a commodity contract under this clause only with ‘‘(1) sections 1505, 1513, and 1514 apply in all commercial mortgage loan unless the Corpora- respect to each agreement or transaction under cases under this title; and tion determines by regulation, resolution, or the master agreement that is referred to in sub- ‘‘(2) section 1509 applies whether or not a case order to include any such agreement within the clause (I), (II), (III), (IV), (V), (VI), (VII), or under this title is pending.’’. meaning of such term; (VIII); or (b) DEFINITIONS.—Paragraphs (23) and (24) of ‘‘(III) means any option entered into on a na- ‘‘(X) a security agreement or arrangement or title 11, United States Code, are amended to tional securities exchange relating to foreign other credit enhancement related to any agree- read as follows: currencies; ment or transaction referred to in this clause.’’. ‘‘(23) ‘foreign proceeding’ means a collective ‘‘(IV) means the guarantee by or to any secu- (d) DEFINITION OF FORWARD CONTRACT.—Sec- judicial or administrative proceeding in a for- rities clearing agency of any settlement of cash, tion 11(e)(8)(D)(iv) of the Federal Deposit Insur- eign country, including an interim proceeding, securities, certificates of deposit, mortgage loans ance Act (12 U.S.C. 1821(e)(8)(D)(iv)) is amended under a law relating to insolvency or adjust- or interests therein, group or index of securities, to read as follows: ment of debt in which proceeding the assets and certificates of deposit, or mortgage loans or in- ‘‘(iv) FORWARD CONTRACT.—The term ‘forward affairs of the debtor are subject to control or su- terests therein (including any interest therein or contract’ means— pervision by a foreign court, for the purpose of based on the value thereof) or option on any of ‘‘(I) a contract (other than a commodity con- reorganization or liquidation; the foregoing, including any option to purchase tract) for the purchase, sale, or transfer of a

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commodity or any similar good, article, service, ‘‘(VI) means a security agreement or arrange- ‘‘(viii) TRANSFER.—The term ‘transfer’ means right, or interest which is presently or in the fu- ment or other credit enhancement related to any every mode, direct or indirect, absolute or condi- ture becomes the subject of dealing in the for- agreement or transaction referred to in sub- tional, voluntary or involuntary, of disposing of ward contract trade, or product or byproduct clause (I), (III), (IV), or (V). or parting with property or with an interest in thereof, with a maturity date more than 2 days For purposes of this clause, the term ‘qualified property, including retention of title as a secu- after the date the contract is entered into, in- foreign government security’ means a security rity interest and foreclosure of the depository cluding, but not limited to, a repurchase agree- that is a direct obligation of, or that is fully institutions’s equity of redemption.’’. ment, reverse repurchase agreement, consign- guaranteed by, the central government of a (h) TREATMENT OF QUALIFIED FINANCIAL CON- ment, lease, swap, hedge transaction, deposit, member of the Organization for Economic Co- TRACTS.—Section 11(e)(8) of the Federal Deposit loan, option, allocated transaction, unallocated operation and Development (as determined by Insurance Act (12 U.S.C. 1821(e)(8)) is amend- transaction, or any other similar agreement; regulation or order adopted by the appropriate ed— ‘‘(II) any combination of agreements or trans- Federal banking authority).’’. (1) in subparagraph (A), by striking ‘‘para- actions referred to in subclauses (I) and (III); (f) DEFINITION OF SWAP AGREEMENT.—Section graph (10)’’ and inserting ‘‘paragraphs (9) and ‘‘(III) any option to enter into any agreement 11(e)(8)(D)(iv) of the Federal Deposit Insurance (10)’’; or transaction referred to in subclause (I) or Act (12 U.S.C. 1821(e)(8)(D)(vi)) is amended to (2) in subparagraph (A)(i), by striking ‘‘to (II); read as follows: cause the termination or liquidation’’ and in- ‘‘(IV) a master agreement that provides for an ‘‘(vi) SWAP AGREEMENT.—The term ‘swap serting ‘‘such person has to cause the termi- agreement or transaction referred to in sub- agreement’ means— nation, liquidation, or acceleration’’; clauses (I), (II), or (III), together with all sup- ‘‘(I) any agreement, including the terms and (3) by amending subparagraph (A)(ii) to read plements to any such master agreement, without conditions incorporated by reference in any as follows: regard to whether the master agreement pro- such agreement, which is an interest rate swap, ‘‘(ii) any right under any security agreement vides for an agreement or transaction that is not option, future, or forward agreement, including or arrangement or other credit enhancement re- a forward contract under this clause, except a rate floor, rate cap, rate collar, cross-currency lated to 1 or more qualified financial contracts that the master agreement shall be considered to rate swap, and basis swap; a spot, same day-to- described in clause (i);’’; and be a forward contract under this clause only morrow, tomorrow-next, forward, or other for- (4) by amending subparagraph (E)(ii) to read with respect to each agreement or transaction eign exchange or precious metals agreement; a as follows: under the master agreement that is referred to currency swap, option, future, or forward agree- ‘‘(ii) any right under any security agreement in subclause (I), (II), or (III); or ment; an equity index or equity swap, option, or arrangement or other credit enhancement re- ‘‘(V) a security agreement or arrangement or future, or forward agreement; a debt index or lated to 1 or more qualified financial contracts other credit enhancement related to any agree- debt swap, option, future, or forward agree- described in clause (i);’’. ment or transaction referred to in subclause (I), ment; a credit spread or credit swap, option, fu- (i) AVOIDANCE OF TRANSFERS.—Section (II), (III), or (IV).’’. ture, or forward agreement; a commodity index 11(e)(8)(C)(i) of the Federal Deposit Insurance (e) DEFINITION OF REPURCHASE AGREEMENT.— or commodity swap, option, future, or forward Act (12 U.S.C. 1821(e)(8)(C)(i)) is amended by in- Section 11(e)(8)(D)(v) of the Federal Deposit In- agreement; serting ‘‘section 5242 of the Revised Statutes of surance Act (12 U.S.C. 1821(e)(8)(D)(v)) is ‘‘(II) any agreement or transaction similar to the United States (12 U.S.C. 91) or any other amended to read as follows: any other agreement or transaction referred to Federal or State law relating to the avoidance of ‘‘(v) REPURCHASE AGREEMENT.—The term ‘re- in this clause that is presently, or in the future preferential or fraudulent transfers,’’ before purchase agreement’ (which definition also ap- becomes, regularly entered into in the swap ‘‘the Corporation’’. plies to a reverse repurchase agreement)— market (including terms and conditions incor- SEC. 1002. AUTHORITY OF THE CORPORATION ‘‘(I) mean an agreement, including related porated by reference in such agreement) and WITH RESPECT TO FAILED AND FAIL- terms, which provides for the transfer of 1 or that is a forward, swap, future, or option on 1 ING INSTITUTIONS. more certificates of deposit, mortgage-related se- or more rates, currencies, commodities, equity (a) IN GENERAL.—Section 11(e)(8) of the Fed- curities (as such term is defined in the Securities securities or other equity instruments, debt secu- eral Deposit Insurance Act (12 U.S.C. 1821(e)(8)) Exchange Act of 1934), mortgage loans, interests rities or other debt instruments, or economic in- is amended— in mortgage-related securities or mortgage loans, dices or measures of economic risk or value; (1) in subparagraph (E), by striking ‘‘other eligible bankers’ acceptances, qualified foreign ‘‘(III) any combination of agreements or than paragraph (12) of this subsection, sub- government securities or securities that are di- transactions referred to in this clause; section (d)(9)’’ and inserting ‘‘other than sub- rect obligations of, or that are fully guaranteed ‘‘(IV) any option to enter into any agreement sections (d)(9) and (e)(10)’’; and by, the United States or any agency of the or transaction referred to in this clause; (2) by adding at the end the following new United States against the transfer of funds by ‘‘(V) a master agreement that provides for an subparagraphs: the transferee of such certificates of deposit, eli- agreement or transaction referred to in sub- ‘‘(F) CLARIFICATION.—No provision of law gible bankers’ acceptances, securities, loans, or clause (I), (II), (III), or (IV), together with all shall be construed as limiting the right or power interests with a simultaneous agreement by such supplements to any such master agreement, of the Corporation, or authorizing any court or transferee to transfer to the transferor thereof without regard to whether the master agreement agency to limit or delay, in any manner, the certificates of deposit, eligible bankers’ accept- contains an agreement or transaction that is not right or power of the Corporation to transfer ances, securities, loans, or interests as described a swap agreement under this clause, except that any qualified financial contract in accordance above, at a date certain not later than 1 year the master agreement shall be considered to be a with paragraphs (9) and (10) of this subsection after such transfers or on demand, against the swap agreement under this clause only with re- or to disaffirm or repudiate any such contract in transfer of funds, or any other similar agree- spect to each agreement or transaction under accordance with subsection (e)(1) of this section. ment; the master agreement that is referred to in sub- ‘‘(G) WALKAWAY CLAUSES NOT EFFECTIVE.— ‘‘(II) does not include any repurchase obliga- clause (I), (II), (III), or (IV); and ‘‘(i) IN GENERAL.—Notwithstanding the provi- tion under a participation in a commercial mort- ‘‘(VI) any security agreement or arrangement sions of subparagraphs (A) and (E), and sec- gage loan unless the Corporation determines by or other credit enhancement related to any tions 403 and 404 of the Federal Deposit Insur- regulation, resolution, or order to include any agreements or transactions referred to in sub- ance Corporation Improvement Act of 1991, no such participation within the meaning of such paragraph (I), (II), (III), or (IV). walkaway clause shall be enforceable in a quali- term; Such term is applicable for purposes of this title fied financial contract of an insured depository ‘‘(III) means any combination of agreements only and shall not be construed or applied so as institution in default. or transactions referred to in subclauses (I) and to challenge or affect the characterization, defi- ‘‘(ii) WALKAWAY CLAUSE DEFINED.—For pur- (IV); nition, or treatment of any swap agreement poses of this subparagraph, the term ‘walkaway ‘‘(IV) means any option to enter into any under any other statute, regulation, or rule, in- clause’ means a provision in a qualified finan- agreement or transaction referred to in sub- cluding the Securities Act of 1933, the Securities cial contract that, after calculation of a value of clause (I) or (III); Exchange Act of 1934, the Public Utility Holding a party’s position or an amount due to or from ‘‘(V) means a master agreement that provides Company Act of 1935, the Trust Indenture Act 1 of the parties in accordance with its terms for an agreement or transaction referred to in of 1939, the Investment Company Act of 1940, upon termination, liquidation, or acceleration of subclause (I), (III), or (IV), together with all the Investment Advisers Act of 1940, the Securi- the qualified financial contract, either does not supplements to any such master agreement, ties Investor Protection Act of 1970, the Com- create a payment obligation of a party or extin- without regard to whether the master agreement modity Exchange Act, and the regulations pro- guishes a payment obligation of a party in provides for an agreement or transaction that is mulgated by the Securities and Exchange Com- whole or in part solely because of such party’s not a repurchase agreement under this clause, mission or the Commodity Futures Trading Com- status as a nondefaulting party.’’. except that the master agreement shall be con- mission.’’. (b) TECHNICAL AND CONFORMING AMEND- sidered to be a repurchase agreement under this (g) DEFINITION OF TRANSFER.—Section MENT.—Section 11(e)(12)(A) of the Federal De- subclause only with respect to each agreement 11(e)(8)(D)(viii) of the Federal Deposit Insur- posit Insurance Act (12 U.S.C. 1821(e)(12)(A)) is or transaction under the master agreement that ance Act (12 U.S.C. 1821(e)(8)(D)(viii)) is amend- amended by inserting ‘‘or the exercise of rights is referred to in subclause (I), (III), or (IV); and ed to read as follows: or powers’’ after ‘‘the appointment’’.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00058 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8551 SEC. 1003. AMENDMENTS RELATING TO TRANS- any person who is a party to any such contract conservator or receiver with respect to any FERS OF QUALIFIED FINANCIAL of such transfer by 5:00 p.m. (eastern time) on qualified financial contract to which an insured CONTRACTS. the business day following the date of the ap- depository institution is a party, the conservator (a) TRANSFERS OF QUALIFIED FINANCIAL CON- pointment of the receiver, in the case of a re- or receiver for such institution shall either— TRACTS TO FINANCIAL INSTITUTIONS.—Section ceivership, or the business day following such ‘‘(A) disaffirm or repudiate all qualified fi- 11(e)(9) of the Federal Deposit Insurance Act (12 transfer, in the case of a conservatorship.’’. nancial contracts between— U.S.C. 1821(e)(9)) is amended to read as follows: (c) RIGHTS AGAINST RECEIVER AND TREATMENT ‘‘(i) any person or any affiliate of such per- ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON- OF BRIDGE BANKS.—Section 11(e)(10) of the Fed- son; and TRACTS.— eral Deposit Insurance Act (12 U.S.C. ‘‘(ii) the depository institution in default; or ‘‘(A) IN GENERAL.—In making any transfer of 1821(e)(10)) is further amended— ‘‘(B) disaffirm or repudiate none of the quali- assets or liabilities of a depository institution in (1) by redesignating subparagraph (B) as sub- fied financial contracts referred to in subpara- default which includes any qualified financial paragraph (D); and graph (A) (with respect to such person or any contract, the conservator or receiver for such de- (2) by inserting after subparagraph (A) the affiliate of such person).’’. pository institution shall either— following new subparagraphs: ‘‘(i) transfer to 1 financial institution, other SEC. 1005. CLARIFYING AMENDMENT RELATING ‘‘(B) CERTAIN RIGHTS NOT ENFORCEABLE.— TO MASTER AGREEMENTS. than a financial institution for which a conser- ‘‘(i) RECEIVERSHIP.—A person who is a party Section 11(e)(8)(D)(vii) of the Federal Deposit vator, receiver, trustee in bankruptcy, or other to a qualified financial contract with an insured Insurance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is legal custodian has been appointed or which is depository institution may not exercise any amended to read as follows: otherwise the subject of a bankruptcy or insol- right such person has to terminate, liquidate, or ‘‘(vii) TREATMENT OF MASTER AGREEMENT AS 1 vency proceeding— net such contract under paragraph (8)(A) or ‘‘(I) all qualified financial contracts between AGREEMENT.—Any master agreement for any section 403 or 404 of the Federal Deposit Insur- contract or agreement described in any pre- any person or any affiliate of such person and ance Corporation Improvement Act of 1991 solely the depository institution in default; ceding clause of this subparagraph (or any mas- by reason of or incidental to the appointment of ter agreement for such master agreement or ‘‘(II) all claims of such person or any affiliate a receiver for the depository institution (or the of such person against such depository institu- agreements), together with all supplements to insolvency or financial condition of the deposi- such master agreement, shall be treated as a sin- tion under any such contract (other than any tory institution for which the receiver has been claim which, under the terms of any such con- gle agreement and a single qualified financial appointed)— contract. If a master agreement contains provi- tract, is subordinated to the claims of general ‘‘(I) until 5:00 p.m. (eastern time) on the busi- unsecured creditors of such institution); sions relating to agreements or transactions that ness day following the date of the appointment are not themselves qualified financial contracts, ‘‘(III) all claims of such depository institution of the receiver; or against such person or any affiliate of such per- the master agreement shall be deemed to be a ‘‘(II) after the person has received notice that qualified financial contract only with respect to son under any such contract; and the contract has been transferred pursuant to ‘‘(IV) all property securing or any other credit those transactions that are themselves qualified paragraph (9)(A). financial contracts.’’. enhancement for any contract described in sub- ‘‘(ii) CONSERVATORSHIP.—A person who is a clause (I) or any claim described in subclause party to a qualified financial contract with an SEC. 1006. FEDERAL DEPOSIT INSURANCE COR- (II) or (III) under any such contract; or PORATION IMPROVEMENT ACT OF insured depository institution may not exercise 1991. ‘‘(ii) transfer none of the qualified financial any right such person has to terminate, liq- contracts, claims, property or other credit en- (a) DEFINITIONS.—Section 402 of the Federal uidate, or net such contract under paragraph Deposit Insurance Corporation Improvement Act hancement referred to in clause (i) (with respect (8)(E) or sections 403 or 404 of the Federal De- to such person and any affiliate of such per- of 1991 (12 U.S.C. 4402) is amended— posit Insurance Corporation Improvement Act of (1) in paragraph (6)— son). 1991, solely by reason of or incidental to the ap- ‘‘(B) TRANSFER TO FOREIGN BANK, FOREIGN FI- (A) by redesignating subparagraphs (B) pointment of a conservator for the depository NANCIAL INSTITUTION, OR BRANCH OR AGENCY OF through (D) as subparagraphs (C) through (E), institution (or the insolvency or financial condi- A FOREIGN BANK OR FINANCIAL INSTITUTION.—In respectively; tion of the depository institution for which the transferring any qualified financial contracts (B) by inserting after subparagraph (A) the conservator has been appointed). and related claims and property pursuant to following new subparagraph: ‘‘(iii) NOTICE.—For purposes of this sub- ‘‘(B) an uninsured national bank or an unin- subparagraph (A)(i), the conservator or receiver section, the Corporation as receiver or conser- sured State bank that is a member of the Fed- for such depository institution shall not make vator of an insured depository institution shall eral Reserve System if the national bank or such transfer to a foreign bank, financial insti- be deemed to have notified a person who is a State member bank is not eligible to make appli- tution organized under the laws of a foreign party to a qualified financial contract with such cation to become an insured bank under section country, or a branch or agency of a foreign depository institution if the Corporation has 5 of the Federal Deposit Insurance Act;’’; and bank or financial institution unless, under the taken steps reasonably calculated to provide no- (C) by amending subparagraph (C) (as redes- law applicable to such bank, financial institu- tice to such person by the time specified in sub- ignated) to read as follows: tion, branch or agency, to the qualified finan- paragraph (A) of this subsection. ‘‘(C) a branch or agency of a foreign bank, a cial contracts, and to any netting contract, any ‘‘(C) TREATMENT OF BRIDGE BANKS.—The fol- foreign bank and any branch or agency of the security agreement or arrangement or other lowing institutions shall not be considered a fi- foreign bank, or the foreign bank that estab- credit enhancement related to 1 or more quali- nancial institution for which a conservator, re- lished the branch or agency, as those terms are fied financial contracts, the contractual rights ceiver, trustee in bankruptcy, or other legal cus- defined in section 1(b) of the International of the parties to such qualified financial con- todian has been appointed or which is otherwise Banking Act of 1978;’’; tracts, netting contracts, security agreements or the subject of a bankruptcy or insolvency pro- (2) in paragraph (11), by adding before the pe- arrangements, or other credit enhancements are ceeding for purposes of subsection (e)(9)— riod ‘‘and any other clearing organization with enforceable substantially to the same extent as ‘‘(i) a bridge bank; or permitted under this section. ‘‘(ii) a depository institution organized by the which such clearing organization has a netting ‘‘(C) TRANSFER OF CONTRACTS SUBJECT TO THE Corporation, for which a conservator is ap- contract’’; RULES OF A CLEARING ORGANIZATION.—In the pointed either— (3) by amending paragraph (14)(A)(i) to read event that a conservator or receiver transfers ‘‘(I) immediately upon the organization of the as follows: any qualified financial contract and related institution; or ‘‘(i) means a contract or agreement between 2 claims, property and credit enhancements pur- ‘‘(II) at the time of a purchase and assump- or more financial institutions, clearing organi- suant to subparagraph (A)(i) and such contract tion transaction between such institution and zations, or members that provides for netting is subject to the rules of a clearing organization, the Corporation as receiver for a depository in- present or future payment obligations or pay- the clearing organization shall not be required stitution in default.’’. ment entitlements (including liquidation or closeout values relating to such obligations or to accept the transferee as a member by virtue of SEC. 1004. AMENDMENTS RELATING TO the transfer. DISAFFIRMANCE OR REPUDIATION entitlements) among the parties to the agree- ‘‘(D) DEFINITION.—For purposes of this sec- OF QUALIFIED FINANCIAL CON- ment; and’’; and tion, the term ‘financial institution’ means a TRACTS. (4) by adding at the end the following new broker or dealer, a depository institution, a fu- Section 11(e) of the Federal Deposit Insurance paragraph: tures commission merchant, or any other insti- Act (12 U.S.C. 1821(e)) is further amended— ‘‘(15) PAYMENT.—The term ‘payment’ means a tution as determined by the Corporation by reg- (1) by redesignating paragraphs (11) through payment of United States dollars, another cur- ulation to be a financial institution.’’. (15) as paragraphs (12) through (16), respec- rency, or a composite currency, and a noncash (b) NOTICE TO QUALIFIED FINANCIAL CON- tively; and delivery, including a payment or delivery to liq- TRACT COUNTERPARTIES.—Section 11(e)(10)(A) of (2) by inserting after paragraph (10) the fol- uidate an unmatured obligation.’’. the Federal Deposit Insurance Act (12 U.S.C. lowing new paragraph: (b) ENFORCEABILITY OF BILATERAL NETTING 1821(e)(10)(A)) is amended by amending the ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF CONTRACTS.—Section 403 of the Federal Deposit flush material following clause (ii) to read as QUALIFIED FINANCIAL CONTRACTS.—In exercising Insurance Corporation Improvement Act of 1991 follows: ‘‘the conservator or receiver shall notify the rights of disaffirmance or repudiation of a (12 U.S.C. 4403) is amended—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00059 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 8552 CONGRESSIONAL RECORD—HOUSE May 5, 1999 (1) by amending subsection (a) to read as fol- ‘‘(1) any reference to the ‘Corporation as re- the date of’’ and replacing it with ‘‘at any time lows: ceiver’ or ‘the receiver or the Corporation’ shall before’’; ‘‘(a) GENERAL RULE.—Notwithstanding any refer to the receiver of an uninsured national (C) by amending paragraph (47) to read as fol- other provision of State or Federal law (other bank or uninsured Federal branch or Federal lows: than paragraphs (8)(E), (8)(F), and (10)(B) of agency appointed by the Comptroller of the Cur- ‘‘(47) ‘repurchase agreement’ (which defini- section 11(e) of the Federal Deposit Insurance rency; tion also applies to a reverse repurchase agree- Act or any order authorized under section ‘‘(2) any reference to the ‘Corporation’ (other ment) means— 5(b)(2) of the Securities Investor Protection Act than in section 11(e)(8)(D) of such Act), the ‘‘(i) an agreement, including related terms, of 1970, the covered contractual payment obliga- ‘Corporation, whether acting as such or as con- which provides for the transfer of 1 or more cer- tions and the covered contractual payment enti- servator or receiver’, a ‘receiver’, or a ‘conser- tificates of deposit, mortgage-related securities tlements between any 2 financial institutions vator’ shall refer to the receiver or conservator (as defined in the Securities Exchange Act of shall be netted in accordance with, and subject of an uninsured national bank or uninsured 1934), mortgage loans, interests in mortgage-re- to the conditions of, the terms of any applicable Federal branch or Federal agency appointed by lated securities or mortgage loans, eligible bank- netting contract (except as provided in section the Comptroller of the Currency; and ers’ acceptances, qualified foreign government 561(b)(2) of title 11).’’; and ‘‘(3) any reference to an ‘insured depository securities; or securities that are direct obliga- (2) by adding at the end the following new institution’ or ‘depository institution’ shall refer tions of, or that are fully guaranteed by, the subsection: to an uninsured national bank or an uninsured United States or any agency of the United ‘‘(f) ENFORCEABILITY OF SECURITY AGREE- Federal branch or Federal agency. States against the transfer of funds by the MENTS.—The provisions of any security agree- ‘‘(b) LIABILITY.—The liability of a receiver or transferee of such certificates of deposit, eligible ment or arrangement or other credit enhance- conservator of an uninsured national bank or bankers’ acceptances, securities, loans, or inter- ment related to 1 or more netting contracts be- uninsured Federal branch or agency shall be de- ests; with a simultaneous agreement by such tween any 2 financial institutions shall be en- termined in the same manner and subject to the transferee to transfer to the transferor thereof forceable in accordance with their terms (except same limitations that apply to receivers and certificates of deposit, eligible bankers’ accept- as provided in section 561(b)(2) of title 11) and conservators of insured depository institutions ance, securities, loans, or interests of the kind shall not be stayed, avoided, or otherwise lim- under section 11(e) of the Federal Deposit Insur- described above, at a date certain not later than ited by any State or Federal law (other than ance Act. 1 year after such transfer or on demand, against paragraphs (8)(E), (8)(F), and (10)(B) of section ‘‘(c) REGULATORY AUTHORITY.— the transfer of funds; 11(e) of the Federal Deposit Insurance Act and ‘‘(1) IN GENERAL.—The Comptroller of the Cur- ‘‘(ii) any combination of agreements or trans- section 5(b)(2) of the Securities Investor Protec- rency, in consultation with the Federal Deposit actions referred to in clauses (i) and (iii); tion Act of 1970).’’. Insurance Corporation, may promulgate regula- ‘‘(iii) an option to enter into an agreement or (c) ENFORCEABILITY OF CLEARING ORGANIZA- tions to implement this section. transaction referred to in clause (i) or (ii); TION NETTING CONTRACTS.—Section 404 of the ‘‘(2) SPECIFIC REQUIREMENT.—In promulgating ‘‘(iv) a master agreement that provides for an Federal Deposit Insurance Corporation Im- regulations to implement this section, the Comp- agreement or transaction referred to in clause provement Act of 1991 (12 U.S.C. 4404) is amend- troller of the Currency shall ensure that the reg- (i), (ii), or (iii), together with all supplements to ed— ulations generally are consistent with the regu- any such master agreement, without regard to (1) by amending subsection (a) to read as fol- lations and policies of the Federal Deposit In- whether such master agreement provides for an lows: surance Corporation adopted pursuant to the agreement or transaction that is not a repur- ‘‘(a) GENERAL RULE.—Notwithstanding any chase agreement under this paragraph, except other provision of State or Federal law (other Federal Deposit Insurance Act. that such master agreement shall be considered than paragraphs (8)(E), (8)(F), and (10)(B) of ‘‘(d) DEFINITIONS.—For purposes of this sec- to be a repurchase agreement under this para- section 11(e) of the Federal Deposit Insurance tion, the terms ‘Federal branch’, ‘Federal agen- graph only with respect to each agreement or Act and any order authorized under section cy’, and ‘foreign bank’ have the same meaning transaction under the master agreement that is 5(b)(2) of the Securities Investor Protection Act as in section 1(b) of the International Banking referred to in clause (i), (ii), or (iii); or of 1970, the covered contractual payment obliga- Act.’’. ‘‘(v) a security agreement or arrangement or tions and the covered contractual payment enti- SEC. 1007. BANKRUPTCY CODE AMENDMENTS. other credit enhancement related to any agree- tlements of a member of a clearing organization (a) DEFINITIONS OF FORWARD CONTRACT, RE- ment or transaction referred to in clause (i), (ii), to and from all other members of a clearing or- PURCHASE AGREEMENT, SECURITIES CLEARING (iii), or (iv), but not to exceed the actual value ganization shall be netted in accordance with AGENCY, SWAP AGREEMENT, COMMODITY CON- of such contract on the date of the filing of the and subject to the conditions of any applicable TRACT, AND SECURITIES CONTRACT.—Title 11, petition; and netting contract (except as provided in section United States Code, is amended— ‘‘(B) does not include a repurchase obligation 561(b)(2) of title 11, United States Code).’’; and (1) in section 101— under a participation in a commercial mortgage (2) by adding at the end the following new (A) in paragraph (25)— subsection: (i) by striking ‘‘means a contract’’ and insert- loan; and, for purposes of this paragraph, the term ‘‘(h) ENFORCEABILITY OF SECURITY AGREE- ing ‘‘means— ‘qualified foreign government security’ means a MENTS.—The provisions of any security agree- ‘‘(A) a contract’’; ment or arrangement or other credit enhance- (ii) by striking ‘‘, or any combination thereof security that is a direct obligation of, or that is ment related to 1 or more netting contracts be- or option thereon;’’ and inserting ‘‘, or any fully guaranteed by, the central government of tween any 2 members of a clearing organization other similar agreement;’’; and a member of the Organization for Economic Co- shall be enforceable in accordance with their (iii) by adding at the end the following: operation and Development;’’; (D) in paragraph (48) by inserting ‘‘or exempt terms (except as provided in section 561(b)(2) of ‘‘(B) any combination of agreements or trans- from such registration under such section pur- title 11, United States Code) and shall not be actions referred to in subparagraphs (A) and suant to an order of the Securities and Ex- stayed, avoided, or otherwise limited by any (C); ‘‘(C) any option to enter into an agreement or change Commission’’ after ‘‘1934’’; and State or Federal law other than paragraphs transaction referred to in subparagraph (A) or (E) by amending paragraph (53B) to read as (8)(E), (8)(F), and (10)(B) of section 11(e) of the (B); follows: Federal Deposit Insurance Act and section ‘‘(D) a master agreement that provides for an ‘‘(53B) ‘swap agreement’ 5(b)(2) of the Securities Investor Protection Act agreement or transaction referred to in subpara- ‘‘(A) means— of 1970.’’. graph (A), (B), or (C), together with all supple- ‘‘(i) any agreement, including the terms and (d) ENFORCEABILITY OF CONTRACTS WITH UN- ments to any such master agreement, without conditions incorporated by reference in such INSURED NATIONAL BANKS AND UNINSURED FED- regard to whether such master agreement pro- agreement, which is an interest rate swap, op- ERAL BRANCHES AND AGENCIES.—The Federal tion, future, or forward agreement, including a Deposit Insurance Corporation Improvement Act vides for an agreement or transaction that is not rate floor, rate cap, rate collar, cross-currency of 1991 (12 U.S.C. 4401 et seq.) is amended— a forward contract under this paragraph, except (1) by redesignating section 407 as section 408; that such master agreement shall be considered rate swap, and basis swap; a spot, same day-to- and to be a forward contract under this paragraph morrow, tomorrow-next, forward, or other for- (2) by adding after section 406 the following only with respect to each agreement or trans- eign exchange or precious metals agreement; a new section: action under such master agreement that is re- currency swap, option, future, or forward agree- ‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UN- ferred to in subparagraph (A), (B) or (C); or ment; an equity index or an equity swap, op- INSURED NATIONAL BANKS AND UN- ‘‘(E) a security agreement or arrangement, or tion, future, or forward agreement; a debt index INSURED FEDERAL BRANCHES AND other credit enhancement related to any agree- or a debt swap, option, future, or forward agree- AGENCIES. ment or transaction referred to in subparagraph ment; a credit spread or a credit swap, option, ‘‘(a) IN GENERAL.—Notwithstanding any other (A), (B), (C), or (D), but not to exceed the actual future, or forward agreement; or a commodity provision of law, paragraphs (8), (9), (10), and value of such contract, option, agreement, or index or a commodity swap, option, future, or (11) of section 11(e) of the Federal Deposit In- transaction on the date of the filing of the peti- forward agreement; surance Act shall apply to an uninsured na- tion;’’; ‘‘(ii) any agreement or transaction similar to tional bank or uninsured Federal branch or (B) in paragraph (46), by striking ‘‘on any any other agreement or transaction referred to Federal agency except— day during the period beginning 90 days before in this paragraph that—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00060 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8553 ‘‘(I) is presently, or in the future becomes, reg- ter agreement provides for an agreement or transaction with the debtor or any other entity ularly entered into in the swap market (includ- transaction that is not a securities contract (other than an affiliate) on any day during the ing terms and conditions incorporated by ref- under this paragraph, except that such master previous 15-month period;’’; and erence therein); and agreement shall be considered to be a securities (3) by amending paragraph (26) to read as fol- ‘‘(II) is a forward, swap, future, or option on contract under this paragraph only with respect lows: 1 or more rates, currencies commodities, equity to each agreement or transaction under such ‘‘(26) ‘forward contract merchant’ means a securities, or other equity instruments, debt se- master agreement that is referred to in clause Federal reserve bank, or an entity whose busi- curities or other debt instruments, or on an eco- (i), (ii), (iii), (iv), (v), (vi), or (vii); or ness consists in whole or in part of entering into nomic index or measure of economic risk or ‘‘(ix) any security agreement or arrangement, forward contracts as or with merchants or in a value; or other credit enhancement, related to any commodity, as defined or in section 761 of this ‘‘(iii) any combination of agreements or trans- agreement or transaction referred to in this title, or any similar good, article, service, right, actions referred to in this paragraph; paragraph, but not to exceed the actual value of or interest which is presently or in the future ‘‘(iv) any option to enter into an agreement or such contract on the date of the filing of the pe- becomes the subject of dealing or in the forward transaction referred to in this paragraph; tition; and contract trade;’’. ‘‘(v) a master agreement that provides for an ‘‘(B) does not include any purchase, sale, or (c) DEFINITION OF MASTER NETTING AGREE- agreement or transaction referred to in clause repurchase obligation under a participation in a MENT AND MASTER NETTING AGREEMENT PARTIC- (i), (ii), (iii), or (iv), together with all supple- commercial mortgage loan.’’; and IPANT.—Section 101 of title 11, United States ments to any such master agreement, and with- (3) in section 761(4)— Code, is amended by inserting after paragraph out regard to whether the master agreement (A) by striking ‘‘or’’ at the end of subpara- (38) the following new paragraphs: contains an agreement or transaction that is not graph (D); and ‘‘(38A) ‘master netting agreement’ means an a swap agreement under this paragraph, except (B) by adding at the end the following: agreement providing for the exercise of rights, that the master agreement shall be considered to ‘‘(F) any other agreement or transaction that including rights of netting, setoff, liquidation, be a swap agreement under this paragraph only is similar to an agreement or transaction re- termination, acceleration, or closeout, under or with respect to each agreement or transaction ferred to in this paragraph; in connection with 1 or more contracts that are under the master agreement that is referred to ‘‘(G) any combination of the agreements or described in any 1 or more of paragraphs (1) in clause (i), (ii), (iii), or (iv); or transactions referred to in this paragraph; through (5) of section 561(a), or any security ‘‘(B) any security agreement or arrangement ‘‘(H) any option to enter into an agreement or agreement or arrangement or other credit en- or other credit enhancement related to any transaction referred to in this paragraph; hancement related to 1 or more of the foregoing. agreements or transactions referred to in sub- ‘‘(I) a master agreement that provides for an If a master netting agreement contains provi- paragraph (A); and agreement or transaction referred to in subpara- sions relating to agreements or transactions that ‘‘(C) is applicable for purposes of this title graph (A), (B), (C), (D), (E), (F), (G), or (H), to- are not contracts described in paragraphs (1) only and shall not be construed or applied so as gether with all supplements to such master net- through (5) of section 561(a), the master netting to challenge or affect the characterization, defi- ting agreement, without regard to whether the agreement shall be deemed to be a master net- nition, or treatment of any swap agreement master netting agreement provides for an agree- ting agreement only with respect to those agree- under any other statute, regulation, or rule, in- ment or transaction that is not a commodity ments or transactions that are described in any cluding the Securities Act of 1933, the Securities contract under this paragraph, except that the 1 or more of the paragraphs (1) through (5) of Exchange Act of 1934, the Public Utility Holding master agreement shall be considered to be a section 561(a); Company Act of 1935, the Trust Indenture Act commodity contract under this paragraph only ‘‘(38B) ‘master netting agreement participant’ of 1939, the Investment Company Act of 1940, with respect to each agreement or transaction means an entity that, at any time before the fil- the Investment Advisers Act of 1940, the Securi- under the master agreement that is referred to ing of the petition, is a party to an outstanding ties Investor Protection Act of 1970, the Com- in subparagraph (A), (B), (C), (D), (E), (F), (G), master netting agreement with the debtor;’’. modity Exchange Act, and the regulations pre- or (H); or (d) SWAP AGREEMENTS, SECURITIES CON- scribed by the Securities and Exchange Commis- ‘‘(J) a security agreement or arrangement, or TRACTS, COMMODITY CONTRACTS, FORWARD sion or the Commodity Futures Trading Commis- other credit enhancement related to any agree- CONTRACTS, REPURCHASE AGREEMENTS, AND sion.’’; ment or transaction referred to in this para- MASTER NETTING AGREEMENTS UNDER THE (2) by amending section 741(7) to read as fol- graph, but not to exceed the actual value of AUTOMATIC-STAY.— lows: such contract on the date of the filing of the pe- (1) IN GENERAL.—Section 362(b) of title 11, ‘‘(7) ‘securities contract’— tition;’’. United States Code, as amended by sections 118, ‘‘(A) means— (b) DEFINITIONS OF FINANCIAL INSTITUTION, 132, 136, 142, 203 and 818, is amended— ‘‘(i) a contract for the purchase, sale, or loan FINANCIAL PARTICIPANT, AND FORWARD CON- (A) in paragraph (6), by inserting ‘‘, pledged of a security, a certificate of deposit, a mortgage TRACT MERCHANT.—Section 101 of title 11, to, and under the control of,’’ after ‘‘held by’’; loan or any interest in a mortgage loan, a group United States Code, is amended— (B) in paragraph (7), by inserting ‘‘, pledged or index of securities, certificates of deposit or (1) by amending paragraph (22) to read as fol- to, and under the control of,’’ after ‘‘held by’’; mortgage loans or interests therein (including lows: (C) by amending paragraph (17) to read as fol- an interest therein or based on the value there- ‘‘(22) ‘financial institution’ means— lows: of), or option on any of the foregoing, including ‘‘(A) a Federal reserve bank, or an entity (do- ‘‘(17) under subsection (a), of the setoff by a an option to purchase or sell any such security mestic or foreign) that is a commercial or sav- swap participant of a mutual debt and claim certificate of deposit, loan, interest, group or ings bank, industrial savings bank, savings and under or in connection with 1 or more swap index or option; loan association, trust company, or receiver or agreements that constitutes the setoff of a claim ‘‘(ii) any option entered into on a national se- conservator for such entity and, when any such against the debtor for any payment or other curities exchange relating to foreign currencies; Federal reserve bank, receiver, conservator or transfer of property due from the debtor under ‘‘(iii) the guarantee by or to any securities entity is acting as agent or custodian for a cus- or in connection with any swap agreement clearing agency of a settlement of cash, securi- tomer in connection with a securities contract, against any payment due to the debtor from the ties, certificates of deposit mortgage loans or in- as defined in section 741 of this title, such cus- swap participant under or in connection with terests therein, group or index of securities, or tomer; or any swap agreement or against cash, securities, mortgage loans or interests therein (including ‘‘(B) in connection with a securities contract, or other property held by, pledged to, and under any interest therein or based on the value there- as defined in section 741 of this title, an invest- the control of, or due from such swap partici- of), or option on any of the foregoing, including ment company registered under the Investment pant to margin guarantee, secure, or settle a an option to purchase or sell any such security Company Act of 1940;’’; swap agreement;’’; certificate of deposit, loan, interest, group or (2) by inserting after paragraph (22) the fol- (D) in paragraph (30) by striking ‘‘or’’ at the index or option; lowing: end; ‘‘(iv) any margin loan; ‘‘(22A) ‘financial participant’ means an entity (E) in paragraph (31) by striking the period at ‘‘(v) any other agreement or transaction that that, at the time it enters into a securities con- the end and inserting ‘‘; or’’; and is similar to an agreement or transaction re- tract, commodity contract or forward contract, (F) by inserting after paragraph (31) the fol- ferred to in this paragraph; or at the time of the filing of the petition, has lowing new paragraph: ‘‘(vi) any combination of the agreements or 1 or more agreements or transactions that is de- ‘‘(32) under subsection (a), of the setoff by a transactions referred to in this paragraph; scribed in section 561(a)(2) with the debtor or master netting agreement participant of a mu- ‘‘(vii) any option to enter into any agreement any other entity (other than an affiliate) of a tual debt and claim under or in connection with or transaction referred to in this paragraph; total gross dollar value of at least $1,000,000,000 1 or more master netting agreements or any con- ‘‘(viii) a master agreement that provides for in notional or actual principal amount out- tract or agreement subject to such agreements an agreement or transaction referred to in standing on any day during the previous 15- that constitutes the setoff of a claim against the clause (i), (ii), (iii), (iv), (v), (vi), or (vii), to- month period, or has gross mark-to-market posi- debtor for any payment or other transfer of gether with all supplements to any such master tions of at least $100,000,000 (aggregated across property due from the debtor under or in con- agreement, without regard to whether the mas- counterparties) in 1 or more such agreement or nection with such agreements or any contract or

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00061 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 8554 CONGRESSIONAL RECORD—HOUSE May 5, 1999 agreement subject to such agreements against ‘‘§ 556. Contractual right to liquidate, termi- under, or in connection with, a commodity con- any payment due to the debtor from such master nate, or accelerate a commodities contract tract entered into or held on behalf of a cus- netting agreement participant under or in con- or forward contract’’; and tomer of the debtor against any claim arising nection with such agreements or any contract or (2) in the first sentence, by striking ‘‘liquida- under, or in connection with, other instruments, agreement subject to such agreements or against tion’’ and inserting ‘‘liquidation, termination, contracts, or agreements listed in subsection (a). cash, securities, or other property held by, or acceleration’’. ‘‘(c) DEFINITION.—As used in this section, the pledged or and under the control of, or due from (i) TERMINATION OR ACCELERATION OF REPUR- term ‘contractual right’ includes a right set such master netting agreement participant to CHASE AGREEMENTS.—Section 559 of title 11, forth in a rule or bylaw of a national securities margin, guarantee, secure, or settle such agree- United States Code, is amended— exchange, a national securities association, or a ments or any contract or agreement subject to (1) by amending the section heading to read securities clearing agency, a right set forth in a such agreements, to the extent such participant as follows: bylaw of a clearing organization or contract is eligible to exercise such offset rights under market or in a resolution of the governing board ‘‘§ 559. Contractual right to liquidate, termi- paragraph (6), (7), or (17) for each individual thereof, and a right, whether or not evidenced nate, or accelerate a repurchase agree- contract covered by the master netting agree- in writing, arising under common law, under ment’’; and ment in issue.’’. law merchant, or by reason of normal business (2) LIMITATION.—Section 362 of title 11, United (2) in the first sentence, by striking ‘‘liquida- practice.’’. States Code, as amended by sections 120, 302, tion’’ and inserting ‘‘liquidation, termination, (2) CONFORMING AMENDMENT.—The table of and 412, is amended by adding at the end the or acceleration’’. sections of chapter 9 of title 11, United States following: (j) LIQUIDATION, TERMINATION, OR ACCELERA- Code, is amended by inserting after the item re- TION OF SWAP AGREEMENTS.—Section 560 of title ‘‘(l) LIMITATION.—The exercise of rights not lating to section 560 the following: subject to the stay arising under subsection (a) 11, United States Code, is amended— ‘‘561. Contractual right to terminate, liquidate, pursuant to paragraph (6), (7), or (17), or (31) of (1) by amending the section heading to read accelerate, or offset under a mas- subsection (b) shall not be stayed by any order as follows: ter netting agreement and across of a court or administrative agency in any pro- ‘‘§ 560. Contractual right to liquidate, termi- contracts. ceeding under this title.’’. nate, or accelerate a swap agreement’’; and (l) ANCILLARY PROCEEDINGS.—Section 304 of title 11, United States Code, as amended by sec- (e) LIMITATION OF AVOIDANCE POWERS UNDER (2) in the first sentence, by striking ‘‘termi- tion 215, is amended by adding at the end the MASTER NETTING AGREEMENT.—Section 546 of nation of a swap agreement’’ and inserting ‘‘liq- title 11, United States Code, as amended by sec- uidation, termination, or acceleration of 1 or following: ‘‘(c) Any provisions of this title relating to se- tions 207 and 302, is amended— more swap agreements’’; and curities contracts, commodity contracts, forward (3) by striking ‘‘in connection with any swap (1) in subsection (g) (as added by section 103 contracts, repurchase agreements, swap agree- agreement’’ and inserting ‘‘in connection with of Public Law 101–311)— ments, or master netting agreements shall apply the termination, liquidation, or acceleration of 1 (A) by striking ‘‘under a swap agreement’’; in a case ancillary to a foreign proceeding under or more swap agreements’’. (B) by striking ‘‘in connection with a swap this section or any other section of this title, so (k) LIQUIDATION, TERMINATION, ACCELERA- agreement’’ and inserting ‘‘under or in connec- that enforcement of contractual provisions of TION, OR OFFSET UNDER A MASTER NETTING tion with any swap agreement’’; and such contracts and agreements in accordance AGREEMENT AND ACROSS CONTRACTS.—(1) Title (2) by adding at the end the following: with their terms will not be stayed or otherwise 11, United States Code, is amended by inserting ‘‘(j) Notwithstanding sections 544, 545, 547, limited by operation of any provision of this title after section 560 the following: 548(a)(2)(B), and 548(b) of this title, the trustee or by order of a court in any case under this may not avoid a transfer made by or to a master ‘‘§ 561. Contractual right to terminate, liq- title, and to limit avoidance powers to the same netting agreement participant under or in con- uidate, accelerate, or offset under a master extent as in a proceeding under chapter 7 or 11 nection with any master netting agreement or netting agreement and across contracts of this title (such enforcement not to be limited any individual contract covered thereby that is ‘‘(a) IN GENERAL.—Subject to subsection (b), based on the presence or absence of assets of the made before the commencement of the case, ex- the exercise of any contractual right, because of debtor in the United States).’’. cept under section 548(a)(1)(A) of this title, and a condition of the kind specified in section (m) COMMODITY BROKER LIQUIDATIONS.—Title except to the extent the trustee could otherwise 365(e)(1), to cause the termination, liquidation, 11, United States Code, is amended by inserting avoid such a transfer made under an individual or acceleration of or to offset or net termination after section 766 the following: contract covered by such master netting agree- values, payment amounts or other transfer obli- ‘‘§ 767. Commodity broker liquidation and for- ment.’’. gations arising under or in connection with 1 or ward contract merchants, commodity bro- (f) FRAUDULENT TRANSFERS OF MASTER NET- more (or the termination, liquidation, or accel- kers, stockbrokers, financial institutions, se- TING AGREEMENTS.—Section 548(d)(2) of title 11, eration of 1 or more)— curities clearing agencies, swap partici- United States Code, is amended— ‘‘(1) securities contracts, as defined in section pants, repo participants, and master net- (1) in subparagraph (C), by striking ‘‘and’’; 741(7); ting agreement participants (2) in subparagraph (D), by striking the pe- ‘‘(2) commodity contracts, as defined in sec- ‘‘Notwithstanding any other provision of this riod and inserting ‘‘; and’’; and tion 761(4); title, the exercise of rights by a forward contract (3) by adding at the end the following new ‘‘(3) forward contracts; merchant, commodity broker, stockbroker, fi- subparagraph: ‘‘(4) repurchase agreements; nancial institution, securities clearing agency, ‘‘(E) a master netting agreement participant ‘‘(5) swap agreements; or swap participant, repo participant, or master that receives a transfer in connection with a ‘‘(6) master netting agreements, netting agreement participant under this title master netting agreement or any individual con- shall not be stayed, avoided, or otherwise lim- shall not affect the priority of any unsecured tract covered thereby takes for value to the ex- ited by operation of any provision of this title or claim it may have after the exercise of such tent of such transfer, except, with respect to a by any order of a court or administrative agency rights.’’. transfer under any individual contract covered in any proceeding under this title. (n) STOCKBROKER LIQUIDATIONS.—Title 11, thereby, to the extent such master netting agree- ‘‘(b) EXCEPTION.— United States Code, is amended by inserting ment participant otherwise did not take (or is ‘‘(1) A party may exercise a contractual right after section 752 the following: otherwise not deemed to have taken) such trans- described in subsection (a) to terminate, liq- ‘‘§ 753. Stockbroker liquidation and forward fer for value.’’. uidate, or accelerate only to the extent that contract merchants, commodity brokers, (g) TERMINATION OR ACCELERATION OF SECU- such party could exercise such a right under stockbrokers, financial institutions, securi- RITIES CONTRACTS.—Section 555 of title 11, section 555, 556, 559, or 560 for each individual ties clearing agencies, swap participants, United States Code, is amended— contract covered by the master netting agree- repo participants, and master netting (1) by amending the section heading to read ment in issue. agreement participants as follows: ‘‘(2) If a debtor is a commodity broker subject ‘‘Notwithstanding any other provision of this to subchapter IV of chapter 7 of this title— ‘‘§ 555. Contractual right to liquidate, termi- title, the exercise of rights by a forward contract ‘‘(A) a party may not net or offset an obliga- merchant, commodity broker, stockbroker, fi- nate, or accelerate a securities contract’’; tion to the debtor arising under, or in connec- and nancial institution, securities clearing agency, tion with, a commodity contract against any swap participant, repo participant, financial (2) in the first sentence, by striking ‘‘liquida- claim arising under, or in connection with, participant, or master netting agreement partici- tion’’ and inserting ‘‘liquidation, termination, other instruments, contracts, or agreements list- pant under this title shall not affect the priority or acceleration’’. ed in subsection (a) except to the extent the of any unsecured claim it may have after the ex- (h) TERMINATION OR ACCELERATION OF COM- party has positive net equity in the commodity ercise of such rights.’’. MODITIES OR FORWARD CONTRACTS.—Section 556 accounts at the debtor, as calculated under sub- (o) SETOFF.—Section 553 of title 11, United of title 11, United States Code, is amended— chapter IV; and States Code, is amended— (1) by amending the section heading to read ‘‘(B) another commodity broker may not net (1) in subsection (a)(3)(C), by inserting ‘‘(ex- as follows: or offset an obligation to the debtor arising cept for a setoff of a kind described in section

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362(b)(6), 362(b)(7), 362(b)(17), 362(b)(19), 555, ‘‘(2) EXEMPTIONS FROM CONTEMPORANEOUS amounts, or other transfer obligations arising 556, 559, 560 or 561 of this title)’’ before the pe- EXECUTION REQUIREMENT.—An agreement to under or in connection with 1 or more of such riod; and provide for the lawful collateralization of— contracts or agreements, or to foreclose on any (2) in subsection (b)(1), by striking ‘‘(A) deposits of, or other credit extension by, cash collateral pledged by the debtor whether or ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), a Federal, State, or local governmental entity, not with respect to 1 or more of such contracts 362(b)(19), 555, 556, 559, 560, 561’’. or of any depositor referred to in section or agreements. (p) SECURITIES CONTRACTS, COMMODITY CON- 11(a)(2), including an agreement to provide col- ‘‘(ii) Notwithstanding clause (i), such applica- TRACTS, AND FORWARD CONTRACTS.—Title 11, lateral in lieu of a surety bond; tion, order, or decree may operate as a stay of United States Code, is amended— ‘‘(B) bankruptcy estate funds pursuant to sec- the foreclosure on securities collateral pledged (1) in section 362(b)(6), by striking ‘‘financial tion 345(b)(2) of title 11, United States Code; by the debtor, whether or not with respect to 1 institutions,’’ each place such term appears and ‘‘(C) extensions of credit, including any over- or more of such contracts or agreements, securi- inserting ‘‘financial institution, financial par- draft, from a Federal reserve bank or Federal ties sold by the debtor under a repurchase ticipant’’; home loan bank; or agreement or securities lent under a securities (2) in section 546(e), by inserting ‘‘financial ‘‘(D) 1 or more qualified financial contracts, lending agreement. participant,’’ after ‘‘financial institution,’’; as defined in section 11(e)(8)(D), ‘‘(iii) As used in this section, the term ‘con- (3) in section 548(d)(2)(B), by inserting ‘‘fi- shall not be deemed invalid pursuant to para- tractual right’ includes a right set forth in a nancial participant,’’ after ‘‘financial institu- graph (1)(B) solely because such agreement was rule or bylaw of a national securities exchange, tion,’’; not executed contemporaneously with the acqui- a national securities association, or a securities (4) in section 555— sition of the collateral or because of pledges, de- clearing agency, a right set forth in a bylaw of (A) by inserting ‘‘financial participant,’’ after livery, or substitution of the collateral made in a clearing organization or contract market or in ‘‘financial institution,’’; and a resolution of the governing board thereof, and (B) by inserting before the period at the end accordance with such agreement.’’. a right, whether or not in writing, arising under ‘‘, a right set forth in a bylaw of a clearing or- SEC. 1010. DAMAGE MEASURE. common law, under law merchant, or by reason ganization or contract market or in a resolution (a) Title 11, United States Code, as amended of normal business practice.’’. of the governing board thereof, and a right, by section 1007, is amended— whether or not in writing, arising under com- (1) by inserting after section 561 the following: SEC. 1012. ASSET-BACKED SECURITIZATIONS. Section 541 of title 11, United States Code, as mon law, under law merchant, or by reason of ‘‘§ 562. Damage measure in connection with amended by section 150, is amended— normal business practice’’; and swap agreements, securities contracts, for- (1) by redesignating paragraph (5) of sub- (5) in section 556, by inserting ‘‘, financial ward contracts, commodity contracts, repur- participant’’ after ‘‘commodity broker’’. section (b) as paragraph (6); chase agreements, or master netting agree- (2) by inserting after paragraph (4) of sub- (q) CONFORMING AMENDMENTS.—Title 11 of the ments United States Code is amended— section (b) the following new paragraph: (1) in the table of sections of chapter 5— ‘‘If the trustee rejects a swap agreement, secu- ‘‘(5) any eligible asset (or proceeds thereof), to (A) by amending the items relating to sections rities contract as defined in section 741 of this the extent that such eligible asset was trans- 555 and 556 to read as follows: title, forward contract, commodity contract (as ferred by the debtor, before the date of com- defined in section 761 of this title) repurchase ‘‘555. Contractual right to liquidate, terminate, mencement of the case, to an eligible entity in agreement, or master netting agreement pursu- or accelerate a securities contract. connection with an asset-backed securitization, ‘‘556. Contractual right to liquidate, terminate, ant to section 365(a) of this title, or if a forward except to the extent such asset (or proceeds or or accelerate a commodities con- contract merchant, stockbroker, financial insti- value thereof) may be recovered by the trustee tract or forward contract.’’; and tution, securities clearing agency, repo partici- under section 550 by virtue of avoidance under (B) by amending the items relating to sections pant, financial participant, master netting section 548(a);’’; and 559 and 560 to read as follows: agreement participant, or swap participant (3) by adding at the end the following new liquidates, terminates, or accelerates such con- ‘‘559. Contractual right to liquidate, terminate, subsection: tract or agreement, damages shall be measured ‘‘(e) For purposes of this section, the following or accelerate a repurchase agree- as of the earlier of— definitions shall apply: ment. ‘‘(1) the term ‘asset-backed securitization’ ‘‘560. Contractual right to liquidate, terminate, ‘‘(1) the date of such rejection; or means a transaction in which eligible assets or accelerate a swap agreement.’’; ‘‘(2) the date of such liquidation, termination, transferred to an eligible entity are used as the and or acceleration.’’; and (2) in the table of sections of chapter 7— (2) in the table of sections of chapter 5 by in- source of payment on securities, the most senior (A) by inserting after the item relating to sec- serting after the item relating to section 561 the of which are rated investment grade by 1 or tion 766 the following: following: more nationally recognized securities rating or- ganizations, issued by an issuer; ‘‘767. Commodity broker liquidation and forward ‘‘562. Damage measure in connection with swap ‘‘(2) the term ‘eligible asset’ means— contract merchants, commodity agreements, securities contracts, forward contracts, commodity ‘‘(A) financial assets (including interests brokers, stockbrokers, financial therein and proceeds thereof), either fixed or re- institutions, securities clearing contracts, repurchase agreements, or master netting agreements.’’. volving, including residential and commercial agencies, swap participants, repo mortgage loans, consumer receivables, trade re- participants, and master netting (b) CLAIMS ARISING FROM REJECTION.—Sec- tion 502(g) of title 11, United States Code, is ceivables, and lease receivables, that, by their agreement participants.’’; and terms, convert into cash within a finite time pe- (B) by inserting after the item relating to sec- amended— riod, plus any residual interest in property sub- tion 752 the following: (1) by designating the existing text as para- graph (1); and ject to receivables included in such financial as- ‘‘753. Stockbroker liquidation and forward con- sets plus any rights or other assets designed to tract merchants, commodity bro- (2) by adding at the end the following: ‘‘(2) A claim for damages calculated in accord- assure the servicing or timely distribution of kers, stockbrokers, financial insti- proceeds to security holders; tutions, securities clearing agen- ance with section 561 of this title shall be al- lowed under subsection (a), (b), or (c), or dis- ‘‘(B) cash; and cies, swap participants, repo par- ‘‘(C) securities. allowed under subsection (d) or (e), as if such ticipants, and master netting ‘‘(3) the term ‘eligible entity’ means— agreement participants.’’. claim had arisen before the date of the filing of ‘‘(A) an issuer; or the petition.’’. SEC. 1008. RECORDKEEPING REQUIREMENTS. ‘‘(B) a trust, corporation, partnership, or Section 11(e)(8) of the Federal Deposit Insur- SEC. 1011. SIPC STAY. other entity engaged exclusively in the business ance Act (12 U.S.C. 1821(e)(8)) is amended by Section 5(b)(2) of the Securities Investor Pro- of acquiring and transferring eligible assets di- adding at the end the following new subpara- tection Act of 1970 (15 U.S.C. 78eee(b)(2)) is rectly or indirectly to an issuer and taking ac- graph: amended by adding after subparagraph (B) the tions ancillary thereto; ‘‘(H) RECORDKEEPING REQUIREMENTS.—The following new subparagraph: ‘‘(4) the term ‘issuer’ means a trust, corpora- Corporation, in consultation with the appro- ‘‘(C) EXCEPTION FROM STAY.— tion, partnership, or other entity engaged exclu- priate Federal banking agencies, may prescribe ‘‘(i) Notwithstanding section 362 of title 11, sively in the business of acquiring and holding regulations requiring more detailed record- United States Code, neither the filing of an ap- eligible assets, issuing securities backed by eligi- keeping with respect to qualified financial con- plication under subsection (a)(3) nor any order ble assets, and taking actions ancillary thereto; tracts (including market valuations) by insured or decree obtained by Securities Investor Protec- and depository institutions.’’. tion Corporation from the court shall operate as ‘‘(5) the term ‘transferred’ means the debtor, SEC. 1009. EXEMPTIONS FROM CONTEMPORA- a stay of any contractual rights of a creditor to pursuant to a written agreement, represented NEOUS EXECUTION –––REQUIRE- liquidate, terminate, or accelerate a securities and warranted that eligible assets were sold, MENT. contract, commodity contract, forward contract, contributed, or otherwise conveyed with the in- Section 13(e)(2) of the Federal Deposit Insur- repurchase agreement, swap agreement, or mas- tention of removing them from the estate of the ance Act (12 U.S.C. 1823(e)(2)) is amended to ter netting agreement, each as defined in title debtor pursuant to subsection (b)(5), irrespec- read as follows: 11, to offset or net termination values, payment tive, without limitation of—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00063 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 8556 CONGRESSIONAL RECORD—HOUSE May 5, 1999 ‘‘(A) whether the debtor directly or indirectly SEC. 1104. TECHNICAL AMENDMENTS. (1) in subsection (b), by striking ‘‘subsection obtained or held an interest in the issuer or in Title 11 of the United States Code is amend- (c)’’ and inserting ‘‘subsections (c) and (i)’’; and any securities issued by the issuer; ed— (2) by adding at the end the following: ‘‘(B) whether the debtor had an obligation to (1) in section 109(b)(2) by striking ‘‘subsection ‘‘(i) If the trustee avoids under subsection (b) repurchase or to service or supervise the serv- (c) or (d) of’’; and a transfer made between 90 days and 1 year be- icing of all or any portion of such eligible assets; (2) in section 552(b)(1) by striking ‘‘product’’ fore the date of the filing of the petition, by the or each place it appears and inserting ‘‘products’’. debtor to an entity that is not an insider for the ‘‘(C) the characterization of such sale, con- SEC. 1105. PENALTY FOR PERSONS WHO NEG- benefit of a creditor that is an insider, such tribution, or other conveyance for tax, account- LIGENTLY OR FRAUDULENTLY PRE- transfer may be avoided under this section only ing, regulatory reporting, or other purposes.’’. PARE BANKRUPTCY PETITIONS. with respect to the creditor that is an insider.’’. SEC. 1013. FEDERAL RESERVE COLLATERAL RE- Section 110(j)(3) of title 11, United States (b) APPLICABILITY.—The amendments made by QUIREMENTS. Code, is amended by striking ‘‘attorney’s’’ and this section shall apply to any case that is pend- The 3d sentence of the 3d undesignated para- inserting ‘‘attorneys’ ’’. ing or commenced on or after the date of enact- graph of section 16 of the Federal Reserve Act SEC. 1106. LIMITATION ON COMPENSATION OF ment of this Act. (12 U.S.C. 412) is amended by striking ‘‘accept- PROFESSIONAL PERSONS. SEC. 1117. POSTPETITION TRANSACTIONS. ances acquired under the provisions of section Section 328(a) of title 11, United States Code, Section 549(c) of title 11, United States Code, 13 of this Act’’ and inserting ‘‘acceptances ac- is amended by inserting ‘‘on a fixed or percent- is amended— quired under section 10A, 10B, 13, or 13A of this age fee basis,’’ after ‘‘hourly basis,’’. (1) by inserting ‘‘an interest in’’ after ‘‘trans- Act’’. SEC. 1107. SPECIAL TAX PROVISIONS. fer of’’; SEC. 1014. EFFECTIVE DATE; APPLICATION OF ––– Section 346(g)(1)(C) of title 11, United States (2) by striking ‘‘such property’’ and inserting AMENDMENTS. Code, is amended by striking ‘‘, except’’ and all ‘‘such real property’’; and (a) EFFECTIVE DATE.—This title shall take ef- that follows through ‘‘1986’’. (3) by striking ‘‘the interest’’ and inserting fect on the date of the enactment of this Act. SEC. 1108. EFFECT OF CONVERSION. ‘‘such interest’’. (b) APPLICATION OF AMENDMENTS.—The Section 348(f)(2) of title 11, United States SEC. 1118. DISPOSITION OF PROPERTY OF THE amendments made by this title shall apply with Code, is amended by inserting ‘‘of the estate’’ ESTATE. respect to cases commenced or appointments after ‘‘property’’ the first place it appears. Section 726(b) of title 11, United States Code, made under any Federal or State law after the SEC. 1109. ALLOWANCE OF ADMINISTRATIVE EX- is amended by striking ‘‘1009,’’. date of enactment of this Act, but shall not PENSES. SEC. 1119. GENERAL PROVISIONS. apply with respect to cases commenced or ap- Section 503(b)(4) of title 11, United States Section 901(a) of title 11, United States Code, pointments made under any Federal or State Code, is amended by inserting ‘‘subparagraph is amended by inserting ‘‘1123(d),’’ after law before the date of enactment of this Act. (A), (B), (C), (D), or (E) of’’ before ‘‘paragraph ‘‘1123(b),’’. TITLE XI—TECHNICAL CORRECTIONS (3)’’. SEC. 1120. APPOINTMENT OF ELECTED TRUSTEE. SEC. 1101. DEFINITIONS. SEC. 1110. PRIORITIES. Section 1104(b) of title 11, United States Code, Section 101 of title 11, United States Code, as Section 507(a) of title 11, United States Code, is amended— amended by sections 102, 105, 132, 138, 301, 302, as amended by section 323, is amended in para- (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and 402, 902, and 1007, is amended— graph (4), as so redesignated by section 142, by (2) by adding at the end the following: (1) by striking ‘‘In this title—’’ and inserting striking the semicolon at the end and inserting ‘‘(2)(A) If an eligible, disinterested trustee is ‘‘In this title:’’; a period. elected at a meeting of creditors under para- graph (1), the United States trustee shall file a (2) in each paragraph, by inserting ‘‘The SEC. 1111. EXEMPTIONS. report certifying that election. Upon the filing term’’ after the paragraph designation; Section 522(g)(2) of title 11, United States of a report under the preceding sentence— (3) in paragraph (35)(B), by striking ‘‘para- Code, is amended by striking ‘‘subsection (f)(2)’’ ‘‘(i) the trustee elected under paragraph (1) graphs (21B) and (33)(A)’’ and inserting ‘‘para- and inserting ‘‘subsection (f)(1)(B)’’. graphs (23) and (35)’’; shall be considered to have been selected and SEC. 1112. EXCEPTIONS TO DISCHARGE. (4) in each of paragraphs (35A) and (38), by appointed for purposes of this section; and Section 523 of title 11, United States Code, as striking ‘‘; and’’ at the end and inserting a pe- ‘‘(ii) the service of any trustee appointed amended by section 146, is amended— riod; under subsection (d) shall terminate. (1) in subsection (a)(3), by striking ‘‘or (6)’’ (5) in paragraph (51B)— ‘‘(B) In the case of any dispute arising out of (A) by inserting ‘‘who is not a family farmer’’ each place it appears and inserting ‘‘(6), or an election under subparagraph (A), the court after ‘‘debtor’’ the first place it appears; and (15)’’; shall resolve the dispute.’’. (2) as amended by section 304(e) of Public Law (B) by striking ‘‘thereto having aggregate’’ SEC. 1121. ABANDONMENT OF RAILROAD LINE. and all that follows through the end of the 103–394 (108 Stat. 4133), in paragraph (15), by Section 1170(e)(1) of title 11, United States paragraph; transferring such paragraph so as to insert it Code, is amended by striking ‘‘section 11347’’ (6) by amending paragraph (54) to read as fol- after paragraph (14A) of subsection (a); and inserting ‘‘section 11326(a)’’. lows: (3) in subsection (a)(9), by inserting ‘‘, watercraft, or aircraft’’ after ‘‘motor vehi- SEC. 1122. CONTENTS OF PLAN. ‘‘(54) The term ‘transfer’ means— Section 1172(c)(1) of title 11, United States ‘‘(A) the creation of a lien; cle’’; (4) in subsection (a)(15), as so redesignated by Code, is amended by striking ‘‘section 11347’’ ‘‘(B) the retention of title as a security inter- and inserting ‘‘section 11326(a)’’. est; paragraph (2) of this subsection, by inserting SEC. 1123. DISCHARGE UNDER CHAPTER 12. ‘‘(C) the foreclosure of a debtor’s equity of re- ‘‘to a spouse, former spouse, or child of the debt- Subsections (a) and (c) of section 1228 of title demption; or or and’’ after ‘‘(15)’’; and 11, United States Code, are amended by striking ‘‘(D) each mode, direct or indirect, absolute or (5) in subsection (e), by striking ‘‘a insured’’ ‘‘1222(b)(10)’’ each place it appears and insert- conditional, voluntary or involuntary, of dis- and inserting ‘‘an insured’’. ing ‘‘1222(b)(9)’’. posing of or parting with— SEC. 1113. EFFECT OF DISCHARGE. ‘‘(i) property; or Section 524(a)(3) of title 11, United States SEC. 1124. BANKRUPTCY CASES AND PRO- ‘‘(ii) an interest in property;’’; Code, is amended by striking ‘‘section 523’’ and CEEDINGS. (7) in each of paragraphs (1) through (35), in all that follows through ‘‘or that’’ and inserting Section 1334(d) of title 28, United States Code, each of paragraphs (36) and (37), and in each of ‘‘section 523, 1228(a)(1), or 1328(a)(1) of this is amended— paragraphs (40) through (55) (including para- title, or that’’. (1) by striking ‘‘made under this subsection’’ graph (54), as amended by paragraph (6) of this and inserting ‘‘made under subsection (c)’’; and SEC. 1114. PROTECTION AGAINST DISCRIMINA- (2) by striking ‘‘This subsection’’ and insert- section), by striking the semicolon at the end TORY TREATMENT. ing ‘‘Subsection (c) and this subsection’’. and inserting a period; and Section 525(c) of title 11, United States Code, (8) by redesignating paragraphs (4) through is amended— SEC. 1125. KNOWING DISREGARD OF BANK- (55), including paragraph (54), as amended by (1) in paragraph (1), by inserting ‘‘student’’ RUPTCY LAW OR RULE. paragraph (6) of this section, in entirely numer- before ‘‘grant’’ the second place it appears; and Section 156(a) of title 18, United States Code, ical sequence. (2) in paragraph (2), by striking ‘‘the program is amended— operated under part B, D, or E of’’ and insert- (1) in the first undesignated paragraph— SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS. (A) by inserting ‘‘(1) the term’’ before ‘‘ ‘bank- ing ‘‘any program operated under’’. Section 104 of title 11, United States Code, is ruptcy’’; and amended by inserting ‘‘522(f)(3), 707(b)(5),’’ after SEC. 1115. PROPERTY OF THE ESTATE. (B) by striking the period at the end and in- ‘‘522(d),’’ each place it appears. Section 541(b)(4)(B)(ii) of title 11, United serting ‘‘; and’’; and SEC. 1103. EXTENSION OF TIME. States Code, is amended by inserting ‘‘365 or’’ (2) in the second undesignated paragraph— Section 108(c)(2) of title 11, United States before ‘‘542’’. (A) by inserting ‘‘(2) the term’’ before ‘‘ ‘docu- Code, is amended by striking ‘‘922’’ and all that SEC. 1116. PREFERENCES. ment’’; and follows through ‘‘or’’, and inserting ‘‘922, 1201, (a) IN GENERAL.—Section 547 of title 11, (B) by striking ‘‘this title’’ and inserting ‘‘title or’’. United States Code, is amended— 11’’.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00064 Fmt 0688 Sfmt 6333 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8557 SEC. 1126. TRANSFERS MADE BY NONPROFIT (1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and It is now in order to consider Amend- CHARITABLE CORPORATIONS. (2) by adding at the end the following: ment No. 1 printed in House Report (a) SALE OF PROPERTY OF ESTATE.—Section ‘‘(2) A trustee whose appointment under sub- 106–126. 363(d) of title 11, United States Code, is amend- section (a)(1) or under subsection (b) is termi- AMENDMENT NO. 1 OFFERED BY MR. GEKAS ed— nated or who ceases to be assigned to cases filed (1) by striking ‘‘only’’ and all that follows under title 11 of the United States Code may ob- Mr. GEKAS. Mr. Chairman, I offer through the end of the subsection and inserting tain judicial review of the final agency decision amendment No. 1. ‘‘only— by commencing an action in the United States The CHAIRMAN. The Clerk will des- ‘‘(1) in accordance with applicable nonbank- district court for the district for which the panel ignate the amendment. ruptcy law that governs the transfer of property to which the trustee is appointed under sub- The text of the amendment is as fol- by a corporation or trust that is not a moneyed, section (a)(1), or in the United States district lows: business, or commercial corporation or trust; court for the district in which the trustee is ap- and Amendment No. 1 offered by Mr. GEKAS: pointed under subsection (b) resides, after first In the table of contents of the bill— ‘‘(2) to the extent not inconsistent with any exhausting all available administrative rem- relief granted under subsection (c), (d), (e), or (1) in the item relating to section 107, edies, which if the trustee so elects, shall also strike ‘‘congress’’ and insert ‘‘Congress’’, and (f) of section 362 of this title.’’. include an administrative hearing on the record. (b) CONFIRMATION OF PLAN FOR REORGANIZA- (2) in the item relating to section 134, Unless the trustee elects to have an administra- strike ‘‘Giving debtors the ability to keep’’ TION.—Section 1129(a) of title 11, United States tive hearing on the record, the trustee shall be Code, as amended by section 140, is amended by and insert ‘‘Allowing a debtor to retain’’. deemed to have exhausted all administrative Page 9, line 1, strike ‘‘applicable’’ and in- adding at the end the following: remedies for purposes of this paragraph if the ‘‘(15) All transfers of property of the plan sert ‘‘actual’’. agency fails to make a final agency decision Page 9, beginning on line 1, strike ‘‘specifi- shall be made in accordance with any applicable within 90 days after the trustee requests admin- provisions of nonbankruptcy law that govern cally listed’’ and insert ‘‘specified’’. istrative remedies. The Attorney General shall Page 10, line 3, strike ‘‘proceeding the transfer of property by a corporation or prescribe procedures to implement this para- brought’’ and insert ‘‘motion filed’’. trust that is not a moneyed, business, or com- graph. The decision of the agency shall be af- Beginning on page 10, strike line 22 and all mercial corporation or trust.’’. firmed by the district court unless it is unrea- that follows through line 5 on page 11. (c) TRANSFER OF PROPERTY.—Section 541 of sonable and without cause based on the admin- Page 11, line 6, strike ‘‘(D)’’ and insert title 11, United States Code, as amended by sec- istrative record before the agency.’’. ‘‘(C)’’. tion 1102, is amended by adding at the end the (b) EXPENSES OF STANDING TRUSTEES.—Sec- Page 12, beginning on line 11, strike ‘‘in following: tion 586(e) of title 28, United States Code, is prosecuting the motion’’. ‘‘(f) Notwithstanding any other provision of amended by adding at the end the following: Page 16, line 13, insert ‘‘or not’’ after this title, property that is held by a debtor that ‘‘(3) After first exhausting all available ad- ‘‘whether’’. is a corporation described in section 501(c)(3) of ministrative remedies, an individual appointed Page 17, after line 16, insert the following the Internal Revenue Code of 1986 and exempt under subsection (b) may obtain judicial review (and make such technical and conforming from tax under section 501(a) of such Code may of final agency action to deny a claim of actual, changes as may be appropriate): be transferred to an entity that is not such a necessary expenses under this subsection by (d) DEBTOR’S DUTIES.—Section 521(a)(1)(B) corporation, but only under the same conditions commencing an action in the United States dis- of title 11, United States Code, as amended as would apply if the debtor had not filed a case trict court in the district where the individual by section 603, is amended— under this title.’’. resides. The decision of the agency shall be af- (1) in clause (v) by striking ‘‘and’’ at the (d) APPLICABILITY.—The amendments made by firmed by the district court unless it is unrea- end; this section shall apply to a case pending under sonable and without cause based upon the ad- (2) in clause (vi) by adding ‘‘and’’ at the title 11, United States Code, on the date of en- ministrative record before the agency. end; actment of this Act, except that the court shall ‘‘(4) The Attorney General shall prescribe pro- (3) by inserting the following after clause not confirm a plan under chapter 11 of this title cedures to implement this subsection.’’. (vi): without considering whether this section would ‘‘(vii) a statement of the debtor’s current TITLE XII—GENERAL EFFECTIVE DATE; substantially affect the rights of a party in in- monthly income, and the calculations which APPLICATION OF AMENDMENTS terest who first acquired rights with respect to determine whether a presumption arises the debtor after the date of the petition. The SEC. 1201. EFFECTIVE DATE; APPLICATION OF under section 707(b)(2)(A)(i), showing how parties who may appear and be heard in a pro- AMENDMENTS. each amount is calculated.’’. ceeding under this section include the attorney (a) EFFECTIVE DATE.—Except as provided oth- (e) BANKRUPTCY FORMS.—Section 2075 of general of the State in which the debtor is incor- erwise in this Act, this Act and the amendments title 28, United States Code, is amended by porated, was formed, or does business. made by this Act shall take effect 180 days after adding the following at the end of the 1st (e) RULE OF CONSTRUCTION.—Nothing in this the date of the enactment of this Act. paragraph: section shall be deemed to require the court in (b) APPLICATION OF AMENDMENTS.—Except as ‘‘The bankruptcy rules promulgated under which a case under chapter 11 is pending to re- otherwise provided in this Act, the amendments this section shall prescribe a form for the mand or refer any proceeding, issue, or con- made by this Act shall not apply with respect to statement referred to in section troversy to any other court or to require the ap- cases commenced under title 11 of the United 521(a)(1)(B)(vii) of title 11, United States proval of any other court for the transfer of States Code before the effective date of this Act. Code, and may provide general rules on the property. The CHAIRMAN pro tempore. No content of such statement.’’. SEC. 1127. PROHIBITION ON CERTAIN ACTIONS amendment shall be in order except (f) CHAPTER 13.—Section 1325(a) of title 11, FOR FAILURE TO INCUR FINANCE United States Code, is amended— CHARGES. those printed in House Report 106–126. Each amendment may be. Each amend- (1) in paragraph (5) by striking ‘‘and’’ at Section 127 of the Truth in Lending Act (15 the end; U.S.C. 1637) is amended by adding at the end ment may be offered only in the order (2) in paragraph (6) by striking the period the following: specified, may be offered only by a and inserting ‘‘; and’’; ‘‘(i) PROHIBITION ON CERTAIN ACTIONS FOR Member designated in the report, shall (3) by inserting the following after para- FAILURE TO INCUR FINANCE CHARGES.—A cred- be considered as read, debatable for the graph (6): itor of an account under an open end consumer ‘‘(7) the action of the debtor in filing the credit plan may not terminate an account prior time specified in the report, equally di- vided and controlled by the proponent petition under this chapter was in good to its expiration date solely because the con- faith.’’. sumer has not incurred finance charges on the and an opponent, shall not be subject to amendment, and shall not be subject Page 19, line 15, strike ‘‘this title’’ and in- account. Nothing in this subsection shall pro- sert ‘‘title 11, United States Code’’. hibit a creditor from terminating an account for to a demand for a division of the ques- Page 22, lines 17 and 20, insert ‘‘case or’’ inactivity in 3 or more consecutive months.’’. tion. after ‘‘a’’. SEC. 1128. PROTECTION OF VALID PURCHASE The Chairman of the Committee of Page 23, lines 9 and 12, strike ‘‘proceeding’’ MONEY SECURITY INTERESTS. the Whole may postpone a request for a and insert ‘‘case’’. Section 547(c)(3)(B) of title 11, United States recorded vote on any amendment and Page 77, strike line 1, and insert the fol- Code, is amended by striking ‘‘20’’ and inserting lowing: ‘‘30’’. may reduce to a minimum of 5 minutes the time for voting on any postponed SEC. 134. ALLOWING THE DEBTOR TO RETAIN SEC. 1129. TRUSTEES. LEASED (a) SUSPENSION AND TERMINATION OF PANEL question that immediately follows an- Beginning on page 114, strike line 1 and all TRUSTEES AND STANDING TRUSTEES.—Section other vote, provided that the time for that follows through line 5 on page 115 (and 586(d) of title 28, United States Code, is amend- voting on the first question shall be a make such technical and conforming ed— minimum of 15 minutes. changes as may be appropriate).

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00065 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 8558 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Page 91, line 15, insert ‘‘(a) AMEND- or permitted under any applicable State in- I believe that adoption of this amendment is MENT.—’’ before ‘‘Section’’. surance law or regulation for the benefit of necessary to preserve state homestead laws. Page 92, beginning on line 13, strike ‘‘ex- claim holders in the United States. I am pleased that the manager’s amendment pressly’’ and all that follows through ‘‘this Page 231, strike line 13, and insert the fol- paragraph’’, and insert ‘‘provides by stat- lowing: includes two critically important amendments that I offered yesterday in the House Rules ute’’. ‘‘SEC. 902. OTHER AMENDMENTS TO TITLES 11 Page 92, after line 15, insert the following: AND 28 OF THE UNITED STATES Committee. The adoption of the manager’s (b) APPLICATION OF AMENDMENT TO INDI- CODE. amendment would ensure that states can de- VIDUAL STATES.—(1) Section 522(p) of title 11, Page 233, after line 11, insert the following cide how much property should be exempted United States Code, as added by subsection (and make such technical and conforming when a consumer files for bankruptcy. This (a), shall not apply with respect to a State changes as may be appropriate): will grant the states latitude to opt out of this before the end of the first regular session of (d) OTHER SECTIONS OF TITLE 11.—(1) Sec- intrusive law protecting their prerogative in de- the State legislature following the date of tion 109(b)(3) of title 11, United States Code, the enactment of this Act. is amended to read as follows: termining what homestead exemptions are al- (2) For purposes of paragraph (1), the term ‘‘(3)(A) a foreign insurance company, en- lowed. State’s citizens will not be forced to live ‘‘State’’ has the meaning given such term in gaged in such business in the United States; under this new federal mandate until such section 101 of title 11, United States Code. or time as a state legislature reconvened. Page 115, beginning on line 20, strike ‘‘(ex- ‘‘(B) a foreign bank, savings bank, coopera- The first Bentsen amendment would change cluding’’ and all that follows through ‘‘se- tive bank, savings and loan association, the effective date of the new federal home- cret)’’. building and loan association, or credit stead cap of $250,000 until the last day of the Page 116, line 7, insert ‘‘(excluding execu- union, which has a branch or agency (as de- next legislative session of any state. The sec- fined in section 3101 of title 12, United States tory contracts that transfer a right or inter- ond Bentsen amendment would preserve the est under a filed or issued patent, copyright, Code) in the United States.’’. trademark, trade dress, or trade secret)’’ (2) Section 303(k) of title 11, United States right of states to opt out of the cap and allow after ‘‘contract’’. Code, is repealed. states to prospectively opt out of the new Page 117, line 15, strike ‘‘365(b)(1)(A)’’ and (3)(A) Section 304 of title 11, United States homestead cap prior to this bill being enacted insert ‘‘365(b)(2)’’. Code, is repealed. into law. This would allow the legislatures Page 174, line 2, insert ‘‘(a) APPEALS.—’’ be- (B) The table of sections of chapter 3 of ample time to pass legislation opting out of fore ‘‘Title’’. title 11, United States Code, is amended by this new federal standard. Page 175, line 9, strike ‘‘(b)’’ and insert striking the item relating to section 304. The bill as reported by the House Judiciary ‘‘(5)’’. (C) Section 306 of title 11, United States Committee, includes many provisions related Page 175, indent lines 9 through 11 2 ems to Code, is amended by striking ‘‘, 304,’’ each the right. place it appears. to the homestead exemption. First, it would Page 175, line 12, strike ‘‘(c)(1)’’ and insert Page 279, beginning on line 1, strike ‘‘that place a monetary cap of $250,000 on the ‘‘(b)(1)’’. is described in section 561(a)(2)’’ and insert amount of homestead equity individuals can Page 175, line 17, strike ‘‘(1)-(4)’’ and insert ‘‘described in paragraph (1), (2), (3), (4), or (5) protect from bankruptcy foreclosure pro- ‘‘(1) through (5)’’. of section 561(a)’’. ceedings. If a consumer holds more than Page 175, line 24, strike ‘‘subsection (b)’’ The CHAIRMAN pro tempore. Pursu- $250,000 in equity, the consumer would be re- and insert ‘‘paragraph (1)’’ ant to House Resolution 158, the gen- quired to foreclose on the property to repay Page 176, after line 6, insert the following: tleman from Pennsylvania (Mr. GEKAS) their non-mortgage debts. Second, it includes (b) PROCEDURAL RULES.—Until rules of practice and procedure are promulgated or and a Member opposed each will con- a two-year residency requirement before one amended pursuant to the Rules Enabling Act trol 5 minutes. can qualify. Third, this legislation includes a (28 U.S.C. sections 2071–77) to govern appeals The Chair recognizes the gentleman provision that would prohibit them from trans- to a bankruptcy appellate panel or to a court from Pennsylvania (Mr. GEKAS). ferring assets in their home during this two- of appeals exercising jurisdiction pursuant to Mr. GEKAS. Mr. Chairman, I yield year period. This provision could penalize any section 1293 of title 28, as added by this Act, myself such time as I may consume. homeowner or farmer who tried to pay more the following shall apply: b 1345 than what’s required on their mortgage pay- (1) A notice of appeal with respect to an ments. Finally, this legislation also would per- appeal from an order or judgment of a bank- In this amendment, which is the ruptcy court to a court of appeals or a bank- mit states to ‘‘opt out’’ of this new federal manager’s amendment, of course, the standard. ruptcy appellate panel must be filed within bulk of it is with technical corrections the time provided in Rule 8002 of the Federal My amendment would address the ‘‘opt out’’ Rules of Bankruptcy Procedure. that have to be made, that almost al- provision by ensuring that states are not re- (2) An appeal to a bankruptcy appellate ways appear in a bill that is so mam- quired to choose between convening a special panel shall be taken in the manner provided moth as is ours. But besides that, there legislative session or forcing their citizens to in Part VIII of the Federal Rules of Bank- are some other revisions in it of which live under this intrusive federal mandate. ruptcy Procedure and local court rules. the minority is well aware. There is no substantive reason to address (3) An appeal from an order or judgment of For instance, in the homestead ex- state homestead laws in this or any other leg- a bankruptcy court directly to a court of ap- emption portion, we allow the States islation. No evidence of abusive practices has peals shall be governed by the rules of prac- who want to opt out to do so, even in tice and procedure that apply to a civil ap- been provided during the debate. When the peal from a judgment of a district court ex- advance of the adoption of the bill, be- 105th Congress considered this legislation we ercising original jurisdiction, as if the bank- cause of the legislative schedules in successfully prevailed against such a cap. ruptcy court were a district court, except as some of those States. And, while I support much of the underlying provided in paragraph (1) regarding the time So the technical corrections bill cor- bill, I will be unable to support any conference to appeal or by local court rules. rects some of the technical misgivings report which includes any restriction on the (4) An appeal to a court of appeals from a that we have had about the original states’ ability to determine exempt property decision, judgment, order, or decree entered text. with respect to one’s homestead including by a bankruptcy appellate panel exercising Mr. Chairman, I reserve the balance appellate jurisdiction shall be taken in the eliminating and limiting the states’ ability to opt manner provided by Rule 6(b) of the Federal of my time. out of the new federal standard. Rules of Appellate Procedure. Mr. CONYERS. Mr. Chairman, I yield While this legislation is not perfect, I believe (c) REPEALER.—(1) Section 158 of title 28, myself such time as I may consume. that the manager’s amendment makes impor- United States Code, is repealed. Mr. Chairman, I rise in support of the tant improvements to this legislation. With (2) The table of sections of chapter 6 of amendment. This is a technical amend- these additions, I believe we should support title 28, United States Code, is amended by ment, the manager’s amendment. It the manager’s amendment and would urge striking the item relating to section 158. contains 11 changes. We have examined colleagues to also support this amendment. Page 208, line 9, insert ‘‘, other than a for- them carefully and have absolutely no eign insurance company,’’ after ‘‘entity’’. The CHAIRMAN pro tempore (Mr. Page 208, after line 20, insert the following: objection to them. LAHOOD). The question is on the ‘‘(d) The court may not grant relief under Mr. BENTSEN. Mr. Chairman, I rise today in amendment offered by the gentleman this chapter with respect to any deposit, es- strong support of the manager’s amendment from Pennsylvania (Mr. GEKAS). crow, trust fund, or other security required to H.R. 833, bankruptcy reform legislation. The amendment was agreed to.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00066 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8559 The CHAIRMAN pro tempore. It is of time it would take to repay the $500 out- ‘‘(III) the applicant should contact the now in order to consider amendment standing balance if the consumer paid only creditor for information on any change in number 2 printed in House Report 106– the minimum periodic payment on each the information presented on or with the ap- 126. monthly or periodic statement and obtained plication or solicitation since it was posted; no additional extensions of credit; and ‘‘(iii) a clear and conspicuous disclosure of AMENDMENT NO. 2 OFFERED BY MR. MORAN OF ‘‘(D) a worksheet prescribed by the Board the date the application or solicitation was VIRGINIA to assist the consumer in determining the posted and how frequently the information Mr. MORAN of Virginia. Mr. Chair- consumer’s household income and debt obli- described in subclause (i) is updated; and man, I offer an amendment made in gations.’’. ‘‘(iv) a disclosure, in a conspicuous and order by the rule. Page 35, line 12, strike the close quotation prominent location on or with the applica- The CHAIRMAN pro tempore. The marks and the period at the end. tion or solicitation, of a toll-free telephone Clerk will designate the amendment. Page 35, after line 12 insert the following: number or e-mail address at which the appli- ‘‘(12) the required minimum payment cant may contact the creditor to obtain any The text of the amendment is as fol- amount represented as a dollar figure. change in the information provided on or lows: ‘‘(13) the date by which or the period with- with the application or solicitation since it Amendment No. 2 offered by Mr. MORAN of in which the required minimum payment was posted. Virginia: must be made.’’. ‘‘(B) The disclosures required under sub- Page 34, strike lines 7 through 25 and insert (c) DISCLOSURES RELATED TO INTRODUCTORY paragraph (A) may be contained either: the following: RATES.—Section 127(c)(1)(A)(i) of the Truth ‘‘(i) on the webpage which contains the ap- ‘‘(C) the following examples: in Lending Act (15 U.S.C. 1637(c)(1)(A)(i)) is plication or solicitation; or ‘‘(i) if the average account balance under a amended by inserting the following at the ‘‘(ii) on a separate webpage which can be creditor’s open-end consumer credit plan, end of subclause (III): directly accessed using a hypertext link taken as an average of the account balances ‘‘(IV) Where the initial rate is temporary which is contained on the webpage which for all consumer accounts under that open- and will expire within a period of less than 1 contains the application or solicitation. end consumer credit plan, is $1,000 or less, year, and is lower than the rate that will ‘‘(C) Upon receipt of a request for any of two examples, based on an annual percentage apply after the temporary rate expires— the information referred to in subparagraph rate and method for determining minimum ‘‘(A) the time period during which the ini- (A), the creditor or its agent shall promptly periodic payments recently in effect for that tial rate will remain in effect; and disclose any change in the information re- creditor, and based on outstanding balances ‘‘(B) the annual percentage rate that will quired to be disclosed under subparagraph of $250 and $500, showing the estimated min- apply to the account after the temporary (A). imum periodic payments, and the estimated rate expires, or if that rate is a variable rate, ‘‘(D) For purposes of this paragraph (6)— period of time it would take to repay those the fact that the rate is variable, the rate at ‘‘(i) the term ‘Internet’ means the inter- outstanding balances of $250 and $500, if the the time of mailing, and how the rate is de- national computer network of both Federal consumer paid only the minimum periodic termined. and non-Federal interoperable packets payment on each monthly or periodic state- ‘‘(V)(A) Subject to subclauses (C) and (D), switched data networks; and ment and obtained no additional extensions where the initial rate may increase upon the ‘‘(ii) the term ‘interactive computer serv- of credit; or occurrence of one or more specific events, ice’ means any information service system, ‘‘(ii) if the average account balance under the following information: or access software provider that provides or a creditor’s open-end consumer credit plan, ‘‘(i) the initial rate and the increased rate enables computer access by multiple users to taken as an average of the account balances that may apply; a computer server, including specifically a for all consumer accounts under that open- ‘‘(ii) if the increased rate is a variable rate, service or system that provides access to the end consumer credit plan, is more than the fact that the increased rate is variable, Internet and such systems operated or serv- $1,000, three examples, based on an annual the rate at the time of mailing, and how the ices offered by libraries or educational insti- percentage rate and method for determining rate is determined; and tutions.’’. (2) Section 122(c)(1) of the Truth in Lending minimum periodic payments recently in ef- ‘‘(iii) the specific event or events that may Act (15 U.S.C. 1632(c)(1)) is amended by strik- fect for that creditor, and outstanding bal- result in imposing the increased rate. ing ‘‘and (4)(C)(i)(I)’’ and inserting ‘‘, ances of $1,000, $1,500 and $2,000, showing the ‘‘(B) At the creditor’s option, the creditor (4)(C)(i)(I) and (6)(A)(i)(I)’’. estimated minimum periodic payments, and may disclose the period for which the in- the estimated period of time it would take to creased rate will remain in effect. The CHAIRMAN pro tempore. Pursu- repay those outstanding balances of $1,000, ‘‘(C) If the increased rate cannot be deter- ant to House Resolution 158, the gen- $1,500 and $2,000 if the consumer paid only mined at the time disclosures are given, an tleman from Virginia (Mr. MORAN) and the minimum periodic payment on each explanation of the specific event or events a Member opposed each will control 10 monthly or periodic statement and obtained that may result in an increased rate must be minutes. no additional extensions of credit. disclosed. The Chair recognizes the gentleman ‘‘(10) With respect to one billing cycle per ‘‘(D) A creditor is not required to disclose from Virginia (Mr. MORAN). calendar year, the creditor shall transmit to an increased rate that is imposed when cred- Mr. MORAN of Virginia. Mr. Chair- each consumer to whom the creditor is re- it privileges are permanently terminated.’’. man, I yield myself such time as I may quired to transmit a statement pursuant to (d) INTERNET-BASED CREDIT CARD SOLICITA- consume. subsection (b) for such billing cycle the fol- TIONS.—(1)––Section 127(c) of the Truth in lowing information: Lending Act (15 U.S.C. 1637(c)) is amended by Mr. Chairman, this bill, as reported ‘‘(A) the following statement: ‘The min- inserting after paragraph (5) the following: by the Committee on the Judiciary, al- imum payment amount shown on your bill- ‘‘(6)(A) Any application to open a credit ready does require credit card issuers ing statement is the smallest payment which card account for any person under an open- to tell consumers on every monthly you can make in order to keep the account end consumer credit plan, and any solicita- billing statement that making only the in good standing. This payment option is of- tion to open such an account without requir- minimum payment each month will in- fered as a convenience and you may make ing an application, that is made available crease the amount of interest paid and larger payments at any time. Making only through the Internet or an interactive com- the length of time it takes to repay the the minimum payment each month will in- puter service, shall disclose the following: balance on the account. crease the amount of interest you pay and ‘‘(i) the information.— the length of time it takes to repay your ‘‘(I) described in paragraph (1)(A) in the Our amendment, which is cospon- outstanding balance.’; form required under section 122(c) of this sored by the gentleman from California ‘‘(B) if the plan provides that the consumer chapter, subject to subsection (e), and (Mr. DOOLEY) and the gentleman from will be permitted to forgo making a min- ‘‘(II) described in paragraph (1)(B) in a New York (Mr. ACKERMAN), adds four imum payment during a specified billing clear and conspicuous form, subject to sub- components to the existing consumer cycle, a statement, if applicable, that if the sections (e) and (f); protection provisions of H.R. 833. These consumer chooses to forgo making the min- ‘‘(ii) a statement, in a conspicuous and components have been crafted to re- imum payment, finance charges will con- prominent location on or with the applica- spond to specific concerns that have tinue to accrue; tion or solicitation, that— been expressed about whether con- ‘‘(C) an example, based on an annual per- ‘‘(I) the information is accurate as of the centage rate and method for determining date the application or solicitation was post- sumers have adequate information minimum periodic payments recently in ef- ed; about certain features of their credit fect for that creditor, and a $500 outstanding ‘‘(II) the information contained in the ap- card accounts. balance, showing the estimated minimum plication or solicitation is subject to change First of all, in terms of minimum periodic payment, and the estimated period after such date; payments, it enhances the minimum

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00067 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 8560 CONGRESSIONAL RECORD—HOUSE May 5, 1999 payment disclosure requirements al- ductory rate will expire, after the in- Mr. CONYERS. Mr. Chairman, I yield ready contained in this bill. Under our troductory period. 30 seconds to the gentleman from amendment credit card issuers would This is the kind of information that Texas (Mr. BENTSEN). be required to disclose, when the con- consumers desperately need. The fact Mr. BENTSEN. Mr. Chairman, I sumer first opens an account, several that those disclosures are not required thank the gentleman for yielding me examples of how long it would take to by statute points up a glaring error, this time, and I just wanted to spend a repay a balance if the consumer makes and we think that this significantly second to speak on the amendment only minimum payments. The number improves the bill. It gives balance to that was just adopted, the manager’s and type of examples would be tailored this bill by adding these consumer pro- amendment, to say that I strongly sup- to the size of the card issuer’s typical tections, but does not inappropriately port it; that it includes two important account balance. load up the lending industry with oner- provisions which would correct the opt- Secondly, disclosure of late payment ous and expensive new requirements out language related to the equity cap penalties and deadlines: Our amend- that have nothing to do with the un- for State homestead laws. ment responds to concerns that have derlying purpose of the bill, which is to Without these opt-outs, I think citi- been raised about whether consumers provide long overdue reform to the zens in my State of Texas and several have the information they need in bankruptcy bill. other States would be unfairly affected order to avoid the imposition of late So I think these are appropriate, if I by the homestead provisions in this fees and penalties. Credit card issuers do say so myself, Mr. Chairman, and we bill, which I believe are unfair and un- would have to disclose on each month- would hope that this body would ap- necessary. ly statement the amount of the min- prove them unanimously. Mr. CONYERS. Mr. Chairman, I yield imum payment expressed as a dollar Mr. GEKAS. Mr. Chairman, will the such time as he may consume to the amount and the date by which it must gentleman yield? gentleman from New York (Mr. ACKER- be paid. Believe it or not, these re- Mr. MORAN of Virginia. I yield to MAN). Mr. ACKERMAN. Mr. Chairman, I quirements are not currently in the the gentleman from Pennsylvania. Mr. GEKAS. Mr. Chairman, I want to rise in support of this amendment, of Federal code. which I am a cosponsor, and ask for its The amendment would require appli- commend the gentleman for offering approval. cations or solicitations for a credit the amendment, and to indicate to all parties that we on this side agree to Mr. CONYERS. Mr. Chairman, I yield card to include a clear and conspicuous the balance of my time to the gen- disclosure of any so-called penalty rate the amendment. Mr. MORAN of Virginia. Mr. Chair- tleman from New York (Mr. NADLER), that may apply if the consumer does man, I yield back the balance of my the ranking member of the sub- not pay as agreed. Such penalty rates time, and thank the gentleman for his committee. are higher than the regular interest comments. Mr. NADLER. Mr. Chairman, this rate, and this amendment would ensure The CHAIRMAN pro tempore. Is amendment is harmless enough, and that consumers were adequately in- there any Member in opposition to the may do a little bit of good. I really do formed in advance about the cir- amendment? not think it is very important one way cumstances under which they would Mr. CONYERS. Mr. Chairman, I rise or the other. apply. in opposition to the amendment. It is somewhat deceptive, however. It Thirdly, worldwide web-based credit The CHAIRMAN pro tempore. The is somewhat deceptive. I am not going card solicitations: We modify the gentleman from Michigan (Mr. CON- to urge a vote against it, but I do think Truth in Lending Act to establish for YERS) is recognized for 10 minutes. we should have a word of caution here. the first time disclosure requirements Mr. CONYERS. Mr. Chairman, I yield It will lead to some misleading infor- that specifically apply to credit card 21⁄2 minutes to the gentleman from mation because it demands that the applications or solicitations that are North Carolina (Mr. WATT). credit card information tell us, the posted on the worldwide web. The Mr. WATT of North Carolina. Mr. credit card information, not about our amendment would require these solici- Chairman, I am not rising in opposi- credit card, not about what we are tations to post the same disclosures, tion to the amendment, I am rising to doing, but about what some typical usually presented in a table, that cur- express my disappointment that the borrower might do if he were borrowing rently apply to every other credit card Committee on Rules failed to make an $500 or $300 or $1,000. offer made through the traditional even better amendment in order. Unfortunately, this amendment was mail system. This amendment certainly improves made in order by the Committee on The amendment would require that the bill from its current position, and I Rules in order to avoid making in order the web site include the date the dis- intend to vote for it, but it still is no- the amendment of the gentleman from closures were posted and a statement where as good as the amendment Massachusetts (Mr. DELAHUNT) which that they were accurate as of that should have been. Because instead of had real consumer protections in it. date. It would also require a statement providing borrowers the kind of infor- The amendment of the gentleman from that the information disclosed on the mation they need to really evaluate Massachusetts, which was voted down web site may change, and a toll free how much money they will make in on a party line vote in the committee, telephone number or e-mail address payments on their credit cards, we con- requires actual disclosure of minimum would have to be provided so the con- tinue to provide hypothetical informa- payments and interest based on the ac- sumer could obtain the most current tion to them under this amendment. tual debt on our own credit card, rath- information. It would not have been any more er than have the information just give Lastly, related to teaser rates, our costly or any more burdensome to samples which may bear no relation- amendment would ensure that con- lenders to provide actual information ship to our own situation. sumers receive the information they about the amount of time it takes to The amendment of the gentleman need in order to make informed deci- pay off a loan if one pays the minimum from Massachusetts (Mr. DELAHUNT) sions regarding credit card introduc- amount. And, unfortunately, we had an has disclosure on teaser rates and pen- tory rates, sometimes called teaser amendment that would have done that, alties. They have to tell us that, the rates. Specifically, the amendment but the Committee on Rules did not see disclosure on penalties for having no would amend the Truth in Lending Act fit to make it in order. interest, for paying in full, disclosures to require that an application or solici- So I will support this amendment be- regarding prohibiting soliciting kids, tation for a credit card that has an in- cause it is better than what is in the and makes other real consumer protec- troductory rate must include a clear bill, but it is still not anywhere close tions and disclosures. and conspicuous disclosure of when the to being as good as it could be and Unfortunately, the Committee on introductory rate will expire, as well as should be for the consumers of Amer- Rules chose to make this basically ir- the rate that will apply after the intro- ica. relevant amendment and somewhat

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00068 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8561 misleading amendment in order, and comes for nothing; that they have to and in order to avoid the imposition of did not put in order the real amend- read the print, they have to understand late fees. And whenever a solicitation ment by the gentleman from Massa- the obligations that they are incurring includes an introductory rate, it must chusetts (Mr. DELAHUNT), which par- when they do make a purchase and be clear when that rate expires. allels the provisions the Senate put in, they do use this tool, which ensures I think these and some of the other sponsored by Senator DURBIN in last that many Americans have more af- small steps make it much better to year’s bill, but which the conference fordable and accessible credit. avoid bankruptcy on the part of many committee took out. I think this is a great amendment consumers and users of credit. Now, I understand the authors of this and I think it will go a long ways to- Mr. MORAN of Virginia. Mr. Chair- bill do not want real consumer protec- wards ensuring consumers have the in- man, I yield the remaining 2 minutes tions in this bill. It is supposed to be a formation to make responsible pur- to the distinguished gentleman from one-sided bill. But it is too bad we have chasing decisions. Indiana (Mr. ROEMER), co-chairman of these illusory protections and some- Mr. MORAN of Virginia. Mr. Chair- the new Democrat Coalition. what misleading instead of real protec- man, I yield 2 minutes to the gen- Mr. ROEMER. Mr. Chairman, I thank tions. Just another ground for voting tleman from New York (Mr. ACKER- my good friend from Virginia (Mr. MORAN) and my good friend from Cali- against the bill. MAN), also a cosponsor of this amend- Mr. MORAN of Virginia. Mr. Chair- ment. fornia (Mr. DOOLEY), co-chairs of the man, I ask unanimous consent to re- new Democrat Coalition, for spon- b 1400 claim the time I yielded back. I did not soring the amendment, along with the expect there would be these comments Mr. ACKERMAN. Mr. Chairman, we gentleman from New York (Mr. ACKER- that I understand, while they are sup- all have been told in so many words MAN). I am a proud cosponsor of this legis- portive, are not necessarily whole- that bankruptcies are on the rise, and lation and a strong supporter of this hearted endorsements. indeed they are, and that because of amendment offered by my friends. I I do have speakers that would use that everybody suffers because of in- think there are two key issues as we what time is remaining, if the Speaker creased interest rates and other debate this bankruptcy reform bill. would tell me how much time is re- charges. And we are also told, and One is personal responsibilities. maining, and I would ask unanimous rightfully so, that consumers need to take personal responsibility for their We have seen a 94-percent increase in consent if I could reclaim it and use it the filings of bankruptcy since 1990. We for speakers on behalf of the amend- obligations. That is true, as well. As we address bankruptcy reform need to address this, and I believe this ment. bill does it in a coherent and fair fash- The CHAIRMAN pro tempore. The today, we have a unique opportunity to at least modestly combat part of this ion. gentleman from Virginia (Mr. MORAN) The second issue that this amend- rising trend in bankruptcies, and one of has 6 minutes remaining. ment gets to is not so much credit card the best ways that we can begin to Is there objection to the request of availability but consumer protections. tackle that is to have more informa- the gentleman from Virginia? There are two provisions in this tion for consumers so that they are There was no objection. amendment that I encourage my col- better informed and can make smarter Mr. MORAN of Virginia. Mr. Chair- leagues to take a look at and support. decisions about their credit needs. man, I yield 2 minutes to the gen- One is the minimum payment that we How do we do this? First, with better tleman from California (Mr. DOOLEY). have, that we have better disclosures and clearer disclosure rules for solici- Mr. DOOLEY of California. Mr. on how long it would simply take to tations and credit applications. Every Chairman, I am proud to be a cospon- repay a balance if they pay the min- one of my colleagues here are familiar sor of the amendment offered by the imum amount each month. That is the were the deluge of solicitations that we gentleman from Virginia (Mr. MORAN). minimum payments requirement. I would say that we are dedicated to get in the mail almost on a daily basis Secondly, the so-called teaser rates is providing for true consumer protec- advertising a particularly low intro- that companies need to disclose what tion. This amendment does, I think, ductory rate, and the rate is on the en- that introductory rate is, if it is 9 or 10 take a balanced and responsible ap- velope and it does not tell us how long percent, and then what it is going to go proach to ensuring that consumers and that rate is for and the consumer can- up to after it teases them with that those who are incurring debt will have not make an objective kind of a deci- first 9 or 10 percent, if it is then going the information they need in order to sion; and then he borrows at a rate to be 11 or 12 or 18 or 19 percent later make informed decisions about their that he thinks he is going to have for on. We need consumer disclosure and purchases and about the debt that they a longer period of time and that ends consumer protections. incur. and the interest rates goes up and he is So this is a good amendment offered The amendment goes a long ways to paying more than he did under a pre- by the gentleman from Virginia (Mr. ensuring that consumers who are faced vious credit card that he might have MORAN) and the gentleman from Cali- with credit card applications coming to had that he switched over from. fornia (Mr. DOOLEY) and the gentleman them in their homes are fully aware of This is an opportunity for us to fix from New York (Mr. ACKERMAN). I the real rates that they will be facing part of that problem, and that is why strongly encourage my colleagues to and ensuring that the teaser rates will the gentleman from Virginia (Mr. support it. And, hopefully, that will be clearly distinguished. MORAN) and the gentleman from Cali- continue to improve this bill and we It also ensures that our consumers fornia (Mr. DOOLEY) and myself have will have a sound bill both on personal that unfortunately use credit cards in introduced this amendment. The responsibility and the consumer pro- a manner which is not consistent with amendment requires lenders to provide tections aspects. their ability to repay will have the in- consumers with the information they The CHAIRMAN (Mr. NETHERCUTT). formation that will be disclosed to need to make informed decisions. The question is on the amendment of- them, if they did make that payment Specifically, they would have to do fered by the gentleman from Virginia of the monthly minimum payment, several things. They would have to in- (Mr. MORAN). how long, in fact, it would take them dicate the minimum payment and day The amendment was agreed to. to repay the obligation that they have that the payment is due on every peri- The CHAIRMAN. It is now in order to incurred. odic statement that they send. They consider amendment No. 3 printed in I would say this: That all consumers would have to indicate what the late House Report 106–126. are going to have to accept the per- penalty deadlines are so that con- AMENDMENT NO. 3 OFFERED BY MR. MORAN OF sonal responsibility to show their due sumers have all the information they VIRGINIA diligence; to understand when they get need in order to make that appropriate Mr. MORAN of Virginia. Mr. Chair- a credit card application that nothing decision and meet their responsibilities man, I offer an amendment.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00069 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 8562 CONGRESSIONAL RECORD—HOUSE May 5, 1999 The CHAIRMAN. The Clerk will des- ruptcy can be complex, many cases are rou- ‘‘527. Disclosures.’’. ignate the amendment. tine. SEC. 155. DEBTOR’S BILL OF RIGHTS. The text of the amendment is as fol- ‘‘ ‘Before filing a bankruptcy case, either Subchapter II of chapter 5 of title 11, you or your attorney should analyze your lows: United States Code, as amended by sections eligibility for different forms of debt relief 106 and 154, is amended by adding at the end Amendment No. 3 offered by Mr. MORAN of made available by the Bankruptcy Code and the following: Virginia: which form of relief is most likely to be ben- Page 101, after line 9, insert the following eficial for you. Be sure you understand the ‘‘§ 528. Debtor’s bill of rights (and make such technical and conforming relief you can obtain and its limitations. To ‘‘(a) A debt relief agency shall— changes as may be appropriate): file a bankruptcy case, documents called a ‘‘(1) no later than five business days after SEC. 154. DISCLOSURES. Petition, Schedules and Statement of Finan- the first date on which a debt relief agency (a) DISCLOSURES.—Subchapter II of chapter cial Affairs, as well as in some cases a State- provides any bankruptcy assistance services 5 of title 11, United States Code, as amended ment of Intention need to be prepared cor- to an assisted person, but prior to such as- by section 106, is amended by adding at the rectly and filed with the bankruptcy court. sisted person’s petition under this title being end the following: You will have to pay a filing fee to the bank- filed, execute a written contract with the as- ‘‘§ 527. Disclosures ruptcy court. Once your case starts, you will sisted person specifying clearly and con- spicuously the services the agency will pro- ‘‘(a) A debt relief agency providing bank- have to attend the required first meeting of creditors where you may be questioned by a vide the assisted person and the basis on ruptcy assistance to an assisted person shall court official called a ‘‘trustee’’ and by which fees or charges will be made for such provide the following notices to the assisted creditors. services and the terms of payment, and give person: ‘‘ ‘If you choose to file a chapter 7 case, you the assisted person a copy of the fully exe- ‘‘(1) the written notice required under sec- may be asked by a creditor to reaffirm a cuted and completed contract in a form the tion 342(b)(1) of this title; and debt. You may want help deciding whether person can keep; ‘‘(2) to the extent not covered in the writ- to do so and a creditor is not permitted to ‘‘(2) disclose in any advertisement of bank- ten notice described in paragraph (1) of this coerce you into reaffirming your debts. ruptcy assistance services or of the benefits section and no later than three business days ‘‘ ‘If you choose to file a chapter 13 case in of bankruptcy directed to the general public after the first date on which a debt relief which you repay your creditors what you can (whether in general media, seminars or spe- agency first offers to provide any bank- afford over three to five years, you may also cific mailings, telephonic or electronic mes- ruptcy assistance services to an assisted per- want help with preparing your chapter 13 sages or otherwise) that the services or bene- son, a clear and conspicuous written notice plan and with the confirmation hearing on fits are with respect to proceedings under advising assisted persons of the following— your plan which will be before a bankruptcy this title, clearly and conspicuously using ‘‘(A) all information the assisted person is judge. the following statement: ‘We are a debt re- required to provide with a petition and ‘‘ ‘If you select another type of relief under lief agency. We help people file Bankruptcy thereafter during a case under this title the Bankruptcy Code other than chapter 7 or petitions to obtain relief under the Bank- must be complete, accurate and truthful; chapter 13, you will want to find out what ruptcy Code.’ or a substantially similar ‘‘(B) all assets and all liabilities must be needs to be done from someone familiar with statement. An advertisement shall be of completely and accurately disclosed in the that type of relief. bankruptcy assistance services if it describes documents filed to commence the case, and ‘‘ ‘Your bankruptcy case may also involve or offers bankruptcy assistance with a chap- the replacement value of each asset as de- litigation. You are generally permitted to ter 13 plan, regardless of whether chapter 13 fined in section 506 of this title must be stat- represent yourself in litigation in bank- is specifically mentioned, including such ed in those documents where requested after ruptcy court, but only attorneys, not bank- statements as ‘federally supervised repay- reasonable inquiry to establish such value; ruptcy petition preparers, can give you legal ment plan’ or ‘Federal debt restructuring ‘‘(C) current monthly income, the amounts advice.’. help’ or other similar statements which specified in section 707(b)(2) and, in a chapter ‘‘(c) Except to the extent the debt relief would lead a reasonable consumer to believe 13 case, disposable income (determined in ac- agency provides the required information that help with debts was being offered when cordance with section 707(b)(2)) must be stat- itself after reasonably diligent inquiry of the in fact in most cases the help available is ed after reasonable inquiry; and assisted person or others so as to obtain such bankruptcy assistance with a chapter 13 ‘‘(D) that information an assisted person information reasonably accurately for inclu- plan; and provides during their case may be audited sion on the petition, schedules or statement ‘‘(3) if an advertisement directed to the pursuant to this title and that failure to pro- of financial affairs, a debt relief agency pro- general public indicates that the debt relief vide such information may result in dis- viding bankruptcy assistance to an assisted agency provides assistance with respect to missal of the proceeding under this title or person, to the extent permitted by nonbank- credit defaults, mortgage foreclosures, lease other sanction including, in some instances, ruptcy law, shall provide each assisted per- eviction proceedings, excessive debt, debt criminal sanctions. son at the time required for the notice re- collection pressure, or inability to pay any ‘‘(b) A debt relief agency providing bank- quired under subsection (a)(1) reasonably suf- consumer debt, disclose conspicuously in ruptcy assistance to an assisted person shall ficient information (which shall be provided that advertisement that the assistance is provide each assisted person at the same in a clear and conspicuous writing) to the as- with respect to or may involve proceedings time as the notices required under sub- sisted person on how to provide all the infor- under this title, using the following state- section (a)(1) with the following statement, mation the assisted person is required to ment: ‘We are a debt relief agency. We help to the extent applicable, or one substantially provide under this title pursuant to section people file Bankruptcy petitions to obtain similar. The statement shall be clear and 521, including— relief under the Bankruptcy Code.’ or a sub- conspicuous and shall be in a single docu- ‘‘(1) how to value assets at replacement stantially similar statement.’’. ment separate from other documents or no- value, determine current monthly income, (b) CONFORMING AMENDMENT.—The table of tices provided to the assisted person: the amounts specified in section 707(b)(2)) sections for chapter 5 of title 11, United ‘‘ ‘IMPORTANT INFORMATION ABOUT and, in a chapter 13 case, how to determine States Code, as amended by sections 106 and BANKRUPTCY ASSISTANCE SERVICES disposable income in accordance with sec- 154, is amended by inserting after the item FROM AN ATTORNEY OR BANKRUPTCY tion 707(b)(2) and related calculations; relating to section 527, the following: PETITION PREPARER ‘‘(2) how to complete the list of creditors, ‘‘ ‘If you decide to seek bankruptcy relief, including how to determine what amount is ‘‘528. Debtor’s bill of rights.’’. you can represent yourself, you can hire an owed and what address for the creditor The CHAIRMAN. Pursuant to House attorney to represent you, or you can get should be shown; and Resolution 158, the gentleman from help in some localities from a bankruptcy ‘‘(3) how to determine what property is ex- Virginia (Mr. MORAN) and a Member petition preparer who is not an attorney. empt and how to value exempt property at THE LAW REQUIRES AN ATTORNEY OR replacement value as defined in section 506 opposed each will control 10 minutes. BANKRUPTCY PETITION PREPARER TO of this title. The Chair recognizes the gentleman GIVE YOU A WRITTEN CONTRACT SPECI- ‘‘(d) A debt relief agency shall maintain a from Virginia (Mr. MORAN). FYING WHAT THE ATTORNEY OR BANK- copy of the notices required under subsection Mr. MORAN of Virginia. Mr. Chair- RUPTCY PETITION PREPARER WILL DO (a) of this section for two years after the man, I yield myself such time as I may FOR YOU AND HOW MUCH IT WILL COST. date on which the notice is given the as- consume. Ask to see the contract before you hire any- sisted person.’’. Mr. Chairman, I rise today to offer one. (b) CONFORMING AMENDMENT.—The table of ‘‘ ‘The following information helps you un- sections for chapter 5 of title 11, United this amendment for the purpose of add- derstand what must be done in a routine States Code, as amended by section 106, is ing to the consumer protections that bankruptcy case to help you evaluate how amended by inserting after the item relating are already contained in H.R. 833. We much service you need. Although bank- to section 526 the following: have all seen the advertisements.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00070 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8563 ‘‘Consolidate your bills into one ments of the chair of the sub- Most of the disclosures are, essen- monthly payment without borrowing’’ committee. tially, worthless because what most goes one. ‘‘Stop credit harassment, Mr. Chairman, I reserve the balance people will do is print up these disclo- foreclosures, repossessions, tax levies of my time. sures verbatim from the bill and hand and garnishments’’ is another adver- Mr. WATT of North Carolina. Mr. them to people when they come into tisement. ‘‘Wipe out your debts. Con- Chairman, I rise in opposition to the their offices and nobody is going to solidate your bills. How? By using the amendment, and I yield myself such read this stuff. And Republicans and protection that the Federal Govern- time as I may consume. Democrats alike acknowledge that ment offers provided by Federal law.’’ Mr. Chairman, I am saddened to have these kinds of disclosures are simply We have seen these advertisements. to rise in opposition to this amend- worthless. They are all opportunities to exploit ment. This exact language that is pro- posed in this amendment was in the Additionally, for those of us, includ- the consumer, exploit the consumer’s ing the gentleman from Virginia (Mr. ignorance. And they would be ad- bill originally and was considered by the Committee on the Judiciary, and MORAN), who is the sponsor of this bill dressed by this bill. Because only later who say that they want to stop attor- does the consumer find out that very an amendment passed in the Com- mittee on the Judiciary to remove this neys from soliciting folks to file bank- often these phrases involve bankruptcy ruptcy, there are additional advertise- proceedings which can hurt their credit language from the bill. Now, the chairman of the sub- ments that must be given which re- and cost them substantial attorney’s committee, who has risen to express quire folks who advertise to say to the fees. They often do not realize that his support for this amendment to put public, look, I am in the business of very often these are bankruptcy mills it back in, voted against that amend- providing bankruptcy advice. that do not advise consumers on other ment in the committee. So it is not options that they have, including con- That is exactly the kind of adver- surprising that he would be here saying sumer credit counseling, working out a tising we have been trying to discour- he likes the Moran amendment. But repayment plan with their creditors, or age. That is not something that is fur- the majority of the Committee on the getting a second mortgage. thering the public policy that underlies Judiciary, including a bipartisan group This amendment adds to the bill pro- this bill. of individuals, not just Democrats or visions requiring so-called ‘‘debt relief So, for those reasons, I want to state Republicans, both Democrats and Re- organizations,’’ but more appropriately strongly that we do not want to impose publicans, voted to remove this lan- sometimes ‘‘bankruptcy mills,’’ to additional burdens on good reliable guage from the bill. make certain minimal disclosures to Now, why did they vote to do it? business people. We want to, as the bill consumer debtors and to prevent decep- First of all, understand that there con- still does, prohibit false information tive and fraudulent advertising prac- tinues to be language in the bill which from being given to potential filers of tices that were identified by the Fed- prohibits misrepresentation and mis- bankruptcy. But we do not need to bur- eral Trade Commission in their Con- leading of the public by these persons den the people who are the attorneys sumer Alert. who are assisting folks with bank- and credit counseling people who are The disclosures are designed to en- ruptcies. But remember that every at- reputable by forcing them to give page sure that debtors who retain the serv- torney who does bankruptcy practice after page after page of useless disclo- ices of these organizations understand would be covered by this provision; sures. the nature of the services that are every credit counseling service, con- Mr. Chairman, I reserve the balance being provided, the cost of the services sumer credit organization, many of of my time. and, if the service includes placing the which are governed by or under the debtor into bankruptcy, the con- city and county governments in our b 1415 sequences of that action. local communities, would be governed This requirement was included in the by these provisions; and these agencies Mr. MORAN of Virginia. Mr. Chair- conference report of last year’s bank- would be put to the task of giving page man, I yield myself such time as I may ruptcy reform bill, which was over- after page after page of disclosures in consume. I refer for the record to the whelmingly approved by the House of an effort to get at a few bad people who Consumer Alert issued by the Federal Representatives. The requirement is are in this business. Trade Commission warning consumers modeled on legislation enacted by Con- Now, I am not saying that there are of exactly the situation that this gress several years ago to address not people who are providing credit amendment addresses, the fraudulent abuses by so-called credit repair orga- counseling advice who are bad. There advertising, the kind of advertising nizations. are people in the business who are bad. that sucks consumers into a situation Mr. GEKAS. Mr. Chairman, will the But 99 percent of the people who are where they wind up declaring bank- gentleman yield? providing advice to bankruptcy appli- ruptcy, which was not their original in- Mr. MORAN of Virginia. I yield to cants or potential bankruptcy appli- tent, because they were misled by the the gentleman from Pennsylvania. cants are reputable people, attorneys people that would be covered by this Mr. GEKAS. Mr. Chairman, I rise to who provide information and services, amendment. support the amendment of the gen- credit counseling services and the like, This amendment addresses abuses by tleman. I must tell my colleagues, I that we are simply imposing substan- ‘‘bankruptcy mills’’ which advertise was set back a bit when in the full tial burdens on if we put this language themselves as debt counseling organi- committee this group of debtors’ back in the bill, which the Committee zations or government sanctioned rights, ‘‘debtors’ rights’’ I repeat, were on the Judiciary, I remind my col- sources of assistance for consumers removed from the bill. Just as the gen- leagues, has taken out of the bill. tleman says, last year’s effort resulted If we start on page 3 of this proposed having difficulty meeting debt repay- in a conference report that had this amendment and we go all the way over ments. According to the Federal Trade debtors’ bill of rights as part and par- to page 5 of this proposed amendment, Commission, consumers are frequently cel. there are disclosures that would have using these organizations without un- Now we are faced with the prospect to be made by anybody who even sat derstanding that the only relief that of attempting to do, and I will help the down and talked to somebody about these groups offer is to put the debtor gentleman do so, restore this same set the possibility of filing a bankruptcy. into bankruptcy, sometimes when the of debtors’ rights, and I will do every- This is not for people who file bank- debtor could have avoided such a dras- thing I can to help the gentleman suc- ruptcies, because these disclosures tic step through voluntary repayment ceed. have to be given at the first encounter arrangements. Mr. MORAN of Virginia. Mr. Chair- before there is even a decision to file The amendment requires debt relief man, I greatly appreciate the com- bankruptcy. organizations to disclose the nature of

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00071 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 8564 CONGRESSIONAL RECORD—HOUSE May 5, 1999 the services they offer, explain to con- filing for bankruptcy. Whether your debt di- when your creditor has an unpaid mortgage sumers the alternatives to filing bank- lemma is the result of an illness, unemploy- or lien on it. ruptcy, disclose the rights and obliga- ment, or simply overspending, it can seem Visit the FTC web site at www.ftc.gov, or contact the AFSA’s Education Foundation tions of a debtor who files for bank- overwhelming. In your effort to get solvent, be on the alert for advertisements that offer at 1-888-400-2233 for more credit/money man- ruptcy and the consequences of a bank- seemingly quick fixes. While the ads pitch agement information. ruptcy filing. The purpose of the the promise of debt relief, they rarely say re- Mr. Chairman, I reserve the balance amendment is to educate the consumer lief may be spelled b-a-n-k-r-u-p-t-c-y. And of my time. about bankruptcy and bankruptcy although bankruptcy is one option to deal Mr. WATT of North Carolina. Mr. mills before it is too late; in other with financial problems, it’s generally con- Chairman, I reserve the balance of my words, before the debtor has made an sidered the option of last resort. The reason: its long-term negative impact on your cred- time. I believe it is my right to close as uninformed decision. a member of the committee and in de- Those who feel that the answer to the itworthiness. A bankruptcy stays on your credit report for 10 years, and can hinder fense of the bill. growth in bankruptcies is increased your ability to get credit, a job, insurance, The CHAIRMAN. The gentleman disclosure about the consequences of or even a place to live. from North Carolina is correct. incurring credit card or other debt The Federal Trade Commission cautions Mr. MORAN of Virginia. Mr. Chair- should support the up-front disclosure consumers to read between the lines when man, I guess I must not fully under- approach of this amendment and not faced with ads in newspapers, magazines or stand parliamentary procedure. I try to protect these lawyers who are even telephone directories that say: ‘‘Con- thought that the person introducing solidate your bills into one monthly pay- exploiting the ignorance of their cli- the amendment has the right to close ents. ment without borrowing.’’ ‘‘STOP credit har- assment, foreclosures, repossessions, tax lev- on the amendment. This is an amendment that is en- ies and garnishments,’’ ‘‘Keep Your Prop- How much time do I have remaining, tirely appropriate. It is appropriate erty.’’ ‘‘Wipe out your debts! Consolidate Mr. Chairman? that it be called the Debtor’s Bill of your bills! How? By using the protection and The CHAIRMAN. The gentleman Rights. It is directly addressing a assistance provided by Federal law. For from Virginia (Mr. MORAN) has 4 min- warning that the Federal Trade Com- once, let the law work for you!’’ utes remaining, and the gentleman mission has made available to con- You’ll find out later that such phrases from North Carolina (Mr. WATT) has 4 sumers. I would hope that the House often involve bankruptcy proceedings, which minutes remaining. would pass this unanimously. can hurt your credit and cost you attorneys’ Mr. MORAN of Virginia. Mr. Chair- fees. FEDERAL TRADE COMMISSION, FOR YOUR If you’re having trouble paying your bills, man, I yield myself such time as I may INFORMATION, MARCH 26, 1997 consider these possibilities before consid- consume. Debt-burdened consumers who answer ads ering filing for bankruptcy: Since this is going to be challenged, that offer to ‘‘consolidate bills’’ or ‘‘stop Talk with your creditors. They may be let me again say for the Members who credit harassment’’ may be the targets of willing to work out a modified payment may be listening that this is a Debtor’s bankruptcy mills, according to a new publi- plan. Bill of Rights. It strengthens this bill. cation from the Federal Trade Commission. Contact a credit counseling service. These It responds to a very serious concern ‘‘Advertisements Promising Debt Relief May organizations work with you and your credi- that the Federal Trade Commission has tors to develop debt repayment plans. Such Be Offering Bankruptcy,’’ the FTC Consumer stipulated in its Consumer Alert. It in- Alert warns. plans require you to deposit money each A record one million consumers file for month with the counseling service. The serv- forms debtors who retain the services bankruptcy in 1996, according to the Alert. ice then pays your creditors. Some nonprofit of bankruptcy mills to disclose the But bankruptcy can have a long-term nega- organizations charge little or nothing for services, the costs and the con- tive impact on creditworthiness; stays on their services. sequences, and particularly the con- you credit report for 10 years, and can hinder Carefully consider a second mortgage or sequences of filing for bankruptcy. We a consumer’s ability to get credit, a job, in- home equity line of credit. While these loans do not want people to have to file for surance or even a place to live. ‘‘Although may allow you to consolidate your debt, bankruptcy, particularly people who bankruptcy is one option to deal with finan- they also require your home as collateral. If none of these options is possible, bank- never intended to file for bankruptcy. cial problems, it’s generally considered the Mr. GEKAS. Mr. Chairman, will the option of last resort,’’ the publication says. ruptcy may be the likely alternative. There The Alert says that some newspaper, mag- are two kinds of personal bankruptcy: Chap- gentleman yield? azine and telephone directory ads give tip- ter 13 and Chapter 7. Each must be filed in Mr. MORAN of Virginia. I yield to offs that their ‘‘debt consolidation’’ ads are federal court. The current filing fee is $160. the gentleman from Pennsylvania. really toting bankruptcy mills. Ads that Attorney fees are additional and can vary Mr. GEKAS. I wanted to add to the make claims such as: widely. The consequences of bankruptcy are gentleman’s sentiments, that who can ‘‘Consolidate your bills into one monthly significant and require careful consideration. be opposed to the idea that an indi- payment without borrowing;’’ Chapter 13, also known as a reorganization, vidual who is contemplating bank- ‘‘Wipe out your debts! Consolidate your allows you to keep property, such as a mort- ruptcy should be given full disclosure bills! How? By using the protection and as- gaged home or car, that you otherwise might sistance provided by federal law;’’ and lose. Reorganization may allow you to pay on what entities or others out there ‘‘Stop credit harassment, foreclosures, re- off a default during a period of three to five who are ready to assist him or prod possessions’’ . . . ‘‘Keep your Property,’’ may years, rather than surrender any property. him into bankruptcy? What we are be touting bankruptcy services which can Chapter 7, known as a straight bankruptcy, talking about is if we could do it, to hurt consumers’ credit and cost attorneys; involves liquidating all assets that are not prevent people from jumping headlong fees, the Alert says. exempt in your state. Exempt property may into bankruptcy, we ought to take The FTC advises that before considering include work-related tools and basic house- every step in order to do that. bankruptcy, consumers having trouble pay- hold furnishings. Some property may be sold The gentleman from North Carolina ing their bills should: by a court-appointed official or turned over (Mr. WATT) is correct that I voted Talk with their creditors who may be will- to creditors. You can file for Chapter 7 only ing to work out a modified payment plan; once every six years. Both types of bank- against his amendment in committee. I Contact a credit counseling service. Some ruptcy may get rid of unsecured debts and will remind him at the proper time of nonprofit organizations charge little or stop foreclosures, repossessions, garnish- how many other votes then were taken nothing for these services; ments, utility shut-offs, and debt collection on a bipartisan basis that he opposes Consider a second mortgage or home eq- activities. Both also provide exemptions that still. So that is not a criterion, that uity line of credit. allow you to keep certain assets, although when a bill is passed on a bipartisan exemption amounts vary among states. Per- basis, he believes it is worthy of some- ADVERTISEMENTS PROMISING DEBT RELIEF sonal bankruptcy usually does not erase thing. So do I. But I will remind him MAY BE OFFERING BANKRUPTCY child support, alimony, fines, taxes, and WASHINGTON, DC—Debt got you down? some student loan obligations. Also, unless when the time comes of bipartisan sup- You’re not alone. Consumer debt is at an all- you have an acceptable plan to catch up on port for X or Y and see if he has the time high. What’s more, record numbers of your debt under Chapter 13, bankruptcy usu- same rationale applicable to that consumers—more than 1 million in 1996—are ally does not allow you to keep property amendment.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00072 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8565 But in the meantime, it is not a bad things that are listed in this bill. One The text of the amendment is as fol- thing to let a prospective bankrupt in- of those things it shall not do is mis- lows: dividual look at all the possible traps represent to any assisted person or pro- Amendment No. 4 offered by Ms. into which he can fall. I commend the spective assisted person, directly or in- VELA´ ZQUEZ: gentleman’s return to sanity through directly, affirmatively or by material Page 109, line 23, insert ‘‘(a) APPOINT- the debtor’s rights amendment. omission, what services the debt relief MENT.—’’. Mr. MORAN of Virginia. I thank the agency can reasonably expect to pro- Page 110, line 4, insert the following before gentleman for his comments. vide that person or the benefits, and it the close quotation marks: Mr. Chairman, if I may briefly sum goes on and on and on. The court may expand the membership of a up my argument, which is simply that There is a prohibition in this bill committee to include a creditor that is small so-called debt relief agencies that are against the kind of activity that the business if the court determines that such creditor holds claims of the kind represented gentleman from Virginia (Mr. MORAN) coming out with this kind of delib- by such committee that are, in the aggre- erately misleading advertising sug- is trying to outlaw. I think it ought to gate, disproportionately large when com- gesting even that they are government be outlawed, but we ought not impose pared to the annual gross revenue of such sanctioned organizations, which they the burdens of all of these disclosures creditor. are not, they should be required to give on the reputable people who are in the Page 110, after line 4, insert the following: written notice within 3 business days business. (b) INFORMATION.—Section 1102(b) of title after the first date of services to advise He says that we have got to stop this 11, United States Code, is amended by adding the people they are allegedly assisting faulty advertising, but what does his at the end the following: ‘‘(3) A committee appointed under sub- of their rights and responsibilities of amendment do? I am reading directly from page 8 of his amendment. If you section (a) shall provide access to informa- disclosure. tion for creditors who hold claims of the It would require attorneys or bank- do an advertisement, under the Moran kind represented by such committee and who ruptcy petition preparers to give the amendment, this is what you have got are not appointed such committee, shall to person they are assisting a written to say, in quotes: be open for comment from such creditors, contract specifying what the attorney ‘‘We are a debt relief agency. We help and shall be subject to a court order compel- or bankruptcy petition preparer will people file bankruptcy petitions to ob- ling additional reports or disclosure to be do, what it will cost and the terms of tain relief under the Bankruptcy made to such creditors.’’. payment. That is what we would want Code.’’ The CHAIRMAN. Pursuant to House I do not want people to be disclosing for our mother or our spouse or our Resolution 158, the gentlewoman from that or saying that to the public. I children or our neighbor or any other New York (Ms. VELA´ ZQUEZ) and a Mem- want to stop people from advertising. consumer in the United States, to be ber opposed each will control 10 min- And yet the same people he is saying able to have the value of that kind of utes. we want to stop from faulty adver- information. The Chair recognizes the gentle- tising, he is telling them how to go out This is a consumer amendment, to woman from New York (Ms. and advertise in a misleading way. educate consumers so they do not get VELA´ ZQUEZ). That is not what we need to be doing, taken in by people who are designing Ms. VELA´ ZQUEZ. Mr. Chairman, I is undermining the policy of the bill. yield myself such time as I may con- to exploit them and exploit the bank- Mr. Chairman, I understand his moti- sume. ruptcy system. Mr. Chairman, I strong- vations for this amendment. I under- Mr. Chairman, while H.R. 833 pro- ly urge an ‘‘aye’’ vote on this amend- stand that there may be some lawyers vides a plan for overhauling our Na- ment. he does not like, there may be some tion’s bankruptcy law, there is one Mr. Chairman, I yield back the bal- consumer credit counselors that he issue that, while seemingly small, will ance of my time. does not like. There are some that I do have a great impact on this Nation’s Mr. WATT of North Carolina. Mr. not like. That is why we have prohib- small businesses. That is the way that Chairman, I yield myself the balance of ited them in the bill from engaging in the bankruptcy process leaves small my time. any kind of sinister activities. But that businesses who are creditors on the Mr. Chairman, let me just advise my is different than requiring every rep- outside looking in. colleagues that these bankruptcy mills utable lawyer and every reputable con- To solve this problem, I am offering that the gentleman from Virginia (Mr. sumer credit counseling service to give an amendment that will quickly and MORAN) is talking about are attorneys page after page after page of worthless fairly address the issue by ensuring who provide bankruptcy services, con- disclosures. I encourage my colleagues more small business involvement and sumer credit counseling services, many to vote against this amendment. It just greater communication in the bank- of whom are sanctioned by local gov- adds paperwork and adds burdens to ruptcy process. My amendment will ernments because they provide a very small businesses. That is what it does. valuable service in local communities. The CHAIRMAN. The question is on make two simple changes. I have one in my own community of the amendment offered by the gen- First, it would allow a small business involved as a creditor in a Chapter 11 Charlotte. I was on the board of direc- tleman from Virginia (Mr. MORAN). tors of this nonprofit agency which re- The question was taken; and the bankruptcy case to be added to the ceives substantial government funds Chairman announced that the ayes ap- creditor committee by the court. The and provides a major service when peo- peared to have it. court could make such an appointment ple get into debt. Mr. WATT. Mr. Chairman, I demand by comparing the amount of the claim We can characterize every single one a recorded vote. as a proportion of the business’ gross of these people as bankruptcy mills if The CHAIRMAN. Pursuant to House annual revenue, thus showing that a we want, but they are not. To try to in- Resolution 158, further proceedings on business is disproportionately affected. flame the opinions of the colleagues in the amendment offered by the gen- Second, my amendment will ensure this body by referring to every lawyer tleman from Virginia (Mr. MORAN) will that those small businesses not in- who practices bankruptcy law or every be postponed. cluded on the creditor committee will consumer credit counselor as a bank- It is now in order to consider amend- have access to critical information re- ruptcy mill is just inaccurate and un- ment No. 4 printed in House Report garding the credit committee’s actions. fair and it should not be done. There 106–126. This could be achieved by simply mak- are some bad apples in the barrel. AMENDMENT NO. 4 OFFERED BY MS. VELA´ ZQUEZ ing the committee open to comments For those we need to understand, Mr. Ms. VELA´ ZQUEZ. Mr. Chairman, I from and required to provide additional Chairman, that there is a specific pro- offer an amendment made in order by information to those small businesses vision which remains in this bill, this the rule. not included on the committee but who section 526, which says that a debt re- The CHAIRMAN. The Clerk will des- will nonetheless be affected by the out- lief agency shall not do a whole list of ignate the amendment. come.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00073 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 8566 CONGRESSIONAL RECORD—HOUSE May 5, 1999 I urge the adoption of these measures sulting firm, 30 or $35,000 for the work small businesses, the bankruptcy of which will help small businesses. The that has been done and that both of other companies can mean an uncer- need to take them can be underscored them are unsecured creditors. Well, tain future. The adoption of my amend- by looking at just one example of a Microsoft is going to get on the credi- ment provides small businesses with company that was nearly devastated tors committee because it has the larg- some peace of mind. when one of its customers filed for er debt, but $100,000 to Microsoft may I urge my colleagues to support this bankruptcy. be nothing, in terms of that firm is amendment and to support small busi- Unicare Corporation, a small busi- nothing in terms of that firm’s total nesses. ness located in Ohio, was caught off revenue. But that 30 or $35,000 could be Mr. Chairman, I include the following guard when one of its largest cus- a crucial account for that small busi- letter for the RECORD: tomers filed for bankruptcy. The debt ness consulting firm, and they need to NATIONAL SMALL BUSINESS UNITED, to Unicare represented almost 10 per- be represented on the creditors com- Washington, DC, May 3, 1999. Hon. NYDIA VALA´ ZQUEZ, cent of the company’s annual revenue. mittee. That is really the only way House of Representatives, The bankruptcy court created an unse- that their interests can be protected. Washington, DC. cured creditors committee based on The gentlewoman’s amendment al- DEAR REPRESENTATIVE VELA´ ZQUEZ: As the total outstanding debts owed. lows the court to appoint that small House Rules Committee, and subsequently the entire House of Representatives, con- b 1430 business to the creditors committee. It does not require it, but it at least al- siders H.R. 833—the Bankruptcy Reform Act Not only did Unicare not qualify as a lows that small business to make its of 1999—NSBU fully supports your amend- ment protecting small businesses. National member of the credit committee, but it case to the court. I think it is a timely was left on the outside looking in with Small Business United, the nation’s oldest and important amendment, Mr. Chair- small business advocacy organization, is a no involvement in the process. This man. member of the Coalition for Financial Re- made Unicare’s future uncertain, forc- There is nothing worse really than a sponsibility and has been a leading partici- ing it to reduce staff and revise plans small business caught up in this, an pant in this important debate for many for expansion. Fortunately, because of unforeseen bankruptcy on the part of years. We see your amendment as an impor- hard work and strong strategic plan- one of its important clients. It cannot tant addition to the bill that has already ning, Unicare was able to recover, and cleared the Judiciary Committee. protect its interests, it does not know Your amendment provides vital language today it continues as a very strong what is going on, does not have the that would allow for greater small business business. money to hire legions of lawyers the representation on the unsecured creditors But, Mr. Chairman, if each of us were way the bigger, unsecured creditors do. committees, the key working group that to look around our districts, we will Again, I congratulate the gentle- structures and partitions the payments a find that we will have many small busi- woman for fixing what I think is, if not bankrupt company owes its creditors. Tradi- nesses that could face the same unfair a problem in the bill, at least an ab- tionally, those companies that are owed the greatest lump sum of money have been challenge, which is why we need to sence in the bill of an important pro- adopt this uniform and practical solu- placed on these committees, with little to no tection for small business. I am pleased requirement to keep other interested compa- tion. Because, unlike Unicare, many to support the amendment, and I thank nies informed of the situation. Your amend- businesses in our communities might the gentlewoman from New York for ment would allow for greater communica- not be so fortunate. If small businesses having yielded. tion and a more vital small business involve- had the ability to appeal to the court Mr. CONYERS. Mr. Chairman I yield ment in this process. based on their claim compared to the myself such time as I may consume. For too long, small businesses have been overall effect on the company, dev- hurt when customers and clients have been Mr. Chairman, I want to thank the unable to pay their bills without representa- astating problems might be averted. gentlewoman from New York (Ms. tion. This practice would be limited by this Finally, Mr. Chairman, when we re- VELA´ ZQUEZ) for bringing forward the important legislation and has the full sup- convene in the full House, I will submit provision before us now that would port of our 65,000 members nationwide. If for the record a letter of support from allow the expansion of the credit com- there is anything else we can do to assist you Small Business United, this Nation’s mittee membership and also ensure in your efforts on before of the nation’s 23.3 oldest small business trade association. better access to information for the million small businesses, please let us know. Their support reflects the same con- small businesses not included on the Sincerely, cern that I have heard from small busi- TODD MCCRACKEN, committee by allowing them to be President. ness owners. They need access to the open for comment and subject to addi- Mr. Chairman, I yield back the bal- bankruptcy process. tional reports or disclosures. And so we We must insure that small businesses ance of my time. have no problem with this amendment. The CHAIRMAN. All time has ex- are not financially crippled through no I would also point out to the gentle- pired. fault of their own and that their hard woman from New York that there is The question is on the amendment work is not undone by the failures of another amendment of mine coming up offered by the gentlewoman from New others. I urge the adoption of this shortly dealing with small business, York (Ms. VELA´ ZQUEZ). amendment. she serves with great distinction on the The amendment was agreed to. Mr. TALENT. Mr. Chairman, will the Committee on Small Business, in The CHAIRMAN. It is now in order to gentlewoman yield? which we would allow small business consider Amendment No. 5 printed in ´ Ms. VELAZQUEZ. I yield to the gen- debtors in cases where application of House Report 106–126. tleman from Missouri. these provisions could result in the loss AMENDMENT NO. 5 OFFERED BY MR. GRAHAM Mr. TALENT. Mr. Chairman, I rise in of five or more jobs to waive the provi- Mr. GRAHAM. Mr. Chairman, I offer support of the gentlewoman from New sions of chapter 11 that relate to other an amendment. York’s very timely and important business debtors, and I hope that that The CHAIRMAN. The Clerk will des- amendment and congratulate her on will gain her attention and other mem- ignate the amendment. this important amendment for small bers that serve on that committee. The text of the amendment is as fol- business; and, Mr. Chairman, all of us So we have no objection to this lows: who have dealt with small businesses amendment whatsoever, Mr. Chairman. Amendment No. 5 offered by Mr. GRAHAM: in this kind of a context understand Ms. VELA´ ZQUEZ. Mr. Chairman, I Page 119, after line 9, insert the following the problem the gentlewoman’s amend- yield myself such time as I may con- (and make such technical and conforming ment is intended to adopt. sume, and I would like to close. changes as may be appropriate): I mean, let us suppose that a firm Mr. Chairman, for too long small SEC. 219. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS AND goes bankrupt and that it owes Micro- businesses who are creditors have been LOANS. soft $100,000 for software and it owes a hurt when customers and clients have Section 523(a)(8) of title 11, United States small consulting firm, computer con- been unable to pay their bills. For Code, is amended to read as follows:

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00074 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8567 ‘‘(8) for— think, flaw in the Bankruptcy Code re- or insured education loans or education ‘‘(A) an educational benefit overpayment garding student loans. loans made by nonprofit institutions. or loan made, insured or guaranteed by a Under our current Bankruptcy Code, What the gentleman from South Caro- governmental unit, or made under any pro- a Federal- guaranteed student loan is a lina would do now is extend the prohi- gram funded in whole or in part by a govern- nondischargeable loan. As many stu- mental unit or nonprofit institution, or for bition from discharge to all qualified an obligation to repay funds received as an dents graduate from college with a stu- education loans and include exceptions educational benefit, scholarship or stipend; dent debt, they are starting their lives, for undue hardships. or and we have protected the Federal- That is the thrust of the amendment, ‘‘(B) any other education loan incurred by guaranteed student loans from dis- and we have no objection to that what- an individual debtor that meets the defini- charge from bankruptcy because I soever. tion of ‘Qualified Education Loan’ under sec- think that is just a common-sense ap- Mr. Chairman, I yield back the bal- tion 221(e)(1) of the Internal Revenue Code; proach to a problem that existed in the ance of my time. unless excepting such debt from discharge past. Mr. GRAHAM. Mr. Chairman, I thank under this paragraph will impose an undue In addition, nonprofit lending organi- hardship on the debtor and a debtor’s de- the gentleman from Michigan (Mr. pendents;’’. zations are also protected under the CONYERS), and I yield back the balance Bankruptcy Code, that their student of my time. MODIFICATION TO AMENDMENT NO. 5 OFFERED loans are nondischargeable. The CHAIRMAN. All time has ex- BY MR. GRAHAM There is a growing industry in the pired. Mr. GRAHAM. Mr. Chairman, I ask private sector. There is a $1.25 billion The question is on the amendment, unanimous consent to modify my loan volume for where private lenders as modified, offered by the gentleman amendment, that modification is at the who will loan money to students for from South Carolina (Mr. GRAHAM). desk. their college expenses as the federally The amendment, as modified, was The CHAIRMAN. The Clerk will re- guaranteed program does not in every agreed to. port the modification. occasion meet the needs of the student, The CHAIRMAN. It is now in order to The Clerk read as follows: and we are trying to give the private consider Amendment No. 6 printed in Modification offered by Mr. GRAHAM to lender the same protection under bank- House Report 106–126. Amendment No. 5: ruptcy that the federally guaranteed AMENDMENT NO. 6 OFFERED BY MR. DOOLEY OF Page 119, after line 9, insert the following loan program has and nonprofit organi- CALIFORNIA (and make such technical and conforming changes as may be appropriate): zations have. We are trying to make Mr. DOOLEY of California. Mr. sure they are available loans, loans are Chairman, I offer an amendment. SEC. 219. NONDISCHARGEABILITY OF CERTAIN available to students to meet their fi- The CHAIRMAN. The Clerk will des- EDUCATIONAL BENEFITS AND nancial needs, and this would have a ignate the amendment. LOANS. beneficial effect, make sure that the The text of the amendment is as fol- Section 523(a)(8) of title 11, United States loan volume necessary to take care of lows: Code, is amended to read as follows: college expenses are available for stu- Amendment No. 6 offered by Mr. DOOLEY of ‘‘(8) for— dents, and I would appreciate the co- California: ‘‘(A) an educational benefit overpayment Page 124, strike lines 13 through 20, and in- or loan made, insured or guaranteed by a operation from the gentleman from sert the following: governmental unit, or made under any pro- New York (Mr. NADLER) and the gen- ‘‘(a) The clerk of each district shall main- gram funded in whole or in part by a govern- tleman from Pennsylvania (Mr. GEKAS) tain a publicly available list of credit coun- mental unit or nonprofit institution, or for on this amendment. seling agencies and of programs described in an obligation to repay funds received as an Mr. GEKAS. Mr. Chairman, will the section 109(h) and instructional courses of- educational benefit, scholarship or stipend; gentleman yield? fered by such agencies currently approved or Mr. GRAHAM. I yield to the gen- by— ‘‘(B) any other education loan incurred by tleman from Pennsylvania. ‘‘(1) the United States Trustee; or an individual debtor that meets the defini- Mr. GEKAS. Mr. Chairman, I want to ‘‘(2) the bankruptcy administrator for the tion of ‘Qualified Education Loan’ under sec- indicate to the gentleman that the district. tion 221(e)(1) of the Internal Revenue Code; ‘‘(b) The United States Trustee or bank- unless excepting such debt from discharge amendment is well thought out and is ruptcy administrator shall only approve under this paragraph will impose an undue a necessary change to our original bill. credit counseling agencies which satisfy hardship on the debtor and a debtor’s de- It draws attention to our intent to standards set in regulations promulgated by pendents;’’. treat everybody fairly, and the student the Federal Trade Commission and which are Mr. GRAHAM (during the reading). loan quotient is one of the most impor- accredited by the Council on Accreditation Mr. Chairman, I ask unanimous con- tant features in all of bankruptcy. or an equivalent third party nonprofit ac- sent that the modification to Amend- We thank the gentleman for that, crediting organization. ment No. 5 be considered read and and I will agree to the amendment. ‘‘(c) The United States Trustee or bank- Mr. GRAHAM. Mr. Chairman, I re- ruptcy administrator shall only approve pro- printed in the RECORD. serve the balance of my time. grams or courses under subsection (a) if they The CHAIRMAN. Is there objection Mr. CONYERS. Mr. Chairman, I yield satisfy standards set in regulations promul- to the request of the gentleman from myself such time as I may consume. gated by the Executive Office of the United South Carolina? The CHAIRMAN. Does the gentleman States Trustees. The Executive Office of the There was no objection. from Michigan claim the time in oppo- United States Trustee is authorized to pro- The CHAIRMAN. Is there objection sition to the amendment offered by the mulgate regulations setting such standards. to the request of the gentleman from ‘‘(d) The Federal Trade Commission shall gentleman from South Carolina? have authority to promulgate regulations South Carolina that Amendment No. 5 Mr. CONYERS. Absolutely. Mr. be modified? setting standards for credit counseling agen- Chairman, I claim time in opposition cies for the purposes of subsection (b). Such There was no objection. to the amendment. standards shall establish minimum require- The CHAIRMAN. Pursuant to House The CHAIRMAN. The gentleman ments for such agencies with respect to pro- Resolution 158, the gentleman from from Michigan (Mr. CONYERS) is recog- viding qualified counselors, safekeeping and South Carolina (Mr. GRAHAM) and a nized for 10 minutes. payment of client funds, disclosure to cli- Member opposed each will control 10 Mr. CONYERS. Mr. Chairman, I will ents, adequate counseling with respect to cli- minutes. not oppose the amendment. As a mat- ent credit problems, and such other matters The Chair recognizes the gentleman ter of fact, I think particularly with an as relate to the quality and financial secu- rity of such programs. Nothing in this provi- from South Carolina (Mr. GRAHAM). inclusion for exceptions for undue sion shall limit the authority of the Federal Mr. GRAHAM. Mr. Chairman, I yield hardships this amendment is an impor- Trade Commission pursuant to the Federal myself such time as I may consume. tant one. Trade Commission Act (15 U.S.C. 45 et seq.). Mr. Chairman, very briefly, this The Bankruptcy Code prohibits the ‘‘(e) The United States Trustee or bank- amendment is designed to correct a, I discharge of federally made guaranteed ruptcy administrator may notify the clerk

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00075 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.002 H05MY9 8568 CONGRESSIONAL RECORD—HOUSE May 5, 1999 that a credit counseling agency, or a pro- counseling provisions of this legisla- and creating jobs in the House of Rep- gram or course, is no longer approved, in tion will function as intended from the resentatives. Accordingly, if we really which case the clerk shall remove it from outset and that consumers will have want to protect jobs, there should be the list maintained under subsection (a). ‘‘(2) REGULATIONS.—The Federal Trade access to qualified credit counseling. little problem in supporting my Commission and the Executive Office of I urge my colleagues to support this amendment which waives the harsh United States Trustees shall promulgate reg- common-sense amendment. new small business and single asset ulations pursuant to the power delegated in Mr. Chairman, I reserve the balance real estate provisions of the bill where this section within 180 days of the date of the of my time. they could result in the loss of five jobs enactment of this Act.’’. The CHAIRMAN. Does any Member or more. We are now talking about Page 124, line 21, strike ‘‘(2)’’ and insert claim time in opposition to the amend- ‘‘(3)’’. small business and protecting the jobs ment offered by the gentleman from therein under the bankruptcy bill. The CHAIRMAN. Pursuant to House California (Mr. DOOLEY)? Now, the measure before us would Resolution 158, the gentleman from Mr. CONYERS. For purposes of get- completely alter the manner in which California (Mr. DOOLEY) and a Member ting the floor I oppose the amendment, small business and real estate concerns opposed each will control 10 minutes. and I ask to be recognized. The Chair recognizes the gentleman may reorganize under the bankruptcy The CHAIRMAN. Without objection, laws. For small businesses, H.R. 833 from California (Mr. DOOLEY). Mr. DOOLEY of California. Mr. the gentleman from Michigan may would mandate the operation of a Chairman, I yield myself such time as have the time otherwise reserved for whole host of burdensome new require- I may consume. those in opposition. ments, requiring them to provide bal- Mr. Chairman, my amendment is There was no objection. ance sheets, for example, statements of very simple and straightforward. Sim- The CHAIRMAN. The Chair recog- operation, cash flow statements, in- ply put, it would require consumer nizes the gentleman from Michigan come tax returns, within 3 days after credit counselors to meet basic profes- (Mr. CONYERS) for 10 minutes. filing a bankruptcy petition. sional standards established by the Mr. CONYERS. Mr. Chairman, this is The bill also shortens the time period Federal Trade Commission. an amendment that we find absolutely the debtor has to file a plan of reorga- One of the most progressive and debt- acceptable, and I plan to support it, nization to a mere 90 days, making liq- or-friendly reforms made in H.R. 833 is and we urge the Members to join in uidations far more likely than they the requirement that debtors seek support of it. might have otherwise been. credit counseling prior to filing bank- Mr. Chairman, I yield back the bal- Now I have no problem with these ruptcy. Many consumers want assist- ance of my time. new requirements, as long as the prin- ance in dealing with their bills, not Mr. DOOLEY of California. Mr. cipal parties involved are the business bankruptcy. Legitimate consumer Chairman, I yield myself such time as owner and his creditor, but where the credit counseling helped approximately I may consume. new deadlines will result in a loss of 1 million debtors this past year. This Mr. Chairman, I urge the passage of jobs, there I have a major concern. bill provides the opportunity for many this amendment. These provisions have drawn the more to receive help. Mr. Chairman, I yield back the bal- strong opposition of organized labor Done properly by a qualified profes- ance of my time. and the Small Business Administra- sional, consumer credit counseling has b 1445 tion’s Office of Advocacy. I think my proven highly successful in helping amendment is a way out of this di- The CHAIRMAN. The question is on debtors regain control over their finan- lemma. the amendment offered by the gen- cial lives, a goal we all share. Many of The American Federation of Labor tleman from California (Mr. DOOLEY). my colleagues are familiar with the has warned that the small business The amendment was agreed to. Federal Trade Commission’s struggle provisions will threaten jobs by placing The CHAIRMAN. It is now in order to to clean up abusive and fraudulent substantial procedural and substantive consider amendment No. 7 printed in credit repair clinics that dupe debtors barriers in the way of small businesses House Report 106–126. facing financial problems with prom- and their ability to access the provi- ises to clean up their credit records. AMENDMENT NO. 7 OFFERED BY MR. CONYERS sions of Chapter 11, threatening their The FTC has worked to protect con- Mr. CONYERS. Mr. Chairman, I offer overall ability to successfully reorga- sumers through the provisions ap- an amendment. nize and go on to succeed. proved by Congress several years ago The CHAIRMAN. The Clerk will des- Similarly, the Small Business Ad- as a part of the Fair Credit Reporting ignate the amendment. ministration has written that under Act. However, as the opportunities for The text of the amendment is as fol- the bill H.R. 833, small business owners credit counseling would be signifi- lows: who are legitimately using Chapter 11 cantly increased under this bill, we Amendment No. 7 offered by Mr. CONYERS: proceedings to reorganize their busi- need to ensure from the outset that Page 151, after line 24, insert the following nesses may be forced into a premature fraudulent and abusive credit coun- (and make such technical and conforming dismissal or conversion or may have to changes as may be appropriate): seling operations do not spring up and expend vital resources to fend off chal- SEC. 416. APPLICABILITY OF CERTAIN PROVI- meet this new demand for services. SIONS. lenges by any creditor for relatively My amendment is designed to ensure The provisions of title 11 of the United minor procedural infractions. that consumers have access to quali- States Code relating to small business debt- So we urge that this amendment be fied, professional consumer credit ors or to single asset real estate shall not accepted and crafted into this bill. It counselors and to prevent the prolifera- apply in a case under such title if the appli- would help at least in a small way tion of substandard counseling prac- cation of any of such provisions in such case those small businesses who might be in tices. The amendment will provide that could result in the loss of 5 or more jobs. a position to lose five or more jobs as the U.S. trustee or bankruptcy admin- The CHAIRMAN. Pursuant to House a result of bankruptcy proceedings. istrator can only approve credit coun- Resolution 158, the gentleman from Mr. Chairman, I reserve the balance seling agencies which satisfy standards Michigan (Mr. CONYERS), and the gen- of my time. set in regulations promulgated by the tleman from Pennsylvania (Mr. GEKAS) Mr. GEKAS. Mr. Chairman, I yield FTC and are credited by the Council of each will control 10 minutes. myself such time as I may consume. Accreditation or equivalent third-party The Chair recognizes the gentleman Mr. Chairman, the record should in- nonprofit accrediting organization. The from Michigan (Mr. CONYERS). dicate right at the outset that the pro- FTC is able and experienced in address- Mr. CONYERS. Mr. Chairman, I yield visions that we have built into the cur- ing issues of this nature. myself such time as I may consume. rent legislation having to do with With this amendment we have an op- Mr. Chairman, as usual, there is a small business have reached the high- portunity to ensure that the credit good deal of talk about preserving jobs est possible approval by the advocate

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of the Small Business Administration, restrictive time deadlines and terrible vania (Mr. GEKAS) for yielding me this the Justice Department itself, and restrictions only on small businesses. time. most importantly for this debate, of We think this is going to result in a Mr. Chairman, I rise in opposition to the Bankruptcy Commission on whom lot of businesses that otherwise would this amendment, in opposition to my we relied for this extensive comprehen- have the opportunity to reorganize in good friend the gentleman from Michi- sive review that they finished a few Chapter 11 to get protection from their gan (Mr. CONYERS). years back. debtors, reorganize, get back on their This bill, the Bankruptcy Reform Act So we start off with a creditable feet and survive and not lay off all of 1999, includes a provision that ad- small business set of provisions which their employees, it will require instead dresses an injustice that exists within now the gentleman, if this amendment that a lot of these companies liquidate Title 11 of the United States Code re- should be adopted, would absolutely and go out of business and lay off their garding single asset bankruptcies. That wreck. Beyond that, one can imagine employees because they will not be is a big long statement. that every case that came under Title able to meet these new restrictions. This provision mirrors legislation 11, as the gentleman proposes in his Now, the gentleman from Pennsyl- that I introduced in H.R. 624, and I amendment, would first have to be vania (Mr. GEKAS) and the people on want to thank the gentleman from scrutinized to see if five or more jobs the other side say, no, that will not Pennsylvania (Chairman GEKAS) for his would or could be lost, and we would happen. Well, all this amendment says instructive help on that matter. This never get to the first event in a bank- is, well, maybe they are right, maybe was done in the previous Congress and ruptcy situation before we had had they are wrong. I thank him for including this in H.R. time to litigate the number of jobs. In a given case, the judge is looking 833. What if someone contends there are over the situation in this case, and if Let me say what, in addition to what only four affected or others say none the judge finds that there is a likeli- we have heard, is wrong with this would be affected? That entire set of hood that this company, which is now amendment. The injustice within Title circumstances would have to be liti- seeking Chapter 11 protection from its 11 stems from a last-minute decision gated. It is a monstrous scenario of ad- creditors, could reorganize, could get that was made in the 103rd Congress, back on its feet, could avoid liqui- ditional litigation proposed in a situa- which placed an arbitrary $4 million dating, could avoid laying off its em- tion where we have already structured ceiling on the single asset provisions of ployees, but he further finds that if the provisions in such a way to have the bankruptcy reform bill. The effect these new onerous restrictions are im- met the approval of everybody who has been to render investors helpless in posed and timetables that that would looks at the small business provisions foreclosure on single assets valued at probably force the company out of of our bill. over $4 million. business and would cost at least five Beyond that, the wording of the bill H.R. 833 provides relief to victims by jobs, it lets the judge say, ‘‘It really seems to indicate that not just the eliminating this arbitrary ceiling. looks like this is going to cost five small business provisions of Chapter 11 Under this law, Chapter 11 of the Bank- jobs, so I will not impose these new re- would be affected but any and all provi- ruptcy Code serves as a legal shield for strictions on this small business.’’ If sions of the title known as 11 would be the debtor. Upon the investors filing to the judge makes the finding that these affected, and we would have to take foreclose, the debtor preemptively files new restrictions will kill this business, for Chapter 11 protection, which this test of five jobs, which in itself is force this job loss and force this busi- postpones indefinitely foreclosure, very murky, very cloudy. How many ness out of business, the judge would be while in Chapter 11 the debtor will con- jobs would be included, part-time, full- given the discretion to say, use the old tinue to collect the rents on the com- time? How many individuals? If some- law, not these new restrictions. body is carrying on two occupations in What could be fairer than to look at mercial asset. the same firm, would that apply? It is the individual case? Now listen to this. However, the com- so nondescriptive of any real problem Now, the gentleman from Pennsyl- mercial property will typically be left that we must reject it out of hand. vania (Mr. GEKAS) will say this is ex- to deteriorate and the property taxes I ask all the Members to vote ‘‘no’’ tensive litigation. No, it is not. It is go unpaid. When the investor finally on this amendment. simply a company asking for Chapter recovers the property through the de- Mr. Chairman, I reserve the balance 11 protection and saying, ‘‘Judge, we layed foreclosure, they owe an enor- of my time. think we need X time but this gives us mous amount in back taxes; they re- Mr. CONYERS. Mr. Chairman, I yield less time, and here is why we think we ceive a commercial property left in de- myself 1 minute. need so much additional time as we terioration which has a lower rent Mr. Chairman, I would like to remind could have gotten under the old law,’’ value and resale value, and meanwhile the esteemed chairman of the sub- and the judge says either yes or no. the rent for all the months or years committee that the Bankruptcy Com- Why not let the judge have that discre- they were trying to retain the property mission was the one that turned down tion? went to an uncollectable debtor. means testing, which has now been put I know that the gentleman from H.R. 833 does not leave the debtor into the bill. So I am glad that he picks Pennsylvania (Mr. GEKAS) and other without protection, however. First, the and chooses those that he likes. proponents of this bill do not trust investor brings a foreclosure against a There are some people involved in human beings; they do not trust judges debtor only as a last result. This usu- labor that have a strong opposition to at all. They say throughout this bill ally comes after all other efforts to the bill without this amendment. They judges have no discretion; they are al- reconcile delinquent mortgage pay- are called the AFL-CIO. That is the ways wrong. Maybe they are always ments have failed. largest collective bargaining organiza- wrong, but give them a chance to save Second, the debtor has up to 90 days tion in the United States of America. some jobs and save some small busi- to reorganize under a Chapter 11. It They have examined it pretty care- nesses. That is all this amendment should be noted, however, that single fully. does. asset reorganizations are typically a Mr. Chairman, I yield such time as he I do not see how anybody who cares false hope, since the owner of a single may consume to the gentleman from about small businesses or jobs could asset does not normally have other New York (Mr. Nadler), the ranking oppose this amendment. It just boggles properties from which he can recapi- member of the subcommittee. the mind. talize his business. Mr. NADLER. Mr. Chairman, this Mr. GEKAS. Mr. Chairman, I yield 4 Mr. Chairman, I urge my colleagues amendment is really in the nature of minutes to the gentleman from Michi- to defeat the amendment offered by the the truth. We say that this bill imposes gan (Mr. KNOLLENBERG). gentleman from Michigan (Mr. CON- very onerous restrictions on small Mr. KNOLLENBERG. Mr. Chairman, YERS), which could prohibit the single businesses. It imposes very sharp and I thank the gentleman from Pennsyl- asset real estate definition from being

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00077 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8570 CONGRESSIONAL RECORD—HOUSE May 5, 1999 applied in such case, which could result debtors whose property are valued at $4 at, suppose it was the gentleman’s job, in the loss of five or more jobs. This million or less. I say to the gentleman from Pennsyl- amendment, if adopted, would effec- Typically, when the owner of a build- vania (Mr. GEKAS), one of the five. It tively nullify the single asset protec- ing is bankrupt and the lender is al- would not be hard for a referee in bank- tion currently in the code and allow lowed to foreclose, there is usually a ruptcy or a judge in bankruptcy to Chapter 11 debtors to continue gaming net economic benefit to the property, make the decision. the system by hiring new employees because it is the goal of the lender to But what we are doing is saying that just before the filing. maximize the value of the property. A every single real estate concern, no Make no mistake about it, this weak owner is replaced by a strong matter how large its operation or how amendment, if approved, would allow owner who has resources to make the many jobs are at stake, be subject to unscrupulous debtors to drag out single repairs, attract new tenants, and effect expedited liquidation and bankruptcy. asset cases for years to avoid meeting capital improvements. This benefits That is, within 90 days after filing, their financial obligations. our communities as well, including the they can be subject to foreclosure by Mr. Chairman, H.R. 833 restores per- generation of tax revenues. their creditors. Give us a break. All we sonal responsibility to our bankruptcy Moreover, by helping to keep the are doing is giving additional discre- laws; closes the loopholes, in addition, property commercially viable, we help tion to the judge. that allow individuals to game the sys- ensure that the workers who maintain I urge the Members on both sides of tem. I urge my colleagues on both sides the building, from the janitors to the the aisle to support this modest of the aisle to oppose the Conyers engineers, will remain employed. amendment. amendment and vote ‘‘yes’’ on final Clearly, everybody benefits from keep- Mr. Chairman I yield the balance of passage. ing the property from deteriorating. my time to the gentleman from New Significantly, H.R. 833 would elimi- York (Mr. NADLER). b 1500 nate the arbitrary $4 million cap with The CHAIRMAN. The gentleman Mr. GEKAS. Mr. Chairman, I yield respect to expedited foreclosures on from New York (Mr. NADLER) is recog- such time as she may consume to the these entities, so that all commercial nized for 1 minute. gentlewoman from Ohio (Ms. PRYCE). properties, regardless of value, can be Mr. NADLER. Mr. Chairman, this Ms. PRYCE of Ohio. Mr. Chairman, I protected from deterioration during amendment does two things. The gen- thank the gentleman for yielding me bankruptcy proceedings. tleman from Michigan (Mr. CONYERS) the time. However, the Conyers amendment described the impact on the single- Mr. Chairman, I rise in opposition to would prohibit expedited foreclosure in asset realty. But it does something the amendment offered by the gen- any case where five employees of the else, and we did not hear from the tleman from Michigan (Mr. CONYERS). property could be lost. As such, the other side why it is so terrible, what it By way of background, the great ma- Conyers amendment would not only does, or why they rejected it in com- jority of commercial properties within gut the provision in H.R. 833 which lifts mittee and reject it now, having noth- the United States are owned by cor- the $4 million cap, but it would also, in ing to do with single-asset real estate. porations, partnerships, and limited li- effect, nullify existing expedited fore- What this does is say to the judge, is ability companies that only own one closure provisions in the Bankruptcy to give the judge discretion. When property. These are known as single- Code. looking at a small business bank- asset real estate entities. The Conyers amendment would recre- ruptcy, the judge would have discretion The typical single-asset real estate ate the uncertainty that the current to say, if he finds that imposition of entity has only one major creditor, the law seeks to remedy. Bankruptcy these new onerous filing requirements mortgage lender that provided the fi- courts could hold endless hearings on and deadlines was likely to push that nancing for the acquisition of the prop- the application of this amendment and business into liquidation and cost more erty. In most cases, the mortgage lend- whether certain employees may or may than five jobs, instead of enabling the er’s only remedy in the case of default not lose their jobs. Chapter 11 debtors business to reorganize, he is given the is to take possession of the property could continue to game the system, as discretion to say, never mind these new through foreclosure. they have sometimes in the past, by restrictions, these new onerous re- The recession of the late eighties and hiring employees before filing, or de- quirements, better the business shall early 1990s caused a flood of Chapter 11 laying the bankruptcy action unfairly. survive and not lay off the workers. filings by single-asset real estate enti- Moreover, the very employees that Why not let judges have that discre- ties. In the typical case, the single- the gentleman from Michigan (Mr. tion? Why insist that small businesses asset entity merely sought to stave off CONYERS) seeks to protect would be have to go out of existence and lay off foreclosure and to use the bankruptcy worse off because new entities would be these people? Let the judge have dis- process to force concessions from its hampered in their efforts to take over cretion, if he makes a finding that im- mortgage lender. As a result, prop- the troubled property and return it to position of these new restrictions erties deteriorated and lenders suffered a going concern, and keep them em- would likely cause the business to go large losses as cases dragged on and on, ployed. out of existence instead of reorga- sometimes for months and years. Mr. Chairman, I urge my colleagues nizing, getting on its feet and saving In the Bankruptcy Reform Act of to defeat the Conyers amendment, in the jobs. 1994, Congress recognized that single- the very interest of those he purports This is an anti-jobs bill. This is a pro- asset entities should receive expedited to protect. jobs amendment. I do not understand treatment in bankruptcy proceedings Mr. CONYERS. Mr. Chairman, I yield the opposition to it. in order to protect properties from oth- myself the balance of my time. Mr. GEKAS. Mr. Chairman, I yield erwise deteriorating during these Mr. Chairman, this is puzzling. It is myself such time as I may consume. lengthy bankruptcy proceedings. one thing to tighten the bankruptcy Mr. Chairman, I ask the Members to At that time, Congress amended the rules on only the parties that are in- vote no on this amendment. I repeat, automatic stay provision of the Bank- volved that are borrowing from the we have taken great pains to solidify in ruptcy Code to provide that mortgage lender, but where the changes will our bill, the bill that is before us, those lenders may have the stay lifted and harm innocent third parties, the em- provisions having to do with small proceed with foreclosure, unless the ployees and their families, I believe we business that have found broad favor single-asset debtor files a feasible reor- have an obligation to give the business across the commercial world, to in- ganization plan within 90 days, or com- a reasonable chance to reorganize. clude the Justice Department, to in- mences monthly interest payments to The single-asset real estate provi- clude the advocate for the SBA and the lender. However, these provisions sion, connected with the five-job re- other organizations. I ask for a no currently apply only to single-asset quirement that the judge would look vote.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00078 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8571 The CHAIRMAN. All time has ex- matter whether his filing is or is not going to look at most of these tax re- pired. contested, file at least 3 years’ worth of turns, he is willing to cost the tax- The question is on the amendment tax returns with the court. In our sub- payers of America $34 million because offered by the gentleman from Michi- committee we had hearings, and the he has this personal agenda that, I do gan (Mr. CONYERS). bankruptcy judges, bankruptcy trust- not know, even Republican Members on The question was taken; and the ees, every single witness who came the committee said, this is a bad idea. Chairman announced that the noes ap- agreed that requiring all of these tax Even members of the Committee on peared to have it. returns to be filed simply creates a Rules said, this is a bad idea. We sup- Mr. CONYERS. Mr. Chairman, I de- massive paperwork burden and expense port your amendment. That is how this mand a recorded vote. to the bankruptcy system, and that amendment got made in order. The CHAIRMAN. Pursuant to House this was not a good idea. These burdens Yet, we are taking up valuable legis- Resolution 158, further proceedings on are unnecessary. lative time arguing about something the amendment offered by the gen- Credit industry finance studies, con- that is completely inconsistent with tleman from Michigan (Mr. CONYERS) sumer advocacy group finance studies, what the professed philosophy is, to will be postponed. all indicate that the number of abusive save taxpayers’ money and to do some- It is now in order to consider amend- Chapter 7 bankruptcy filings are ap- thing that is valuable to the system of ment No. 8 printed in House report 106– proximately 10 percent, at most, of the bankruptcy. This is a provision in the 126. bankruptcy filings. They also indicate bill which is not needed. AMENDMENT NO. 8 OFFERED BY MR. WATT OF that the vast majority of bankruptcy Mr. Chairman, I reserve the balance NORTH CAROLINA filings are what they categorize as of my time. Mr. WATT of North Carolina. Mr. uncontested filings. b 1515 Chairman, I offer amendment No. 8, So why are we requiring tax returns Mr. GEKAS. Mr. Chairman, I yield which is made in order under the rule. for 3 years to be filed with the bank- The CHAIRMAN. The Clerk will des- myself such time as I may consume. ruptcy court, when in the great major- It is amazing to me that we can be ignate the amendment. ity of these cases there will not be any criticized for trying to bring into the The text of the amendment is as fol- contest about it, there will not be any bankruptcy world a sense of account- lows: need for the tax returns? They will ability, of discipline. What is wrong Amendment No. 8 offered by Mr. WATT of simply sit there in a corner in the with asking an individual who ap- North Carolina: bankruptcy court, clutter up space, Beginning on page 160, strike line 23 and proaches the bankruptcy court and all that follows through line 2 on page 161. take up needed time and energy to says, I am in terrible shape; I need to Page 162, strike lines 1 through 15, and in- move around from place to place. They have bankruptcy relief, what is wrong sert the following (and make such technical are simply unneeded. with asking that individual to prove at and conforming changes as may be appro- So my amendment simply says, look, the outset or to demonstrate at least priate): you do not have to file these returns prima facie what those financial cir- ‘‘(f) An individual debtor in a case under unless some party in interest says, I cumstances are? That is a common chapter 7 or 13 of this title shall file with the want you to file the returns. If some sense requirement in most of the pro- court at the request of any party in inter- party in interest, any party in interest est— ceedings and most of the cases that we ‘‘(1) all tax returns, including any sched- in the bankruptcy wants the tax re- have of every conceivable kind in the ules or attachments, with respect to the pe- turns, all they have to do is file one court system of our country. riod from the commencement of the case sentence which says, I want the tax re- So here we have an individual who until such time as the case is closed; turns filed. They do not have to give a says, my income cannot match, cannot ‘‘(2) at the time filed with the taxing au- reason, there has to be no hearing, meet the debts that have fallen upon thority, all tax returns, including any sched- there does not have to be anything but me. So we tell that individual to come ules or attachments, that were not filed with one sentence saying, I want the tax re- to the bankruptcy court, to file for dis- the taxing authority when the schedules turns of this filer filed, and that person charge of their obligations, to bring under subsection (a)(1) were filed with re- spect to the period that is 3 years before the would have to file them. And for some their income tax returns so they can order of relief; reason the author of this bill thinks show right away, to the lawyer who is ‘‘(3) any amendments to any of the tax re- that is terrible. helping them or to the bankruptcy turns, including schedules or attachments, Mr. Chairman, I think he is overre- court which will ultimately receive described in paragraph (1) or (2); and acting. What he has decided is that them, what their stream of income has The CHAIRMAN. Pursuant to House every person who files a bankruptcy been and what can be perceived as fore- Resolution 158, the gentleman from petition is a bad person, and we are casting what income they will have in North Carolina (Mr. WATT) and a Mem- going to impose all these burdens on the next year or so beyond the aegis of ber opposed each will control 10 min- him. the bankruptcy court. utes. But Mr. Chairman, listen to what the That allows a couple of things to The Chair recognizes the gentleman Congressional Budget Office says about happen. Number one, it will allow from North Carolina (Mr. WATT). this provision. I quote: ‘‘This section many times, in our judgment, right at Mr. WATT of North Carolina. Mr. would require the Administrative Of- the outset, that the debtor and his Chairman, I yield myself such time as fice of the U.S. courts to receive and counselor or bankruptcy adviser will I may consume. retain the tax returns for the three come to the conclusion that he may Mr. Chairman, this is a simple most recent years preceding the com- not fare well in the bankruptcy court. amendment, and hopefully it will not mencement of the bankruptcy case for The income stream that the individual take the entire allotted time. This is all Chapter 7 and Chapter 13 debtors, has, together with the expenses that an amendment that was offered in the about 8 million debtors over the 2000 to are matched against it, they might find Committee on the Judiciary, and the 2004 period. CBO estimates that appro- that they would be rejected in bank- Committee on the Judiciary split even- priations of $34 million over the next 5 ruptcy. So maybe it would be better to ly, so I am sure the chairman of the years would be required to store and wait a while, try to work out some of subcommittee has a position on it, but provide access to over 20 million tax these debts and then decide later the Committee on the Judiciary itself returns.’’ whether or not bankruptcy should be has failed to express an opinion one That is the Congressional Budget Of- approached. That is a commonsense, way or another because it failed on a fice, who is telling the sponsor of this valuable, preliminary finding for the split vote. I believe the vote was 13 to bill that because he thinks every filer debtor to make with his counselor. 13. in America of a bankruptcy petition is We believe that that is helpful. That Mr. Chairman, this bill currently re- a bad person and ought to be subjected brings accountability, personal respon- quires that every bankruptcy filer, no to this, even though nobody is ever sibility, and a sense of stability to the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00079 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8572 CONGRESSIONAL RECORD—HOUSE May 5, 1999 system, and may prevent countless in- Mr. Chairman, I reserve the balance rich and won the lottery, but somehow, dividuals from filing bankruptcy where of my time. because of the foolish management of before all they had to say was, as is the Mr. WATT of North Carolina. Mr. their own money, they leave a lot of system now, I am bankrupt, I do not Chairman, how much time remains? creditors out in the lurch. I would like have any income, and so forth. And The CHAIRMAN. Both Members have to see some of those tax returns, and I when asked how much they make; well, 31⁄2 minutes remaining. would like to see the income from they do not want to be asked those Mr. WATT of North Carolina. Mr. those lottery proceeds, and I think the questions. They may say, I think I am Chairman, I yield 1 minute to the gen- court is entitled to them. making $85 a week, or whatever cal- tleman from Michigan (Mr. CONYERS). I think then to go and require one of culation that the debtor asserts then Mr. CONYERS. Mr. Chairman, I the aggrieved parties to step forward becomes the basis of his asking for thank the gentleman for yielding me and say, judge, I would like to petition bankruptcy relief. Well, that is wrong. this time. to have a tax return submitted for the I wish to say to the gentleman from And furthermore, if we should rely on record so we can at least look to see if Pennsylvania, Mr. Chairman, that ap- what the gentleman from North Caro- the income is there to satisfy the parently the Congressional Budget Of- lina says, to ask someone or embed in debts, is only going to encumber the fice did not see the savings that the the law the requirement that a tax re- process. It will drag it out. The debtor gentleman envisions in this, and the turn be requested and that that should may say, well, I do not know where my gentleman has been here long enough be granted automatically, first of all, to remember the Paperwork Reduction copies are; well, let me see if I can get it would allow that system itself to be Act. Whatever happened to that? them; well, I may have to acquire them gamed by some. Here, if the gentleman were to exam- through the IRS to get copies back to For instance, if I am a debtor, ready ine the proceedings in any bankruptcy make a presentation to the court, sim- to approach the filing of bankruptcy, court, he would quickly know that the ply looking to delay and obfuscate the and my counselor tells me that I may court can demand an income tax re- problem. or may not be asked for an income tax turn, and certainly any party in inter- I want to speak for a moment on the return once I file, if the amendment est is not about to forget to bring that amendment offered by the gentleman were carried, the debtor might say, in to the proceeding if there is any from Michigan (Mr. CONYERS) on the well, I will take that chance. And if the slight notice that he needs it. So what job requirements. request is not made for the tax return, the gentleman from North Carolina is Mr. WATT of North Carolina. Mr. he glides on his merry way towards a doing is merely making this optional Chairman, will the gentleman yield? discharge in bankruptcy. If the trustee to anybody that wants it, and here the Mr. FOLEY. I yield to the gentleman or the bankruptcy court asks for the gentleman from Pennsylvania is resist- from North Carolina. tax return, he still has the option to ing it. Mr. WATT of North Carolina. Mr. drop out of the bankruptcy filing. So, If a Federal agency tried to promul- Chairman, the gentleman is aware, of in a way, we have an uncertain system gate this rule, the gentleman from course, that that possibility that he at hand under the Watt amendment. Pennsylvania would be leading the just mentioned exists under the under- I am not ready to vouch for the inevi- Congress in demanding to know why lying bill. If somebody does not have tability that mountains of paper will they want such unnecessary authority. the tax returns, they can still come in, be piled on top of the paper that has al- So, please, let us improve the bill to at in an emergency situation, and have ready been filed. I believe that with the least this minor amount. the same kind of argument. electronic systems that are at hand, Mr. GEKAS. Mr. Chairman, I yield And there is no hearing required that it may be after the first filing of the balance of my time to the gen- under my amendment. I do not know the 3 years of income tax returns, that tleman from Florida (Mr. FOLEY). which amendment the gentleman is de- almost forthwith they would be re- Mr. FOLEY. Mr. Chairman, I want to bating. All someone has to do is file turned to the bankrupt filer while the thank the gentleman from Pennsyl- one sentence saying, I would like to system goes on with an electronic rec- vania (Mr. GEKAS) for his hard work on have the tax returns. This is not about ordation of the data in that income tax this vitally important bill and on the not filing the tax returns. return. So I see some relief even in the series of amendments we have been de- I agree with the gentleman. There paperwork that might not otherwise be bating today. Clearly, we want to make are a lot of cases where the tax returns seen. We all agree that the increased certain that people pay their debts. are needed, and I am not trying to im- technology is helping these kinds of Having been a commercial realtor and pede that. I am just trying to keep systems all along. involved in the business of real estate mountains and mountains of paper The other important feature here is and restaurants and different things, from stacking up in the bankruptcy that I take it from the offering by the certainly I understand when people court. gentleman from North Carolina that have trouble in society. Mr. FOLEY. Reclaiming my time, the gentleman intends to vote against The one provision sponsored by the Mr. Chairman, I think that is a moun- the Nadler substitute which is coming, gentleman from North Carolina that tain of paperwork we desperately need because as one of the debtor’s duties would make a tax return subject to the to see. We need to see the facts. We that even the gentleman from New presentation of one of the parties inter- need to see the proof in the pudding of York recognizes and applauds and in- ested in asking for it I think strikes at what the income of the gentleman or cludes in his version of bankruptcy re- what we should be trying to accom- gentlewoman was as they are making form is the filing of tax returns from plish in the bill. Having a tax form as their claims to the courts. I think ab- the previous 3 years for anyone who a requirement of a bankruptcy petition sent that information the courts have dares to enter the bankruptcy courts will, in fact, give the courts and all in- very little to base whether in fact this asking for relief. terested parties a chance to review the is a viable bankruptcy petition filed. The commonsense requirement that assets of the individual, at least the in- These are the types of things that a person seeking the help of the court come of the individual, and whether in will strengthen the law; so that all provide all the information necessary fact they can make due their debts to things that are material are filed accu- for the court to determine the real sta- society. I think it is an important and rately in the court and we are not tus of that individual is a common- fundamental thing that occur at the waiting until we have delay after delay sense precept of our law, and we should very, very beginning of a bankruptcy after delay. not have any court rely only on the hearing. I think the court should be So I again strongly urge the Congress word or the assertions of the person able to review in fact that they have to reject the amendment and proceed who wants relief without the evidence income to satisfy their debts. to support the underlying bill to bring that will make it a more stable set of It seems time and time again I am some semblance of reasonableness to provisions. reading about somebody who struck it the Bankruptcy Reform Act of 1999.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00080 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8573 Mr. GEKAS. Mr. Chairman, I yield mination of the outcome of the case. ter shall not exceed the greater of the trust- back the balance of my time. And all that is required under my ee fee allowed pursuant to section 330 of this Mr. WATT of North Carolina. Mr. amendment to get that tax return is a title plus— Chairman, I yield 1 minute to the gen- one-sentence statement saying I need ‘‘(i) $25 per month; or ‘‘(ii) the amount payable to unsecured non- tleman from New York (Mr. NADLER). the tax return. No reasons, nothing. priority creditors as provided by the plan Mr. NADLER. Mr. Chairman, this is a b 1530 multiplied by 5 percent, and the result di- simply silly provision and does not, vided by the number of months in the plan; frankly, deserve the attention it is Please save the taxpayers $34 million and being paid on the floor today. and vote for this amendment. ‘‘(C) notwithstanding any other provision Why should we not waste $34 million The CHAIRMAN (Mr. NETHERCUTT). of this title, any such compensation awarded of the taxpayers’ money for no purpose All time has expired. to a chapter 7 trustee in a converted or dis- at all, the gentleman from Pennsyl- The question is on the amendment missed case shall be payable and may be col- vania asks? My answer is because it is offered by the gentleman from North lected in a case under this chapter— Carolina (Mr. WATT). ‘‘(i) even if such amount has been dis- $34 million of the taxpayers’ money. charged in a prior proceeding under this There are no hearings here. Anyone The question was taken; and the Chairman announced that the noes ap- title; and who practices bankruptcy knows that ‘‘(ii) only to the extent permitted by this in a vast number of cases it is open and peared to have it. section.’’. Mr. WATT of North Carolina. Mr. shut. Everybody knows what is going The CHAIRMAN. Pursuant to House on. There are no assets, very little in- Chairman, I demand a recorded vote. The CHAIRMAN. Pursuant to House Resolution 158, the gentleman from come, no one has any desire to see the Resolution 158, further proceedings on Kentucky (Mr. WHITFIELD) and a Mem- tax forms. Anyone, any creditor, the the amendment offered by the gen- ber opposed each will control 10 min- judge, anybody who wants to see the tleman from North Carolina (Mr. utes. tax form, a one-sentence request suf- WATT) will be postponed. The Chair recognizes the gentleman fices. It is now in order to consider amend- from Kentucky (Mr. WHITFIELD). All that not passing the amendment ment No. 9 printed in House Report Mr. WHITFIELD. Mr. Chairman, I of the gentleman from North Carolina 106–126. yield myself such time as I may con- will do will be to waste $34 million of sume. AMENDMENT NO. 9 OFFERED BY MR. WHITFIELD the taxpayers’ money in order to pile First of all, I would like to certainly Mr. WHITFIELD. Mr. Chairman, I up tax forms in court that no one will thank and congratulate the leadership offer an amendment. read. of the gentleman from Pennsylvania The CHAIRMAN. The Clerk will des- Sure, there are many cases where we (Mr. GEKAS) on this important legisla- may want to see what the assets are, ignate the amendment. The text of the amendment is as fol- tion, as well as that of the gentlemen what the income is, whether the bank- lows: from Michigan and New York, for the ruptcy makes sense or not, whether it hard work that they have put in on Amendment No. 9 offered by Mr. meets the requirements of the law. All this legislation, as well as that of their WHITFIELD: anyone has to do is ask, and someone Page 176, after line 24, insert the following: staffs. It is very important legislation will ask, and those are the complicated to reform the bankruptcy laws and to ones. But for those where there is no SEC. 614. COMPENSATING TRUSTEES. Title 11, United States Code, is amended— bring it up to date. question, why require the court, as is (1) in section 104(b)(1) in the material pre- This amendment that I have, Mr. not now required, to bury itself under a ceding subparagraph (A)— Chairman, is an amendment really mountain of paper for no other purpose (A) by striking ‘‘and’’; and about basic fairness; and that is, this than to waste the taxpayers’ money? (B) by inserting ‘‘, 1326(b)(3)’’ before ‘‘im- legislation requires trustees to do some Mr. WATT of North Carolina. Mr. mediately’’; additional tasks, some additional Chairman, how much time remains? (2) in section 326, by inserting at the end work, and to simply provide them an The CHAIRMAN. The gentleman the following: opportunity to be compensated for that ‘‘(e) Notwithstanding any other provision from North Carolina (Mr. WATT) has 11⁄2 of this section, the court shall allow reason- work. minutes remaining. able compensation under section 330(a) of Specifically, it provides the oppor- Mr. WATT of North Carolina. Mr. this title for the services and expenses of the tunity for the trustees to be com- Chairman, I yield myself the balance of trustee in taking the actions described in pensated for the additional responsibil- my time. paragraphs (1) and (2) if— ities they must perform pursuant to Mr. Chairman, let me just very quiet- ‘‘(1) a trustee in a chapter 7 case com- the terms of H.R. 833. ly and calmly explain to the gentleman mences a motion to dismiss or convert under Under this bill, trustees must comply from Pennsylvania (Mr. GEKAS) and the section 707(b) and such motion is granted; or with new duties, clarifying which debt- ‘‘(2) the trustee demonstrates by a prepon- gentleman from Florida (Mr. FOLEY) ors truly need the relief provided by that I agree with them. There are a derance of the evidence that the case was converted or dismissed because of the trust- Chapter 7 and whether those debtors number of cases where tax returns are ee’s actions.’’; and should be converted to the Chapter 13 necessary in the bankruptcy court. But (3) in section 1326(b)— payment plan. However, despite those there are just as many cases where tax (A) in paragraph (1), by striking ‘‘and’’; additional duties, there are no provi- returns are unnecessary in the bank- (B) in paragraph (2), by striking the period sions compensating the trustees or ruptcy court; where no issue exists in at the end thereof and inserting ‘‘; and’’; and even giving them the opportunity to be the case, no argument about whether (C) by adding at the end the following: compensated for the additional func- the person is bankrupt, nothing to be ‘‘(3)(A) the amount of the compensation de- tions. gained by having somebody bring in a scribed in subclauses (I) and (II) which is un- paid at the time of each such payment, pro- This amendment will allow the court stack of papers of 3 years’ worth of tax rated over the remaining duration of the or the bankruptcy judge to award a returns other than that they will stack plan— reasonable fee for trustees’ actions re- up in the corner and sit there and the ‘‘(i) and which has been allowed in a case— sulting in a case being converted from taxpayers of America will have to pay ‘‘(I) converted to this chapter; or Chapter 7 to Chapter 13. the storage cost on that. ‘‘(II) dismissed from chapter 7 in which the In addition, in order to avoid over- This whole notion that the gen- debtor in this case was a debtor, whether dis- burdening debtors and reducing the ef- tleman has put together, that every missed voluntarily by the debtor or on mo- fect this fee would have on the dis- single person ought to come in with a tion of the trustee under section 707(b); ‘‘(ii) but only to the extent such compensa- tribution to any creditors, this fee will tax return, is just the gentleman box- tion has been allowed to a chapter 7 trustee be paid monthly over the life of the ing with a shadow. This is not evidence under section 326(e); Chapter 13 plan. unless somebody wants it to be evi- ‘‘(B) the compensation payable to the It is only fair that individuals have dence; unless it is relevant to a deter- chapter 7 trustee in the case under this chap- the opportunity to be compensated for

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additional work performed. Therefore, tioners, debtors and also creditors. And linois (Mr. HYDE) and the gentleman Mr. Chairman, I would request that if we are going to require, under the from Pennsylvania (Mr. GEKAS) each this amendment be accepted. present main text of this bill, the filing will control 20 minutes. Mr. Chairman, I reserve the balance of tax returns, we are going to have to The Chair recognizes the gentleman of my time. pass an appropriation to increase the from Illinois (Mr. HYDE). Mr. CONYERS. Mr. Chairman, I rise size of the Federal courthouses in order Mr. HYDE. Mr. Chairman, I yield half in opposition to the amendment, and I to hold all the paperwork. my time to the gentleman from Michi- yield myself such time as I may con- So I speak in favor of the Watt gan (Mr. CONYERS), and I ask unani- sume. amendment, if the tax return is re- mous consent that he may control that Mr. Chairman, I think that we can quested by any party, that it could be time. accept this amendment. This is a provi- turned over, as opposed to putting ad- The CHAIRMAN. Is there objection sion that we think will be helpful. We ditional paperwork into every single to the request of the gentleman from want to make sure that, whatever fees, bankruptcy petition that is filed. Illinois? that that would come out of the debt- The CHAIRMAN. It is now in order to There was no objection. or’s assets so that that would not be consider amendment No. 10 printed in Mr. HYDE. Mr. Chairman, I yield my- something else he would have to con- House Report 106–126. self such time as I may consume. front. AMENDMENT NO. 10 OFFERED BY MR. HYDE Mr. Chairman, I am pleased to speak Mr. Chairman, I yield to the gen- Mr. HYDE. Mr. Chairman, I offer an in support of an amendment that I am tleman from Kentucky (Mr. amendment. offering, together with the gentleman WHITFIELD). The CHAIRMAN. The Clerk will des- from Michigan (Mr. CONYERS), that re- Mr. WHITFIELD. Mr. Chairman, that ignate the amendment. lates to permissible living expenses of is my understanding; that is the intent. The text of the amendment is as fol- debtors and their families. It replaces Mr. CONYERS. Mr. Chairman, under lows: the bill’s reliance on Internal Revenue those circumstances, we approve of the Amendment No. 10 offered by Mr. Hyde: Service expense allowances and instead amendment; and I yield back the bal- Page 8, beginning on line 14, strike incorporates a test based on the dispos- ance of my time. ‘‘(which’’ and all that follows through able income standard of current law, Mr. WHITFIELD. Mr. Chairman, I ‘‘104(b))’’ on line 19. namely, whether income is reasonably yield myself such time as I may con- Beginning on page 8, strike line 23, and all necessary for maintenance or support. that follows through line 13 on page 9, and sume. insert the following (and make such tech- To enhance predictability, the Mr. Chairman, I thank the gentleman nical and conforming changes as may be ap- amendment requires the Director of from Michigan (Mr. CONYERS) for his propriate): the Executive Office for United States support on this amendment. ‘‘(ii) The debtor’s monthly expenses shall Trustees to issue guidelines that will Mr. Chairman, I yield the balance of be the debtor’s monthly expenses reasonably be considered in the application of the my time to the gentleman from Penn- necessary to be expended— ‘‘reasonably necessary’’ standard. sylvania (Mr. GEKAS). ‘‘(I) for the maintenance or support of the Before discussing our proposed Mr. GEKAS. Mr. Chairman, I thank debtor, the dependents of the debtor, and, in amendment relating to living expenses, a joint case, the spouse of the debtor if the the gentleman for yielding me the spouse is not otherwise a dependent; and I want to emphasize, and I mean ‘‘em- time. ‘‘(II) if the debtor is engaged in business, phasize,’’ that various pro-creditor en- I want to indicate, for the record, and for the payment of expenditures necessary hancements in Section 102, the rel- to urge the Members that we support for the continuation, preservation, and oper- evant section of the bill, are unaffected this amendment and that it goes to ation of such business. by this amendment. These enhance- some of the dependability and predict- Notwithstanding any other provision of this ments greatly expand the potential for ability that we are trying to build into clause, the debtor’s monthly expenses shall utilizing Bankruptcy Code Section the revised Bankruptcy Code. So the not include any payments for debts described 707(b) to remove cases from Chapter 7 gentleman comes to the Chamber with in clauses (iii) and (iv). of the Bankruptcy Code, where a debt- an amendment that is worthy of the Page 14, line 15, add close quotation marks or can receive a limited discharge of support of all the Members. and a period at the end. obligations in return for giving up non- Mr. WHITFIELD. Mr. Chairman, I Beginning on page 14, strike line 16 and all exempt assets. yield back the balance of my time. that follows through line 3 on page 15. By recent count, there are a dozen The CHAIRMAN. All time has ex- Page 101, after line 9, insert the following pro-creditor enhancements in Section pired. (and make such technical and conforming 102 that my amendment leaves in place The question is on the amendment changes as may be appropriate): and 63 creditor-friendly reforms in offered by the gentleman from Ken- SEC. 154. GUIDELINES FOR ASSESSING INCOME. other sections of the bill. Believe me, Section 586 of title 28, United States Code, tucky (Mr. WHITFIELD). is amended by adding at the end the fol- we can enact legislation that is highly The amendment was agreed to. lowing: favorable to creditors without depriv- Mr. MANZULLO. Mr. Chairman, I ‘‘(f) Not later than 1 year after the effec- ing debtors and their families of ‘‘rea- ask unanimous consent to speak for 1 tive date of this subsection, the Director of sonably necessary’’ living expenses. minute on the Watt amendment. the Executive Office for United States Trust- This bill effectuates a major shift in The CHAIRMAN. Is there objection ees shall issue guidelines to assist in making bankruptcy policy, a change in direc- to the request of the gentleman from assessments of whether income is not rea- tion that necessitates focusing on what Illinois? sonably necessary to be expended by a debtor portion of a debtor’s future income will for the maintenance or support of the debtor, There was no objection. the dependents of the debtor, and, in a joint be available to meet the requirements Mr. MANZULLO. Mr. Chairman, I case, the spouse of the debtor if the spouse is of daily living. For the last century, in- was listening to the debate in my office not otherwise a dependent.’’. dividual debtors generally have been on the Watt amendment, which would Page 153, line 23, insert ‘‘as amended by able to receive an immediate financial simply say that whenever the trustee section 154,’’ after ‘‘Code,’’. fresh start without having to encumber or any party or any attorney requests Page 154, line 3, strike ‘‘(f)’’ and insert their future incomes. By greatly in- a copy of the tax returns that that ‘‘(g)’’. creasing the potential for dismissing Page 154, line 5, strike ‘‘(f)(1)(A)’’ and in- would be turned over, as opposed to sert ‘‘(g)(1)(A)’’. Chapter 7 liquidation cases, this bill having a mandatory provision requir- Page 156, line 22, strike ‘‘586(f)’’ and insert channels many debtors into 5-year ing the filing of tax returns with a ‘‘586(g)’’. Chapter 13 repayment plans. bankruptcy petition. Page 157, line 4, strike ‘‘586(f)’’ and insert What will debtors, their spouses, and When I practiced law, I probably had ‘‘586(g)’’. children be able to live on during long somewhere between 300 and 500 bank- The CHAIRMAN. Pursuant to House repayment periods? This bill says, in ruptcy petitions representing peti- Resolution 158, the gentleman from Il- effect, that debtors and their families

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00082 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8575 must adhere to a somewhat modified able needs-based bankruptcy system that for too many times and too many version of expense allowances formu- than one which attempts to incor- pieces of legislation have resulted in lated within the Internal Revenue porate IRS expense standards.’’ excessively drawn out cases under the Service to facilitate compromises with An unfortunate consequence of ap- law where in fact the law was written delinquent taxpayers. This model is in- plying IRS living allowances in bank- on an ad hoc basis, in the courtroom, appropriate for imposition in bank- ruptcy cases is to penalize some family by the court. Many of us who believe so ruptcy because, firstly, the successful members because they live with the much in judicial constructionism have collection of taxes is a matter of na- debtor and cannot benefit from a sup- bemoaned that liberalism in the tional self-preservation; and, secondly, port order. courts. the creditors can minimize the risk of The bill includes protections for the This legislation as it comes to the losses by adhering to prudent creditor beneficiaries of support orders issued floor has a good, acceptable, reasonable practices. by family courts, courts that are not and I believe necessary objective stand- I do not think it is a particularly Re- constrained by the living allowances ard. The Hyde-Conyers amendment publican idea to advance the IRS living the IRS seeks to impose on delinquent would remove that and would leave us standards. Recently, Congress gave leg- taxpayers. again to the vagaries of judgments in islative expression to the need for Mr. Chairman, this is simple. What the courts and all that go with it. flexibility in the application of IRS ex- are they going to live on while they are No, I think at this point we must pense allowances with the IRS to de- playing out the 5 years that they have practice legislative discipline. We must termine the appropriateness of apply- to play out paying their bills, paying write the law as Congress intends the ing the schedules to individual tax- their debts under Chapter 13? law. And we must give everybody who payers. It would be particularly anom- The bill wants to use the IRS living would enter the courtroom under the alous for this body to disregard the IRS standards. I want to replace them with jurisdiction of the law a clear under- Restructuring Act of 1998 and mandate the reasonably necessary standard, standing of what the law is and what an application of IRS expense allow- which is the current law. This bill has are the rules of the game and what are ances in bankruptcy cases that is more over 75 creditor enhancements. And to the compliances required going into it. rigid and inflexible than what IRS say if my amendment passes this is a I implore all of us to vote against itself does in the context of accepting deal breaker, that kills the bill, is ludi- this amendment, uphold clear, defined compromises of tax obligations. crous. There is so much in here for the standards under the law. Let this legis- Professor Jack Williams of Georgia creditors they ought to grab it and run. lation go forward as it does, as it is State University School of Law, who brought to the floor, as legislation that b 1545 chaired the National Bankruptcy Re- once again will connect freedom and view Commission’s Tax Advisory Com- It just seems to me a little human- responsibility in financial dealings as a mittee, pointed out to us that tying ity, a little flexibility, a little reason- message before all our families. debtor eligibility to a formula that the ableness in working out the living We all teach these lessons to our IRS deviates from on a regular basis standards, the rules by which you are children about accepting your respon- makes no sense. He described the IRS going to live on while you are working sibilities and fulfilling your respon- collections standards as too par- out your Chapter 13 obligations, is ap- sibilities. Let the bankruptcy laws of simonious and said the standards are propriate. this great land be a complement to the unrealistic. Mr. Chairman, I reserve the balance teachings we give our children and an The limited effort to modify the IRS of my time. encouragement to that, and let our expense allowances during our markup Mr. GEKAS. Mr. Chairman, I yield children know the standards of compli- by including a potential add-on for food such time as he may consume to the ance that are expected of them under and clothing only of up to 5 percent gentleman from Texas (Mr. ARMEY), the law. Let us not leave that to the and providing for continuation of pri- the majority leader. whim of a judicial proceeding. vate school expenses failed to solve Mr. ARMEY. I thank the gentleman Mr. CONYERS. Mr. Chairman, I yield major problems with the incorporation for yielding me this time. I will be myself 5 minutes. of IRS schedules into our bankruptcy brief. May I make it clear to my colleagues law. Mr. Chairman, let me say, first of all, that there is no other amendment that Allowances for food are included in I do not think it is any secret around I support stronger than this one with the IRS National Standards which here the high esteem with which I hold the gentleman from Illinois (Mr. apply throughout the contiguous 48 the gentleman from Illinois (Mr. HYDE), deleting provisions in the bill States and do not reflect differing costs HYDE). The gentleman from Illinois is that would impose the sort of one-size- from one region to another. In addi- one of my heroes and a close personal fits-all standard for the income and ex- tion, allowable expenses for food under friend. It pains me to find myself ever pense test based on IRS standards to IRS schedules increase dramatically in disagreement with a gentleman I ad- determine who is eligible for bank- with increases in income. mire so much, but I could not be more ruptcy relief and how much they are The broader problem, of course, is in disagreement with the gentleman required to pay their creditors. I am the bill does not even make an attempt from Illinois on this point than I am. appalled with the thought of using IRS to address problems with IRS allow- Mr. Chairman, for years we have la- expense standards. ances unrelated to food, clothing, and bored here, watching bills come and First, the IRS standards do not pro- education. bills go, markups come and markups tect a debtor’s ability to pay for health Leading national organizations with go, legislation pass through the floor. care, for elderly, care for the elderly, bankruptcy related expertise and credi- For all those years what I have looked taxes, accounting or legal fees. Now, an bility recognize the need to replace the to is for the Congress to act in such a IRS standard like this has the effect of IRS expense allowances in this bill. I way as to exercise the legislative dis- requiring the payment of unsecured am speaking of the Commercial Law cipline in the way the law is written, credit card debt before allowing for League of America. They have written to write in an acceptable objective payment of these important family- us favorably. standard so that anybody that comes friendly items. Judge Randal Newsome, President of under the jurisdiction of the law will In the second place, where the IRS the National Conference of Bankruptcy know in fact the rules of the game does allow specific expense items, the Judges, has said that, ‘‘On behalf of the when they enter the courtroom. permitted amounts are often 319 members of the National Con- For too many years, what we have inhumanely inadequate. For example, ference of Bankruptcy Judges, I firmly done is we have written law in this the permitted automobile expense in believe your amendment would lead to body to leave things at a subjective the San Francisco Bay area for two a far less complex and far more work- level and to the discretion of the court, cars is $373 per month, even though

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00083 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8576 CONGRESSIONAL RECORD—HOUSE May 5, 1999 most families could barely cover the ings. But these efforts often fail, especially access to the bankruptcy process more dif- cost of automobile insurance, let alone when the creditors refuse to give them a sec- ficult for our economy’s most vulnerable car payments, gasoline, tolls and other ond chance that they desperately need. links—small businesses and consumers. This items of expense. H.R. 833 contains numerous provisions that will likely result in increased business clo- Question: How can we expect people will allow creditors, particularly the credit sures, job loss and home foreclosure, increas- card industry, to unfairly burden or harass ing the severity and length of any future to keep their jobs if we do not provide working families. Of particular concern is economic downturn. It does so in the face of them with enough money for transpor- the ‘‘means test’’ that would unfairly bar academic data showing that consumers filing tation to get to work? many working families from being able to bankruptcy are overwhelmingly working Number three, the IRS standards obtain a fresh start under Chapter 7. families who have experienced a catastrophic have a severe bias against renters and There is no economic evidence to suggest event—families whose median income is less other debtors without secured debts. that the profiles of families in Chapter 7 than $18,000. This is because the bill allows all se- have improved since last year’s Conference H.R. 833 threatens jobs and tilts the play- Report was published. During the debate ing field against working families and small cured debt payments to be deducted businesses. We urge the Senate to reject the from monthly income but limits rental over the bankruptcy legislation last year, much evidence was presented to the con- harsh and ill-considered proposals embodied and lease payments to the amount per- trary; families in Chapter 7, on average, are in the current text of H.R. 833. mitted by the IRS standards. This worse off today than in the past. There is Sincerely, means that the person renting apart- also no evidence that these families are PEGGY TAYLOR, ments or leasing cars may not be able abusing the system. Director, Department of Legislation. to deduct the full amount of their AFSCME supports balanced bankruptcy re- housing and transportation cost in form, but this bill departs from the bipar- INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE & AGRI- bankruptcy, while persons with mort- tisan version of reform which cleared the Senate floor last fall. We again urge you to CULTURAL IMPLEMENT WORKERS gages and automobile debt would be OF AMERICA—UAW able to do so. There is no legitimate vote against H.R. 833. Sincerely, Washington, DC, April 28, 1999. DEAR REPRESENTATIVE: This week the policy rationale for this discrepancy CHARLES M. LOVELESS, which punishes persons who try to live Director of Legislation. House is scheduled to vote on H.R. 833, the within their means. Bankruptcy Reform Act of 1999. This bill in- corporates the Conference Report on the I have just a few letters that I will AMERICAN FEDERATION OF LABOR bankruptcy legislation in the last Congress. shortly put in the RECORD. From the AND CONGRESS OF INDUSTRIAL OR- The UAW opposed that Conference Report, GANIZATIONS, American Federation of State, County and we urge you to oppose H.R. 833, because Washington, DC, April 20, 1999. and Municipal Employees we have a they represent one sided legislation that ele- Hon. HENRY J. HYDE, strong letter arguing against the vates the interests of banks and credit card Chairman, House Committee on the Judiciary, means test. From the American Fed- companies above the interests of working Washington, DC. men and women. eration of Labor, we have a legislative DEAR MR. CHAIRMAN: This week the House alert that says imposing an unwork- Many hard-working American families find is scheduled to take up H.R. 833, the Bank- themselves in unfortunate financial posi- able and unfair means test on families ruptcy Reform Act of 1999. The AFL–CIO is tions due to circumstances beyond their con- seeking to obtain a fresh start under opposed to this radical legislation. It will trol. Layoffs, divorce and medical crisis can Chapter 7 is to be avoided. We also harm working families and weaken a vital quickly introduce financial instability into have a letter from the United Auto- safety net protecting small businesses and the lives of workers and their families. These mobile Workers of America, who are jobs in times of economic downturn. families typically struggle with their debts particularly disturbed by the up-front Specifically, the AFL–CIO opposes provi- for substantial periods of time. They work sions in the bill that: arbitrary means test that would un- extra hours and multiple jobs, or borrow Threaten jobs by placing substantial proce- money from their relatives and friends. They fairly bar many working families from dural and substantive barriers in the way of try to avoid bankruptcy to protect their being able to obtain a fresh start under small businesses’ access to the protections of homes and save their credit rating. But these Chapter 7. Chapter 11; efforts often fail, especially when creditors Mr. Chairman, this is probably the Threaten jobs by broadening the scope of refuse to give them a second chance that touchstone of this whole bill. If we signal asset real estate debtors subject to they desperately need. could move to this agreement to accept rules which increase the threat of disruptive Like last year’s Conference Report, H.R. this joint amendment, we may be able summary foreclosures of commercial prop- 833 contains numerous provisions that will erty; to save this bill from being turned allow creditors, particularly the credit card Threaten jobs by requiring commercial industry, to unfairly burden or harass work- down in the administration. I am urg- debtors to assume or reject commercial ing families. We are particularly disturbed ing the Members to give this their con- leases within a rigid timetable, which would with its up-front, arbitrary ‘‘means test’’ sideration and ultimately their sup- force debtors to favor one class of creditors that would unfairly bar many working fami- port. over others, and threaten their overall abil- lies from being able to obtain a fresh start Mr. Chairman, I include the following ity to successfully reorganize. under Chapter 7. This concern is shared by material for the RECORD: Impose an unworkable and unfair ‘‘means’’ Judiciary Chairman Hyde, as demonstrated AMERICAN FEDERATION OF STATE, test on families seeking to obtain a fresh by the series of amendments he offered to COUNTY AND MUNICIPAL EMPLOY- start under Chapter 7; overcome the arbitrary and unfair effects of EES, AFL–CIO, Impose burdensome, bureaucratic require- using IRS standards in the means test and to Washington, DC, April 19, 1999. ments on consumer debtors that could result allow bankruptcy judges more discretion DEAR REPRESENTATIVE: On behalf of 1.3 in the arbitrary dismissal of many bank- over the outcome. Unfortunately, these million members of the American Federation ruptcy petitions, even when there is no abuse amendments were rejected by the Com- of State, County and Municipal Employees and working families genuinely need relief; mittee. (AFSCME), I am writing concerning the and There is no economic evidence to suggest scheduled mark up of the Bankruptcy Re- Place severe, punitive restrictions on re- that the profiles of families in Chapter 7 form Act of 1999 (H.R. 833). We urge you to peat consumer filings. have improved since the Conference Report oppose H.R. 833 because it represents one- The current bankruptcy system is the re- was published. Indeed, during the course of sided legislation that elevates the interests sult of decades of thoughtful, careful bi-par- the debate over the bankruptcy legislation of banks and credit card companies above tisan legislative efforts, designed to balance last year, much evidence was presented to the interests of working men and women. the interests of creditors, debots and the na- the contrary; families in Chapter 7, on aver- Many hard-working American families find tion as a whole. Working families and their age, are worse off today than the past. There themselves in unfortunate financial posi- unions participate in this system as debtors, is also no objective evidence that these fami- tions due to circumstances beyond their con- creditors and employees of both debtors and lies are abusing the system. Despite credit trol. These families typically struggle with creditors. We have much to lose if this sys- industry claims to the contrary, a recent their debts for substantial periods of time. tem becomes unbalanced or damaged by study commissioned by the American Bank- They work extra hours at multiple jobs, or hasty and poorly thought-out changes. ruptcy Institute found that only 3 percent of borrow money from their relatives and But the real danger posed by H.R. 833 is Chapter 7 filers could afford to repay some friends. They try to avoid bankruptcy to pro- the threat it poses to our economy’s ability portion of their debt—a finding that was also tect their homes and save their credit rat- to weather downturns. The bill aims to make confirmed by the U.S. Trustee’s office.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00084 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8577 The UAW is also deeply concerned that have to use these objective standards, and the gentleman from Michigan for H.R. 833 contains only watered-down con- let us use subjective standards, reason- this amendment, for trying to retain sumer ‘‘protections’’. For example, it would able and necessary expenses. That some humanity in the bankruptcy not provide for meaningful disclosure about means that before some fact finder a courts. the consequences of making low credit card payments. It also fails to adequately protect debtor can plead a Rolls Royce and b 1600 debtors against strong-arm tactics used by really make a case or try to make a case that that is reasonable and nec- The objective standards of which the creditors to re-affirm debt, abuses that have gentleman from Pennsylvania (Mr. been recently well-documented in the Sears essary—I am exaggerating, of course, case and others. to make a point—for the conduct of GEKAS) speaks are rigid and inhumane The UAW also is troubled that H.R. 833 that person’s enterprise. standards, inhumane standards that places substantial procedural and sub- For a variety of things from Oregon this Congress told the IRS to junk last stantive barriers in the way of small busi- to Georgia, there would be 20 different year because we found they were inhu- ness seeking to re-organize under Chapter 11. mane. They are also standards that ig- This could result in the loss of thousands of types of decisions made by 25 different courts on 25 different items in a bank- nore the facts. jobs for American workers. In addition to what the gentleman The UAW supports balanced bankruptcy ruptcy proceeding. Disparity will re- from Michigan said before about the reform. But that is not what H.R. 833 is turn. We are trying to get rid of dis- things they ignore, the fact is these about. Instead, it would favor the interests parity. Flexibility of outcome will re- of credit card companies and banks over the standards are rigid and are averages. If turn where we are trying to contract you are a bankrupt and you are going interests of hard working families that are that, to bring predictability and sta- experiencing financial difficulties. We there- to bankruptcy and they want to figure fore urge you to oppose H.R. 833. bility into the system. out how much you can afford to pay, Sincerely, I do not believe that, in looking at it the proper question is, what is your ALAN REUTHER, very closely, that the gentleman from rent? What is your mortgage? Not what Legislative Director. Michigan and the gentleman from Illi- is the average mortgage payment in Mr. Chairman, I reserve the balance nois would want to shower additional the northeast United States. If the IRS of my time. benefits on the higher income people, says the average mortgage payment in Mr. GEKAS. Mr. Chairman, I yield because that is what the result is. They the United States is $400 a month, but myself such time as I may consume. are loosening those standards, return- your mortgage payment is $500, try to Mr. Chairman, we share, all of us, the ing them to the status quo now where tell the bank that you can only pay reverence for the gentleman from Illi- so many of the high earners are escap- $400. See how far you get. nois (Mr. HYDE) and the gentleman ing scrutiny in the bankruptcy system. The fact is, a means test ought to be from Michigan (Mr. CONYERS), two of That is what their unintended con- based on the reality, on the facts. What the statesmen of our organization and sequences might be. is your real income? That is a problem to whom we look for decision-making Furthermore, all the worry that the with this test that this amendment on a broad spate of subject matters. gentleman from Illinois articulates does not deal with, but what is your But here I think they themselves may about the lack of discretion and flexi- real income? What are your real ex- not realize what they are espousing. bility is taken care of by one flat phra- penses? Not what the IRS thinks the I say that with all kindness, because seology that we employ in our bill, and expenses of the average person in New there are many times when I do not re- that is extraordinary circumstances. York or California might be. alize what I am doing, but this may be When we have a situation, even when The gentleman from Pennsylvania an example of good intentions that re- we apply the objective standards which (Mr. GEKAS) says that you have the sult in unintended consequences. We we think are absolutely necessary for safe harbor, that people under the me- have heard that phraseology many stability of the system, but we also dian income are excluded from this times. allow a variance from that when ex- means test. He forgets his own bill, be- What the gentlemen do, these two traordinary circumstances can be dem- cause this means test is used in Chap- stalwarts of our Chamber, is shower ad- onstrated, then we have covered all the ter 13 without the safe harbor. In Chap- ditional benefits upon the higher in- concerns that the gentleman from Illi- ter 13 this means test says how much come people in our society. How do nois and the gentleman from Michigan you can afford to repay in a repayment they do that? All of us will agree that express and still retain that stalwart plan, even if you are making $10,000 or this whole process begins with the me- set of objective standards that brings $20,000 and you are under the median. dian income. Those people at the me- predictability and stability to the sys- But, again, how much can you afford to dian income or less are protected by tem. repay? Who cares what your real ex- legislation that the gentleman from Il- We must reject it, while applauding penses are? All we care about is what linois himself has put into this bill, the the gentlemen for their intentions, but the IRS says. That is simply unjust. It safe harbor. Those people are beyond the intentions of the proponents and simply will produce injustice. the accountability that we seek from sponsors of this bill is to make sanity This amendment would have the ex- others because they are in such bad out of a system that has gone awry. ecutive office of the United States shape that they must be given almost What they do is retain the status quo. trustee set up standards and the judge automatically a fresh start. We resist that temptation by saying to could look at the real facts. That is But now we are going to the higher the Members, vote ‘‘no’’ on the Hyde- what a just system is. The gentleman income, over $50,000, 60, 70, 80, 90. Now, Conyers amendment. from Pennsylvania (Mr. GEKAS) says, those people under our bill, we have a Mr. Chairman, I reserve the balance well, you can go in and plead extraor- set of standards to make sure that of my time. dinary circumstances. Sure you can, if when we scrutinize their financial cir- Mr. CONYERS. Mr. Chairman, I yield you can spend $7,000 or $8,000 to do that cumstances, we can find, if at all, the 4 minutes to the gentleman from New with a lawyer. And you are bankrupt. possibility that they could repay some York (Mr. NADLER). Good luck. of the debt. By putting these objective Mr. NADLER. Mr. Chairman, the pic- The gentleman from Pennsylvania standards in it that we have, the IRS ture painted by the gentleman from (Mr. GEKAS) says the gentleman from standards, we are putting a standard Pennsylvania (Mr. GEKAS) would be Illinois (Mr. HYDE) and the gentleman into play which allows a reasonable, funny if it were not serious. The gen- from Michigan (Mr. CONYERS) do not objective scrutiny of these financial tleman from Illinois (Mr. HYDE), that understand what they are doing. They circumstances. paragon, supporter and champion of certainly do understand what they are Look what the gentleman from Illi- the raging liberal judiciary. Who be- doing, and because they understand nois and what the gentleman from lieves that? what they are doing, that is why the Michigan do. They say that for the The fact of the matter is that I must National Bankruptcy Conference ap- $90,000 or $100,000 earner, we do not commend the gentleman from Illinois proves of this amendment, and why the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00085 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8578 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Commercial Law League and the Na- Mr. ROYCE. Mr. Chairman, I rise in does not mean they are going to get tional Association of Consumer Bank- strong opposition to the Hyde-Conyers them. I cannot think of a Federal ruptcy Attorneys, the National Asso- amendment. bankruptcy court that would allow ciation of Bankruptcy Trustees, the Mr. Chairman, this legislation, H.R. that sort of thing. National Association of Chapter 13 833, is about personal responsibility. It Mr. Chairman, it is no answer to as- Trustees, the Consumer Federation of is about clear standards. It is about sert that ‘‘glitches’’, so-called, can be America, the Consumers Union, Public correcting a system that was designed resolved through the bill’s allowance Citizen, and everybody who knows any- to help those who have fallen on hard for extraordinary circumstances, that thing about bankruptcy, except the times, but which is now used to protect has been raised more than once here, creditors who are buying and paying those who can afford to pay to repay because establishing that a particular for this bill, support this amendment. some of their debt, but they choose not expense is extraordinary is neither Mr. GEKAS. Mr. Chairman, I yield 2 to. simple nor cost free. These cir- minutes to the gentleman from Ten- H.R. 833 imposes clear objective cumstances can only be established on nessee (Mr. BRYANT), a member of the standards to give debtors, creditors, a motion to the court prepared by legal committee. judges and trustees guidance in apply- counsel. Mr. BRYANT. Mr. Chairman, I thank ing a means test used to determine who We are talking about bankrupts. The the gentleman for yielding me time. has the ability to repay some of their motion must be detailed, documented Mr. Chairman, I too stand in opposi- debt. How is this test based? On the and subject to creditor challenge. tion to this amendment. In order to median expenditure levels as deter- Moreover, the burden of proof lies with have effective bankruptcy reform, we mined by the Bureau of Labor Stand- the debtor in establishing extraor- need to have in this bill a set of uni- ards and Statistics. This represents dinary circumstances. So if the debt- form standards as to whether or not what the average American family or’s motion fails, he is then subject to someone should be allowed to file in spends each month and what someone paying the creditor’s fees and costs. Chapter 7 or in Chapter 13 bankruptcy. in bankruptcy can afford to repay. Collectively, these risks provide a tre- The reason I oppose this amendment is This amendment that we are dis- mendous disincentive for debtors to that it would effectively damage the cussing removes this standard and re- claim extraordinary circumstances. To means test, using an open-ended sub- places it with an entirely undefined add insult to injury, the bill does not jective standards test. We have talked standard of reasonably necessary ex- even provide for the deduction of the about that a little bit. You have heard penses. Essentially this amendment legal expenses needed to establish ex- about that already. would put us right back where we In effect what that does in the real traordinary circumstances. started. The IRS standards should offend us courtroom, it allows the debtor’s ex- Yesterday’s Washington Post in- all, every Member of this body. They penses, rather than being determined cluded an article which, in my view, have been rejected by us, abandoned by in a uniform fashion, to be determined exemplifies what is wrong with the cur- on a case-by-case, jurisdiction-by-juris- the IRS, and, yet, the credit card com- rent bankruptcy code. This article re- diction, court-by-court basis, bound panies would have us apply them in ports on a family with an annual in- only by the limits of the debtor’s bankruptcy. We, who are so strongly imagination or the discretion of the come of $180,000. The family apparently opposed to abusive IRS collection tac- judge. fell on hard times and filed for bank- tics in the income tax context, cannot The debtor may deduct any expense, ruptcy seeking to discharge $140,000 in be supportive of incorporating these if they can show that it is reasonably unsecured debt, but, upon filing, they same standards into bankruptcy law. necessary. If there is ever a word that listed as among their monthly expenses Mr. Chairman, this amendment goes is litigated to the ‘‘Nth’’ degree, it is projected $600 for entertainment, $270 to the heart of my concerns about the the word ‘‘reasonable.’’ That is what for cell phone expenses and so forth. bill. If it is adopted, we may have a you are inviting in this situation. It in- Under H.R. 833, this family would re- chance. I urge Members to give it their vites an open door for litigation every ceive the same allowances for mort- unfettered support. time there is a dispute over what is gage, food, clothing and utilities as Mr. GEKAS. Mr. Chairman, I yield 3 meant by ‘‘reasonably necessary.’’ By they do under current law. However, minutes to the gentleman from Vir- having more litigation, you increase they would be denied the cell phone ginia (Mr. BOUCHER). the administrative burdens on the and the entertainment allowances that Mr. BOUCHER. Mr. Chairman, I bankruptcy system and already add to most Americans who pay their bills on thank the gentleman from Pennsyl- a costly situation. time do not enjoy. vania for yielding me time. The ability to consider in this case Under the Conyers-Hyde amendment Mr. Chairman, I rise in opposition to that our chairman has spoken about there would be no clear standard giving the amendment offered by the gen- the extraordinary circumstances I the judges the same discretion they tleman from Illinois and the gentleman think does give the requisite flexibility have now, and this family and thou- from Michigan. If adopted, the amend- that is needed, while at the same time sands in a similar situation could very ment would seriously undermine the maintaining some uniformity to this well continue with the $600 entertain- needs-based test for the entry into situation. Allowing bankruptcy judges ment and the $270 cell phone calls per Chapter 7 that is at the very core of to create their own test is an invita- month, all at the expense of the con- this bankruptcy reform. tion, as has been said before, to dis- sumers who will ultimately pick up the Our major goal in proposing bank- parate treatment of claims and confu- tab. ruptcy reform is to assure that people sion among creditors and all those who Again, H.R. 833 imposes the clear, who need bankruptcy protection, but work within the bankruptcy system. consistent national standards that will who can afford to repay a substantial Mr. Chairman, in conclusion, I would ensure that those that have the ability part of what they owe, receive their say that my understanding of H.R. 833 to repay their debts are in fact re- protection in Chapter 13 plans in which is that it does not actually incorporate quired to do so. This amendment evis- the court will supervise the repayment. the repayment test by the IRS. In- cerates those standards, and I urge my In the process of determining who stead, it merely incorporates the cat- colleagues to oppose it. can afford to repay a substantial part egories identified by the IRS as nec- Mr. CONYERS. Mr. Chairman, I yield of their debt, the bill subtracts from essary expenses. So I urge my col- myself 2 minutes. the debtor’s monthly income a number leagues to oppose this amendment and Mr. Chairman, first I would point out of items: All secured debt is sub- vote no. to the gentleman that the court would tracted; all priority debts, including Mr. GEKAS. Mr. Chairman, I yield 3 merely disallow those claims that the child support and back taxes are sub- minutes to the gentleman from Cali- gentleman rattled off from the news- tracted; certain school tuition costs fornia (Mr. ROYCE). paper. Just because someone files them are subtracted; and living expenses

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00086 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8579 based upon standards determined by nite guidelines means those interest Manhattan. So what is realistic about the Internal Revenue Service are also rates will not come down; it means an inflexible standard? Why not give subtracted. that the increased availability of those some wiggle room so that humanity The amendment that is now being loans will not be forthcoming until the can play out? considered would replace the certainty lenders have decided what judges are This could be a good bill. It is a great of the IRS standard with a discre- going to do with the discretion that is bill for the creditors, I can say. I have tionary standard for bankruptcy judges added by the Hyde amendment. 75 enhancements here for the creditors. to determine what expenses are reason- H.R. 833 does not incorporate the actual re- Why not throw a little small bone to ably necessary. The certainty of the payment test used by the IRS. Instead, it in- the debtor? IRS standard should be retained, and, corporates the categories identified by the IRS Do not talk about ‘‘reasonably nec- in support of that position, I would cite as necessary expenses. This is an important essary’’ as too vague. Are my col- these arguments. distinction because the means test of H.R. leagues aware, those who have said First, the Internal Revenue Service 833 is more flexible than anything used by the that, that there is 15 years of litigation standards are generous. In a review of IRS. and decisional authority interpreting 2,100 bankruptcy filings in 1997 con- The ability to consider ‘‘extraordinary cir- that? Of course. ‘‘Reasonable’’ is a ducted by a major accounting firm, it cumstances’’ provided for under the bill is a word used in negligence law, in the ex- was found that the living expenses better mechanism to establish fair and equi- ercise of reasonable care and caution. under the IRS standard are, on aver- table reform than the amendment giving bank- To hear some of my colleagues talk, I age, 8 percent higher than the actual ruptcy judges discretion to create their own would think this was from outer space. expenses reported by Chapter 7 filers. tests of ‘‘reasonableness’’. That is nonsense. The expenses allowed under the stand- Allowing bankruptcy judges to create their We have to allow for regional dif- ard are clearly more than adequate. own test is an invitation not only to the dif- ferences, for family differences. A rea- Secondly, discretion already exists ferent treatment of debtors but also to confu- sonably necessary standard is ascer- for bankruptcy judges and trustees to sion among creditors and those who work tainable. move filers from Chapter 7 to Chapter within the bankruptcy system. I am as capitalist as anybody, I am 13 by the filing of a motion alleging I urge defeat of the Hyde amendment. as conservative as anybody, but it does that petitioners are substantially abus- Mr. GEKAS. Mr. Chairman, I yield 1 not seem to me when there is a bill ing Chapter 7 because they can repay a minute to the gentlewoman from Cali- that is truly tilted towards the credi- large part of the debt and really belong fornia (Mrs. TAUSCHER). tors, that giving a little flexibility for in Chapter 13. But, as a practical mat- Mrs. TAUSCHER. Mr. Chairman, I living standards for people who are ter, these motions are rarely filed rise in opposition to this amendment. bankrupt is a violation of one’s creden- today by trustees or by bankruptcy The Bankruptcy Reform Act would en- tials as a conservative. judges. sure that Americans who can reason- The median income that the gen- ably repay some of their debt will do tleman from Pennsylvania (Mr. GEKAS) b 1615 so. It is based on the principle of per- mentioned of $51,000 sounds like a lot The amendment now under consider- sonal responsibility and intended to of money, but that is for a family of ation would simply move this complete stem the tide of American bankruptcy four, a family of four. That may be a discretion over whether to bring a sub- filings. lot of money in Boise, Idaho. It may be stantial abuse motion to the living ex- The Hyde-Conyers amendment flies very little in New York. pense portion of the process. in the face of that fundamental prin- Give some flexibility. The current Since judges and trustees have been ciple. Instead of establishing a reason- law is what ought to obtain. My col- reluctant to use their existing discre- able standard of living expenses, as the leagues are trying to change it by put- tion to require a greater use of Chapter bill does, this amendment would give ting the IRS standards in. It is the first 13 and the lesser use of Chapter 7, there judges broad authority to determine, time, and I dare say the last time, so is little reason to have confidence that quote/unquote, reasonably necessary much kind approbation will be essentially the same discretion will be expenses. showered on the IRS by this side of the any better used under the Hyde-Con- This definition is ambiguous. It pro- aisle. I certainly do not join in that yers amendment than it is under the vides a loophole for bankruptcy filers showering. current process. If it is not, the core re- to avoid repayment and maintains one So this litigation, there will be liti- form that we are seeking to achieve of the deficiencies of the current sys- gation on the IRS standards, there will will not be achieved. tem. be as much litigation as anyone wants. The better course is to reject this This legislation recognizes not every- This could be a good bill. I support amendment and to retain the certainty one who files for bankruptcy is able to this bill, but for goodness sake give of the IRS standard in determining rea- repay their debts but it employs a rea- some humanity in the establishment of sonable living expenses. sonable standard to make that deter- living standards while paying out Mr. GEKAS. Mr. Chairman, I yield 1 mination. The Hyde-Conyers amend- Chapter 13. minute to the gentleman from Michi- ment would remove that reasonable- Lastly, let me pay my respects to the gan (Mr. SMITH). ness from the bill. I urge my colleagues creditor lobby. They are awesome. Mr. SMITH of Michigan. Mr. Chair- to oppose the Hyde-Conyers amend- Mr. GEKAS. Mr. Chairman, I yield man, the reason I am supporting this ment and support the Bankruptcy Re- myself 2 minutes. bill is because it has the tendency of form Act. Mr. Chairman, we return to the re- making loans more available and it has Mr. HYDE. Mr. Chairman, I yield my- curring issue. The current state of the tendency of bringing interest rates self the balance of my time. bankruptcy is in a chaotic mess. One of down. Mr. CONYERS. Mr. Chairman, I yield the reasons is that an individual who This amendment throws open the 30 seconds to the gentleman from Illi- wishes to file bankruptcy finds it very door for litigation every time there is a nois. easy to do so. Very few standards are dispute as to whether a debtor’s par- The CHAIRMAN. The gentleman applied. ticular expenses are reasonably nec- from Illinois (Mr. HYDE) is recognized The system needed tightening up. Ev- essary. This will dramatically increase for 3 minutes. erybody in the world knows that. administrative burdens on the bank- Mr. HYDE. Mr. Chairman, my col- Creditors, and the credit lobby, really ruptcy system. leagues are making a virtue out of understand that; there is no question It also leaves the door open to indeci- what is a vice, and that is the inflexi- about it. We understand how they un- sion based on individual judge interpre- bility of the IRS standards. The cost of derstand it. On the other hand, an ob- tation. Passing this amendment and food in Omaha, Nebraska or Boise, jective onlooker, the lawmakers that doing away with the bill’s more defi- Idaho, is different than in downtown we are, who are eager to tighten up the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00087 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8580 CONGRESSIONAL RECORD—HOUSE May 5, 1999 bankruptcy laws because it is good for In order to differentiate amongst debtors Lowey Oberstar Snyder our society, it is good for our economy, Maloney (NY) Obey Spratt and to end the abuses of the bankruptcy sys- Manzullo Olver Stabenow it saves money for consumers to pre- tem, objective standards are needed to re- Markey Ortiz Stark vent bankruptcies, it saves money for place today’s vague and ambiguous subjective Martinez Owens Strickland taxpayers to prevent bankruptcies, it guidelines in use by the bankruptcy courts. Mascara Pallone Stupak Matsui Payne helps the tax collecting authorities Thompson (MS) Mr. Chairman, the amendment before us will McCarthy (MO) Pelosi Thurman like State governments, school boards, undercut the basic objective of reforming the McCarthy (NY) Phelps Tierney municipal governments to be able to bankruptcy system by allowing judges to con- McDermott Pomeroy Towns McGovern Price (NC) Traficant regain some of their lost taxes by rea- tinue to make the same subjective decisions McHugh Rahall Udall (CO) son of unwarranted bankruptcies, all of about repayment—the very same decisions McIntosh Rangel Udall (NM) McKinney Reyes these societal needs are met in our bill. that have not prevented recent abuse of the Vento What really is something that must McNulty Rodriguez system. Meehan Ros-Lehtinen Visclosky be made clear to first the Members of The decision before us is clear: Vote ‘‘yes’’ Meek (FL) Roybal-Allard Wamp Congress and then to the public is that only if you feel that the majority of your con- Meeks (NY) Rush Waters the current system, that chaotic sys- Miller, George Sabo Watt (NC) stituents should continue to pay the costs of Waxman tem, has too much flexibility. What the Minge Sanchez these abuses. Mink Sanders Weiner Hyde-Conyers amendment does is re- But better yet, vote ‘‘no’’ to give bankruptcy Moakley Sawyer Weldon (PA) turn too much flexibility to a system reform a chance to instill a sense of personal Morella Schakowsky Wexler where we are trying to create stand- Murtha Scott Wilson responsibility in consumer financial trans- Nadler Serrano Wise ards and to tighten up on every corner actions. Napolitano Sherman Woolsey of the bankruptcy field. I urge my colleagues to vote ‘‘no’’ on this Neal Shows Wu How ironic it is that on the one hand amendment. NOES—238 they remove the IRS standards because The CHAIRMAN. The question is on they are odious to many and then they Aderholt Everett McInnis the amendment offered by the gen- Andrews Ewing McIntyre reinsert standards to be set by a trust- tleman from Illinois (Mr. HYDE). Archer Fletcher McKeon ee panel. So all of a sudden we are back Armey Foley Menendez The question was taken; and the to establishing standards anyway. Baker Fowler Metcalf What we have found throughout the Chairman announced that the ayes ap- Ballenger Franks (NJ) Mica peared to have it. Barcia Frelinghuysen Miller (FL) test of the time that has been engulfed Barr Frost Miller, Gary in bankruptcy reform, that the IRS RECORDED VOTE Bartlett Gallegly Mollohan standards provide the starting point Mr. GEKAS. Mr. Chairman, I demand Barton Gekas Moore Bass Gibbons Moran (KS) and from there we have a better system a recorded vote. Bateman Gillmor Moran (VA) at hand. A recorded vote was ordered. Bereuter Goode Myrick Mr. DELAY. Mr. Chairman, I rise today to The CHAIRMAN. Pursuant to House Berry Goodlatte Nethercutt urge my colleagues to vote no on this amend- Biggert Goodling Ney Resolution 158, after this 15-minute Bilbray Gordon Northup ment. Bankruptcy reform must be allowed a vote on the Hyde amendment the Chair Bilirakis Goss Norwood chance to work. will resume proceedings on the three Bliley Graham Nussle The bankruptcy reform bill that is before us questions postponed earlier on which Blunt Granger Ose today is simply trying to jump-start a sense of Boehner Green (WI) Oxley demands for recorded votes are pend- Bonilla Greenwood Packard personal responsibility in the area of consumer ing. Any electronic vote after the first Bono Gutknecht Pascrell financial transactions. vote in this series will be a 5-minute Boswell Hall (TX) Pastor Today’s bankruptcy system has made it too vote. Boucher Hansen Paul easy for irresponsible people to pass on the Boyd Hastings (WA) Pease The vote was taken by electronic de- Brady (TX) Hayes Peterson (MN) burden of their financial debt to responsible vice, and there were—ayes 184, noes 238, Bryant Hayworth Peterson (PA) people. not voting 11, as follows: Burr Hefley Petri The greatness of this country is based on Burton Herger Pickering freedom. But with this freedom comes respon- [Roll No. 110] Buyer Hill (MT) Pickett AYES—184 Callahan Hilleary Pitts sibility for your actions. Calvert Hobson Pombo Because the stigma that was once associ- Abercrombie Davis (IL) Hinchey Campbell Hoekstra Porter ated with bankruptcy has disappeared, we see Ackerman DeFazio Hinojosa Canady Holden Portman Allen DeGette Hoeffel Cannon Hooley Pryce (OH) too many people using bankruptcy as a finan- Bachus Delahunt Holt Castle Horn Quinn cial planning tool. Baird DeLauro Houghton Chabot Hostettler Radanovich And, too many lawyers are getting rich sell- Baldacci Deutsch Hoyer Chenoweth Hulshof Ramstad ing that tool. Baldwin Diaz-Balart Hyde Coble Hunter Regula Gone is the notion that bankruptcy is to be Barrett (NE) Dickey Inslee Coburn Hutchinson Reynolds Barrett (WI) Dicks Jackson (IL) Collins Isakson Riley a last-resort solution to a personal financial Bentsen Dingell Jackson-Lee Combest Istook Rivers crisis. Berkley Dixon (TX) Condit Jenkins Roemer Gone is the chance of receiving a fresh start Bishop Doggett Jefferson Cook John Rogan only after agreeing to a repayment plan. Blagojevich Doyle Johnson, E. B. Cooksey Johnson (CT) Rogers Blumenauer Edwards Jones (OH) Cox Johnson, Sam Rohrabacher Instead, we see debtors routinely expecting Boehlert Engel Kanjorski Cramer Jones (NC) Rothman others to pick up their tab. Bonior Eshoo Kaptur Crane Kasich Roukema That in fact is what happens when the cred- Borski Evans Kildee Crowley Kelly Royce itor passes on his or her losses to other bor- Brady (PA) Farr Kilpatrick Cubin Kennedy Ryan (WI) Brown (FL) Fattah Kind (WI) Cunningham Kingston Ryun (KS) rowers—everyone pays a portion of that debt- Brown (OH) Filner King (NY) Davis (FL) Knollenberg Salmon or’s bill. Camp Forbes Kleczka Davis (VA) Kolbe Sandlin Mr. Chairman, the bankruptcy bill under Capps Ford Klink Deal Kuykendall Sanford consideration today is based on the premise Capuano Fossella Kucinich DeLay Largent Saxton Cardin Frank (MA) LaFalce DeMint Latham Scarborough that those debtors who can afford to repay Carson Ganske LaHood Dooley Lazio Schaffer their debt should do so, rather that have it for- Chambliss Gejdenson Lampson Doolittle Lewis (CA) Sensenbrenner given. Clay Gilchrest Lantos Dreier Lewis (KY) Sessions To accomplish this seemingly simple goal, Clayton Gilman Larson Duncan Linder Shadegg Clement Gonzalez LaTourette Dunn LoBiondo Shaw an income-based means test is employed to Clyburn Green (TX) Leach Ehlers Lucas (KY) Shays determine if a debtor could do one of three Conyers Gutierrez Lee Ehrlich Lucas (OK) Sherwood things: have debt forgiven; reorganize and Costello Hall (OH) Levin Emerson Maloney (CT) Shimkus Coyne Hastings (FL) Lewis (GA) English McCollum Shuster enter into a repayment plan; or refrain from fil- Cummings Hill (IN) Lipinski Etheridge McCrery Sisisky ing for bankruptcy at all. Danner Hilliard Lofgren

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00088 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8581 Skeen Tancredo Upton [Roll No. 111] Reynolds Shimkus Thune Skelton Tanner ´ Riley Shows Velazquez AYES—373 Thurman Smith (MI) Tauscher Walden Rivers Shuster Tiahrt Smith (NJ) Tauzin Walsh Abercrombie Duncan Kucinich Rodriguez Sisisky Tierney Smith (TX) Taylor (MS) Watkins Ackerman Dunn Kuykendall Roemer Skeen Toomey Smith (WA) Taylor (NC) Weldon (FL) Aderholt Edwards LaFalce Rogan Skelton Towns Souder Terry Weller Allen Ehrlich LaHood Rogers Smith (MI) Traficant Spence Thomas Weygand Andrews Emerson Lampson Rohrabacher Smith (NJ) Turner Stearns Thompson (CA) Archer Engel Lantos Ros-Lehtinen Smith (TX) Whitfield Udall (CO) Stenholm Thornberry Armey English Largent Rothman Smith (WA) Wicker Udall (NM) Stump Thune Bachus Eshoo Larson Roukema Snyder Wolf Upton Sununu Tiahrt Baird Etheridge Latham Roybal-Allard Spence Vela´ zquez Sweeney Toomey Young (AK) Baker Ewing LaTourette Royce Stabenow Vento Talent Turner Baldacci Farr Lazio Rush Stark Walden Ballenger Filner Leach Ryun (KS) Stearns Walsh NOT VOTING—11 Barcia Fletcher Levin Sabo Stenholm Wamp Becerra Luther Slaughter Barr Foley Lewis (CA) Salmon Strickland Watkins Berman Millender- Watts (OK) Barrett (NE) Forbes Lewis (GA) Sanchez Stump Brown (CA) McDonald Wynn Barrett (WI) Ford Lewis (KY) Sanders Stupak Waxman Gephardt Simpson Young (FL) Bartlett Fossella Linder Sanford Sununu Weiner Barton Fowler LoBiondo Sawyer Sweeney Weldon (FL) b 1645 Bass Frank (MA) Lucas (KY) Scarborough Talent Weldon (PA) Weller Messrs. PAUL, QUINN, LEWIS of Bateman Frelinghuysen Lucas (OK) Schakowsky Tancredo Bentsen Frost Maloney (CT) Scott Tanner Wexler California, BASS, PETERSON of Penn- Bereuter Gallegly Maloney (NY) Sensenbrenner Tauscher Weygand sylvania, and MOLLOHAN changed Berkley Ganske Manzullo Serrano Tauzin Whitfield their vote from ‘‘aye’’ to ‘‘no.’’ Berry Gejdenson Markey Sessions Taylor (MS) Wicker Ms. McCARTHY of Missouri and Mr. Biggert Gekas Mascara Shadegg Terry Wise Bilbray Gibbons Matsui Shaw Thomas Wolf EVANS changed their vote from ‘‘no’’ Bilirakis Gilchrest McCarthy (MO) Shays Thompson (CA) Woolsey to ‘‘aye.’’ Bishop Gillmor McCarthy (NY) Sherman Thompson (MS) Wu So the amendment was rejected. Blagojevich Gilman McCollum Sherwood Thornberry Young (AK) The result of the vote was announced Bliley Gonzalez McCrery Blumenauer Goode McGovern NOES—47 as above recorded. Blunt Goodlatte McHugh Baldwin Fattah Nadler Stated for: Boehlert Gordon McIntosh Bonior Goodling Owens Mr. BERMAN. Mr. Chairman, I was unable Boehner Goss McIntyre Bono Hefley Paul Bonilla Graham McKeon Borski Hinchey Payne to cast a vote on the Hyde-Conyers amend- Boswell Granger McKinney ment due to a family emergency. However, Brady (PA) Jackson-Lee Peterson (MN) Boucher Green (TX) McNulty Burr (TX) Pombo had I been present, I would have voted ‘‘aye.’’ Boyd Green (WI) Meek (FL) Canady Kilpatrick Ryan (WI) Stated against: Brady (TX) Greenwood Menendez Cannon Lee Sandlin Mr. DICKEY. Mr. Chairman, I inad- Brown (FL) Gutierrez Metcalf Chenoweth Lipinski Schaffer Brown (OH) Gutknecht Mica vertently voted incorrectly on the Conyers Lofgren Souder Bryant Hall (OH) Millender- DeFazio Lowey Spratt Hyde-Conyers amendment. I would like Burton Hall (TX) McDonald Delahunt Martinez Taylor (NC) the RECORD to reflect that my vote of Buyer Hansen Miller (FL) DeLauro McDermott Visclosky ‘‘yes’’ should have been a vote of ‘‘no.’’ Callahan Hastings (FL) Miller, Gary Ehlers McInnis Waters Calvert Hastings (WA) Miller, George Evans Meehan Watt (NC) That was my intention. Camp Hayes Minge Everett Meeks (NY) Wilson SEQUENTIAL VOTES POSTPONED IN COMMITTEE Campbell Hayworth Mink Capps Herger Moakley OF THE WHOLE NOT VOTING—13 Capuano Hill (IN) Mollohan The CHAIRMAN. Pursuant to House Cardin Hill (MT) Moore Becerra Gephardt Watts (OK) Resolution 158, proceedings will now Carson Hilleary Moran (KS) Berman Luther Wynn resume on those amendments on which Castle Hilliard Moran (VA) Brown (CA) Saxton Young (FL) Chabot Hinojosa Morella Cox Simpson further proceedings were postponed in Chambliss Hobson Murtha Franks (NJ) Slaughter the following order: Amendment No. 3 Clay Hoeffel Myrick offered by the gentleman from Virginia Clayton Hoekstra Napolitano Clement b 1654 (Mr. MORAN); amendment No. 7 offered Holden Neal Clyburn Holt Nethercutt by the gentleman from Michigan (Mr. Coble Hooley Ney Ms. JACKSON-LEE of Texas, Mr. CONYERS); and amendment No. 8 offered Coburn Horn Northup MEEKS of New York, and Mr. PAYNE by the gentleman from North Carolina Collins Hostettler Norwood changed their vote from ‘‘aye’’ to ‘‘no.’’ Combest Houghton Nussle (Mr. WATT). Condit Hoyer Oberstar So the amendment was agreed to. The Chair will reduce to 5 minutes Cook Hulshof Obey The result of the vote was announced the time for any electronic vote in this Cooksey Hunter Olver as above recorded. series. Costello Hutchinson Ortiz Coyne Hyde Ose AMENDMENT NO. 7 OFFERED BY MR. CONYERS AMENDMENT NO. 3 OFFERED BY MR. MORAN OF Cramer Inslee Oxley VIRGINIA Crane Isakson Packard The CHAIRMAN. The pending busi- The CHAIRMAN. The pending busi- Crowley Istook Pallone ness is the demand for a recorded vote Cubin Jackson (IL) Pascrell on the amendment offered by the gen- ness is the demand for a recorded vote Cummings Jefferson Pastor tleman from Michigan (Mr. CONYERS) on the amendment offered by the gen- Cunningham Jenkins Pease tleman from Virginia (Mr. MORAN) on Danner John Pelosi on which further proceedings were which further proceedings were post- Davis (FL) Johnson (CT) Peterson (PA) postponed and on which the noes pre- Davis (IL) Johnson, E. B. Petri vailed by voice vote. poned and on which the ayes prevailed Davis (VA) Johnson, Sam Phelps by voice vote. Deal Jones (NC) Pickering The Clerk will redesignate the The Clerk will redesignate the DeGette Jones (OH) Pickett amendment. amendment. DeLay Kanjorski Pitts DeMint Kaptur Pomeroy The Clerk redesignated the amend- The Clerk redesignated the amend- Deutsch Kasich Porter ment. ment. Diaz-Balart Kelly Portman RECORDED VOTE RECORDED VOTE Dickey Kennedy Price (NC) Dicks Kildee Pryce (OH) The CHAIRMAN. A recorded vote has The CHAIRMAN. A recorded vote has Dingell Kind (WI) Quinn been demanded. been demanded. Dixon King (NY) Radanovich A recorded vote was ordered. Doggett Kingston Rahall A recorded vote was ordered. The vote was taken by electronic de- Dooley Kleczka Ramstad The vote was taken by electronic de- Doolittle Klink Rangel vice, and there were—ayes 373, noes 47, Doyle Knollenberg Regula vice, and there were—ayes 143, noes 278, not voting 13, as follows: Dreier Kolbe Reyes not voting 12, as follows:

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00089 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8582 CONGRESSIONAL RECORD—HOUSE May 5, 1999 [Roll No. 112] Hulshof Moran (KS) Sherman The Clerk redesignated the amend- Hunter Moran (VA) Sherwood ment. AYES—143 Hutchinson Morella Shimkus Abercrombie Hinchey Neal Hyde Myrick Shuster RECORDED VOTE Inslee Nethercutt Ackerman Hinojosa Oberstar Sisisky The CHAIRMAN. A recorded vote has Isakson Ney Allen Hoeffel Obey Skeen been demanded. Baird Holden Istook Northup Skelton Olver Jefferson Norwood A recorded vote was ordered. Baldacci Holt Ortiz Smith (NJ) Jenkins Nussle Smith (TX) Baldwin Houghton Owens The CHAIRMAN. This will be a 5- John Ose Smith (WA) Barcia Jackson (IL) Pallone minute vote. Johnson (CT) Oxley Snyder Barrett (WI) Jackson-Lee Pascrell Johnson, Sam Packard Souder The vote was taken by electronic de- Berkley (TX) Payne Jones (NC) Pastor Spence vice, and there were—ayes 192, noes 230, Bishop Johnson, E. B. Pelosi Blagojevich Jones (OH) Kasich Paul Spratt Phelps not voting 11, as follows: Bonior Kanjorski Kelly Pease Stabenow Price (NC) Kennedy Peterson (MN) [Roll No. 113] Borski Kaptur Stearns Rahall Kind (WI) Peterson (PA) Brady (PA) Kildee Stenholm AYES—192 Rangel King (NY) Petri Brown (FL) Kilpatrick Stump Reyes Kingston Pickering Abercrombie Hastings (FL) Napolitano Brown (OH) Kleczka Sununu Rivers Knollenberg Pickett Ackerman Hill (IN) Neal Capuano Klink Sweeney Allen Hilliard Rodriguez Kolbe Pitts Oberstar Carson Kucinich Talent Bachus Hinchey Obey Clay LaFalce Rothman Kuykendall Pombo Tancredo Baird Hinojosa Olver Clayton Lampson Roybal-Allard LaHood Pomeroy Tanner Baldwin Hoeffel Ortiz Clyburn Lantos Rush Largent Porter Latham Portman Tauscher Barcia Holt Owens Conyers Larson Sabo Tauzin Barrett (WI) Hooley Coyne Lee Sanders LaTourette Pryce (OH) Pallone Lazio Quinn Taylor (MS) Bentsen Hyde Pastor Crowley Lewis (GA) Sawyer Taylor (NC) Leach Radanovich Bereuter Inslee Payne Cummings Linder Saxton Terry Berkley Jackson (IL) Levin Ramstad Pease Davis (IL) Lowey Schakowsky Thomas Bishop Jefferson Lewis (CA) Regula Pelosi DeFazio Maloney (NY) Scott Thompson (CA) Blagojevich John Lewis (KY) Reynolds Petri DeGette Markey Serrano Thornberry Blumenauer Johnson, E. B. Lipinski Riley Phelps Delahunt Martinez Shows Thune Boehlert Jones (OH) LoBiondo Roemer Price (NC) DeLauro Mascara Stark Tiahrt Bonior Kanjorski Dingell McCarthy (MO) Lofgren Rogan Rahall Strickland Lucas (KY) Rogers Toomey Borski Kaptur Doyle McCarthy (NY) Stupak Turner Boyd Kildee Rangel Edwards McDermott Lucas (OK) Rohrabacher Reyes Thompson (MS) Maloney (CT) Ros-Lehtinen Udall (NM) Brady (PA) Kilpatrick Engel McGovern Thurman Upton Brown (FL) King (NY) Reynolds Eshoo McIntyre Manzullo Roukema Tierney Walden Brown (OH) Kleczka Rivers Etheridge McKinney Matsui Royce Towns Walsh Bryant Klink Rodriguez Evans McNulty McCollum Ryan (WI) Traficant Wamp Burr Kucinich Rothman Farr Meehan McCrery Ryun (KS) Watkins Campbell LaFalce Roybal-Allard Fattah Meek (FL) Udall (CO) McHugh Salmon ´ Weldon (FL) Canady Lampson Rush Filner Meeks (NY) Velazquez McInnis Sanchez Weldon (PA) Capps Lantos Sabo Ford Menendez Vento McIntosh Sandlin Weller Capuano Larson Salmon Frank (MA) Millender- Visclosky McKeon Sanford Weygand Cardin LaTourette Sanchez Frost McDonald Waters Metcalf Scarborough Whitfield Carson Lee Sanders Gejdenson Miller, George Watt (NC) Mica Schaffer Wicker Chenoweth Levin Sandlin Gonzalez Minge Waxman Miller (FL) Sensenbrenner Wilson Clay Lewis (GA) Sanford Green (TX) Moakley Weiner Miller, Gary Sessions Wise Clayton Linder Sawyer Gutierrez Murtha Wexler Mink Shadegg Wolf Clyburn Lipinski Schakowsky Hastings (FL) Nadler Woolsey Mollohan Shaw Coble Lofgren Scott Hilliard Napolitano Wu Moore Shays Young (AK) Conyers Lowey Serrano NOT VOTING—12 Costello Maloney (NY) Sherwood NOES—278 Becerra Gephardt Smith (MI) Coyne Manzullo Smith (NJ) Aderholt Castle Fletcher Berman Luther Watts (OK) Crowley Markey Snyder Andrews Chabot Foley Bilirakis Simpson Wynn Cummings Martinez Spratt Archer Chambliss Forbes Brown (CA) Slaughter Young (FL) Davis (IL) Mascara Stabenow Armey Chenoweth Fossella DeFazio Matsui Stark Bachus Clement Fowler b 1704 DeGette McCarthy (MO) Strickland Baker Coble Franks (NJ) Delahunt McCarthy (NY) Stupak Mr. DIXON changed his vote from DeLauro McCrery Ballenger Coburn Frelinghuysen Tancredo ‘‘aye’’ to ‘‘no.’’ Diaz-Balart McDermott Barr Collins Gallegly Thompson (MS) Dicks McGovern Barrett (NE) Combest Ganske Mr. MINGE changed his vote from Thurman Dingell McHugh Bartlett Condit Gekas ‘‘no’’ to ‘‘aye.’’ Tierney Dixon McKinney Barton Cook Gibbons So the amendment was rejected. Towns Bass Cooksey Gilchrest Doggett McNulty The result of the vote was announced Dooley Meehan Traficant Bateman Costello Gillmor Turner Bentsen Cox Gilman as above recorded. Doyle Meek (FL) Edwards Meeks (NY) Udall (CO) Bereuter Cramer Goode Stated for: ´ Eshoo Menendez Velazquez Berry Crane Goodlatte Mr. BERMAN. Mr. Chairman, I was unable Vento Biggert Cubin Goodling Etheridge Millender- to cast a vote on the Conyers amendment due Visclosky Bilbray Cunningham Gordon Evans McDonald Waters Bliley Danner Goss to a family emergency. However, had I been Farr Miller (FL) Watt (NC) Blumenauer Davis (FL) Graham present, I would have voted ‘‘aye.’’ Fattah Miller, George Waxman Blunt Davis (VA) Granger Stated against: Filner Minge Weiner Boehlert Deal Green (WI) Mr. BILIRAKIS. Mr. Chairman, I Fossella Mink Gejdenson Moakley Wexler Boehner DeLay Greenwood missed rollcall Vote 112 because I was Bonilla DeMint Gutknecht Gonzalez Mollohan Whitfield Bono Deutsch Hall (OH) unfortunately detained and unable to Gordon Moran (VA) Wise Boswell Diaz-Balart Hall (TX) make it to the floor. Had I been Green (TX) Murtha Wolf Boucher Dickey Hansen present, I would have voted ‘‘no.’’ Gutierrez Myrick Woolsey Boyd Dicks Hastings (WA) Hall (OH) Nadler Wu AMENDMENT OFFERED BY MR. WATT OF NORTH Brady (TX) Dixon Hayes NOES—230 Bryant Doggett Hayworth CAROLINA Burr Dooley Hefley The CHAIRMAN (Mr. NETHERCUTT). Aderholt Bass Boswell Burton Doolittle Herger The pending business is the demand for Andrews Bateman Boucher Buyer Dreier Hill (IN) a recorded vote on the amendment of- Archer Berry Brady (TX) Callahan Duncan Hill (MT) Armey Biggert Burton Calvert Dunn Hilleary fered by the gentleman from North Baker Bilbray Buyer Camp Ehlers Hobson Carolina (Mr. WATT) on which further Baldacci Bilirakis Callahan Campbell Ehrlich Hoekstra proceedings were postponed and on Ballenger Bliley Calvert Canady Emerson Hooley Barr Blunt Camp Cannon English Horn which the noes prevailed by voice vote. Barrett (NE) Boehner Cannon Capps Everett Hostettler The Clerk will redesignate the Bartlett Bonilla Castle Cardin Ewing Hoyer amendment. Barton Bono Chabot

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00090 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8583 Chambliss Hobson Quinn The CHAIRMAN. It is now in order to Sec. 135. Adequate protection of lessors and Clement Hoekstra Radanovich consider amendment No. 11 printed in purchase money secured credi- Coburn Holden Ramstad House Report 106–126. tors. Collins Horn Regula Sec. 136. Automatic stay. Combest Hostettler Riley AMENDMENT IN THE NATURE OF A SUBSTITUTE Sec. 137. Extend period between bankruptcy Condit Houghton Roemer NO. 11 OFFERED BY MR. NADLER Cook Hoyer Rogan discharges. Cooksey Hulshof Rogers Mr. NADLER. Mr. Chairman, I offer Sec. 139. Priorities for claims for domestic Cox Hunter Rohrabacher an amendment in the nature of a sub- support obligations. Cramer Hutchinson Ros-Lehtinen stitute. Sec. 142. Nondischargeability of certain Crane Isakson Roukema The CHAIRMAN. The Clerk will des- debts for alimony, mainte- Cubin Istook Royce nance, and support. Cunningham Jenkins Ryan (WI) ignate the amendment in the nature of Danner Johnson (CT) Sec. 143. Continued liability of property. Ryun (KS) a substitute. Sec. 144. Protection of domestic support Davis (FL) Johnson, Sam Saxton The text of the amendment in the na- Davis (VA) Jones (NC) claims against preferential Scarborough ture of a substitute is as follows: Deal Kasich Schaffer transfer motions. DeLay Kelly Sensenbrenner Amendment in the nature of a substitute Sec. 145. Clarification of meaning of house- DeMint Kennedy Sessions No. 11 offered by Mr. NADLER: hold goods. Deutsch Kind (WI) Shadegg Strike all after the enacting clause and in- Sec. 147. Monetary limitation on certain ex- Dickey Kingston Shaw sert the following: empt property. Doolittle Knollenberg Shays Sec. 148. Bankruptcy fees. Dreier Kolbe Sherman SECTION 1. SHORT TITLE; TABLE OF CONTENTS. Sec. 149. Collection of child support. Duncan Kuykendall Shimkus Dunn LaHood Sec. 150. Excluding employee benefit plan Shows (a) SHORT TITLE.—This Act may be cited as Ehlers Largent participant contributions and Shuster the ‘‘Bankruptcy Reform Act of 1999’’. Ehrlich Latham Sisisky (b) TABLE OF CONTENTS.—The table of con- other property from the estate. Emerson Lazio Skeen Sec. 151. Clarification of postpetition wages Engel Leach tents of this Act is as follows: Skelton and benefits. English Lewis (CA) Sec. 1. Short title; table of contents. Smith (MI) Sec. 152. Exceptions to automatic stay in Everett Lewis (KY) Smith (TX) TITLE I—CONSUMER BANKRUPTCY Ewing LoBiondo domestic support obligation Smith (WA) PROVISIONS Fletcher Lucas (KY) proceedings. Souder Foley Lucas (OK) Subtitle A—Needs based bankruptcy Sec. 153. Automatic stay inapplicable to cer- Spence Forbes Maloney (CT) Sec. 101. Conversion. tain proceedings against the Ford McCollum Stearns Stenholm Sec. 102. Dismissal or conversion. debtor. Fowler McInnis Sec. 154. Definition of domestic support obli- Frank (MA) McIntosh Stump Sec. 103. Notice of alternatives. Sununu Sec. 104. Debtor financial management gation. Franks (NJ) McIntyre Sec. 155. Requirements to obtain confirma- Frelinghuysen McKeon Sweeney training test program. Talent tion and discharge in cases in- Frost Metcalf Subtitle B—Consumer Bankruptcy Tanner volving domestic support obli- Gallegly Mica Protections Ganske Miller, Gary Tauscher gations. Gekas Moore Tauzin Sec. 105. Definitions. Sec. 156. Exceptions to automatic stay in Gibbons Moran (KS) Taylor (MS) Sec. 106. Enforcement. domestic support obligation Gilchrest Morella Taylor (NC) Sec. 107. Sense of the congress. Terry proceedings. Gillmor Nethercutt Sec. 108. Discouraging abusive reaffirmation Sec. 157. Exemption for right to receive cer- Gilman Ney Thomas Thompson (CA) practices. tain alimony, maintenance, or Goode Northup Sec. 109. Promotion of alternative dispute Goodlatte Norwood Thornberry support. Goodling Nussle Thune resolution. Sec. 158. Automatic stay inapplicable to cer- Goss Ose Tiahrt Sec. 110. Enhanced disclosure for credit ex- tain proceedings against the Graham Oxley Toomey tensions secured by a dwelling. debtor. Granger Packard Udall (NM) Sec. 111. Dual use debit card. TITLE II—DISCOURAGING BANKRUPTCY Green (WI) Pascrell Upton Sec. 112. Discouraging reckless lending prac- ABUSE Greenwood Paul Walden tices. Gutknecht Peterson (MN) Walsh Sec. 113. Protection of savings earmarked Sec. 201. Reenactment of chapter 12. Wamp Hall (TX) Peterson (PA) for the postsecondary education Sec. 202. Meetings of creditors and equity se- Hansen Pickering Watkins curity holders. Weldon (FL) of children. Hastings (WA) Pickett Sec. 203. Protection of retirement savings in Hayes Pitts Weldon (PA) Sec. 114. Effect of discharge. Hayworth Pombo Weller Sec. 115. Limiting trustee liability. bankruptcy. Hefley Pomeroy Weygand Sec. 116. Reinforce the fresh start. Sec. 204. Protection of refinance of security Herger Porter Wicker Sec. 117. Discouraging bad faith repeat fil- interest. Hill (MT) Portman Wilson ings. Sec. 205. Executory contracts and unexpired Hilleary Pryce (OH) Young (AK) Sec. 118. Curbing abusive filings. leases. NOT VOTING—11 Sec. 119. Debtor retention of personal prop- Sec. 206. Creditors and equity security hold- ers committees. Becerra Jackson-Lee Slaughter erty security. Sec. 120. Relief from the automatic stay Sec. 207. Amendment to section 546 of title Berman (TX) Watts (OK) 11, United States Code. Brown (CA) Luther Wynn when the debtor does not com- Gephardt Simpson Young (FL) plete intended surrender of con- Sec. 208. Limitation. sumer debt collateral. Sec. 209. Amendment to section 330(a) of title 11, United States Code. b 1715 Sec. 121. Giving secured creditors fair treat- ment in chapter 13. Sec. 210. Postpetition disclosure and solici- Mr. PALLONE changed his vote from Sec. 123. Fair valuation of collateral. tation. Sec. 124. Domiciliary requirements for ex- Sec. 211. Preferences. ‘‘no’’ to ‘‘aye.’’ Sec. 212. Venue of certain proceedings. So the amendment was rejected. emptions. Sec. 125. Restrictions on certain exempt Sec. 213. Period for filing plan under chapter The result of the vote was announced 11. as above recorded. property obtained through fraud. Sec. 214. Fees arising from certain owner- Stated for: Sec. 126. Rolling stock equipment. ship interests. Mr. BERMAN. Mr. Chairman, I was unable Sec. 127. Discharge under chapter 13. Sec. 215. Claims relating to insurance depos- to cast a vote on the Watt amendment due to Sec. 128. Bankruptcy judgeships. its in cases ancillary to foreign Sec. 129. Additional amendments to title 11, proceedings. a family emergency. However, had I been Sec. 216. Defaults based on nonmonetary ob- present, I would have voted ‘‘aye.’’ United States Code. Sec. 131. Application of the codebtor stay ligations. Ms. JACKSON-LEE of Texas. Mr. Sec. 217. Sharing of compensation. only when the stay protects the Chairman, during Rollcall Vote No. 113, Sec. 218. Priority for administrative ex- debtor. penses. the Watt amendment under bill H.R. Sec. 132. Adequate protection for investors. 833 on May 5, 1999, I was unavoidably Sec. 134. Giving debtors the ability to keep TITLE III—GENERAL BUSINESS detained. Had I been present, I would leased personal property by as- BANKRUPTCY PROVISIONS have voted ‘‘aye.’’ sumption. Sec. 301. Definition of disinterested person.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00091 Fmt 0688 Sfmt 0655 E:\BR99\H05MY9.003 H05MY9 8584 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Sec. 302. Miscellaneous improvements. Sec. 805. Tolling of priority of tax claim Sec. 1119. General provisions. Sec. 303. Extensions. time periods. Sec. 1120. Appointment of elected trustee. Sec. 304. Local filing of bankruptcy cases. Sec. 806. Priority property taxes incurred. Sec. 1121. Abandonment of railroad line. Sec. 305. Permitting assumption of con- Sec. 807. Chapter 13 discharge of fraudulent Sec. 1122. Contents of plan. tracts. and other taxes. Sec. 1123. Discharge under chapter 12. TITLE IV—SMALL BUSINESS Sec. 808. Chapter 11 discharge of fraudulent Sec. 1124. Bankruptcy cases and proceedings. BANKRUPTCY PROVISIONS taxes. Sec. 1125. Knowing disregard of bankruptcy Sec. 809. Stay of tax proceedings. law or rule. Sec. 401. Flexible rules for disclosure State- Sec. 810. Periodic payment of taxes in chap- Sec. 1126. Transfers made by nonprofit char- ment and plan. ter 11 cases. itable corporations. Sec. 402. Definitions. Sec. 811. Avoidance of statutory tax liens Sec. 1127. Prohibition on certain actions for Sec. 403. Standard form disclosure State- prohibited. failure to incur finance charges. ment and plan. Sec. 812. Payment of taxes in the conduct of Sec. 1128. Protection of valid purchase Sec. 404. Uniform national reporting re- business. money security interests. quirements. Sec. 813. Tardily filed priority tax claims. Sec. 1129. Trustees. Sec. 405. Uniform reporting rules and forms Sec. 814. Income tax returns prepared by tax for small business cases. TITLE XII—GENERAL EFFECTIVE DATE; authorities. Sec. 406. Duties in small business cases. APPLICATION OF AMENDMENTS Sec. 815. Discharge of the estate’s liability Sec. 407. Plan filing and confirmation dead- Sec. 1201. Effective date; application of for unpaid taxes. lines. amendments. Sec. 816. Requirement to file tax returns to Sec. 408. Plan confirmation deadline. confirm chapter 13 plans. TITLE I—CONSUMER BANKRUPTCY Sec. 409. Prohibition against extension of Sec. 817. Standards for tax disclosure. PROVISIONS time. Sec. 818. Setoff of tax refunds. Sec. 410. Duties of the United States trustee. Subtitle A—Needs based bankruptcy Sec. 411. Scheduling conferences. TITLE IX—ANCILLARY AND OTHER SEC. 101. CONVERSION. Sec. 412. Serial filer provisions. CROSS-BORDER CASES Section 706(c) of title 11, United States Sec. 413. Expanded grounds for dismissal or Sec. 901. Amendment to add chapter 15 to Code, is amended by inserting ‘‘or consents conversion and appointment of title 11, United States Code. to’’ after ‘‘requests’’. trustee or examiner. Sec. 902. Amendments to other chapters in SEC. 102. DISMISSAL OR CONVERSION. Sec. 414. Study of operation of title 11 of the title 11, United States Code. (a) IN GENERAL.—Section 707 of title 11, United States Code with re- TITLE X—FINANCIAL CONTRACT United States Code, is amended— spect to small businesses. PROVISIONS (1) by striking the section heading and in- Sec. 415. Payment of interest. Sec. 1001. Treatment of certain agreements serting the following: Sec. 416. Protection of jobs. by conservators or receivers of ‘‘§ 707. Dismissal of a case or conversion to a TITLE V—MUNICIPAL BANKRUPTCY insured depository institutions. case under chapter 13’’; and PROVISIONS Sec. 1002. Authority of the corporation with (2) by amending subsection (b) to read as Sec. 501. Petition and proceedings related to respect to failed and failing in- follows: petition. stitutions. ‘‘(b)(1) After notice and a hearing, a court, Sec. 502. Applicability of other sections to Sec. 1003. Amendments relating to transfers on its own motion or on a motion by the chapter 9. of qualified financial contracts. United States trustee, the trustee, or any TITLE VI—STREAMLINING THE Sec. 1004. Amendments relating to part in interest who is eligible to bring a mo- BANKRUPTCY SYSTEM disaffirmance or repudiation of tion, may dismiss a case filed by an indi- qualified financial contracts. Sec. 601. Creditor representation at first vidual debtor under this chapter, or with the Sec. 1005. Clarifying amendment relating to meeting of creditors. debtor’s consent, convert such a case to a master agreements. Sec. 602. Audit procedures. case under chapter 11 or 13 of this title if it Sec. 1006. Federal Deposit Insurance Cor- Sec. 603. Giving creditors fair notice in finds that the granting of relief would be an poration Improvement Act of chapter 7 and 13 cases. abuse of the provisions of this chapter, the Sec. 604. Dismissal for failure to timely file 1991. court shall consider whether— Sec. 1007. Bankruptcy Code amendments. schedules or provide required ‘‘(A) the debtor has the ability to repay Sec. 1008. Recordkeeping requirements. information. some portion of the debtor’s unsecured non- Sec. 1009. Exemptions from contempora- Sec. 605. Adequate time to prepare for hear- priority debt as determined under para- neous execution requirement. ing on confirmation of the plan. graphs (2) and (3); Sec. 1010. Damage measure. Sec. 606. Chapter 13 plans to have a 5-year ‘‘(B) the debtor has filed the petition in Sec. 1011. SIPC stay. duration in certain cases. bad faith; or Sec. 1012. Asset-backed securitizations. Sec. 607. Sense of the Congress regarding ex- ‘‘(C) the totality of the circumstances (in- Sec. 1013. Federal Reserve collateral re- pansion of rule 9011 of the Fed- cluding whether the debtor seeks to reject a quirements. eral Rules of Bankruptcy Pro- personal services contract and the financial Sec. 1014. Effective date; application of cedure. need for such rejection as sought by the amendments. Sec. 608. Elimination of certain fees payable debtor) of the debtor’s financial situation in chapter 11 bankruptcy cases. TITLE XI—TECHNICAL CORRECTIONS demonstrates abuse. Sec. 609. Study of bankruptcy impact of Sec. 1101. Definitions. ‘‘(2) In considering under paragraph (1)(A) credit extended to dependent Sec. 1102. Adjustment of dollar amounts. whether the granting of relief would be an students. Sec. 1103. Extension of time. abuse of the provisions of this chapter, the Sec. 610. Prompt relief from stay in indi- Sec. 1104. Technical amendments. court shall conclusively presume abuse does vidual cases. Sec. 1105. Penalty for persons who neg- not exist if the debtor’s current monthly in- Sec. 611. Stopping abusive conversions from ligently or fraudulently prepare come, when multiplied by 12, is less than or chapter 13. bankruptcy petitions. equal to 100 percent of the highest national Sec. 612. Bankruptcy appeals. Sec. 1106. Limitation on compensation of or applicable State or Statistical Area me- Sec. 613. GAO study. professional persons. dian family income reported for a family of TITLE VII—BANKRUPTCY DATA Sec. 1107. Special tax provisions. equal size, whichever is greater, or in the Sec. 1108. Effect of conversion. case of a household of 1 person, less than or Sec. 701. Improved bankruptcy statistics. Sec. 1109. Allowance of administrative ex- equal to 100 percent of the highest national Sec. 702. Uniform rules for the collection of penses. or State or Metropolitan Statistical Area bankruptcy data. Sec. 1110. Priorities. median household income for 1 earner, Sec. 703. Sense of the Congress regarding Sec. 1111. Exemptions. whichever is greater, as adjusted, if applica- availability of bankruptcy Sec. 1112. Exceptions to discharge. ble, as provided in paragraph (6). data. Sec. 1113. Effect of discharge. ‘‘(3) In considering under paragraph (1)(A) TITLE VIII—BANKRUPTCY TAX Sec. 1114. Protection against discriminatory whether the granting of relief would be an PROVISIONS treatment. abuse of the provision of this chapter, the Sec. 801. Treatment of certain liens. Sec. 1115. Property of the estate. court shall presume abuse exists if— Sec. 802. Effective notice to government. Sec. 1116. Preferences. ‘‘(A) the debtor’s current monthly income, Sec. 803. Notice of request for a determina- Sec. 1117. Postpetition transactions. when multiplied by 12, is less than or equal tion of taxes. Sec. 1118. Disposition of property of the es- to 100 percent of the highest national or ap- Sec. 804. Rate of interest on tax claims. tate. plicable State or Metropolitan Statistical

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00092 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8585 Area median family income reported for a whether a presumption arises under para- tical Area median family income reported family of equal size, whichever is greater, or graph (1)(A) of this subsection; or for a family of equal size, whichever is great- in the case of a household of 1 person, less ‘‘(ii) a statement of the debtor’s current er, or in the case of a household of 1 person, than or equal to 100 percent of the highest monthly income showing that the debtor is a less than or equal to 100 percent of the high- national or State or Metropolitan Statistical debtor described in paragraph (14) of this est national or State or Metropolitan Statis- Area median household income for 1 yearner, subsection. tical Area median household income for 1 whichever is greater, as adjusted, if applica- ‘‘(B) The Supreme Court shall promulgate earner, whichever is greater, as adjusted, if ble, as provided in paragraph (6); and rules under section 2075 of title 28, United applicable, as provided in paragraph(6);’’. ‘‘(B) the product of— States Code, that prescribe a form for a (b) DEFINITION.—Section 101 of title 11, ‘‘(i) the debtor’s current monthly income, statement under subparagraph (A) and may United States Code, is amended— reduced by allowable monthly expenses spec- provide general rules on the content of such (1) by inserting after paragraph (10)the fol- ified in paragraph (4) (which shall include, if statement. lowing: applicable the continuation of actual ex- ‘‘(9) If a trustee brings a motion for dis- ‘‘(10A) ‘current monthly income’— penses of a dependent child under the age of missal or conversion under this subsection, ‘‘(A) means the average monthly income 18 for tuition, books, and required fees at a and the court grants that motion and finds from all sources which the debtor, or in a private elementary or secondary school, or that the action of the counsel for the debtor joint case, the debtor and the debtor’s comparable expenses stemming from the in filing under this chapter violated Rule spouse, receive without regard to whether home education of such child, or the attend- 9011, the courts hall assess damages, which the income is taxable income, derived during ance of such child at a public elementary or may include ordering— the 180-day period preceding the date of de- secondary school, not exceeding $10,000) and ‘‘(A) the counsel for the debtor to reim- termination; monthly debt payments specified in para- burse the trustee for all reasonable costs in ‘‘(B) includes any amount paid by any enti- graph (5), and prosecuting a motion brought under section ty other than the debtor (or, in a joint case, ‘‘(ii) multiplied by 36, 707(b), including reasonable attorneys’ fees; the debtor and the debtor’s spouse), on a reg- less estimated administrative expenses and ‘‘(B) the assessment of an appropriate civil ular basis to the household expenses of the reasonable attorneys’ fees, is not less than penalty against the counsel for the debtor; debtor or the debtor’s dependents (and, in a $6,000 of the debtor’s nonpriority unsecured and joint case, the debtor’s spouse if not other- claims in the case. ‘‘(C) the payment of the civil penalty to wise a dependent), but excludes— ‘‘(4) For the purposes of this subsection, the trustee or the United States trustee. ‘‘(i) payments to victims of war crimes or the debtor’s allowable monthly expenses ‘‘(10) The court may award a debtor all rea- crimes against humanity; shall be the expenses reasonably necessary— sonable costs and other appropriate damages ‘‘(ii) benefits received from the Depart- ‘‘(A) for the maintenance or support of the in contesting a motion brought by a party in ment of Veterans Affairs in connection with debtor, the dependents of the debtor, and in interest (other than a trustee, bankruptcy service in the armed forces of the United a joint case, the spouse of the debtor if the administrator, or United States trustee) States; spouse is not otherwise a dependent; and under this subsection (including reasonable ‘‘(iii) income received on account of dis- ‘‘(B) if the debtor is engaged in business, attorneys’ fees) if the court does not grant ability;and for the payment of expenditures necessary the motion and the court finds that— ‘‘(iv) benefits received under the Social Se- for the continuation, preservation, and oper- ‘‘(A) the position of the party that brought curity Act.’’; ation of such business. the motion was not substantially justified; (2) by inserting after paragraph (17) the fol- Notwithstanding any other provision of this or lowing: clause, the debtor’s monthly expenses shall ‘‘(B) the party brought the motion solely ‘‘(17A) ‘estimated administrative expenses’ not include payments for debts described in for the purpose of coercing the debtor into means 10 percent of projected payments paragraph (5). waiving a right guaranteed to the debtor under a chapter 13 plan;’’. (c) DUTIES OF CHAPTER 7 TRUSTEE.—Section ‘‘(5) For purposes of this subsection, the under this title. 704 of title 11, United States Code, is amend- debtor’s monthly debt payments shall in- ‘‘(11) A party in interest may not bring a ed— clude— motion under this section until the United (1) by inserting ‘‘(a)’’ before ‘‘The trustee ‘‘(A) the total amount scheduled as con- States trustee has either filed a statement shall—’’; and tractually due on all secured debts in each under section 704(b)(2)(A) or filed a motion month of the 36 months following the date of (2) by adding at the end the following: under section 704(b)(2)(B). the petition and divided by 36; and ‘‘(b)(1) With respect to an individual debtor ‘‘(12) If an attorney for a party in interest ‘‘(B) the debtor’s expenses for payment of under this chapter, the trustee shall review (other than a trustee, bankruptcy adminis- all priority claims, including priority domes- all materials filed by the debtor and, not trator, or United States trustee) brings a tic support obligations, calculated as the later than 10 days after the first meeting of motion for dismissal or conversion under total amount of debts entitled to priority in creditors, file with the court and the United this subsection, and the court does not grant each month of the 36 months following the States trustee a statement as to whether the that motion and finds that the action of the date of the petition and divided by 36. debtor’s case could be presumed to be an ‘‘(6) For the purposes of this subsection— counsel for the moving party in filing such abuse under section 707(b). ‘‘(A) national or applicable State or Metro- motion under this chapter violated Rule 9011, ‘‘(2) Not later than 60 days after receiving politan Statistical Area median family in- the court shall assess damages, which may a statement filed under paragraph (1), the come reported for a household of more than include ordering— United States trustee or bankruptcy admin- 4 individuals shall be that of a household of ‘‘(A) the counsel for the moving party to istrator shall— 4 individuals plus $583 per month for each ad- reimburse the debtor for all reasonable costs ‘‘(A) file a statement setting forth the rea- ditional member of that household; in defending a motion brought under section sons why the bankruptcy administrator does ‘‘(B) a family or household shall consist of 707(b), including reasonable attorneys’ fees; not believe that such a motion would be ap- the debtor, the debtor’s spouse, and the debt- ‘‘(B) the assessment of an appropriate civil propriate or would be prohibited because the or’s dependents, but not a legally separated penalty against the counsel for the moving debtor is a debtor of the kind described in spouse unless the spouse files a joint case party. section 707(b)(14) of this title; or with the debtor. ‘‘(13) In making a determination whether ‘‘(B) file a motion to dismiss or convert ‘‘(7) In any proceeding brought under this to dismiss a case under this section, the under section 707(b) if, based on the filing of subsection, the presumption of abuse may be court may not take into consideration such statement with the court, the United rebutted by demonstrating special cir- whether a debtor has made, or continues to States trustee or bankruptcy administrator cumstances that justify additional reason- make, charitable contributions (that meet determines that the case should be presumed able expenses or adjustments of current the definition of ‘charitable contribution’ to be an abuse under section 707(b) and the monthly total income. In order to establish under section 548(d)(3) and as described by debtor’s current monthly income, when mul- such circumstances, the debtor shall be re- section 548(a)(2)of this title to any qualified tiplied by 12, is less than or equal to 100 per- quired to— religious or charitable entity or organization cent of the highest national or applicable ‘‘(A) itemize each additional expense or ad- (as that term is defined in section 548(d)(4)) State or State Metropolitan Statistical Area justment of income; and of this title. median family income reported for a family ‘‘(B) provide documentation of such ex- ‘‘(14) No court, United States trustee, of equal size, whichever is greater, or in the penses and a detailed explanation of the cir- bankruptcy administrator, or other party in case of a household of 1 person, less than or cumstances that warrant such expenses. interest shall bring a motion under sub- equal to 100 percent of the highest national ‘‘(8)(A) As part of the schedule of current section (b)(1)(A) if, as of the date of the order or State or Metropolitan Statistical Area income and expenditures required under sec- for relief, the debtor’s current monthly in- median household income for 1 earner, tion 521, the debtor shall include— come, when multiplied by 12, is less than or whichever is greater. For the purposes of de- ‘‘(i) a statement of the debtor’s current equal to 100 percent of the highest national termining whether a motion would be appro- monthly income and calculations that show or applicable State or Metropolitan Statis- priate to be filed, the United States trustee

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00093 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8586 CONGRESSIONAL RECORD—HOUSE May 5, 1999 shall consider adjustments to current ‘‘(A) chapters 7, 11, 12, and 13 and the gen- to an assisted person with the express or im- monthly income for income items received eral purpose, benefits, and costs of pro- plied purpose of providing information, ad- over the most recent 180 days that are not ceeding under each of those chapters; and vice, counsel, document preparation or fil- reasonably expected to be reflected in future ‘‘(B) the types of services available from ing, or attendance at a creditors’ meeting or income, or expenses likely to be due under a credit counseling agencies; and appearing in a proceeding on behalf of an- chapter 13 plan which are not included in the ‘‘(2) statements specifying that— other or providing legal representation with required statement of the debtor’s expense. ‘‘(A) a person who knowingly and fraudu- respect to a proceeding under this title;’’; The debtor shall, at the request of the lently conceals assets or makes a false oath and United States trustee, provide documenta- or statement under penalty of perjury in (3) by inserting after paragraph (12A) the tion for any current income items that are connection with a bankruptcy case shall be following: not reasonably expected to be reelected in subject to fine, imprisonment, or both; and ‘‘(12B) ‘debt relief agency’ means any per- future income, and a detailed explanation of ‘‘(B) all information supplied by a debtor son who provides any bankruptcy assistance the circumstances that warrant making such in connection with a bankruptcy case is sub- to an assisted person in return for the pay- adjustments. If the United States trustee de- ject to examination by the Attorney Gen- ment of money or other valuable consider- termines that, after accounting for these ad- eral.’’. ation, or who is a bankruptcy petition pre- justments, the debtor’s current monthly in- SEC. 104. DEBTOR FINANCIAL MANAGEMENT parer pursuant to section 110 of this title, come, which multiplied by 12, is less than or TRAINING TEST PROGRAM. but does not include any person that is any equal to 100 percent of the higher of the na- (a) DEVELOPMENT OF FINANCIAL MANAGE- of the following or an officer, director, em- tional, State, or Metropolitan Statistical MENT AND TRAINING CURRICULUM AND MATE- ployee or agent thereof— Area median family income reported for a RIALS.—The Director of the Executive Office ‘‘(A) any nonprofit organization which is family of equal or lesser size, or in the case for United States Trustees (in this section exempt from taxation under section 501(c)(3) of a household of 1 person, the national me- referred to as the ‘‘Director’’) shall consult of the Internal Revenue Code of 1986; dian household income for 1 earner, then the with a wide range of individuals who are ex- ‘‘(B) any creditor of the person to the ex- case shall be presumed not be an abuse of the perts in the field of debtor education, includ- tent the creditor is assisting the person to previous of this chapter. ing trustees who are appointed under chapter restructure any debt owed by the person to 13 of title 11 of the United States Code and the creditor; or For the purpose of this subsection, the na- who operate financial management edu- ‘‘(C) any depository institution (as defined tional or applicable State or Metropolitan cation programs for debtors, and shall de- in section 3 of the Federal Deposit Insurance Statistical Area median family income re- velop a financial management training cur- Act) or any Federal credit union or State ported for a household of more than 4 indi- riculum and materials that can be used to credit union (as those terms are defined in viduals shall be that of a household of 4 indi- educate individual debtors on how to better section 101 of the Federal Credit Union Act), viduals plus $583 per month for each addi- manage their finances. or any affiliate or subsidiary of such a depos- tional member of that household. (b) TEST—(1) The Director shall select 6 ju- itory institution or credit union;’’. ‘‘(3) Paragraph (2) shall not be construed to dicial districts of the United States in which (b) CONFORMING AMENDMENT.—In section preclude the court or any other party who is to test the effectiveness of the financial 104(b)(1) by inserting ‘‘101(3),’’ after ‘‘sec- eligible to file a motion under section 707(b) management training curriculum and mate- tions’’. from bringing such a motion.’’. rials developed under subsection (a). SEC. 106. ENFORCEMENT. (d) MEETING OF CREDITORS AND EQUITY SE- (2) For a 18-month period beginning not (a) ENFORCEMENT.—Subchapter II of chap- CURITY HOLDERS.—Section 341 of title 11, later than 270 days after the date of the en- ter 5 of title 11, United States Code, is United States Code, is amended by adding actment of this Act, such curriculum and amended by adding at the end the following: the following new subsection: materials shall be, for the 6 judicial districts ‘‘§ 526. Debt relief agency enforcement ‘‘(e) The initial notice of the meeting of selected under paragraph (1), used as the in- creditors shall indicate whether the debtor’s structional course concerning personal fi- ‘‘(a) A debt relief agency shall not— current monthly income is reported to be nancial management for purposes of section ‘‘(1) fail to perform any service which the equal or greater than the applicable median 111 of this title. debt relief agency has told the assisted per- income for purposes of subsection 707(b) of (c) EVALUATION.—(1) During the 1-year pe- son or prospective assisted person the agency this title.’’. riod referred to in subsection (b), the Direc- would provide that person in connection (e) GUIDELINES FOR ASSESSING INCOME.— tor shall evaluate the effectiveness of— with the preparation for or activities during Section 586 of title 28, United States Code, is (A) the financial management training a proceeding under this title; amended by adding the following new sub- curriculum and materials developed under ‘‘(2) make any statement, or counsel or ad- section: subsection (a); and vise any assisted person to make any state- ‘‘(f) Not later than 1 year after the effec- (B) a sample of existing consumer edu- ment in any document filed in a proceeding tive date of this subsection, the Director of cation programs such as those described in under this title, which is untrue and mis- the Executive Office for the United States the Report of the National Bankruptcy Re- leading or which upon the exercise of reason- Trustees shall issue guidelines to assist in view Commission (October 20, 1997) that are able care, should be known by the debt relief making assessment of whether income is not representative of consumer education pro- agency to be untrue or misleading; reasonably necessary to be expended by a grams carried out by the credit industry, by ‘‘(3) misrepresent to any assisted person or debtor for the maintenance or support of the trustees serving under chapter 13 of title 11 prospective assisted person, directly or indi- debtor, the dependents of the debtor, and in of the United States Code, and by consumer rectly, affirmatively or by material omis- a joint case, the spouse of the debtor if the counselling groups. sion, what services the debt relief agency can spouse is not otherwise a dependent. The di- (2) Not later than 3 months after con- reasonably expect to provide that person, or rector shall consult with the Department of cluding such evaluation, the Director shall the benefits an assisted person may obtain or the Treasury, and others as needed in devel- submit a report to the Speaker of the House the difficulties the person may experience if oping the guidelines.’’. of Representatives and the President pro the person seeks relief in a proceeding pursu- (f) Section 104, title 11, United States Code, tempore of the Senate, for referral to the ap- ant to this title; or as amended by subsection ll of this Act, is propriate committees of the Congress, con- ‘‘(4) advise an assisted person or prospec- amended by striking out ‘‘523(a)(2)(C), and taining the findings of the Director regard- tive assisted person to incur more debt in 707(b)(3)’’ each place it appears and inserting ing the effectiveness of such curriculum, contemplation of that person filing a pro- ‘‘523(a)(2)(C), and 707(b)’’ in lieu thereof. such materials, and such programs and their ceeding under this title or in order to pay an (g) CLERICAL AMENDMENT.—The table of costs. attorney or bankruptcy petition preparer fee or charge for services performed as part of sections at the beginning of chapter 7 of title Subtitle B—Consumer Bankruptcy preparing for or representing a debtor in a 11, United States Code, is amended by strik- Protections ing the item relating to section 707 and in- proceeding under this title.’’. SEC. 105. DEFINITIONS. ‘‘(b) ASSISTED PERSON WAIVERS INVALID.— serting the following: (a) DEFINITIONS.—Section 101 of title 11, Any waiver by any assisted person of any ‘‘707. Dismissal of a case or conversion to a United States Code, is amended— protection or right provided by or under this case under chapter 13.’’. (1) by inserting after paragraph (2) the fol- section shall not be enforceable against the SEC. 103. NOTICE OF ALTERNATIVES. lowing: debtor by any Federal or State court or any Section 342(b) of title 11, United States ‘‘(3) ‘assisted person’ means any person other person, but may be enforced against a Code, is amended to read as follows: whose debts consist primarily of consumer debt relief agency. ‘‘(b) Before the commencement of a case debts and whose non-exempt assets are less ‘‘(c) NONCOMPLIANCE.— under this title by an individual whose debts than $150,000;’’; ‘‘(1) Any contract between a debt relief are primarily consumer debts, the clerk shall (2) by inserting after paragraph (4) the fol- agency and an assisted person for bank- give to such individual written notice con- lowing: ruptcy assistance which does not comply taining— ‘‘(4A) ‘bankruptcy assistance’ means any with the material requirements of this sec- ‘‘(1) a brief description of— goods or services sold or otherwise provided tion shall be treated as void and may not be

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00094 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8587 enforced by any Federal or State court or by (1) in subsection (c)(2)(B) by adding at the credit counseling agency acting on behalf of any other person. end the following: the debtor, and if— ‘‘(2) Any debt relief agency shall be liable ‘‘(C)(i) such agreement contains a clear and ‘‘(A) such offer was made within the period to an assisted person in the amount of any conspicuous statement advising the debtor of beginning 60 days before the filing of the pe- fees or charges in connection with providing the amount of the monthly payments, the tition; bankruptcy assistance to such person which total amount payable and number of pay- ‘‘(B) such offer provided for payment of at the debt relief agency has received, for ac- ments if the payments are made according to least 60 percent of the amount of the debt tual damages, and for reasonable attorneys’ schedule, the amount of the total payment over a period not to exceed the repayment fees and costs if the debt relief agency is attributable to principal, interest, late fees, period of the loan, or a reasonable extension found, after notice and hearing, to have— and creditor’s attorneys fees, the interest thereof; and ‘‘(A) intentionally or negligently failed to rate, and the ways in which terms differ ‘‘(C) no part of the debt under the alter- comply with any provision of this section from the original agreement; and native repayment schedule is nondischarge- with respect to a bankruptcy case or related ‘‘(ii) if the debt is secured, the agreement able, is entitled to priority under section 507 proceeding of the assisted person; is accompanied by a copy of the instrument of this title, or would be paid a greater per- ‘‘(B) provided bankruptcy assistance to an creating the debt and any security interest centage in a chapter 13 proceeding than of- assisted person in a case or related pro- or lien and the documents necessary to show fered by the debtor. ceeding which is dismissed or converted be- perfection of the interest, and the agreement ‘‘(2) The debtor shall have the burden of cause of the debt relief agency’s intentional contains a clear and conspicuous statement proving that the proposed alternative repay- or negligent failure to file bankruptcy pa- that advises the debtor of the value of the ment schedule was made in the 60-day period pers, including papers specified in section 521 collateral and the date on which the lien will specified in subparagraph (A) and that the of this title; or be released if payments are made according creditor unreasonably refused to consider ‘‘(C) intentionally or negligently dis- to schedule;’’; the debtor’s proposal.’’. regarded the material requirements of this (2) in subsection (c)(6)(B), by inserting (b) LIMITATION ON AVOIDABILITY.—Section title or the Federal Rules of Bankruptcy after ‘‘real property’’ the following: ‘‘or is a 547 of title 11, United States Code, is amend- Procedure applicable to such debt relief debt described in subsection (c)(7)’’; and ed by adding at the end the following: agency. (3) by adding at the end of subsection (c) ‘‘(h) The trustee may not avoid a transfer ‘‘(3) In addition to such other remedies as the following: if such transfer was made as a part of an al- are provided under State law, whenever the ‘‘(7) in a case concerning an individual, if ternative repayment plan between the debtor and any creditor of the debtor created by an chief law enforcement officer of a State, or the consideration for such agreement is approved credit counseling agency.’’. an official or agency designated by a State, based on whole or in part on an unsecured has reason to believe that any person has consumer debt, or is based on whole or in SEC. 110. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY A DWELL- violated or is violating this section, the part upon a debt for an item of personalty, ING. State— the value of which at point of purchase was (a) STUDY REQUIRED.—During the period ‘‘(A) may bring an action to enjoin such $500 or less, and in which the creditor asserts beginning 180 days after the date of enact- violation; a security interest, the court approves such ment of this Act and ending 18 months after ‘‘(B) may bring an action on behalf of its agreement as— the date of the enactment, the Board of Gov- residents to recover the actual damages of ‘‘(A) in the best interest of the debtor in ernors of the Federal Reserve System (in assisted persons arising from such violation, light of the debtor’s income and expenses; this section referred to as the ‘‘Board’’) shall including any liability under paragraph (2); ‘‘(B) not imposing an undue hardship on conduct a study and submit to Congress a re- and the debtor’s future ability of the debtor to port (including recommendations for any ap- ‘‘(C) in the case of any successful action pay for the needs of children and other de- propriate legislation) regarding— under subparagraph (A) or (B), shall be pendents (including court ordered support); (1) whether a consumer engaging in an awarded the costs of the action and reason- ‘‘(C) not requiring the debtor to pay the open-end credit transaction (as defined pur- able attorney fees as determined by the creditor’s attorney’s fees, expenses, or other suant to section 103 of the Truth in lending court. costs relating to the collection of the debt; Act) secured by the consumer’s principal ‘‘(4) The United States District Court for ‘‘(D) not agreed upon by the debtor to pro- dwelling is provided adequate information any district located in the State shall have tect property necessary for the care and under Federal law, including under section concurrent jurisdiction of any action under maintenance of children or other dependents 127A of the Truth in Lending Act, regarding subparagraph (A) or (B) of paragraph (3). that would have nominal value on reposses- the tax deductibility of interest paid on such ‘‘(5) Notwithstanding any other provision sion; transaction; and of Federal law and in addition to any other ‘‘(E) not the product of coercive threats or (2) whether a consumer engaging in a remedy provided under Federal or State law, actions by the creditor in the creditor’s closed-end credit transaction (as defined pur- if the court, on its own motion or on the mo- course of dealings with the debtor; and suant to section 103 of the Truth in Lending tion of the United States trustee or the debt- ‘‘(F) not unfair because excessive in Act) secured by the consumer’s principal or, finds that a person intentionally violated amount as compared to the value of the col- dwelling is provided adequate information this section, or engaged in a clear and con- lateral; regarding the tax deductibility of interest sistent pattern or practice of violating this (4) in subsection (d)(2) by striking ‘‘sub- paid on such transaction. section, the court may— sections (c)(6)’’ and inserting ‘‘subsections In conducting such study, the Board shall ‘‘(A) enjoin the violation of such section; (c)(6) and (c)(7)’’, and after ‘‘of this section,’’ specifically consider whether additional dis- or by striking ‘‘if the consideration for such closures are necessary with respect to such ‘‘(B) impose an appropriate civil penalty agreement is based in whole or in part on a open-end or closed-end credit transactions in against such person. consumer debt that is not secured by real which the amount of the credit extended ex- ELATION TO STATE LAW.—This section ‘‘(c) R property of the debtor’’ and adding at the ceeds the fair market value of the dwelling. shall not annul, alter, affect or exempt any end ‘‘as applicable’’. (b) REGULATIONS.—If the Board determines person subject to those sections from com- (b) Section 104 of title 11, United States that additional disclosures are necessary in plying with any law of any State except to Code, as amended by subsection ll of this connection with transactions described in the extent that such law is inconsistent with Act, is amended by striking out ‘‘523(a)(2)(C), subsection (a), the Board, pursuant to its au- those sections, and then only to the extent of and 707(b)(3)’’ each place it appears and in- thority under the Truth in Lending Act, may the inconsistency.’’. serting ‘‘523(a)(2)(C), 524(c)(7), and 707(b)(3)’’ promulgate regulations that would require (b) CONFORMING AMENDMENT.—The table of in lieu thereof. such additional disclosures. Any such regula- sections for chapter 5 of title 11, United SEC. 109. PROMOTION OF ALTERNATIVE DISPUTE tions promulgated by the Board under this States Code, is amended by inserting after RESOLUTION. section shall not take effect before the end of the item relating to section 527, the fol- (a) REDUCTION OF CLAIM.—Section 502 of the 36-month period after the date of the en- lowing: title 11, United States Code, is amended by actment of this Act. ‘‘526. Debt relief agency enforcement.’’. adding at the end the following: SEC. 111. DUAL USE DEBIT CARD. SEC. 107. SENSE OF THE CONGRESS. ‘‘(k)(1) The court, on the motion of the (a) STUDY REQUIRED.—The Board of Gov- It is the sense of the Congress that States debtor and after a hearing, may reduce a ernors of the Federal Reserve System (in should develop curricula relating to the sub- claim filed under this section based wholly this section referred to as the ‘‘Board’’) shall ject of personal finance, designed for use in on unsecured consumer debts by not more conduct a study of existing protections pro- elementary and secondary schools. than 20 percent, if the debtor can prove by vided to consumers to limit their liability SEC. 108. DISCOURAGING ABUSIVE REAFFIRMA- clear and convincing evidence that the claim for unauthorized use of a debit card or simi- TION PRACTICES. was filed by a creditor who unreasonably re- lar access device. (a) Section 524 of title 11, United States fused to negotiate a reasonable alternative (b) SPECIFIC CONSIDERATIONS.—In con- Code, is amended— repayment schedule proposed by an approved ducting the study required by subsection (a),

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00095 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8588 CONGRESSIONAL RECORD—HOUSE May 5, 1999 the Board shall specifically consider the fol- for each billing cycle, and the charge or pen- cluding a flat annual fee imposed on the con- lowing— alty, if any, to be imposed for any failure by sumer in advance of any annual period to (1) the extent to which existing provisions the obligor to pay the required minimum cover the cost of maintaining a credit card of section 909 of the Electronic Fund Trans- payment amount; account during such annual period without fer Act and the Board’s implementing regu- ‘‘(D) of any charge that may be imposed regard to whether any credit is actually ex- lations provide adequate unauthorized use li- due to the failure of the obligor to make pay- tended under such account during such pe- ability protection for consumers; ment on or before a required payment due riod, or the actual finance charge applicable (2) the extent to which any voluntary in- date, the date that payment is due or, if dif- with respect to any credit extended under dustry rules have enhanced the level of pro- ferent, the date on which a late payment fee such account during such annual period at tection afforded consumers in connection will be charged, and that the terms and con- the annual percentage rate disclosed to the with such unauthorized use liability; and ditions of such charge will be stated promi- consumer in accordance with this title for (3) whether amendments to the Electronic nently in a conspicuous location on each the period of time any such credit is out- Funds Transfer Act or the Board’s imple- billing statement, together with the amount standing; menting regulations thereto are necessary to of the charge to be imposed if payment is ‘‘(14) such claim is for a debt that arose provide adequate protection for consumers in made after such date; and from an increase in any annual percentage this area. ‘‘(E) in any application or solicitation for a rate of interest (other than an increase due (c) REPORT AND REGULATIONS.—Not later credit card issued under such plan that of- to the expiration of any introductory per- than 2 years after the date of the enactment fers, during an introductory period of less centage rate of interest or due solely to a of this Act, the Board shall make public a re- than 1 year, an annual percentage rate of in- change in another rate of interest to which port on its findings with respect to the ade- terest that— such rate is indexed) applicable to any out- quacy of existing protections afforded con- ‘‘(i) is less than the annual percentage rate standing balance of credit under such plan sumers with respect to unauthorized-use li- of interest which will apply after the end of may take effect before the beginning of the ability for debit cards and similar access de- such introductory period, of such rate in a billing cycle which begins not less than 15 vices. If the Board determines that such pro- statement that includes the following: ‘The days after the obligor receives notice of such tections are inadequate, the Board, pursuant annual percentage rate of interest applicable increase; and to its authority under the Electronic Funds during the introductory period is not the an- ‘‘(15) that if an obligor referred to in para- Transfer Act, may issue regulations to ad- dress such inadequacy. Any regulations nual percentage rate which will apply after graph (14) cancels the credit card account be- issued by the Board shall not be effective be- the end of the introductory period. The per- fore the beginning of the billing cycle re- fore 36 months after the date of the enact- manent annual percentage rate will apply ferred to in such paragraph— ment of this Act. after [insert applicable date] and will be [in- ‘‘(A) if the an annual percentage rate of in- sert applicable percentage rate].’ ; or terest applicable after the cancellation with SEC. 112. DISCOURAGING RECKLESS LENDING PRACTICES. ‘‘(ii) varies in accordance with an index, respect to such outstanding balance on such (a) LIMITING CLAIMS ARISING FROM IRRE- which is less than the current annual per- account as of the date of cancellation ex- SPONSIBLE LENDING PRACTICES.—Section centage rate under the index which will ceeds any annual percentage rate of interest 502(b) of title 11, United States Code, is apply after the end of such period, of such applicable with respect to such balance amended— rate in a statement that includes the fol- under the terms and conditions in effect be- (1) in paragraph (8) by striking ‘‘or’’ at the lowing: ‘The annual percentage rate of inter- fore the increase referred to in paragraph end, est applicable during the introductory period (14); and (2) in paragraph (9) by striking the period is not the annual percentage rate which will ‘‘(B) the repayment of such outstanding at the end and inserting a semicolon; and apply after the end of the introductory pe- balance after the cancellation is not subject (3) by adding at the end the following: riod. The permanent annual percentage rate to all other terms and conditions applicable ‘‘(10) the claim is for a consumer debt will be determined by an index and will with respect to such account before the in- under an open end credit plan (as defined in apply after [insert date]. If the index which crease referred to in such paragraph; section 103 of the Truth in Lending Act) and will apply after such date were applied to (b) DEFINITION.—Section 101 of title 11, before incurring such debt under such plan your account today, the annual percentage United States Code, is amended by inserting the debtor was not informed in writing in a rate would be [insert applicable percentage after paragraph (9) the following: clear and conspicuous manner (or in the case rate].’ ; ‘‘(9A) ‘credit card’ includes any dual pur- of a worldwide web-based solicitation to ‘‘(11) such claim is for a debt that arose pose or multifunction card, including a open a credit card account under such plan, from a credit card account under an open end stored-value card, debit card, check card, at the time of solicitation by the person credit plan (as defined in section 103 of the check guarantee card, or purchase-price dis- making the solicitation to open such ac- Truth in Lending Act, for which account a count card, that is connected with an open count)— creditor imposed a fee based on inactivity end credit plan (as defined in section 103 of ‘‘(A) of the method of determining the re- for the account during any period in which the Truth in Lending Act) and can be used, quired minimum payment amount, if a min- no advances were made if the obligor main- either on issuance or upon later activation, imum payment is required that is different tains any outstanding balance and is charged to obtain credit directly or indirectly.’’. from the amount of any finance charge, and a finance charge applicable to such balance; SEC. 113. PROTECTION OF SAVINGS EARMARKED the charges or penalties, if any, which may ‘‘(12) such claim is for a debt that arose FOR THE POSTSECONDARY EDU- be imposed for failure by the obligor to pay from a credit card account for which a credit CATION OF CHILDREN. the required finance charge or minimum card that was issued to or on behalf of, any Section 522 of title 11, United States Code, payment amount; individual who has not attained 21 years of is amended— ‘‘(B) of repayment information that would age except in response to a written request (1) in subsection (b)(2)— apply to the outstanding balance of the con- or application to the card issuer to open a (A) in subparagraph (A) by striking ‘‘and’’ sumer under the credit plan, including— credit card account containing— at the end; ‘‘(i) the required minimum monthly pay- ‘‘(A) the signature of the parent or guard- (B) in subparagraph (B) by striking the pe- ment on that balance, represented as both a ian of such individual indicating joint liabil- riod at the end and inserting ‘‘; and’’; and dollar figure and a percentage of that bal- ity for debts incurred by such individual in (C) by adding at the end the following: ance; connection with the account before such in- ‘‘(C) except as provided in paragraph (n), ‘‘(ii) the number of months (rounded to the dividual reaches the age of 21; or funds placed in an education individual re- nearest month) that it would take to pay the ‘‘(B) a submission by such individual of fi- tirement account (as defined in section entire amount of that current balance if the nancial information indicating an inde- 530(b)(1) of the Internal Revenue Code of 1986) consumer pays only the required minimum pendent means of repaying any obligation not less than 365 days before the date of monthly payments and if no further ad- arising from the proposed extension of credit entry of the order of relief but only to the vances are made; in connection with the account; extent such funds— ‘‘(iii) the total cost to the consumer, in- ‘‘(13) such claim is for a debt that arose on ‘‘(i) are not pledged or promised to any en- cluding interest and principal payments, of an account that a creditor cancelled, im- tity in connection with any extension of paying that balance in full if the consumer posed a minimum finance charge for any pe- credit; and pays only the required minimum monthly riod (including any annual period), imposed ‘‘(ii) are not excess contributions (as de- payments and if no further advances are any fee in lieu of a minimum finance charge, scribed in section 4973(e) of the Internal Rev- made; and or imposed any other charge or penalty with enue Code of 1986).’’; and (iv) the following statement: ‘If your cur- regard to such account or credit extended (2) by adding at the end the following: rent rate is a temporary introductory rate, under such account solely on the basis that ‘‘(n) For purposes of subsection (b)(3)(C), your total costs may be higher.’ ; any credit extended has been repaid in full funds placed in an education individual re- ‘‘(C) of the method for determining the re- before the end of any grace period applicable tirement account shall not be exempt under quired minimum payment amount to be paid with respect to the extension of credit, ex- this subsection—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00096 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8589 ‘‘(1) unless the designated beneficiary of (1) by striking ‘‘by a court’’ and inserting single or joint cases of the debtor were pend- such account was a dependent child of the ‘‘by any court’’, ing within the previous year but were dis- debtor for the taxable year for which the (2) by striking ‘‘section 1915(b) or (f)’’ and missed, the stay under subsection (a) will funds were placed in such account; and inserting ‘‘subsection (b) or (f)(2) of section not go into effect upon the filing of the later ‘‘(2) to the extent such funds exceed— 1915’’, and case. On request of a party in interest, the ‘‘(A) $50,000 in the aggregate in all such ac- (3) by inserting ‘‘(or a similar non-Federal court shall promptly enter an order con- counts having the same designated bene- law)’’ after ‘‘title 28’’ each place it appears. firming that no stay is in effect. If a party in ficiary; or SEC. 117. DISCOURAGING BAD FAITH REPEAT interest requests within 30 days of the filing ‘‘(B) $100,000 in the aggregate in all such FILINGS. of the later case, the court may order the accounts attributable to all such dependent Section 362(c) of title 11, United States stay to take effect in the case as to any or children of the debtor.’’. Code, is amended— all creditors (subject to such conditions or SEC. 114. EFFECT OF DISCHARGE. (1) in paragraph (1) by striking ‘‘and’’ at limitations as the court may impose), after Section 524 of title 11, United States Code, the end; notice and hearing, only if the party in in- is amended by adding at the end the fol- (2) in paragraph (2) by striking the period terest demonstrates that the filing of the lowing: at the end and inserting a semicolon; and later case is in good faith as to the creditors ‘‘(i) The willful failure of a creditor to (3) by adding at the end the following new to be stayed. A stay imposed pursuant to the credit payments received under a plan con- paragraphs: preceding sentence will be effective on the firmed under this title (including a plan of ‘‘(3) If a single or joint case is filed by or date of entry of the order allowing the stay reorganization confirmed under chapter 11 of against an individual debtor under chapter 7, to go into effect. A case is presumptively not this title) in the manner required by the plan 11, or 13 (other than a case refiled under a filed in good faith (but such presumption (including crediting the amounts required chapter other than chapter 7 after dismissal may be rebutted by clear and convincing evi- under the plan) shall constitute a violation under section 707(b) of this title), and if a dence to the contrary)— of any injunction under subsection (a)(2) single or joint case of the debtor was pending ‘‘(A) as to all creditors if— which has arisen at the time of the failure. within the previous 1-year period but was ‘‘(i) 2 or more previous cases under this ‘‘(j) An individual who is injured by the dismissed, the stay under subsection (a) with title in which the individual was a debtor willful failure of a creditor to comply with respect to any action taken with respect to were pending within the 1-year period; the requirements for a reaffirmation agree- a debt or property securing such debt or with ‘‘(ii) a previous case under this title in ment under subsections (c) and (d), or by any respect to any lease will terminate with re- which the individual was a debtor was dis- willful violation of the injunction under sub- spect to the debtor on the 30th day after the missed within the time period stated in this section (a)(2), shall be entitled to recover— filing of the later case. Upon motion by a paragraph after the debtor failed to file or ‘‘(1) the greater of— party in interest for continuation of the amend the petition or other documents as re- ‘‘(A) the amount of actual damages; or automatic stay and upon notice and a hear- quired by this title or the court without sub- ‘‘(B) $1,000; and ing, the court may extend the stay in par- stantial excuse (but mere inadvertence or ‘‘(2) costs and attorneys’ fees.’’. ticular cases as to any or all creditors (sub- negligence shall not be substantial excuse ject to such conditions or limitations as the unless the dismissal was caused by the neg- SEC. 115. LIMITING TRUSTEE LIABILITY. court may then impose) after notice and a ligence of the debtor’s attorney), failed to (a) QUALIFICATION OF TRUSTEE.—Section hearing completed before the expiration of provide adequate protection as ordered by 322 of title 11, United States Code, is amend- the 30-day period only if the party in interest the court, or failed to perform the terms of ed— demonstrates that the filing of the later case a plan confirmed by the court; or (1) in subsection (a) by adding at the end is in good faith as to the creditors to be ‘‘(iii) there has not been a substantial the following: stayed. A case is presumptively filed not in change in the financial or personal affairs of ‘‘The trustee in a case under this title is not good faith (but such presumption may be re- the debtor since the dismissal of the next liable personally or on such trustee’s bond butted by clear and convincing evidence to most previous case under this title, or there for acts taken within the scope of the trust- the contrary)— is not any other reason to conclude that the ee’s duties or authority as delineated by ‘‘(A) as to all creditors if— later case will be concluded, if a case under other sections of this title or by order of the ‘‘(i) more than 1 previous case under any of chapter 7, with a discharge, and if a case court, except to the extent that the trustee chapter 7, 11, or 13 in which the individual under chapter 11 or 13, with a confirmed plan acted with gross negligence. Gross neg- was a debtor was pending within such 1-year that will be fully performed; or ligence shall be defined as reckless indiffer- period; ‘‘(B) as to any creditor that commenced an ence or deliberate disregard of the trustee’s ‘‘(ii) a previous case under any of chapters action under subsection (d) in a previous fiduciary duty.’’; and 7, 11, or 13 in which the individual was a case in which the individual was a debtor if, (2) in subsection (c) by inserting ‘‘for any debtor was dismissed within such 1-year pe- as of the date of dismissal of such case, such acts within the scope of the trustee’s author- riod, after the debtor failed to file or amend action was still pending or had been resolved ity defined in subsection (a)’’ before the pe- the petition or other documents as required by terminating, conditioning, or limiting the riod at the end. by this title or the court without substantial stay as to action of such creditor.’’. (b) ROLE AND CAPACITY OF TRUSTEE.—Sec- excuse (but mere inadvertence or negligence SEC. 118. CURBING ABUSIVE FILINGS. tion 323 of title 11, United States Code, is shall not be substantial excuse unless the amended— dismissal was caused by the negligence of (a) IN GENERAL.—Section 362(d) of title 11, (1) in subsection (b) by inserting at the end the debtor’s attorney), failed to provide ade- United States Code, is amended— the following: ‘‘in the trustee’s official ca- quate protection as ordered by the court, or (1) in paragraph (2), by striking ‘‘or’’ at the pacity as representative of the estate’’ before failed to perform the terms of a plan con- end; the period at the end; and firmed by the court; or (2) in paragraph (3), by striking the period (2) by adding at the end the following: ‘‘(iii) there has not been a substantial at the end and inserting ‘‘; or’’; and ‘‘(c) The trustee in a case under this title change in the financial or personal affairs of (3) by adding at the end the following: may not be sued, either personally, in a rep- the debtor since the dismissal of the next ‘‘(4) with respect to a stay of an act against resentative capacity, or against the trustee’s most previous case under any of chapters 7, real property under subsection (a), by a cred- bond in favor of the United States— 11, or 13 of this title, or there is not any itor whose claim is secured by an interest in ‘‘(1) for acts taken in furtherance of the other reason to conclude that the later case such real estate, if the court finds that the trustee’s duties or authority in a case in will be concluded, if a case under chapter 7 of filing of the bankruptcy petition was part of which the debtor is subsequently determined this title, with a discharge, and if a chapter a scheme to delay, hinder, and defraud credi- to be ineligible for relief under the chapter 11 or 13 case, a confirmed plan which will be tors that involved either— in which the trustee was appointed; or fully performed; ‘‘(A) transfer of all or part ownership of, or ‘‘(2) for the dissemination of statistics and ‘‘(B) as to any creditor that commenced an other interest in, the real property without other information regarding a case or cases, action under subsection (d) in a previous the consent of the secured creditor or court unless the trustee has actual knowledge that case in which the individual was a debtor if, approval; or the information is false. as of the date of dismissal of such case, that ‘‘(B) multiple bankruptcy filings affecting ‘‘(d) The trustee in a case under this title action was still pending or had been resolved the real property. may not be sued in a personal capacity with- by terminating, conditioning, or limiting the If recorded in compliance with applicable out leave of the bankruptcy court in which stay as to actions of such creditor. State laws governing notices of interests or the case is pending.’’. ‘‘(4) If a single or joint case is filed by or liens in real property, an order entered pur- SEC. 116. REINFORCE THE FRESH START. against an individual debtor under this title suant to this subsection shall be binding in (a) RESTORATION OF AN EFFECTIVE DIS- (other than a case refiled under a chapter any other case under this title purporting to CHARGE.—Section 523(a)(17) of title 11, United other than chapter 7 after a dismissal under affect the real property filed not later than States Code, is amended— section 707(b) of this title), and if 2 or more 2 years after that recording, except that a

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00097 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8590 CONGRESSIONAL RECORD—HOUSE May 5, 1999 debtor in a subsequent case may move for re- SEC. 120. RELIEF FROM THE AUTOMATIC STAY in this subsection shall be deemed to justify lief from such order based upon changed cir- WHEN THE DEBTOR DOES NOT COM- limiting such a provision in any other cir- cumstances or for good cause shown, after PLETE INTENDED SURRENDER OF cumstance.’’. notice and a hearing. Any Federal, State, or CONSUMER DEBT COLLATERAL. Title 11, United States Code, is amended as SEC. 121. GIVING SECURED CREDITORS FAIR local governmental unit which accepts no- TREATMENT IN CHAPTER 13. follows— tices of interests or liens in real property Section 1325(a)(5)(B)(i) of title 11, United (1) in section 362— shall accept any certified copy of an order States Code, is amended to read as follows: (A) by striking ‘‘(e), and (f)’’ in subsection described in this subsection for indexing and ‘‘(i) the plan provides that the holder of (c) and inserting in lieu thereof ‘‘(e), (f), and recording.’’. such claim retain the lien securing such (h)’’; and (b) AUTOMATIC STAY.—Section 362(b) of claim until the earlier of payment of the un- (B) by redesignating subsection (h) as sub- title 11, United States Code, is amended— derlying debt determined under nonbank- section (i) and by inserting after subsection (1) in paragraph (17), by striking ‘‘or’’ at ruptcy law or discharge under section 1328 of (g) the following: the end; this title, and that if the case under this ‘‘(h) In an individual case pursuant to (2) in paragraph (18) by striking the period chapter is dismissed or converted without at the end and inserting a semicolon; and chapter 7, 11, or 13 the stay provided by sub- section (a) is terminated with respect to per- completion of the plan, such lien shall also (3) by inserting after paragraph (18) the fol- be retained by such holder to the extent rec- lowing: sonal property of the estate or of the debtor securing in whole or in part a claim, or sub- ognized by applicable nonbankruptcy law; ‘‘(19) under subsection (a), of any act to en- and’’. force any lien against or security interest in ject to an unexpired lease, and such personal SEC. 123. FAIR VALUATION OF COLLATERAL. real property following the entry of an order property shall no longer be property of the Section 506(a) of title 11, United States under section 362(d)(4) of this title as to that estate if the debtor fails within the applica- Code, is amended by adding at the end the property in any prior bankruptcy case for a ble time set by section 521(a)(2) of this title— following: period of 2 years after entry of such an order. ‘‘(1) to file timely any statement of inten- ‘‘In the case of an individual debtor under The debtor in a subsequent case, however, tion required under section 521(a)(2) of this chapters 7 and 13, such value with respect to may move the court for relief from such title with respect to that property or to indi- personal property securing an allowed claim order based upon changed circumstances or cate therein that the debtor will either sur- shall be determined based on the replace- for other good cause shown (consistent with render the property or retain it and, if re- ment value of such property as of the date of the standards for good faith in subsection taining it, either redeem the property pursu- filing the petition without deduction for (c)), after notice and a hearing; or ant to section 722 of this title, reaffirm the costs of sale or marketing. With respect to ‘‘(20) under subsection (a), of any act to en- debt it secures pursuant to section 524(c) of property acquired for personal, family, or force any lien against or security interest in this title, or assume the unexpired lease pur- household purpose, replacement value shall real property— suant to section 365(p) of this title if the ‘‘(A) if the debtor is ineligible under sec- trustee does not do so, as applicable; or mean the price a retail merchant would tion 109(g) of this title to be a debtor in a ‘‘(2) to take timely the action specified in charge for property of that kind considering bankruptcy case; or that statement of intention, as it may be the age and condition of the property at the ‘‘(B) if the bankruptcy case was filed in amended before expiration of the period for time value is determined.’’. violation of a bankruptcy court order in a taking action, unless the statement of inten- SEC. 124. DOMICILIARY REQUIREMENTS FOR EX- prior bankruptcy case prohibiting the debtor tion specifies reaffirmation and the creditor EMPTIONS. from being a debtor in another bankruptcy refuses to reaffirm on the original contract Section 522(b)(2)(A) of title 11, United case.’’. terms; States Code, is amended— (1) by striking ‘‘180’’ and inserting ‘‘730’’; SEC. 119. DEBTOR RETENTION OF PERSONAL unless the court determines on the motion of and PROPERTY SECURITY. the trustee filed before the expiration of the (2) by striking ‘‘, or for a longer portion of Title 11, United States Code, is amended— applicable time set by section 521(a)(2), and such 180-day period than in any other place’’ (1) in section 521— after notice and a hearing, that such prop- (A) in paragraph (4) by striking ‘‘, and’’ at erty is of consequential value or benefit to and inserting ‘‘or if the debtor’s domicile has the end and inserting a semicolon; the estate, orders appropriate adequate pro- not been located at a single State for such (B) in paragraph (5) by striking the period tection of the creditor’s interest, and orders 730-day period, the place in which the debt- at the end and inserting ‘‘; and’’; and the debtor to deliver any collateral in the or’s domicile was located for 180 days imme- (C) by adding at the end the following: debtor’s possession to the trustee. If the diately preceding the 730-day period or for a ‘‘(6) in an individual case under chapter 7 court does not so determine an order, the longer portion of such 180-day period than in of this title, not retain possession of per- stay shall terminate upon the conclusion of any other place’’. sonal property as to which a creditor has an the proceeding on the motion.’’; and SEC. 125. RESTRICTIONS ON CERTAIN EXEMPT allowed claim for the purchase price secured (2) in section 521, as amended by sections PROPERTY OBTAINED THROUGH FRAUD. in whole or in part by an interest in that per- 603 and 604— Section 522 of title 11, United States Code, sonal property unless, in the case of an indi- (A) in paragraph (2) by striking ‘‘con- as amended by section 113, is amended— vidual debtor, the debtor takes 1 of the fol- sumer’’; (1) in subsection (b)(2)(A) by inserting lowing actions within 45 days after the first (B) in paragraph (2)(B)— ‘‘subject to subsection (o),’’ before ‘‘any meeting of creditors under section 341(a)— (i) by striking ‘‘forty-five days after the property’’; and ‘‘(A) enters into an agreement with the filing of a notice of intent under this sec- (2) by adding at the end the following: creditor pursuant to section 524(c) of this tion’’ and inserting ‘‘30 days after the first title with respect to the claim secured by ‘‘(o) For purposes of subsection (b)(3)(A) date set for the meeting of creditors under and notwithstanding subsection (a), the such property; or section 341(a) of this title’’; and ‘‘(B) redeems such property from the secu- value of an interest in— (ii) by striking ‘‘forty-five day’’ the second ‘‘(1) real or personal property that the rity interest pursuant to section 722 of this place it appears and inserting ‘‘30-day’’; title. debtor or a dependent of the debtor uses as a (C) in paragraph (2)(C) by inserting ‘‘except residence; ‘‘If the debtor fails to so act within the 45- as provided in section 362(h) of this title’’ be- ‘‘(2) a cooperative that owns property that day period, the stay under section 362(a) of fore the semicolon; and the debtor or a dependent of the debtor uses this title is terminated with respect to the (D) by inserting after subsection (b) the personal property of the estate or of the as a residence; or following: ‘‘(3) a burial plot for the debtor or a de- debtor which is affected, such property shall ‘‘(c) If the debtor fails timely to take the pendent of the debtor; no longer be property of the estate, and the action specified in subsection (a)(6) of this creditor may take whatever action as to section, or in paragraphs (1) and (2) of sec- shall be reduced to the extent such value is such property as is permitted by applicable tion 362(h) of this title, with respect to prop- attributable to any portion of any property nonbankruptcy law, unless the court deter- erty which a lessor or bailor owns and has that the debtor disposed of in the 730-day pe- mines on the motion of the trustee brought leased, rented, or bailed to the debtor or as riod ending of the date of the filing of the pe- before the expiration of such 45-day period, to which a creditor holds a security interest tition, with the intent to hinder, delay, or and after notice and a hearing, that such not otherwise voidable under section 522(f), defraud a creditor and that the debtor could property is of consequential value or benefit 544, 545, 547, 548, or 549 of this title, nothing not exempt, or that portion that the debtor to the estate, orders appropriate adequate in this title shall prevent or limit the oper- could not exempt, under subsection (b) if on protection of the creditor’s interest, and or- ation of a provision in the underlying lease such date the debtor had held the property so ders the debtor to deliver any collateral in or agreement which has the effect of placing disposed of.’’. the debtor’s possession to the trustee.’’; and the debtor in default under such lease or SEC. 126. ROLLING STOCK EQUIPMENT. (2) in section 722 by inserting ‘‘in full at agreement by reason of the occurrence, pend- (a) IN GENERAL.—Section 1168 of title 11, the time of redemption’’ before the period at ency, or existence of a proceeding under this United States Code, is amended to read as the end. title or the insolvency of the debtor. Nothing follows:

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00098 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8591 ‘‘§ 1168. Rolling stock equipment equipment described in subsection (a)(2), any such transaction is entered into, holds an air ‘‘(a)(1) The right of a secured party with a lease of such equipment, and any security carrier operating certificate issued pursuant security interest in or of a lessor or condi- agreement or conditional sale contract relat- to chapter 447 of title 49 for aircraft capable tional vendor of equipment described in ing to such equipment, if such security of carrying 10 or more individuals or 6,000 paragraph (2) to take possession of such agreement or conditional sale contract is an pounds or more of cargo; or equipment in compliance with an equipment executory contract, shall be deemed re- ‘‘(ii) a documented vessel (as defined in security agreement, lease, or conditional jected. section 30101(1) of title 46) that is subject to sale contract, and to enforce any of its other ‘‘(d) With respect to equipment first placed a security interest granted by, leased to, or rights or remedies under such security agree- in service on or prior to October 22, 1994, for conditionally sold to a debtor that is a water ment, lease, or conditional sale contract, to purposes of this section— carrier that, at the time such transaction is sell, lease, or otherwise retain or dispose of ‘‘(1) the term ‘lease’ includes any written entered into, holds a certificate of public such equipment, is not limited or otherwise agreement with respect to which the lessor convenience and necessity or permit issued affected by any other provision of this title and the debtor, as lessee, have expressed in by the Department of Transportation; and or by any power of the court, except that the the agreement or in a substantially contem- ‘‘(B) includes all records and documents re- right to take possession and enforce those poraneous writing that the agreement is to lating to such equipment that are required, other rights and remedies shall be subject to be treated as a lease for Federal income tax under the terms of the security agreement, section 362 of this title, if— purposes; and lease, or conditional sale contract, to be sur- ‘‘(A) before the date that is 60 days after ‘‘(2) the term ‘security interest’ means a rendered or returned by the debtor in con- the date of commencement of a case under purchase-money equipment security inter- nection with the surrender or return of such this chapter, the trustee, subject to the est. equipment. court’s approval, agrees to perform all obli- ‘‘(e) With respect to equipment first placed ‘‘(4) Paragraph (1) applies to a secured gations of the debtor under such security in service after October 22, 1994, for purposes party, lessor, or conditional vendor acting in agreement, lease, or conditional sale con- of this section, the term ‘rolling stock equip- its own behalf or acting as trustee or other- tract; and ment’ includes rolling stock equipment that wise in behalf of another party. ‘‘(B) any default, other than a default of a is substantially rebuilt and accessories used ‘‘(b) The trustee and the secured party, les- kind described in section 365(b)(2) of this on such equipment.’’. sor, or conditional vendor whose right to title, under such security agreement, lease, (b) AIRCRAFT EQUIPMENT AND VESSELS.— take possession is protected under sub- or conditional sale contract— Section 1110 of title 11, United States Code, section (a) may agree, subject to the ap- ‘‘(i) that occurs before the date of com- is amended to read as follows: proval of the court, to extend the 60-day pe- mencement of the case and is an event of de- ‘‘§ 1110. Aircraft equipment and vessels riod specified in subsection (a)(1). fault therewith is cured before the expiration ‘‘(a)(1) Except as provided in paragraph (2) ‘‘(c)(1) In any case under this chapter, the of such 60-day period; and subject to subsection (b), the right of a trustee shall immediately surrender and re- ‘‘(ii) that occurs or becomes an event of de- secured party with a security interest in turn to a secured party, lessor, or condi- fault after the date of commencement of the equipment described in paragraph (3), or of a tional vendor, described in subsection (a)(1), case and before the expiration of such 60-day lessor or conditional vendor of such equip- equipment described in subsection (a)(3), if period is cured before the later of— ment, to take possession of such equipment at any time after the date of the order for re- ‘‘(I) the date that is 30 days after the date in compliance with a security agreement, lief under this chapter such secured party, of the default or event of the default; or lease, or conditional sale contract, and to en- lessor, or conditional vendor is entitled pur- ‘‘(II) the expiration of such 60-day period; force any of its other rights or remedies, suant to subsection (a)(1) to take possession and under such security agreement, lease, or con- of such equipment and makes a written de- ‘‘(iii) that occurs on or after the expiration ditional sale contract, to sell, lease, or oth- mand for such possession to the trustee. ‘‘(2) At such time as the trustee is required of such 60-day period is cured in accordance erwise retain or dispose of such equipment, under paragraph (1) to surrender and return with the terms of such security agreement, is not limited or otherwise affected by any equipment described in subsection (a)(3), any lease, or conditional sale contract, if cure is other provision of this title or by any power lease of such equipment, and any security permitted under that agreement, lease, or of the court. agreement or conditional sale contract relat- conditional sale contract. ‘‘(2) The right to take possession and to en- ‘‘(2) The equipment described in this para- force the other rights and remedies described ing to such equipment, if such security graph— in paragraph (1) shall be subject to section agreement or conditional sale contract is an ‘‘(A) is rolling stock equipment or acces- 362 of this title if— executory contract, shall be deemed re- sories used on rolling stock equipment, in- ‘‘(A) before the date that is 60 days after jected. ‘‘(d) With respect to equipment first placed cluding superstructures or racks, that is sub- the date of the order for relief under this in service on or before October 22, 1994, for ject to a security interest granted by, leased chapter, the trustee, subject to the approval purposes of this section— to, or conditionally sold to a debtor; and of the court, agrees to perform all obliga- ‘‘(1) the term ‘lease’ includes any written ‘‘(B) includes all records and documents re- tions of the debtor under such security agreement with respect to which the lessor lating to such equipment that are required, agreement, lease, or conditional sale con- and the debtor, as lessee, have expressed in under the terms of the security agreement, tract; and the agreement or in a substantially contem- lease, or conditional sale contract, that is to ‘‘(B) any default, other than a default of a poraneous writing that the agreement is to be surrendered or returned by the debtor in kind specified in section 365(b)(2) of this be treated as a lease for Federal income tax connection with the surrender or return of title, under such security agreement, lease, purposes; and such equipment. or conditional sale contract— ‘‘(3) Paragraph (1) applies to a secured ‘‘(i) that occurs before the date of the order ‘‘(2) the term ‘security interest’ means a party, lessor, or conditional vendor acting in is cured before the expiration of such 60-day purchase-money equipment security inter- its own behalf or acting as trustee or other- period; est.’’. wise in behalf of another party. ‘‘(ii) that occurs after the date of the order SEC. 127. DISCHARGE UNDER CHAPTER 13. ‘‘(b) The trustee and the secured party, les- and before the expiration of such 60-day pe- Section 1328(a) of title 11, United States sor, or conditional vendor whose right to riod is cured before the later of— Code, is amended by striking paragraphs (1) take possession is protected under sub- ‘‘(I) the date that is 30 days after the date through (3) and inserting the following: section (a) may agree, subject to the court’s of the default; or ‘‘(1) provided for under section 1322(b)(5) of approval, to extend the 60-day period speci- ‘‘(II) the expiration of such 60-day period; this title; fied in subsection (a)(1). and ‘‘(2) of the kind specified in paragraph (2), ‘‘(c)(1) In any case under this chapter, the ‘‘(iii) that occurs on or after the expiration (4), (3)(B), (5), (8), or (9) of section 523(a) of trustee shall immediately surrender and re- of such 60-day period is cured in compliance this title; turn to a secured party, lessor, or condi- with the terms of such security agreement, ‘‘(3) for restitution, or a criminal fine, in- tional vendor, described in subsection (a)(1), lease, or conditional sale contract, if a cure cluded in a sentence on the debtor’s convic- equipment described in subsection (a)(2), if is permitted under that agreement, lease, or tion of a crime; or at any time after the date of commencement contract. ‘‘(4) for restitution, or damages, awarded in of the case under this chapter such secured ‘‘(3) The equipment described in this para- a civil action against the debtor as a result party, lessor, or conditional vendor is enti- graph— of willful or malicious injury by the debtor tled pursuant to subsection (a)(1) to take ‘‘(A) is— that caused personal injury to an individual possession of such equipment and makes a ‘‘(i) an aircraft, aircraft engine, propeller, or the death of an individual.’’. written demand for such possession of the appliance, or spare part (as defined in section SEC. 128. BANKRUPTCY JUDGESHIPS. trustee. 40102 of title 49) that is subject to a security (a) SHORT TITLE.—This section may be ‘‘(2) At such time as the trustee is required interest granted by, leased to, or condi- cited as the ‘‘Bankruptcy Judgeship Act of under paragraph (1) to surrender and return tionally sold to a debtor that, at the time 1999’’.

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(b) TEMPORARY JUDGESHIPS.— (e) TRAVEL EXPENSES OF BANKRUPTCY ‘‘(i) the individual that received that con- (1) APPOINTMENTS.—The following judge- JUDGES.—Section 156 of title 28, United sideration; or ship positions shall be filled in the manner States Code, is amended by adding at the end ‘‘(ii) property not in the possession of the prescribed in section 152(a)(1) of title 28, the following new subsection: debtor that secures that claim. United States Code, for the appointment of ‘‘(g)(1) In this subsection, the term ‘travel ‘‘(B) Notwithstanding subparagraph (A), bankruptcy judges provided for in section expenses’— the stay provided by subsection (a) shall 152(a)(2) of such title: ‘‘(A) means the expenses incurred by a apply in any case in which the debtor is pri- (A) One additional bankruptcy judgeship bankruptcy judge for travel that is not di- marily obligated to pay the creditor in whole for the eastern district of California. rectly related to any case assigned to such or in part with respect to a claim described (B) Four additional bankruptcy judgeships bankruptcy judge; and in subparagraph (A) under a legally binding for the central district of California. ‘‘(B) shall not include the travel expenses separation or property settlement agreement (C) One additional bankruptcy judgeship of a bankruptcy judge if— or divorce or dissolution decree with respect for the southern district of Florida. ‘‘(i) the payment for the travel expenses is to— (D) Two additional bankruptcy judgeships paid by such bankruptcy judge from the per- ‘‘(i) an individual described in subpara- for the district of Maryland. sonal funds of such bankruptcy judge; and graph (A)(i); or (E) One additional bankruptcy judgeship ‘‘(ii) such bankruptcy judge does not re- ‘‘(ii) property described in subparagraph for the eastern district of Michigan. ceive funds (including reimbursement) from (A)(ii). ‘‘(3) Notwithstanding subsection (c), the (F) One additional bankruptcy judgeship the United States or any other person or en- stay provided by subsection (a) shall termi- for the southern district of Mississippi. tity for the payment of such travel expenses. nate as of the date of confirmation of the (G) One additional bankruptcy judgeship ‘‘(2) Each bankruptcy judge shall annually plan, in any case in which the plan of the submit the information required under para- for the district of New Jersey. debtor provides that the debtor’s interest in (H) One additional bankruptcy judgeship graph (3) to the chief bankruptcy judge for personal property subject to a lease with re- for the eastern district of New York. the district in which the bankruptcy judge is spect to which the debtor is the lessee will be (I) One additional bankruptcy judgeship for assigned. surrendered or abandoned or no payments the northern district of New York. ‘‘(3)(A) Each chief bankruptcy judge shall will be made under the plan on account of (J) One additional bankruptcy judgeship submit an annual report to the Director of the debtor’s obligations under the lease.’’. for the southern district of New York. the Administrative Office of the United SEC. 132. ADEQUATE PROTECTION FOR INVES- (K) One additional bankruptcy judgeship States Courts on the travel expenses of each TORS. for the eastern district of Pennsylvania. bankruptcy judge assigned to the applicable (a) DEFINITION.—Section 101 of title 11, (L) One additional bankruptcy judgeship district (including the travel expenses of the United States Code, is amended by inserting for the middle district of Pennsylvania. chief bankruptcy judge of such district). after paragraph (48) the following: (M) One additional bankruptcy judgeship ‘‘(B) The annual report under this para- ‘‘(48A) ‘securities self regulatory organiza- for the western district of Tennessee. graph shall include— tion’ means either a securities association (N) One additional bankruptcy judgeship ‘‘(i) the travel expenses of each bankruptcy registered with the Securities and Exchange for the eastern district of Virginia. judge, with the name of the bankruptcy Commission pursuant to section 15A of the (2) VACANCIES.—The first vacancy occur- judge to whom the travel expenses apply; Securities Exchange Act of 1934 or a national ring in the office of a bankruptcy judge in ‘‘(ii) a description of the subject matter securities exchange registered with the Se- each of the judicial districts set forth in and purpose of the travel relating to each curities and Exchange Commission pursuant paragraph (1) that— travel expense identified under clause (i), to section 6 of the Securities Exchange Act (A) results from the death, retirement, res- with the name of the bankruptcy judge to of 1934;’’. ignation, or removal of a bankruptcy judge; whom the travel applies; and (b) AUTOMATIC STAY.—Section 362(b) of and ‘‘(iii) the number of days of each travel de- title 11, United States Code, as amended by (B) occurs 5 years or more after the ap- scribed under clause (ii), with the name of section 118, is amended— pointment date of a bankruptcy judge ap- the bankruptcy judge to whom the travel ap- (1) in paragraph (19) by striking ‘‘or’’ at the pointed under paragraph (1); plies. end; shall not be filled. ‘‘(4)(A) The Director of the Administrative (2) in paragraph (20) by striking the period (c) EXTENSIONS.— Office of the United States Courts shall— at the end and a inserting ‘‘; or’’; and (1) IN GENERAL.—The temporary bank- ‘‘(i) consolidate the reports submitted (3) by inserting after paragraph (20) the fol- ruptcy judgeship positions authorized for the under paragraph (3) into a single report; and lowing: northern district of Alabama, the district of ‘‘(ii) annually submit such consolidated re- ‘‘(21) under subsection (a), of the com- Delaware, the district of Puerto Rico, the port to Congress. mencement or continuation of an investiga- district of South Carolina, and the eastern ‘‘(B) The consolidated report submitted tion or action by a securities self regulatory district of Tennessee under section 3(a) (1), under this paragraph shall include the spe- organization to enforce such organization’s (3), (7), (8), and (9) of the Bankruptcy Judge- cific information required under paragraph regulatory power; of the enforcement of an ship Act of 1992 (28 U.S.C. 152 note) are ex- (3)(B), including the name of each bank- order or decision, other than for monetary tended until the first vacancy occurring in ruptcy judge with respect to clauses (i), (ii), sanctions, obtained in an action by the secu- the office of a bankruptcy judge in the appli- and (iii) of paragraph (3)(B).’’. rities self regulatory organization to enforce cable district resulting from the death, re- SEC. 129. ADDITIONAL AMENDMENTS TO TITLE such organization’s regulatory power; or of tirement, resignation, or removal of a bank- 11, UNITED STATES CODE. any act taken by the securities self regu- ruptcy judge and occurring— Section 507(a) of title 11, United States latory organization to delist, delete, or (A) 8 years or more after November 8, 1993, Code, is amended by inserting after para- refuse to permit quotation of any stock that with respect to the northern district of Ala- graph (9) the following: does not meet applicable regulatory require- bama; ‘‘(10) Tenth, allowed claims for death or ments.’’. (B) 10 years or more after October 28, 1993, personal injuries resulting from the oper- SEC. 134. GIVING DEBTORS THE ABILITY TO KEEP with respect to the district of Delaware; ation of a motor vehicle or vessel if such op- LEASED PERSONAL PROPERTY BY ASSUMPTION. (C) 8 years or more after August 29, 1994, eration was unlawful because the debtor was intoxicated from using alcohol, a drug or an- Section 365 of title 11, United States Code, with respect to the district of Puerto Rico; is amended by adding at the end the fol- other substance.’’. (D) 8 years or more after June 27, 1994, with lowing: respect to the district of South Carolina; and SEC. 131. APPLICATION OF THE CODEBTOR STAY ‘‘(p)(1) If a lease of personal property is re- (E) 8 years or more after November 23, 1993, ONLY WHEN THE STAY PROTECTS jected or not timely assumed by the trustee with respect to the eastern district of Ten- THE DEBTOR. under subsection (d), the leased property is nessee. Section 1301(b) of title 11, United States no longer property of the estate and the stay (2) APPLICABILITY OF OTHER PROVISIONS.— Code, is amended— under section 362(a) of this title is automati- All other provisions of section 3 of the Bank- (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and cally terminated. ruptcy Judgeship Act of 1992 remain applica- (2) by adding at the end the following: ‘‘(2) In the case of an individual under ble to such temporary judgeship position. ‘‘(2)(A) Notwithstanding subsection (c) and chapter 7, the debtor may notify the creditor (d) TECHNICAL AMENDMENT.—The first sen- except as provided in subparagraph (B), in in writing that the debtor desires to assume tence of section 152(a)(1) of title 28, United any case in which the debtor did not receive the lease. Upon being so notified, the cred- States Code, is amended to read as follows: the consideration for the claim held by a itor may, at its option, notify the debtor ‘‘Each bankruptcy judge to be appointed for creditor, the stay provided by subsection (a) that it is willing to have the lease assumed a judicial district as provided in paragraph shall apply to that creditor for a period not by the debtor and may, at its option, condi- (2) shall be appointed by the United States to exceed 30 days beginning on the date of tion such assumption on cure of any out- court of appeals for the circuit in which such the order for relief, to the extent the cred- standing default on terms set by the con- district is located.’’. itor proceeds against— tract. If within 30 days of the notice from the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00100 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8593 creditor the debtor notifies the lessor in section (a) may retain possession of property ‘‘(A) Claims that, as of the date of entry of writing that the lease is assumed, the liabil- described in that subsection that was ob- the order for relief, are owed directly to a ity under the lease will be assumed by the tained in accordance with applicable law be- spouse, former spouse, or child of the debtor, debtor and not by the estate. The stay under fore the date of filing of the petition until or the parent of such child, without regard to section 362 of this title and the injunction the first payment under subsection (a)(1)(A) whether the claim is filed by the spouse, under section 524(a) of this title shall not be is received by the lessor or creditor. former spouse, child, or parent, or is filed by violated by notification of the debtor and ne- ‘‘(e) On or before 60 days after the filling of a governmental unit on behalf of that per- gotiation of cure under this subsection. a case under this chapter, a debtor retaining son. Nothing in this paragraph shall require a possession of personal property subject to a ‘‘(B) Claims that, as of the date of entry of debtor to assume a lease, or a creditor to lease or securing a claim attributable in the order for relief, are assigned by a spouse, permit assumption. whole or in part to the purchase price of former spouse, child of the debtor, or the ‘‘(3) In a case under chapter 11 of this title such property shall provide each creditor or parent of that child to a governmental unit in which the debtor is an individual and in a lessor reasonable evidence of the mainte- or are owed directly to a governmental unit case under chapter 13 of this title, if the nance of any required insurance coverage under applicable nonbankruptcy law.’’. debtor is the lessee with respect to personal with respect to the use or ownership of such SEC. 142. NONDISCHARGEABILITY OF CERTAIN property and the lease is not assumed in the property and continue to do so for so long as DEBTS FOR ALIMONY, MAINTE- plan confirmed by the court, the lease is the debtor retains possession of such prop- NANCE, AND SUPPORT. deemed rejected as of the conclusion of the erty.’’. Section 523 of title 11, United States Code, hearing on confirmation. If the lease is re- (b) CLERICAL AMENDMENT.—The table of is amended— jected, the stay under section 362 of this title sections at the beginning of chapter 13 of (1) in subsection (a), by striking paragraph and any stay under section 1301 is automati- title 11, United States Code, is amended by (5) and inserting the following: cally terminated with respect to the prop- inserting after the item relating to section ‘‘(5) for a domestic support obligation;’’; erty subject to the lease.’’. 1307 the following: (2) in subsection (a)(15)— SEC. 135. ADEQUATE PROTECTION OF LESSORS ‘‘1307A. Adequate protection in chapter 13 (A) by inserting ‘‘or’’ after ‘‘court of AND PURCHASE MONEY SECURED cases.’’. record,’’; CREDITORS. (B) by striking ‘‘unless—’’ and all that fol- (a) IN GENERAL.—Chapter 13 of title 11, SEC. 136. AUTOMATIC STAY. lows through ‘‘debtor’’ the last place it ap- United States Code, is amended by adding Section 362(b) of title 11, United States pears; and after section 1307 the following: Code, as amended by sections 118 and 132, is amended— (3) in subsection (c), by striking ‘‘(6), or ‘‘§ 1307A. Adequate protection in chapter 13 (1) in paragraph (20), by striking ‘‘or’’ at (15)’’ each place it appears and inserting ‘‘or cases the end; (6)’’. ‘‘(a)(1)(A) On or before the date that is 30 (2) in paragraph (21), by striking the period SEC. 143. CONTINUED LIABILITY OF PROPERTY. days after the filing of a case under this at the end and inserting a semicolon; and Section 522 of title 11, United States Code, chapter, the debtor shall make cash pay- (3) by inserting after paragraph (21) the fol- is amended— ments in an amount determined under para- lowing: (1) in subsection (c), by striking paragraph graph (2), to— ‘‘(22) under subsection (a) of any transfer (1) and inserting the following: ‘‘(i) any lessor of personal property; and that is not avoidable under section 544 of ‘‘(1) a debt of a kind specified in paragraph ‘‘(ii) any creditor holding a claim secured this title and that is not avoidable under sec- (1) or (5) of section 523(a) (in which case, not- by personal property to the extent that the tion 549 of this title; or withstanding any provision of applicable claim is attributable to the purchase of that ‘‘(23) under subsection (a)(3), of eviction ac- nonbankruptcy law to the contrary, such property by the debtor. tions based on endangerment to property or property shall be liable for a debt of a kind ‘‘(B) The debtor or the plan shall continue person or the use of illegal drugs.’’. specified in section 523(a)(5);’’; and making the adequate protection payments (2) in subsection (f)(1)(A), by striking the required under subparagraph (A) until the SEC. 137. EXTEND PERIOD BETWEEN BANK- RUPTCY DISCHARGES. dash and all that follows through the end of earlier of the date on which— Title 11, United States Code, is amended— the subparagraph and inserting ‘‘of a kind ‘‘(i) the creditor begins to receive actual (1) in section 727(a)(8) by striking ‘‘six’’ and that is specified in section 523(a)(5); or’’. payments under the plan; or inserting ‘‘7’’; and ‘‘(ii) the debtor relinquishes possession of SEC. 144. PROTECTION OF DOMESTIC SUPPORT (2) in section 1328 by adding at the end the CLAIMS AGAINST PREFERENTIAL the property referred to in subparagraph (A) following: TRANSFER MOTIONS. to— ‘‘(f) Notwithstanding subsections (a) and Section 547(c)(7) of title 11, United States ‘‘(I) the lessor or creditor; or (b), the court shall not grant a discharge of Code, is amended to read as follows: ‘‘(II) any third party acting under claim of all debts provided for by the plan or dis- ‘‘(7) to the extent such transfer was a bona right, as applicable. allowed under section 502 of this title if the fide payment of a debt for a domestic sup- ‘‘(2) The payments referred to in paragraph debtor has received a discharge in any case port obligation; or’’. (1)(A) shall be the contract amount and shall filed under this title within 5 years of the reduce any amount payable under section SEC. 145. CLARIFICATION OF MEANING OF order for relief under this chapter.’’. HOUSEHOLD GOODS. 1326(a) of the title. ‘‘(b)(1) Subject to the limitations under SEC. 139. PRIORITIES FOR CLAIMS FOR DOMES- Section 101 of title 11, United States Code, paragraph (2), the court may, after notice TIC SUPPORT OBLIGATIONS. is amended by inserting after paragraph (27) and hearing, change the amount and timing Section 507(a) of title 11, United States the following: of the dates of payment of payments made Code, is amended— ‘‘(27A) ‘household goods’ includes tangible under subsection (a). (1) by striking paragraph (7); personal property normally found in or ‘‘(2)(A) The payments referred to in para- (2) by redesignating paragraphs (1) through around a residence, but does not include mo- graph (1) shall be payable not less frequently (6) as paragraphs (2) through (7), respec- torized vehicles used for transportation pur- than monthly. tively; poses;’’. ‘‘(B) The amount of payments referred to (3) in paragraph (2), as redesignated, by SEC. 147. MONETARY LIMITATION ON CERTAIN in paragraph (1) shall not be less than the striking ‘‘First’’ and inserting ‘‘Second’’; EXEMPT PROPERTY. amount of any weekly, biweekly, monthly, (4) in paragraph (3), as redesignated, by Section 522 of title 11, United States Code, or other periodic payment scheduled as pay- striking ‘‘Second’’ and inserting ‘‘Third’’; as amended by section 125, is amended— able under the contract between the debtor (5) in paragraph (4), as redesignated, by (1) in subsection (b)(2)(A) by striking ‘‘sub- and creditor. striking ‘‘Third’’ and inserting ‘‘Fourth’’; section (o)’’ and inserting ‘‘subsections (o) ‘‘(c) Notwithstanding section 1326(b), the (6) in paragraph (5), as redesignated, by and (p)’’ before ‘‘any property’’; and payments referred to in subsection (a)(1)(A) striking ‘‘Fourth’’ and inserting ‘‘Fifth’’; (2) by adding at the end the following: shall be continued in addition to plan pay- (7) in paragraph (6), as redesignated, by ‘‘(p)(1) Except as provided in paragraphs (2) ments under a confirmed plan until actual striking ‘‘Fifth’’ and inserting ‘‘Sixth’’; and (3), as a result of electing under sub- payments to the creditor begin under that (8) in paragraph (7), as redesignated, by section (b)(3)(A) to exempt property under plan, if the confirmed plan provides— striking ‘‘Sixth’’ and inserting ‘‘Seventh’’; State or local law, a debtor may not exempt ‘‘(1) for payments to a creditor or lessor de- and any interest that exceeds $250,000 in value, in scribed in subsection (a)(1); and (9) by inserting before paragraph (2), as re- the aggregate, in— ‘‘(2) for the deferral of payments to such designated, the following: ‘‘(A) real or personal property that the creditor or lessor under the plan until the ‘‘(1) First, allowed claims for domestic sup- debtor or a dependent of the debtor uses as a payment of amounts described in section port obligations to be paid in the following residence; 1326(b). order on the condition that funds received ‘‘(B) a cooperative that owns property that ‘‘(d) Notwithstanding sections 362, 542, and under this paragraph by a governmental unit the debtor or a dependent of the debtor uses 543, a lessor or creditor described in sub- in a case under this title be applied: as a residence; or

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00101 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8594 CONGRESSIONAL RECORD—HOUSE May 5, 1999 ‘‘(C) a burial plot for the debtor or a de- that is not discharged under paragraph (2), SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN pendent of the debtor. (4), or (14A) of section 523(a) of this title or PARTICIPANT CONTRIBUTIONS AND ‘‘(2) The limitation under paragraph (1) that was reaffirmed by the debtor under sec- OTHER PROPERTY FROM THE ES- TATE. shall not apply to an exemption claimed tion 524(c) of this title. (a) IN GENERAL.—Section 541(b) of title 11 under subsection (b)(3)(A) by a family farmer ‘‘(2)(A) If, after receiving a notice under of the United States Code is amended— for the principal residence of that farmer. paragraph (1)(B)(iii), a holder of a claim or a (1) by striking ‘‘or’’ at the end of paragraph ‘‘(3) Paragraph (1) shall not apply to debt- State child support agency is unable to lo- (4)(B)(ii); ors if applicable State law expressly provides (2) by striking the period at the end of by a statute enacted after the effective date cate the debtor that is the subject of the no- paragraph (5) and inserting ‘‘; or’’; and of this paragraph that such paragraph shall tice, such holder or such agency may request (3) by inserting after paragraph (5) the fol- not apply to debtors.’’. from a creditor described in paragraph (1)(B)(iii)(III) the last known address of the lowing: SEC. 148. BANKRUPTCY FEES. debtor. ‘‘(7) any amount or interest in property to Section 1930 of title 28, United States Code, the extent that an employer has withheld is amended— ‘‘(B) Notwithstanding any other provision amounts from the wages of employees for (1) in subsection (a) by striking ‘‘Notwith- of law, a creditor that makes a disclosure of contribution to an employee benefit plan standing section 1915 of this title, the’’ and a last known address of a debtor in connec- subject to title I of the Employee Retire- inserting ‘‘The’’; and tion with a request made under subpara- ment Income Security Act of 1974, or to the (2) by adding at the end the following: graph (A) shall not be liable to the debtor or extent that the employer has received ‘‘(f)(1) Pursuant to procedures prescribed any other person by reason of making such amounts as a result of payments by partici- by the Judicial Conference of the United disclosure.’’. pants or beneficiaries to an employer for States, the district court or the bankruptcy (b) DUTIES OF TRUSTEE UNDER CHAPTER contribution to an employee benefit plan court may waive the filing fee in a case 13.—Section 1302 of title 11, United States subject to title I of the Employee Retire- under chapter 7 of title 11 for an individual ment Income Security Act of 1974.’’. debtor who is unable to pay such fee in in- Code, is amended— (1) in subsection (b)— (b) APPLICATION OF AMENDMENT.—The stallments. For purposes of this paragraph, amendment made by this section shall not (A) in paragraph (4) by striking ‘‘and’’ at the term ‘filing fee’ means the filing fee re- apply to cases commenced under title 11 of the end, quired by subsection (a), or any other fee the United States Code before the expiration (B) in paragraph (5) by striking the period prescribed by the Judicial Conference under of the 180-day period beginning on the date of subsections (b) and (c) that is payable to the and inserting ‘‘; and’’, and the enactment of this Act. (C) by adding at the end the following: clerk upon the commencement of a case SEC. 151. CLARIFICATION OF POSTPETITION ‘‘(6) if, with respect to an individual debt- under chapter 7 of title 11. WAGES AND BENEFITS. ‘‘(2) The district court or the bankruptcy or, there is a claim for support of a child of Section 503(b)(1)(A) of title 11, United court may also waive for such debtors other the debtor or a custodial parent of such child States Code, is amended to read as follows: fees prescribed pursuant to subsections (b) entitled to receive priority under section ‘‘(A) the actual, necessary costs and ex- and (c). 507(a)(1) of this title, provide the applicable penses of preserving the estate, including ‘‘(3) This subsection does not restrict the notification specified in subsection (d).’’, and wages, salaries, or commissions for services district court or the bankruptcy court from (2) by adding at the end the following: rendered after the commencement of the waiving, in accordance with Judicial Con- ‘‘(d)(1) In any case described in subsection case, and wages and benefits attributable to ference policy, fees prescribed pursuant to (b)(6), the trustee shall— any period of time after commencement of such subsections for other debtors and credi- ‘‘(A)(i) notify in writing the holder of the the case as a result of the debtor’s violation tors.’’. claim of the right of such holder to use the of Federal law, without regard to when the SEC. 149. COLLECTION OF CHILD SUPPORT. services of a State child support enforcement original unlawful act occurred or to whether (a) DUTIES OF TRUSTEE UNDER CHAPTER 7.— agency established under sections 464 and 466 any services were rendered;’’. Section 704 of title 11, United States Code, as of the Social Security Act for the State in SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN amended by section 102, is amended— which the holder resides; and DOMESTIC SUPPORT OBLIGATION PROCEEDINGS. (1) by inserting ‘‘(a)’’ before ‘‘The trustee’’, ‘‘(ii) include in the notice under this para- Section 362(b)(2) of title 11, United States (2) in paragraph (9) by striking ‘‘and’’ at graph the address and telephone number of Code, is amended— the end, the child support enforcement agency; and (1) in subparagraph (A) by striking ‘‘or’’ at (3) in paragraph (10) by striking the period ‘‘(B)(i) notify in writing the State child the end; support agency of the State in which the and inserting ‘‘; and’’, and (2) in subparagraph (B) by adding ‘‘or’’ at holder of the claim resides of the claim; and (4) by adding at the end the following: the end; and ‘‘(ii) include in the notice under this para- ‘‘(11) if, with respect to an individual debt- (3) by adding at the end the following: graph the name, address, and telephone num- or, there is a claim for support of a child of ‘‘(C) under subsection (a) of— the debtor or a custodial parent of such child ber of the holder of the claim; ‘‘(i) the withholding of income for payment entitled to receive priority under section ‘‘(iii) at such time as the debtor is granted of a domestic support obligation pursuant to 507(a)(1) of this title, provide the applicable a discharge under section 1328 of this title, a judicial or administrative order or statute notification specified in subsection (b). notify the holder of the claim and the State for such obligation that first becomes pay- ‘‘(b)(1) In any case described in subsection child support agency of the State in which able after the date on which the petition is (a)(11), the trustee shall— such holder resides of— filed; or ‘‘(A)(i) notify in writing the holder of the ‘‘(I) the granting of the discharge; ‘‘(ii) the withholding of income for pay- claim of the right of such holder to use the ‘‘(II) the last recent known address of the ment of a domestic support obligation owed services of a State child support enforcement debtor; and directly to the spouse, former spouse or child agency established under sections 464 and 466 ‘‘(III) with respect to the debtor’s case, the of the debtor or the parent of such child, pur- of the Social Security Act for the State in name of each creditor that holds a claim suant to a judicial or administrative order or which the holder resides; and that is not discharged under paragraph (2), statute for such obligation that becomes ‘‘(ii) include in the notice under this para- (4), or (14A) of section 523(a) of this title or payable before the date on which the peti- graph the address and telephone number of that was reaffirmed by the debtor under sec- tion is filed unless the court finds, after no- the child support enforcement agency; and tion 524(c) of this title. tice and hearing, that such withholding ‘‘(B)(i) notify in writing the State child ‘‘(2)(A) If, after receiving a notice under would render the plan infeasible;’’. support agency of the State in which the paragraph (1)(B)(iii), a holder of a claim or a SEC. 153. AUTOMATIC STAY INAPPLICABLE TO holder of the claim resides of the claim; State child support agency is unable to lo- CERTAIN PROCEEDINGS AGAINST ‘‘(ii) include in the notice under this para- cate the debtor that is the subject of the no- THE DEBTOR. graph the name, address, and telephone num- Section 362(b)(2) of title 11, United States tice, such holder or such agency may request ber of the holder of the claim; and Code, as amended by section 153, is amend- from a creditor described in paragraph ‘‘(iii) at such time as the debtor is granted ed— (1)(B)(iii) the last known address of the debt- a discharge under section 727 of this title, (1) in subparagraph (B) by striking ‘‘or’’ at or. notify the holder of such claim and the State the end; child support agency of the State in which ‘‘(B) Notwithstanding any other provision (2) by inserting after subparagraph (C) the such holder resides of— of law, a creditor that makes a disclosure of following: ‘‘(I) the granting of the discharge; a last known address of a debtor in connec- ‘‘(D) the commencement or continuation of ‘‘(II) the last recent known address of the tion with a request made under subpara- a proceeding concerning a child custody or debtor; and graph (A) shall not be liable to the debtor or visitation; ‘‘(III) with respect to the debtor’s case, the any other person by reason of making such ‘‘(E) the commencement or continuation of name of each creditor that holds a claim disclosure.’’. a proceeding alleging domestic violence; or

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00102 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8595 ‘‘(F) the commencement or continuation of by the debtor of all payments under the ‘‘(E) the right to receive— a proceeding seeking a dissolution of mar- plan’’. ‘‘(i) alimony, maintenance , support, or riage, except to the extent the proceeding SEC. 156. EXCEPTIONS TO AUTOMATIC STAY IN property traceable to alimony, maintenance concerns property of the estate;’’. DOMESTIC SUPPORT OBLIGATION , support; or SEC. 154. DEFINITION OF DOMESTIC SUPPORT PROCEEDINGS. ‘‘(ii) amounts payable as a result of a prop- OBLIGATION. Section 362(b) of title 11, United States erty settlement agreement with the debtor’s Section 101 of title 11, United States Code, Code, as amended by sections 104 and 606, is spouse or former spouse; or of an interlocu- is amended— amended— tory or final divorce decree; (1) by striking paragraph (12A); and (1) amending paragraph (2) to read as fol- to the extent reasonably necessary for the (2) by inserting after paragraph (14) the fol- lows: support of the debtor or a dependent of the lowing: ‘‘(2) under subsection (a)— debtor.’’. (14A) ‘domestic support obligation’ means a ‘‘(A) of the commencement or continuation SEC. 158. AUTOMATIC STAY INAPPLICABLE TO debt that accrues before or after the entry of of an action or proceeding for— CERTAIN PROCEEDINGS AGAINST an order for relief under this title that is— ‘‘(i) the establishment of paternity as a THE DEBTOR. ‘‘(A) owed to or recoverable by— part of an effort to collect domestic support Section 362(b)(2) of title 11, United States ‘‘(i) a spouse, former spouse, or child of the obligations; or Code, as amended by section 156, is amend- debtor or that child’s legal guardian; or ‘‘(ii) the establishment or modification of ed— ‘‘(ii) a governmental unit; an order for domestic support obligations; or (1) in subparagraph (A) by striking ‘‘or’’ at ‘‘(B) in the nature of alimony, mainte- ‘‘(B) the collection of a domestic support the end; nance, or support (including assistance pro- obligation from property that is not prop- (2) by inserting after subparagraph (B) the vided by a governmental unit) of such erty of the estate; or following: spouse, former spouse, or child, without re- ‘‘(C) under subsection (a) of— ‘‘(C) the commencement or continuation of gard to whether such debt is expressly so ‘‘(i) the withholding of income for payment a proceeding concerning a child custody or designated; of a domestic support obligation pursuant to visitation; ‘‘(C) established or subject to establish- a judicial or administrative order or statute ‘‘(D) the commencement or continuation of ment before or after entry of an order for re- for such obligation that first becomes pay- a proceeding alleging domestic violence; or lief under this title, by reason of applicable able after the date on which the petition is ‘‘(E) the commencement or continuation of provisions of— filed; or a proceeding seeking a dissolution of mar- ‘‘(i) a separation agreement, divorce de- ‘‘(ii) the withholding of income for pay- riage, except to the extent the proceeding cree, or property settlement agreement; ment of a domestic support obligation owed concerns property of the estate;’’. ‘‘(ii) an order of a court of record; or directly to the spouse, former spouse or child TITLE II—DISCOURAGING BANKRUPTCY ‘‘(iii) a determination made in accordance of the debtor or the parent of such child, pur- ABUSE suant to a judicial or administrative order or with applicable nonbankruptcy law by a gov- SEC. 201. REENACTMENT OF CHAPTER 12. statute for such obligation that becomes ernmental unit; and (a) REENACTMENT.—(1) Chapter 12 of title 11 payable before the date on which the peti- ‘‘(D) not assigned to a nongovernmental of the United States Code, as in effect on tion is filed unless the court finds, after no- entity, unless that obligation is assigned vol- September 30, 1999, is hereby reenacted. untarily by the spouse, former spouse, child, tice and hearing, that such withholding (2) Paragraph (1) shall take effect on Sep- or parent solely for the purpose of collecting would render the plan infeasible;’’; tember 30, 1999. the debt.’’. (2) in paragraph (19), by striking ‘‘or’’ at (b) CONTENTS OF CHAPTER 12 PLAN.—Sec- SEC. 155. REQUIREMENTS TO OBTAIN CONFIRMA- the end; tion 1222(a)(2) of title 11, United States Code, TION AND DISCHARGE IN CASES IN- (3) in paragraph (20), by striking the period is amended to read as follows: VOLVING DOMESTIC SUPPORT OBLI- at the end and inserting a semicolon; and ‘‘(2) provide for the full payment, in de- GATIONS. (4) by inserting after paragraph (20) the fol- ferred cash payments, of all claims entitled Title 11, United States Code, is amended— lowing: to priority under section 507, unless— (1) in section 1129(a), by adding at the end ‘‘(21) under subsection (a) with respect to— ‘‘(A) the claim is a claim owed to a govern- the following: ‘‘(A) the withholding, suspension, or re- mental unit that arises as a result of the ‘‘(14) If the debtor is required by a judicial striction of drivers’ licenses, professional sale, transfer, exchange, or other disposition or administrative order or statute to pay a and occupational licenses, and recreational of any farm asset used in the debtor’s farm- domestic support obligation, the debtor has licenses pursuant to State law, as specified ing operation, in which case the claim shall paid all amounts payable under such order or in section 466(a)(16) of the Social Security be treated as an unsecured claim that is not statute for such obligation that first become Act (42 U.S.C. 666(a)(16)) or with respect to entitled to priority under section 507, but the payable after the date on which the petition the reporting of overdue support owed by an debt shall be treated in such manner only if is filed.’’; absent parent to any consumer reporting the debtor receives a discharge; or (2) in section 1325(a)— agency as specified in section 466(a)(7) of the ‘‘(B) the holder of a particular claim agrees (A) in paragraph (5), by striking ‘‘and’’ at Social Security Act (42 U.S.C. 666(a)(7)) if to a different treatment of that claim; and’’. the end; such debt is payable solely to a spouse, (c) SPECIAL NOTICE PROVISIONS.—Section (B) in paragraph (6), by striking the period former spouse or child of the debtor or the 1231(d) of title 11, United States Code, is at the end and inserting ‘‘; and’’; and parent of such child pursuant to a judicial or amended by striking ‘‘a State or local gov- (C) by adding at the end the following: administrative order or statute, unless the ernmental unit’’ and inserting ‘‘any govern- ‘‘(7) if the debtor is required by a judicial holder of such claim agrees to waive such mental unit’’. or administrative order or statute to pay a withholding, suspension or restriction; (d) EXPANDED DEFINITION OF FAMILY FARM- domestic support obligation, the debtor has ‘‘(B) the interception of tax refunds, as ER.—Section 101(18) of title 11, United States paid all amounts payable under such order specified in sections 464 and 466(a)(3) of the Code, is amended— for such obligation that become payable Social Security Act (42 U.S.C. 664 and (1) in subparagraph (A)— after the date on which the petition is 666(a)(3)) if such tax refund is payable solely (A) by striking ‘‘$1,500,000’’ and inserting filed.’’; and to a spouse, former spouse or child of the ‘‘$3,000,000’’; (3) in section 1328(a) in the matter pre- debtor or the parent of such child pursuant (B) by striking ‘‘80’’ and inserting ‘‘50’’; ceding paragraph (1), by inserting ‘‘, after a to a judicial or administrative order or stat- and debtor who is required by a judicial or ad- ute; or (C) by striking ‘‘the taxable year preceding ministrative order to pay a domestic support ‘‘(C) the enforcement of medical obliga- the taxable year’’ and inserting ‘‘at least 1 of obligation certifies that all amounts payable tions as specified under title IV of the Social the 3 taxable years preceding the taxable under such order that are due on or after the Security Act (42 U.S.C. 601 et seq.).’’. year’’; and date the petition was filed have been paid, SEC. 157. EXEMPTION FOR RIGHT TO RECEIVE (2) in subparagraph (B)— and after a debtor who is required by a judi- CERTAIN ALIMONY, MAINTENANCE, (A) in clause (i), by striking ‘‘80’’ and in- cial or administrative order to pay a domes- OR SUPPORT. serting ‘‘50’’; and tic support obligation, certifies that all Section 522(b)(3) of title 11, United States (B) in clause (ii), by striking ‘‘$1,500,000’’ amounts payable under such order that are Code, as so redesignated and amended by sec- and inserting ‘‘$3,000,000’’. due before the date on which the petition tions 115 and 203, is amended— (e) MEETINGS OF CREDITORS AND EQUITY SE- was filed if such amounts are due solely to a (1) in subparagraph (C) by striking ‘‘and’’ CURITY HOLDERS.—Section 341 of title 11, spouse, former spouse or child of the debtor at the end, United States Code, is amended by adding at or the parent of such child pursuant to a ju- (2) in subparagraph (D) by striking the pe- the end the following: dicial or administrative order, unless the riod at the end and inserting ‘‘; and’’, and ‘‘(e) Notwithstanding subsections (a) and holder of such claim agrees to a different (3) by inserting after subparagraph (D) the (b), the court, on the request of a party in in- treatment of such claim’’ after ‘‘completion following: terest and after notice and a hearing, for

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00103 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.003 H05MY9 8596 CONGRESSIONAL RECORD—HOUSE May 5, 1999 cause may order that the United States ‘‘(D)(i) Any distribution that qualifies as ‘‘(A) a loan permitted under section trustee not convene a meeting of creditors or an eligible rollover distribution within the 408(b)(1) of the Employee Retirement Income equity security holders if the debtor has filed meaning of section 402(c) of the Internal Rev- Security Act of 1974) or subject to section a plan as to which the debtor solicited ac- enue Code of 1986 or that is described in 72(p) of the Internal Revenue Code of 1986; or ceptances prior to the commencement of the clause (ii) shall not cease to qualify for ex- ‘‘(B) a loan from the thrift savings plan de- case.’’. emption under paragraph (3)(D) or subsection scribed in subchapter III of title 5, that satis- SEC. 202. MEETINGS OF CREDITORS AND EQUITY (d)(12) by reason of that distribution. fies the requirements of section 8433(g) of SECURITY HOLDERS. ‘‘(ii) A distribution described in this clause such title. Section 341 of title 11, United States Code, is an amount that— Paragraph (19) does not apply to any amount is amended by adding at the end the fol- ‘‘(I) has been distributed from a fund or ac- owed to a plan referred to in that paragraph lowing: count that is exempt from taxation under that is incurred under a loan made during ‘‘(e) Notwithstanding subsections (a) and section 401, 403, 408, 408A, 414, 457, or 501(a) of the 1-year period preceding the filing of a pe- (b), the court, on the request of a party in in- the Internal Revenue Code of 1986; and tition. Nothing in paragraph (19) may be con- terest and after notice and a hearing, for ‘‘(II) to the extent allowed by law, is depos- strued to provide that any loan made under cause may order that the United States ited in such a fund or account not later than a governmental plan under section 414(d), or trustee not convene a meeting of creditors or 60 days after the distribution of that a contract or account under section 403(b), of equity security holders if the debtor has filed amount.’’; and the Internal Revenue Code of 1986 con- a plan as to which the debtor solicited ac- (2) in subsection (d)— ceptances prior to the commencement of the stitutes a claim or a debt under this title.’’. (A) in the matter preceding paragraph (1), (d) PLAN CONTENTS.—Section 1322 of title case.’’. by striking ‘‘subsection (b)(1)’’ and inserting 11, United States Code, is amended by adding SEC. 203. PROTECTION OF RETIREMENT SAVINGS ‘‘subsection (b)(2)’’; and at the end the following: IN BANKRUPTCY. (B) by adding at the end the following: ‘‘(f) A plan may not materially alter the (a) IN GENERAL.—Section 522 of title 11, ‘‘(12) Retirement funds to the extent that terms of a loan described in section 362(b)(29) United States Code, as amended by sections of this title.’’. 113, 125, and 147 is amended— those funds are in a fund or account that is exempt from taxation under section 401, 403, SEC. 204. PROTECTION OF REFINANCE OF SECU- (1) in subsection (b)— RITY INTEREST. (A) in paragraph (2)— 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.’’. Subparagraphs (A), (B), and (C) of section (i) by striking ‘‘(2)(A)’’ and inserting: 547(e)(2) of title 11, United States Code, are ‘‘(3) Property listed in this paragraph is— (b) AUTOMATIC STAY.—Section 362(b) of title 11, United States Code, as amended by amended by striking ‘‘10’’ each place it ap- ‘‘(A) subject to subsections (o) and (p),’’; pears and inserting ‘‘30’’. (ii) in subparagraph (B), by striking ‘‘and’’ sections 118, 132, 136, and 141 is amended— SEC. 205. EXECUTORY CONTRACTS AND UNEX- at the end; (1) in paragraph (27), by striking ‘‘or’’ at the end; PIRED LEASES. (iii) in subparagraph (C), by striking the Section 365(d)(4) of title 11, United States period at the end and inserting ‘‘; and’’; and (2) in paragraph (28), by striking the period and inserting ‘‘; or’’; Code, is amended to read as follows: (iv) by adding at the end the following: ‘‘(4)(A) Subject to subparagraph (B), in any (3) by inserting after paragraph (28) the fol- ‘‘(D) retirement funds to the extent that case under any chapter in this title, an unex- lowing: those funds are in a fund or account that is pired lease of nonresidential real property ‘‘(29) under subsection (a), of withholding exempt from taxation under section 401, 403, under which the debtor is the lessee shall be of income from a debtor’s wages and collec- 408, 408A, 414, 457, or 501(a) of the Internal deemed rejected, and the trustee shall imme- tion of amounts withheld, pursuant to the Revenue Code of 1986.’’; diately surrender such property to the les- debtor’s agreement authorizing that with- (B) by striking paragraph (1) and inserting: sor, if the trustee does not assume or reject holding and collection for the benefit of a ‘‘(2) Property listed in this paragraph is the unexpired lease by the earlier of— pension, profit-sharing, stock bonus, or other property that is specified under subsection ‘‘(i) the date that is 120 days after the date plan established under section 401, 403, 408, (d), unless the State law that is applicable to of the order for relief; or 408A, 414, 457, or 501(a) of the Internal Rev- the debtor under paragraph (3)(A) specifi- ‘‘(ii) the date of the entry of an order con- enue Code of 1986 that is sponsored by the cally does not so authorize.’’; firming a plan. (C) in the matter preceding paragraph (2)— employer of the debtor, or an affiliate, suc- ‘‘(B)(i) The court may extend the period de- (i) by striking ‘‘(b)’’ and inserting ‘‘(b)(1)’’; cessor, or predecessor of such employer— termined under subparagraph (A) for 120 days (ii) by striking ‘‘paragraph (2)’’ both places ‘‘(A) to the extent that the amounts with- upon motion of the trustee or the lessor for it appears and inserting ‘‘paragraph (3)’’; held and collected are used solely for pay- cause. (iii) by striking ‘‘paragraph (1)’’ each place ments relating to a loan from a plan that ‘‘(ii) If the court grants an extension under it appears and inserting ‘‘paragraph (2)’’; and satisfies the requirements of section 408(b)(1) clause (i), the court may grant a subsequent (iv) by striking ‘‘Such property is—’’; and of the Employee Retirement Income Secu- extension only upon prior written consent of (D) by adding at the end of the subsection rity Act of 1974 or is subject to section 72(p) the lessor.’’. the following: of the Internal Revenue Code of 1986; or SEC. 206. CREDITORS AND EQUITY SECURITY ‘‘(4) For purposes of paragraph (3)(D) and ‘‘(B) in the case of a loan from a thrift sav- HOLDERS COMMITTEES. subsection (d)(12), the following shall apply: ings plan described in subchapter III of title Section 1102(a)(2) of title 11, United States ‘‘(A) If the retirement funds are in a retire- 5, that satisfies the requirements of section Code, is amended by inserting before the ment fund that has received a favorable de- 8433(g) of such title.’’; and first sentence the following: ‘‘On its own mo- termination pursuant to section 7805 of the (4) by adding at the end of the flush mate- tion or on request of a party in interest, and Internal Revenue Code of 1986, and that de- rial following paragraph (29) the following: after notice and hearing, the court may termination is in effect as of the date of the ‘‘Paragraph (29) does not apply to any order a change in the membership of a com- commencement of the case under section 301, amount owed to a plan referred to in that mittee appointed under this subsection, if 302, or 303 of this title, those funds shall be paragraph that is incurred under a loan the court determines that the change is nec- presumed to be exempt from the estate. made during the 1-year period preceding the essary to ensure adequate representation of ‘‘(B) If the retirement funds are in a retire- filing of a petition. Nothing in paragraph (29) creditors or equity security holders.’’. ment fund that has not received a favorable may be construed to provide that any loan SEC. 207. AMENDMENT TO SECTION 546 OF TITLE determination pursuant to such section 7805, made under a governmental plan under sec- 11, UNITED STATES CODE. those funds are exempt from the estate if the tion 414(d), or a contract or account under Section 546 of title 11, United States Code, debtor demonstrates that— section 403(b), of the Internal Revenue Code is amended by inserting at the end thereof: ‘‘(i) no prior determination to the contrary of 1986 constitutes a claim or a debt under ‘‘(i) Notwithstanding section 545 (2) and (3) has been made by a court or the Internal this title.’’. of this title, the trustee may not avoid a Revenue Service; and (c) EXCEPTIONS TO DISCHARGE.—Section warehouseman’s lien for storage, transpor- ‘‘(ii) the retirement fund is in substantial 523(a) of title 11, United States Code, is tation or other costs incidental to the stor- compliance with the applicable requirements amended— age and handling of goods, as provided by of the Internal Revenue Code of 1986. (1) by striking ‘‘or’’ at the end of paragraph section 7–209 of the Uniform Commercial ‘‘(C) A direct transfer of retirement funds (17); Code.’’. from 1 fund or account that is exempt from (2) by striking the period at the end of SEC. 208. LIMITATION. taxation under section 401, 403, 408, 408A, 414, paragraph (18) and inserting ‘‘; or’’; and Section 546(c)(1)(B) of title 11, United 457, or 501(a) of the Internal Revenue Code of (3) by adding at the end the following: States Code, is amended by striking ‘‘20’’ and 1986, pursuant to section 401(a)(31) of the In- ‘‘(19) owed to a pension, profit-sharing, inserting ‘‘45’’. ternal Revenue Code of 1986, or otherwise, stock bonus, or other plan established under SEC. 209. AMENDMENT TO SECTION 330(a) OF shall not cease to qualify for exemption section 401, 403, 408, 408A, 414, 457, or 501(c) of TITLE 11, UNITED STATES CODE. under paragraph (3)(D) or subsection (d)(12) the Internal Revenue Code of 1986, pursuant Section 330(a) of title 11, United States by reason of that direct transfer. to— Code, is amended—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00104 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8597 (1) in paragraph (3)— equitable, or possessory ownership interest (B) in paragraph (3) by striking ‘‘; or’’ at (A) in subparagraph (A) after ‘‘awarded’’, in such unit, such corporation, or such lot,’’. the end and inserting a period; and by inserting ‘‘to an examiner, chapter 11 SEC. 215. CLAIMS RELATING TO INSURANCE DE- (C) by striking paragraph (4); trustee, or professional person’’; and POSITS IN CASES ANCILLARY TO (3) in subsection (d)— (B) by redesignating subdivisions (A) FOREIGN PROCEEDINGS. (A) by striking paragraphs (5) through (9); through (E) as clauses (i) through (iv), re- Section 304 of title 11, United States Code, and spectively; and is amended to read as follows: (B) by redesignating paragraph (10) as (2) by adding at the end the following: ‘‘§ 304. Cases ancillary to foreign proceedings paragraph (5); and ‘‘(B) In determining the amount of reason- (4) in subsection (f)(1) by striking ‘‘; except able compensation to be awarded a trustee, ‘‘(a) For purposes of this section— that’’ and all that follows through the end of the court shall treat such compensation as a ‘‘(1) the term ‘domestic insurance com- the paragraph and inserting a period. commission based on the results achieved.’’. pany’ means a domestic insurance company, (b) IMPAIRMENT OF CLAIMS OR INTERESTS.— as such term is used in section 109(b)(2); SEC. 210. POSTPETITION DISCLOSURE AND SO- Section 1124(2) of title 11, United States LICITATION. ‘‘(2) the term ‘foreign insurance company’ Code, is amended— Section 1125 of title 11, United States Code, means a foreign insurance company, as such (1) in subparagraph (A) by inserting ‘‘or of is amended by adding at the end the fol- term is used in section 109(b)(3); a kind that section 365(b)(1)(A) of this title lowing: ‘‘(3) the term ‘United States claimant’ expressly does not require to be cured’’ be- ‘‘(g) Notwithstanding subsection (b), an ac- means a beneficiary of any deposit referred fore the semicolon at the end; ceptance or rejection of the plan may be so- to in subsection (b) or any multibeneficiary (2) in subparagraph (C) by striking ‘‘and’’ licited from a holder of a claim or interest if trust referred to in subsection (b); at the end; such solicitation complies with applicable ‘‘(4) the term ‘United States creditor’ (3) by redesignating subparagraph (D) as nonbankruptcy law and if such holder was means, with respect to a foreign insurance subparagraph (E); and solicited before the commencement of the company— (4) by inserting after subparagraph (C) the case in a manner complying with applicable ‘‘(A) a United States claimant; or following: nonbankruptcy law.’’. ‘‘(B) any business entity that operates in ‘‘(D) if such claim or such interest arises the United States and that is a creditor; and SEC. 211. PREFERENCES. from any failure to perform a nonmonetary Section 547(c) of title 11, United States ‘‘(5) the term ‘United States policyholder’ obligation, compensates the holder of such Code, is amended— means a holder of an insurance policy issued claim or such interest (other than the debtor (1) by amending paragraph (2) to read as in the United States. or an insider) for any actual pecuniary loss follows: ‘‘(b) The court may not grant relief under incurred by such holder as a result of such ‘‘(2) to the extent that such transfer was in chapter 15 of this title with respect to any failure; and’’. payment of a debt incurred by the debtor in deposit, escrow, trust fund, or other security SEC. 217. SHARING OF COMPENSATION. the ordinary course of business or financial required or permitted under any applicable Section 504 of title 11, United States Code, affairs of the debtor and the transferee, and State insurance law or regulation for the is amended by adding at the end the fol- such transfer was— benefit of claim holders in the United lowing: ‘‘(A) made in the ordinary course of busi- States.’’. ‘‘(c) This section shall not apply with re- ness or financial affairs of the debtor and the SEC. 216. DEFAULTS BASED ON NONMONETARY spect to sharing, or agreeing to share, com- transferee; or OBLIGATIONS. pensation with a bona fide public service at- ‘‘(B) made according to ordinary business (a) EXECUTORY CONTRACTS AND UNEXPIRED torney referral program that operates in ac- terms;’’; LEASES.—Section 365 of title 11, United cordance with non-Federal law regulating at- (2) in paragraph (7) by striking ‘‘or’’ at the States Code, is amended— torney referral services and with rules of end; (1) in subsection (b)— professional responsibility applicable to at- (3) in paragraph (8) by striking the period (A) in paragraph (1)(A) by striking the torney acceptance of referrals.’’. at the end and inserting ‘‘; or’’; and semicolon at the end and inserting the fol- SEC. 218. PRIORITY FOR ADMINISTRATIVE EX- (4) by adding at the end the following: lowing: PENSES. ‘‘(9) if, in a case filed by a debtor whose ‘‘other than a default that is a breach of a Section 503(b) of title 11, United States debts are not primarily consumer debts, the provision relating to— Code, is amended— aggregate value of all property that con- ‘‘(i) the satisfaction of any provision (other (1) by deleting ‘‘and’’ at the end of para- stitutes or is affected by such transfer is less than a penalty rate or penalty provision) re- graph (5); than $5,000.’’. lating to a default arising from any failure (2) by striking the period at the end of SEC. 212. VENUE OF CERTAIN PROCEEDINGS. to perform nonmonetary obligations under paragraph (6) and inserting ‘‘; and’’; Section 1409(b) of title 28, United States an unexpired lease of real property (exclud- (3) by inserting the following after para- Code, is amended by inserting ‘‘, or a non- ing executory contracts that transfer a right graph (6): consumer debt against a noninsider of less or interest under a filed or issued patent, ‘‘(7) with respect to a nonresidential real than $10,000,’’ after ‘‘$5,000’’. copyright, trademark, trade dress, or trade property lease previously assumed under sec- tion 365, and subsequently rejected, a sum SEC. 213. PERIOD FOR FILING PLAN UNDER secret), if it is impossible for the trustee to CHAPTER 11. cure such default by performing nonmone- equal to all monetary obligations due, ex- Section 1121(d) of title 11, United States tary acts at and after the time of assump- cluding those arising from or relating to a Code, is amended— tion; or failure to operate or penalty provisions, for (1) by striking ‘‘On’’ and inserting ‘‘(1) ‘‘(ii) the satisfaction of any provision the period of one year following the later of Subject to paragraph (1), on’’; and (other than a penalty rate or penalty provi- the rejection date or date of actual turnover (2) by adding at the end the following: sion) relating to a default arising from any of the premises, without reduction or setoff ‘‘(2)(A) Such 120-day period may not be ex- failure to perform nonmonetary obligations for any reason whatsoever except for sums tended beyond a date that is 18 months after under an executory contract, if it is impos- actually received or to be received from a the date of the order for relief under this sible for the trustee to cure such default by nondebtor; and the claim for remaining sums chapter. performing nonmonetary acts at and after due for the balance of the term of the lease ‘‘(B) Such 180-day period may not be ex- the time of assumption and if the court de- shall be a claim under section 502(b)(6).’’. tended beyond a date that is 20 months after termines, based on the equities of the case, TITLE III—GENERAL BUSINESS the date of the order for relief under this that this subparagraph should not apply with BANKRUPTCY PROVISIONS chapter.’’. respect to such default;’’; and SEC. 301. DEFINITION OF DISINTERESTED PER- SEC. 214. FEES ARISING FROM CERTAIN OWNER- (B) by amending paragraph (2)(D) to read SON. SHIP INTERESTS. as follows: Section 101(14) of title 11, United States Section 523(a)(16) of title 11, United States ‘‘(D) the satisfaction of any penalty rate or Code, is amended to read as follows: Code, is amended— penalty provision relating to a default aris- ‘‘(14) ‘disinterested person’ means a person (1) by striking ‘‘dwelling’’ the first place it ing from a failure to perform nonmonetary that— appears; obligations under an executory contract (ex- ‘‘(A) is not a creditor, an equity security (2) by striking ‘‘ownership or’’ and insert- cluding executory contracts that transfer a holder, or an insider; ing ‘‘ownership,’’; right or interest under a filed or issued pat- ‘‘(B) is not and was not, within 2 years be- (3) by striking ‘‘housing’’ the first place it ent, copyright, trademark, trade dress, or fore the date of the filing of the petition, a appears; and trade secret) or under an unexpired lease of director, officer, or employee of the debtor; (4) by striking ‘‘but only’’ and all that fol- real or personal property.’’; and lows through ‘‘such period,’’, and inserting (2) in subsection (c)— ‘‘(C) does not have an interest materially ‘‘or a lot in a homeowners association, for as (A) in paragraph (2) by adding ‘‘or’’ at the adverse to the interest of the estate or of long as the debtor or the trustee has a legal, end; any class of creditors or equity security

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00105 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8598 CONGRESSIONAL RECORD—HOUSE May 5, 1999 holders, by reason of any direct or indirect such a determination shall review that de- without limitation, property commonly con- relationship to, connection with, or interest termination not later than 1 year after the veyed with a principal residence where the in, the debtor, or for any other reason;’’. date of that determination, and not less fre- real estate is located, window treatments, SEC. 302. MISCELLANEOUS IMPROVEMENTS. quently than every year thereafter.’’. carpets, appliances and equipment located in (a) WHO MAY BEADEBTOR.—Section 109 of (c) CHAPTER 13 DISCHARGE.—Section 1328 of the residence, and easements, appurtenances, title 11, United States Code, is amended by title 11, United States Code, as amended by fixtures, rents, royalties, mineral rights, oil adding at the end the following: section 137, is amended by adding at the end and gas rights, escrow funds and insurance ‘‘(h)(1) Subject to paragraphs (2) and (3) the following: proceeds;’’; and notwithstanding any other provision of ‘‘(g) The court shall not grant a discharge (3) in section 362(b), as amended by sec- this section, an individual may not be a under this section to a debtor, unless after tions 117, 118, 132, 136, 141 203, 818, and 1007,— debtor under this title unless that individual filing a petition the debtor has completed an (A) in paragraph (28) by striking ‘‘or’’ at has, during the 90-day period preceding the instructional course concerning personal fi- the end thereof; date of filing of the petition of that indi- nancial management described in section (B) in paragraph (29) by striking the period vidual, received credit counseling, including, 111. at the end and inserting ‘‘; or’’; and at a minimum, participation in an individual ‘‘(h) Subsection (g) shall not apply with re- (C) by inserting after paragraph (29) the spect to a debtor who resides in a district for or group briefing that outlined the opportu- following: which the United States trustee or bank- nities for available credit counseling and as- ‘‘(30) under subsection (a), until a ruptcy administrator of the bankruptcy sisted that individual in performing an ini- prepetition default is cured fully in a case court of that district determines that the ap- tial budget analysis, through a credit coun- under chapter 13 of this title by actual pay- proved instructional courses are not ade- seling program (offered through an approved ment of all arrears as required by the plan, quate to provide service to the additional in- credit counseling service described in section of the postponement, continuation or other dividuals who would be required to complete 111(a)). similar delay of a prepetition foreclosure ‘‘(2)(A) Paragraph (1) shall not apply with the instructional course by reason of the re- proceeding or sale in accordance with appli- respect to a debtor who resides in a district quirements of this section. cable nonbankruptcy law, but nothing herein ‘‘(i) Each United States trustee or bank- for which the United States trustee or bank- shall imply that such postponement, con- ruptcy administrator that makes a deter- ruptcy administrator of the bankruptcy tinuation or other similar delay is a viola- mination described in subsection (h) shall re- court of that district determines that the ap- tion of the stay under subsection (a).’’; and view that determination not later than 1 proved credit counseling services for that (4) by amending section 1322(b)(2) to read year after the date of that determination, district are not reasonably able to provide as follows: and not less frequently than every year adequate services to the additional individ- ‘‘(2) modify the rights of holders of secured thereafter.’’. uals who would otherwise seek credit coun- claims, other than a claim secured primarily (d) DEBTOR’S DUTIES.—Section 521 of title by a security interest in property used as the seling from those programs by reason of the 11, United States Code, as amended by sec- debtor’s principal residence at any time dur- requirements of paragraph (1). tions 604 and 120, is amended by adding at ‘‘(B) Each United States trustee or bank- ing 180 days prior to the filing of the peti- the end the following: ruptcy administrator that makes a deter- ‘‘(d) In addition to the requirements under tion, or of holders of unsecured claims, or mination described in subparagraph (A) shall subsection (a), an individual debtor shall file leave unaffected the rights of holders of any review that determination not later than one with the court— class of claims;’’. (f) LIMITATION.—Section 362 of title 11, year after the date of that determination, ‘‘(1) a certificate from the credit coun- United States Code, is amended by adding at and not less frequently than every year seling service that provided the debtor serv- the end the following: thereafter. ices under section 109(h); and ‘‘(j) If one case commenced under chapter ‘‘(3)(A) Subject to subparagraph (B), the re- ‘‘(2) a copy of the debt repayment plan, if 7, 11, or 13 of this title is dismissed due to the quirements of paragraph (1) shall not apply any, developed under section 109(h) through creation of a debt repayment plan adminis- with respect to a debtor who submits to the the credit counseling service referred to in tered by a credit counseling agency approved court a certification that— paragraph (1).’’. pursuant to section 111 of this title, then for ‘‘(i) describes exigent circumstances that (e) GENERAL PROVISIONS.— purposes of section 362(c)(3) of this title the merit a waiver of the requirements of para- (1) IN GENERAL.—Chapter 1 of title 11, subsequent case commenced under any such graph (1); United States Code, is amended by adding at chapter shall not be presumed to be filed not ‘‘(ii) states that the debtor requested cred- the end the following: it counseling services from an approved cred- in good faith.’’. ‘‘§ 111. Credit counseling services; financial it counseling service, but was unable to ob- (g) RETURN OF GOODS SHIPPED.—Section management instructional courses tain the services referred to in paragraph (1) 546(g) of title 11, United States Code, as during the 5-day period beginning on the ‘‘The clerk of each district shall maintain added by section 222(a) of Public Law 103–394, date on which the debtor made that request a list of credit counseling services that pro- is amended to read as follows: or that the exigent circumstances require vide 1 or more programs described in section ‘‘(h) Notwithstanding the rights and pow- filing before such 5-day period expires; and 109(h) and a list of instructional courses con- ers of a trustee under sections 544(a), 545, 547, ‘‘(iii) is satisfactory to the court. cerning personal financial management that 549, and 553 of this title, if the court deter- ‘‘(B) With respect to a debtor, an exemp- have been approved by— mines on a motion by the trustee made not tion under subparagraph (A) shall cease to ‘‘(1) the United States trustee; or later than 120 days after the date of the order apply to that debtor on the date on which ‘‘(2) the bankruptcy administrator for the for relief in a case under chapter 11 of this the debtor meets the requirements of para- district.’’. title and after notice and hearing, that a re- graph (1), but in no case may the exemption (2) CLERICAL AMENDMENT.—The table of turn is in the best interests of the estate, the apply to that debtor after the date that is 30 sections at the beginning of chapter 1 of title debtor, with the consent of the creditor, and days after the debtor files a petition.’’. 11, United States Code, is amended by adding subject to the prior rights, if any, of third (b) CHAPTER 7 DISCHARGE.—Section 727(a) at the end the following: parties in such goods, may return goods of title 11, United States Code, is amended— ‘‘111. Credit counseling services; financial shipped to the debtor by the creditor before (1) in paragraph (9), by striking ‘‘or’’ at the management instructional the commencement of the case, and the cred- end; courses.’’. itor may offset the purchase price of such (2) in paragraph (10), by striking the period (e) DEFINITIONS.—Section 101 of title 11, goods against any claim of the creditor and inserting ‘‘; or’’; and United States Code, is amended— against the debtor that arose before the com- (3) by adding at the end the following: (1) by inserting after paragraph (13) the fol- mencement of the case.’’. ‘‘(11) after the filing of the petition, the lowing: SEC. 303. EXTENSIONS. debtor failed to complete an instructional ‘‘(13A) ‘debtor’s principal residence’ means Section 302(d)(3) of the Bankruptcy, course concerning personal financial man- a residential structure including incidental Judges, United States Trustees, and Family agement described in section 111 unless the property when the structure contains 1 to 4 Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 debtor resides in a district for which the units, whether or not that structure is at- note) is amended— United States trustee or bankruptcy admin- tached to real property, and includes, with- (1) in subparagraph (A), in the matter fol- istrator of the bankruptcy court of that dis- out limitation, an individual condominium lowing clause (ii), by striking ‘‘or October 1, trict determines that the approved instruc- or cooperative unit or mobile or manufac- 2002, whichever occurs first’’; and tional courses are not adequate to provide tured home or trailer;’’; (2) in subparagraph (F)— service to the additional individuals who (2) by inserting after paragraph (27A), as (A) in clause (i)— would be required to compete the instruc- added by section 318 of this Act, the fol- (i) in subclause (II), by striking ‘‘or Octo- tional course by reason of the requirements lowing: ber 1, 2002, whichever occurs first’’; and of this section. Each United States trustee ‘‘(27B) ‘incidental property’ means prop- (ii) in the matter following subclause (II), or bankruptcy administrator that makes erty incidental to such residence including, by striking ‘‘October 1, 2003, or’’; and

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00106 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8599 (B) in clause (ii), in the matter following sign, and the debtor in possession may not Code, as amended by this Act), designed to subclause (II)— assume, the contract or lease by reason of achieve a practical balance between— (i) by striking ‘‘before October 1, 2003, or’’; the provisions of subsection (c) of this sec- (1) the reasonable needs of the courts, the and tion.’’. United States trustee, creditors, and other (ii) by striking ‘‘, whichever occurs first’’. (d) Section 365(f)(1) of title 11, United parties in interest for reasonably complete SEC. 304. LOCAL FILING OF BANKRUPTCY CASES. States Code, is amended by striking the information; and Section 1408 of title 28, United States Code, semicolon and all that follows through (2) economy and simplicity for debtors. is amended— ‘‘event’’. SEC. 404. UNIFORM NATIONAL REPORTING RE- (1) by striking ‘‘Except’’ and inserting ‘‘(a) TITLE IV SMALL BUSINESS BANKRUPTCY QUIREMENTS. Except’’; and PROVISIONS (a) REPORTING REQUIRED.— (2) by adding at the end the following: (1) Title 11 of the United States Code is SEC. 401. FLEXIBLE RULES FOR DISCLOSURE amended by inserting after section 307 the ‘‘(b) For the purposes of subsection (a), if STATEMENT AND PLAN. following: the debtor is a corporation, the domicile and (a) Section 1125(a)(1) of title 11, United residence of the debtor are conclusively pre- States Code, is amended by inserting before ‘‘§ 308. Debtor reporting requirements sumed to be where the debtor’s principal the semicolon following: ‘‘A small business debtor shall file periodic place of business in the United States is lo- financial and other reports containing infor- ‘‘and in determining whether a disclosure cated.’’. mation including— statement provides adequate information, ‘‘(1) the debtor’s profitability, that is, ap- SEC. 305. PERMITTING ASSUMPTION OF CON- the court shall consider the complexity of TRACTS. proximately how much money the debtor has the case, the benefit of additional informa- (a) Section 365(c) of title 11, United States been earning or losing during current and re- tion to creditors and other parties in inter- Code, is amended to read as follows: cent fiscal periods; est, and the cost of providing additional in- ‘‘(c)(1) The trustee may not assume or as- ‘‘(2) reasonable approximations of the debt- formation’’. sign an executory contract or unexpired or’s projected cash receipts and cash dis- (b) Section 1125(f) of title 11, United States lease of the debtor, whether or not the con- bursements over a reasonable period; Code, is amended to read as follows: tract or lease prohibits or restricts assign- ‘‘(3) comparisons of actual cash receipts ‘‘(f) Notwithstanding subsection (b)— ment of rights or delegation of duties, if— and disbursements with projections in prior ‘‘(1) the court may determine that the plan ‘‘(A)(i) applicable law excuses a party to reports; and itself provides adequate information and the contract or lease from accepting per- ‘‘(4) whether the debtor is— that a separate disclosure statement is not formance from or rendering performance to ‘‘(A) in compliance in all material respects necessary; an assignee of the contract or lease, whether with postpetition requirements imposed by ‘‘(2) the court may approve a disclosure or not the contract or lease prohibits or re- this title and the Federal Rules of Bank- statement submitted on standard forms ap- stricts assignment of rights or delegation of ruptcy Procedure; and proved by the court or adopted pursuant to duties; and ‘‘(B) timely filing tax returns and paying section 2075 of title 28; and ‘‘(ii) the party does not consent to the as- taxes and other administrative claims when ‘‘(3)(A) the court may conditionally ap- sumption or assignment; or due, and, if not, what the failures are and prove a disclosure statement subject to final ‘‘(B) the contract is a contract to make a how, at what cost, and when the debtor in- approval after notice and a hearing; loan, or extend other debt financing or finan- tends to remedy such failures; and ‘‘(B) acceptances and rejections of a plan cial accommodations, to or for the benefit of ‘‘(5) such other matters as are in the best may be solicited based on a conditionally ap- the debtor, or to issue a security of the debt- interests of the debtor and creditors, and in proved disclosure statement if the debtor or. the public interest in fair and efficient pro- provides adequate information to each hold- ‘‘(2) Notwithstanding paragraph (1)(A) and cedures under chapter 11 of this title.’’. er of a claim or interest that is solicited, but applicable nonbankruptcy law, in a case (2) The table of sections of chapter 3 of a conditionally approved disclosure state- under chapter 11 of this title, a trustee in a title 11, United States Code, is amended by ment shall be mailed not less than 20 days case in which a debtor is a corporation, or a inserting after the item relating to section before the date of the hearing on confirma- debtor in possession, may assume an execu- 307 the following: tion of the plan; and tory contract or unexpired lease of the debt- ‘‘(C) the hearing on the disclosure state- ‘‘308. Debtor reporting requirements.’’. or, whether or not the contract or lease pro- ment may be combined with the hearing on (b) EFFECTIVE DATE.—The amendments hibits or restricts assignment of rights or confirmation of a plan.’’. made by subsection (a) shall take effect 60 delegation of duties. SEC. 402. DEFINITIONS. days after the date on which rules are pre- ‘‘(3) The trustee may not assume or assign scribed pursuant to section 2075, title 28, an unexpired lease of the debtor of nonresi- (a) DEFINITIONS. Section 101 of title 11, United States Code, is amended by striking United States Code to establish forms to be dential real property, whether or not the used to comply with section 308 of title 11, paragraph (51C) and inserting the following: contract or lease prohibits or restricts as- United States Code, as added by subsection ‘‘(51C) ‘small business case’ means a case signment of rights or delegation of duties, if (a). the lease has been terminated under applica- filed under chapter 11 of this title in which the debtor is a small business debtor; and SEC. 405. UNIFORM REPORTING RULES AND ble nonbankruptcy law before the order for FORMS FOR SMALL BUSINESS relief.’’. ‘‘(51D) ‘small business debtor’ means (A) a CASES. (b) Section 365(d) of title 11, United States person (including affiliates of such person (a) PROPOSAL OF RULES AND FORMS.—The Code, is amended by striking paragraphs (5), that are also debtors under this title) that Advisory Committee on Bankruptcy Rules of (6), (7), (8), and (9), and redesignating para- has aggregate noncontingent, liquidated se- the Judicial Conference of the United States graph (10) as paragraph (5). cured and unsecured debts as of the date of shall propose for adoption amended Federal (c) Section 365(e) of title 11, United States the petition or the order for relief in an Rules of Bankruptcy Procedure and Official Code, is amended to read as follows: amount not more than $4,000,000 (excluding Bankruptcy Forms to be used by small busi- ‘‘(e)(1) Notwithstanding a provision in an debts owed to 1 or more affiliates or insid- ness debtors to file periodic financial and executory contract or unexpired lease, or in ers), except that if a group of affiliated debt- other reports containing information, in- applicable law, an executory contract or un- ors has aggregate noncontingent liquidated cluding information relating to— expired lease of the debtor may not be termi- secured and unsecured debts greater than (1) the debtor’s profitability; nated or modified, and any right or obliga- $4,000,000 (excluding debt owed to 1 or more (2) the debtor’s cash receipts and disburse- tion under such contract or lease may not be affiliates or insiders), then no member of ments; and terminated or modified, at any time after such group is a small business debtor;’’. (3) whether the debtor is timely filing tax the commencement of the case solely be- (b) CONFORMING AMENDMENT.—Section returns and paying taxes and other adminis- cause of a provision in such contract or lease 1102(a)(3) of title 11, United States Code, is trative claims when due. that is conditioned on— amended by inserting ‘‘debtor’’ after ‘‘small (b) PURPOSE.—The rules and forms pro- ‘‘(A) the insolvency or financial condition business’’ . posed under subsection (a) shall be designed of the debtor at any time before the closing SEC. 403. STANDARD FORM DISCLOSURE STATE- to achieve a practical balance between— of the case; MENT AND PLAN. (1) the reasonable needs of the bankruptcy ‘‘(B) the commencement of a case under The Advisory Committee on Bankruptcy court, the United States trustee, creditors, this title; or Rules of the Judicial Conference of the and other parties in interest for reasonably ‘‘(C) the appointment of or taking posses- United States shall, within a reasonable pe- complete information; sion by a trustee in a case under this title or riod of time after the date of the enactment (2) the small business debtor’s interest a custodian before such commencement. of this Act, propose for adoption standard that required reports be easy and inexpen- ‘‘(2) Paragraph (1) does not apply to an ex- form disclosure statements and plans of reor- sive to complete; and ecutory contract or unexpired lease of the ganization for small business debtors (as de- (3) the interest of all parties that the re- debtor if the trustee may not assume or as- fined in section 101 of title 11, United States quired reports help the small business debtor

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00107 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8600 CONGRESSIONAL RECORD—HOUSE May 5, 1999 to understand its financial condition and ‘‘(2) the debtor shall file a plan, and any tional duties specified in title 11 pertaining plan its future. necessary disclosure statement, not later to such cases’’; SEC. 406. DUTIES IN SMALL BUSINESS CASES. than 90 days after the date of the order for (2) in paragraph (5) by striking ‘‘and at the (a) DUTIES IN CHAPTER 11 CASES.—Title 11 relief, unless the United States Trustee has end’’; of the United States Code is amended by in- appointed under section 1102(a)(1) of this (3) in paragraph (6) by striking the period serting after section 1114 the following: title a committee of unsecured creditors at the end and inserting ‘‘; and’’; and ‘‘§ 1115. Duties of trustee or debtor in posses- that the court has determined, before the 90 (4) by inserting after paragraph (7) the fol- sion in small business cases days has expired, is sufficiently active and lowing: ‘‘(a) In a small business case, a trustee or representative to provide effective oversight ‘‘(7) in each of such small business cases— the debtor in possession, in addition to the of the debtor; and ‘‘(A) conduct an initial debtor interview as duties provided in this title and as otherwise ‘‘(3) the time periods specified in para- soon as practicable after the entry of order required by law, shall— graphs (1) and (2) of this subsection and the for relief but before the first meeting sched- ‘‘(1) append to the voluntary petition or, in time fixed in section 1129(e) of this title for uled under section 341(a) of title 11 at which an involuntary case, file within 3 days after confirmation of a plan, may be extended only time the United States trustee shall begin to the date of the order for relief— as follows: investigate the debtor’s viability, inquire ‘‘(A) its most recent balance sheet, state- ‘‘(A) On request of a party in interest made about the debtor’s business plan, explain the ment of operations, cash-flow statement, within the respective periods, and after no- debtor’s obligations to file monthly oper- Federal income tax return; or tice and hearing, the court may for cause ating reports and other required reports, at- grant one or more extensions, cumulatively ‘‘(B) a statement made under penalty of tempt to develop an agreed scheduling order, not to exceed 60 days, if the movant estab- perjury that no balance sheet, statement of and inform the debtor of other obligations; lishes— operations, or cash-flow statement has been ‘‘(B) when determined to be appropriate ‘‘(i) that no cause exists to dismiss or con- prepared and no Federal tax return has been and advisable, visit the appropriate business vert the case or appoint a trustee or exam- filed; premises of the debtor and ascertain the iner under subparagraphs (A) (I) of section ‘‘(2) attend, through its responsible indi- state of the debtor’s books and records and 1112(b) of this title; and vidual, meetings scheduled by the court or verify that the debtor has filed its tax re- ‘‘(ii) that there is a reasonable possibility the United States trustee, including initial turns; and the court will confirm a plan within a rea- debtor interviews and meetings of creditors ‘‘(C) review and monitor diligently the sonable time; convened under section 341 of this title; debtor’s activities, to identify as promptly ‘‘(B) On request of a party in interest made as possible whether the debtor will be unable ‘‘(3) timely file all schedules and state- within the respective periods, and after no- ments of financial affairs, unless the court, to confirm a plan; and tice and hearing, the court may for cause ‘‘(8) in cases in which the United States after notice and a hearing, grants an exten- grant one or more extensions in excess of sion, which shall not extend such time period trustee finds material grounds for any relief those authorized under subparagraph (A) of under section 1112 of title 11, the United to a date later than 30 days after the date of this paragraph, if the movant establishes: the order for relief, absent extraordinary and States trustee shall apply promptly to the ‘‘(i) that no cause exists to dismiss or con- court for relief.’’. compelling circumstances; vert the case or appoint a trustee or exam- ‘‘(4) file all postpetition financial and iner under subparagraphs (A) (I) of section SEC. 411. SCHEDULING CONFERENCES. Section 105(d) of title 11, United States other reports required by the Federal Rules 1112(b)(3) of this title; and Code, is amended— of Bankruptcy Procedure or by local rule of ‘‘(ii) that it is more likely than not that (1) in the matter preceding paragraph (1) the district court; the court will confirm a plan within a rea- ‘‘(5) subject to section 363(c)(2) of this title, sonable time; and by striking ‘‘, may’’; maintain insurance customary and appro- ‘‘(C) a new deadline shall be imposed when- (2) by amending paragraph (1) to read as priate to the industry; ever an extension is granted.’’. follows: ‘‘(1) shall hold such status conferences as ‘‘(6)(A) timely file tax returns; SEC. 408. PLAN CONFIRMATION DEADLINE. are necessary to further the expeditious and ‘‘(B) subject to section 363(c)(2) of this Section 1129 of title 11, United States Code, title, timely pay all administrative expense is amended by adding at the end the fol- economical resolution of the case; and’’; and tax claims, except those being contested by lowing: (3) in paragraph (2) by striking ‘‘unless in- appropriate proceedings being diligently ‘‘(e) In a small business case, the debtor consistent with another provision of this prosecuted; and shall confirm a plan not later than 150 days title or with applicable Federal Rules of ‘‘(C) subject to section 363(c)(2) of this after the date of the order for relief unless— Bankruptcy Procedure’’, and inserting title, establish 1 or more separate deposit ac- ‘‘(1) the United States Trustee has ap- ‘‘may’’. counts not later than 10 business days after pointed, under section 1102(a)(1) of this title, SEC. 412. SERIAL FILER PROVISIONS. the date of order for relief (or as soon there- a committee of unsecured creditors that the Section 362 of title 11, United States Code, after as possible if all banks contacted de- court has determined, before the 150 days has as amended by section 302, is amended— cline the business) and deposit therein, not expired, is sufficiently active and representa- (1) in subsection (i) as so redesignated by later than 1 business day after receipt there- tive to provide effective oversight of the section 122— of or a responsible time set by the court, all debtor; or (A) by striking ‘‘An’’ and inserting ‘‘(1) Ex- taxes payable for periods beginning after the ‘‘(2) such 150-day period is extended as pro- cept as provided in paragraph (2), an’’; and date the case is commenced that are col- vided in section 1121(e)(3) of this title.’’. (B) by adding at the end the following: lected or withheld by the debtor for govern- SEC. 409. PROHIBITION AGAINST EXTENSION OF ‘‘(2) If such violation is based on an action mental units unless the court waives this re- TIME. taken by an entity in the good-faith belief quirement after notice and hearing; and Section 105(d) of title 11, United States that subsection (h) applies to the debtor, ‘‘(7) allow the United States trustee, or its Code, is amended— then recovery under paragraph (1) against designated representative, to inspect the (1) in paragraph (2)(B)(vi) by striking the such entity shall be limited to actual dam- debtor’s business premises, books, and period at the end and inserting ‘‘; and’’; and ages.’’; and records at reasonable times, after reasonable (2) by adding at the end the following: (2) by inserting after subsection (j), as prior written notice, unless notice is waived ‘‘(3) in a small business case, not extend added by section 302, the following: by the debtor.’’. the time periods specified in sections 1121(e) ‘‘(k)(1) Except as provided in paragraph (2) (b) TECHNICAL AMENDMENT.—The table of and 1129(e) of this title except as provided in of this subsection, the provisions of sub- sections of chapter 11, United States Code, is section 1121(e)(3) of this title.’’. section (a) of thissection shall not apply in a amended by inserting after the item relating SEC. 410. DUTIES OF THE UNITED STATES TRUST- case in which the debtor— to section 1114 the following: EE. ‘‘(A) is a debtor in a case under this title ‘‘1115. Duties of trustee or debtor in posses- (a) DUTIES OF THE UNITED STATES TRUST- pending at the time the petition is filed; sion in small business cases.’’. EE.— ‘‘(B) was a debtor in a case under this title SEC. 407. PLAN FILING AND CONFIRMATION Section 586(a) of title 28, United States which was dismissed for any reason by an DEADLINES. Code, is amended— order that became final in the 2-year period Section 1121(e) of title 11, United States (1) in paragraph (3)— ending on the date of the order for relief en- Code, is amended to read as follows: (A) in subparagraph (G) by striking ‘‘and tered with respect to the petition; ‘‘(e) In a small business case— at the end’’; ‘‘(C) was a debtor in a case under this title ‘‘(1) only the debtor may file a plan until (B) by redesignating subparagraph (H) as in which a chapter 11, 12, or 13 plan was con- after 90 days after the date of the order for subparagraph (I); and firmed in the 2-year period ending on the relief, unless a trustee has been appointed (C) by inserting after subparagraph (G) the date of the order for relief entered with re- under this chapter, or unless the court, on following: spect to the petition; or request of a party in interest and after no- ‘‘(H) in small business cases (as defined in ‘‘(D) is an entity that has succeeded to sub- tice and hearing, shortens such time; section 101 of title 11), performing the addi- stantially all of the assets or business of a

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00108 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8601 debtor described in subparagraph (A), (B), or ‘‘(K) failure to pay any fees or charges re- then-applicable nondefault contract rate of (C). quired under chapter 123 of title 28; interest on the value of the creditor’s inter- ‘‘(2) This subsection shall not apply— ‘‘(L) revocation of an order of confirmation est in the real estate; or’’. ‘‘(A) to a case initiated by an involuntary under section 1144 of this title; SEC. 416. PROTECTION OF JOBS. petition filed by a creditor that is not an in- ‘‘(M) inability to effectuate substantial The provisions of title 11 of the United sider or affiliate of the debtor; or consummation of a confirmed plan; States Code relating to small business debt- ‘‘(B) after such time as the debtor, after ‘‘(N) material default by the debtor with ors or to single asset real estate shall not notice and a hearing, demonstrates by a pre- respect to a confirmed plan; and apply in a case under such title if the appli- ponderance of the evidence, that the filing of ‘‘(O) termination of a plan by reason of the cation of any of such provisions in such case such petition resulted from circumstances occurrence of a condition specified in the could result in the loss of 5 or more jobs. beyond the control of the debtor and not plan. TITLE V—MUNICIPAL BANKRUPTCY foreseeable at the time the earlier case was ‘‘(4) The court may grant relief under this PROVISIONS filed; and that it is more likely than not that subsection for cause as defined in subpara- the court will confirm a plan, other than a graphs C, F, G, H, or K of paragraph 3 of this SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION. liquidating plan, within a reasonable time.’’. subsection only upon motion of the United (a) TECHNICAL AMENDMENT RELATING TO SEC. 413. EXPANDED GROUNDS FOR DISMISSAL States trustee or bankruptcy administrator MUNICIPALITIES.—Section 921(d) of title 11, OR CONVERSION AND APPOINT- or upon the court s own motion. MENT OF TRUSTEE OR EXAMINER. ‘‘(5) The court shall commence the hearing United States Code, is amended by inserting (a) EXPANDED GROUNDS FOR DISMISSAL OR on any motion under this subsection not ‘‘notwithstanding section 301(b)’’ before the CONVERSION.—Section 1112(b) of title 11, later than 30 days after filing of the motion, period at the end. (b) CONFORMING AMENDMENT.—Section 301 United States Code, is amended to read as and shall decide the motion within 15 days of title 11, United States Code, is amended— follows: after commencement of the hearing, unless (1) by inserting ‘‘(a)’’ before ‘‘A vol- ‘‘(b)(1) Except as provided in paragraphs (2) the movant expressly consents to a continu- untary’’; and and (4) of this subsection, and in subsection ance for a specific period of time or compel- (c) of this section, on request of a party in (2) by amending the last sentence to read ling circumstances prevent the court from interest, and after notice and a hearing, the as follows: meeting the time limits established by this court shall convert a case under this chapter ‘‘(b) The commencement of a voluntary paragraph.’’. to a case under chapter 7 of this title or dis- case under a chapter of this title constitutes (b) ADDITIONAL GROUNDS FOR APPOINTMENT miss a case under this chapter, or appoint a an order for relief under such chapter.’’. OF TRUSTEE OR EXAMINER.—Section 1104 of trustee or examiner under section 1104(e) of title 11, United States Code, is amended by SEC. 502. APPLICABILITY OF OTHER SECTIONS this title, whichever is in the best interest of adding at the end the following: TO CHAPTER 9. creditors and the estate, if the movant estab- Section 901(a) of title 11, United States lishes cause. ‘‘(e) If grounds exist to convert or dismiss the case under section 1112 of this title, the Code, is amended— ‘‘(2) The court may decline to grant the re- (1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and lief specified in paragraph (1) of this sub- court may instead appoint a trustee or ex- aminer, if it determines that such appoint- (2) by inserting ‘‘559, 560, 561, 562’’ after section if the debtor or another party in in- ‘‘557,’’. terest objects and establishes by a prepon- ment is in the best interests of creditors and derance of the evidence that— the estate.’’. TITLE VI—STREAMLINING THE ‘‘(A) it is more likely than not that a plan SEC. 414. STUDY OF OPERATION OF TITLE 11 OF BANKRUPTCY SYSTEM will be confirmed within a time as fixed by THE UNITED STATES CODE WITH RE- SEC. 601. CREDITOR REPRESENTATION AT FIRST this title or by order of the court entered SPECT TO SMALL BUSINESSES. MEETING OF CREDITORS. pursuant to section 1121(e)(3), or within a Not later than 2 years after the date of the Section 341(c) of title 11, United States reasonable time if no time has been fixed; enactment of this Act, the Administrator of Code, is amended by inserting after the first and the Small Business Administration, in con- sentence the following: ‘‘Notwithstanding ‘‘(B) if the cause is an act or omission of sultation with the Attorney General, the Di- any local court rule, provision of a State the debtor that— rector of the Administrative Office of United constitution, any other Federal or State law ‘‘(i) there exists a reasonable justification States Trustees, and the Director of the Ad- that is not a bankruptcy law, or other re- for the act or omission; and ministrative Office of the United States quirement that representation at the meet- ‘‘(ii) the act or omission will be cured with- Courts, shall— ing of creditors under subsection (a) be by an in a reasonable time fixed by the court not (1) conduct a study to determine— attorney, a creditor holding a consumer debt to exceed 30 days after the court decides the (A) the internal and external factors that or any representative of the creditor (which motion, unless the movant expressly con- cause small businesses, especially sole pro- may include an entity or an employee of an sents to a continuance for a specific period of prietorships, to become debtors in cases entity and may be a representative for more time, or compelling circumstances beyond under title 11 of the United States Code and than one creditor) shall be permitted to ap- the control of the debtor justify an exten- that cause certain small businesses to suc- pear at and participate in the meeting of sion. cessfully complete cases under chapter 11 of creditors and activities related thereto in a ‘‘(3) For purposes of this subsection, cause such title; and case under chapter 7 or 13, either alone or in includes— (B) how Federal laws relating to bank- conjunction with an attorney for the cred- ‘‘(A) substantial or continuing loss to or ruptcy may be made more effective and effi- itor. Nothing in this subsection shall be con- diminution of the estate; cient in assisting small businesses to remain strued to require any creditor to be rep- ‘‘(B) gross mismanagement of the estate; viable; and resented by an attorney at any meeting of ‘‘(C) failure to maintain insurance that (2) submit to the President pro tempore of creditors.’’. poses a material risk to the estate or the the Senate and the Speaker of the House of SEC. 602. AUDIT PROCEDURES. public; Representatives a report summarizing that (a) AMENDMENTS.—Section 586 of title 28, ‘‘(D) unauthorized use of cash collateral study. United States Code, is amended— harmful to 1 or more creditors; SEC. 415. PAYMENT OF INTEREST. (1) in subsection (a) by amending striking ‘‘(E) failure to comply with an order of the Section 362(d)(3) of title 11, United States paragraph (6) to read as follows: court; Code, is amended— ‘‘(6) make such reports as the Attorney ‘‘(F) failure timely to satisfy any filing or (1) by inserting ‘‘or 30 days after the court General directs, including the results of au- reporting requirement established by this determines that the debtor is subject to this dits performed under subsection (f); and’’; title or by any rule applicable to a case paragraph, whichever is later’’ after ‘‘90-day and under this chapter; period)’’; and (2) by adding at the end the following: ‘‘(G) failure to attend the meeting of credi- (2) by amending subparagraph (B) to read ‘‘(f)(1)(A) The Attorney General shall es- tors convened under section 341(a) of this as follows: tablish procedures to determine the accu- title; ‘‘(B) the debtor has commenced monthly racy, veracity, and completeness of peti- ‘‘(H) failure timely to provide information payments (which payments may, in the debt- tions, schedules, and other information or attend meetings reasonably requested by or’s sole discretion, notwithstanding section which the debtor is required to provide under the United States trustee or bankruptcy ad- 363(c)(2) of this title, be made from rents or sections 521 and 1322 of title 11, and, if appli- ministrator; other income generated before or after the cable, section 111 of title 11, in individual ‘‘(I) failure timely to pay taxes due after commencement of the case by or from the cases filed under chapter 7 or 13 of such title. the date of the order for relief or to file tax property) to each creditor whose claim is se- Such audits shall be in accordance with gen- returns due after the order for relief; cured by such real estate (other than a claim erally accepted auditing standards and per- ‘‘(J) failure to file a disclosure statement, secured by a judgment lien or by an formed by independent certified public ac- or to file or confirm a plan, within the time unmatured statutory lien), which payments countants or independent licensed public ac- fixed by this title or by order of the court; are in an amount equal to interest at the countants.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00109 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8602 CONGRESSIONAL RECORD—HOUSE May 5, 1999 ‘‘(B) Those procedures shall— (1) in subsection (c)— ‘‘(iii) a statement of the debtor’s financial ‘‘(i) establish a method of selecting appro- (A) by striking ‘‘, but the failure of such affairs and, if applicable, a certificate— priate qualified persons to contract to per- notice to contain such information shall not ‘‘(I) of an attorney whose name is on the form those audits; invalidate the legal effect of such notice’’; petition as the attorney for the debtor or ‘‘(ii) establish a method of randomly se- and any bankruptcy petition preparer signing lecting cases to be audited, except that not (B) by adding the following at the end: the petition pursuant to section 110(b)(1) of less than 1 out of every 250 cases in each Fed- ‘‘If the credit agreement between the debtor this title indicating that such attorney or eral judicial district shall be selected for and the creditor or the last communication bankruptcy petition preparer delivered to audit; before the filing of the petition in a vol- the debtor any notice required by section ‘‘(iii) require audits for schedules of in- untary case from the creditor to a debtor 342(b) of this title; or come and expenses which reflect greater who is an individual states an account num- ‘‘(II) if no attorney for the debtor is indi- than average variances from the statistical ber of the debtor which is the current ac- cated and no bankruptcy petition preparer norm of the district in which the schedules count number of the debtor with respect to signed the petition, of the debtor that such were filed; and any debt held by the creditor against the notice was obtained and read by the debtor; ‘‘(iv) establish procedures for providing, debtor, the debtor shall include such account ‘‘(iv) copies of any Federal tax returns, in- not less frequently than annually, public in- number in any notice to the creditor re- cluding any schedules or attachments, filed formation concerning the aggregate results quired to be given under this title. If the by the debtor for the 3-year period preceding of such audits including the percentage of creditor has specified to the debtor an ad- the order for relief; cases, by district, in which a material dress at which the creditor wishes to receive ‘‘(v) copies of all payment advices or other misstatement of income or expenditures is correspondence regarding the debtor’s ac- evidence of payment, if any, received by the reported. count, any notice to the creditor required to debtor from any employer of the debtor in ‘‘(2) The United States trustee for each dis- be given by the debtor under this title shall the period 60 days prior to the filing of the trict is authorized to contract with auditors be given at such address. For the purposes of petition; and to perform audits in cases designated by the this section, ‘notice’ shall include, but shall ‘‘(vi) a statement disclosing any reason- United States trustee according to the proce- not be limited to, any correspondence from ably anticipated increase in income or ex- dures established under paragraph (1). the debtor to the creditor after the com- penditures over the 12-month period fol- ‘‘(3)(A) The report of each audit conducted mencement of the case, any statement of the lowing the date of filing;’’; under this subsection shall be filed with the debtor’s intention under section 521(a)(2) of court and transmitted to the United States (3) by adding at the end the following: this title, notice of the commencement of ‘‘(e)(1) At any time, a creditor, in the case trustee. Each report shall clearly and con- any proceeding in the case to which the cred- spicuously specify any material of an individual under chapter 7 or 13, may itor is a party, and any notice of the hearing file with the court notice that the creditor misstatement of income or expenditures or under section 1324 of this title.’’; of assets identified by the person performing requests the petition, schedules, and a state- (2) by adding at the end the following: ment of affairs filed by the debtor in the case the audit. In any case where a material ‘‘(d) At any time, a creditor in a case of an and the court shall make those documents misstatement of income or expenditures or individual debtor under chapter 7 or 13 may available to the creditor who requests those of assets has been reported, the clerk of the file with the court and serve on the debtor a documents at a reasonable cost within 5 bankruptcy court shall give notice of the notice of the address to be used to notify the business days after such request. misstatement to the creditors in the case. creditor in that case. After 5 days following ‘‘(B) If a material misstatement of income receipt of such notice, any notice the court ‘‘(2) At any time, a creditor in a case under or expenditures or of assets is reported, the or the debtor is required to give the creditor chapter 13 may file with the court notice United States trustee shall— shall be given at that address. that the creditor requests the plan filed by ‘‘(i) report the material misstatement, if ‘‘(e) An entity may file with the court a the debtor in the case, and the court shall appropriate, to the United States Attorney notice stating its address for notice in cases make such plan available to the creditor who pursuant to section 3057 of title 18, United under chapters 7 and 13. After 30 days fol- requests such plan at a reasonable cost and States Code; and lowing the filing of such notice, any notice not later than 5 days after such request. ‘‘(ii) if advisable, take appropriate action, in any case filed under chapter 7 or 13 given ‘‘(f) An individual debtor in a case under including but not limited to commencing an by the court shall be to that address unless chapter 7 or 13 shall file with the court— adversary proceeding to revoke the debtor’s specific notice is given under subsection (d) ‘‘(1) at the time filed with the taxing au- discharge pursuant to section 727(d) of title with respect to a particular case. thority, all tax returns, including any sched- 11, United States Code.’’. ‘‘(f) Notice given to a creditor other than ules or attachments, with respect to the pe- (b) AMENDMENTS TO SECTION 521 OF TITLE as provided in this section shall not be effec- riod from the commencement of the case 11, U.S.C.—Section 521(a) of title 11, United tive notice until it has been brought to the until such time as the case is closed; States Code, as amended by section 603, is attention of the creditor. If the creditor has ‘‘(2) at the time filed with the taxing au- amended in paragraphs (3) and (4) by adding designated a person or department to be re- thority, all tax returns, including any sched- ‘‘or an auditor appointed pursuant to section sponsible for receiving notices concerning ules or attachments, that were not filed with 586 of title 28, United States Code’’ after bankruptcy cases and has established reason- the taxing authority when the schedules ‘‘serving in the case’’. able procedures so that bankruptcy notices under subsection (a)(1) were filed with re- (c) AMENDMENTS TO SECTION 727 OF TITLE spect to the period that is 3 years before the 11, U.S.C.—Section 727(d) of title 11, United received by the creditor will be delivered to order for relief; States Code, is amended— such department or person, notice will not ‘‘(3) any amendments to any of the tax re- (1) by deleting ‘‘or’’ at the end of para- be brought to the attention of the creditor turns, including schedules or attachments, graph (2); until received by such person or department. described in paragraph (1) or (2); and (2) by substituting ‘‘; or’’ for the period at No sanction under section 362(h) of this title ‘‘(4) in a case under chapter 13, a statement the end of paragraph (3); and or any other sanction which a court may im- subject to the penalties of perjury by the (3) by adding the following at the end the pose on account of violations of the stay following: under section 362(a) of this title or failure to debtor of the debtor’s current monthly in- ‘‘(4) the debtor has failed to explain satis- comply with section 542 or 543 of this title come and expenditures in the preceding tax factorily— may be imposed on any action of the creditor year and current monthly income less ex- ‘‘(A) a material misstatement in an audit unless the action takes place after the cred- penditures for the month preceding the performed pursuant to section 586(f) of title itor has received notice of the commence- statement prepared in accordance with sec- 28, United States Code; or ment of the case effective under this sec- tion 707(b)(2) that shows how the amounts ‘‘(B) a failure to make available for inspec- tion.’’. are calculated— tion all necessary accounts, papers, docu- (b) DEBTOR’S DUTIES.—Section 521 of title ‘‘(A) beginning on the date that is the later ments, financial records, files, and all other 11, United States Code, as amended by sec- of 90 days after the close of the debtor’s tax papers, things, or property belonging to the tions 604, 120, and 302, is amended— year or 1 year after the order for relief, un- debtor that are requested for an audit con- (1) by inserting ‘‘(a)’’ before ‘‘The debtor less a plan has been confirmed; and ducted pursuant to section 586(f) of title 28, shall—’’; ‘‘(B) thereafter, on or before the date that United States Code.’’. (2) by striking paragraph (1) and inserting is 45 days before each anniversary of the con- (d) EFFECTIVE DATE.—The amendments the following: firmation of the plan until the case is closed. made by this section shall take effect 18 ‘‘(1) file— ‘‘(g)(1) A statement referred to in sub- months after the date of enactment of this ‘‘(A) a list of creditors; and section (f)(4) shall disclose— Act. ‘‘(B) unless the court orders otherwise— ‘‘(A) the amount and sources of income of SEC. 603. GIVING CREDITORS FAIR NOTICE IN ‘‘(i) a schedule of assets and liabilities; the debtor; CHAPTER 7 AND 13 CASES. ‘‘(ii) a schedule of current monthly income ‘‘(B) the identity of any persons respon- (a) NOTICE.—Section 342 of title 11, United and current expenditures prepared in accord- sible with the debtor for the support of any States Code, is amended— ance with section 707(b)(2); dependents of the debtor; and

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00110 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8603 ‘‘(C) the identity of any persons who con- ‘‘(3) Upon request of the debtor made with- ‘‘The duration period shall be 5 years if the tributed, and the amount contributed, to the in 45 days after the filing of the petition current monthly income of the debtor and household in which the debtor resides. commencing a case described in paragraph the debtor’s spouse combined, when multi- ‘‘(2) The tax returns, amendments, and (1), the court may allow the debtor an addi- plied by 12, is not less than the highest na- statement of income and expenditures de- tional period not to exceed 45 days to file the tional median family income last reported scribed in paragraph (1) shall be available to information required under subsection (a)(1) by the Bureau of the Census for a family of the United States trustee, any bankruptcy if the court finds justification for extending equal or lesser size or, in the case of a house- administrator, any trustee, and any party in the period for the filing.’’. hold of 1 person, the national median house- interest for inspection and copying, subject SEC. 605. ADEQUATE TIME TO PREPARE FOR hold income for 1 earner, as of the date of to the requirements of subsection (h). HEARING ON CONFIRMATION OF the modification and shall be 3 years if the ‘‘(h)(1) Not later than 30 days after the date THE PLAN. current monthly total income of the debtor of enactment of the Consumer Bankruptcy (a) HEARING.—Section 1324 of title 11, and the debtor’s spouse combined, when mul- Reform Act of 1999, the Director of the Ad- United States Code, is amended— tiplied by 12, is less than the highest na- ministrative Office of the United States (1) by striking ‘‘After’’ and inserting the tional median family income last reported Courts shall establish procedures for safe- following: by the Bureau of the Census for a family of guarding the confidentiality of any tax infor- ‘‘(a) Except as provided in subsection (b) equal or lesser size or, in the case of a house- mation required to be provided under this and after’’; and hold of 1 person, less than the national me- section. (2) by adding at the end the following: dian household income for 1 earner as of the ‘‘(b) The hearing on confirmation of the ‘‘(2) The procedures under paragraph (1) date of the modification. Notwithstanding plan may be held not earlier than 20 days, shall include reasonable restrictions on cred- the foregoing, the national median family and not later than 45 days, after the meeting itor access to tax information that is re- income for a family of more than 4 individ- of creditors under section 341(a) of this quired to be provided under this section to title.’’. uals shall be the national median family in- verify creditor identity and to restrict use of come last reported by the Bureau of the Cen- SEC. 606. CHAPTER 13 PLANS TO HAVE A 5-YEAR the information except with respect to the DURATION IN CERTAIN CASES. sus for a family of 4 individuals plus $583 for case. Title 11, United States Code, is amended— each additional member of the family.’’. ‘‘(3) Not later than 1 year after the date of (1) by amending section 1322(d) to read as SEC. 607. SENSE OF THE CONGRESS REGARDING enactment of the Consumer Bankruptcy Re- follows: EXPANSION OF RULE 9011 OF THE form Act of 1999, the Director of the Admin- ‘‘(d) If the current monthly income of the FEDERAL RULES OF BANKRUPTCY istrative Office of the United States Courts debtor and the debtor’s spouse combined, PROCEDURE. shall prepare, and submit to Congress a re- when multiplied by 12, is not less than the It is the sense of the Congress that rule port that— highest national median family income last 9011 of the Federal Rules of Bankruptcy Pro- ‘‘(A) assesses the effectiveness of the proce- reported by the Bureau of the Census for a cedure (11 U.S.C. App) should be modified to dures under paragraph (1) to provide timely family of equal or lesser size or, in the case include a requirement that all documents and sufficient information to creditors con- of a household of 1 person, not less than the (including schedules), signed and unsigned, cerning the case; and national median household income for 1 submitted to the court or to a trustee by ‘‘(B) if appropriate, includes proposed leg- earner, the plan may not provide for pay- debtors who represent themselves and debt- islation— ments over a period that is longer than 5 ors who are represented by an attorney be ‘‘(i) to further protect the confidentiality years. If the current monthly income of the submitted only after the debtor or the debt- of tax information or to make it better debtor and the debtor’s spouse combined, or’s attorney has made reasonable inquiry to available to creditors; and when multiplied by 12, is less than the high- verify that the information contained in ‘‘(ii) to provide penalties for the improper est national median family income for a such documents is well grounded in fact, and use by any person of the tax information re- family of equal or lesser size, or in the case is warranted by existing law or a good-faith quired to be provided under this section. of a household of 1 person, the national me- argument for the extension, modification, or ‘‘(i) If requested by the United States dian household income for 1 earner, the plan reversal of existing law. trustee or a trustee serving in the case, the may not provide for payments over a period SEC. 608. ELIMINATION OF CERTAIN FEES PAY- debtor provide a document that establishes that is longer than 3 years, unless the court, ABLE IN CHAPTER 11 BANKRUPTCY the identity of the debtor, including a driv- for cause, approves a longer period, but the CASES. er’s license, passport, or other document court may not approve a period that is (a) AMENDMENTS.—Section 1930(a)(6) of that contains a photograph of the debtor and longer than 5 years. Notwithstanding the title 28, United States Code, is amended— such other personal identifying information foregoing, the national median family in- (1) in the 1st sentence by striking ‘‘until relating to the debtor that establishes the come for a family of more than 4 individuals the case is converted or dismissed, whichever identity of the debtor.’’. shall be the national median family income occurs first’’; and (c) Section 1324 of title 11, United States last reported by the Bureau of the Census for (2) in the 2d sentence— Code, is amended— a family of 4 individuals plus $583 for each (A) by striking ‘‘The’’ and inserting ‘‘Until (1) by inserting ‘‘(a)’’ before ‘‘After’’; and additional member of the family.’’; the plan is confirmed or the case is con- (2) by inserting at the end thereof— (2) in section 1325(b)(1)(B) as amended by verted (whichever occurs first) the’’; and ‘‘(c) Whenever a party in interest is given section 130— (B) by striking ‘‘less than $300,000;’’ and in- notice of a hearing on the confirmation or (A) by striking ‘‘three year period’’ and in- serting ‘‘less than $300,000. Until the case is modification of a plan under this chapter, serting ‘‘applicable commitment period’’; converted, dismissed, or closed (whichever such notice shall include the information and occurs first and without regard to confirma- provided by the debtor on the most recent (B) by inserting at the end of subparagraph tion of the plan) the fee shall be’’. statement filed with the court pursuant to (B) the following: ‘‘The ‘applicable commit- (b) DELAYED EFFECTIVE DATE.—The amend- section 521(a)(1)(B)(ii) or (f)(4) of this title.’’. ment period’ shall be not less than 5 years if ments made by subsection (a) shall take ef- the current monthly income of the debtor SEC. 604. DISMISSAL FOR FAILURE TO TIMELY fect on October 1, 1999. FILE SCHEDULES OR PROVIDE RE- and the debtor’s spouse combined, when mul- QUIRED INFORMATION. tiplied by 12, is not less than the highest na- SEC. 609. STUDY OF BANKRUPTCY IMPACT OF Section 521 of title 11, United States Code, tional median family income last reported CREDIT EXTENDED TO DEPENDENT as amended by section 603 is amended by in- by the Bureau of the Census for a family of STUDENTS. serting after subsection (a) the following: equal or lesser size, or in the case of a house- Not later than 1 year after the date of the ‘‘(b)(1) Notwithstanding section 707(a) of hold of 1 person, the national median house- enactment of this Act, the Comptroller Gen- this title, and subject to paragraph (2), if an hold income for 1 earner. Notwithstanding eral of the United States shall— individual debtor in a voluntary case under the foregoing, the national median family (1) conduct a study regarding the impact chapter 7 or 13 fails to file all of the informa- income for a family of more than 4 individ- that the extension of credit to individuals tion required under subsection (a)(1) within uals shall be the national median family in- who are— 45 days after the filing of the petition com- come last reported by the Bureau of the Cen- (A) claimed as dependents for purposes of mencing the case, the case shall be auto- sus for a family of 4 individuals plus $583 for the Internal Revenue Code of 1986; and matically dismissed effective on the 46th day each additional member of the family.’’; and (B) enrolled in post-secondary educational after the filing of the petition. (3) in section 1329— institutions, ‘‘(2) With respect to a case described in (A) by striking in subsection (c) ‘‘three has on the rate of cases filed under title 11 of paragraph (1), any party in interest may re- years’’ and inserting ‘‘the applicable com- the United States Code; and quest the court to enter an order dismissing mitment period under section 1325(b)(1)(B)’’; (2) submit to the Speaker of the House of the case. The court shall, if so requested, and Representatives and the President pro tem- enter an order of dismissal not later than 5 (B) by inserting at the end of subsection (c) pore of the Senate a report summarizing days after such request. the following: such study.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00111 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8604 CONGRESSIONAL RECORD—HOUSE May 5, 1999 SEC. 610. PROMPT RELIEF FROM STAY IN INDI- tion 1104(a) or 1121(d) of title 11, or the re- ‘‘(1) compile the statistics referred to in VIDUAL CASES. fusal to enter an order under such section. subsection (a); Section 362(e) of title 11, United States ‘‘(4) An interlocutory order of a bank- ‘‘(2) make the statistics available to the Code, is amended— ruptcy court or district court entered in a public; and (1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and case under title 11, in a proceeding arising ‘‘(3) not later than October 31, 2000, and an- (2) by adding at the end the following: under title 11, or in a proceeding arising in nually thereafter, prepare, and submit to ‘‘(2) Notwithstanding paragraph (1), in the or related to a case under title 11, if the Congress a report concerning the informa- case of an individual filing under chapter 7, court of appeals that would have jurisdiction tion collected under subsection (a) that con- 11, or 13, the stay under subsection (a) shall of an appeal of a final order entered in such tains an analysis of the information. terminate on the date that is 60 days after a case or such proceeding permits, in its dis- ‘‘(c) The compilation required under sub- request is made by a party in interest under cretion, appeal to be taken from such inter- section (b) shall— subsection (d), unless— locutory order. ‘‘(1) be itemized, by chapter, with respect ‘‘(A) a final decision is rendered by the ‘‘(b) Final decisions, judgments, orders, to title 11; court during the 60-day period beginning on and decrees entered by a bankruptcy appel- ‘‘(2) be presented in the aggregate and for the date of the request; or late panel under subsection (b) of this sec- each district; and ‘‘(B) that 60-day period is extended— tion. ‘‘(3) include information concerning— ‘‘(i) by agreement of all parties in interest; ‘‘(c)(1) The judicial council of a circuit ‘‘(A) the total assets and total liabilities of or may establish a bankruptcy appellate panel the debtors described in subsection (a), and ‘‘(ii) by the court for such specific period of composed of bankruptcy judges in the circuit in each category of assets and liabilities, as time as the court finds is required by for who are appointed by the judicial council, reported in the schedules prescribed pursu- good cause as described in findings made by which panel shall exercise the jurisdiction to ant to section 2075 of this title and filed by the court.’’. review orders and judgments of bankruptcy those debtors; SEC. 611. STOPPING ABUSIVE CONVERSIONS courts described in paragraphs (1)–(4) of sub- ‘‘(B) the current monthly income, and av- FROM CHAPTER 13. section (a) of this section unless— erage income and average expenses of those Section 348(f)(1) of title 11, United States ‘‘(A) the appellant elects at the time of fil- debtors as reported on the schedules and Code, is amended— ing the appeal; or statements that each such debtor files under (1) in subparagraph (A), by striking ‘‘and’’ ‘‘(B) any other party elects, not later than sections 521 and 1322 of title 11; at the end; 10 days after service of the notice of the ap- ‘‘(C) the aggregate amount of debt dis- (2) in subparagraph (B)— peal; charged in the reporting period, determined (A) by striking ‘‘in the converted case, to have such jurisdiction exercised by the as the difference between the total amount with allowed secured claims’’ and inserting court of appeals. of debt and obligations of a debtor reported ‘‘only in a case converted to chapter 11 or 12 ‘‘(2) An appeal to be heard by a bankruptcy on the schedules and the amount of such but not in a case converted to chapter 7, with appellate panel under this subsection (b) debt reported in categories which are pre- allowed secured claims in cases under chap- shall be heard by 3 members of the bank- dominantly nondischargeable; ters 11 and 12’’; and ruptcy appellate panel, provided that a mem- ‘‘(D) the average period of time between (B) by striking the period and inserting ‘‘; ber of such panel may not hear an appeal the filing of the petition and the closing of and’’; and originating in the district for which such the case; (3) by adding at the end the following: member is appointed or designated under ‘‘(E) for the reporting period— ‘‘(C) with respect to cases converted from section 152 of this title. ‘‘(i) the number of cases in which a reaffir- chapter 13— ‘‘(3) If authorized by the Judicial Con- mation was filed; and ‘‘(i) the claim of any creditor holding secu- ference of the United States, the judicial ‘‘(ii)(I) the total number of reaffirmations rity as of the date of the petition shall con- councils of 2 or more circuits may establish filed; tinue to be secured by that security unless a joint bankruptcy appellate panel.’’. ‘‘(II) of those cases in which a reaffirma- the full amount of such claim determined SEC. 613. GAO STUDY. tion was filed, the number in which the debt- under applicable nonbankruptcy law has (a) STUDY.—Not later than 270 days after or was not represented by an attorney; and been paid in full as of the date of conversion, the date of the enactment of this Act, the ‘‘(III) of those cases, the number of cases in notwithstanding any valuation or deter- Comptroller General of the United States which the reaffirmation was approved by the mination of the amount of an allowed se- shall conduct a study of the feasibility, ef- court; cured claim made for the purposes of the fectiveness, and cost of requiring trustees ‘‘(F) with respect to cases filed under chap- chapter 13 proceeding; and appointed under title 11 of the United States ter 13 of title 11, for the reporting period— ‘‘(ii) unless a prebankruptcy default has Code, or the bankruptcy courts, to provide to ‘‘(i)(I) the number of cases in which a final been fully cured pursuant to the plan at the the Office of Child Support Enforcement order was entered determining the value of time of conversion, in any proceeding under promptly after the commencement of cases property securing a claim in an amount less this title or otherwise, the default shall have by individual debtors under such title, the than the amount of the claim; and the effect given under applicable nonbank- names and social security numbers of such ‘‘(II) the number of final orders deter- ruptcy law.’’. debtors for the purposes of allowing such Of- mining the value of property securing a SEC. 612. BANKRUPTCY APPEALS. fice to determine whether such debtors have claim issued; Title 28 of the United States Code is outstanding obligations for child support (as ‘‘(ii) the number of cases dismissed, the amended by inserting after section 1292 the determined on the basis of information in number of cases dismissed for failure to following: the Federal Case Registry or other national make payments under the plan, the number ‘‘§ 1293. Bankruptcy appeals database). of cases refiled after dismissal, and the num- ‘‘(a) The courts of appeals (other than the (b) REPORT.—Not later than 300 days after ber of cases in which the plan was completed, United States Court of Appeals for the Fed- the date of the enactment of this Act, the separately itemized with respect to the num- eral Circuit) shall have jurisdiction of ap- Comptroller General shall submit to the ber of modifications made before completion peals from the following: Speaker of the House of Representatives and of the plan, if any; and ‘‘(1) Final orders and judgments entered by the President pro tempore of the Senate, a ‘‘(iii) the number of cases in which the bankruptcy courts and district courts in report containing the results of the study re- debtor filed another case within the 6 years cases under title 11, in proceedings arising quired by subsection (a). previous to the filing; ‘‘(G) the number of cases in which credi- under title 11, and in proceedings arising in TITLE VII—BANKRUPTCY DATA or related to a case under title 11, including tors were fined for misconduct and any final orders in proceedings regarding the SEC. 701. IMPROVED BANKRUPTCY STATISTICS. amount of punitive damages awarded by the automatic stay of section 362 of title 11. (a) AMENDMENT.—Chapter 6 of part I of court for creditor misconduct; and ‘‘(2) Interlocutory orders entered by bank- title 28, United States Code, is amended by ‘‘(H) the number of cases in which sanc- ruptcy courts and district courts granting, adding at the end the following: tions under rule 9011 of the Federal Rules of continuing, modifying, refusing or dissolving ‘‘§ 159. Bankruptcy statistics Bankruptcy Procedure were imposed against injunctions, or refusing to dissolve or modify ‘‘(a) The clerk of each district shall com- debtor’s counsel and damages awarded under injunctions in cases under title 11, in pro- pile statistics regarding individual debtors such Rule.’’. ceedings arising under title 11, and in pro- with primarily consumer debts seeking relief (b) CLERICAL AMENDMENT.—The table of ceedings arising in or related to a case under under chapters 7, 11, and 13 of title 11. Those sections at the beginning of chapter 6 of title title 11, other than interlocutory orders in statistics shall be in a form prescribed by the 28, United States Code, is amended by adding proceedings regarding the automatic stay of Director of the Administrative Office of the at the end the following: section 362 of title 11. United States Courts (referred to in this sec- ‘‘159. Bankruptcy statistics.’’. ‘‘(3) Interlocutory orders of bankruptcy tion as the ‘Office’). (c) EFFECTIVE DATE.—The amendments courts and district courts entered under sec- ‘‘(b) The Director shall— made by this section shall take effect 18

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00112 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8605 months after the date of enactment of this each reporting period since the case was and subject to the requirements of sub- Act. filed; section (e)— SEC. 702. UNIFORM RULES FOR THE COLLECTION ‘‘(4) cash receipts, cash disbursements and ‘‘(1) claims for wages, salaries, and com- OF BANKRUPTCY DATA. profitability of the debtor for the most re- missions that are entitled to priority under (a) AMENDMENT.—Title 28 of the United cent period and cumulatively since the date section 507(a)(3) of this title; or States Code is amended by inserting after of the order for relief; ‘‘(2) claims for contributions to an em- section 589a the following: ‘‘(5) compliance with title 11, whether or ployee benefit plan entitled to priority under ‘‘§ 589b. Bankruptcy data not tax returns and tax payments since the section 507(a)(4) of this title, may be paid from property of the estate ‘‘(a) RULES.—The Attorney General shall, date of the order for relief have been timely which secures a tax lien, or the proceeds of within a reasonable time after the effective filed and made; such property.’’. date of this section, issue rules requiring ‘‘(6) all professional fees approved by the (b) DETERMINATION OF TAX LIABILITY.—Sec- uniform forms for (and from time to time court in the case for the most recent period and cumulatively since the date of the order tion 505(a)(2) of title 11, United States Code, thereafter to appropriately modify and ap- is amended— prove)— for relief (separately reported, in for the pro- fessional fees incurred by or on behalf of the (1) in subparagraph (A), by striking ‘‘or’’ at ‘‘(1) final reports by trustees in cases under the end; chapters 7, 12, and 13 of title 11; and debtor, between those that would have been incurred absent a bankruptcy case and those (2) in subparagraph (B), by striking the pe- ‘‘(2) periodic reports by debtors in posses- riod at the end and inserting ‘‘; or’’; and sion or trustees, as the case may be, in cases not); and ‘‘(7) plans of reorganization filed and con- (3) by adding at the end the following: under chapter 11 of title 11. ‘‘(C) the amount or legality of any amount ‘‘(b) REPORTS.—All reports referred to in firmed and, with respect thereto, by class, the recoveries of the holders, expressed in arising in connection with an ad valorem tax subsection (a) shall be designed (and the re- on real or personal property of the estate, if quirements as to place and manner of filing aggregate dollar values and, in the case of claims, as a percentage of total claims of the the applicable period for contesting or rede- shall be established) so as to facilitate com- termining that amount under any law (other pilation of data and maximum possible ac- class allowed.’’. (b) TECHNICAL AMENDMENT.—The table of than a bankruptcy law) has expired.’’. cess of the public, both by physical inspec- sections of chapter 39 of title 28, United SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT. tion at 1 or more central filing locations, and States Code, is amended by adding at the end (a) EFFECTIVE NOTICE TO GOVERNMENTAL by electronic access through the Internet or the following: UNITS.—Section 342 of title 11, United States other appropriate media. Code, as amended by section 603, is amended ‘‘(c) REQUIRED INFORMATION.—The informa- ‘‘589b. Bankruptcy data.’’. SEC. 703. SENSE OF THE CONGRESS REGARDING by adding at the end the following: tion required to be filed in the reports re- ‘‘(g) If a debtor lists a governmental unit ferred to in subsection (b) shall be that AVAILABILITY OF BANKRUPTCY DATA. as a creditor in a list or schedule, any notice which is in the best interests of debtors and It is the sense of the Congress that— required to be given by the debtor under this creditors, and in the public interest in rea- (1) the national policy of the United States title, any rule, any applicable law, or any sonable and adequate information to evalu- should be that all data held by bankruptcy order of the court, shall identify the depart- ate the efficiency and practicality of the clerks in electronic form, to the extent such ment, agency, or instrumentality through Federal bankruptcy system. In issuing rules data reflects only public records (as defined which the debtor is indebted. The debtor proposing the forms referred to in subsection in section 107 of title 11 of the United States shall identify (with information such as a (a), the Attorney General shall strike the Code), should be released in a usable elec- taxpayer identification number, loan, ac- best achievable practical balance between— tronic form in bulk to the public subject to count or contract number, or real estate par- ‘‘(1) the reasonable needs of the public for such appropriate privacy concerns and safe- cel number, where applicable), and describe information about the operational results of guards as the Judicial Conference of the the underlying basis for the governmental the Federal bankruptcy system; and United States may determine; and unit’s claim. If the debtor’s liability to a ‘‘(2) economy, simplicity, and lack of (2) there should be established a bank- governmental unit arises from a debt or obli- undue burden on persons with a duty to file ruptcy data system in which— gation owed or incurred by another indi- reports. (A) a single set of data definitions and vidual, entity, or organization, or under a ‘‘(d) FINAL REPORTS.—Final reports pro- forms are used to collect data nationwide; different name, the debtor shall identify posed for adoption by trustees under chap- and such individual, entity, organization, or ters 7, 12, and 13 of title 11 shall, in addition (B) data for any particular bankruptcy name. ‘‘(h) The clerk shall keep and update quar- to such other matters as are required by law case are aggregated in the same electronic terly, in the form and manner as the Direc- or as the Attorney General in the discretion record. of the Attorney General, shall propose, in- tor of the Administrative Office of the TITLE VIII—BANKRUPTCY TAX clude with respect to a case under such United States Courts prescribes, and make PROVISIONS title— available to debtors, a register in which a ‘‘(1) information about the length of time SEC. 801. TREATMENT OF CERTAIN LIENS. governmental unit may designate a safe har- the case was pending; (a) TREATMENT OF CERTAIN LIENS.—Section bor mailing address for service of notice in ‘‘(2) assets abandoned; 724 of title 11, United States Code, is amend- cases pending in the district. A govern- ‘‘(3) assets exempted; ed— mental unit may file a statement with the (1) in subsection (b), in the matter pre- ‘‘(4) receipts and disbursements of the es- clerk designating a safe harbor address to ceding paragraph (1), by inserting ‘‘(other tate; which notices are to be sent, unless such than to the extent that there is a properly ‘‘(5) expenses of administration; governmental unit files a notice of change of perfected unavoidable tax lien arising in con- address.’’. ‘‘(6) claims asserted; nection with an ad valorem tax on real or (b) ADOPTION OF RULES PROVIDING NO- ‘‘(7) claims allowed; and personal property of the estate)’’ after TICE.—The Advisory Committee on Bank- ‘‘(8) distributions to claimants and claims ‘‘under this title’’; ruptcy Rules of the Judicial Conference discharged without payment, (2) in subsection (b)(2), after ‘‘507(a)(1)’’, in- shall, within a reasonable period of time in each case by appropriate category and, in sert ‘‘(except that such expenses, other than after the date of the enactment of this Act, cases under chapters 12 and 13 of title 11, claims for wages, salaries, or commissions propose for adoption enhanced rules for pro- date of confirmation of the plan, each modi- which arise after the filing of a petition, viding notice to State, Federal, and local fication thereto, and defaults by the debtor shall be limited to expenses incurred under government units that have regulatory au- in performance under the plan. chapter 7 of this title and shall not include thority over the debtor or which may be ‘‘(e) PERIODIC REPORTS.—Periodic reports expenses incurred under chapter 11 of this creditors in the debtor’s case. Such rules proposed for adoption by trustees or debtors title)’’; and shall be reasonably calculated to ensure that in possession under chapter 11 of title 11 (3) by adding at the end the following: notice will reach the representatives of the shall, in addition to such other matters as ‘‘(e) Before subordinating a tax lien on real governmental unit, or subdivision thereof, are required by law or as the Attorney Gen- or personal property of the estate, the trust- who will be the proper persons authorized to eral, in the discretion of the Attorney Gen- ee shall— act upon the notice. At a minimum, the eral, shall propose, include— ‘‘(1) exhaust the unencumbered assets of rules should require that the debtor— ‘‘(1) information about the standard indus- the estate; and (1) identify in the schedules and the notice, try classification, published by the Depart- ‘‘(2) in a manner consistent with section the subdivision, agency, or entity in respect ment of Commerce, for the businesses con- 506(c) of this title, recover from property se- of which such notice should be received; ducted by the debtor; curing an allowed secured claim the reason- (2) provide sufficient information (such as ‘‘(2) length of time the case has been pend- able, necessary costs and expenses of pre- case captions, permit numbers, taxpayer ing; serving or disposing of that property. identification numbers, or similar identi- ‘‘(3) number of full-time employees as at ‘‘(f) Notwithstanding the exclusion of ad fying information) to permit the govern- the date of the order for relief and at end of valorem tax liens set forth in this section mental unit or subdivision thereof, entitled

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00113 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8606 CONGRESSIONAL RECORD—HOUSE May 5, 1999 to receive such notice, to identify the debtor SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM (B) by striking the period at the end and or the person or entity on behalf of which TIME PERIODS. inserting ‘‘; and’’; and the debtor is providing notice where the Section 507(a)(8)(A) of title 11, United (3) by adding at the end the following: debtor may be a successor in interest or may States Code, as so redesignated, is amend- ‘‘(D) with respect to a secured claim which not be the same as the person or entity ed— would be described in section 507(a)(8) of this which incurred the debt or obligation; and (1) in clause (i) by inserting after ‘‘peti- title but for its secured status, the holder of (3) identify, in appropriate schedules, tion’’ and before the semicolon ‘‘, plus any such claim will receive on account of such served together with the notice, the property time, plus 6 months, during which the stay of claim cash payments of not less than is re- in respect of which the claim or regulatory proceedings was in effect in a prior case quired in subparagraph (C) and over a period obligation may have arisen, if any, the na- under this title’’; and no greater than is required in such subpara- ture of such claim or regulatory obligation (2) amend clause (ii) to read as follows: graph.’’. and the purpose for which notice is being ‘‘(ii) assessed within 240 days before the SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS given. date of the filing of the petition, exclusive PROHIBITED. (c) EFFECT OF FAILURE OF NOTICE.—Section of— Section 545(2) of title 11, United States 342 of title 11, United States Code, as amend- ‘‘(I) any time plus 30 days during which an Code, is amended by striking the semicolon ed by section 603 and subsection (a), is offer in compromise with respect of such tax, at the end and inserting ‘‘, except where such amended by adding at the end the following: was pending or in effect during such 240-day purchaser is a purchaser described in section ‘‘(i) A notice that does not comply with period; 6323 of the Internal Revenue Code of 1986 or subsections (d) and (e) shall not be effective ‘‘(II) any time plus 30 days during which an similar provision of State or local law;’’. installment agreement with respect of such unless the debtor demonstrates, by clear and SEC. 812. PAYMENT OF TAXES IN THE CONDUCT convincing evidence, that timely notice was tax was pending or in effect during such 240- OF BUSINESS. given in a manner reasonably calculated to day period, up to 1 year; and (a) PAYMENT OF TAXES REQUIRED.—Section satisfy the requirements of this section was ‘‘(III) any time plus 6 months during which 960 of title 28, United States Code, is amend- given, and that— a stay of proceedings against collections was ed— ‘‘(1) either the notice was timely sent to in effect in a prior case under this title dur- (1) by inserting ‘‘(a)’’ before ‘‘Any’’; and the safe harbor address provided in the reg- ing such 240-day period.’’. (2) by adding at the end the following: ister maintained by the clerk of the district SEC. 806. PRIORITY PROPERTY TAXES INCURRED. ‘‘(b) Such taxes shall be paid when due in in which the case was pending for such pur- Section 507(a)(8)(B) of title 11, United the conduct of such business unless— poses; or States Code, is amended by striking ‘‘as- ‘‘(1) the tax is a property tax secured by a ‘‘(2) no safe harbor address was provided in sessed’’ and inserting ‘‘incurred’’. lien against property that is abandoned such list for the governmental unit and that SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDU- within a reasonable time after the lien at- an officer of the governmental unit who is LENT AND OTHER TAXES. taches, by the trustee of a bankruptcy es- responsible for the matter or claim had ac- Section 1328(a)(2) of title 11, United States tate, pursuant to section 554 of title 11; or tual knowledge of the case in sufficient time Code, is amended by inserting ‘‘(1),’’ after ‘‘(2) payment of the tax is excused under a to act.’’. ‘‘paragraph’’. specific provision of title 11. SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDU- SEC. 803. NOTICE OF REQUEST FOR A DETER- ‘‘(c) In a case pending under chapter 7 of LENT TAXES. MINATION OF TAXES. title 11, payment of a tax may be deferred Section 1141(d) of title 11, United States until final distribution is made under section Section 505(b) of title 11, United States Code, is amended by adding at the end the 726 of title 11 if— Code, is amended by striking ‘‘Unless’’ at the following: beginning of the second sentence thereof and ‘‘(6) Notwithstanding the provisions of ‘‘(1) the tax was not incurred by a trustee inserting ‘‘If the request is made substan- paragraph (1), the confirmation of a plan duly appointed under chapter 7 of title 11; or tially in the manner designated by the gov- does not discharge a debtor which is a cor- ‘‘(2) before the due date of the tax, the ernmental unit and unless’’. poration from any debt for a tax or customs court has made a finding of probable insuffi- SEC. 804. RATE OF INTEREST ON TAX CLAIMS. duty with respect to which the debtor made ciency of funds of the estate to pay in full (a) AMENDMENT.—Chapter 5 of title 11, a fraudulent return or willfully attempted in the administrative expenses allowed under United States Code, is amended by adding at any manner to evade or defeat such tax.’’. section 503(b) of title 11 that have the same the end the following: SEC. 809. STAY OF TAX PROCEEDINGS. priority in distribution under section 726(b) (a) SECTION 362 STAY LIMITED TO of title 11 as such tax.’’. ‘‘§ 511. Rate of interest on tax claims AYMENT OF D ALOREM AXES E PREPETITION TAXES.—Section 362(a)(8) of (b) P A V T R - ‘‘If any provision of this title requires the title 11, United States Code, is amended by QUIRED.—Section 503(b)(1)(B) of title 11, payment of interest on a tax claim or re- striking the period at the end and inserting United States Code, is amended in clause (i) quires the payment of interest to enable a ‘‘, in respect of a tax liability for a taxable by inserting after ‘‘estate,’’ and before ‘‘ex- creditor to receive the present value of the period ending before the order for relief.’’. cept’’ the following: ‘‘whether secured or un- allowed amount of a tax claim, the rate of (b) APPEAL OF TAX COURT DECISIONS PER- secured, including property taxes for which interest shall be as follows: MITTED.—Section 362(b)(9) of title 11, United liability is in rem only, in personam or ‘‘(1) In the case of ad valorem tax claims, States Code, is amended— both,’’. whether secured or unsecured, other unse- (1) in subparagraph (C) by striking ‘‘or’’ at (c) REQUEST FOR PAYMENT OF ADMINISTRA- cured tax claims where interest is required the end; TIVE EXPENSE TAXES ELIMINATED.—Section to be paid under section 726(a)(5) of this title, (2) in subparagraph (D) by striking the pe- 503(b)(1) of title 11, United States Code, is secured tax claims, and administrative tax riod at the end and inserting ‘‘; or’’; and amended by adding at the end the following: claims paid under section 503(b)(1) of this (3) by adding at the end the following: ‘‘(D) notwithstanding the requirements of title, the rate shall be determined under ap- ‘‘(E) the appeal of a decision by a court or subsection (a) of this section, a govern- plicable nonbankruptcy law. administrative tribunal which determines a mental unit shall not be required to file a re- ‘‘(2) In the case of all other tax claims, the tax liability of the debtor without regard to quest for the payment of a claim described in minimum rate of interest shall be the Fed- whether such determination was made subparagraph (B) or (C);’’. eral short-term rate rounded to the nearest prepetition or postpetition.’’. (d) PAYMENT OF TAXES AND FEES AS SE- full percent, determined under section SEC. 810. PERIODIC PAYMENT OF TAXES IN CHAP- CURED CLAIMS.—Section 506 of title 11, 1274(d) of the Internal Revenue Code of 1986, TER 11 CASES. United States Code, is amended— plus 3 percentage points. Section 1129(a)(9) of title 11, United States (1) in subsection (b) by inserting ‘‘or State ‘‘(A) In the case of claims for Federal in- Code, is amended— statute’’ after ‘‘agreement’’; and come taxes, such rate shall be subject to any (1) in subparagraph (B) by striking ‘‘and’’ (2) in subsection (c) by inserting ‘‘, includ- adjustment that may be required under sec- at the end; and ing the payment of all ad valorem property tion 6621(d) of the Internal Revenue Code of (2) in subparagraph (C)— taxes in respect of the property’’ before the 1986. (A) by striking ‘‘deferred cash payments, period at the end. ‘‘(B) In the case of taxes paid under a con- over a period not exceeding six years after SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS. firmed plan or reorganization, such rate the date of assessment of such claim,’’ and Section 726(a)(1) of title 11, United States shall be determined as of the calendar month inserting ‘‘regular installment payments in Code, is amended by striking ‘‘before the in which the plan is confirmed.’’. cash, but in no case with a balloon provision, date on which the trustee commences dis- (b) CONFORMING AMENDMENT.—The table of and no more than three months apart, begin- tribution under this section’’ and inserting sections of chapter 5 of title 11, United ning no later than the effective date of the ‘‘on or before the earlier of 10 days after the States Code, is amended by inserting after plan and ending on the earlier of five years mailing to creditors of the summary of the the item relating to section 510 the fol- after the petition date or the last date pay- trustee’s final report or the date on which lowing: ments are to be made under the plan to unse- the trustee commences final distribution ‘‘511. Rate of interest on tax claims.’’. cured creditors,’’; under this section’’.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00114 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8607 SEC. 814. INCOME TAX RETURNS PREPARED BY ‘‘(3) upon notice and hearing, and order en- (2) by inserting ‘‘such’’ after ‘‘enable’’; and TAX AUTHORITIES. tered before the lapse of any deadline fixed (3) by striking ‘‘reasonable’’ where it ap- Section 523(a)(1)(B) of title 11, United according to this subsection, where the debt- pears after ‘‘hypothetical’’ and by striking States Code, is amended— or demonstrates, by clear and convincing ‘‘typical of holders of claims or interests’’ (1) by inserting ‘‘or equivalent report or evidence, that the failure to file the returns after ‘‘investor’’. notice,’’ after ‘‘a return,’’; as required is because of circumstances be- SEC. 818. SETOFF OF TAX REFUNDS. (2) in clause (i)— yond the control of the debtor, the court Section 362(b) of title 11, United States (A) by inserting ‘‘or given’’ after ‘‘filed’’; may extend the deadlines set by the trustee Code, as amended by sections 118, 132, 136, and as provided in this subsection for— and 203, is amended— (B) by striking ‘‘or’’ at the end; ‘‘(A) a period of no more than 30 days for (1) in paragraph (29) by striking ‘‘or’’; (3) in clause (ii)— returns described in paragraph (1) of this (2) in paragraph (30) by striking the period (A) by inserting ‘‘or given’’ after ‘‘filed’’; subsection; and at the end and inserting ‘‘; or’’; and and ‘‘(B) for no more than the period of time (3) by inserting after paragraph (30) the fol- (B) by inserting ‘‘, report, or notice’’ after ending on the applicable extended due date lowing: ‘‘return’’; and for the returns described in paragraph (2). ‘‘(31) under subsection (a) of the setoff of (4) by adding at the end the following: ‘‘(c) For purposes of this section only, a re- an income tax refund, by a governmental ‘‘(iii) for purposes of this subsection, a re- turn includes a return prepared pursuant to unit, in respect of a taxable period which turn— section 6020 (a) or (b) of the Internal Revenue ended before the order for relief against an ‘‘(I) must satisfy the requirements of appli- Code of 1986 or similar State or local law, or income tax liability for a taxable period cable nonbankruptcy law, and includes a re- a written stipulation to a judgment entered which also ended before the order for relief, turn prepared pursuant to section 6020(a) of by a nonbankruptcy tribunal.’’. unless— (2) The table of sections of chapter 13 of the Internal Revenue Code of 1986, or similar ‘‘(A) prior to such setoff, an action to de- title 11, United States Code, is amended by State or local law, or a written stipulation termine the amount or legality of such tax inserting after the item relating to section to a judgment entered by a nonbankruptcy liability under section 505(a) was com- 1307 the following: tribunal, but does not include a return made menced; or pursuant to section 6020(b) of the Internal ‘‘1308. Filing of prepetition tax returns.’’. ‘‘(B) where the setoff of an income tax re- (c) DISMISSAL OR CONVERSION ON FAILURE Revenue Code of 1986, or similar State or fund is not permitted because of a pending TO COMPLY.—Section 1307 of title 11, United local law; and action to determine the amount or legality States Code, is amended— ‘‘(II) must have been filed in a manner per- of a tax liability, the governmental unit may (1) by redesignating subsections (e) and (f) mitted by applicable nonbankruptcy law; hold the refund pending the resolution of the as subsections (f) and (g), respectively; and or’’. action.’’. (2) by inserting after subsection (d) the fol- SEC. 815. DISCHARGE OF THE ESTATE’S LIABIL- TITLE IX—ANCILLARY AND OTHER CROSS- ITY FOR UNPAID TAXES. lowing: Section 505(b) of title 11, United States ‘‘(e) Upon the failure of the debtor to file BORDER CASES Code, is amended in the second sentence by tax returns under section 1308 of this title, SEC. 901. AMENDMENT TO ADD CHAPTER 15 TO inserting ‘‘the estate,’’ after ‘‘misrepresenta- on request of a party in interest or the TITLE 11, UNITED STATES CODE. tion,’’. United States trustee and after notice and a (a) IN GENERAL.—Title 11, United States hearing, the court shall dismiss a case or Code, is amended by inserting after chapter SEC. 816. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 13 PLANS. convert a case under this chapter to a case 13 the following: (a) FILING OF PREPETITION TAX RETURNS under chapter 7 of this title, whichever is in ‘‘CHAPTER 15—ANCILLARY AND OTHER the best interests of creditors and the es- REQUIRED FOR PLAN CONFIRMATION.—Section CROSS-BORDER CASES tate.’’. 1325(a) of title 11, United States Code, as ‘‘Sec. (d) TIMELY FILED CLAIMS.—Section 502(b)(9) amended by section 140, is amended— ‘‘1501. Purpose and scope of application. of title 11, United States Code, is amended by (1) in paragraph (6) by striking ‘‘and’’ at striking the period at the end and inserting ‘‘SUBCHAPTER I—GENERAL PROVISIONS the end; ‘‘, and except that in a case under chapter 13 ‘‘1502. Definitions. (2) in paragraph (7) by striking the period of this title, a claim of a governmental unit ‘‘1503. International obligations of the at the end and inserting ‘‘; and’’; and for a tax in respect of a return filed under United States. (3) by adding at the end the following: section 1308 of this title shall be timely if it ‘‘1504. Commencement of ancillary case. ‘‘(8) if the debtor has filed all Federal, is filed on or before 60 days after such return ‘‘1505. Authorization to act in a foreign State, and local tax returns as required by or returns were filed as required.’’. country. section 1308 of this title.’’. (e) RULES FOR OBJECTIONS TO CLAIMS AND ‘‘1506. Public policy exception. DDITIONAL IME ERMITTED FOR ILING (b) A T P F TO CONFIRMATION.—It is the sense of the Con- ‘‘1507. Additional assistance. TAX RETURNS.—(1) Chapter 13 of title 11, gress that the Advisory Committee on Bank- ‘‘1508. Interpretation. United States Code, as amended by section ruptcy Rules of the Judicial Conference ‘‘SUBCHAPTER II—ACCESS OF FOREIGN 135, is amended by adding at the end the fol- should, within a reasonable period of time REPRESENTATIVES AND CREDITORS lowing: after the date of the enactment of this Act, TO THE COURT ‘‘§ 1308. Filing of prepetition tax returns propose for adoption amended Federal Rules ‘‘1509. Right of direct access. ‘‘(a) On or before the day prior to the day of Bankruptcy Procedure which provide ‘‘1510. Limited jurisdiction. on which the first meeting of the creditors is that— ‘‘1511. Commencement of case under section convened under section 341(a) of this title, (1) notwithstanding the provisions of Rule 301 or 303. the debtor shall have filed with appropriate 3015(f), in cases under chapter 13 of title 11, ‘‘1512. Participation of a foreign representa- tax authorities all tax returns for all taxable United States Code, a governmental unit tive in a case under this title. periods ending in the 3-year period ending on may object to the confirmation of a plan on ‘‘1513. Access of foreign creditors to a case the date of filing of the petition. or before 60 days after the debtor files all tax under this title. ‘‘(b) If the tax returns required by sub- returns required under sections 1308 and ‘‘1514. Notification to foreign creditors con- section (a) have not been filed by the date on 1325(a)(7) of title 11, United States Code; and cerning a case under this title. which the first meeting of creditors is con- (2) in addition to the provisions of Rule ‘‘SUBCHAPTER III—RECOGNITION OF A vened under section 341(a) of this title, the 3007, in a case under chapter 13 of title 11, FOREIGN PROCEEDING AND RELIEF trustee may continue such meeting for a rea- United States Code, no objection to a tax in ‘‘1515. Application for recognition of a for- sonable period of time, to allow the debtor respect of a return required to be filed under eign proceeding. additional time to file any unfiled returns, such section 1308 shall be filed until such re- ‘‘1516. Presumptions concerning recognition. but such additional time shall be no more turn has been filed as required. ‘‘1517. Order recognizing a foreign pro- than— SEC. 817. STANDARDS FOR TAX DISCLOSURE. ceeding. ‘‘(1) for returns that are past due as of the Section 1125(a) of title 11, United States ‘‘1518. Subsequent information. date of the filing of the petition, 120 days Code, is amended in paragraph (1)— ‘‘1519. Relief that may be granted upon peti- from such date; (1) by inserting after ‘‘records,’’ the fol- tion for recognition of a foreign ‘‘(2) for returns which are not past due as lowing: ‘‘including a full discussion of the proceeding. of the date of the filing of the petition, the potential material Federal, State, and local ‘‘1520. Effects of recognition of a foreign later of 120 days from such date or the due tax consequences of the plan to the debtor, main proceeding. date for such returns under the last auto- any successor to the debtor, and a hypo- ‘‘1521. Relief that may be granted upon rec- matic extension of time for filing such re- thetical investor domiciled in the State in ognition of a foreign pro- turns to which the debtor is entitled, and for which the debtor resides or has its principal ceeding. which request has been timely made, accord- place of business typical of the holders of ‘‘1522. Protection of creditors and other in- ing to applicable nonbankruptcy law; and claims or interests in the case,’’; terested persons.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00115 Fmt 0688 Sfmt 0655 E:\BR99\H05MY9.004 H05MY9 8608 CONGRESSIONAL RECORD—HOUSE May 5, 1999 ‘‘1523. Actions to avoid acts detrimental to broker subject to subchapter IV of chapter 7 venience in the processing of claims in such creditors. of this title. foreign proceeding; ‘‘1524. Intervention by a foreign representa- ‘‘SUBCHAPTER I—GENERAL PROVISIONS ‘‘(3) prevention of preferential or fraudu- tive. lent dispositions of property of the debtor; ‘‘§ 1502. Definitions ‘‘SUBCHAPTER IV—COOPERATION WITH ‘‘(4) distribution of proceeds of the debtor’s ‘‘For the purposes of this chapter, the FOREIGN COURTS AND FOREIGN REP- property substantially in accordance with term— RESENTATIVES the order prescribed by this title; and ‘‘(1) ‘debtor’ means an entity that is the ‘‘(5) if appropriate, the provision of an op- ‘‘1525. Cooperation and direct communica- subject of a foreign proceeding; tion between the court and for- portunity for a fresh start for the individual ‘‘(2) ‘establishment’ means any place of op- that such foreign proceeding concerns. eign courts or foreign rep- erations where the debtor carries out a non- resentatives. transitory economic activity; ‘‘§ 1508. Interpretation ‘‘1526. Cooperation and direct communica- ‘‘(3) ‘foreign court’ means a judicial or ‘‘In interpreting this chapter, the court tion between the trustee and other authority competent to control or su- shall consider its international origin, and foreign courts or foreign rep- pervise a foreign proceeding; the need to promote an application of this resentatives. ‘‘(4) ‘foreign main proceeding’ means a for- chapter that is consistent with the applica- ‘‘1527. Forms of cooperation. eign proceeding taking place in the country tion of similar statutes adopted by foreign ‘‘SUBCHAPTER V—CONCURRENT where the debtor has the center of its main jurisdictions. PROCEEDINGS interests; ‘‘SUBCHAPTER II—ACCESS OF FOREIGN ‘‘1528. Commencement of a case under this ‘‘(5) ‘foreign nonmain proceeding’ means a REPRESENTATIVES AND CREDITORS title after recognition of a for- foreign proceeding, other than a foreign TO THE COURT eign main proceeding. main proceeding, taking place in a country ‘‘§ 1509. Right of direct access where the debtor has an establishment; ‘‘1529. Coordination of a case under this title ‘‘(a) A foreign representative may com- ‘‘(6) ‘trustee’ includes a trustee, a debtor in and a foreign proceeding. mence a case under section 1504 of this title ‘‘1530. Coordination of more than 1 foreign possession in a case under any chapter of by filing with the court a petition for rec- proceeding. this title, or a debtor under chapter 9 of this ognition of a foreign proceeding under sec- ‘‘1531. Presumption of insolvency based on title; and tion 1515 of this title. recognition of a foreign main ‘‘(7) ‘within the territorial jurisdiction of ‘‘(b) If the court grants recognition under proceeding. the United States’ when used with reference section 1515 of this title, and subject to any ‘‘1532. Rule of payment in concurrent pro- to property of a debtor refers to tangible limitations that the court may impose con- ceedings. property located within the territory of the sistent with the policy of this chapter— United States and intangible property ‘‘§ 1501. Purpose and scope of application ‘‘(1) the foreign representative has the ca- deemed under applicable nonbankruptcy law ‘‘(a) The purpose of this chapter is to in- pacity to sue and be sued in a court in the to be located within that territory, including corporate the Model Law on Cross-Border In- United States; any property subject to attachment or gar- solvency so as to provide effective mecha- ‘‘(2) the foreign representative may apply nishment that may properly be seized or gar- nisms for dealing with cases of cross-border directly to a court in the United States for nished by an action in a Federal or State insolvency with the objectives of— appropriate relief in that court; and court in the United States. ‘‘(1) cooperation between— ‘‘(3) a court in the United States shall ‘‘(A) United States courts, United States ‘‘§ 1503. International obligations of the grant comity or cooperation to the foreign trustees, trustees, examiners, debtors, and United States representative. debtors in possession; and ‘‘To the extent that this chapter conflicts ‘‘(c) A request for comity or cooperation by ‘‘(B) the courts and other competent au- with an obligation of the United States aris- a foreign representative in a court in the thorities of foreign countries involved in ing out of any treaty or other form of agree- United States shall be accompanied by a cer- cross-border insolvency cases; ment to which it is a party with 1 or more tified copy of an order granting recognition ‘‘(2) greater legal certainty for trade and other countries, the requirements of the under section 1517 of this title. investment; treaty or agreement prevail. ‘‘(d) If the court denies recognition under ‘‘(3) fair and efficient administration of ‘‘§ 1504. Commencement of ancillary case this chapter, the court may issue any appro- cross-border insolvencies that protects the priate order necessary to prevent the foreign ‘‘A case under this chapter is commenced interests of all creditors, and other inter- representative from obtaining comity or co- by the filing of a petition for recognition of ested entities, including the debtor; operation from courts in the United States. a foreign proceeding under section 1515. ‘‘(4) protection and maximization of the ‘‘(e) Whether or not the court grants rec- value of the debtor’s assets; and ‘‘§ 1505. Authorization to act in a foreign ognition, and subject to sections 306 and 1510 ‘‘(5) facilitation of the rescue of financially country of this title, a foreign representative is sub- troubled businesses, thereby protecting in- ‘‘A trustee or another entity (including an ject to applicable nonbankruptcy law. vestment and preserving employment. examiner) may be authorized by the court to ‘‘(f) Notwithstanding any other provision ‘‘(b) This chapter applies where— act in a foreign country on behalf of an es- of this section, the failure of a foreign rep- ‘‘(1) assistance is sought in the United tate created under section 541. An entity au- resentative to commence a case or to obtain States by a foreign court or a foreign rep- thorized to act under this section may act in recognition under this chapter does not af- resentative in connection with a foreign pro- any way permitted by the applicable foreign fect any right the foreign representative ceeding; law. may have to sue in a court in the United ‘‘(2) assistance is sought in a foreign coun- ‘‘§ 1506. Public policy exception State to collect or recover a claim which is try in connection with a case under this the property of the debtor.’’. ‘‘Nothing in this chapter prevents the title; court from refusing to take an action gov- ‘‘§ 1510. Limited jurisdiction ‘‘(3) a foreign proceeding and a case under erned by this chapter if the action would be ‘‘The sole fact that a foreign representa- this title with respect to the same debtor are manifestly contrary to the public policy of tive files a petition under section 1515 does taking place concurrently; or the United States. not subject the foreign representative to the ‘‘(4) creditors or other interested persons jurisdiction of any court in the United in a foreign country have an interest in re- ‘‘§ 1507. Additional assistance States for any other purpose. questing the commencement of, or partici- ‘‘(a) Subject to the specific limitations pating in, a case or proceeding under this stated elsewhere in this chapter the court, ‘‘§ 1511. Commencement of case under section title. upon recognition of a foreign proceeding, the 301 or 303 ‘‘(c) This chapter does not apply to— court may provide additional assistance to a ‘‘(a) Upon recognition, a foreign represent- ‘‘(1) a proceeding concerning an entity foreign representative under this title or ative may commence— identified by exclusion in subsection 109(b); under other laws of the United States. ‘‘(1) an involuntary case under section 303; ‘‘(2) an individual, or to an individual and ‘‘(b) In determining whether to provide ad- or such individual’s spouse, who have debts ditional assistance under this title or under ‘‘(2) a voluntary case under section 301 or within the limits specified in section 109(e) other laws of the United States, the court 302, if the foreign proceeding is a foreign and who are citizens of the United States or shall consider whether such additional as- main proceeding. aliens lawfully admitted for permanent resi- sistance, consistent with the principles of ‘‘(b) The petition commencing a case under dence in the United States; or comity, will reasonably assure— subsection (a) must be accompanied by cer- ‘‘(3) an entity subject to a proceeding ‘‘(1) just treatment of all holders of claims tified copy of an order granting recognition. under the Securities Investor Protection against or interests in the debtor’s property; The court where the petition for recognition Act, a stockbroker subject to subchapter III ‘‘(2) protection of claim holders in the has been filed must be advised of the foreign of chapter 7 of this title, or a commodity United States against prejudice and incon- representative’s intent to commence a case

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00116 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8609 under subsection (a) prior to such com- ‘‘(2) a certificate from the foreign court af- ‘‘§ 1519. Relief that may be granted upon peti- mencement. firming the existence of the foreign pro- tion for recognition of a foreign proceeding ‘‘§ 1512. Participation of a foreign representa- ceeding and of the appointment of the for- ‘‘(a) From the time of filing a petition for tive in a case under this title eign representative; or recognition until the court rules on the peti- ‘‘Upon recognition of a foreign proceeding, ‘‘(3) in the absence of evidence referred to tion, the court may, at the request of the the foreign representative in that proceeding in paragraphs (1) and (2), any other evidence foreign representative, where relief is ur- is entitled to participate as a party in inter- acceptable to the court of the existence of gently needed to protect the assets of the est in a case regarding the debtor under this the foreign proceeding and of the appoint- debtor or the interests of the creditors, grant title. ment of the foreign representative. relief of a provisional nature, including— ‘‘(c) A petition for recognition shall also be ‘‘(1) staying execution against the debtor’s ‘‘§ 1513. Access of foreign creditors to a case accompanied by a statement identifying all assets; under this title foreign proceedings with respect to the debt- ‘‘(2) entrusting the administration or real- ‘‘(a) Foreign creditors have the same rights or that are known to the foreign representa- ization of all or part of the debtor’s assets lo- regarding the commencement of, and partici- tive. pation in, a case under this title as domestic ‘‘(d) The documents referred to in para- cated in the United States to the foreign rep- creditors. graphs (1) and (2) of subsection (b) must be resentative or another person authorized by ‘‘(b)(1) Subsection (a) does not change or translated into English. The court may re- the court, including an examiner, in order to codify present law as to the priority of quire a translation into English of additional protect and preserve the value of assets that, claims under section 507 or 726 of this title, documents. by their nature or because of other cir- cumstances, are perishable, susceptible to except that the claim of a foreign creditor ‘‘§ 1516. Presumptions concerning recognition under those sections shall not be given a devaluation or otherwise in jeopardy; and ‘‘(a) If the decision or certificate referred ‘‘(3) any relief referred to in paragraph (3), lower priority than that of general unse- to in section 1515(b) indicates that the for- (4), or (7) of section 1521(a). cured claims without priority solely because eign proceeding is a foreign proceeding as de- ‘‘(b) Unless extended under section the holder of such claim is a foreign creditor. fined in section 101 and that the person or 1521(a)(6), the relief granted under this sec- ‘‘(2)(A) Subsection (a) and paragraph (1) do body is a foreign representative as defined in tion terminates when the petition for rec- not change or codify present law as to the al- section 101, the court is entitled to so pre- ognition is decided upon. lowability of foreign revenue claims or other sume. foreign public law claims in a proceeding ‘‘(b) The court is entitled to presume that ‘‘(c) It is a ground for denial of relief under under this title. documents submitted in support of the peti- this section that such relief would interfere ‘‘(B) Allowance and priority as to a foreign tion for recognition are authentic, whether with the administration of a foreign main tax claim or other foreign public law claim or not they have been legalized. proceeding. shall be governed by any applicable tax trea- ‘‘(c) In the absence of evidence to the con- ‘‘(d) The court may not enjoin a police or ty of the United States, under the conditions trary, the debtor’s registered office, or habit- regulatory act of a governmental unit, in- and circumstances specified therein. ual residence in the case of an individual, is cluding a criminal action or proceeding, under this section. ‘‘§ 1514. Notification to foreign creditors con- presumed to be the center of the debtor’s ‘‘(e) The standards, procedures, and limita- cerning a case under this title main interests. ‘‘§ 1517. Order recognizing a foreign pro- tions applicable to an injunction shall apply ‘‘(a) Whenever in a case under this title no- to relief under this section. tice is to be given to creditors generally or ceeding to any class or category of creditors, such ‘‘(a) Subject to section 1506, after notice ‘‘§ 1520. Effects of recognition of a foreign notice shall also be given to the known and a hearing an order recognizing a foreign main proceeding creditors generally, or to creditors in the no- proceeding shall be entered if— ‘‘(a) Upon recognition of a foreign pro- tified class or category, that do not have ad- ‘‘(1) the foreign proceeding is a foreign ceeding that is a foreign main proceeding— dresses in the United States. The court may main proceeding or foreign nonmain pro- ‘‘(1) sections 361 and 362 with respect to the order that appropriate steps be taken with a ceeding within the meaning of section 1502; debtor and that property of the debtor that view to notifying any creditor whose address ‘‘(2) the foreign representative applying for is within the territorial jurisdiction of the is not yet known. recognition is a person or body as defined in United States; ‘‘(b) Such notification to creditors with section 101; and ‘‘(2) sections 363, 549, and 552 of this title foreign addresses described in subsection (a) ‘‘(3) the petition meets the requirements of apply to a transfer of an interest of the debt- shall be given individually, unless the court section 1515. or in property that is within the territorial considers that, under the circumstances, ‘‘(b) The foreign proceeding shall be recog- jurisdiction of the United States to the same some other form of notification would be nized— extent that the sections would apply to prop- more appropriate. No letters rogatory or ‘‘(1) as a foreign main proceeding if it is erty of an estate; other similar formality is required. taking place in the country where the debtor ‘‘(3) unless the court orders otherwise, the ‘‘(c) When a notification of commencement has the center of its main interests; or foreign representative may operate the debt- of a case is to be given to foreign creditors, ‘‘(2) as a foreign nonmain proceeding if the or’s business and may exercise the rights and the notification shall— debtor has an establishment within the powers of a trustee under and to the extent ‘‘(1) indicate the time period for filing meaning of section 1502 in the foreign coun- provided by sections 363 and 552; and proofs of claim and specify the place for try where the proceeding is pending. ‘‘(4) section 552 applies to property of the their filing; ‘‘(c) A petition for recognition of a foreign debtor that is within the territorial jurisdic- ‘‘(2) indicate whether secured creditors proceeding shall be decided upon at the ear- tion of the United States.’’. liest possible time. Entry of an order recog- need to file their proofs of claim; and ‘‘(b) Subsection (a) does not affect the nizing a foreign proceeding constitutes rec- ‘‘(3) contain any other information re- right to commence an individual action or ognition under this chapter. proceeding in a foreign country to the extent quired to be included in such a notification ‘‘(d) The provisions of this subchapter do necessary to preserve a claim against the to creditors under this title and the orders of not prevent modification or termination of the court. recognition if it is shown that the grounds debtor. ‘‘(d) Any rule of procedure or order of the for granting it were fully or partially lack- ‘‘(c) Subsection (a) does not affect the court as to notice or the filing of a claim ing or have ceased to exist, but in consid- right of a foreign representative or an entity shall provide such additional time to credi- ering such action the court shall give due to file a petition commencing a case under tors with foreign addresses as is reasonable weight to possible prejudice to parties that this title or the right of any party to file under the circumstances. have relied upon the granting of recognition. claims or take other proper actions in such ‘‘SUBCHAPTER III—RECOGNITION OF A The case under this chapter may be closed in a case. FOREIGN PROCEEDING AND RELIEF the manner prescribed under section 350. ‘‘§ 1521. Relief that may be granted upon rec- ‘‘§ 1515. Application for recognition of a for- ‘‘§ 1518. Subsequent information ognition of a foreign proceeding eign proceeding ‘‘From the time of filing the petition for ‘‘(a) Upon recognition of a foreign pro- ‘‘(a) A foreign representative applies to the recognition of the foreign proceeding, the ceeding, whether main or nonmain, where court for recognition of the foreign pro- foreign representative shall file with the necessary to effectuate the purpose of this ceeding in which the foreign representative court promptly a notice of change of status chapter and to protect the assets of the debt- has been appointed by filing a petition for concerning— or or the interests of the creditors, the court recognition. ‘‘(1) any substantial change in the status of may, at the request of the foreign represent- ‘‘(b) A petition for recognition shall be ac- the foreign proceeding or the status of the ative, grant any appropriate relief, includ- companied by— foreign representative’s appointment; and ing— ‘‘(1) a certified copy of the decision com- ‘‘(2) any other foreign proceeding regarding ‘‘(1) staying the commencement or con- mencing the foreign proceeding and appoint- the debtor that becomes known to the for- tinuation of an individual action or pro- ing the foreign representative; eign representative. ceeding concerning the debtor’s assets,

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00117 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8610 CONGRESSIONAL RECORD—HOUSE May 5, 1999 rights, obligations or liabilities to the extent ‘‘(b) When the foreign proceeding is a for- ‘‘§ 1529. Coordination of a case under this they have not been stayed under section eign nonmain proceeding, the court must be title and a foreign proceeding 1520(a); satisfied that an action under subsection (a) ‘‘Where a foreign proceeding and a case ‘‘(2) staying execution against the debtor’s relates to assets that, under United States under another chapter of this title are tak- assets to the extent it has not been stayed law, should be administered in the foreign ing place concurrently regarding the same under section 1520(a); nonmain proceeding. debtor, the court shall seek cooperation and ‘‘(3) suspending the right to transfer, en- ‘‘§ 1524. Intervention by a foreign representa- coordination under sections 1525, 1526, and cumber or otherwise dispose of any assets of tive 1527, and the following shall apply: the debtor to the extent this right has not ‘‘(1) When the case in the United States is ‘‘Upon recognition of a foreign proceeding, been suspended under section 1520(a); taking place at the time the petition for rec- the foreign representative may intervene in ‘‘(4) providing for the examination of wit- ognition of the foreign proceeding is filed— any proceedings in a State or Federal court nesses, the taking of evidence or the delivery ‘‘(A) any relief granted under sections 1519 in the United States in which the debtor is a of information concerning the debtor’s as- or 1521 must be consistent with the relief party. sets, affairs, rights, obligations or liabilities; granted in the case in the United States; and ‘‘(5) entrusting the administration or real- ‘‘SUBCHAPTER IV—COOPERATION WITH ‘‘(B) even if the foreign proceeding is rec- ization of all or part of the debtor’s assets FOREIGN COURTS AND FOREIGN REP- ognized as a foreign main proceeding, section within the territorial jurisdiction of the RESENTATIVES 1520 does not apply. United States to the foreign representative ‘‘§ 1525. Cooperation and direct communica- ‘‘(2) When a case in the United States or another person, including an examiner, tion between the court and foreign courts under this title commences after recogni- authorized by the court; or foreign representatives tion, or after the filing of the petition for ‘‘(6) extending relief granted under section ‘‘(a) Consistent with section 1501, the court recognition, of the foreign proceeding— 1519(a); and shall cooperate to the maximum extent pos- ‘‘(A) any relief in effect under sections 1519 ‘‘(7) granting any additional relief that sible with foreign courts or foreign rep- or 1521 shall be reviewed by the court and may be available to a trustee, except for re- resentatives, either directly or through the shall be modified or terminated if incon- sistent with the case in the United States; lief available under sections 522, 544, 545, 547, trustee. and 548, 550, and 724(a). ‘‘(b) The court is entitled to communicate ‘‘(B) if the foreign proceeding is a foreign ‘‘(b) Upon recognition of a foreign pro- directly with, or to request information or main proceeding, the stay and suspension re- ceeding, whether main or nonmain, the court assistance directly from, foreign courts or ferred to in section 1520(a) shall be modified may, at the request of the foreign represent- foreign representatives, subject to the rights or terminated if inconsistent with the relief ative, entrust the distribution of all or part of parties in interest to notice and participa- granted in the case in the United States. of the debtor’s assets located in the United tion. States to the foreign representative or an- ‘‘(3) In granting, extending, or modifying ‘‘§ 1526. Cooperation and direct communica- other person, including an examiner, author- relief granted to a representative of a foreign tion between the trustee and foreign courts ized by the court, provided that the court is nonmain proceeding, the court must be satis- or foreign representatives satisfied that the interests of creditors in fied that the relief relates to assets that, the United States are sufficiently protected. ‘‘(a) Consistent with section 1501, the trust- under the law of the United States, should be ‘‘(c) In granting relief under this section to ee or other person, including an examiner, administered in the foreign nonmain pro- a representative of a foreign nonmain pro- authorized by the court, shall, subject to the ceeding or concerns information required in ceeding, the court must be satisfied that the supervision of the court, cooperate to the that proceeding. relief relates to assets that, under the law of maximum extent possible with foreign ‘‘(4) In achieving cooperation and coordina- the United States, should be administered in courts or foreign representatives. tion under sections 1528 and 1529, the court the foreign nonmain proceeding or concerns ‘‘(b) The trustee or other person, including may grant any of the relief authorized under information required in that proceeding. an examiner, authorized by the court is enti- section 305. ‘‘(d) The court may not enjoin a police or tled, subject to the supervision of the court, ‘‘§ 1530. Coordination of more than 1 foreign regulatory act of a governmental unit, in- to communicate directly with foreign courts proceeding cluding a criminal action or proceeding, or foreign representatives. ‘‘In matters referred to in section 1501, under this section. ‘‘§ 1527. Forms of cooperation with respect to more than 1 foreign pro- ‘‘(e) The standards, procedures, and limita- ‘‘Cooperation referred to in sections 1525 ceeding regarding the debtor, the court shall seek cooperation and coordination under sec- tions applicable to an injunction shall apply and 1526 may be implemented by any appro- tions 1525, 1526, and 1527, and the following to relief under paragraphs (1), (2), (3), and (6) priate means, including— shall apply: of subsection (a). ‘‘(1) appointment of a person or body, in- ‘‘(1) Any relief granted under section 1519 cluding an examiner, to act at the direction ‘‘§ 1522. Protection of creditors and other in- or 1521 to a representative of a foreign of the court; terested persons nonmain proceeding after recognition of a ‘‘(2) communication of information by any ‘‘(a) The court may grant relief under sec- foreign main proceeding must be consistent tion 1519 or 1521, or may modify or terminate means considered appropriate by the court; with the foreign main proceeding. relief under subsection (c), only if the inter- ‘‘(3) coordination of the administration and ‘‘(2) If a foreign main proceeding is recog- ests of the creditors and other interested en- supervision of the debtor’s assets and affairs; nized after recognition, or after the filing of tities, including the debtor, are sufficiently ‘‘(4) approval or implementation of agree- a petition for recognition, of a foreign protected. ments concerning the coordination of pro- nonmain proceeding, any relief in effect ‘‘(b) The court may subject relief granted ceedings; and under section 1519 or 1521 shall be reviewed under section 1519 or 1521, or the operation of ‘‘(5) coordination of concurrent pro- by the court and shall be modified or termi- the debtor’s business under section 1520(a)(3) ceedings regarding the same debtor. nated if inconsistent with the foreign main of this title, to conditions it considers appro- ‘‘SUBCHAPTER V—CONCURRENT proceeding. priate, including the giving of security or PROCEEDINGS ‘‘(3) If, after recognition of a foreign the filing of a bond. ‘‘§ 1528. Commencement of a case under this nonmain proceeding, another foreign ‘‘(c) The court may, at the request of the title after recognition of a foreign main nonmain proceeding is recognized, the court foreign representative or an entity affected proceeding shall grant, modify, or terminate relief for by relief granted under section 1519 or 1521, ‘‘After recognition of a foreign main pro- the purpose of facilitating coordination of or at its own motion, modify or terminate ceeding, a case under another chapter of this the proceedings. such relief. title may be commenced only if the debtor ‘‘§ 1531. Presumption of insolvency based on ‘‘(d) Section 1104(d) shall apply to the ap- has assets in the United States. The effects recognition of a foreign main proceeding pointment of an examiner under this chap- of such case shall be restricted to the assets ‘‘In the absence of evidence to the con- ter. Any examiner shall comply with the of the debtor that are within the territorial trary, recognition of a foreign main pro- qualification requirements imposed on a jurisdiction of the United States and, to the ceeding is for the purpose of commencing a trustee by section 322. extent necessary to implement cooperation proceeding under section 303, proof that the ‘‘§ 1523. Actions to avoid acts detrimental to and coordination under sections 1525, 1526, debtor is generally not paying its debts as creditors and 1527, to other assets of the debtor that such debts become due. ‘‘(a) Upon recognition of a foreign pro- are within the jurisdiction of the court under ‘‘§ 1532. Rule of payment in concurrent pro- ceeding, the foreign representative has sections 541(a) of this title, and 1334(e) of ceedings standing in a case concerning the debtor title 28, to the extent that such other assets ‘‘Without prejudice to secured claims or pending under another chapter of this title are not subject to the jurisdiction and con- rights in rem, a creditor who has received to initiate actions under sections 522, 544, trol of a foreign proceeding that has been payment with respect to its claim in a for- 545, 547, 548, 550, and 724(a). recognized under this chapter. eign proceeding pursuant to a law relating to

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00118 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8611 insolvency may not receive a payment for TITLE X—FINANCIAL CONTRACT ‘‘(I) with respect to a futures commission the same claim in a case under any other PROVISIONS merchant, a contract for the purchase or sale chapter of this title regarding the debtor, so SEC. 1001. TREATMENT OF CERTAIN AGREE- of a commodity for future delivery on, or long as the payment to other creditors of the MENTS BY CONSERVATORS OR ––RE- subject to the rules of, a contract market or CEIVERS OF INSURED DEPOSITORY board of trade; same class is proportionately less than the INSTITUTIONS. ‘‘(II) with respect to a foreign futures com- payment the creditor has already received.’’. (a) DEFINITION OF QUALIFIED FINANCIAL mission merchant, a foreign future; (b) CLERICAL AMENDMENT.—The table of CONTRACT.—Section 11(e)(8)(D)(i) of the Fed- ‘‘(III) with respect to a leverage trans- chapters for title 11, United States Code, is eral Deposit Insurance Act (12 U.S.C. action merchant, a leverage transaction; amended by inserting after the item relating 1821(e)(8)(D)(i)) is amended by inserting ‘‘, ‘‘(IV) with respect to a clearing organiza- resolution or order’’ after ‘‘any similar to chapter 13 the following: tion, a contract for the purchase or sale of a agreement that the Corporation determines commodity for future delivery on, or subject ‘‘15. Ancillary and Other Cross-Border by regulation’’. to the rules of, a contract market or board of Cases ...... 1501’’. (b) DEFINITION OF SECURITIES CONTRACT.— trade that is cleared by such clearing organi- Section 11(e)(8)(D)(ii) of the Federal Deposit zation, or commodity option traded on, or SEC. 902. AMENDMENTS TO OTHER CHAPTERS IN Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is subject to the rules of, a contract market or TITLE 11, UNITED STATES CODE. amended to read as follows: board of trade that is cleared by such clear- ‘‘(ii) SECURITIES CONTRACT.—The term ‘se- (a) APPLICABILITY OF CHAPTERS.—Section ing organization; curities contract’— 103 of title 11, United States Code, is amend- ‘‘(V) with respect to a commodity options ‘‘(I) means a contract for the purchase, dealer, a commodity option; ed— sale, or loan of a security, a certificate of de- (1) in subsection (a), by inserting before ‘‘(VI) any other agreement or transaction posit, a mortgage loan, or any interest in a that is similar to any agreement or trans- the period the following: ‘‘, and this chapter, mortgage loan, a group or index of securi- sections 307, 304, 555 through 557, 559, and 560 action referred to in this clause; ties, certificates of deposit, or mortgage ‘‘(VII) any combination of the agreements apply in a case under chapter 15’’; and loans or interests therein (including any in- (2) by adding at the end the following: or transactions referred to in this clause; terest therein or based on the value thereof) ‘‘(VIII) any option to enter into any agree- ‘‘(j) Chapter 15 applies only in a case under or any option on any of the foregoing, in- ment or transaction referred to in this such chapter, except that— cluding any option to purchase or sell any clause; ‘‘(1) sections 1505, 1513, and 1514 apply in all such security, certificate of deposit, loan, in- ‘‘(IX) a master agreement that provides for cases under this title; and terest, group or index, or option; an agreement or transaction referred to in ‘‘(2) section 1509 applies whether or not a ‘‘(II) does not include any purchase, sale, subclause (I), (II), (III), (IV), (V), (VI), (VII), case under this title is pending.’’. or repurchase obligation under a participa- or (VIII), together with all supplements to tion in a commercial mortgage loan unless any such master agreement, without regard (b) DEFINITIONS.—Paragraphs (23) and (24) the Corporation determines by regulation, to whether the master agreement provides of title 11, United States Code, are amended resolution, or order to include any such for an agreement or transaction that is not to read as follows: agreement within the meaning of such term; a commodity contract under this clause, ex- ‘‘(23) ‘foreign proceeding’ means a collec- ‘‘(III) means any option entered into on a cept that the master agreement shall be con- tive judicial or administrative proceeding in national securities exchange relating to for- sidered to be a commodity contract under a foreign country, including an interim pro- eign currencies; this clause only with respect to each agree- ceeding, under a law relating to insolvency ‘‘(IV) means the guarantee by or to any se- ment or transaction under the master agree- or adjustment of debt in which proceeding curities clearing agency of any settlement of ment that is referred to in subclause (I), (II), the assets and affairs of the debtor are sub- cash, securities, certificates of deposit, (III), (IV), (V), (VI), (VII), or (VIII); or ject to control or supervision by a foreign mortgage loans or interests therein, group or ‘‘(X) a security agreement or arrangement court, for the purpose of reorganization or index of securities, certificates of deposit, or or other credit enhancement related to any liquidation; mortgage loans or interests therein (includ- agreement or transaction referred to in this ‘‘(24) ‘foreign representative’ means a per- ing any interest therein or based on the clause.’’. son or body, including a person or body ap- value thereof) or option on any of the fore- (d) DEFINITION OF FORWARD CONTRACT.— pointed on an interim basis, authorized in a going, including any option to purchase or Section 11(e)(8)(D)(iv) of the Federal Deposit foreign proceeding to administer the reorga- sell any such security, certificate of deposit, Insurance Act (12 U.S.C. 1821(e)(8)(D)(iv)) is nization or the liquidation of the debtor’s as- loan, interest, group or index or option; amended to read as follows: sets or affairs or to act as a representative of ‘‘(V) means any margin loan; ‘‘(iv) FORWARD CONTRACT.—The term ‘for- the foreign proceeding;’’. ‘‘(VI) means any other agreement or trans- ward contract’ means— action that is similar to any agreement or ‘‘(I) a contract (other than a commodity (c) AMENDMENTS TO TITLE 28, UNITED transaction referred to in this clause; contract) for the purchase, sale, or transfer STATES CODE.— ‘‘(VII) means any combination of the of a commodity or any similar good, article, (1) PROCEDURES.—Section 157(b)(2) of title agreements or transactions referred to in service, right, or interest which is presently 28, United States Code, is amended— this clause; or in the future becomes the subject of deal- (A) in subparagraph (N), by striking ‘‘and’’ ‘‘(VIII) means any option to enter into any ing in the forward contract trade, or product at the end; agreement or transaction referred to in this or byproduct thereof, with a maturity date (B) in subparagraph (O), by striking the pe- clause; more than 2 days after the date the contract riod at the end and inserting ‘‘; and’’; and ‘‘(IX) means a master agreement that pro- is entered into, including, but not limited to, (C) by adding at the end the following: vides for an agreement or transaction re- a repurchase agreement, reverse repurchase ‘‘(P) recognition of foreign proceedings and ferred to in subclause (I), (III), (IV), (V), (VI), agreement, consignment, lease, swap, hedge other matters under chapter 15 of title 11.’’. (VII), or (VIII), together with all supple- transaction, deposit, loan, option, allocated (2) BANKRUPTCY CASES AND PROCEEDINGS.— ments to any such master agreement, with- transaction, unallocated transaction, or any Section 1334(c) of title 28, United States out regard to whether the master agreement other similar agreement; Code, is amended by striking ‘‘Nothing in’’ provides for an agreement or transaction ‘‘(II) any combination of agreements or and inserting ‘‘Except with respect to a case that is not a securities contract under this transactions referred to in subclauses (I) and under chapter 15 of title 11, nothing in’’. clause, except that the master agreement (III); (3) DUTIES OF TRUSTEES.—Section 586(a)(3) shall be considered to be a securities con- ‘‘(III) any option to enter into any agree- of title 28, United States Code, is amended by tract under this clause only with respect to ment or transaction referred to in subclause striking ‘‘or 13’’ and inserting ‘‘13, or 15,’’ each agreement or transaction under the (I) or (II); after ‘‘chapter’’. master agreement that is referred to in sub- ‘‘(IV) a master agreement that provides for (4) Section 305(a)(2) of title 11, United clause (I), (III), (IV), (V), (VI), (VII), or an agreement or transaction referred to in States Code, is amended to read: (VIII); and subclauses (I), (II), or (III), together with all ‘‘(2)(A) a petition under section 1515 of this ‘‘(X) means any security agreement or ar- supplements to any such master agreement, title for recognition of a foreign proceeding rangement or other credit enhancement re- without regard to whether the master agree- has been granted; and lated to any agreement or transaction re- ment provides for an agreement or trans- ‘‘(B) the purposes of chapter 15 of this title ferred to in this clause.’’. action that is not a forward contract under would be best served by such dismissal or (c) DEFINITION OF COMMODITY CONTRACT.— this clause, except that the master agree- suspension.’’. Section 11(e)(8)(D)(iii) of the Federal Deposit ment shall be considered to be a forward con- (5) Section 508 of title 11, United States Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is tract under this clause only with respect to Code, is amended by striking subsection (a) amended to read as follows: each agreement or transaction under the and by striking out the letter ‘‘(b)’’ at the ‘‘(iii) COMMODITY CONTRACT.—The term master agreement that is referred to in sub- beginning of the second paragraph. ‘commodity contract’ means— clause (I), (II), or (III); or

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00119 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8612 CONGRESSIONAL RECORD—HOUSE May 5, 1999 ‘‘(V) a security agreement or arrangement ment, including a rate floor, rate cap, rate inserting ‘‘such person has to cause the ter- or other credit enhancement related to any collar, cross-currency rate swap, and basis mination, liquidation, or acceleration’’; agreement or transaction referred to in sub- swap; a spot, same day-tomorrow, tomorrow- (3) by amending subparagraph (A)(ii) to clause (I), (II), (III), or (IV).’’. next, forward, or other foreign exchange or read as follows: (e) DEFINITION OF REPURCHASE AGREE- precious metals agreement; a currency swap, ‘‘(ii) any right under any security agree- MENT.—Section 11(e)(8)(D)(v) of the Federal option, future, or forward agreement; an eq- ment or arrangement or other credit en- Deposit Insurance Act (12 U.S.C. uity index or equity swap, option, future, or hancement related to 1 or more qualified fi- 1821(e)(8)(D)(v)) is amended to read as fol- forward agreement; a debt index or debt nancial contracts described in clause (i);’’; lows: swap, option, future, or forward agreement; a and ‘‘(v) REPURCHASE AGREEMENT.—The term credit spread or credit swap, option, future, (4) by amending subparagraph (E)(ii) to ‘repurchase agreement’ (which definition or forward agreement; a commodity index or read as follows: also applies to a reverse repurchase agree- commodity swap, option, future, or forward ‘‘(ii) any right under any security agree- ment)— agreement; ment or arrangement or other credit en- ‘‘(I) mean an agreement, including related ‘‘(II) any agreement or transaction similar hancement related to 1 or more qualified fi- terms, which provides for the transfer of 1 or to any other agreement or transaction re- nancial contracts described in clause (i);’’. more certificates of deposit, mortgage-re- ferred to in this clause that is presently, or (i) AVOIDANCE OF TRANSFERS.—Section lated securities (as such term is defined in in the future becomes, regularly entered into 11(e)(8)(C)(i) of the Federal Deposit Insurance the Securities Exchange Act of 1934), mort- in the swap market (including terms and Act (12 U.S.C. 1821(e)(8)(C)(i)) is amended by gage loans, interests in mortgage-related se- conditions incorporated by reference in such inserting ‘‘section 5242 of the Revised Stat- curities or mortgage loans, eligible bankers’ agreement) and that is a forward, swap, fu- utes of the United States (12 U.S.C. 91) or acceptances, qualified foreign government ture, or option on 1 or more rates, cur- any other Federal or State law relating to securities or securities that are direct obli- rencies, commodities, equity securities or the avoidance of preferential or fraudulent gations of, or that are fully guaranteed by, other equity instruments, debt securities or transfers,’’ before ‘‘the Corporation’’. the United States or any agency of the other debt instruments, or economic indices SEC. 1002. AUTHORITY OF THE CORPORATION United States against the transfer of funds or measures of economic risk or value; WITH RESPECT TO FAILED AND by the transferee of such certificates of de- ‘‘(III) any combination of agreements or FAILING INSTITUTIONS. (a) IN GENERAL.—Section 11(e)(8) of the posit, eligible bankers’ acceptances, securi- transactions referred to in this clause; Federal Deposit Insurance Act (12 U.S.C. ties, loans, or interests with a simultaneous ‘‘(IV) any option to enter into any agree- 1821(e)(8)) is amended— agreement by such transferee to transfer to ment or transaction referred to in this (1) in subparagraph (E), by striking ‘‘other the transferor thereof certificates of deposit, clause; than paragraph (12) of this subsection, sub- eligible bankers’ acceptances, securities, ‘‘(V) a master agreement that provides for section (d)(9)’’ and inserting ‘‘other than sub- loans, or interests as described above, at a an agreement or transaction referred to in sections (d)(9) and (e)(10)’’; and date certain not later than 1 year after such subclause (I), (II), (III), or (IV), together with (2) by adding at the end the following new transfers or on demand, against the transfer all supplements to any such master agree- subparagraphs: of funds, or any other similar agreement; ment, without regard to whether the master ‘‘(F) CLARIFICATION.—No provision of law ‘‘(II) does not include any repurchase obli- agreement contains an agreement or trans- shall be construed as limiting the right or gation under a participation in a commercial action that is not a swap agreement under power of the Corporation, or authorizing any mortgage loan unless the Corporation deter- this clause, except that the master agree- court or agency to limit or delay, in any mines by regulation, resolution, or order to ment shall be considered to be a swap agree- manner, the right or power of the Corpora- include any such participation within the ment under this clause only with respect to tion to transfer any qualified financial con- meaning of such term; each agreement or transaction under the tract in accordance with paragraphs (9) and ‘‘(III) means any combination of agree- master agreement that is referred to in sub- (10) of this subsection or to disaffirm or repu- ments or transactions referred to in sub- clause (I), (II), (III), or (IV); and diate any such contract in accordance with clauses (I) and (IV); ‘‘(VI) any security agreement or arrange- subsection (e)(1) of this section. ‘‘(IV) means any option to enter into any ment or other credit enhancement related to ‘‘(G) WALKAWAY CLAUSES NOT EFFECTIVE.— agreement or transaction referred to in sub- any agreements or transactions referred to ‘‘(i) IN GENERAL.—Notwithstanding the pro- clause (I) or (III); in subparagraph (I), (II), (III), or (IV). visions of subparagraphs (A) and (E), and sec- ‘‘(V) means a master agreement that pro- Such term is applicable for purposes of this tions 403 and 404 of the Federal Deposit In- vides for an agreement or transaction re- title only and shall not be construed or ap- surance Corporation Improvement Act of ferred to in subclause (I), (III), or (IV), to- plied so as to challenge or affect the charac- 1991, no walkaway clause shall be enforceable gether with all supplements to any such terization, definition, or treatment of any in a qualified financial contract of an in- master agreement, without regard to wheth- swap agreement under any other statute, sured depository institution in default. er the master agreement provides for an regulation, or rule, including the Securities ‘‘(ii) WALKAWAY CLAUSE DEFINED.—For pur- agreement or transaction that is not a repur- Act of 1933, the Securities Exchange Act of poses of this subparagraph, the term chase agreement under this clause, except 1934, the Public Utility Holding Company ‘walkaway clause’ means a provision in a that the master agreement shall be consid- Act of 1935, the Trust Indenture Act of 1939, qualified financial contract that, after cal- ered to be a repurchase agreement under this the Investment Company Act of 1940, the In- culation of a value of a party’s position or an subclause only with respect to each agree- vestment Advisers Act of 1940, the Securities amount due to or from 1 of the parties in ac- ment or transaction under the master agree- Investor Protection Act of 1970, the Com- cordance with its terms upon termination, ment that is referred to in subclause (I), modity Exchange Act, and the regulations liquidation, or acceleration of the qualified (III), or (IV); and promulgated by the Securities and Exchange financial contract, either does not create a ‘‘(VI) means a security agreement or ar- Commission or the Commodity Futures payment obligation of a party or extin- rangement or other credit enhancement re- Trading Commission.’’. guishes a payment obligation of a party in lated to any agreement or transaction re- (g) DEFINITION OF TRANSFER.—Section whole or in part solely because of such par- ferred to in subclause (I), (III), (IV), or (V). 11(e)(8)(D)(viii) of the Federal Deposit Insur- ty’s status as a nondefaulting party.’’. For purposes of this clause, the term ‘quali- ance Act (12 U.S.C. 1821(e)(8)(D)(viii)) is (b) TECHNICAL AND CONFORMING AMEND- fied foreign government security’ means a amended to read as follows: MENT.—Section 11(e)(12)(A) of the Federal security that is a direct obligation of, or ‘‘(viii) TRANSFER.—The term ‘transfer’ Deposit Insurance Act (12 U.S.C. that is fully guaranteed by, the central gov- means every mode, direct or indirect, abso- 1821(e)(12)(A)) is amended by inserting ‘‘or ernment of a member of the Organization for lute or conditional, voluntary or involun- the exercise of rights or powers’’ after ‘‘the Economic Cooperation and Development (as tary, of disposing of or parting with property appointment’’. determined by regulation or order adopted or with an interest in property, including re- SEC. 1003. AMENDMENTS RELATING TO TRANS- by the appropriate Federal banking author- tention of title as a security interest and FERS OF QUALIFIED FINANCIAL ity).’’. foreclosure of the depository institutions’s CONTRACTS. (f) DEFINITION OF SWAP AGREEMENT.—Sec- equity of redemption.’’. (a) TRANSFERS OF QUALIFIED FINANCIAL tion 11(e)(8)(D)(iv) of the Federal Deposit In- (h) TREATMENT OF QUALIFIED FINANCIAL CONTRACTS TO FINANCIAL INSTITUTIONS.—Sec- surance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is CONTRACTS.—Section 11(e)(8) of the Federal tion 11(e)(9) of the Federal Deposit Insurance amended to read as follows: Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is Act (12 U.S.C. 1821(e)(9)) is amended to read ‘‘(vi) SWAP AGREEMENT.—The term ‘swap amended— as follows: agreement’ means— (1) in subparagraph (A), by striking ‘‘para- ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON- ‘‘(I) any agreement, including the terms graph (10)’’ and inserting ‘‘paragraphs (9) and TRACTS.— and conditions incorporated by reference in (10)’’; ‘‘(A) IN GENERAL.—In making any transfer any such agreement, which is an interest (2) in subparagraph (A)(i), by striking ‘‘to of assets or liabilities of a depository institu- rate swap, option, future, or forward agree- cause the termination or liquidation’’ and tion in default which includes any qualified

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00120 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8613 financial contract, the conservator or re- day following such transfer, in the case of a cising the rights of disaffirmance or repudi- ceiver for such depository institution shall conservatorship.’’. ation of a conservator or receiver with re- either— (c) RIGHTS AGAINST RECEIVER AND TREAT- spect to any qualified financial contract to ‘‘(i) transfer to 1 financial institution, MENT OF BRIDGE BANKS.—Section 11(e)(10) of which an insured depository institution is a other than a financial institution for which the Federal Deposit Insurance Act (12 U.S.C. party, the conservator or receiver for such a conservator, receiver, trustee in bank- 1821(e)(10)) is further amended— institution shall either— ruptcy, or other legal custodian has been ap- (1) by redesignating subparagraph (B) as ‘‘(A) disaffirm or repudiate all qualified fi- pointed or which is otherwise the subject of subparagraph (D); and nancial contracts between— a bankruptcy or insolvency proceeding— (2) by inserting after subparagraph (A) the ‘‘(i) any person or any affiliate of such per- ‘‘(I) all qualified financial contracts be- following new subparagraphs: son; and tween any person or any affiliate of such per- ‘‘(B) CERTAIN RIGHTS NOT ENFORCEABLE.— ‘‘(ii) the depository institution in default; son and the depository institution in default; ‘‘(i) RECEIVERSHIP.—A person who is a or ‘‘(II) all claims of such person or any affil- party to a qualified financial contract with ‘‘(B) disaffirm or repudiate none of the iate of such person against such depository an insured depository institution may not qualified financial contracts referred to in institution under any such contract (other exercise any right such person has to termi- subparagraph (A) (with respect to such per- than any claim which, under the terms of nate, liquidate, or net such contract under son or any affiliate of such person).’’. paragraph (8)(A) or section 403 or 404 of the any such contract, is subordinated to the SEC. 1005. CLARIFYING AMENDMENT RELATING claims of general unsecured creditors of such Federal Deposit Insurance Corporation Im- TO MASTER AGREEMENTS. institution); provement Act of 1991 solely by reason of or Section 11(e)(8)(D)(vii) of the Federal De- ‘‘(III) all claims of such depository institu- incidental to the appointment of a receiver posit Insurance Act (12 U.S.C. tion against such person or any affiliate of for the depository institution (or the insol- 1821(e)(8)(D)(vii)) is amended to read as fol- vency or financial condition of the deposi- such person under any such contract; and lows: tory institution for which the receiver has ‘‘(IV) all property securing or any other ‘‘(vii) TREATMENT OF MASTER AGREEMENT been appointed)— credit enhancement for any contract de- AS 1 AGREEMENT.—Any master agreement for ‘‘(I) until 5:00 p.m. (eastern time) on the scribed in subclause (I) or any claim de- any contract or agreement described in any business day following the date of the ap- scribed in subclause (II) or (III) under any preceding clause of this subparagraph (or pointment of the receiver; or such contract; or any master agreement for such master ‘‘(II) after the person has received notice ‘‘(ii) transfer none of the qualified finan- agreement or agreements), together with all that the contract has been transferred pursu- cial contracts, claims, property or other supplements to such master agreement, shall ant to paragraph (9)(A). credit enhancement referred to in clause (i) be treated as a single agreement and a single ‘‘(ii) CONSERVATORSHIP.—A person who is a (with respect to such person and any affiliate party to a qualified financial contract with qualified financial contract. If a master of such person). an insured depository institution may not agreement contains provisions relating to ‘‘(B) TRANSFER TO FOREIGN BANK, FOREIGN exercise any right such person has to termi- agreements or transactions that are not FINANCIAL INSTITUTION, OR BRANCH OR AGENCY nate, liquidate, or net such contract under themselves qualified financial contracts, the OF A FOREIGN BANK OR FINANCIAL INSTITU- paragraph (8)(E) or sections 403 or 404 of the master agreement shall be deemed to be a TION.—In transferring any qualified financial Federal Deposit Insurance Corporation Im- qualified financial contract only with re- contracts and related claims and property provement Act of 1991, solely by reason of or spect to those transactions that are them- pursuant to subparagraph (A)(i), the conser- incidental to the appointment of a conser- selves qualified financial contracts.’’. vator or receiver for such depository institu- vator for the depository institution (or the SEC. 1006. FEDERAL DEPOSIT INSURANCE COR- tion shall not make such transfer to a for- insolvency or financial condition of the de- PORATION IMPROVEMENT ACT OF eign bank, financial institution organized pository institution for which the conser- 1991. under the laws of a foreign country, or a vator has been appointed). (a) DEFINITIONS.—Section 402 of the Fed- branch or agency of a foreign bank or finan- eral Deposit Insurance Corporation Improve- ‘‘(iii) NOTICE.—For purposes of this sub- cial institution unless, under the law appli- section, the Corporation as receiver or con- ment Act of 1991 (12 U.S.C. 4402) is amended— cable to such bank, financial institution, servator of an insured depository institution (1) in paragraph (6)— branch or agency, to the qualified financial shall be deemed to have notified a person (A) by redesignating subparagraphs (B) contracts, and to any netting contract, any who is a party to a qualified financial con- through (D) as subparagraphs (C) through security agreement or arrangement or other tract with such depository institution if the (E), respectively; credit enhancement related to 1 or more Corporation has taken steps reasonably cal- (B) by inserting after subparagraph (A) the qualified financial contracts, the contractual culated to provide notice to such person by following new subparagraph: rights of the parties to such qualified finan- the time specified in subparagraph (A) of this ‘‘(B) an uninsured national bank or an un- cial contracts, netting contracts, security subsection. insured State bank that is a member of the agreements or arrangements, or other credit Federal Reserve System if the national bank ‘‘(C) TREATMENT OF BRIDGE BANKS.—The enhancements are enforceable substantially following institutions shall not be considered or State member bank is not eligible to to the same extent as permitted under this a financial institution for which a conser- make application to become an insured bank section. vator, receiver, trustee in bankruptcy, or under section 5 of the Federal Deposit Insur- ‘‘(C) TRANSFER OF CONTRACTS SUBJECT TO other legal custodian has been appointed or ance Act;’’; and THE RULES OF A CLEARING ORGANIZATION.—In which is otherwise the subject of a bank- (C) by amending subparagraph (C) (as re- the event that a conservator or receiver ruptcy or insolvency proceeding for purposes designated) to read as follows: transfers any qualified financial contract of subsection (e)(9)— ‘‘(C) a branch or agency of a foreign bank, and related claims, property and credit en- ‘‘(i) a bridge bank; or a foreign bank and any branch or agency of hancements pursuant to subparagraph (A)(i) ‘‘(ii) a depository institution organized by the foreign bank, or the foreign bank that and such contract is subject to the rules of a the Corporation, for which a conservator is established the branch or agency, as those clearing organization, the clearing organiza- appointed either— terms are defined in section 1(b) of the Inter- tion shall not be required to accept the ‘‘(I) immediately upon the organization of national Banking Act of 1978;’’; transferee as a member by virtue of the the institution; or (2) in paragraph (11), by adding before the transfer. ‘‘(II) at the time of a purchase and assump- period ‘‘and any other clearing organization ‘‘(D) DEFINITION.—For purposes of this sec- tion transaction between such institution with which such clearing organization has a tion, the term ‘financial institution’ means a and the Corporation as receiver for a deposi- netting contract’’; broker or dealer, a depository institution, a tory institution in default.’’. (3) by amending paragraph (14)(A)(i) to futures commission merchant, or any other read as follows: SEC. 1004. AMENDMENTS RELATING TO institution as determined by the Corporation DISAFFIRMANCE OR REPUDIATION ‘‘(i) means a contract or agreement be- by regulation to be a financial institution.’’. OF QUALIFIED FINANCIAL CON- tween 2 or more financial institutions, clear- (b) NOTICE TO QUALIFIED FINANCIAL CON- TRACTS. ing organizations, or members that provides TRACT COUNTERPARTIES.—Section 11(e)(10)(A) Section 11(e) of the Federal Deposit Insur- for netting present or future payment obliga- of the Federal Deposit Insurance Act (12 ance Act (12 U.S.C. 1821(e)) is further amend- tions or payment entitlements (including U.S.C. 1821(e)(10)(A)) is amended by amend- ed— liquidation or closeout values relating to ing the flush material following clause (ii) to (1) by redesignating paragraphs (11) such obligations or entitlements) among the read as follows: ‘‘the conservator or receiver through (15) as paragraphs (12) through (16), parties to the agreement; and’’; and shall notify any person who is a party to any respectively; and (4) by adding at the end the following new such contract of such transfer by 5:00 p.m. (2) by inserting after paragraph (10) the fol- paragraph: (eastern time) on the business day following lowing new paragraph: ‘‘(15) PAYMENT.—The term ‘payment’ the date of the appointment of the receiver, ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF means a payment of United States dollars, in the case of a receivership, or the business QUALIFIED FINANCIAL CONTRACTS.—In exer- another currency, or a composite currency,

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00121 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8614 CONGRESSIONAL RECORD—HOUSE May 5, 1999 and a noncash delivery, including a payment (1) by redesignating section 407 as section ment, without regard to whether such mas- or delivery to liquidate an unmatured obli- 408; and ter agreement provides for an agreement or gation.’’. (2) by adding after section 406 the following transaction that is not a forward contract (b) ENFORCEABILITY OF BILATERAL NETTING new section: under this paragraph, except that such mas- CONTRACTS.—Section 403 of the Federal De- ‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UN- ter agreement shall be considered to be a for- posit Insurance Corporation Improvement INSURED NATIONAL BANKS AND UN- ward contract under this paragraph only Act of 1991 (12 U.S.C. 4403) is amended— INSURED FEDERAL BRANCHES AND with respect to each agreement or trans- (1) by amending subsection (a) to read as AGENCIES. action under such master agreement that is follows: ‘‘(a) IN GENERAL.—Notwithstanding any referred to in subparagraph (A), (B) or (C); or ‘‘(a) GENERAL RULE.—Notwithstanding any other provision of law, paragraphs (8), (9), ‘‘(E) a security agreement or arrangement, other provision of State or Federal law (10), and (11) of section 11(e) of the Federal or other credit enhancement related to any Deposit Insurance Act shall apply to an un- (other than paragraphs (8)(E), (8)(F), and agreement or transaction referred to in sub- insured national bank or uninsured Federal (10)(B) of section 11(e) of the Federal Deposit paragraph (A), (B), (C), or (D), but not to ex- branch or Federal agency except— Insurance Act or any order authorized under ceed the actual value of such contract, op- ‘‘(1) any reference to the ‘Corporation as section 5(b)(2) of the Securities Investor Pro- tion, agreement, or transaction on the date receiver’ or ‘the receiver or the Corporation’ tection Act of 1970, the covered contractual of the filing of the petition;’’; payment obligations and the covered con- shall refer to the receiver of an uninsured national bank or uninsured Federal branch (B) in paragraph (46), by striking ‘‘on any tractual payment entitlements between any day during the period beginning 90 days be- 2 financial institutions shall be netted in ac- or Federal agency appointed by the Comp- fore the date of’’ and replacing it with ‘‘at cordance with, and subject to the conditions troller of the Currency; any time before’’; of, the terms of any applicable netting con- ‘‘(2) any reference to the ‘Corporation’ (C) by amending paragraph (47) to read as tract (except as provided in section 561(b)(2) (other than in section 11(e)(8)(D) of such follows: of title 11).’’; and Act), the ‘Corporation, whether acting as ‘‘(47) ‘repurchase agreement’ (which defini- (2) by adding at the end the following new such or as conservator or receiver’, a ‘re- subsection: ceiver’, or a ‘conservator’ shall refer to the tion also applies to a reverse repurchase agreement) means— ‘‘(f) ENFORCEABILITY OF SECURITY AGREE- receiver or conservator of an uninsured na- ‘‘(i) an agreement, including related terms, MENTS.—The provisions of any security tional bank or uninsured Federal branch or agreement or arrangement or other credit Federal agency appointed by the Comp- which provides for the transfer of 1 or more enhancement related to 1 or more netting troller of the Currency; and certificates of deposit, mortgage-related se- contracts between any 2 financial institu- ‘‘(3) any reference to an ‘insured depository curities (as defined in the Securities Ex- tions shall be enforceable in accordance with institution’ or ‘depository institution’ shall change Act of 1934), mortgage loans, inter- their terms (except as provided in section refer to an uninsured national bank or an un- ests in mortgage-related securities or mort- 561(b)(2) of title 11) and shall not be stayed, insured Federal branch or Federal agency. gage loans, eligible bankers’ acceptances, avoided, or otherwise limited by any State ‘‘(b) LIABILITY.—The liability of a receiver qualified foreign government securities; or or Federal law (other than paragraphs (8)(E), or conservator of an uninsured national bank securities that are direct obligations of, or (8)(F), and (10)(B) of section 11(e) of the Fed- or uninsured Federal branch or agency shall that are fully guaranteed by, the United eral Deposit Insurance Act and section be determined in the same manner and sub- States or any agency of the United States 5(b)(2) of the Securities Investor Protection ject to the same limitations that apply to re- against the transfer of funds by the trans- Act of 1970).’’. ceivers and conservators of insured deposi- feree of such certificates of deposit, eligible (c) ENFORCEABILITY OF CLEARING ORGANIZA- tory institutions under section 11(e) of the bankers’ acceptances, securities, loans, or in- TION NETTING CONTRACTS.—Section 404 of the Federal Deposit Insurance Act. terests; with a simultaneous agreement by Federal Deposit Insurance Corporation Im- ‘‘(c) REGULATORY AUTHORITY.— such transferee to transfer to the transferor provement Act of 1991 (12 U.S.C. 4404) is ‘‘(1) IN GENERAL.—The Comptroller of the thereof certificates of deposit, eligible bank- amended— Currency, in consultation with the Federal ers’ acceptance, securities, loans, or inter- (1) by amending subsection (a) to read as Deposit Insurance Corporation, may promul- ests of the kind described above, at a date follows: gate regulations to implement this section. certain not later than 1 year after such ‘‘(a) GENERAL RULE.—Notwithstanding any ‘‘(2) SPECIFIC REQUIREMENT.—In promul- transfer or on demand, against the transfer other provision of State or Federal law gating regulations to implement this sec- of funds; (other than paragraphs (8)(E), (8)(F), and tion, the Comptroller of the Currency shall ‘‘(ii) any combination of agreements or (10)(B) of section 11(e) of the Federal Deposit ensure that the regulations generally are transactions referred to in clauses (i) and Insurance Act and any order authorized consistent with the regulations and policies (iii); of the Federal Deposit Insurance Corporation under section 5(b)(2) of the Securities Inves- ‘‘(iii) an option to enter into an agreement adopted pursuant to the Federal Deposit In- tor Protection Act of 1970, the covered con- or transaction referred to in clause (i) or (ii); surance Act. tractual payment obligations and the cov- ‘‘(iv) a master agreement that provides for ‘‘(d) DEFINITIONS.—For purposes of this sec- ered contractual payment entitlements of a an agreement or transaction referred to in member of a clearing organization to and tion, the terms ‘Federal branch’, ‘Federal agency’, and ‘foreign bank’ have the same clause (i), (ii), or (iii), together with all sup- from all other members of a clearing organi- plements to any such master agreement, zation shall be netted in accordance with and meaning as in section 1(b) of the Inter- national Banking Act.’’. without regard to whether such master subject to the conditions of any applicable agreement provides for an agreement or netting contract (except as provided in sec- SEC. 1007. BANKRUPTCY CODE AMENDMENTS. transaction that is not a repurchase agree- tion 561(b)(2) of title 11, United States (a) DEFINITIONS OF FORWARD CONTRACT, RE- ment under this paragraph, except that such Code).’’; and PURCHASE AGREEMENT, SECURITIES CLEARING master agreement shall be considered to be a (2) by adding at the end the following new AGENCY, SWAP AGREEMENT, COMMODITY CON- repurchase agreement under this paragraph subsection: TRACT, AND SECURITIES CONTRACT.—Title 11, only with respect to each agreement or ‘‘(h) ENFORCEABILITY OF SECURITY AGREE- United States Code, is amended— transaction under the master agreement MENTS.—The provisions of any security (1) in section 101— that is referred to in clause (i), (ii), or (iii); agreement or arrangement or other credit (A) in paragraph (25)— or enhancement related to 1 or more netting (i) by striking ‘‘means a contract’’ and in- ‘‘(v) a security agreement or arrangement contracts between any 2 members of a clear- serting ‘‘means— ing organization shall be enforceable in ac- ‘‘(A) a contract’’; or other credit enhancement related to any cordance with their terms (except as pro- (ii) by striking ‘‘, or any combination agreement or transaction referred to in vided in section 561(b)(2) of title 11, United thereof or option thereon;’’ and inserting ‘‘, clause (i), (ii), (iii), or (iv), but not to exceed States Code) and shall not be stayed, avoid- or any other similar agreement;’’; and the actual value of such contract on the date ed, or otherwise limited by any State or Fed- (iii) by adding at the end the following: of the filing of the petition; and eral law other than paragraphs (8)(E), (8)(F), ‘‘(B) any combination of agreements or ‘‘(B) does not include a repurchase obliga- and (10)(B) of section 11(e) of the Federal De- transactions referred to in subparagraphs (A) tion under a participation in a commercial posit Insurance Act and section 5(b)(2) of the and (C); mortgage loan; Securities Investor Protection Act of 1970.’’. ‘‘(C) any option to enter into an agreement and, for purposes of this paragraph, the term (d) ENFORCEABILITY OF CONTRACTS WITH or transaction referred to in subparagraph ‘qualified foreign government security’ UNINSURED NATIONAL BANKS AND UNINSURED (A) or (B); means a security that is a direct obligation FEDERAL BRANCHES AND AGENCIES.—The Fed- ‘‘(D) a master agreement that provides for of, or that is fully guaranteed by, the central eral Deposit Insurance Corporation Improve- an agreement or transaction referred to in government of a member of the Organization ment Act of 1991 (12 U.S.C. 4401 et seq.) is subparagraph (A), (B), or (C), together with for Economic Cooperation and Develop- amended— all supplements to any such master agree- ment;’’;

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(D) in paragraph (48) by inserting ‘‘or ex- cates of deposit or mortgage loans or inter- (b) DEFINITIONS OF FINANCIAL INSTITUTION, empt from such registration under such sec- ests therein (including an interest therein or FINANCIAL PARTICIPANT, AND FORWARD CON- tion pursuant to an order of the Securities based on the value thereof), or option on any TRACT MERCHANT.—Section 101 of title 11, and Exchange Commission’’ after ‘‘1934’’; and of the foregoing, including an option to pur- United States Code, is amended— (E) by amending paragraph (53B) to read as chase or sell any such security certificate of (1) by amending paragraph (22) to read as follows: deposit, loan, interest, group or index or op- follows: ‘‘(53B) ‘swap agreement’ tion; ‘‘(22) ‘financial institution’ means— ‘‘(A) means— ‘‘(ii) any option entered into on a national ‘‘(A) a Federal reserve bank, or an entity ‘‘(i) any agreement, including the terms securities exchange relating to foreign cur- (domestic or foreign) that is a commercial or and conditions incorporated by reference in rencies; savings bank, industrial savings bank, sav- such agreement, which is an interest rate ‘‘(iii) the guarantee by or to any securities ings and loan association, trust company, or swap, option, future, or forward agreement, clearing agency of a settlement of cash, se- receiver or conservator for such entity and, including a rate floor, rate cap, rate collar, curities, certificates of deposit mortgage when any such Federal reserve bank, re- cross-currency rate swap, and basis swap; a loans or interests therein, group or index of ceiver, conservator or entity is acting as spot, same day-tomorrow, tomorrow-next, securities, or mortgage loans or interests agent or custodian for a customer in connec- forward, or other foreign exchange or pre- therein (including any interest therein or tion with a securities contract, as defined in cious metals agreement; a currency swap, based on the value thereof), or option on any section 741 of this title, such customer; or option, future, or forward agreement; an eq- of the foregoing, including an option to pur- ‘‘(B) in connection with a securities con- uity index or an equity swap, option, future, chase or sell any such security certificate of tract, as defined in section 741 of this title, or forward agreement; a debt index or a debt deposit, loan, interest, group or index or op- an investment company registered under the swap, option, future, or forward agreement; a tion; Investment Company Act of 1940;’’; credit spread or a credit swap, option, future, ‘‘(iv) any margin loan; (2) by inserting after paragraph (22) the fol- or forward agreement; or a commodity index ‘‘(v) any other agreement or transaction lowing: or a commodity swap, option, future, or for- that is similar to an agreement or trans- ‘‘(22A) ‘financial participant’ means an en- ward agreement; action referred to in this paragraph; tity that, at the time it enters into a securi- ‘‘(ii) any agreement or transaction similar ‘‘(vi) any combination of the agreements or ties contract, commodity contract or for- to any other agreement or transaction re- transactions referred to in this paragraph; ward contract, or at the time of the filing of ferred to in this paragraph that— ‘‘(vii) any option to enter into any agree- the petition, has 1 or more agreements or ‘‘(I) is presently, or in the future becomes, ment or transaction referred to in this para- transactions that is described in section regularly entered into in the swap market graph; 561(a)(2) with the debtor or any other entity (including terms and conditions incorporated ‘‘(viii) a master agreement that provides (other than an affiliate) of a total gross dol- by reference therein); and for an agreement or transaction referred to lar value of at least $1,000,000,000 in notional ‘‘(II) is a forward, swap, future, or option in clause (i), (ii), (iii), (iv), (v), (vi), or (vii), or actual principal amount outstanding on on 1 or more rates, currencies commodities, together with all supplements to any such any day during the previous 15-month period, equity securities, or other equity instru- master agreement, without regard to wheth- or has gross mark-to-market positions of at ments, debt securities or other debt instru- er the master agreement provides for an least $100,000,000 (aggregated across agreement or transaction that is not a secu- ments, or on an economic index or measure counterparties) in 1 or more such agreement rities contract under this paragraph, except of economic risk or value; or transaction with the debtor or any other that such master agreement shall be consid- ‘‘(iii) any combination of agreements or entity (other than an affiliate) on any day ered to be a securities contract under this transactions referred to in this paragraph; during the previous 15-month period;’’; and paragraph only with respect to each agree- ‘‘(iv) any option to enter into an agree- (3) by amending paragraph (26) to read as ment or transaction under such master ment or transaction referred to in this para- follows: agreement that is referred to in clause (i), graph; ‘‘(26) ‘forward contract merchant’ means a (ii), (iii), (iv), (v), (vi), or (vii); or ‘‘(v) a master agreement that provides for Federal reserve bank, or an entity whose ‘‘(ix) any security agreement or arrange- an agreement or transaction referred to in business consists in whole or in part of en- ment, or other credit enhancement, related clause (i), (ii), (iii), or (iv), together with all to any agreement or transaction referred to tering into forward contracts as or with mer- supplements to any such master agreement, in this paragraph, but not to exceed the ac- chants or in a commodity, as defined or in and without regard to whether the master tual value of such contract on the date of the section 761 of this title, or any similar good, agreement contains an agreement or trans- filing of the petition; and article, service, right, or interest which is action that is not a swap agreement under ‘‘(B) does not include any purchase, sale, or presently or in the future becomes the sub- this paragraph, except that the master repurchase obligation under a participation ject of dealing or in the forward contract agreement shall be considered to be a swap in a commercial mortgage loan.’’; and trade;’’. agreement under this paragraph only with (3) in section 761(4)— (c) DEFINITION OF MASTER NETTING AGREE- respect to each agreement or transaction (A) by striking ‘‘or’’ at the end of subpara- MENT AND MASTER NETTING AGREEMENT PAR- under the master agreement that is referred graph (D); and TICIPANT.—Section 101 of title 11, United to in clause (i), (ii), (iii), or (iv); or (B) by adding at the end the following: States Code, is amended by inserting after ‘‘(B) any security agreement or arrange- ‘‘(F) any other agreement or transaction paragraph (38) the following new paragraphs: ment or other credit enhancement related to that is similar to an agreement or trans- ‘‘(38A) ‘master netting agreement’ means any agreements or transactions referred to action referred to in this paragraph; an agreement providing for the exercise of in subparagraph (A); and ‘‘(G) any combination of the agreements or rights, including rights of netting, setoff, liq- ‘‘(C) is applicable for purposes of this title transactions referred to in this paragraph; uidation, termination, acceleration, or close- only and shall not be construed or applied so ‘‘(H) any option to enter into an agreement out, under or in connection with 1 or more as to challenge or affect the characteriza- or transaction referred to in this paragraph; contracts that are described in any 1 or more tion, definition, or treatment of any swap ‘‘(I) a master agreement that provides for of paragraphs (1) through (5) of section agreement under any other statute, regula- an agreement or transaction referred to in 561(a), or any security agreement or arrange- tion, or rule, including the Securities Act of subparagraph (A), (B), (C), (D), (E), (F), (G), ment or other credit enhancement related to 1933, the Securities Exchange Act of 1934, the or (H), together with all supplements to such 1 or more of the foregoing. If a master net- Public Utility Holding Company Act of 1935, master netting agreement, without regard to ting agreement contains provisions relating the Trust Indenture Act of 1939, the Invest- whether the master netting agreement pro- to agreements or transactions that are not ment Company Act of 1940, the Investment vides for an agreement or transaction that is contracts described in paragraphs (1) Advisers Act of 1940, the Securities Investor not a commodity contract under this para- through (5) of section 561(a), the master net- Protection Act of 1970, the Commodity Ex- graph, except that the master agreement ting agreement shall be deemed to be a mas- change Act, and the regulations prescribed shall be considered to be a commodity con- ter netting agreement only with respect to by the Securities and Exchange Commission tract under this paragraph only with respect those agreements or transactions that are or the Commodity Futures Trading Commis- to each agreement or transaction under the described in any 1 or more of the paragraphs sion.’’; master agreement that is referred to in sub- (1) through (5) of section 561(a); (2) by amending section 741(7) to read as paragraph (A), (B), (C), (D), (E), (F), (G), or ‘‘(38B) ‘master netting agreement partici- follows: (H); or pant’ means an entity that, at any time be- ‘‘(7) ‘securities contract’— ‘‘(J) a security agreement or arrangement, fore the filing of the petition, is a party to ‘‘(A) means— or other credit enhancement related to any an outstanding master netting agreement ‘‘(i) a contract for the purchase, sale, or agreement or transaction referred to in this with the debtor;’’. loan of a security, a certificate of deposit, a paragraph, but not to exceed the actual (d) SWAP AGREEMENTS, SECURITIES CON- mortgage loan or any interest in a mortgage value of such contract on the date of the fil- TRACTS, COMMODITY CONTRACTS, FORWARD loan, a group or index of securities, certifi- ing of the petition;’’. CONTRACTS, REPURCHASE AGREEMENTS, AND

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MASTER NETTING AGREEMENTS UNDER THE ee may not avoid a transfer made by or to a ‘‘§ 561. Contractual right to terminate, liq- AUTOMATIC-STAY.— master netting agreement participant under uidate, accelerate, or offset under a master (1) IN GENERAL.—Section 362(b) of title 11, or in connection with any master netting netting agreement and across contracts United States Code, as amended by sections agreement or any individual contract cov- ‘‘(a) IN GENERAL.—Subject to subsection 118, 132, 136, 142, 203 and 818, is amended— ered thereby that is made before the com- (b), the exercise of any contractual right, be- (A) in paragraph (6), by inserting ‘‘, mencement of the case, except under section cause of a condition of the kind specified in pledged to, and under the control of,’’ after 548(a)(1)(A) of this title, and except to the ex- section 365(e)(1), to cause the termination, ‘‘held by’’; tent the trustee could otherwise avoid such a liquidation, or acceleration of or to offset or (B) in paragraph (7), by inserting ‘‘, pledged transfer made under an individual contract net termination values, payment amounts or to, and under the control of,’’ after ‘‘held covered by such master netting agreement.’’. other transfer obligations arising under or in by’’; (f) FRAUDULENT TRANSFERS OF MASTER connection with 1 or more (or the termi- (C) by amending paragraph (17) to read as NETTING AGREEMENTS.—Section 548(d)(2) of nation, liquidation, or acceleration of 1 or follows: title 11, United States Code, is amended— more)— ‘‘(17) under subsection (a), of the setoff by (1) in subparagraph (C), by striking ‘‘and’’; ‘‘(1) securities contracts, as defined in sec- a swap participant of a mutual debt and (2) in subparagraph (D), by striking the pe- tion 741(7); claim under or in connection with 1 or more riod and inserting ‘‘; and’’; and ‘‘(2) commodity contracts, as defined in swap agreements that constitutes the setoff (3) by adding at the end the following new section 761(4); of a claim against the debtor for any pay- subparagraph: ‘‘(3) forward contracts; ment or other transfer of property due from ‘‘(E) a master netting agreement partici- ‘‘(4) repurchase agreements; the debtor under or in connection with any pant that receives a transfer in connection ‘‘(5) swap agreements; or swap agreement against any payment due to with a master netting agreement or any in- ‘‘(6) master netting agreements, the debtor from the swap participant under dividual contract covered thereby takes for shall not be stayed, avoided, or otherwise or in connection with any swap agreement or value to the extent of such transfer, except, limited by operation of any provision of this against cash, securities, or other property with respect to a transfer under any indi- title or by any order of a court or adminis- held by, pledged to, and under the control of, vidual contract covered thereby, to the ex- trative agency in any proceeding under this or due from such swap participant to margin tent such master netting agreement partici- title. guarantee, secure, or settle a swap agree- pant otherwise did not take (or is otherwise ‘‘(b) EXCEPTION.— ment;’’; not deemed to have taken) such transfer for ‘‘(1) A party may exercise a contractual (D) in paragraph (30) by striking ‘‘or’’ at value.’’. right described in subsection (a) to termi- the end; (g) TERMINATION OR ACCELERATION OF SECU- nate, liquidate, or accelerate only to the ex- (E) in paragraph (31) by striking the period RITIES CONTRACTS.—Section 555 of title 11, tent that such party could exercise such a at the end and inserting ‘‘; or’’; and United States Code, is amended— right under section 555, 556, 559, or 560 for (F) by inserting after paragraph (31) the (1) by amending the section heading to each individual contract covered by the mas- following new paragraph: read as follows: ter netting agreement in issue. ‘‘(32) under subsection (a), of the setoff by ‘‘§ 555. Contractual right to liquidate, termi- ‘‘(2) If a debtor is a commodity broker sub- a master netting agreement participant of a nate, or accelerate a securities contract’’; ject to subchapter IV of chapter 7 of this mutual debt and claim under or in connec- and title— tion with 1 or more master netting agree- (2) in the first sentence, by striking ‘‘liq- ‘‘(A) a party may not net or offset an obli- ments or any contract or agreement subject uidation’’ and inserting ‘‘liquidation, termi- gation to the debtor arising under, or in con- to such agreements that constitutes the nation, or acceleration’’. nection with, a commodity contract against setoff of a claim against the debtor for any (h) TERMINATION OR ACCELERATION OF COM- any claim arising under, or in connection payment or other transfer of property due MODITIES OR FORWARD CONTRACTS.—Section with, other instruments, contracts, or agree- from the debtor under or in connection with 556 of title 11, United States Code, is amend- ments listed in subsection (a) except to the such agreements or any contract or agree- ed— extent the party has positive net equity in ment subject to such agreements against any (1) by amending the section heading to the commodity accounts at the debtor, as payment due to the debtor from such master read as follows: calculated under subchapter IV; and netting agreement participant under or in ‘‘§ 556. Contractual right to liquidate, termi- ‘‘(B) another commodity broker may not connection with such agreements or any con- nate, or accelerate a commodities contract net or offset an obligation to the debtor aris- tract or agreement subject to such agree- or forward contract’’; and ing under, or in connection with, a com- ments or against cash, securities, or other modity contract entered into or held on be- (2) in the first sentence, by striking ‘‘liq- property held by, pledged or and under the half of a customer of the debtor against any uidation’’ and inserting ‘‘liquidation, termi- control of, or due from such master netting claim arising under, or in connection with, nation, or acceleration’’. agreement participant to margin, guarantee, (i) TERMINATION OR ACCELERATION OF RE- other instruments, contracts, or agreements secure, or settle such agreements or any con- PURCHASE AGREEMENTS.—Section 559 of title listed in subsection (a). ‘‘(c) DEFINITION.—As used in this section, tract or agreement subject to such agree- 11, United States Code, is amended— the term ‘contractual right’ includes a right ments, to the extent such participant is eli- (1) by amending the section heading to set forth in a rule or bylaw of a national se- gible to exercise such offset rights under read as follows: paragraph (6), (7), or (17) for each individual curities exchange, a national securities asso- contract covered by the master netting ‘‘§ 559. Contractual right to liquidate, termi- ciation, or a securities clearing agency, a agreement in issue.’’. nate, or accelerate a repurchase agree- right set forth in a bylaw of a clearing orga- ment’’; and (2) LIMITATION.—Section 362 of title 11, nization or contract market or in a resolu- United States Code, as amended by sections (2) in the first sentence, by striking ‘‘liq- tion of the governing board thereof, and a 120, 302, and 412, is amended by adding at the uidation’’ and inserting ‘‘liquidation, termi- right, whether or not evidenced in writing, end the following: nation, or acceleration’’. arising under common law, under law mer- ‘‘(l) LIMITATION.—The exercise of rights not (j) LIQUIDATION, TERMINATION, OR ACCEL- chant, or by reason of normal business prac- subject to the stay arising under subsection ERATION OF SWAP AGREEMENTS.—Section 560 tice.’’. (a) pursuant to paragraph (6), (7), or (17), or of title 11, United States Code, is amended— (2) CONFORMING AMENDMENT.—The table of (31) of subsection (b) shall not be stayed by (1) by amending the section heading to sections of chapter 9 of title 11, United any order of a court or administrative agen- read as follows: States Code, is amended by inserting after cy in any proceeding under this title.’’. ‘‘§ 560. Contractual right to liquidate, termi- the item relating to section 560 the fol- (e) LIMITATION OF AVOIDANCE POWERS nate, or accelerate a swap agreement’’; and lowing: UNDER MASTER NETTING AGREEMENT.—Sec- (2) in the first sentence, by striking ‘‘ter- ‘‘561. Contractual right to terminate, liq- tion 546 of title 11, United States Code, as mination of a swap agreement’’ and inserting uidate, accelerate, or offset amended by sections 207 and 302, is amend- ‘‘liquidation, termination, or acceleration of under a master netting agree- ed— 1 or more swap agreements’’; and ment and across contracts. (1) in subsection (g) (as added by section (3) by striking ‘‘in connection with any (l) ANCILLARY PROCEEDINGS.—Section 304 of 103 of Public Law 101–311)— swap agreement’’ and inserting ‘‘in connec- title 11, United States Code, as amended by (A) by striking ‘‘under a swap agreement’’; tion with the termination, liquidation, or ac- section 215, is amended by adding at the end (B) by striking ‘‘in connection with a swap celeration of 1 or more swap agreements’’. the following: agreement’’ and inserting ‘‘under or in con- (k) LIQUIDATION, TERMINATION, ACCELERA- ‘‘(c) Any provisions of this title relating to nection with any swap agreement’’; and TION, OR OFFSET UNDER A MASTER NETTING securities contracts, commodity contracts, (2) by adding at the end the following: AGREEMENT AND ACROSS CONTRACTS.—(1) forward contracts, repurchase agreements, ‘‘(j) Notwithstanding sections 544, 545, 547, Title 11, United States Code, is amended by swap agreements, or master netting agree- 548(a)(2)(B), and 548(b) of this title, the trust- inserting after section 560 the following: ments shall apply in a case ancillary to a

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00124 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8617 foreign proceeding under this section or any (5) in section 556, by inserting ‘‘, financial the collateral made in accordance with such other section of this title, so that enforce- participant’’ after ‘‘commodity broker’’. agreement.’’. ment of contractual provisions of such con- (q) CONFORMING AMENDMENTS.—Title 11 of SEC. 1010. DAMAGE MEASURE. tracts and agreements in accordance with the United States Code is amended— (a) Title 11, United States Code, as amend- their terms will not be stayed or otherwise (1) in the table of sections of chapter 5— ed by section 1007, is amended— limited by operation of any provision of this (A) by amending the items relating to sec- (1) by inserting after section 561 the fol- title or by order of a court in any case under tions 555 and 556 to read as follows: lowing: this title, and to limit avoidance powers to ‘‘555. Contractual right to liquidate, termi- ‘‘§ 562. Damage measure in connection with the same extent as in a proceeding under nate, or accelerate a securities swap agreements, securities contracts, for- chapter 7 or 11 of this title (such enforce- contract. ward contracts, commodity contracts, re- ment not to be limited based on the presence ‘‘556. Contractual right to liquidate, termi- purchase agreements, or master netting or absence of assets of the debtor in the nate, or accelerate a commod- agreements United States).’’. ities contract or forward con- ‘‘If the trustee rejects a swap agreement, (m) COMMODITY BROKER LIQUIDATIONS.— tract.’’; and securities contract as defined in section 741 Title 11, United States Code, is amended by (B) by amending the items relating to sec- of this title, forward contract, commodity inserting after section 766 the following: tions 559 and 560 to read as follows: contract (as defined in section 761 of this ‘‘§ 767. Commodity broker liquidation and for- ‘‘559. Contractual right to liquidate, termi- title) repurchase agreement, or master net- ting agreement pursuant to section 365(a) of ward contract merchants, commodity bro- nate, or accelerate a repurchase this title, or if a forward contract merchant, kers, stockbrokers, financial institutions, agreement. stockbroker, financial institution, securities securities clearing agencies, swap partici- ‘‘560. Contractual right to liquidate, termi- clearing agency, repo participant, financial pants, repo participants, and master net- nate, or accelerate a swap participant, master netting agreement par- ting agreement participants agreement.’’; and ‘‘Notwithstanding any other provision of ticipant, or swap participant liquidates, ter- (2) in the table of sections of chapter 7— minates, or accelerates such contract or this title, the exercise of rights by a forward (A) by inserting after the item relating to agreement, damages shall be measured as of contract merchant, commodity broker, section 766 the following: the earlier of— stockbroker, financial institution, securities ‘‘(1) the date of such rejection; or clearing agency, swap participant, repo par- ‘‘767. Commodity broker liquidation and for- ‘‘(2) the date of such liquidation, termi- ticipant, or master netting agreement par- ward contract merchants, com- nation, or acceleration.’’; and ticipant under this title shall not affect the modity brokers, stockbrokers, (2) in the table of sections of chapter 5 by priority of any unsecured claim it may have financial institutions, securi- inserting after the item relating to section after the exercise of such rights.’’. ties clearing agencies, swap participants, repo participants, 561 the following: (n) STOCKBROKER LIQUIDATIONS.—Title 11, United States Code, is amended by inserting and master netting agreement ‘‘562. Damage measure in connection with after section 752 the following: participants.’’; and swap agreements, securities (B) by inserting after the item relating to contracts, forward contracts, ‘‘§ 753. Stockbroker liquidation and forward section 752 the following: commodity contracts, repur- contract merchants, commodity brokers, ‘‘753. Stockbroker liquidation and forward chase agreements, or master stockbrokers, financial institutions, securi- netting agreements.’’. ties clearing agencies, swap participants, contract merchants, com- (b) CLAIMS ARISING FROM REJECTION.—Sec- repo participants, and master netting modity brokers, stockbrokers, tion 502(g) of title 11, United States Code, is agreement participants financial institutions, securi- amended— ‘‘Notwithstanding any other provision of ties clearing agencies, swap participants, repo participants, (1) by designating the existing text as this title, the exercise of rights by a forward paragraph (1); and contract merchant, commodity broker, and master netting agreement participants.’’. (2) by adding at the end the following: stockbroker, financial institution, securities ‘‘(2) A claim for damages calculated in ac- clearing agency, swap participant, repo par- SEC. 1008. RECORDKEEPING REQUIREMENTS. cordance with section 561 of this title shall ticipant, financial participant, or master Section 11(e)(8) of the Federal Deposit In- be allowed under subsection (a), (b), or (c), or netting agreement participant under this surance Act (12 U.S.C. 1821(e)(8)) is amended disallowed under subsection (d) or (e), as if title shall not affect the priority of any un- by adding at the end the following new sub- such claim had arisen before the date of the secured claim it may have after the exercise paragraph: filing of the petition.’’. of such rights.’’. ‘‘(H) RECORDKEEPING REQUIREMENTS.—The SEC. 1011. SIPC STAY. (o) SETOFF.—Section 553 of title 11, United Corporation, in consultation with the appro- Section 5(b)(2) of the Securities Investor States Code, is amended— priate Federal banking agencies, may pre- Protection Act of 1970 (15 U.S.C. 78eee(b)(2)) (1) in subsection (a)(3)(C), by inserting scribe regulations requiring more detailed is amended by adding after subparagraph (B) ‘‘(except for a setoff of a kind described in recordkeeping with respect to qualified fi- the following new subparagraph: section 362(b)(6), 362(b)(7), 362(b)(17), nancial contracts (including market valu- ‘‘(C) EXCEPTION FROM STAY.— 362(b)(19), 555, 556, 559, 560 or 561 of this ations) by insured depository institutions.’’. ‘‘(i) Notwithstanding section 362 of title 11, title)’’ before the period; and SEC. 1009. EXEMPTIONS FROM CONTEMPORA- United States Code, neither the filing of an (2) in subsection (b)(1), by striking NEOUS EXECUTION –––REQUIRE- application under subsection (a)(3) nor any ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), MENT. order or decree obtained by Securities Inves- 362(b)(19), 555, 556, 559, 560, 561’’. Section 13(e)(2) of the Federal Deposit In- tor Protection Corporation from the court (p) SECURITIES CONTRACTS, COMMODITY CON- surance Act (12 U.S.C. 1823(e)(2)) is amended shall operate as a stay of any contractual TRACTS, AND FORWARD CONTRACTS.—Title 11, to read as follows: rights of a creditor to liquidate, terminate, United States Code, is amended— ‘‘(2) EXEMPTIONS FROM CONTEMPORANEOUS or accelerate a securities contract, com- (1) in section 362(b)(6), by striking ‘‘finan- EXECUTION REQUIREMENT.—An agreement to modity contract, forward contract, repur- cial institutions,’’ each place such term ap- provide for the lawful collateralization of— chase agreement, swap agreement, or master pears and inserting ‘‘financial institution, fi- ‘‘(A) deposits of, or other credit extension netting agreement, each as defined in title nancial participant’’; by, a Federal, State, or local governmental 11, to offset or net termination values, pay- (2) in section 546(e), by inserting ‘‘financial entity, or of any depositor referred to in sec- ment amounts, or other transfer obligations participant,’’ after ‘‘financial institution,’’; tion 11(a)(2), including an agreement to pro- arising under or in connection with 1 or (3) in section 548(d)(2)(B), by inserting ‘‘fi- vide collateral in lieu of a surety bond; more of such contracts or agreements, or to nancial participant,’’ after ‘‘financial insti- ‘‘(B) bankruptcy estate funds pursuant to foreclose on any cash collateral pledged by tution,’’; section 345(b)(2) of title 11, United States the debtor whether or not with respect to 1 (4) in section 555— Code; or more of such contracts or agreements. (A) by inserting ‘‘financial participant,’’ ‘‘(C) extensions of credit, including any ‘‘(ii) Notwithstanding clause (i), such ap- after ‘‘financial institution,’’; and overdraft, from a Federal reserve bank or plication, order, or decree may operate as a (B) by inserting before the period at the Federal home loan bank; or stay of the foreclosure on securities collat- end ‘‘, a right set forth in a bylaw of a clear- ‘‘(D) 1 or more qualified financial con- eral pledged by the debtor, whether or not ing organization or contract market or in a tracts, as defined in section 11(e)(8)(D), with respect to 1 or more of such contracts resolution of the governing board thereof, shall not be deemed invalid pursuant to or agreements, securities sold by the debtor and a right, whether or not in writing, aris- paragraph (1)(B) solely because such agree- under a repurchase agreement or securities ing under common law, under law merchant, ment was not executed contemporaneously lent under a securities lending agreement. or by reason of normal business practice’’; with the acquisition of the collateral or be- ‘‘(iii) As used in this section, the term and cause of pledges, delivery, or substitution of ‘contractual right’ includes a right set forth

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00125 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8618 CONGRESSIONAL RECORD—HOUSE May 5, 1999 in a rule or bylaw of a national securities ex- counting, regulatory reporting, or other pur- (2) in section 552(b)(1) by striking ‘‘prod- change, a national securities association, or poses.’’. uct’’ each place it appears and inserting a securities clearing agency, a right set forth SEC. 1013. FEDERAL RESERVE COLLATERAL RE- ‘‘products’’. in a bylaw of a clearing organization or con- QUIREMENTS. SEC. 1105. PENALTY FOR PERSONS WHO NEG- tract market or in a resolution of the gov- The 3d sentence of the 3d undesignated LIGENTLY OR FRAUDULENTLY PRE- erning board thereof, and a right, whether or paragraph of section 16 of the Federal Re- PARE BANKRUPTCY PETITIONS. not in writing, arising under common law, serve Act (12 U.S.C. 412) is amended by strik- Section 110(j)(3) of title 11, United States under law merchant, or by reason of normal ing ‘‘acceptances acquired under the provi- Code, is amended by striking ‘‘attorney’s’’ business practice.’’. sions of section 13 of this Act’’ and inserting and inserting ‘‘attorneys’ ’’. SEC. 1012. ASSET-BACKED SECURITIZATIONS. ‘‘acceptances acquired under section 10A, SEC. 1106. LIMITATION ON COMPENSATION OF Section 541 of title 11, United States Code, 10B, 13, or 13A of this Act’’. PROFESSIONAL PERSONS. as amended by section 150, is amended— SEC. 1014. EFFECTIVE DATE; APPLICATION OF –– Section 328(a) of title 11, United States (1) by redesignating paragraph (5) of sub- –AMENDMENTS. Code, is amended by inserting ‘‘on a fixed or section (b) as paragraph (6); (a) EFFECTIVE DATE.—This title shall take percentage fee basis,’’ after ‘‘hourly basis,’’. effect on the date of the enactment of this (2) by inserting after paragraph (4) of sub- SEC. 1107. SPECIAL TAX PROVISIONS. Act. section (b) the following new paragraph: Section 346(g)(1)(C) of title 11, United ‘‘(5) any eligible asset (or proceeds there- (b) APPLICATION OF AMENDMENTS.—The amendments made by this title shall apply States Code, is amended by striking ‘‘, ex- of), to the extent that such eligible asset was with respect to cases commenced or appoint- cept’’ and all that follows through ‘‘1986’’. transferred by the debtor, before the date of ments made under any Federal or State law SEC. 1108. EFFECT OF CONVERSION. commencement of the case, to an eligible en- after the date of enactment of this Act, but Section 348(f)(2) of title 11, United States tity in connection with an asset-backed shall not apply with respect to cases com- Code, is amended by inserting ‘‘of the es- securitization, except to the extent such menced or appointments made under any tate’’ after ‘‘property’’ the first place it ap- asset (or proceeds or value thereof) may be Federal or State law before the date of en- pears. recovered by the trustee under section 550 by actment of this Act. virtue of avoidance under section 548(a);’’; SEC. 1109. ALLOWANCE OF ADMINISTRATIVE EX- PENSES. and TITLE XI—TECHNICAL CORRECTIONS Section 503(b)(4) of title 11, United States (3) by adding at the end the following new SEC. 1101. DEFINITIONS. Code, is amended by inserting ‘‘subparagraph subsection: Section 101 of title 11, United States Code, (A), (B), (C), (D), or (E) of’’ before ‘‘paragraph ‘‘(e) For purposes of this section, the fol- as amended by sections 102, 105, 132, 138, 301, (3)’’. lowing definitions shall apply: 302, 402, 902, and 1007, is amended— ‘‘(1) the term ‘asset-backed securitization’ (1) by striking ‘‘In this title—’’ and insert- SEC. 1110. PRIORITIES. means a transaction in which eligible assets ing ‘‘In this title:’’; Section 507(a) of title 11, United States transferred to an eligible entity are used as (2) in each paragraph, by inserting ‘‘The Code, as amended by section 323, is amended the source of payment on securities, the term’’ after the paragraph designation; in paragraph (4), as so redesignated by sec- most senior of which are rated investment (3) in paragraph (35)(B), by striking ‘‘para- tion 142, by striking the semicolon at the end grade by 1 or more nationally recognized se- graphs (21B) and (33)(A)’’ and inserting and inserting a period. curities rating organizations, issued by an ‘‘paragraphs (23) and (35)’’; SEC. 1111. EXEMPTIONS. issuer; (4) in each of paragraphs (35A) and (38), by Section 522(g)(2) of title 11, United States ‘‘(2) the term ‘eligible asset’ means— striking ‘‘; and’’ at the end and inserting a Code, is amended by striking ‘‘subsection ‘‘(A) financial assets (including interests period; (f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’. therein and proceeds thereof), either fixed or (5) in paragraph (51B)— SEC. 1112. EXCEPTIONS TO DISCHARGE. revolving, including residential and commer- (A) by inserting ‘‘who is not a family farm- Section 523 of title 11, United States Code, cial mortgage loans, consumer receivables, er’’ after ‘‘debtor’’ the first place it appears; as amended by section 146, is amended— trade receivables, and lease receivables, and (1) in subsection (a)(3), by striking ‘‘or (6)’’ that, by their terms, convert into cash with- (B) by striking ‘‘thereto having aggregate’’ each place it appears and inserting ‘‘(6), or in a finite time period, plus any residual in- and all that follows through the end of the (15)’’; terest in property subject to receivables in- paragraph; (2) as amended by section 304(e) of Public cluded in such financial assets plus any (6) by amending paragraph (54) to read as Law 103–394 (108 Stat. 4133), in paragraph (15), rights or other assets designed to assure the follows: by transferring such paragraph so as to in- servicing or timely distribution of proceeds ‘‘(54) The term ‘transfer’ means— sert it after paragraph (14A) of subsection to security holders; ‘‘(A) the creation of a lien; (a); ‘‘(B) cash; and ‘‘(B) the retention of title as a security in- (3) in subsection (a)(9), by inserting ‘‘(C) securities. terest; ‘‘, watercraft, or aircraft’’ after ‘‘motor ve- ‘‘(3) the term ‘eligible entity’ means— ‘‘(C) the foreclosure of a debtor’s equity of hicle’’; ‘‘(A) an issuer; or redemption; or (4) in subsection (a)(15), as so redesignated ‘‘(B) a trust, corporation, partnership, or ‘‘(D) each mode, direct or indirect, abso- by paragraph (2) of this subsection, by in- other entity engaged exclusively in the busi- lute or conditional, voluntary or involun- serting ‘‘to a spouse, former spouse, or child ness of acquiring and transferring eligible as- tary, of disposing of or parting with— of the debtor and’’ after ‘‘(15)’’; and sets directly or indirectly to an issuer and ‘‘(i) property; or (5) in subsection (e), by striking ‘‘a in- taking actions ancillary thereto; ‘‘(ii) an interest in property;’’; sured’’ and inserting ‘‘an insured’’. (7) in each of paragraphs (1) through (35), in ‘‘(4) the term ‘issuer’ means a trust, cor- SEC. 1113. EFFECT OF DISCHARGE. poration, partnership, or other entity en- each of paragraphs (36) and (37), and in each Section 524(a)(3) of title 11, United States gaged exclusively in the business of acquir- of paragraphs (40) through (55) (including Code, is amended by striking ‘‘section 523’’ ing and holding eligible assets, issuing secu- paragraph (54), as amended by paragraph (6) and all that follows through ‘‘or that’’ and rities backed by eligible assets, and taking of this section), by striking the semicolon at inserting ‘‘section 523, 1228(a)(1), or 1328(a)(1) actions ancillary thereto; and the end and inserting a period; and of this title, or that’’. ‘‘(5) the term ‘transferred’ means the debt- (8) by redesignating paragraphs (4) through or, pursuant to a written agreement, rep- (55), including paragraph (54), as amended by SEC. 1114. PROTECTION AGAINST DISCRIMINA- TORY TREATMENT. resented and warranted that eligible assets paragraph (6) of this section, in entirely nu- Section 525(c) of title 11, United States were sold, contributed, or otherwise con- merical sequence. Code, is amended— veyed with the intention of removing them SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS. (1) in paragraph (1), by inserting ‘‘student’’ from the estate of the debtor pursuant to Section 104 of title 11, United States Code, before ‘‘grant’’ the second place it appears; subsection (b)(5), irrespective, without limi- is amended by inserting ‘‘522(f)(3), 707(b)(5),’’ and tation of— after ‘‘522(d),’’ each place it appears. (2) in paragraph (2), by striking ‘‘the pro- ‘‘(A) whether the debtor directly or indi- SEC. 1103. EXTENSION OF TIME. gram operated under part B, D, or E of’’ and rectly obtained or held an interest in the Section 108(c)(2) of title 11, United States inserting ‘‘any program operated under’’. issuer or in any securities issued by the Code, is amended by striking ‘‘922’’ and all issuer; that follows through ‘‘or’’, and inserting SEC. 1115. PROPERTY OF THE ESTATE. ‘‘(B) whether the debtor had an obligation ‘‘922, 1201, or’’. Section 541(b)(4)(B)(ii) of title 11, United to repurchase or to service or supervise the SEC. 1104. TECHNICAL AMENDMENTS. States Code, is amended by inserting ‘‘365 servicing of all or any portion of such eligi- Title 11 of the United States Code is or’’ before ‘‘542’’. ble assets; or amended— SEC. 1116. PREFERENCES. ‘‘(C) the characterization of such sale, con- (1) in section 109(b)(2) by striking ‘‘sub- (a) IN GENERAL.—Section 547 of title 11, tribution, or other conveyance for tax, ac- section (c) or (d) of’’; and United States Code, is amended—

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00126 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8619 (1) in subsection (b), by striking ‘‘sub- (2) in the second undesignated paragraph— SEC. 1128. PROTECTION OF VALID PURCHASE section (c)’’ and inserting ‘‘subsections (c) (A) by inserting ‘‘(2) the term’’ before MONEY SECURITY INTERESTS. and (i)’’; and ‘‘ ‘document’’; and Section 547(c)(3)(B) of title 11, United (2) by adding at the end the following: (B) by striking ‘‘this title’’ and inserting States Code, is amended by striking ‘‘20’’ and ‘‘(i) If the trustee avoids under subsection ‘‘title 11’’. inserting ‘‘30’’. SEC. 1129. TRUSTEES. (b) a transfer made between 90 days and 1 SEC. 1126. TRANSFERS MADE BY NONPROFIT year before the date of the filing of the peti- CHARITABLE CORPORATIONS. (a) SUSPENSION AND TERMINATION OF PANEL TRUSTEES AND STANDING TRUSTEES.—Section tion, by the debtor to an entity that is not (a) SALE OF PROPERTY OF ESTATE.—Section an insider for the benefit of a creditor that is 363(d) of title 11, United States Code, is 586(d) of title 28, United States Code, is an insider, such transfer may be avoided amended— amended— under this section only with respect to the (1) by striking ‘‘only’’ and all that follows (1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and creditor that is an insider.’’. through the end of the subsection and insert- (2) by adding at the end the following: ‘‘(2) A trustee whose appointment under (b) APPLICABILITY.—The amendments made ing ‘‘only— subsection (a)(1) or under subsection (b) is by this section shall apply to any case that ‘‘(1) in accordance with applicable non- terminated or who ceases to be assigned to is pending or commenced on or after the date bankruptcy law that governs the transfer of cases filed under title 11 of the United States of enactment of this Act. property by a corporation or trust that is Code may obtain judicial review of the final SEC. 1117. POSTPETITION TRANSACTIONS. not a moneyed, business, or commercial cor- agency decision by commencing an action in Section 549(c) of title 11, United States poration or trust; and the United States district court for the dis- Code, is amended— ‘‘(2) to the extent not inconsistent with trict for which the panel to which the trust- (1) by inserting ‘‘an interest in’’ after any relief granted under subsection (c), (d), ee is appointed under subsection (a)(1), or in ‘‘transfer of’’; (e), or (f) of section 362 of this title.’’. the United States district court for the dis- (2) by striking ‘‘such property’’ and insert- (b) CONFIRMATION OF PLAN FOR REORGA- ing ‘‘such real property’’; and trict in which the trustee is appointed under NIZATION.—Section 1129(a) of title 11, United subsection (b) resides, after first exhausting (3) by striking ‘‘the interest’’ and inserting States Code, as amended by section 140, is ‘‘such interest’’. all available administrative remedies, which amended by adding at the end the following: if the trustee so elects, shall also include an SEC. 1118. DISPOSITION OF PROPERTY OF THE ‘‘(15) All transfers of property of the plan ESTATE. administrative hearing on the record. Unless shall be made in accordance with any appli- the trustee elects to have an administrative Section 726(b) of title 11, United States cable provisions of nonbankruptcy law that Code, is amended by striking ‘‘1009,’’. hearing on the record, the trustee shall be govern the transfer of property by a corpora- deemed to have exhausted all administrative SEC. 1119. GENERAL PROVISIONS. tion or trust that is not a moneyed, business, remedies for purposes of this paragraph if Section 901(a) of title 11, United States or commercial corporation or trust.’’. the agency fails to make a final agency deci- Code, is amended by inserting ‘‘1123(d),’’ (c) TRANSFER OF PROPERTY.—Section 541 of sion within 90 days after the trustee requests after ‘‘1123(b),’’. title 11, United States Code, as amended by administrative remedies. The Attorney Gen- SEC. 1120. APPOINTMENT OF ELECTED TRUSTEE. section 1102, is amended by adding at the end eral shall prescribe procedures to implement Section 1104(b) of title 11, United States the following: this paragraph. The decision of the agency Code, is amended— ‘‘(f) Notwithstanding any other provision shall be affirmed by the district court unless (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and of this title, property that is held by a debt- it is unreasonable and without cause based (2) by adding at the end the following: or that is a corporation described in section on the administrative record before the ‘‘(2)(A) If an eligible, disinterested trustee 501(c)(3) of the Internal Revenue Code of 1986 agency.’’. is elected at a meeting of creditors under and exempt from tax under section 501(a) of (b) EXPENSES OF STANDING TRUSTEES.—Sec- paragraph (1), the United States trustee such Code may be transferred to an entity tion 586(e) of title 28, United States Code, is shall file a report certifying that election. that is not such a corporation, but only amended by adding at the end the following: Upon the filing of a report under the pre- under the same conditions as would apply if ‘‘(3) After first exhausting all available ad- ceding sentence— the debtor had not filed a case under this ministrative remedies, an individual ap- ‘‘(i) the trustee elected under paragraph (1) title.’’. pointed under subsection (b) may obtain ju- shall be considered to have been selected and (d) APPLICABILITY.—The amendments made dicial review of final agency action to deny appointed for purposes of this section; and by this section shall apply to a case pending a claim of actual, necessary expenses under ‘‘(ii) the service of any trustee appointed under title 11, United States Code, on the this subsection by commencing an action in under subsection (d) shall terminate. date of enactment of this Act, except that the United States district court in the dis- ‘‘(B) In the case of any dispute arising out the court shall not confirm a plan under trict where the individual resides. The deci- of an election under subparagraph (A), the chapter 11 of this title without considering sion of the agency shall be affirmed by the court shall resolve the dispute.’’. whether this section would substantially af- district court unless it is unreasonable and SEC. 1121. ABANDONMENT OF RAILROAD LINE. fect the rights of a party in interest who without cause based upon the administrative Section 1170(e)(1) of title 11, United States first acquired rights with respect to the record before the agency. Code, is amended by striking ‘‘section 11347’’ debtor after the date of the petition. The ‘‘(4) The Attorney General shall prescribe and inserting ‘‘section 11326(a)’’. parties who may appear and be heard in a procedures to implement this subsection.’’. SEC. 1122. CONTENTS OF PLAN. proceeding under this section include the at- TITLE XII—GENERAL EFFECTIVE DATE; Section 1172(c)(1) of title 11, United States torney general of the State in which the APPLICATION OF AMENDMENTS Code, is amended by striking ‘‘section 11347’’ debtor is incorporated, was formed, or does SEC. 1201. EFFECTIVE DATE; APPLICATION OF and inserting ‘‘section 11326(a)’’. business. AMENDMENTS. SEC. 1123. DISCHARGE UNDER CHAPTER 12. (e) RULE OF CONSTRUCTION.—Nothing in (a) EFFECTIVE DATE.—Except as provided Subsections (a) and (c) of section 1228 of this section shall be deemed to require the otherwise in this Act, this Act and the title 11, United States Code, are amended by court in which a case under chapter 11 is amendments made by this Act shall take ef- striking ‘‘1222(b)(10)’’ each place it appears pending to remand or refer any proceeding, fect 180 days after the date of the enactment and inserting ‘‘1222(b)(9)’’. issue, or controversy to any other court or to of this Act. SEC. 1124. BANKRUPTCY CASES AND PRO- require the approval of any other court for (b) APPLICATION OF AMENDMENTS.—Except CEEDINGS. the transfer of property. as otherwise provided in this Act, the Section 1334(d) of title 28, United States SEC. 1127. PROHIBITION ON CERTAIN ACTIONS amendments made by this Act shall not Code, is amended— FOR FAILURE TO INCUR FINANCE apply with respect to cases commenced (1) by striking ‘‘made under this sub- CHARGES. under title 11 of the United States Code be- section’’ and inserting ‘‘made under sub- Section 127 of the Truth in Lending Act (15 fore the effective date of this Act. section (c)’’; and U.S.C. 1637) is amended by adding at the end MODIFICATION OF AMENDMENT IN THE NATURE (2) by striking ‘‘This subsection’’ and in- the following: OF A SUBSTITUTE NO. 11 OFFERED BY MR. NAD- serting ‘‘Subsection (c) and this subsection’’. ‘‘(i) PROHIBITION ON CERTAIN ACTIONS FOR LER SEC. 1125. KNOWING DISREGARD OF BANK- FAILURE TO INCUR FINANCE CHARGES.—A Mr. NADLER. Mr. Chairman, I ask RUPTCY LAW OR RULE. creditor of an account under an open end unanimous consent that the amend- Section 156(a) of title 18, United States consumer credit plan may not terminate an ment in the nature of a substitute be Code, is amended— account prior to its expiration date solely modified in the form I have placed at (1) in the first undesignated paragraph— because the consumer has not incurred fi- the desk. (A) by inserting ‘‘(1) the term’’ before nance charges on the account. Nothing in ‘‘ ‘bankruptcy’’; and this subsection shall prohibit a creditor from The CHAIRMAN. The Clerk will re- (B) by striking the period at the end and terminating an account for inactivity in 3 or port the modification. inserting ‘‘; and’’; and more consecutive months.’’. The Clerk read as follows:

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00127 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.004 H05MY9 8620 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Modification of amendment in the nature will not be misconstrued as my idea of told that you could just put the debtor of a substitute No. 11 offered by Mr. NADLER: an ideal bankruptcy bill. through a home computer and find out Page 7, lines 19 and 24, strike ‘‘less than or I certainly do not agree with every- how much bankruptcy relief they are equal to’’ each place it appears and insert thing in the substitute, and I hope no entitled to. The gentleman from Illi- ‘‘greater than’’. Page 9, line 8, insert ‘‘allowable’’ after one will pull sections out of it and say nois (Mr. HYDE) is right, the IRS ‘‘debtor’s’’. that I think this is a good idea. But I should not be entrusted with this task. Page 11, line 13, strike ‘‘hall’’ and insert certainly do agree with the main If the real circumstances do not ‘‘shall’’. changes we make from the Gekas bill. match your income from the last 6 Page 16, lines 7 and 12, strike ‘‘less than or In its current form, this bill provides months and what the IRS says your equal to’’ each place it appears and insert ample loopholes for the wealthy, well- landlord should be charging you, never ‘‘greater than’’. advised debtor to escape his or her obli- mind what he actually does charge Page 17, line 6, strike ‘‘less than or equal gations in bankruptcy but sets numer- you, the bill allows you to go to court to’’ and insert ‘‘greater than’’. ous traps for the middle and low-in- and plead extraordinary circumstances. Mr. GEKAS (during the reading). Mr. come debtor who will face unnecessary In other words, to get the court to look Chairman, I ask unanimous consent litigation and costs, unrealistic legal at your real situation, you have to hire that the modification be considered as requirements and legal presumptions a lawyer and litigate a motion. read and printed in the RECORD. which bear no relation to reality. The It is right in the bill, and it is the The CHAIRMAN. Is there objection bill will destroy businesses, it will de- first roadblock in the path of someone to the request of the gentleman from stroy families and it will destroy lives. with no money who really needs bank- Pennsylvania? America is better than that. ruptcy relief. How many people who There was no objection. We can get at that small percentage really have no money are going to be The CHAIRMAN. Is there objection of people. The ABI, the American able to afford to litigate the question to the modification? Bankruptcy Institute, estimated 3 per- of whether their daughter’s braces are Mr. GEKAS. Mr. Chairman, reserving cent of debtors can afford to repay 20 extraordinary circumstances? Why the right to object, I may object, but I percent or more of their debt. The should they have to? probably will not. creditors said oh, no, they are wrong, it Any reasonable means test would The gentleman from New York has is double that, 6 percent. We can get at say, what are your real means, what is offered through his counsel in con- that small percentage, 3 or 6 percent of your real income, what are your real sultation with me that these are sim- people who are abusing the system, expenses? Not what does the IRS think ply technical amendments. They do without making costs skyrocket and the average rent or the average mort- not, I trust, constitute sloppy work on without violating the rights of small gage payment in the Northeast ought the part of anybody, it is simply that debtors and creditors. to be, what is your mortgage payment? we want to make sure that your The substitute I am offering makes You cannot take the IRS estimate to amendment is technically correct. Is several major changes in the bill before the bank. The substitute has the court look at that correct, may I ask? us. It makes two changes in the so- reality from the very beginning of the Mr. NADLER. Mr. Chairman, if the called means test. First, it would look case, no Alice in Wonderland. The sub- gentleman will yield, I am informed by at a debtor’s real income rather than stitute allows the debtor to bring to distinguished counsel that they were his past income. The bill would average typos and errors in drafting, that he the court’s attention at the beginning the previous 6 months of income and of the case changes in his or her cir- made no substantive changes. create a legal presumption that this is Mr. GEKAS. No way that that was cumstances which would make the 6- what the debtor will receive every month lookback for income unreal- sloppy handwork of any type, is that month for the next 5 years, but we correct? istic. No special motions, no litigation. know this is wrong. Part of the filing. Mr. NADLER. I do not think I would For example, people are making Unlike the bill, in addition to allow- call the work of the staff sloppy. I $50,000 at middle management at IBM ing people to pay for private school and would think in view of the haste it was and they are laid off, now they are counting that as part of his expenses, hasty because of the committee sched- making a much less amount of money. our bill would allow expenses for public ule. That is why they are going bankrupt. school, if any, and for home schooling. Mr. GEKAS. Mr. Chairman, further One cannot presume that they are Private school should not get a special reserving the right to object, we will making $50,000. This amendment would preference over public schools and over engage in a spelling bee on ‘‘sloppy’’ look at their real income and it looks home schooling. some other time. forward, it does not look back. We have also heard a great deal Mr. Chairman, I withdraw my res- Second, the means test does not look about the effect nondischargeability ervation of objection. at your actual expenses, it looks at will have on families and child support. The CHAIRMAN. Without objection, what some IRS bureaucrat thinks that Let us talk about what this bill adds, the modification is agreed to. the average expense in your part of the why it is a problem and what this sub- There was no objection. country ought to be. The substitute stitute would do. The CHAIRMAN. Pursuant to House makes the same change here as the The first addition to Resolution 158, the gentleman from Hyde-Conyers amendment we voted on nondischargeability would make non- New York (Mr. NADLER) and a Member a few minutes ago would have done. dischargeable purchases in the aggre- opposed each will control 30 minutes. In the last Congress, the majority de- gate of $250 or more in the 90 days be- The Chair recognizes the gentleman clared the IRS to be the great Satan fore the bankruptcy filing, it would as- from New York (Mr. NADLER). and held hearings designed to show sume that that is for luxury goods or Mr. NADLER. Mr. Chairman, I yield that these guys could not be trusted. services. But it presumes that that $250 myself such time as I may consume. We even passed legislation to reform is for purchase of luxury goods. If you Mr. Chairman, I am reluctantly offer- the IRS which specifically directed the put your groceries, your gas and your ing this substitute in the hope that it IRS to drop these guidelines and to dry cleaning on a credit card for 3 will open the door to rational discus- fashion new ones with greater leniency months for your family, do you think sion and an eventual compromise that because we thought these guidelines that would be more than $250? will ensure both that people will be un- were inaccurate and too harsh. Now, the credit card company would able to game the system and that all Yet this bill would require that those get to drag you to court and you would parties, debtors and creditors alike, same guidelines that we judged last have to prove that it is not a luxury will be treated fairly in our bankruptcy year to be inflexible, inaccurate and good. The presumption would be that it courts. It is an attempt to foster dia- too harsh should now be applied with- is a luxury good and should be non- logue and compromise and I hope it out any flexibility at all. We have been dischargeable in bankruptcy. You

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00128 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8621 bought a new dishwasher. Could the old repay your debt. And what percentage every other debtor, every other cred- one have been fixed? Can you not do it of income you will pay, 300 percent. itor, with no protection at all. by hand? Go prove it, at the cost of They would have to tell you those The last issue of debtor coercion I litigation. kinds of disclosures so you would know want to address involves something But the main point is that this is a that. called reaffirmation agreements. There litigation trap for people who are real- The last piece I want to discuss con- has been a great deal of publicity about ly broke and cannot afford a lawyer to cerns a matter that is very important people being coerced into signing away defend the discharge action. to me, child support enforcement. As a their rights to a discharge or agreeing The same with the other section member of the New York State Assem- to waive that right without fully un- which makes nondischargeable debts bly, I wrote most of the State’s child derstanding what they are signing. on a credit card incurred to pay non- support enforcement laws. This amendment would require court dischargeable debts. We have seen b 1730 review for reaffirmations of unsecured today that banks are sending live debts and of very small amounts. It checks and preapproved credit cards to There have been a great many fig would also require disclosure to the people, even kids, and saying use it for leafs placed on this bill to make it ap- debtor so he knows, so he understands, whatever you want. Now the same pear as if the bill is not anti-family and what he is agreeing to. Placing some banks want to say, ‘‘Hey, wait a would not very greatly damage child limits on reaffirmations, requiring minute, you paid your tax bill with support enforcement, but the truth is some disclosure and some court over- your credit card. We want our debt on it most certainly would. sight, not in every case but in those the credit card that you used to pay There are two ways in which this bill cases that are most likely to result in your tax to survive bankruptcy be- would hurt child support enforcement. abuses, is important. To the extent cause you should not have paid it with In Chapter 7 we are making credit card that reaffirmation is like non- your credit card.’’ debts or many of them, as I have al- dischargeable debts, limit a debtor’s They do not have to prove any im- ready mentioned, nondischargeable. So post-discharge resources, they interfere proper intent. They simply make the mom, after the bankruptcy is finished with child support. debt nondischargeable. The result, now, now has to compete with the bill The bill would abolish the right to these credit card debts would survive a collector or the attorney from Chem- bring a class action. We all remember a bankruptcy discharge and would com- ical Bank to collect the nondischarge- few years ago when Sears Roebuck pete with other more important non- able debt, because there is more debt cheated over a million people through dischargeable debts after the case is that is now nondischargeable. She has fraud into fraudulent reaffirmations. A over. got to compete for it. class action suit was brought, and $168 Your ex-wife wants to collect child But the sponsors of the bill say, no, million in damages was paid to over a support. Too bad. Let her go and com- no, no. We are giving child support a million people. The average recovery pete with a lawyer for Chemical Bank, priority so she will not have to com- was $150 per person. Sixty million dol- which would now be made non- pete. But of course, as any bankruptcy lars criminal penalty was assessed. dischargeable. That is why advocates attorney knows, priorities only exist in This bill says: We want to crack for women, for families with kids, for bankruptcy court. Once one has the down on the little guy, but the big crime victims, Mothers Against Drunk discharge, they are no longer in bank- guys, if they are crooks, we do not Driving have spoken out so consist- ruptcy court, the priorities are wiped want them to be subject to class action ently against this provision of the bill. out, the Federal jurisdiction is wiped lawsuits. They cannot maintain a class The substitute also includes improve- out, the bankruptcy proceeding is over, action lawsuit, and so Sears Roebuck ments to Chapter 11 which protects and now she is still stuck trying to would get away with it if they only had family farms. The substitute raises, to compete in the real world out there, delayed until this bill has passed. keep pace with inflation, the limit on perhaps in State court with Chemical This substitute would remove this who can file for Chapter 12, and it Bank’s attorney or whoever, to collect provision. The only way one can sue assures that proceeds from the sale of her child support as against their non- the little guys, can sue the big guys, is farm equipment are used to help reor- discharged credit card debt, and prior- through a class action suit. ganize the farm and not to go only to ities do not exist and do not help us. I hope that Members will support the taxes. Like the bill, it also makes Second, the bill defines debts owed to substitute instead of H.R. 833. The sub- Chapter 12 permanent. It is the same the government for past-due child sup- stitute is supported by the administra- language that is in the bipartisan bill port as domestic support. In a Chapter tion. It is a giant step toward a fair and introduced by the gentleman from 13 repayment proceeding the bill says balanced bill and a giant step away Michigan (Mr. SMITH) and the gen- we cannot approve, the judge cannot from the gridlock we experienced in tleman from Minnesota (Mr. MINGE). approve, a Chapter 13 repayment plan the last Congress. If my colleagues We have played politics with family to pay the debts unless the plan in- want real and fair bankruptcy reform, farms too long. There is a crisis in the cludes payment of all the child support support the substitute. If they do not farm belt. They need these improve- due. Period. But it defines the child want a bill that will be vetoed and ments to the law and they need Chap- support as debts owed to the govern- leaving us with nothing at the end of ter 12 to be permanent. We should do it ment for past-due support as well as the session, support the substitute. whether the big banks that hold farm debts owed to the custodial parent, to Mr. Chairman, I reserve the balance mortgages like it or not. mom, to care for the child. of my time. There are a number of provisions in So if the means test that is inserted Mr. GEKAS. Mr. Chairman, I yield this bill for credit card disclosure, the into Chapter 13 finds that there is myself such time as I might consume. same provisions that were in the enough disposable income to pay the I ask the Members to vote no on the amendment that the gentleman from child support to mom but there is not Nadler substitute. What it does in its Massachusetts (Mr. DELAHUNT) offered enough disposable income to pay the provisions one by one is erase the in committee, that the Committee on child support to mom and pay the gov- progress that we have made already in- Rules refused to make permanent. I ernment the debts that are owed, we dicated by the votes taken in this will just mention one. cannot confirm the Chapter 13 plan, Chamber. For instance, one of the main Under this bill, the credit card com- there is no Chapter 13, they cannot go objects, targets, of the Nadler sub- panies tell you the interest rate is X bankrupt. They are too rich for Chap- stitute would be to eliminate the and your minimum payment is $10, but ter 7, they are too poor for Chapter 13, means test, the needs test which is so they do not tell you that if you pay the they cannot get any bankruptcy pro- vital to a real reform in bankruptcy. minimum, how long it will take you to tection, and mom is left out there try- We have already voted on the Hyde- repay. It will take you 200 years to ing to collect her child support against Conyers amendment. We indicated the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00129 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8622 CONGRESSIONAL RECORD—HOUSE May 5, 1999 will of the House of Representatives on nation and to stem abuses to the bankruptcy bare truth revealed now at the end of a that very same feature. Now the gen- system. day’s debate. Specifically, Governors support efforts to tleman from New York (Mr. NADLER) In addition to the overall impact of asks us to repeat the consideration of prevent debtors from filing Chapter 7 bank- the bill on women struggling to raise ruptcy in lieu of Chapter 13 when they are fi- that item. The vote naturally will be nancially capable of repaying part or all of families and make ends meet, the legis- no. I ask for that repeat vote. their unsecured debts. We also encourage lation will have a particularly harsh Mr. NADLER makes a big deal out of Congress to place the highest possible pri- impact on the payment of alimony and some of the provisions in his proposal ority on payment of domestic support obliga- child support. The problem arises from that fly right in the face of what we tions in bankruptcy proceedings. Preserva- the fact that bankruptcy and insol- have already accomplished and what tion of states’ existing rights to determine vency are, by definition, a zero sum we are trying to accomplish. For in- their own standards dealing with homestead gain. By design, this bill will increase stance, we consulted for weeks and exemptions is another important provision the amount of funds being paid to unse- that needs to be included in any bankruptcy months with residential landlords who legislation that Congress passes this year. cured creditors, and it therefore comes were vexed and are still vexed by the We applaud the Judiciary Committee’s re- as no surprise that such payments will havoc, the absolute havoc that can be cent efforts to address this issue. Passage of often come at the expense of other less wreaked upon an investment by the H.R. 833 by the House represents an impor- aggressive creditors, those without automatic stay that would benefit tant step to ensuring enactment of meaning- lawyers such as women and children debtors, and that is tenants who want ful bankruptcy reform this year. We look owed child support or alimony. This to stay on, and on, and on without pay- forward to working with Congress to achieve problem is by no means insignificant ing rent. The bill that we have gives re- this goal. given that an estimated 243,000 maybe Sincerely, lief to the residential landlords. That is GOVERNOR THOMAS R. to 325,000 bankruptcy cases per year in- a big step forward, and we really stud- CARPER. volve child support and alimony orders. ied that provision and consulted with a GOVERNOR MICHAEL O. And so, Mr. Chairman, for these lot of people and heard testimony to LEAVITT. Members who want to support real and that effect. Mr. NADLER would wipe it GOVERNOR GEORGE E. balanced bankruptcy reform without out with this amendment. I think that PATAKI, unnecessarily piling on the middle is retrogressive, completely retrogres- Chairman, class, the mothers and their children sive, anti-reform. Committee on Eco- and without giving the credit industry Beyond that, the gentleman from nomic Development and Commerce. a complete pass, I urge a yes vote for New York makes a big cry out of the GOVERNOR JEANNE the democratic substitute now being reaffirmation language that we have in SHAHEEN, debated. the bill. He fails to note, and this is im- Vice Chair, Mr. GEKAS. Mr. Chairman, I yield 4 portant for us to recall, that the credit Committee on Eco- minutes to the gentleman from Cali- unions who have supported our bill nomic Development fornia (Mr. ROYCE). from the beginning to the end and who and Commerce. Mr. ROYCE. Mr. Chairman, enacting have lent their voices, loaned their Mr. Chairman, I reserve the balance a substitute bill on which there has voices to us on many different occa- of my time. been no hearings or public comment is sions on this bill, they like our lan- Mr. NADLER. Mr. Chairman, I yield no way to approach a task as impor- guage on reaffirmations. 4 minutes to the distinguished gen- tant as reforming the Nation’s bank- If my colleagues like credit unions tleman from Michigan (Mr. CONYERS), ruptcy system. Our bankruptcy laws and the work they do and the loans the ranking member of the Committee play an important and necessary role they provide and the capitalization on the Judiciary. in protecting Americans who really that they indulge, they will not sup- Mr. CONYERS. Mr. Chairman, I first need these laws, and that is the key, port the Nadler substitute. They will want to commend the gentleman from need. But what our act intends to do is be destroying the credit unions’ reli- New York (Mr. NADLER) who has to make the existing bankruptcy sys- ance on our language on reaffirmations worked indefatigably on this bill. No tem a needs-based system, addressing just for one item. one has put in more time than him, the flaw in the current system that en- Mr. Chairman, there are 10 other and as a result we have crafted a demo- courages people to file for bankruptcy flaws in this bill. I do not want to take cratic substitute that I am proud to and walk away from debts regardless of up extra time. I will enumerate them urge my colleagues’ consideration of. whether they are able to repay any for anyone who wants to corner me in This amendment retains the vast ma- portion of what they owe, and it does the cloakroom for that purpose, but jority of the provisions in the under- this while protecting those who truly from time to time I will remind some lying bill, but at the same time re- need protection. of our Members of some of those flaws. sponds to the most egregious and one- Between September of 1997 and Sep- Mr. Chairman, I insert the following sided provision in the legislation. In tember of 1998 in my home State of for the RECORD: addition to fixing the problems with California there were 203,000 personal NATIONAL GOVERNORS ASSOCIATION, the use of IRS expense standards, bankruptcy petitions filed. This trans- GENERAL DEBATE NADLER which is an anathema, and the bill’s lates into one bankruptcy petition filed Washington, DC, May 5, 1999. impact on jobs also would be corrected, for every 56 households. Now that is al- Hon. J. DENNIS HASTERT, the substitute also eliminates many of most three times the next highest Speaker of the House, the problems the bill creates for single State, New York. Moreover, the num- House of Representatives, Washington, DC. mothers and their children as well as ber of bankruptcies in California has Hon. RICHARD A. GEPHARDT, the problem of credit card abuse. more than doubled since 1990. House Minority Leader, House of Representatives, Washington, DC. So here we are. Here is an amend- The cost to all of us is very great for DEAR SPEAKER HASTERT AND MINORITY ment that deals with the IRS expense the rest of the country. This is the cost LEADER GEPHARDT: Our economy has been standards, the small business loss of borne not only by the business commu- setting the right kind of records in the 1990s jobs, the problems created for single nity but by the consumers who pay in terms of real economic growth, low infla- mothers and their children and the their bills responsibly and end up hav- tion, declining welfare rolls, and falling un- problem of credit card abuse. These ing these costs shifted to them. employment rates. During the same period, four items are so critical to any kind of Last year, the 55 of 56 households in however, personal bankruptcy filings have reasonable bill. my State who paid their bills on time repeatedly set the wrong kind of records, reaching new highs each of the last three As the bill presently stands, it is a were forced to pick up the $550 per years. Governors accordingly support revis- disaster for single mothers and their household tab for those who walked ing federal bankruptcy laws to curb the in- children. There has been a lot of con- away from their debts. That is a $550 creasing number of bankruptcy filings in our versation that it is not, but that is the bill that my colleagues and I pay when

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00130 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8623 irresponsible spenders who can afford This substitute provides fairness by In addition, this amendment would to pay all or some of their debt declare including a realistic means test which eliminate from the bill’s needs-based bankruptcy, and this is the problem takes into account the real world cir- test the use of clear, objective stand- that the Bankruptcy Reform Act ad- cumstances of the debtor. Yet the ards. By doing so, the Nadler amend- dresses. amendment ensures that debtors who ment would reverse the bill’s efforts to Therefore, Mr. Chairman, I rise today can repay their debts will repay their bring significant administrative effi- in strong support of the Bankruptcy debts. ciencies to the already overburdened Reform Act of 1999, of which I am a co- Unlike the underlying bill, this U.S. bankruptcy system. sponsor, and in opposition to this sub- amendment also understands that Moreover, by eliminating the clear stitute. The Bankruptcy Reform Act is blame should not be solely shouldered objective standards for debtors to fol- almost identical to legislation passed by the debtors. This amendment con- low in applying the bill’s needs-based by the House of Representatives last siders the fact that the increasing formula, this amendment would harm year by an overwhelming bipartisan availability of consumer credit cor- debtors by subjecting them to endless vote. Unfortunately, that legislation responds with the increased number of litigation, and I might add expensive ultimately stalled late in the year in bankruptcy filings. litigation, of which expenses may be the Senate. We have another oppor- Moving more debtors into repayment taken into account in that formula. tunity today to pass this much-needed plans, even if done correctly, is not the Furthermore, H.R. 833 already con- reform act and send the Senate a bill sole solution to the increased number tains provisions that address the vast with strong bipartisan support, and I of bankruptcies. Credit card applica- majority of concerns that this amend- urge my colleagues to vote for this bill tions with large limits are routinely ment claims to address. For instance, and defeat this substitute amendment. sent to the poor, to college students, to H.R. 833 already addresses issues re- lated to reaffirmation agreements and b 1745 family pets, and even dead people, and this significantly contributes to the would impose significant new disclo- Mr. NADLER. Mr. Chairman, I yield sure requirements on credit cards and 3 minutes to the gentleman from Mas- number of bankruptcies. In 1997, over 250,000 Americans filed other lenders. sachusetts (Mr. MEEHAN). Finally, there has been no prior con- Mr. MEEHAN. Mr. Chairman, I rise for bankruptcy before their 25th birth- day; 250,000. How can people so young gressional consideration of most, if not today in support of the Conyers-Nad- all, of the provisions of this amend- ler-Meehan-Berman substitute bank- have a line of credit so large that they cannot repay it? Because credit card ment. ruptcy amendment. There have been I would urge my colleagues to oppose companies are sending them all kinds debates on bankruptcy reform both this, since enacting a substitute bill on of promises for spring break if they put last session and this year. I have been which there have been no hearings or it on a credit card. alarmed by the rise in the number of public comment is no way to approach Mr. Chairman, let us have fair bank- consumer bankruptcies in this country a task as important as reforming this ruptcy reform. and have been convinced that changes Nation’s bankruptcy code. Mr. GEKAS. Mr. Chairman, I yield 3 need to be made in the bankruptcy sys- Mr. NADLER. Mr. Chairman, I yield tem. minutes to the gentleman from Ten- myself 1 minute. We can all agree that debtors should nessee (Mr. BRYANT), a member of the Mr. Chairman, the gentleman from be obliged to pay more of their debts to committee. Pennsylvania (Mr. GEKAS) talked about their creditors. I fully support the con- Mr. BRYANT. Mr. Chairman, before I a provision in the bill, in his bill, which cept of means testing to determine get into my remarks, I want to express would allow landlords to evict debtors which debtors can pay at least some of my personal appreciation for the way without obtaining permission of the their debts. In fact, last year I offered the gentleman from Pennsylvania (Mr. bankruptcy court, and that that sub- a means test amendment to the bank- GEKAS) has chaired the committee and stitute would eliminate that provision, ruptcy bill that would have done just has managed this bill throughout the which it would do. that. years that I have been involved, espe- Every other creditor has to get per- Today I am a cosponsor of this sub- cially over the last couple of weeks mission of the bankruptcy court to stitute bill, which includes a key provi- when we have been in markup with in- have an exemption from the automatic sion, an improved means test, over the tense debate and good healthy debate stay. Advocates of battered women and one used in the underlying bill. on both sides; as well as thanking the those involved in rehabilitating debt- The means test used in H.R. 833 uses ranking member, the gentleman from ors have expressed concerns that these an elaborate standard in tests to deter- New York (Mr. NADLER) for the out- unsupervised evictions would pose a mine which debtors would be shifted to standing job that he has done certainly threat to the debtor’s safety and to the Chapter 13 and which would remain in representing the view that he has and I safety of his family, and would pose a Chapter 7. In all of those convoluted think is exemplified by this amend- threat to debtors’ ability to remain and exacting calculations, the test ment, which I must oppose. productive wage earning citizens. leaves out one fundamental element: This amendment effectively under- There is a fundamental question. Fairness. mines many of the most important pro- Why should a property owner be in a The bankruptcy system was designed visions of this Bankruptcy Reform Act different position to be exempt from an to provide a fresh start for those who that have been part of the House ap- automatic stay, a different position have fallen on hard times, frequently proach to bankruptcy reform since the than any other creditor? We do not see through little fault of their own. last Congress. an answer to that question. Every cred- Let us look at who is declaring bank- This amendment should be opposed itor has the same provisions. There is ruptcy. In 1997, 280,000 older Americans for many reasons. The Nadler amend- no reason why one creditor should be filed for bankruptcy, two-thirds due to ment would do little, if anything, to in a preferred position, and that is why an unsuspected illness or job loss. address the abuse of the bankruptcy the provision is in the substitute. 300,000 bankruptcy cases involved child system that has become increasingly Mr. GEKAS. Mr. Chairman, I yield 3 support or alimony orders, as women prevalent. For instance, this amend- minutes to the gentleman from Arkan- could not collect what they were owed ment would strike from the bill key sas (Mr. HUTCHINSON). or tried to stabilize their post-divorce provisions that aim to prevent debtors Mr. HUTCHINSON. Mr. Chairman, I economic condition. from loading up on debt just before de- thank the gentleman from Pennsyl- We can all agree that these debtors claring bankruptcy, thereby obtaining vania (Mr. GEKAS) for yielding and I are entitled to a fresh start and should a discharge of this debt. Such loading want to congratulate him on the out- not be forced to repay their debts for up has occurred more frequently as standing work that he has done on this the rest of their lives and beyond by bankruptcy planning becomes more particular bill and in the leadership he leaving debts for their heirs. common in this day and age. has provided in the committee.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00131 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8624 CONGRESSIONAL RECORD—HOUSE May 5, 1999 I think we have had a very good proc- cumstance that would justify a com- have really been shortened, grace peri- ess through the Committee on the Ju- plete discharge from bankruptcy. ods for late payments have been elimi- diciary. This is not an example of Then finally, I think this bill is im- nated, and stiff penalties of up to $29 where every amendment that was of- portant because the claim is that per- are now incurred by cardholders on a fered by the Democrats was defeated on haps we should have individual respon- regular basis. a party line vote or vice versa. There sibility, but those have open-ended I strongly support the Democratic al- was really an open debate and there credit responsibilities; credit card com- ternative offered by the gentleman were many amendments that my Dem- panies should have more disclosure. It from New York (Mr. NADLER), the gen- ocrat colleagues offered that were does require this, and so it balances in- tleman from Michigan (Mr. CONYERS), adopted, and I think that it is a good dividual responsibility with the rec- and the gentleman from Massachusetts product that came through that bill. It ognition that there are legitimate cir- (Mr. MEEHAN), which is a moderate and is the kind of process I think we need cumstances that require bankruptcy. balanced approach to behavior. to have more of in the Committee on Mr. NADLER. Mr. Chairman, I yield It offers a realistic means test, al- 1 the Judiciary. 2 ⁄2 minutes to the distinguished gen- lows child support to precede other As I look at this entire issue of bank- tlewoman from California (Ms. LEE). debts, requires credit card companies Ms. LEE. Mr. Chairman, I want to ruptcy reform, I believe that bank- to provide information so borrowers first thank the gentleman from New ruptcy is important in America and may avoid bankruptcy, and eliminates York (Mr. NADLER) for this time and that we should not do anything to de- new rules for making credit card debts also for his very diligent and hard work nondischargeable. It leaves intact pre- stroy that system which was really a on this issue, to really clarify these hallmark of our country, where people very important issues which are very bankruptcy debt run-ups and fraudu- came to this country getting away complicated and very important to lently-incurred debt nondischargeable, from debtor’s prison, moving to the consumers in this country. and includes bipartisan farm bank- United States of America for a fresh Mr. Chairman, I rise to support the ruptcy legislation. start. That is an important part of our Democratic substitute and in opposi- Mr. GEKAS. Mr. Chairman, I am country, to give debtors a fresh start tion to H.R. 833. I too am troubled by pleased to yield 6 minutes to the gen- when there is not any alternative. the increase in bankruptcy filings since tleman from Virginia (Mr. GOODLATTE), I for one would not want to do any- 1980. I am very concerned about the who has been extraordinarily helpful in thing to erode that important part of rise in individual consumer debt, but I every stage of the bankruptcy reform our country’s history and our country’s am disappointed that we are failing to effort. legal system. So I believe the fresh bring legislation that is balanced be- Mr. GOODLATTE. Mr. Chairman, I start is important. This bill, H.R. 833, tween creditors and debtors. thank the gentleman from Pennsyl- preserves that important right. As drafted, many of the provisions of vania for his kind words, and for his I think we all have to concede that H.R. 833 are unfair to middle- and low- leadership in this excellent piece of there has been some abuse in the sys- income debtors. At the same time, the legislation that I rise today to strongly tem. Certainly the gentleman from bill fails to close loopholes that cur- support, H.R. 833, the Bankruptcy Re- New York (Mr. NADLER) agrees with rently protect the wealthiest debtors. form Act, and to oppose the Nadler that because he has offered a bill before H.R. 833 focuses on the perceived substitute, which would take us back this committee. abuse of the bankruptcy system by to the current situation where we re- Look at the facts that historically debtors without adequately addressing ward people who act irresponsibly and bankruptcies have been filed because of the abuses by creditors, and takes a penalize hardworking consumers who a loss of job or extraordinary cir- rigid approach to a citizen’s ability to make every effort to pay their bills on cumstances. We almost have full em- discharge debt. time; pay their own bills, and pay a ployment in America and yet bank- A majority of people surveyed by portion of someone else’s bills when ruptcies still are going up at almost 20 Consumer Federation of America be- that person files bankruptcy and does percent. So this bill preserves the re- lieve credit card companies share the not take responsibility for their ac- course of bankruptcy for those who blame with debtors for the rising tide tions. truly need it. of personal bankruptcies, yet nowhere With a record high 1.4 million bank- Ernst & Young did a study that I in H.R. 833 is there mention of pre- ruptcy filings last year, every Amer- thought was very significant, and in venting or curbing credit card compa- ican must pay more for credit, goods, that study it looked at the 10 percent nies from targeting people with low in- and services when others go bankrupt. of the people who filed bankruptcy that comes. I worked to pass H.R. 3150 last year, would be impacted by a needs-based Credit card companies are actively which passed the House by a vote of 300 system, and the study indicated that targeting vulnerable potential new to 125 in the final conference report, members. We have seen an increase in those 10 percent of filers would have an which this legislation is very similar the number of bank card mailings sent average income of almost $52,000. So to, and am pleased to cosponsor this out to potential new members. From clearly we are looking at people who legislation this year because it is high 1992 to 1998, the numbers mailed in- have an ability to pay a portion of time that we relieve consumers from creased by 255 percent. It comes as no their debt over a period of time based the burden of paying for the debts of surprise that the amount of per person upon that income. others. debt also increased 225 percent in 6 That study assured me that this ap- The Bankruptcy Reform Act of 1999 years. proach is reasonable, that it is going When credit card companies consoli- restores personal responsibility, fair- after those who abuse the system and date, cardholders are left without any ness, and accountability to our bank- not those who are legitimately claim- protection from rate increases. Credit ruptcy laws, and will be of great ben- ing to look to the system for their le- cards are not like mortgages or car efit to consumers. gitimate relief. loans that may be resold but their For too long our bankruptcy laws Also, the means test that is provided rates do not change. Not credit cards. have allowed individuals to walk away here gives something that is very im- In fact, new owners of credit card busi- from their debts, even though many portant to the bankruptcy judge, and nesses are free to impose whatever in- are able to repay them. That is not fair that is discretion. Again, I looked at terest rates the traffic will bear and to millions of hardworking families the bill and on page 10 it says that the are subject to few remaining State fee who pay their bills, mortgages, car judge, under extraordinary cir- ceilings. loans, student loans, and credit card cumstances, can revise the means test bills every month. to make sure that the debtor would not b 1800 The loopholes in our bankruptcy laws be forced into repaying a portion of the With increased consolidation of cred- have led to a 400 percent increase in debt when they have some special cir- it card companies, payment periods personal bankruptcy filings since 1980,

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00132 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8625 at a cost of $40 billion per year. These law, which prevents creditors from fil- bills a little slower than the creditors costs have been passed directly to con- ing these motions. may like, but they do pay their bills. sumers, costing the average household Another substantive flaw in the sub- In the present bill, the underlying that pays its bills an average of $400 stitute is its provision for determining legislation unfortunately does not seek each year. a debtor’s income. It excepts from the a level of bipartisanship. It has aspects Under the current system, some irre- income side of the needs-based formula of mean-spiritedness, and that is why I sponsible people filing for bankruptcy a series of items that, under current am supporting the Nadler-Conyers- run up their credit card debt imme- law, are considered as income. If we do Meehan substitute, because it fairly diately prior to filing, knowing that not take into consideration all of the addresses the concerns we have. It pro- their debts will soon be wiped away. debtor’s income, but we do take into vides a realistic means test which These debts, however, do not just dis- consideration all of the debtor’s ex- takes into account the debtor’s actual appear, they are passed along to hard- penses, the result is a mathematical income and expenses. working folks who play by the rules imbalance that frustrates the purpose Frankly, Mr. Chairman, the National and pay their own bills on time. of the formula. Bankruptcy Review Commission never The Bankruptcy Reform Act ends The substitute contains what is in ef- supported the means test. The means this practice by requiring bankruptcy fect a back door effort to amend the test, of course, is a barrier, a bar, a filers to pay back nondischargeable Truth-in-Lending Act. Section 112 closed door to those who are seeking debts made in the period immediately would disallow a claim for the credi- debt relief. It suggests that everyone preceding their filing. In addition, new tor’s failure to comply with any of a runs to the courthouse to try and file a debts for luxury goods incurred during very long series of requirements Chapter 7 as opposed to a Chapter 13. this period would be presumed non- spelled out in that section. Without Knowing many people who tragically dischargeable. even reading this section, one can sim- have had to file bankruptcy in light of While ending the abuses of our bank- ply tell from its near seven pages that the economic situation my State of ruptcy laws, the Bankruptcy Reform the substitute essentially wants to es- Texas faced with the falling oil prices Act is strongly pro-consumer in other tablish an entire new set of require- in the 1980s, I know that those people ways, as well. This legislation, for ex- ments for lenders that do not even were not in any way championing run- ample, helps children by strengthening exist under the Truth-in-Lending Act. ning away from debt. They were, if you protections in the law that prioritize This tactic is simply wrong. The will, enormously saddened by losing child support and alimony payments. Truth-in-Lending Act already imposes their homes and other assets that they Additionally, the bill protects con- various penalties for violations of its had, but they went to the bankruptcy sumers from bankruptcy mills that en- provisions. The effect of this substitute court in order to get a fresh start, or in courage folks to file for bankruptcy would be to establish two sets of stand- many instances, to try to find out how without fully informing them of their ards that lenders would have to comply to repay their debt. rights and the potential harms that with, one for purposes of the Truth-in- Mr. Chairman, this is a wrongheaded, bankruptcy can cause. Lending Act and the other for purposes misdirected piece of legislation, and Mr. Chairman, the gentleman from of establishing a claim in bankruptcy. the Nadler amendment helps to fix the Pennsylvania (Mr. GEKAS) outlined Mr. Chairman, bankruptcy should re- dilemma between child support that some of the problems that we have main available to folks who truly need should be paid to help the custodial with the Nadler substitute. I would it, but those who can afford to repay parent versus having to have the custo- like to point out some others. The so- their debts should not be able to stick dial parent fight the government in called refinements of the gentleman other folks with the tab. Enactment of order to get their monies, with some from New York (Mr. NADLER) are sim- this carefully-crafted legislation by the sort of misguided effort to pay back ply inexplicable, or even worse, inane. gentleman from Pennsylvania (Mr. the government if that person was on For instance, we allow the debtor’s GEKAS) and opposition to the legisla- welfare. income to be adjusted upward in a fixed tion by the gentleman from New York When we first started out with this amount on an annual basis if the num- (Mr. NADLER) would send a big signal legislation, we indicated how impor- ber of individuals in the debtor’s house- towards those who would abuse our tant it was for that woman who had hold exceeds four. The substitute of the bankruptcy system that the free ride is that child to make sure she does not gentleman from New York (Mr. NAD- over. have to fight against big government LER) takes that annual figure and con- I want to commend my colleague, the or big corporations to get child sup- verts it into a monthly figure. gentleman from Pennsylvania (Mr. port. As a result, he would allow an adjust- GEKAS) for his outstanding work on It also provides a balance by requir- ment in that in an amount that is 12 this issue, and I urge my colleagues to ing credit card lenders to behave re- times greater than the amount con- support this fair and reasonable bill. sponsibly. It was a terrible shame that templated in our bill. Thus, for a fam- Mr. NADLER. Mr. Chairman, I yield we did not allow an amendment in the ily of let us say eight members, their 3 minutes to the gentlewoman from rules process that would put the burden income could be as high as $79,000 per Texas (Ms. JACKSON-LEE). of responsibility on the solicitation or year and still not be subject to their Ms. JACKSON-LEE of Texas. Mr. the oversolicitation on the credit card so-called needs-based test. Chairman, I thank the gentleman from companies. The substitute is also substantively New York for yielding time to me, I The Nadler-Conyers-Meehan sub- flawed. We spent many months exam- thank him for his leadership. stitute, Mr. Chairman, is a fair and di- ining the current consumer bankruptcy Mr. Chairman, it fascinates me to rect response to the minimal concern law and crafting ways to reintroduce hear this debate go in the direction that we have that some credit or debt balance into the bankruptcy system. that it is going. That is that this coun- use or lack of payment may be abused. One important principle that we try is falling under the weight of debt, I would offer that we support this, and wanted to achieve was to allow greater that we are a country of abusers of that we vote no on the underlying bill. creditor participation in the system. debt or debtors who do not want to pay As we reject this rule, I would like to voice The substitute in many respects under- their debt. my support for an amendment that was jointly cuts that principle. One example is the It is well known in hearings that we offered by myself with Congressman NADLER provision on page 12 of the substitute have had on the Committee on the Ju- to the Rules Committee. that would prohibit a creditor from fil- diciary on this very topic that out of We all know that this bill, as it currently ing a Section 707(b) motion until the the credit card debt that this Nation reads, has garnered a great deal of negative United States Trustee has acted. This has, only 4 percent of it is in default. commentary from women’s and children’s or- provision is simply unfair to creditors, People do pay their bills. Now, as those ganizations, and appropriately so. That is be- and effectively resuscitates current who score credit, they may pay their cause the provisions in this bill which change

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00133 Fmt 0688 Sfmt 9920 E:\BR99\H05MY9.005 H05MY9 8626 CONGRESSIONAL RECORD—HOUSE May 5, 1999 the rules on dischargeability, skew the delicate the facts are, we have heard that lots That is why the only people con- balance between creditors and debtors, and of people can pay their bills and are cerned with child support in any way remain silent on consumer protection issues not. The American Bankruptcy Insti- who are supporting this bill are the hurt families—especially those headed by a tute, in the first nonbipartisan study people in charge of collecting money single parent. that was not bought and paid for by the for the government, the Fort Dietrick Our amendment would make this bill more credit card industry, said and con- people, the Attorneys General, not the amenable to families. It is an omnibus child cluded earlier this year that 3 percent people concerned with the women. support amendment because it carries a full of bankruptcy filers could afford to pay This bill murders small businesses. set of technical corrections and substantive re- 20 percent or more of their bills. We have a way of saving that in this visions. The creditors say that is not true, it provision, and ditto for farmers. We Our amendment would fix Section 1112, is twice as much. All right, granted, heard the gentleman from Virginia which under the current version of the bill, maybe 6 percent, between 3 and 6 per- (Mr. GOODLATTE) say it is a balanced could be interpreted to require that all debts to cent can afford to pay 20 percent or bill. It is not a balanced bill. The sub- a custodial parent and the government be paid more of their bills. So let us not con- stitute makes it more balanced. The before a trustee can approve a repayment tinue to hear this slander against administration says they will veto it plan. This amendment remedies that provision American citizens as deadbeats. because it is not a balanced bill. by allowing a repayment plan to be drafted We also heard that because all these The gentleman from Illinois (Mr. that only provides funding for the custodial people are not paying their bills to the HYDE), who is not exactly a noted lib- parent. The result is that funds can flow to credit card companies, the average eral, says this bill is imbalanced. He children without being held up by government American pays $400 or $500 more in says, ‘‘I asked staff to give me a list of debt. credit card fees. The fact is, credit card what the creditors are getting out of Our amendment also makes changes to fees 10 years ago were 16, 17, 18 percent. this bill. I have pages and pages and Section 1113, eliminating its provision that al- Interest rates have come down, mort- pages of advantages that the creditor lows residential landlords to escape the auto- gage rates have come down, the prime community is getting from this bill. I matic stay provisions contained in this section. rate has come down, car loan fees have was going to read a list of what the This was done at the request of women’s ad- come down, but credit card rates are creditors were getting under this bill. I vocacy groups, who feared that landlords still 16, 17, 18, 19 percent, and they will will not do it, I assume you know, but would have too much discretion in times of al- stay there, no matter what we do with there are 12 or 13 pages of single-spaced this bill. leged domestic violence and divorce. We must printed changes that benefit the credi- This bill will not result in any pass- make sure in these delicate times that our tors.’’ through to consumers. It will simply courts do not completely abdicate their re- mean more profits for the credit card b 1815 sponsibility to ensure the safety and well-being companies. If Members think dif- of the people seeking their assistance. Very imbalanced. That is why this ferently, I have a few bridges in my This Omnibus Child Support amendment bill is opposed. It is opposed by all the home district I would like to sell to also contains other exceptions to the auto- labor unions, by the Leadership Con- Members. matic stay mechanism that are aimed to make ference on Civil Rights, by the Na- Secondly, we have heard about the tional Partnership for Women and the bankruptcy process smarter in domestic means test. This substitute imposes a support cases. It allows a continuation of an Families, the National Women’s Law fairer means test, a means test that Center, the consumer groups; and all action, notwithstanding the automatic stay, in looks at real income; not what you order to determine some facts vitally important the bankruptcy groups that know used to make before you were fired and about bankruptcy, the Bankruptcy in these cases, such as paternity. It also al- laid off, which is why you went bank- Conference, the Commercial Law lows certain issues to be resolved that imme- rupt, but what you are making now and League, and the National Association diately pay dividends to women and children. likely to make; and real expenses, not of Bankruptcy Trustees and Bank- These issues include: the establishment of what the IRS thinks the rent ought to ruptcy Attorneys. modification of a domestic support order; be, but what the rent actually is. That Mr. Chairman, I urge support for the wage garnishment; the interception of tax re- is the only fair means test. funds; and the enforcement of medical obliga- Do not forget, the means test is used substitute to make this a more bal- tions under the federal child support program. in Chapter 13 for everybody, not just in anced bill, and I yield back the balance All of these issues are vitally important, and Chapter 7 with a safe harbor. The bill of my time. our system should allow them to move forward provides no class actions against the Mr. GEKAS. Mr. Chairman, I yield in these cases so as to prevent them from be- greatest malefactors. Let Sears Roe- myself such time as I may consume. coming part of the bankruptcy quagmire. buck get away with stealing $168 mil- Mr. Chairman, we have debated these Finally, our amendment contains an impor- lion from people in bankruptcy. The issues very thoroughly, and the ulti- tant provision originally penned by Congress- substitute says no, if you are cracking mate decision still rests with the Mem- man SHAW last session. It provides that funds down on the little guys, crack down on bers of the House, of course. We have received by a creditor, which have been con- tort feasors and crooks who are big voted on several portions of this sub- verted from dischargeable to non-discharge- guys. Do not stop the class action. stitute amendment in different fash- able debt under the new provisions in this bill, The bill says we are going to, or it ions starting from last year and ending be held in trust for five years. Furthermore, does not say so, but the effect is to with even the votes that were cast during that time, the creditor must make every murder child support enforcement. We today. So we urge again that the Mem- effort to pay those funds to individuals who know some people, that the supporters bers vote ‘‘no’’ on the substitute have a claim of domestic support against the of this bill say they have fixed it, but amendment. debtor. Simply said, this provision makes sure they have not fixed it. The so-called One thing that has rankled me in that scarce funds that are being parsed by this priority does not survive the bank- this whole debate from the beginning bill will always be available to the women and ruptcy and the discharge, post-dis- was the blitheness with which people children that deserve them rather than to the charge. Mom still has to compete with who are opposed to the bankruptcy re- credit card companies. It is a common sense Chemical Bank’s attorney, because the form measure that we have produced solution to a problem that needs to be ad- priority does not survive the bank- criticize and bash and ridicule and at- dressed if we are to have an acceptable bank- ruptcy proceeding. tack the credit industry. Now, no one ruptcy reform bill. And in Chapter 13, if you cannot pay is an apologist or should be an apolo- Mr. NADLER. Mr. Chairman, I yield the government, if the means test says gist for the credit industry as such, but myself such time as I may consume. you do not have enough money to pay to make them the villain is really un- Mr. Chairman, we have heard in the the government, then you cannot con- fair and misleads the American public. last few minutes echoes of the propa- firm the plan and you cannot pay the What we have got to understand is ganda of the credit card industry. But child support. that this economy of ours that is so

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00134 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8627 wonderful, that is the wonder of the Mr. DELAHUNT. Mr. Chairman, I rise in A recorded vote was ordered. world, actually the envy of the world, support of the Nadler-Conyers-Meehan-Ber- The vote was taken by electronic de- is based substantially on the extension man substitute. vice, and there were—ayes 149, noes 272, of credit. Every household in our Na- I am particularly pleased to see that the not voting 12, as follows: tion is a beneficiary of the credit sys- substitute incorporates a series of consumer [Roll No. 114] tem. Every piece of merchandise, every credit disclosure provisions which Mr. LAFALCE AYES—149 and I had attempted to offer as a free-standing automobile, every item that uplifts the Abercrombie Hastings (FL) Nadler life of even the lowest of the lowest amendment in an effort to bring some balance Ackerman Hilliard Napolitano household in our country has credit ex- to this legislation. Allen Hinchey Oberstar tension to thank for its uplifting in the We all know there are some individuals who Baird Hinojosa Obey abuse the bankruptcy system. And we all Baldwin Hoeffel Olver economic sphere of our country. So Barrett (WI) Holt agree that people who let their financial affairs Ortiz when we consider the credit industry, Berkley Inslee Owens recognize that they make things hum. get out of control should take responsibility for Bishop Jackson (IL) Pallone They are the ones that have spread the the consequences of their actions. Blagojevich Jackson-Lee Pascrell But responsibility is a two-way street. And Bonior (TX) Payne American goods and services across the Borski Jefferson Pelosi instead of encouraging responsible use of Brady (PA) Johnson, E. B. world. Phelps credit cards and reduction of credit card debt, Brown (FL) Jones (OH) So let us look at the good that our Pomeroy the credit card lenders who have promoted Brown (OH) Kanjorski competitive free enterprise system has Price (NC) this legislation have done all they can to in- Capps Kaptur done through this global extension of Capuano Kildee Rahall duce consumers to take on ever-increasing Rangel credit of which we are the bene- Cardin Kilpatrick amounts of debt. They have increased interest Carson Kind (WI) Reyes ficiaries, and then look for abuses, per- rates and fees on current accounts—often pro- Clay Kleczka Rodriguez haps by debtors and then by creditors, Clayton Klink Roybal-Allard viding inadequate or misleading disclosures. but do not, I beg of my colleagues, con- Clyburn Kucinich Rush They have imposed penalties on responsible Sabo tinue to vilify the creditors as being Conyers LaFalce debtors who pay off their card balances with- Costello Lampson Sanders the cause of people going bankrupt. out incurring interest charges. They have en- Coyne Lantos Sawyer Crowley Larson Schakowsky That is disingenuous, unfair and should gaged in relentless marketing efforts that tar- be rejected out of hand. Cummings Lee Scott get students with no credit histories and con- Danner Levin Serrano I ask the Members to vote ‘‘no’’ on sumers already heavily in debt. Davis (IL) Lewis (GA) Shows the Nadler amendment. We cannot deal with the rise in consumer DeFazio Lipinski Spratt Mr. MEEKS of New York. Mr. Chairman, I bankruptcies if we ignore the causes. And DeGette Lofgren Stabenow Delahunt Lowey Stark rise today to support the Democratic Sub- there is a strong correlation between the bank- DeLauro Maloney (NY) Stupak stitute—the Nadler amendment. Specifically, I ruptcy rate and these kinds of irresponsible Dicks Markey Thompson (MS) would like to point out that this amendment lending practices. If we are to fix the problem, Dingell Martinez Thurman Dixon Mascara Tierney eliminates a provision of H.R. 833 which we must demand greater responsibility not Doggett Matsui Towns would have allowed landlords to evict debtors only from debtors but from creditors as well. Doyle McCarthy (MO) Traficant Edwards McCarthy (NY) once they have filed for bankruptcy. This pro- The substitute would do this by disallowing Udall (CO) claims in bankruptcy arising from various reck- Engel McDermott vision is key because of the assistance it Eshoo McGovern Udall (NM) gives to battered women as they seek finan- less lending practices. Those practices include Etheridge McKinney Velazquez cial support for themselves and for their chil- the failure to provide complete and con- Evans McNulty Vento Visclosky dren. spicuous disclosure of credit terms—including Farr Meehan Fattah Meek (FL) Waters Many times, battered women must file for low temporary ‘‘teaser’’ rates; the imposition of Filner Meeks (NY) Watt (NC) bankruptcy in order to not get evicted from the unjustifiable penalties and fees against card- Ford Millender- Waxman homes they once shared with their spouses. holders who pay their monthly balances on Gejdenson McDonald Weiner time or who do not engage in account trans- Gonzalez Miller, George Wexler They may have no financial means because Green (TX) Minge Wise they are not the sole providers of their family’s actions that result in finance charges; the Gutierrez Mink Woolsey income. When their spouse leaves the home, issuance of credit cards to minors without the Hall (OH) Moakley Wu signature of a parent or guardian or proof of these women have no choice but to file for NOES—272 independent means of repayment; the failure bankruptcy in order to delay eviction. We must Aderholt Burton Dreier not roll back provisions that have assisted to highlight due dates and penalties for late Andrews Buyer Duncan women who are victims of domestic violence. payments in monthly billing statements, and to Archer Callahan Dunn We must help them reconstruct their life by inform cardholders of the consequences of Armey Calvert Ehlers paying only the minimum due each month; Bachus Camp Ehrlich first making certain they maintain a place to Baker Campbell Emerson live. and the failure to permit consumers to re- Baldacci Canady English Since the Bankruptcy code was enacted, spond to interest rate increases by canceling Ballenger Cannon Everett their credit cards and paying off their balances Barcia Castle Ewing the automatic stay that becomes effective Barr Chabot Fletcher upon the filing of a bankruptcy petition has al- under the old rate. Barrett (NE) Chambliss Foley These are reasonable measures that would ways prohibited a landlord from evicting a ten- Bartlett Chenoweth Forbes help sever the link between irresponsible cred- Barton Clement Fossella ant unless the landlord obtains permission it card lending and the rise in bankruptcy fil- Bass Coble Fowler from the bankruptcy court. ings. That is what needs to occur, Mr. Chair- Bateman Coburn Frank (MA) The stay serves several purposes: In chap- Bentsen Collins Franks (NJ) man, and I urge support for the substitute. Bereuter Combest Frelinghuysen ter 13, a tenant has a right to assume a lease Mr. GEKAS. Mr. Chairman, I yield Berry Condit Frost and to cure a default. In chapter 7, the debtor back the balance of my time. Biggert Cook Gallegly receives a short ‘‘breathing spell’’—which is The CHAIRMAN. All time has ex- Bilbray Cox Ganske very much needed in domestic violence cases. Bilirakis Cramer Gekas pired. Bliley Crane Gibbons The right to avoid eviction is extremely im- The question is on the amendment in Blumenauer Cubin Gilchrest portant to tenants who would suffer the hard- the nature of a substitute, as modified, Blunt Cunningham Gillmor ships of moving and having to find new hous- offered by the gentleman from New Boehlert Davis (FL) Gilman Boehner Davis (VA) Goode ing and to tenants in rent controlled or rent- York (Mr. NADLER). Bonilla Deal Goodlatte subsidized apartments, who would lose valu- The question was taken; and the Bono DeLay Goodling able property rights. Chairman announced that the noes ap- Boswell DeMint Gordon peared to have it. Boucher Deutsch Goss I urge my colleagues to support the Nadler Boyd Diaz-Balart Graham amendment because of provisions that will as- RECORDED VOTE Brady (TX) Dickey Granger sist the helpless and the needy as in the case Mr. NADLER. Mr. Chairman, I de- Bryant Dooley Green (WI) of battered women. mand a recorded vote. Burr Doolittle Greenwood

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00135 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8628 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Gutknecht McIntyre Saxton KOLBE) having assumed the chair, Mr. b 1845 Hall (TX) McKeon Schaffer NETHERCUTT, Chairman of the Com- Hansen Menendez Sensenbrenner This amendment has strong support Hastings (WA) Metcalf Sessions mittee of the Whole House on the State among senior citizens. It is supported Hayes Mica Shadegg of the Union, reported that that Com- by the National Committee to Preserve Hayworth Miller (FL) Shaw mittee, having had under consideration Hefley Miller, Gary Social Security and Medicare and the Shays the bill (H.R. 833) to amend title 11 of Herger Mollohan Sherman National Council of Senior Citizens. I Hill (IN) Moore Sherwood the United States Code, and for other have letters I would like to introduce Hill (MT) Moran (KS) Shimkus purposes, pursuant to House Resolution into the RECORD. Hilleary Moran (VA) Shuster Hobson Morella 158, he reported the bill back to the This amendment by no means cures Sisisky House with an amendment adopted by Hoekstra Murtha Skeen the worst problems in the bill, the use Holden Myrick Skelton the Committee of the Whole. of IRS standards and its impact on Hooley Neal Smith (MI) The SPEAKER pro tempore. Under Horn Nethercutt child care and jobs, to name a few. But Smith (NJ) Hostettler Ney the rule, the previous question is or- it does help fix a problem for seniors. I Smith (TX) Houghton Northup Smith (WA) dered. urge its adoption. Hoyer Norwood Snyder Is a separate vote demanded on any Mr. Speaker, I include the following Hulshof Nussle Souder Hunter Ose amendment to the committee amend- material for the RECORD: Spence Hutchinson Oxley ment in the nature of a substitute, Stearns NATIONAL COMMITTEE TO PRESERVE Hyde Packard Stenholm adopted by the Committee of the SOCIAL SECURITY AND MEDICARE, Isakson Pastor Strickland Whole? If not, the question is on the Washington, DC, May 3, 1999. Istook Paul Stump On behalf of the millions of members and Jenkins Pease amendment. John Peterson (MN) Sununu The amendment was agreed to. supporters of the National Committee to Sweeney Johnson (CT) Peterson (PA) The SPEAKER pro tempore. The Preserve Social Security and Medicare, I Johnson, Sam Petri Talent strongly urge you to oppose H.R. 833, the Jones (NC) Pickering Tancredo question is on the engrossment and bankruptcy reform legislation, when it Tanner Kasich Pickett third reading of the bill. comes up for a vote this week. We, too, are Kelly Pitts Tauscher Tauzin The bill was ordered to be engrossed concerned about the increase in bankruptcy Kennedy Pombo and read a third time, and was read the filings since 1980 and the rise in consumer King (NY) Porter Taylor (MS) Kingston Portman Taylor (NC) third time. debt per household. However, in its current Terry form H.R. 833 would seriously weaken bank- Knollenberg Pryce (OH) MOTION TO RECOMMIT OFFERED BY MR. CONYERS Kolbe Quinn Thomas ruptcy protections for vulnerable older and Kuykendall Radanovich Thompson (CA) Mr. CONYERS. Mr. Speaker, I offer a disabled Americans, while doing nothing to LaHood Ramstad Thornberry motion to recommit the bill, H.R. 833, prevent credit card companies from tar- Largent Regula Thune with instructions. Tiahrt geting people with low incomes. Latham Reynolds Debtors would be subject to an income- LaTourette Riley Toomey The SPEAKER pro tempore. Is the Lazio Rivers Turner gentleman from Michigan opposed to based means test intended to steer people Leach Roemer Upton the bill? away from Chapter 7, which allows con- Lewis (CA) Rogan Walden Mr. CONYERS. Yes, I am, in its sumers to liquidate their assets and divide Lewis (KY) Rogers Walsh them among their creditors in exchange for Linder Rohrabacher Wamp present form, Mr. Speaker. being discharged from the majority of their LoBiondo Ros-Lehtinen Watkins The SPEAKER pro tempore. The debts. Instead, debtors who are projected to Lucas (KY) Rothman Weldon (FL) Clerk will report the motion to recom- have $5,000 in disposable income over the Lucas (OK) Roukema Weldon (PA) Maloney (CT) Royce Weller mit. next five years will have to file for Chapter Manzullo Ryan (WI) Weygand The Clerk read as follows: 13 bankruptcy, which requires a repayment McCollum Ryun (KS) Whitfield Mr. CONYERS moves to recommit the bill plan. McCrery Salmon Wicker (H.R. 833) to the Committee on the Judici- A debtor’s disposable income would be de- McHugh Sanchez Wilson ary, with instructions to report the bill back termined by subtracting allowable expenses McInnis Sandlin Wolf to the House forthwith, with the following such as housing costs and taxes from an indi- McIntosh Sanford Young (AK) amendment: vidual’s overall income. As reported by the NOT VOTING—12 Page 15, line 19, insert ‘‘and benefits re- Judiciary Committee, Social Security, dis- ability and veteran’s benefits are not ex- Becerra Gephardt Slaughter ceived under the Social Security Act’’ after Berman Luther Watts (OK) ‘‘humanity’’. empted from overall income. At the same time an amendment to include medical ex- Brown (CA) Scarborough Wynn The SPEAKER pro tempore. The gen- Cooksey Simpson Young (FL) penses and the costs of caring for an elderly tleman from Michigan (Mr. CONYERS) is parent in the list of allowable expenses also b 1837 recognized for 5 minutes in favor of his failed, although private school tuition was Mr. TERRY and Mr. BALDACCI motion to recommit. allowed. changed their vote from ‘‘aye’’ to ‘‘no.’’ Mr. CONYERS. Mr. Speaker, my mo- In 1997, an estimated 280,000 older Ameri- Mr. DINGELL changed his vote from tion to recommit is simple. It excludes cans filed for bankruptcy. Since 1993, more ‘‘no’’ to ‘‘aye.’’ Social Security and Medicare benefits than a million people aged 50 and older have from the definition of ‘‘income’’ for turned to the bankruptcy courts to receive So the amendment in the nature of a help in dealing with financial catastrophes. substitute, as modified, was rejected. purposes of the bill’s means test. Our nation’s senior have worked hard and The result of the vote was announced As the law currently stands, any sen- played by the rules. Most older American’s as above recorded. ior is eligible for bankruptcy relief. filing for bankruptcy are not profligate Stated for: The bill, however, would force millions spenders. Instead, the two major reasons why Mr. BERMAN. Mr. Chairman, I was unable of seniors living on fixed incomes into people over 50 are in financial difficulty are to cast a vote on the Nadler substitute due to mandatory repayment plans. This is lost jobs and medical problems. a family emergency. However, had I been because there is no exclusion from the Many people in their late 50s and early 60s have serious medical conditions and no present, I would have voted ‘‘aye.’’ definition of ‘‘income’’ for payments health insurance. Even among those eligible The CHAIRMAN (Mr. NETHERCUTT). received for Social Security, retire- for Medicare, skyrocketing drug costs and The question is on the committee ment, for disability insurance, for sup- other out-of-pocket medical expenses can amendment in the nature of a sub- plemental security income, or for un- spell economic disaster. Among bankruptcy stitute, as amended. employment insurance. filers age 65 and older, 37 percent are pushed The committee amendment in the As a matter of fact, there is no exclu- into financial collapse by medical debts. An- nature of a substitute, as amended, was sion for third-party medical payments other 33 percent of those over 65 explain that agreed to. made on behalf of seniors. What does it losing a job has made this difference between getting by and bankruptcy. The CHAIRMAN. Under the rule, the mean? That anytime a senior becomes If H.R. 833 is enacted, a senior who has just Committee rises. ill and receives substantial Medicare $100/per month in ‘‘disposable income’’ would Accordingly, the Committee rose; benefits, they could be denied basic meet the means test and be unable to file and the Speaker pro tempore (Mr. bankruptcy relief. under Chapter 7. Since out-of-pocket medical

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00136 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8629 costs would not generally be considered al- Ms. JACKSON-LEE of Texas. Mr. English Lampson Rogan lowable expenses, this person could easily be Speaker, this was an amendment that I Etheridge Largent Rogers Everett Larson Rohrabacher placed in a situation of having to pay a cred- offered in committee. I thank the it card company instead of purchasing his Ewing Latham Ros-Lehtinen Fletcher Lazio blood-pressure medicine. chairman for acknowledging the im- Rothman portance of the question of protecting Foley Leach Roukema We believe that most Americans, particu- Forbes Lewis (CA) Social Security. With that, I hope we Royce larly most seniors, want to pay their debts. Fossella Lewis (KY) Ryan (WI) Bankruptcy reform should not punish vul- will claim unanimous victory in pro- Fowler Linder Ryun (KS) nerable older Americans who face financial tecting our senior citizens and making Frank (MA) Lipinski Salmon catastrophe because of a job loss or medical Franks (NJ) LoBiondo Sandlin sure that they do not have to choose Frelinghuysen Lucas (KY) crisis. I hope that you will oppose H.R. 833 between medicine and food. Sanford when it is brought to the House floor this Frost Lucas (OK) Saxton Gallegly Maloney (CT) week. The SPEAKER pro tempore (Mr. Scarborough KOLBE). Without objection, the pre- Ganske Maloney (NY) Schaffer Sincerely, Gekas Manzullo Sensenbrenner MARTHA A. MCSTEEN, vious question is ordered on the motion Gibbons McCarthy (MO) Sessions President. to recommit. Gilchrest McCarthy (NY) Shadegg Gillmor McCollum NATIONAL COUNCIL OF SENIOR CITIZENS, There was no objection. Shaw Gilman McCrery Silver Spring, MD, May 5, 1999. Shays The SPEAKER pro tempore. The Gonzalez McHugh Hon. JOHN CONYERS, JR., question is on the motion to recommit. Goode McInnis Sherman U.S. House of Representatives, Sherwood The motion to recommit was agreed Goodlatte McIntosh Washington, DC. Shimkus to. Goodling McIntyre DEAR REPRESENTATIVE CONYERS: The Na- Gordon McKeon Shows tional Council of Senior Citizens supports Mr. GEKAS. Mr. Speaker, pursuant Goss Meeks (NY) Shuster your motion to recommit H.R. 833. This leg- to the instructions of the House, I re- Graham Menendez Sisisky islation is pernicious and destructive of the port the bill, H.R. 833, back to the Granger Metcalf Skeen core economic rights of seniors and working Green (WI) Mica Skelton House with an amendment. Smith (MI) families. It would force millions of seniors to Greenwood Miller (FL) The SPEAKER pro tempore. The Gutknecht Miller, Gary Smith (NJ) make mandatory payments based on a defi- Hall (TX) Minge Smith (TX) nition of income that would include pay- Clerk will report the amendment. The Clerk read as follows: Hansen Mollohan Smith (WA) ments for social security, disability, unem- Hastert Moore Snyder ployment compensation, supplemental secu- Amendment: Hastings (WA) Moran (KS) Souder rity income and other income security and Page 15, line 19, insert ‘‘and benefits re- Hayes Moran (VA) Spence welfare needs. We believe that such pay- ceived under the Social Security Act’’ after Hayworth Morella Spratt ments or resources should be excluded from Hefley Myrick Stabenow ‘‘humanity’’. Herger Napolitano a reasonable definition of income for Federal Stearns The SPEAKER pro tempore. The Hill (IN) Neal Stenholm bankruptcy purposes. question is on the amendment. Hill (MT) Nethercutt Strickland For million of seniors, these payments are Hilleary Ney Stump the difference between depravation and sur- The amendment was agreed to. Hinojosa Northup Sununu vival. They do not fit the definition of dis- The SPEAKER pro tempore. The Hobson Norwood Sweeney posable income. question is on the engrossment and Hoekstra Nussle Talent In recent years, fewer than a quarter of a Holden Ortiz Tancredo third reading of the bill. Holt Ose million seniors have annually filed for bank- The bill was ordered to be engrossed Tanner ruptcy protection. They are not noted as Hooley Oxley Tauscher and read a third time, and was read the Horn Packard Tauzin abusers of bankruptcy systems nor as prof- Hostettler Pallone ligate spenders using credit cards or other third time. Taylor (MS) Houghton Pascrell Taylor (NC) forms of credit purchasing. The SPEAKER pro tempore. The Hoyer Pastor Terry However, persons between the ages of 55 Hulshof Paul question is on the passage of the bill. Thomas Hunter Pease and 65 represent the most rapidly growing The question was taken; and the Thompson (CA) Hyde Peterson (MN) group of Americans without health insur- Thornberry Speaker pro tempore announced that Inslee Peterson (PA) ance. Medical crisis is the most important the ayes appeared to have it. Thune single cause of credit problems after job loss. Isakson Petri Istook Phelps Tiahrt H.R. 833 would force seniors to put credit Mr. CONYERS. Mr. Speaker, on that Toomey I demand the yeas and nays. Jefferson Pickering card debts ahead of housing needs, family Jenkins Pickett Turner needs, and costs associated with chronic or The yeas and nays were ordered. John Pitts Upton disabling illness or disease. No provision cit- The vote was taken by electronic de- Johnson (CT) Pombo Velazquez Walden ing ‘‘extraordinary circumstances’’ claims or vice, and there were—yeas 313, nays Johnson, E. B. Pomeroy potential court relief will take away the Johnson, Sam Porter Walsh 108, not voting 13, as follows: Jones (NC) Portman Wamp sense of panic which will strike seniors if Watkins current reasonable protections are stripped [Roll No. 115] Kaptur Price (NC) Kasich Pryce (OH) Weldon (FL) away for the convenience of predatory finan- YEAS—313 Kelly Quinn Weldon (PA) cial organizations. Aderholt Boehner Condit Kennedy Radanovich Weller We urge the recommitment and defeat of Andrews Bonilla Cook Kind (WI) Ramstad Weygand H.R. 833. Archer Bono Cooksey King (NY) Rangel Whitfield Sincerely, Armey Boswell Costello Kingston Regula Wicker STEVE PROTULIS, Bachus Boucher Cox Kleczka Reyes Wilson Executive Director. Baird Boyd Cramer Knollenberg Reynolds Wise Baker Brady (TX) Crane Kolbe Riley Wolf Mr. GEKAS. Mr. Speaker, will the Ballenger Bryant Crowley Kuykendall Rivers Wu gentleman yield? Barcia Burr Cubin LaHood Roemer Young (AK) Barr Burton Cunningham Mr. CONYERS. I yield to the gen- NAYS—108 tleman from Pennsylvania. Barrett (NE) Buyer Danner Bartlett Callahan Davis (FL) Abercrombie Coyne Fattah Mr. GEKAS. Mr. Speaker, for the in- Barton Calvert Davis (VA) Allen Cummings Filner formation of the Members, we are pre- Bass Camp Deal Baldacci Davis (IL) Ford pared to accept the motion to recom- Bateman Campbell DeLay Baldwin DeFazio Gejdenson mit with the change as to Social Secu- Bentsen Canady DeMint Barrett (WI) DeGette Green (TX) Bereuter Cannon Deutsch Bonior Delahunt Gutierrez rity. It is a welcome change to the lan- Berkley Capps Diaz-Balart Borski DeLauro Hall (OH) guage already in the bill. We ask that Berry Cardin Dickey Brady (PA) Dingell Hastings (FL) the Members vote in favor of recom- Biggert Castle Dicks Brown (FL) Dixon Hilliard Bilbray Chabot Dooley Brown (OH) Doggett Hinchey mittal, and then vote ‘‘yes’’ on final Bilirakis Chambliss Doolittle Capuano Doyle Hoeffel passage. Bishop Chenoweth Dreier Carson Edwards Jackson (IL) Mr. CONYERS. Mr. Speaker, I thank Blagojevich Clement Duncan Clay Engel Jackson-Lee the subcommittee chair. Bliley Coble Dunn Clayton Eshoo (TX) Blumenauer Coburn Ehlers Clyburn Evans Jones (OH) Mr. Speaker, I yield to the gentle- Blunt Collins Ehrlich Conyers Farr Kanjorski woman from Texas (Ms. JACKSON-LEE). Boehlert Combest Emerson

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00137 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8630 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Kildee Millender- Schakowsky The SPEAKER pro tempore (Mrs. We are without any clear delineation of the Kilpatrick McDonald Scott NORTHUP). Is there objection to the re- reason or importance of our being involved or Klink Miller, George Serrano Kucinich Mink Stark quest of the gentleman from Pennsyl- of what represents a successful conclusion to LaFalce Moakley Stupak vania? the conflict. We are in this conflict with an an- Lantos Murtha Thompson (MS) There was no objection. nounced policy that we will not commit ground Lee Nadler Thurman f forces, a position that serves our enemy’s in- Levin Oberstar Tierney Lewis (GA) Obey Towns terest but undermines our objectives, whatever Lofgren Olver SUPPORT A RESOLUTION CON- Traficant they are. I submit that it is the height of irre- Lowey Owens CERNING THE CONFLICT IN THE Udall (CO) sponsibility for the Congress of the United Markey Payne BALKANS AND HOW THAT CON- Udall (NM) States to abdicate their responsibility to either Martinez Pelosi FLICT SHOULD BE CONDUCTED Mascara Rahall Vento approve or disapprove a Kosovo policy. Visclosky Matsui Rodriguez (Mr. BATEMAN asked and was given If the President and his, to use the most McDermott Roybal-Allard Waters permission to address the House for 1 McGovern Rush Watt (NC) charitable reference, ‘‘national security team’’ McKinney Sabo Waxman minute and to revise and extend his re- have produced a national policy disaster, we McNulty Sanchez Weiner marks.) should say so. We should not evade the Meehan Sanders Wexler Mr. BATEMAN. Madam Speaker, we Meek (FL) Sawyer Woolsey issue. If the administration is correct in its as- have stumbled through, I think, inept sertion that the barbarism attributed to the NOT VOTING—13 decision-making into a conflict in the leadership of Yugoslavia demands a military Ackerman Hutchinson Watts (OK) Balkans. Last Wednesday we debated response, we should endorse this conclusion. Becerra LaTourette Wynn that issue. At the end of the day we There are those whose political judgement Berman Luther Young (FL) Brown (CA) Simpson had declared no policy, approved no tells them Congress should not act on this Gephardt Slaughter policy, condemned no policy. I think matter, because if we do, we might have to that is an evasion of our moral, if not b 1907 assume responsibility. I categorically object to constitutional, responsibility. any such notion. Our President may have Mr. HILLIARD changed his vote from So today, I will introduce a resolu- failed to call upon the Congress to support his ‘‘yea’’ to ‘‘nay.’’ tion which seeks to declare a policy policy in the Balkans, but the Congress has a Mr. MEEKS of New York and Mr. with reference to that conflict and how duty to speak out anyway. We have a con- LAMPSON changed their vote from it should be conducted, as well as how stitutional duty whether the President ask us ‘‘nay’’ to ‘‘yea.’’ the cost of it should be borne and for our approval or not. Perhaps the constitu- So the bill was passed. shared among our allies, and how we The result of the vote was announced tional duty is higher when the President seeks should deal with the question of in- to evade us and his policy is muddled. as above recorded. dicted war criminals as a part of any A motion to reconsider was laid on Last Wednesday, I voted no on all four res- agreement, and termination of that olutions regarding the conflict against the Fed- the table. conflict. I solicit the review and hope- Stated for: eral Republic of Yugoslavia. I seriously consid- fully the co-patronage of this resolu- ered voting no even on the Rule regarding our Mr. LATOURETTE. Mr. Speaker, if I were tion by my colleagues. present, I would have voted ‘‘yea’’ on final debate, because under the Rule, we could not The United States Congress has been de- passage of H.R. 833, the Bankruptcy Reform make, approve or disapprove any policy. We bating whether and to what extent our country Act. trivialized the role of the Congress and that is should be involved in the conflict between Stated against: fraught with dire consequences for the future. NATO and the Federal Republic of Yugo- Mr. BERMAN. Mr. Speaker, I was unable to The Congress of the United States makes slavia. I cannot find words strong enough to cast a vote on final passage of H.R. 833 due policy and our politics ought to crystallize con- condemn the miserable performance of the to a family emergency. However, had I been flicting views of good or bad policy. Last week Congress thus far. No American to date present, I would have voted ‘‘nay.’’ we failed in this. For this reason I am offering knows whether the Congress of the United a joint resolution regarding the conflict in the f States approves or condemns the policy of the Balkans. PERSONAL EXPLANATION Commander in Chief. Our fellow citizens will The resolution is critical of how we came to Ms. SLAUGHTER. Mr. Speaker, I was un- not know, because we as their collective na- the sorry choices before us, but recognizes able to be present for rollcall votes 108, 109, tional leadership have steadfastly refused to that our country is confronted with certain re- 110, 111, 112, 113, 114, and 115. either approve or disapprove, condemn or alities which it must confront. The choice the Had I been present, I would have voted condone, any policy. We have done this even resolution makes is to give congressional au- ‘‘yes’’ or ‘‘aye’’ on rollcall votes 108, 110, 111, in the context of a solemn debate by some thorization to the ongoing military conflict 112, 113, and 114 and ‘‘no’’ or ‘‘nay’’ on roll- about our constitutional responsibility and the against the regime of Slobodan Milosevic. It call votes 109 and 115. War Powers Act. does not presume to give political guidance to Last week we ensured that the House of f how the conflict is waged and bespeaks a Representatives would bear no responsibility concern only that it be waged with sound mili- PERSONAL EXPLANATION for the military action against Yugoslavia. We tary judgement, consistent with the earliest Mr. HUTCHINSON. Mr. Speaker, on declared no policy, we disapproved of no pol- victory and least casualties. rollcall No. 115, I was unavoidably de- icy. We didn’t accept the reality that our nation Most importantly, it enunciates a policy and tained. Had I been present I would have has led the NATO alliance into a conflict. By identifies goals, which if correct fully justify our voted ‘‘aye.’’ a majority vote, we asserted that our Com- involvement and leadership into this conflict. If f mander in Chief could not commit ground not correct, clearly the resolution should not forces—whatever that means—without our be supported and should fail. How dare we, AUTHORIZING THE CLERK TO specific prior approval. We then by a tie vote on a matter of such consequence, stand by MAKE CORRECTIONS IN THE EN- failed to approve even the continuation of the and declare neither war nor even any policy. GROSSMENT OF H.R. 833, BANK- ongoing conflict into which we had been in- Are not our armed forces entitled to know that RUPTCY REFORM ACT OF 1999 jected by our President. their Congress approves or disapproves of Mr. GEKAS. Madam Speaker, I ask I cannot tell you how much I have agonized what they are doing on the orders of our Com- unanimous consent that in the engross- over the sorry, inept, and clumsy failure of mander in Chief? Certainly they must hope ment of the bill, H.R. 833, the Clerk be those who determine our national security pol- that the elected representatives of our people authorized to correct section numbers, icy in this latest phases of the ongoing Balkan will not choose to abdicate their responsibility. cross-references, and punctuation, and crisis. Even the prior Administration, so con- The resolution I offer speaks to the financial to make such stylistic, clerical, tech- fident during the Gulf War, failed to lead when burden of this conflict in the bosom of Europe, nical, conforming, and other changes it could and should have in the Balkans. and asserts a policy that the costs should be as may be necessary to reflect the ac- Without direction or credible leadership we fairly allocated among the entire NATO alli- tions of the House in amending the bill. have become deeply embroiled in this conflict. ance.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00138 Fmt 0688 Sfmt 9920 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8631 My resolution also asserts that any agree- critical task before us today. We know what children need for successful learn- ment that concludes this unhappy chapter in what is before us in the world where ing, growth and development. I know our history should exempt no one from pros- life and death situations take place, firsthand that children learn better in ecution who is or may be indicted by the ap- and we also see so clearly the current small class sizes and in classrooms that propriate judicial authority as a war criminal. shortcomings in our health care envi- are not deteriorating. It is not an easy resolution. It is not meant ronment. From this background, I know that as political confrontation. It nonetheless con- I sought a seat on the Committee on health insurance which covers regular fronts all of us with the inescapable duty to Commerce which oversees health care checkups, immunizations and prescrip- declare a policy and decide whether we so that I could be a part of this discus- tion drugs for children is the best pre- should be involved in, go forward with, or re- sion. In the age of managed care, where ventive medicine. I know that clean pudiate our involvement in the ongoing conflict values are often driven by profit mo- water and clean air are not merely en- with Yugoslavia. tives over health care needs, nurses vironmental issues; they are health Oh, yes the choices are not easy, but how have been presented with critical new issues. dare we not even make a choice and deign to challenges. In addition to essential contributions call ourselves the elected representatives of I have stood with nurses in my dis- to quality health care, nurses are the our people. trict in their frustration over staffing heart and soul of so many of our com- I solicit your advice and would appreciate ratios in our hospitals, in our commu- munities. There are over 2.5 million your cosponsorship of this resolution. nities. I have been with nurses as they nurses across this great land and they stand for, to me, the heart and soul of f have shed tears over having to dis- charge frail elderly patients before our values and what binds us together SPECIAL ORDERS they are really ready to go home into in our communities. The SPEAKER pro tempore. Under home situations where there is not ade- We need to pay attention to what our the Speaker’s announced policy of Jan- quate health care and support. nurses are saying. Despite their busy schedules and hectic work environ- uary 6, 1999, and under a previous order Nurses know that we should not com- ments, nurses take the time to reach of the House, the following Members promise a patient’s quality of care to out to our communities, educating will be recognized for 5 minutes each. save a few dollars. Nurses understand neighbors to increase awareness and f the real benefits of real managed care reform. promote healthy lifestyles. Nurses’ efforts in my own community EXCHANGE OF SPECIAL ORDER I have been working hard with Re- on the central coast of California have TIME publicans and Democrats to pass a raised awareness on the harmful con- common sense Patients’ Bill of Rights, Mrs. CAPPS. Madam Speaker, I ask sequences of drinking and driving, legislation which will put patients, unanimous consent to claim the time taught parents how to properly install nurses, doctors and other providers of the gentleman from Illinois (Mr. LI- safety seats and educated our children back in charge of their own health care PINSKI). about underaged alcohol abuse. The SPEAKER pro tempore. Is there and holds HMOs accountable when they As we discuss the positive contribu- objection to the request of the gentle- deny critical, sometimes lifesaving, tions of nurses during National Nurses woman from California? treatment. Week, we need to work to ensure that There was no objection. Nurses know these basic rights can these voices of compassion and experi- f mean the difference between life and ence are included in our health care death and between a quality of life that policy debate today. NATIONAL NURSES WEEK they have spent their profession and f The SPEAKER pro tempore. Under a their training to uphold. They can and previous order of the House, the gentle- they should and we are speaking out. CHURCHES IN INDIANA COME TO- woman from California (Mrs. CAPPS) is The Subcommittee on Health and En- GETHER TO AID REFUGEES IN recognized for 5 minutes. vironment, on which I am privileged to KOSOVO Mrs. CAPPS. Madam Speaker, as one serve, has held only one hearing so far The SPEAKER pro tempore (Mrs. of only three nurses in Congress, it is on managed care reform. In that hear- NORTHUP). Under a previous order of my great honor today to rise in support ing I called for greater participation of the House, the gentleman from Indiana of National Nurses Week. nurses. Nurses can and will make valu- (Mr. SOUDER) is recognized for 5 min- My training and education as a nurse able additions in this discussion and in utes. and my 20 years in my profession in the the debate before us. Mr. SOUDER. Madam Speaker, hav- schools of Santa Barbara in the public In Congress, there is also other legis- ing visited the Balkans, and I was priv- school district have given me a unique lation originally drafted by a nurse ileged to be included in the trip with perspective on my new duties in Con- that will protect nurses and other Senator STEVENS and Chairman YOUNG gress. As a nurse, I have learned to rec- health care workers in all States. The a few weeks ago, I have been aggres- ognize the importance of so many Healthcare Worker Protection Act sively against this war which I do not issues which affect families every day, builds on a California health care ini- believe is winnable in the traditional families in my community, in my con- tiative by ensuring that all nurses and sense. And it is time to get a nego- gressional district, families across this others in hospitals and treatment cen- tiated settlement and it is time to cut great country. ters have safe needle devices and infor- off the funding, but I wanted to share a mation available on how to use them. couple of things tonight about the ter- b 1915 We must make sure these workers are rible things that have happened to the Nurses are good listeners. They with- protected at all costs. people there. hold superficial, quick judgments and As a nurse in Congress, I am working These are pictures that I took in take the time to assess situations be- hard to promote these important Vranje, just north of Skopje, in Mac- fore them, before they act accordingly. issues, but Congress will only be suc- edonia. This shows just one of what I Nurses use common sense skills to put cessful in passing meaningful health call the long white road to the moun- the common good before individual in- care legislation when the contributions tains. These are actually the shorter terests. of those on the front lines, on the every mountains. They rise higher up. It is My nursing background has had the day front lines, are recognized and impossible to get ground troops strongest influence on my priorities in brought into the discussion. through this area, which many armies Congress. As a nurse, I feel that it has Madam Speaker, the profession of throughout hundreds of years have been my duty and also my privilege to nursing also gives people a unique per- learned is impossible. speak out on behalf of patients and spective on other critical issues. As a This street goes on and on, miles and health care providers on what is the nurse in a school setting I have seen miles, and this is just one of the camps.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00139 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8632 CONGRESSIONAL RECORD—HOUSE May 5, 1999 There were 23,000 people, we were told, never be a professional photographer lost a parent to unnatural causes. in that camp when we first came in. because I could not snap the picture Twelve percent have been homeless.’’ 8,000 additional people were added just when her tears were coming down, but The point here, and I will insert the that day. she is separated from her family. She is full thing in the RECORD, is these kids These Albanian men were at the back worried about her little child and so know what it is like to suffer, and be- of the place because they kept asking on. cause of that they collected clothes to us, ‘‘Are the Apaches going to save us? Now, I say that because I want to il- help. Are they going to wipe out the tanks?’’ lustrate some of the things that have I hope all Americans understand we Of course, we had to tell them no, that been happening in my district. No mat- have a long-term responsibility here to is not what Apaches are designed to do, ter what a person’s position is on the those who have been harmed, regard- but we wondered where they were get- war, their heart has to go out to the less of our position on the war. ting that information. refugees here or in the other countries Madam Speaker, I have a series of ar- They have radios throughout the where they have been displaced. ticles that I would like to put in the camp that are constantly broadcasting I am pleased in my district that a RECORD in association with this special to them that there is this hope that number of churches and people have order. they are suddenly going to go back. reached out. We tried to make the [From the Journal Gazette, Apr. 20, 1999] These are some of the people trying point while we were over in Europe to SUPPLIES SHORT IN BALKANS to make do. These tents, this size tent the ambassadors of seven nations, to (By Brian Meyer) from USAID basically had supposedly NATO, that Europe has to pick up the Fort Wayne residents will be asked today four to eight people; many of them I bulk of these funds, but we in America to donate clothing and toiletry items to saw far more that. They get a couple of are going to have some obligations as some of the 600,000 Kosovo refugees fleeing Yugoslavia. cans of food, some bread and fruit each well. The Rev. Rick Hawks, pastor of The Chapel day, but they are desperately trying to One story from Pastor Rick Hawks, in Fort Wayne, has scheduled a news con- make a fire or something to heat it up. who heads a large church in Fort ference for 10:30 a.m. today to announce a As these camps are expanded to Wayne, The Chapel, has coordinated citywide campaign to provide relief for 30,000, 50,000 people and upwards, it is with 8 churches: The Chapel; Broadway Kosovo refugees. Donations of clothing, just not going to work; nor are the Christian; Church of the Good Shep- shoes, socks, outerwear, blankets, linens and restroom facilities, the water facilities. herd in Leo; Blackhawk Baptist, also toiletries will be accepted at seven local churches until May 3. Hawks said the Fort Here people are desperately trying to in Fort Wayne, Indiana; Fellowship Wayne campaign, called ‘‘Clothes for stay clean. Missionary Church in Fort Wayne; Kosovo,’’ followed his discussions with Dick In the Macedonian camps they are North Park Community Church; and Barb Kelley, former Fort Wayne resi- coming mostly out of the cities. They Wallen Baptist Church. dents now affiliated with the Slavic Gospel were often booted out in the middle of We also had in my home church, Em- Association in Rockford, Ill. Donations from the night. Most of the people are well manuel Community Church, Abigail Fort Wayne will be shipped to Rob and Pam dressed. The clothes had not come from Roemke coordinated this. They had so Provost, missionaries working in the Alba- nian capital of Tirana. the U.S. This is not able to be sus- many clothes and toiletries and stuff ‘‘At this point, there’s a shortage of every- tained over a long period of time. come in that it overwhelmed the dis- thing,’’ Hawks said. ‘‘Clothing, personal-hy- This photograph was taken at the tribution system that they originally giene items. back of the camp. I had gotten sepa- had planned. They had far more than ‘‘We aren’t dealing with anything perish- rated from the other Senators and Con- they could actually get directly there able, just things like clothes and blankets.’’ gressmen during the trip, as well as the in that group. Seven Fort Wayne churches will serve as collection sites: The Chapel, 2505 W. Ham- interpreter, and this man was trying to Also Pastor Ron Hawkins’ church, ilton Road, Broadway Christian Church, 910 talk to me by going like this. This girl First Assembly of God, put together a Broadway, Church of the Good Shepherd, had just come into the camp the night group that has two registered nurses, 14711 Wayne St., Leo, Blackhawk Baptist before but spoke some English, said, Nancy Grostefon and Dawn Rice, and Church, 7400 E. State Blvd, Fellowship Mis- ‘‘May I help you try to translate?’’ Dr. David Smith, a pediatric surgeon, sionary Church, 2536 E. Tillman Road, North What he tried to tell me is he saw 20 to spend two weeks working in two Park Community Church, 7160 Flutter Road, people get their throats slit just before camps, and they raised the money and Wallen Baptist Church, 1001 W. Wallen Road. he left; saw the mass grave before they through their church to underwrite Hawks said the local campaign is also torched his house and he got out. That these nurses and this doctor going seeking volunteers to help sort and box the was just one of the many stories we over. donated goods; anyone wishing to volunteer heard. In Fort Wayne we also have a large can call The Chapel at 625–6200. He and all the others around them, Macedonian population. George ‘‘The most labor-intensive thing is that ev- when they were asked, first, do you Labamoff in the Fort Wayne-based erything has to be sorted, and there has to be want to go back? ‘‘Yes.’’ If we get rid of Macedonian Tribune, the oldest contin- a quick quality check,’’ Hawks said. ‘‘And then everything has to be boxed accord- Milosevic, you are going to have to live ually published Macedonian newspaper ingly.’’ under the Serbs. ‘‘No, no, we are not in the world, put together the Macedo- Hawks said he is hoping to acquire enough going to live under the Serbs. We are nian Relief Fund. They have also have donations to fill a tractor-trailer rig. The going to get rid of Milosevic,’’ was an effort to try to raise money for the Chapel will pay the $5,000 to ship the donated what they said, ‘‘all Serbs and refugees in the countries. materials to Albania. Milosevic.’’ We heard that all through Lastly, I wanted to read as much as ‘‘We think we’ll fill that (truck rig) quite easily,’’ Hawks said. the camp. We said, what will you do if I can of this letter. I visited an alter- you get back? You have to try to live native school in Columbia City on [From the News-Sentinel] together. ‘‘No, we are going to kill Monday. One of the things that they LOCALS COORDINATE EFFORTS them.’’ were doing was also collecting clothes (By Jennifer L. Boen) We have now the stories from like and materials to send over to Kosovo. Angie Stump and Bob Boughton are an- this man of the throats slit, and it is The teacher wrote me, saying, ‘‘Teach- guished by pictures of Kosovo residents fleet- not something that is going to lead to ing current events to young people ing to refuge with just the clothes on their this kind of humanitarian peaceful set- with little or no background in geog- backs. tlement that some people are dreaming raphy or history is a challenge. So I ‘‘It’s really heartbreaking to see what’s of. try to make every lesson relevant by going on there,’’ said Boughton, a Tokheim This girl here had just come into the working from what they do know. And Corp. employee in Fort Wayne, ‘‘but it’s really good to help someone less fortunate.’’ camp the night before as well. We at-risk kids, just like at-war kids, The desire to help is compelling Tokheim stopped her. We saw she had diapers. know suffering and deprivation. Twen- employees, local churches and others in the And she broke down crying. I will ty-five percent of my students have Fort Wayne area to organize assistance.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00140 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8633 Well-meaning people and organizations tions such as the Salvation Army and the gees in each, said the Rev. Ron Hawkins, the eager to help refugees or victims of disaster Red Cross. ‘‘Buying things in bulk is much church’s pastor. are well-advised to coordinate their efforts less expensive,’’ Dean said. The Assemblies of God has traditionally through relief agencies to ensure they are Immediatly and lower costs are two good been very active in overseas missions, helping, not hindering the effort, said Ste- reasons to buy relief items as close as pos- Tolbert said, and the local church has sent phen Apatow, executive director of the Hu- sible to the affected countries, and there’s a people on different kinds of missions before. manitarian Resource Institute. third: But, she said, this is the first time the The nonprofit, nonpartisan organization The countries Kosovo refugees are fleeing local church has sent a medical mission into works closely with the United Nations High to are poor. ‘‘They are facing an enormous a refugee situation. Commission for Refugees and coordinates re- strain on their own resources,’’ Dean said. And for some of the team members, a lief efforts. It is why the United Nations agency is buy- chance to minister through an overseas mis- Efforts can easily be wasted: ing things locally (overseas) as much as pos- sion is a dream come true. World Relief, which handled tons of dona- sible. ‘‘We are paying bakeries to make the ‘‘It’s been a desire of mine since I was in tions for Hondurans after Hurricane Mitch bread for refugees,’’ she said, helping both high school,’’ said Grostefon, a cardiac crit- last year, said critical deliveries of food, refugees and their new communities. ical care nurse from Parkview Hospital. ‘‘It’s building materials and other goods were im- The American Red Cross wants monetary a God thing.’’ peded by the pileup at shipping ports of donations only for the Kosovo refugees, said Grostefon said she’s been preparing for the clothes and other noncritical items. Jean Wagaman, interim executive director of trip by watching many TV news reports and Donated clothing piled 17-feet deep covered the Northeast Indiana Chapter. reading newspaper articles about the Alba- a 5-acre collection site after Hurricane An- ‘‘The Red Cross estimates we need $1 mil- nian refugee camps, which, according to drew hit Florida in 1992. Much of the cloth- lion each week to meet the needs of the refu- some reports, now hold more than 370,000 dis- ing eventually was buried or incinerated. gees,’’ she said. The organization is helping placed people. Cases of antibiotics donated by U.S. phar- provide shelter, food, health care and first- Despite the fact that she’s traveling to the maceutical companies were shipped to rural aid teams. fringe of a war zone, Grostefon said her fam- For the U.N. High Commission for Refu- Honduran clinics without Spanish labeling. ily has supported her decision. gees and other organizations, the best way Health-care providers, without instructions ‘‘My kids are excited, and my husband for people to help is to donate money. knows this has been a desire in my heart,’’ in their language, could not use the medi- ‘‘We do not want to discourage anyone who cine. she said. wants to help,’’ Dean said. ‘‘All the enthu- Rice, who is executive director of the Fort In Honduras, clothing donations were so siasm of the caring and help is wonderful.’’ abundant they destroyed the business of Wayne Sexual Assault Treatment Center, But getting the right kind of help is impor- brings another special skill to the mission. small vendors there. tant, Apatow said. Make monetary donations Thus, the United Nations agency has some ‘‘Rape in wartime is not new,’’ she said. for Kosovo relief through these organiza- ‘‘It’s not new to this war, and it won’t be good advice for those with good intentions: tions: Before sending donations, work through held back from the next war.’’ The American Red Cross—send to Amer- Rice said helping rape victims from a war national or international groups that have ican Red Cross International Response Fund, workers on site where the relief is needed, is different than treating rape victims in the P.O. Box 37243, Washington, D.C. 20013; or to city because evidence collection isn’t a said Jennifer Dean, associate public informa- the local chapter, marked Kosovo Relief, 1212 tion officer for the High Commission for Ref- major part of the program. E. California Road, Fort Wayne, IN 46825. Se- But what’s similar is tending to the inju- uges. cure credit card contributions can be made It is precisely why Stump, union counselor ries of the assault. Rice said she hopes to over the Internet at www.redcross.org. Call help with both the psychological and phys- and project organizer for UAW Local 1539 at 1–800–HELP–NOW, or 1–800–435–7669, for more Tokheim, is working with the Salvation ical injuries the victims suffer. information and to make a donation. And for Rice, it’s a chance to do something Army. The Salvation Army and the Amer- Salvation Army—send to 3100 N. Meridian instead of watching it on television. ican Red Cross both have workers in refugee St., Indianapolis, IN 46208; mark check ‘‘It’s so easy to watch what goes on and camps. ‘‘Kosovo relief;’’ credit card donations can be say, ‘I hope someone takes care of them’,’’ The Salvation Army has issued national made by calling 1–800–SAL–ARMY, or 1–800– she said. news bulletins listing what people should 725–2769. It’s not just the three team members who and should not donate. Because at least 45 To donate clothing at one of eight area are hoping to make a difference. tons of clothing awaits distribution, the churches participating in the Chapel’s Geoff Thomas, media coordinator for the agency is not accepting more at this time, ‘‘Clothes for Kosovo’’ campaign, call Abigail Lutheran Health Network, said Lutheran said Maj. Ken Reed, Fort Wayne director. Roemke at 625–6200; Contact Rob Provost on and St. Joseph hospitals are excited to help ‘‘It is important that organizations have the Internet at www.lincolnlintl.org. the refugees through aiding the team. The Salvation Army is accepting the fol- the logistics thoroughly worked out for The hospitals donated handmade quilts, T- lowing donations for military personnel dis- transportation and delivery of in-kind dona- shirts for children, thermometers, stetho- patched to the Kosovo region through tions, said Apatow. scopes, latex and non-latex gloves, bandages, PROJECT SACKS: ‘‘They need to have logistics set up for sutures, surgical kits and Ibuprofen, which Individual-size bottles of anti-bacterial transport before the goods are collected.’’ Thomas said is a hot commodity in the soap; Packaged candy (nothing that melts); It’s also better to buy the building mate- camps. rials, tents, medical supplies and food from Packaged snacks, peanuts, snack-sized bags of potato chips, crackers and cookies; Writ- retailers close to the people who need them, [From the News-Sentinel, Apr. 29, 1999] said Apatow and Dean. It saves shipping ing materials, cards, paper and envelopes; costs that could be better spent on direct Games, playing cards, pocket-sized cross- MEDICAL TEAM GOING TO ALBANIA service. word puzzle books and word-search books; (By Jennifer L. Boen) The cost savings could be enormous. First-aid supplies, adhesive bandages, med- ‘‘I’m being carried by God’s hand,’’ says For example, the Chapel is organizing a ical tape, gauze pads and pocket-size Bibles. nurse Dawn Rice, who is preparing for a two- clothing drive for Kosovo refugees among week medical work trip to Albania. several Fort Wayne churches. [From the Journal Gazette, Apr. 30, 1999] Rice is the director of the Fort Wayne Sex- Coordiantor Abigail Roemke said it would CITY TEAM WILL ASSIST KOSOVARS ual Assault Treatment Center and is experi- cost $5,000 to ship an 8-by-8-by-50-foot con- (By Joe Boyle) enced at helping people through trauma. But tainer of clothing overseas. The Chapel has It’s a matter of faith for three local med- knowing how to help the Kosovar women made a connection to help distribute the ical professionals who are leaving in two who have been raped and tortured is some- clothes: Rob Provost, an American living in weeks for Albania to help Kosovar refugees. thing she can’t fully grasp. Albania who is director of Abraham Lincoln Registered nurses Nancy Grostefon and ‘‘I don’t know what to expect,’’ she said. Center school in Tirana, Albania’s capital. Dawn Rice, and Dr. David Smith, a pediatric ‘‘All these people will have post-traumatic Provot’s school is working with Slavic surgeon, will be on a Health Care Ministries stress syndrome . . . the terrible things that Gospel Association and Samaritan’s Purse to medical team working in refugee camps on are going on there.’’ assist Kosovo refugees. And Samaritan’s the Kosovo-Albania border. Rice is part of a team that includes Fort Purse has a contract with the United Na- ‘‘The team itself, the way it came to- Wayne pediatric surgeon Dr. David Smith of tions relief agency to set up a refugee tent gether, was providential,’’ said Marilyn Lutheran Children’s Hospital, and Nancy camp near Tirana. Tolbert, missions director for First Assem- Grostefon, a Parkview Hospital intensive The clothes will go to evangelical churches bly of God Christian Center, 3301 Coliseum care nurse. in Albania for distribution, Roemke said. Blvd E. The three will fly to Athens, Greece, on Relief organizers urge taking advantage of The team will spend two weeks working at May 14 and travel by land to a refugee camp the enormous purchasing power of organiza- two camps, with a total of 800 to 2,000 refu- just north of Tirana, the Albanian capital.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00141 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8634 CONGRESSIONAL RECORD—HOUSE May 5, 1999 They plan to return to Fort Wayne on June the Macedonian Relief Fund. The fund will Twenty-five percent of my students have 2. provide financial assistance to agencies in lost a parent to unnatural causes. Twelve The team is sponsored and supported by Macedonia to deal with the impact of the percent have been homeless. Most have sur- First Assembly of God, 3301 Coliseum Blvd. NATO-Yugoslavia conflict. vived on rice or beans or cereal for extended E, and will be working under the auspices of Chris Evanoff, a Macedonian American en- periods. All have lost friends to violence, and the denomination’s Health Care Ministries trepreneur in the Detroit area, will chair the all have been outcasts most of their lives. division, based in Springfield, Mo. effort. He will be assisted by people around Do they understand the politics of this (or Also being sent from Fort Wayne will be a the country, including myself. any) war? No. But they understand what it semi-truckload of supplies and medicine do- ‘‘Nearly 150,000 Kosovar refugees have means to be orphaned, to be vagrant, to be nated by local hospitals. Bandages, ther- flooded the tiny country of Macedonia in less hungry, to mourn, and to be hated. They mometers, stethoscopes, medical gloves, than a week, creating a humanitarian catas- fully understand what it means to be a ref- quilts and other items are being donated by trophe of unprecedented proportions,’’ ugee. Lutheran Health Network. Evanoff said. That total could increase to So they collect clothes to help others—and Parkview Hospital is donating surgical and nearly a quarter of a million refugees, he end up helping themselves in the process. In medical supplies, as well as antibiotics, dia- added. He also noted, ‘‘Macedonia was as- the process, they are working cooperatively per rash cream and vitamins. Van Wert Com- sured by NATO nations that sufficient as- with adults (employees in the building, their munity Hospital in Ohio also is donating sistance would be available to care for these parents, community members) they nor- supplies and medicine. unfortunate victims of war and ethnic mally consider adversaries. They are earning This is the first time a medical team is cleansing. The delay in getting aid to the re- respect for a job well-planned and efficiently being sent from the church, said Marilyn gion has crippled the Macedonian economy executed: In just two weeks a mere dozen Tolbert, chairwoman of the church’s mission and its capacity to sustain relief efforts.’’ students have collected enough clothing, committee. The refugee crisis so far has cost the Mac- shoes, socks, and undergarments for about ‘‘We’ve always wanted to do a medical edonia republic more than $250 million. 3600 refugees. Remarkably, these students trip,’’ Tolbert said. The mission committee Total costs this year could exceed $1.5 bil- who anticipate failure and disapproval at had contacted Health Care Ministries earlier lion. every turn are succeeding at something in the year and was told all openings for peo- There are about 500,000 Macedonians in meaningful. ple to participate in medical trips were North America. The group has established a While they may never compose a thesis filled. Macedonian Relief Fund account at comparing and contrasting the present con- Just two weeks ago, however, Health Care Comerica Bank in Detroit. Contributions in flict with events in the Balkans leading up Ministries contacted the church and asked the form of checks, credit card payments and to WWII, they have learned to advertise a for a team of people to go to Albania. Church wire transfers can be mailed to: The Macedo- campaign, schedule and share tasks, meet member Michelle Denton took on the task of nian Relief Fund, c/o Comerica Bank, 28801 deadlines, calculate weight and cubic yard finding the right people. Groesbeck, Roseville, MI 48066. Information measurements, arrange transportation and ‘‘The type of people they want there are requests can be e-mailed to more. people who are skilled in dealing with trau- [email protected]. The group has also I’m glad you inquired about the project. ma,’’ said Tolbert. ‘‘. . . These three were set up a Web site at We appreciate your knowledge and support ready and willing to go.’’ www.macedonianrelieffund.org to provide as you debate the merit of alternative edu- They will be working out of tents and giv- additional information. cation programs. We need critical resources ing medical care to refugees who have MACEDONIAN RELIEF FUND FOR THE KOSOVO to raise citizens as well as test scores. crossed the Yugoslavia-Albania border, she REFUGEE CRISIS Sincerely, said. Rice hopes to help train other medical The Macedonian Tribune, in cooperation REBECCA R. ROADY, personnel to identify those women who have with Macedonians in the United States and Teacher. been raped and give guidance on how to treat Canada, is initiating a relief effort to provide for sexually transmitted diseases. ‘‘A female f resources to the people of Macedonia who are may be able to help better than a male,’’ she sharing what little they have with tens of EXCHANGE OF SPECIAL ORDER said. Smith has been on several previous med- thousands of refugees from Kosovo. TIME Since 1991, Macedonia has feared a humani- ical work trips, but it is a first-time experi- tarian catastrophe if a crisis in Kosovo de- Mr. BERRY. Madam Speaker, I ask ence for Rice and Grostefon. veloped. Regrettably, this catastrophe has unanimous consent to claim the special Other local individuals and businesses are order time of the gentleman from Illi- helping make the trip possible. Root’s Camp been realized. The strain of tens of thousands ’n Ski Haus and GI Joe’s Army Surplus have of refugees has crippled Macedonia, desta- nois (Mr. DAVIS). donated equipment and supplies. Brateman’s bilizing its economy and progress toward a The SPEAKER pro tempore. Is there Inc. donated boots. American Freightways is democratic, free society. Not only are refu- objection to the request of the gen- donating the shipping for the supplies to gees suffering, but so are the people of Mac- tleman from Arkansas? Springfield. An organization called Convoy edonia as their factories have been closed There was no objection. of Hope is packing and shipping the supplies. and work has come to a halt. Donations can be mailed to the Macedo- ‘‘We have so much,’’ said Tolbert. ‘‘The f nian Relief Fund, c/o Comercia Bank, 28801 poorest of us in this area are worlds beyond Groesbeck, Roseville, MI 48066. Reference PRESCRIPTION DRUG FAIRNESS people there. We don’t have a clue.’’ ACT FOR SENIORS The Rev. Ann Steiner Lantz is director of bank account # 1851014603. To wire donations, chaplains at Parkview and chairwoman of use transit/routing # 072000096, refer to the The SPEAKER pro tempore. Under a the hospital’s mission and community out- bank account number and Comercia. You can donate by check or with Visa or previous order of the House, the gen- reach committee. She is coordinating the Master Card. No donation is too small, none tleman from Arkansas (Mr. BERRY) is hospital’s involvement in the project. too large. recognized for 5 minutes. ‘‘This is part of our mission and our Judeo- Mr. BERRY. Madam Speaker, I would Christian heritage,’’ she said. ‘‘It’s the right thing to do.’’ MARSHALL CENTER like to speak this evening about the ‘‘What we’re doing is a drop in the buck- ALTERNATIVE HIGH SCHOOL, Prescription Drug Fairness Act for et,’’ Lantz said. ‘‘But if everyone does a lit- Columbia City, IN, May 2, 1999. Seniors. This legislation will help the tle, we can help a whole lot.’’ DEAR CONGRESSMAN SOUDER: I am pleased problem that our Nation’s seniors have to have been requested to forward details of Donations to help with the cost of sending had to deal with for years, and that is the medical team from Fort Wayne can be my students’ Kosovo clothing drive to you. I welcome this opportunity to illustrate the the outrageous prices of prescription sent to First Assembly of God, 3301 Coliseum drugs in this country. Blvd. E., Fort Wayne, IN 16805. scholastic merit of an unconventional learn- ing activity: The district that I represent has the [From the News-Sentinel] Teaching current events to young people highest number of senior citizens that with little or no background in geography or live only on Social Security of any dis- LETTERS TO THE EDITOR history is a challenge. (Most of the alter- (By George Lebamon) trict in the country. When I hold meet- native students cannot locate Europe on a ings in the First Congressional District A group of prominent Macedonians from map, and one of them even thought NATO around North America and Europe, aided by was a country.) So I try to make every les- of Arkansas, I hear about two issues, the Fort Wayne-based Macedonian Tribune, son relevant by working from what they do and that is the agriculture crisis and the oldest continuously published Macedo- know. And at-risk kids, just like at-war kids, the high cost of prescription drugs, es- nian newspaper in the world, have formed ‘‘know’’ suffering and deprivation. pecially for seniors.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00142 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8635 I also get letters from Arkansas sen- my doctor insists I should not take tunate it is that those who claim to iors who tell me every day that they with these other medications. want a bipartisan remedy turn a deaf cannot afford to pay for all their needs; ‘‘Please do what you can to get the ear, Madam Speaker, I think particu- specifically, all their medicine and all cost of prescriptions back down to a larly to the latest effort to help us save their food. reasonable level. I have had numerous and strengthen Medicare: to a bipar- I also get letters from Arkansas sen- people tell me that they cannot afford tisan Commission, with noteworthy iors who tell me that their drug bills the medicines that are prescribed for Americans from coast-to-coast, and in are massive. Seniors are not following them.’’ particular representatives of both par- their doctors’ orders. Some of them Madam Speaker, sadly enough, this ties, the Senator from Louisiana, Mr. have been given prescriptions which letter is not something that should BREAUX, and my colleague on the Com- they cannot afford to fill. Others have surprise anyone here, because I am mittee on Ways and Means, the gen- filled prescriptions which they cannot sure that if we talk to most of the con- tleman from California (Mr. THOMAS), afford to take as directed. stituents in Members’ districts, they who took a long, hard look at Medi- Because they cannot pay the rent, will tell us they have received similar care, especially in the wake of the cou- pay the electrical bills, buy food and letters and they have talked to many rageous steps this Congress took in the take very expensive prescription drugs, seniors that have the same problem. face of withering propaganda which the they either stop taking them or they What do we do? Do we continue to press accurately described as take less than is prescribed by their stand by and allow our seniors to be Mediscare, intent on scaring our sen- doctor. They are doing things that in taken advantage of, robbed, by the iors and obscuring the choices, and yet, the long run are harmful to their pharmaceutical manufacturing compa- despite that, we came back, we saved health. I find it amazing that we tell nies? Fortunately, we have a bill that Medicare, and yet we want to strength- our seniors that they can live longer if has 108 cosponsors that will help those en it in additional ways. they take this pill or that pill but then seniors who find themselves choosing How interesting it was, Madam if they cannot afford the medication between food and medicine. Speaker, to observe the labors of that that keeps them alive we do not do I call on all my colleagues to stand bipartisan commission, and how won- anything about it. up for our seniors and sign on to this derful it was to see Senator BREAUX The Prescription Drug Fairness for bill. It is a good bill. It is a step in the and the gentleman from California (Mr. Seniors Act of 1999 is a chance for us to right direction. It does the right thing THOMAS) truly fashion a bipartisan so- do something about it. It is a chance to as it concerns the senior citizens of lution. How sad it is to report, Madam step forward and show our seniors that this country. Speaker, the unfortunate efforts of we care about their well-being. f some to avoid a solution, to avoid help- Madam Speaker, this legislation al- ing the neediest seniors, and instead, EXCHANGE OF SPECIAL ORDER lows seniors, Medicare beneficiaries, to attempt to invent an issue. TIME purchase prescription drugs at reduced Madam Speaker, in a few short days prices. It allows pharmacies to pur- Mr. HAYWORTH. Madam Speaker, I a Star Wars prequel will be released, it chase prescription drugs at the best ask unanimous consent to use the spe- may already have been in the theaters, price available to the Federal Govern- cial order time of the gentleman from with wonderful flights of fantasy and ment. It is estimated to reduce pre- Kansas (Mr. MORAN). fiction, but Madam Speaker, we have scription drug prices for seniors by The SPEAKER pro tempore (Mrs. not a prequel but a sequel about to be over 40 percent. NORTHUP). Is there objection to the re- unfurled, Mediscare II. The average American under 65 takes quest of the gentleman from Arizona? Because in the wake of the bipartisan only four prescriptions a year. The av- There was no objection. solution that Senator BREAUX, the gen- erage senior citizen over 65 takes an f tleman from California (Mr. THOMAS), and others from both sides of the aisle average of 14 prescriptions a year. Our TRUE BIPARTISANSHIP NEEDED fashioned, the word went out from the seniors suffer from more than one TO SAVE MEDICARE AND HELP White House: A supermajority of 11 chronic condition: hypertension, diabe- AMERICA’S NEEDIEST SENIORS tes, arthritis, glaucoma, circulatory members of this Commission had to problems, and many others. Medicare The SPEAKER pro tempore. Under a vote to approve the Commission’s rec- beneficiaries spend over $700 per year previous order of the House, the gen- ommendations to take those good ideas on average for prescription drugs and tleman from Arizona (Mr. HAYWORTH) and move them into the realm of sound many seniors spend much more than is recognized for 5 minutes. public policy. that, some as much as $700 a month. Mr. HAYWORTH. Madam Speaker, I Sadly, Madam Speaker, the word Are the pharmaceutical companies listened with great interest to my went out from the other end of Penn- hurting for profits? Certainly not. friend, the gentleman from Arkansas, sylvania Avenue, from our president, They are the most profitable busi- detail a genuine problem. And as the that by actually embracing the bipar- nesses in existence. Last year they had citizen honored to represent the Sixth tisan solution, some in this Chamber of a net profit of $24.5 billion, or 17 per- Congressional District of Arizona, the liberal persuasion would be de- cent of their revenues. home to many of America’s seniors prived of an issue, an issue to drive a who endured a Great Depression, who wedge among Americans, an issue to b 1930 took part in World War II, who built again scare seniors. Certainly we have no objection to the our American economy into the envy Thus, Mediscare II took flight, be- drug companies being profitable, and of the world, and who now, in their cause 10 members of the Commission hope they continue doing so. Here is a golden years, have time to enjoy a voted for this commonsense solution to letter that a senior in my district sent quality of life unparalleled, I still un- help the neediest seniors, but the presi- to me about this very problem. derstand that for many there are gen- dential appointees from this body re- She said, ‘‘I want to thank you for in- uine problems. fused to vote for the program. troducing a bill to investigate the ex- How unfortunate it is, then, Madam How ironic it was, Madam Speaker, treme cost of prescription drugs. As I Speaker, that when those of us in our that our president, one who has come attempt to control blood pressure, cho- commonsense, conservative majority to this Chamber again and again and lesterol, treat a thyroid deficiency, and move in a bipartisan manner to offer offered words of reconciliation and the restless leg syndrome, it costs me over real choices to help the neediest sen- term ‘‘bipartisanship,’’ how sad it is $100 a month. I have had to cut out my iors in our society, to offer alternative that he sent those instructions, and arthritis medicine that costs $125 a plans out from the auspices and away how unfortunate it is that our presi- month that the doctor prescribed, and from the auspices of big government dent, the afternoon the Medicare Com- I have had to return to aspirin, which and bureaucratic solutions, how unfor- mission’s recommendations were voted

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00143 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8636 CONGRESSIONAL RECORD—HOUSE May 5, 1999 down, had the audacity to appear on ican nuclear labs. The Senator’s pro- Madam Speaker, I fully agree that we television and say again, we have to posal comes on the heels of recent re- need to be more wary of China. This is solve the Medicare question in a bipar- ports of compromises to our national an authoritarian country, a one-party tisan way. security with regard to the Peoples’ state, the Communist party, with a Madam Speaker, we spoke yesterday Republic of China. terrible record on human rights and a of teachers, and our first teachers are While I agree that Chinese espionage record of intimidation and aggression our parents. A fundamental lesson activities should cause us to be more against its neighbors. most Americans learn is that we vigilant with regard to that country, I Indeed, Madam Speaker, some of In- should do what we say, live up to our am concerned that this proposed legis- dia’s recent actions, including the nu- words, and mean what we say. lation casts a wide net and would give clear tests and the test-firing of the How unfortunate it is that our presi- too much discretion to officials at the Agni intermediate-range missile, which dent continues to be engulfed not in a Department of Energy. The result have caused diplomatic problems with credibility gap, but sadly, in a credi- could be a cutting off of positive sci- the U.S., have to be seen in the context bility canyon, where his words and his entific exchanges that do not affect our of China. India shares a long border deeds, whether personal, political, or in national security, depriving all of us of with China, the two countries have terms of policy, fail to reconcile with valuable knowledge and disrupting the fought a border war started by China, his actions; the latest example, of types of scientific contacts that actu- and India is directly threatened by Chi- course, being this Mediscare II. ally promote security and cooperation. na’s provision of weapons technology And I appreciate the words of my One country, Madam Speaker, that to Pakistan. friend, the gentleman from Arkansas. could be affected by this legislation is The bottom line, Madam Speaker, is But let me also say that we should India. While the Senate legislation that India is not China. India is a de- really work in a bipartisan fashion. I does not mention any countries by mocracy with multiple political par- would welcome my friends on the left name, a recent report in the newspaper ties. So we need to be careful before we to truly embrace a bipartisan solution. India Abroad quotes an Energy Depart- go on a witch hunt against countries, But as we have heard from pundits in ment official that the list of seven sen- particularly India, which do not pose this town and nationwide, some folks sitive countries includes, in addition to the same type of security risk posed by here are not interested in solving prob- China and Russia, India and Pakistan. China. The official indicated that different lems. Some folks here do not want to The legislation introduced in the criteria were used for putting countries embrace a solution that would Senate is too open-ended, in my mind, on the list, and that India and Paki- strengthen Medicare and save social se- allowing the Department of Energy stan were included because they are curity. Some folks would rather have overly broad discretion. At a time not signatories to the Nuclear Non- an issue that they believe can hang when there is an emerging bipartisan proliferation Treaty. like a sword of Damocles over the com- consensus that we should lift the sanc- Madam Speaker, I, too, am deeply tions that have been imposed on India, monsense, conservative majority. concerned about the persistent pattern Madam Speaker, we all confront this legislation could end up imposing of China’s theft of our nuclear secrets. another punitive sanction that will fur- many challenges in Washington, and I have come to this floor on several oc- ther set back our relations, to the det- we are thankful for the give and take casions to call for more safeguards riment, in my opinion, of both coun- on this floor. But Madam Speaker, to against Chinese espionage, as well as to tries. those who would embrace the cynical focus more attention on China’s docu- politics of overpromising and failing to The question, should we protect our mented actions with regard to nuclear sensitive nuclear secrets from poten- truly live up to their mission, I believe proliferation, which include providing history will render a harsh verdict. tially hostile countries, like China, nuclear and missile technology to un- that have already been shown to have I believe the very people they claim stable countries like Pakistan. stolen those secrets, I think the answer to want to help are the people who will But in the case of India, we clearly is absolutely yes, Madam Speaker. But suffer the most. We will hear more Or- do not have the facts to support the wellian speeches from the left in the conclusion that India is involved in the let us not cut off cooperation and sci- days to come. How mindful it is of same types of activities as China. entific exchanges with countries, like George Orwell’s novel 1984, and the Thus, I would urge Members of the India, that have not been stealing our phrase, ‘‘Ignorance is strength.’’ Senate and the House, as well as the secrets and which could be partners for I do not believe that is true. I believe administration, not to jump to any a more stable and secure world. the facts will reign, and I look forward conclusions about India without the f to working in a truly bipartisan fash- facts. b 1945 ion to save Medicare and help our need- What we know, Madam Speaker, is iest seniors. that U.S.-India relations have suffered KOSOVO WAR IS ILLEGAL f in the past year because of the nuclear The SPEAKER pro tempore (Mrs. tests conducted by India last May. But NORTHUP). Under a previous order of PROCEED WITH CAUTION BEFORE one key fact that is often overlooked is the House, the gentleman from Texas BANNING SCIENTIFIC TIES WITH that India’s nuclear program is essen- (Mr. PAUL) is recognized for 5 minutes. INDIA tially indigenous, developed by India’s Mr. PAUL. Madam Speaker, it is The SPEAKER pro tempore. Under a own scientists. time to stop the bombing. NATO’s war previous order of the House, the gen- Export controls on supercomputers against Serbia left the Congress and tleman from New Jersey (Mr. PALLONE) and other dual use technology have the American people in a quandary, is recognized for 5 minutes. been in effect against India for years, and no wonder. The official excuse for Mr. PALLONE. Madam Speaker, I forcing India to develop its own highly NATO’s bombing war is that Milosevic rise today to draw my colleagues’ at- advanced R&D infrastructure. would not sign a treaty drawn up by tention to legislation that has been in- Another very important point, NATO, which would have taken Kosovo troduced in the other body that could Madam Speaker, is that India has kept away from the Serbs after the KLA de- have the potentially destructive effects its nuclear technology to itself, out of manded independence from Serbia. of cutting off important exchanges be- the hands of rogue regimes and inter- This war is immoral because Serbia tween American scientists and their national sponsors of terrorism. This is did not commit aggression against us. counterparts from other countries. in marked contrast to China, which has We were not attacked and there has The legislation in question, offered not only stolen our technology, but has been no threat to our national secu- by Senator SHELBY, would impose a shared very sensitive information with rity. This war is illegal. It is moratorium on visiting scientists from unstable countries in Asia and the Mid- undeclared. There has been no congres- so-called sensitive countries in Amer- dle East. sional authorization and no money has

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00144 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8637 been appropriated for it. The war is $13 billion than the money the Presi- considering action on bills containing pursued by the U.S. under NATO’s dent has already spent on the war. appropriations. This presents a predic- terms, yet it is illegal even according Appropriating funds to fight a war, ament for them when good policies and to NATO’s treaty as well as the U.N. even without a declaration, provides a necessary investments are overloaded charter. The internationalists do not much more powerful legal and political by unnecessary spending proposals. even follow their own laws and do not endorsement of the war than the public This line item veto has had a long care about the U.S. Constitution. statements made against it by non- history in the U.S. Congress. The first The humanitarian excuse for the war binding resolutions passed by the proposal was introduced in 1876. Presi- is suspect. Economic interests are in- House last week. Declaring war and dent Grant endorsed the mechanism in volved, as they so often are in most funding war are two powerful tools of response to the common practice of armed conflicts. NATO’s vaguely stat- the Congress to restrain a president Congress attaching riders to appropria- ed goals have not been achieved. For from waging an unwise and illegal war. tions bills. In 1938, the House approved the most part, the opposite has. Let me If the President pursues an undeclared a line item veto amendment to the give my colleagues a few examples. war and we fund it, we become part- independent offices appropriations bill Number one. Milosevic is now more ners, no matter what justification is by voice vote, but the amendment was powerful than ever; the Serb’s more given for the spending. rejected by the other body. unified. Only chaos can come from ignoring the strict prohibition by the Constitu- It did not come until 1996, in this re- Number two. Russia is now alienated form Congress, that the line item veto from the west. Their hold on a nuclear tion of a president unilaterally waging war. If a president ignores the absence act was finally signed into law by the arsenal is ignored. Along with Russia’s President, and this law became effec- economic desperation and political in- of a declaration, and we are serious, the only option left to Congress is the tive in 1997. Unfortunately, after the stability, NATO is pushing Russia into President first invoked this new au- a new alliance against the west. power of the purse, which is clearly the responsibility of the Congress. We thority in August of 1997, the Supreme Number three. Innocent Serbs and Court weighed the constitutionality of Albanian citizens are routinely being should not fund this illegal and im- moral NATO war. this law when it upheld a District killed by our bombs. Court ruling declaring the line item Number four. Civilian targets are de- f veto law unconstitutional. liberately hit, including water, power H.J. RES. 9, THE LINE ITEM VETO Those of us who support the line item and sewer plants, fuel storage and TV CONSTITUTIONAL AMENDMENT veto have come to recognize that in stations. The SPEAKER pro tempore. Under a order to authorize a line item veto, a Number five. An economic embargo previous order of the House, the gen- constitutional amendment must be is now being instituted to starve chil- tleman from Pennsylvania (Mr. passed, and that is why I stand before dren and prevent medications from ENGLISH) is recognized for 5 minutes. my colleagues today. My legislation reaching the sick, just as we have been Mr. ENGLISH. Madam Speaker, for will correct an imbalance in our budg- doing for a decade against Iraq. many of us who came to Congress in etary process long recognized, permit- Number six. This war institutional- 1994, elected on a platform of fiscal re- ting a president committed to cutting izes foreign control over our troops. sponsibility and reform, it is a source unnecessary spending to do so sur- Tony Blair now tells Bill Clinton how of wonder and considerable pride that gically, using a scalpel instead of a to fight a NATO war, while the U.S. America now has something that a broad sword. taxpayers pay for it. generation of national leaders had only Madam Speaker, the line item veto is Number seven. Greater instability in dreamt of, and that is a balanced Fed- the region has resulted. a powerful weapon in the cause of fiscal eral budget. responsibility. It flushes out special in- Number eight. We are once again sup- The current surplus is a major public porting Osama bin Laden and his terests, pork barrel spending buried in benefit, opening long-term vistas of a the depths of large appropriations and friends in the KLA. debt-free America with a higher growth Number nine. We have bombed Bul- forces them to be considered individ- rate, lower interest rates and a cornu- ually, on their own merits, in the light garia. By mistake, of course. Sorry. copia of economic opportunity. It was of day. It allows a determined chief ex- Number ten. Our weapons are being achieved through the disciplined ef- ecutive to challenge specific expendi- depleted, our troops spread too thin, forts of a fiscally conservative Con- tures no matter how powerful their resulting in further undermining of our gress dedicated to reining in Washing- champions of the legislative process. national defense. ton’s spending counterculture. Number eleven. Billions of dollars We now know we can balance the Currently, constitutions in 43 States, are thrown down a rat hole and Con- budget, but we can only realize the including my own commonwealth of gress is about to vote for more. long-term benefits of a balanced Fed- Pennsylvania, provide for a line item Number twelve. The massive refugee eral budget if we keep it balanced. This veto, usually confined to appropria- problem, which is essentially a result will require changes in the way that tions bills. These constitutions allow of NATO’s bombing, continues. Congress appropriates tax dollars. the governor the power to eliminate Up until now, general defense funds As Members of Congress, we need to discrete spending provisions in legisla- have been spent to wage this war with- look at real budgetary reform which tion that comes to his desk for his sig- out permission. The President wants to will promote accountability in the ap- nature. Governors have successfully catch up and is asking for $6 billion, propriations process when we consider utilized this power on the State level but Congress, in its infinite wisdom, how to spend taxpayers’ dollars. With and it is now time to give this power to wants to give him $13 billion for a war this in mind, my friend, the gentleman the President to cut unnecessary Congress rejects. Once we directly fund from Maine (Mr. JOHN BALDACCI), and I spending. the war we will be partners in this mis- have introduced House Joint Resolu- Already, Madam Speaker, this adventure. The votes last week were tion 9, a proposed constitutional amendment has been endorsed by a symbolic. They had no effect of law, amendment that would provide a line number of prominent national organi- but appropriations do. item veto to the President of the zations, including the National Tax- Saying the new appropriations will United States in his consideration of payers Union, the U.S. Chamber of be used to beef up a neglected defense any appropriation. This is important, Commerce, Citizens for a Sound Econ- does not make it so. Defense funds are bipartisan, and fiscally responsible leg- omy and Citizens Against Government fungible. The President has proven this islation that deserves the prompt at- Waste. More importantly, in my view, by waging a war for a month without tention of this House. the line item veto enjoys broad support any authorization or appropriation. For too long presidents have had to from millions of taxpayers who are Congress will no more control the next adopt an all-or-nothing approach when frustrated by the ponderous size and

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00145 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8638 CONGRESSIONAL RECORD—HOUSE May 5, 1999 unbridled waste of the Federal Govern- It has gotten so bad, Madam Speaker, wants to divorce them, maybe they ment. Their call to action deserves to that at the end of last year the Joint would think there is an emergency. be heard. Chiefs of Staff came and testified be- If they are an infantryman in the Ko- Madam Speaker, I invite my col- fore the Senate Committee on Armed rean Peninsula and they know that if leagues to join me in supporting this Services that we are $148 billion short the attack comes they are not going to reform legislation and supporting this over the next 6 years in what we need have the modern anti-tank weapons important amendment in restoring ac- to maintain minimal standards of read- they need so they are going to have to countability to the process. iness. And tomorrow we have a chance stand out there in the middle of the f to make a modest downpayment on open, look that tank in the eye and EXCHANGE OF SPECIAL ORDER what we need to do to protect Amer- fire, rather than fire and get back to TIME ica’s greatness and to provide for our cover, maybe they would think there is men and women in the military. an emergency. Mr. TALENT. Madam Speaker, I ask Nobody disputes these figures, Mr. Speaker, my first year in the unanimous consent to take the time of Madam Speaker. The administration Committee on Armed Services we had a the gentleman from Kentucky (Mr. does not. Nobody here will stand up to- hearing. A retired military person tes- WHITFIELD). morrow and argue that we do not need tified; and he said, ‘‘The military life is The SPEAKER pro tempore. Is there to spend this money to maintain readi- a difficult one. We sacrifice a lot. We objection to the request of the gen- ness. They will have a lot of excuses are willing to put our lives on the line. tleman from Missouri? There was no objection. why we should not vote for the bill to- It is not easy, but we are proud to do morrow, just as we have had excuses it.’’ Then he looked up at us in the f year after year after year. Committee on Armed Services and he SUPPLEMENTAL DEFENSE BILL We heard one of them a little while said something that applies to the NEEDED TO SUPPORT AMERICA’S ago. We cannot pay for this extra mili- whole Congress. He said, ‘‘But we count MILITARY tary spending because that would pay on you. We count on you to protect The SPEAKER pro tempore. Under a for the war in Kosovo. No, it will not. us.’’ previous order of the House, the gen- That is going to pay for the money Mr. Speaker, we have let them down tleman from Missouri (Mr. TALENT) is that otherwise will be sucked away year after year after year after year. recognized for 5 minutes. from the military by the war in Tomorrow we have a chance to stop Mr. TALENT. Madam Speaker, to- Kosovo. letting them down. Let us end the ex- morrow we have a chance to be true or If my colleagues want to stop the war cuses. Let us do what we all admit now false to the interests of our country in Kosovo, wait for the military appro- we need to do. Let us make a modest and the men and women in America’s priations bill and put a rider on it that down payment on what we need to do military service when we consider the says the money cannot be used in to allow these men and women to pro- supplemental defense bill to add $7 bil- Kosovo. Do not starve the rest of the tect us and to protect our families and lion to defense spending this year. military in order to fund one of the de- protect our future. Vote for the supple- It is about time that we considered ployments that has caused the military mental bill tomorrow. such a measure. For the last 10 years to go hollow in the first place. History is watching. The dictators of we have reduced military spending by Another excuse we will hear is that the world are watching. And these men 31 percent; by almost a third. At the we cannot take the money out of So- and women who count on us are watch- same time, the number of engagements cial Security. Madam Speaker, by the ing. we have asked our men and women in most conservative estimates we will America’s military to be involved in have over $800 billion in surpluses over f has increased by a factor of three. the 10 years, even apart from the ‘‘BELIEVERS IN READING’’ HON- We deployed them 10 times during money that comes from Social Secu- ORING KAREN TAYLOR AND NA- the Cold War around the world. We rity. TIONAL TEACHER APPRECIATION have deployed them 26 times in the last My father is 87 years old. He gets So- WEEK 8 years. Essentially, we have never re- cial Security. He fought in the Navy in duced operational tempo, the business the second world war. The generation The SPEAKER pro tempore (Mr. of the force, since Desert Storm. We that saved private Ryan, my father’s ISAKSON). Under a previous order of the have continued to ask them to do more generation, is not going to begrudge House, the gentleman from Missouri and more with less and less, and they the men and women of America’s mili- (Mr. HULSHOF) is recognized for 5 min- are at the breaking point. tary what they need now to provide for utes. First, they robbed the future to pay our security, especially when it does Mr. HULSHOF. Mr. Speaker, this week is for the present in order to deal with not even affect Social Security. National Teacher Appreciation week and our that. They deferred maintenance. They The excuse I like the most is that we attention is focused on education. As the reduced pay raises and retirement. do not have an emergency. That is why elected Representative of Missouri’s Ninth They allowed health care to decline in we do not need this supplemental now. Congressional District, I have the distinct the service. They postponed military Well, whether we have an emergency honor of representing sixteen colleges and construction and they slashed mod- kind of depends on one’s point of view. universities, and a plethora of public and pri- ernization. Standing here in this chamber, it is vate schools which help prepare students to When that was not enough, they nice and warm and safe, no, we do not enter these educational institutions. robbed parts of the present to pay for have an emergency. Mr. Speaker, I stand before you today to other parts of the present. They sac- honor all of the hard working individuals who rificed the important to the urgent. So b 2000 work in these educational institutions in central now we have a shortage of spare parts. But if they are in an AWACS unit and northeastern Missouri. Each and every We have reduced training for our men and they are working 80 hours a week one deserves accolades for their role in pro- and women in the military. We have a and they have for years because they viding excellence in education. huge shortfall in ammunition, and we need two people in that unit to do their Today, however, I would like to point the na- cannibalize the troops that are de- job and there is only them to do it, tional spotlight to highlight one of many de- ployed here at home in order to sup- maybe they would think there is an voted teachers who have dedicated their lives port deployments abroad. We take peo- emergency. to provide quality education in Missouri’s Ninth ple and spare parts and machines away If they are on their second tour of Congressional District. from units that are here in the United duty on an aircraft carrier and they Last month, Mr. Stan Taylor of Columbia, States in order to support units have been at sea for 9 months and they Missouri, stopped by my district office to re- abroad. have not seen their kids and their wife quest a congratulations letter be sent to his

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00146 Fmt 0688 Sfmt 9920 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8639 wife, Karen, on her retirement from the Colum- goes all the way around, ‘‘thank you children in the public schools, which, Rudner bia Public School system. Karen began teach- very much.’’ It is from a young man explained, deviates little from that value. ing in 1961 in a rural, one room school house named Jerrod Padinama. It says: Home schoolers also did significantly better than their private school counterparts based called East Center School in Kirksville, Mis- Dear Mr. Tancredo, thank you for giving on Catholic school norms where the median souri. She had the tremendous responsibility us the privilege of home schooling. My home scaled scores were in the 65th to 75th per- for teaching all grades, first through twelve, at school co-op is studying the Constitution, centile range. East Center School. and it is fun. I am 9 years old. I am in the According to Rudner, major findings in the In 1967, Karen began teaching within the third grade. I am praying for you. study include the following: Columbia Public School District, and for the Jerrod Padinama. Almost one-quarter of home-school stu- last twenty years she has taught second grade Well, Jerrod, thank you for your dents are enrolled one or more grades above elementary school at Rock Bridge Elementary prayers. I sincerely appreciate them. their age-level peers in public and private schools. School in Columbia, Missouri. But I tell my colleagues, this is real- Mr. Speaker, as I learned of Karen’s dedica- ly a very touching little card I re- It goes on, Mr. Speaker, but I would tion to improve education in Missouri’s Ninth ceived, and I have been holding on to it just say that it verifies what we al- District, I felt if befitting that I recognize her because I wanted to reference it in a ready know about home schooling and special efforts, and in doing so, I honor all of way. The neat part is that this young that is that it works, it works in an those like her who have dedicated their pro- man would take the time to send me academic sense, it works in a social fessional lives to help enhance the education this little card and draw it in. But in a sense. And I want to take the oppor- of their students. way it is a sad commentary because he tunity here today to thank Jerrod for Not surprisingly, I do not stand alone in has to tell me ‘‘thank you’’ for letting his card, to thank Jerrod’s parents for placing this honor. On May 22nd, the Missouri me be home schooled. giving him the opportunity to be home Teachers Association and more than 300 peo- And he does know intuitively, I sup- schooled, and to thank all those thou- ple—family, friends, colleagues and former pose, and certainly his parents are well sands and thousands, perhaps millions, students—will help celebrate Karen’s edu- aware of the fact that often there are of parents around the country who are cational efforts at Rock Bridge Elementary attempts in this body and certainly in doing the same for their children. School during a reception to commemorate legislatures all over the country and f States all over the Nation to actually her retirement after twenty years of teaching in KOSOVO the Columbia Public School system. restrict the ability of parents to actu- Mr. Speaker, I would like to close with Mr. ally teach their children at home. And The SPEAKER pro tempore. Under Taylor’s words about his wife. He wrote that they have to say ‘‘thank you’’ to us for the Speaker’s announced policy of Jan- the most important lesson Karen stressed to letting them have a right that, frank- uary 6, 1999, the gentleman from Cali- her students was the power of knowledge ly, is as natural as breathing, a right of fornia (Mr. CUNNINGHAM) is recognized through reading. Every day she would read to a parent to teach their child at home. for 60 minutes as the designee of the her students. It was her goal throughout her This is as if this is a strange anom- majority leader. thirty year teaching career to encourage every aly, this is something weird that we do Mr. CUNNINGHAM. Mr. Speaker, I student to become believers in the importance in this country that they have to be al- yield to the gentleman from Arizona of reading. Thank-you Karen, for your devotion lowed to do by the legislature. And (Mr. JOHN SHADEGG) who has, I think, a to your students and for providing excellent that is the only kind of negative part good health care proposal and is one of education for many generations of children. I of this thing I see. Because, otherwise, our leaders in Congress on health care stand here today to honor you and all those it is a very beautiful thing. issues. who share your commitment towards excel- I just wanted to point out that home PATIENTS’ HEALTH CARE CHOICE ACT lence in education. May we all celebrate Na- schooling certainly preceded any other Mr. SHADEGG. Mr. Speaker, I thank tional Teacher Appreciation Week with those kind of schooling we had in the United the gentleman for yielding. And I pre- who have given us the priceless gift of edu- States of America; and it did very, very sume he is going to discuss with us a cation. well, and it continues to do very, very little bit later some issues about na- f well. And it is an expanding phe- tional defense, and I will await hearing nomena. Many, many people are par- his topic and hearing his remarks. HOME SCHOOLING ticipating in this. It is growing astro- Mr. Speaker, today, on behalf of my- The SPEAKER pro tempore. Under a nomically, almost beyond, really, ways self and 13 other colleagues, I have in- previous order of the House, the gen- to describe it. troduced the Patients’ Health Care tleman from Colorado (Mr. TANCREDO) I find in my own State of Colorado Choice Act, H.R. 1687. We are embroiled is recognized for 5 minutes. that there are thousands and thousands in a great debate about health care re- Mr. TANCREDO. Mr. Speaker, this of parents who are taking on the re- form in this Nation, and it is appro- week we are celebrating Teacher Ap- sponsibility of teaching their children priate that we should be embroiled in preciation Week. There have been a at home. that debate, and there is a great deal of number of speeches on this floor. I Mr. Speaker, recently I received a discussion about how we ensure that have, in fact, come to this microphone copy of an article that was written by Americans get quality health care. before to extol the virtues of the teach- a gentleman by the name of Steven Ar- But, as a part of that discussion, we ers of America, the public school, the cher, and he details a study that was have left out a big piece of the debate. private school teachers who work so just done by Larry Rudner, who is the We have talked a lot on this floor hard and contribute so much to the leading statistician at the University about patient protection legislation. I well-being of the children of this Na- of Maryland. He studied home want to make it very clear. I do think tion. schoolers, and what it comes down to is that we need HMO reform. I do believe Today, however, Mr. Speaker, I want this. that we need to do something to ensure to rise in recognition of a particular He said, that Americans get the health care part of that educational establishment Regarding the results of this research, that they purchase and that they pay that is not often recognized. And it was Rudner said, the bottom line of the study is for and that they deserve. brought to my attention again, al- that the 20,000 home-school students I stud- But I want to make it equally clear though I have long been aware of its ied were doing extremely well in terms of that the entire problem cannot be existence, but it was brought to my at- their scores on the Iowa Test of Basic Skills. solved by a mega-regulatory piece of tention again by a card I received in In fact, the median test scores for home- legislation which puts a Band-Aid on schooled children who participated in this the mail not too long ago. study were in the 75th and 85th percentile the current problems in health care, Here it is, a little handwritten, hand- range. This is exceptional compared to the which addresses the short-term prob- drawn and colored-in star here. It says, national average which, by definition, is the lems we have and ignores the long- ‘‘thank you, thank you, thank you.’’ It 50th percentile based on the performance of term problems with our health care

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00147 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8640 CONGRESSIONAL RECORD—HOUSE May 5, 1999 system. And be sure, there are long- health care benefits.’’ And as a result Let me make a point at this par- term problems. of a ruling of the IRS and a ruling of ticular instance. In America, I believe The Patients’ Health Care Choice Act the Tax Code, what we established dur- we have reached a consensus some is a bill that takes a long-range look at ing World War II was a policy which years ago, maybe 5, maybe 8, maybe 10, the health care industry and says that has driven employer-based health in- that no American should go without we can do it better. Fundamentally, it surance. And that policy says that if basic health care. If that is our belief, operates on the premise that giving their employer provides them health if our public policy in this Nation is Americans greater choice in their coverage, that health care coverage is that people should not go without health care options, that giving them a deductible expense to the employer. health care, then how can we have a greater access to health care and im- That is, he can deduct it from his tax policy that says, if they are lucky proving the incentives for them to pur- return before he pays taxes on that tax enough to work for an employer that chase and consume health care services return or before she pays taxes on the provides health care, the government in a responsible fashion will do far earnings of that business but, most im- will subsidize it with a deduction to more to improve our health care sys- portantly, it is excluded from income that business; but if, by pure happen- tem in America than a whole new set to the employer. That is to say, it is stance, they are either unemployed or of complex government regulations unlike wages, which would be taxed they are employed by an employer who that try to mandate the marketplace when received by the employee. In- cannot offer them or does not offer and tell businesses how to run their stead, health care benefits are excluded them health insurance coverage, we are businesses. from income. going to punish them and we are going Let me talk about those three issues Now, what has that meant? What it to say they ought to go out and buy in- that I have just addressed, greater has meant is that many, many busi- surance but, if they do, we are going to choice and health care options. Today, nesses offer very, very strong health charge them 30 to 50 percent more be- most Americans get their health insur- care plans that have many aspects to cause the government will not help. ance through their employer; and that them and give Americans health care. Well, the Patients’ Health Care has been a good system. It has enabled That is very, very good. But there has Choice Act takes a giant step towards millions of Americans to get health been an unintended consequence of helping those people by providing a re- care. But, regrettably, it does not give that, one I already mentioned, and that fundable tax credit for those people. It those Americans the kind of choice is now we have got employers pur- is a refundable tax credit set at a mod- that we have everywhere else in the chasing health care, not individual em- est level, but its purpose is to put on an market. ployees, and that is taking away equal footing to create equity between If any one of us wants to go buy an choice, as I already mentioned. those Americans who get their health automobile, we have dozens we can But another consequence of the cur- insurance from their employer and take our pick from. If we want to buy rent structure is that all of those those Americans not lucky enough to a pair of shoes or a new suit or a new Americans not fortunate enough to be do that. working for an employer that offers home, we have virtually unlimited b 2015 them health insurance coverage are choices; and this is a great aspect of left out of the system. What would this tax credit mean and the American economy. Let me try to explain that. If they who would be eligible for it? Any But one of the drawbacks of the are a lucky American and they work American who does not get health in- health care system that we have in for an employer who provides them surance coverage from their employer America today is that many Ameri- health care insurance, they are getting would be eligible for the tax credit. cans, indeed more than half of the that health care from their employer The tax credit would be set, is set, at Americans who are insured, are given and they are getting a tax subsidy be- an amount roughly equal to the tax two choices or less. And indeed many cause their employer’s cost is sub- benefit that employers now get, the tax of those, and the statistics are dis- sidized. It is a deductible expense to subsidy that those who are employed puted, many in fact get only one the employer, and it is not income to now get for their coverage. choice: Their employer says, ‘‘You may them. All one would have to do to qualify have this plan.’’ But what about those uninsured for the tax credit would be to go out This bill, the Patients’ Health Care Americans? Today, in America, there and buy at least a catastrophic policy. Choice Act, says we ought to be giving are 43 million uninsured Americans. You would then apply to the govern- Americans a much broader choice. Let How do we treat them under our Tax ment, you would certify that you have them pick the kind of health care plan Code? The answer is we kind of give bought the policy and you would imme- they want. Let them pick the plan that them the back of the hand. diately get the tax credit. suits their needs and their family’s Now what we say to them is they are Is the tax credit difficult to admin- needs. Let them shop with their feet not going to get a subsidy from the ister? It is not. It works through the and make market decisions about their government for their health insurance. withholding system, so that you could health care. They are not going to get a tax write- withhold from your wages, or you Now, how can we do that? Well, I will off. What we are going to do is say to would get a benefit in a withholding of explain how this bill does that. them, we are going to punish them. If your wages to allow you to pay for But there is a second aspect of our they decide to go out and do something your health insurance as you go and let health care system that is equally bro- prudent and take some of their hard- you buy that health care as you move ken, and that is access to health care. earned dollars and buy a health insur- forward. We honestly believe that is a Let me explain that. ance plan, we are going to punish them giant step forward for Americans. Beginning during World War II, many because we are going to say that they I do not know how I am doing on employers wanted to be able to give have to pay for that plan with after-tax time, but let me just finish with the their employees additional incentives dollars, dollars on which they already last portion of the bill because I think to work for them and they wanted to paid taxes. it is critically important. The third do that by giving them raises. The gov- What that means to the average piece of the bill is to institute some ernment, however, had instituted wage American whose employer does not major improvements to both the group and price controls. As a result of those provide them health coverage is that insurance market and the individual wage and price controls, employers their cost of health coverage is some- insurance market by instituting health were prohibited from giving their em- where between 30 and 50 percent higher marts, association health plans, and a ployees additional raises. than their peer that works for an em- new concept called individual member- So, the mind of man being ingenious, ployer who provides health coverage. I ship associations. they came up with the idea of saying to suggest that that is absolutely irra- Health marts are organizations that their employees, ‘‘We will give you tional and insane. are set up, and association health plans

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00148 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8641 are similar to those, to create new employee might be $800; for an older Of course that is not true. They did pooling mechanisms so that companies employee it might be $4,000. They not already pay for that particular could go together and create pooling would then say to the employee, ‘‘This visit, and of course no visit to a doctor mechanisms to offer their employees is the amount of money you have to is free. But that is the mind set we greater choice. Individual membership shop.’’ have gotten into in America, where we associations are a new concept in the If the employee then went out and have made people not individually re- law, and they do essentially the same shopped and found a health care plan sponsible for purchasing their own thing, only they move away from rely- which better suited his or her needs or health care acting in an irresponsible ing solely on employer-based health in- his or her family’s needs, that amount fashion. surance. of money could be spent by that em- I believe this legislation takes us in What they say is that new organiza- ployee to purchase that amount of in- the right direction. I am extremely tions, like for example the American surance. Now, we do require that the pleased that as we introduced it today, Automobile Association, or any other money must be spent to purchase in- the House majority leader, the gen- association, the Daughters of the surance. However, if you are lucky tleman from Texas (Mr. ARMEY), was American Revolution, in my home enough to go out and buy, for example, an original cosponsor of the bill and State of Arizona the Arizona State a catastrophic policy and have some had some very nice things to say about University Alumni Association or the savings, the legislation allows you to this legislation. He said, ‘‘I am proud University of Arizona Alumni Associa- roll that savings into a medical savings to be an original cosponsor of the Pa- tion, could sponsor a health care plan, account or a medical IRA for future tients’ Health Care Choice Act,’’ and he pool together a large number of Ameri- health care needs. complimented the tax credit provision cans and have a group health care plan What we will have done by achieving of it which will deal with the problem called an individual membership asso- this is we will have truly made health of uninsured Americans by giving them ciation. Those health care plans would care personal and portable for those a tax credit to go out and buy health provide new pooling mechanisms and Americans who choose to opt out of care coverage. help bring down the cost of insurance. their employer’s plan. We, the cospon- I am also extremely pleased that the The last aspect of this bill that I sors of this legislation, the Patients’ American Medical Association, in a think is critically important goes to Health Care Choice Act, H.R. 1687, be- letter sent to me on April 29 of this the issue of choice, is that as I men- lieve that giving Americans choice will year after having reviewed our draft tioned at the beginning, many, many create the right kind of market incen- legislation, specifically said, ‘‘Your Americans are trapped in one health tives that will improve quality and proposed bill will make a significant care plan. Their employer offers them bring down cost, and will do so in a step in the right direction.’’ I think only one plan and that is the plan they fashion that will benefit the entire sys- that is because the bill does many of get to pick from. Sadly, that does not tem. the things that the American Medical give people the kind of options they We also believe it will be tremen- Association says need to be done. want. dously beneficial to small employers We need to make health care per- The final piece of this bill, to encour- with a relatively small number of em- sonal, we need to make it portable, we age the creation of a market and to ployees who do not want to be in the need to change the system where one give people choice, is a provision in the business of procuring health insurance person, employers purchase health bill which says that at the employer’s for their employees. They would have care, but others, individual employees, decision, employees could be allowed to the option of allowing their employees consume that health care. We can re- opt out of their company’s health care to opt out and creating this new sys- store the marketplace here, we can do plan. tem. things that will benefit people in a Let us say right now you are an em- We have dealt with the problem very positive fashion, and we can do ployee of a company and you are being which will be raised, the issue of ad- that through this legislation. offered a health care plan. Let us say verse selection, by allowing the em- I am extremely excited about it. I am hypothetically after this legislation ployer to make this actuarial calcula- thrilled to have the encouragement of goes into effect, you say that you tion, so that people will not have a mo- the AMA and of many leaders here in would rather go shop in the private tivation to opt out of their employer’s the Congress. I look forward to work- market, you would rather go look and system for any reason other than they ing on this legislation, the Patients’ see if you wanted to join a health mart would like to have a choice. We believe Health Care Choice Act of 1999, H.R. or see if you wanted to go to an asso- fundamentally that choice and market 1687, I am thrilled that we can move ciation health plan or see if you want- incentives will improve health care. this kind of legislation forward to give ed to join one of the insurance plans of- We would end the problem that Americans a long-term solution to the fered by an individual membership as- plagues our current system of over- health care problem. sociation. consumption. Right now, the current Mr. CUNNINGHAM. If the gentleman What you would do is you would go system, because your employer pays would answer one question. to your employer and you would say, ‘‘I for the plan and you consume it, has Mr. SHADEGG. Surely. would like to consider opting out of my created a great incentive for over- Mr. CUNNINGHAM. I do not feel that employer-sponsored plan.’’ The em- consumption. The average employee, our colleagues on the other side of the ployer would then calculate his or her understanding that somebody else or aisle, the answer in their Patients’ Bill actual cost of insuring you. In reality believing that somebody else, their em- of Rights was to have unlimited law- we know that younger people cost a lot ployer, has already paid for the bene- suits, which in my opinion would drive less to insure than older people. So an fits, they tend to overutilize the sys- up the cost of health care and destroy employer might do a calculation. To tem. our HMOs, versus what you are plan- insure a single young woman 21 years I recently had a conversation with a ning to do is to make changes, to make old might be as little as $850 a year. By leader in the Senate who indicated to sure that people have access and ade- contrast, to insure her counterpart, a me that he had recently had a con- quate care. Is that correct? 58-year-old secretary, might be two or versation with a family member who Mr. SHADEGG. That is exactly right. three or four or five times that amount had a cold. The family member said, The whole theory behind the Patients’ of money. ‘‘I’m going to go see the doctor tomor- Bill of Rights is between a combination The employer would make this cal- row about this cold.’’ This leader said, of complex government regulations, culation based on an actuarial basis, ‘‘Well, jeeze, why are you going to go and going at the issue of ERISA reform looking at the employee’s age, sex, and see the doctor about the cold?’’ The in- by allowing lawsuits, we can solve the geographical location, and come up dividual said, ‘‘Well, I already paid for problem. That is not going to solve the with a figure. That figure for a young it, and it’s free.’’ problem.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00149 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8642 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Our legislation says, let us create a some of those solutions are instead of Hitler’s days. They do not trust them, marketplace. If people want to buy a committing ground troops or con- and they are not about to let them on plan where the plan is less expensive tinuing the air war, because as I give what they consider their homeland. because they have given up their right the solutions, Mr. Speaker, I think my Kosovo, as per Rambouillet, you have to sue their plan, let them do that. On colleagues will see that the causes and got to start over. The President had a the other hand, if people want to pay a the problems come in fold. I would like total disregard for the gut feeling of little bit more for a plan and recognize to start first of all by starting at what what Kosovo means to the Yugoslavian that in paying more, they are getting I consider the beginning of the end. people and to the Albanians as well. It the right to sue their plan, that seems The first was Rambouillet. Ram- was a no-win situation, and let us start to me to give them an option. In addi- bouillet was an agreement. I would ask over. You may have a vote on Kosovo, tion to which I think this Congress is you, Mr. Speaker, would you take this but it will have to remain, if you want going to move forward on thoughtful agreement in hand? First of all, if you peace in that part of the world, it will legislation for HMO reform which will were going to allow a foreign power to have to remain part of the greater Ser- not open the door to unlimited law- occupy what you considered your coun- bia. suits. I agree with the gentleman, the try. Secondly, that that foreign power You can have a cantonization pro- last thing we want to do is create a would hold that country, yours, in its gram, much like they have in the Scan- litigation frenzy. hand for 3 years and then turn it over dinavian countries to where they have Mr. CUNNINGHAM. I thank the gen- to a country like Albania that since an area for the French, where they tleman for his leadership on the health 1880 has not only tried to take Kosovo have French speakers in French care issues. I am on the Labor-HHS ap- in expansionism but also Macedonia, schools, and for the Germans, and for propriations committee. I think it is Montenegro and even parts of Greece. the Swiss, and on and on. That is ac- absolutely exciting seeing the revolu- That is why the Greeks are so pet- cepted by the Orthodox Catholic tionary research that is being done all rified. Church of both Greece and greater Ser- the way from cancer to Alzheimer’s to The ad hoc air campaign is no strat- bia and over 200,000 Serbian Americans. Parkinson’s, diabetes. Many of us want egy. It is a disaster in my opinion. The Milosevic, once there is stability to double that research budget over the strategy of bombing until they capitu- with the peacekeeping troops that he next 5 years. We are going to have late is poor foreign policy and is not a trusts and that the Albanians trust, trouble doing that by some of the strategy. For us that have fought in then Milosevic has got to withdraw his things that I am going to talk about wars, unlike many of my colleagues in troops and his armor prior to Ram- here today. But I thank the gentleman this body, it is easy to kill but it is bouillet. It does not mean they have to for his leadership. very, very difficult to work to live. give up full power or autonomy, but Mr. Speaker, I am RANDY ‘‘DUKE’’ What would you do, then, Mr. Con- they have got to remove the threat to CUNNINGHAM. I represent the 51st Con- gressman, if you had the power? First the Albanians and to themselves in the gressional District in north county, of all, halt the bombing. Jesse Jackson, long run. San Diego. I come here tonight, as who I disagree with most of the time, The KLA who is supported, and this someone once said, with a very heavy has shown more leadership than the is not secondhand, not just in the news- heart. President or many of the leaders in papers, but looking George Tenet, head I would say, Mr. Speaker, unlike this body and the other body in my of the CIA, eye to eye, face to face, and many of my colleagues in this body and opinion. Jesse Jackson has said that a George Tenet told me. He says: the other body, I spent the majority of diplomacy with no diplomacy is no di- Duke, the KLA is supported by Osama Bin my adult life in the military. I come plomacy; that bombing and forcing an Laden, the terrorist that blew up our embas- with a lot of experience. I have flown in enemy to capitulate with no other dia- sies. Izetbegovic, a Muslim leader in Sara- three fighter squadrons. I was both a logue is wrong. I agree. jevo, has over 12,000 Mujahideen and Hamas student and an instructor at the Navy First of all, Russian military, 70 per- that surround him, Mr. Speaker, 12,000. They fighter weapons school, which most cent of the Russian military, according have emigrated from Iran, Iraq, and Afghani- stan and Syria, the fundamentalist Muslims. people call Top Gun, where we devised to our CIA. I would say, Mr. Speaker, the tactics and invasions of countries These are the Jihad, the real bad people in nothing I am going to say here tonight this world. They know that some day that of our potential enemies. I served on is secondhand. It is firsthand, face to NATO and the United States will pull out of Seven Fleet Staff, where we planned face, either with our intelligence agen- both Bosnia and Kosovo, and they have sur- and my preliminary job was planning cies, our military or sources directly rounded themselves with people they think the invasion and the defense of South- related to Kosovo. will give them the strength. Unfortunately, east Asia countries. I flew 300 combat the strength is a threat to world peace and a 2030 missions in Vietnam. I was shot down b threat to the United States and the free on the 10th of May, 1972, and I was very But 70 percent of the Russian mili- world, in my opinion. fortunate, unlike my colleague SAM tary support the overthrow of the So, the President has got to look the JOHNSON in this body, was not taken Yeltsin government. These are the President of Albania in the eye and prisoner of war but had a helicopter hard-line Communists, the hard-line say: We want every single one of those rescue me before the enemy got to me. Communists that want to see Yeltsin Mideast Mujahideen and Hamas out of I was commanding officer of an adver- leave and communism returned to the the country within a short time. He sary squadron that flew Russian and former Soviet Union. These are the has got to look Izetbegovic in the eye Chinese tactics, forces against our same Communists that strongly sup- and say: I want every single one of the fighters and allied fighters. And I am a port Milosevic, and it is part of the Mujahideen and Hamas and other fun- student of history, not only of the ca- problem. damentalist terrorists out of Bosnia, pabilities but the planning, the So how do you resolve that? Let us out of Kosovo and out of Europe. Be- strengths and weaknesses in the de- solve Russia’s problem, and the United sides that, the President has got to ployment of air, land and sea forces. States and Kosovo and the Albanians look the President of Albania in the That was my job in the military. at the same time. eye and say: You have got to stop your I come tonight first of all to speak on The Serbians, the Yugoslavians have expansionism toward Kosovo, toward Kosovo. Many people will tell you said that they would allow Russian Macedonia, toward Montenegro and to- about the problems. They will tell you troops to act as peacekeepers because ward Greece. about the travesties that are taking they trust them. The Greeks, the Scan- When there is stability and not be- place, on both sides in my opinion, but dinavians, the Italians and maybe even fore there is stability can you even they will not give you any solutions. the Ukrainians, but let us keep out the start considering bringing back in the Mr. Speaker, what I would like to do United States, Britain and Germany, refugees. There will have to be some tonight is first give in my opinion what who is Yugoslavia’s bitter enemy since kind of outside source to determine

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00150 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8643 which refugees should come back to in Saudi Arabia. It has got to stop, and They were not evacuating, they were Kosovo. this all needs to be part of the solution not refugees, but our bombing forced One of the problems the Serbs cre- as well as strength through peace. acceleration of that, and there are mil- ated themselves is tearing up the pa- Mr. Speaker, let me go back and tell lions of people that in my opinion this pers of the Albanians. Why? Because you in my opinion what some of the President and Milosevic are responsible over 60 percent of the Albanians in causes, and there is a saying: for that would not be there today, and Kosovo are there illegally. They have If you smell the roses, look for the this is a sad thing to say about your crossed the border, they are not citi- coffins. own country, Mr. Speaker, and the zens, and to separate now the citizens In Vietnam it is: Where have all the lack of planning and understanding and from the noncitizens, I think the Serbs flowers gone? leadership. have made it even more difficult. But As I mentioned, Rambouillet was a You think in the planning to just yet that has got to be accomplished, in disaster, a shortsighted attempt at for- conduct air strikes, something I did for my opinion; and it is going to have to eign policy, and I quote Henry Kis- 20 years, that the President would have be done thoughtfully. singer and Larry Eagleburger: looked at the weather to commence air In the meantime, we are going to Was an offer that the President ei- strikes when the weather is predicted have to take a look at the millions of ther knew or could not accept, that the to be overcast and bad weather, which people, in my opinion, that the United Yugoslavians could not accept to give you cannot conduct your air strikes States, NATO and Milosevic himself up Kosovo even if Milosevic had said I safely for 2 weeks. Do you think they have caused through forced evacuation, will give up Kosovo. The Serbian peo- might have checked the weather? that those people starving, they are ple with their nationalism have been When Chernomyrdin was on his way hungry. If you look into the eyes of the fighting in Kosovo since 1385, that one to the United States knowing how Rus- children, they do not have the slightest in three Serbs during World War II sia supports the Serbs, do you think clue of what is going on. gave up their lives against 700,000 Ger- they might have notified Russia? In- These are not the Albanians that I mans on April 5, 1941. The Germans stead Chernomyrdin had to turn am talking about, the terrorists. These bombed Belgrade and along with a half around his airplane and go back to are people like you and me with fami- a million Croatians and a quarter mil- Russia. To me, that is ludicrous. It is lies that just want to live and survive. lion Muslims have fought with Nazi not something that you would plan. But I would also say there is the Germany. One in three Serbs died de- And this ad hoc air circus warfare Yugoslavians the same way, that to fending Kosovo, and they either kicked that is stepped up little by little with identify an entire race as evil is wrong. out or killed every single one of the very little planning is not the way to We have gone down that road in his- Muslims, of the Croatians and the win a war, and I would ask you, Mr. tory too often, and each time it has Nazis, and in doing that they paid for President, to think about what we have been disastrous. that country in their blood in their done. So we have to aid the citizens on opinion. And I think before you ever Mr. Speaker, do you know the total both sides at least with minimal condi- have a solution, before you ever have a number of people killed in Kosovo prior tions because what are you going to foreign policy, you have got to look in to our bombing? It is amazing. People do? You going to bring them back into the eyes of all the sides affected, not will say 10,000, 20,000. It is 2,012. Prior Kosovo in tents, with no food, and just one side, or that diplomacy will to us bombing, this great massive kill- there has got to be a general plan and fail. It will be a no-win situation. ing, 2,012. a central clearinghouse. The President basically tried to put a Tudjman, the head of the Croatians, The United States should provide horse’s head in bed with the Serbian slaughtered 10,000 Serbs in 1995 and eth- leadership, technology and intelligence people, Milosevic. Milosevic sent him nically cleansed out of Croatia 750,000 in its part of the cost. Europe coun- the rest of the horse back because the Yugoslavians. Where were we then? tries, Russia, Greece, Ukraine, Italy, President had not a clue on the gut And on a scale 2,012, and one-third of France, Britain and the others, need to feeling of the Yugoslavian people as far those were Serbs killed by the KLA. pick up the slack and to put the pieces as Kosovo. Was there an apartheid? Yes. Ninety of the puzzle back together; and NATO This is the home of the Orthodox percent, not all Albanians, made up of needs to pay its fair share. The United Catholic Church. It is their Jerusalem, other nations. States is paying for 90 percent of this and they will not give it up. So Kosovo As my colleagues know, there was war. That is wrong. There are 18 other has got to go off the table and remain over 100,000 Serbs that left Kosovo be- nations in this war, and they should part of greater Serbia, but yet it can be cause of the harassment by the KLA. have burden sharing equal to ours. cantonized. There was fighting on both sides. And One of the other problems, Mr. The military, the Pentagon, told the before you can have diplomacy, you Speaker, is that the President talks President. I can name the guys that I have got to understand the only prob- about wanting to save Social Security flew with in these wars that are now in lem is not Milosevic. The KLA is a and Medicare and education. Every the Pentagon. They looked me eye to problem. Tudjman is a problem. Our penny of that surplus that he is talking eye and said: lack of understanding of European about comes out of Kosovo. We have al- Duke, we told the President not to problems is the problem. ready spent $16 billion in Bosnia. We get into this air war, not to do it, be- And again what I tell you is not sec- still spend $25 million a year in Haiti cause, A, the goals could not be ondhand; it is firsthand. building roads and bridges. That all achieved with air strikes alone, and the comes out of the military budget, and unwillingness to conduct ground troops b 2045 that has got to change. We are in over and to insert them into the war, that General Clark, face-to-face, when I 150 countries. Our military is so spread we would make things worse, that we was in Brussels, said, DUKE, NATO only out and so distraught that we are only would kill a lot of innocent people, we wanted to bomb one day and quit; to saving about 23 percent of our enlisted would stretch our military beyond be- me, face-to-face, not in a newspaper, and 30 percent of our pilots. That lief, we would make ourselves vulner- not from an Intel source, that NATO means your experience, not only your able in North Korea and Iraq and other only wanted to bomb one day and quit. troops working on your maintenance, places in the world and that we would Secretary Cohen said, well, DUKE, our but your aviators and your personnel accelerate an increased forced evacu- biggest problem is the media. If we are without leadership in many cases ation of refugees. And that is exactly, have the media coming down on us, we and/or expenses. Mr. Speaker, what we have done. are lost. In other words, the spin has We have been in Korea over 50 years. When you ask the people where were got to come. Because I asked, why did Bosnia, we were supposed to be there 1 you when the Serbs came: We were in they continue? Because the President year, and it is $16 billion. We are still our homes; they told us to get out. got ahold of Blair from Britain, and the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00151 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8644 CONGRESSIONAL RECORD—HOUSE May 5, 1999 German Chancellor, and pushed the cause they do not have the gut inclina- Mr. Speaker, I have a tape here. I bombs to what we are doing now, and tions on what the use of the military cannot play it on the floor because it is that is why I think it really is a Clin- is, and especially when they deny what illegal to use electronics on the floor of ton-Gore war. their warfighters say and go on. the House, and I will not play it, but For us to disregard the Pentagon, to Let us look at NATO today. It is not what is in this tape is some 36 surface- not have the knowledge of what Kosovo Ronald Reagan and Margaret Thatcher. to-air missiles fired at a strike in Jan- meant, to push NATO into this, and Let us look at the makeup. France is a uary of 1972. My flight had over 36 now they are into it, and then to say socialist communist coalition. Italy, a SAMS fired at it. I lost two good NATO speaks with one voice after last former, and I say ‘‘former’’, com- friends this day. I lost two other good week in their meeting, if they are munist; they say he is a quick study friends and pilots in a strike up by speaking with one voice, why is Hun- for democracy. Germany, a Greenpeace Quang Tri City. gary still shipping oil to Serbia, a socialist. Tony Blair, a liberal left Part of the supplemental that we are NATO country? Why is France still labor party. And then the President going to fight for tomorrow has these shipping oil? Why is France trading nu- with his military record. stand-off weapons, the stand-off weap- clear weapons to Iran? These are part I contend that this is not leadership ons that have kept many of our pilots of NATO nations and they are speaking in foreign policy with the use of that safe but yet because of Iraq, because of with one voice? vehicle that will be successful, espe- other places the President has gotten I think that is wrong. The policy to cially if they turn their heads away us into, four times in Iraq, the Sudan, bomb into submission is a lack of pol- from their advisors, the people that Somalia, Haiti, that we are running icy. know what they are doing in conflict. out of these stand-off weapons like the Again, I would like to thank Jesse They are out of their element and dis- Tomahawk. We call it a TLAM. The Jackson, who I disagree with most of aster is inevitable. conventional air launch cruise missile the time, and his son serves here on the I asked General Clark, face-to-face, I we call a CALCM, these run at about $2 other side of the aisle, but I want to said, how many sorties, how many million apiece. The Tomahawk runs at say Mr. Jackson gave more leadership flights, is the United States making? about a million. The Joint STARS, and more thought toward this problem We have got 19 nations in this. With his which is a joint surveillance large air- than the President of the United eyes he looked at me and he said, craft that gives us the intelligence and States, and I want to personally thank DUKE, to the sortie we are flying 75 per- the information we need on the ground, him for that. cent of the air strikes. That does not we are short of those. We have lost two It is easy to fight, we have the power, include the B–2s, the C–17 logistics, the F–16s. We have lost two Apaches. We but it is difficult to work and live, and tanking and the other missions. That lost an F–117 fighter. I quote Jesse Jackson: There is fear on puts us up over 86 percent. Ninety per- I would say, Mr. Speaker, we are both sides. The understanding, the di- cent of the weapons dropped are from going to lose more aircraft, and if we plomacy. the United States. There are 18 other commit ground forces into Kosovo, When I was a youngster, I worked in nations, Mr. Speaker, in this. even if we force Milosevic to capitu- Our supplemental coming up tomor- a hay field and I sat on a bench and I late, we then buy Kosovo. If you look row should be a check from NATO. Bil- had a Persian cat jump up in my lap, at the history, General Shelton said lions of dollars for a European war and and I was petting the cat. Just a few this is absolutely the most difficult we are paying for it, and we are taking minutes later a Siamese cat came on land and area environment to attack in the money out of the things that we the world. It is one of the easiest to de- the other side. Of course, the two cats are trying to support like medical re- tensed up but I was going to make fend. search and Social Security and Medi- A single rocket launcher can knock them friends. I was smarter than those care and education to fight this war. out a tank and these narrow roads can cats, and I knew their attitudes could There are many of us who think that tie up a whole column of tanks. Gue- be changed. we should not be there, and that there rilla warfare, which they are used to I moved those cats closer and closer is a better way. Eighteen other na- fighting, they have been fighting there and they would tighten, and I would tions. I think that is wrong. for 800 years. Yes, I think we can over- pet them. They would tighten and I I talked to Stavros Dimas, he is num- come the Serbian forces but if we do, would pet them, and I would move ber two in the Greek parliament on the A, at what cost? B, we have just bought them closer. I sat there out of the hay minority side. They are absolutely pet- Kosovo. And then what? I think it is a fields with no shirt on and those cats rified of Albanian expansionism be- disaster. hit each other and I was a shredded cause, like I said, in the early 1800s So, Mr. Speaker, I think with the his- mess. they wanted even parts of Greece. His- tory of the area, that with the lack of If one tries to bring refugees into a tory, in 1389 when Kosovo was one, and understanding by the White House, the country where they want to kill each I mentioned that on April 5, 1941, lack of diplomacy with Russia and the other and put the United States in the 700,000 German troops invaded Kosovo threat of Russia becoming involved, it middle, it is going to be a disaster. and Belgrade was bombed. The Chet- is very evident that we are in a very The Serbs fear the KLA. The Alba- niks, who were mostly the guerilla dangerous situation. nian people fear the Serbs. The Serbs fighters, the partisans and the loyal- I have here, Mr. Speaker, an article feel that the country is theirs. The Al- ists, were led by a general named that I would like to submit. It says, banians feel that portions of the coun- Miholevic, not Milosevic but Head of U.S. Air Command Warns of try is theirs. Again, before we can have Miholevic, and they killed or kicked Strained Forces. They warned of any diplomacy, the President has to out every single German out of Kosovo. strained forces long before Kosovo ever understand, when the liberal level at- The CIA, George Tenet, again, told took place. tempts to use a vehicle like the mili- me that the KLA is supported by We had 14 of 24 jets at Top Gun down tary that they neither understand nor Osama bin Laden, the Mujahideen and for parts; 137 parts were missing. Eight have supported in the past, they are Hamas from Middle East countries. of them were down for engines. The bound to fail. And these are the people that some of 414th, which is the Air Force aggressor They have a strange dichotomy, Mr. my colleagues want to arm? squadron in fighter weapons school, Speaker. They have a vehicle which They say, oh, no, no, no, that is not was about the same way. Oceana, a they loath at times, and at the same true. That is not true. There cannot be training base, had 4 of 35 jets up, only time they use this vehicle to serve for- any KLA sympathizers to Mujahideen 4, which trained our new pilots, be- eign policy. They are inept, and I and Hamas. cause they are sending the parts for- would say that the Strobe Talbotts, the Well, I would tell my friends that ward. Jane Fondas, the Tom Haydens, the they are wrong and it is backed up eye- I do not guess Iraq is important any- Ramsey Clarks are bound to fail be- ball-to-eyeball with George Tenet. more because the no-fly zone, we are

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00152 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8645 letting that skid. Or the threat to heads on a single missile. If that is not gets with less harm to ethnic Albanian refu- North Korea is not there. bad enough, the targeting devices, be- gees in the area that higher-flying NATO There is another article here that I fore, yes, they could hit the United warplanes now in use. But yesterday’s crash would like to submit, Mr. Speaker, States, or if they were targeting Chi- of an Apache in Albania, during what defense that says if we were forced to go into officials described as a training accident, cago, they may hit Peoria. But now only heightened concerns among some Pen- North Korea or these other areas, that they could hit the fourth window on tagon officers about putting the Apaches we could no longer fight a two-conflict the third apartment on 32nd Street, into action in a risky environment. battle, which is what our national se- with that accuracy. curity policy has been. When we have that kind of foreign [From the Military Readiness Review, April, This is a very difficult time for my policy mixed with Kosovo, mixed with 1999] colleagues on both sides of the aisle. the threat to this country with Iraq KOSOVO AND THE NATIONAL MILITARY STRAT- We will find a mix of people on both and Iran, then I think this country EGY: THE COST OF DOING MORE WITH LESS sides of this issue from both sides of needs to take a sidestep and readjust (Written and produced by Floyd Spence the aisle. I like to bring to it an under- not only its foreign policy but its trade Chairman, House Armed Services Com- mittee) standing, not only of the diplomacy policy as well. ‘‘The [U.S. military] must be able to defeat that is needed but the understanding Mr. Speaker, it brings me a lot of that is needed before we can ever have adversaries in two distant, overlapping sadness to come to the well tonight to major theater wars from a posture of global a peace. speak in this manner. But this is not The President’s position of just bomb engagement and in the face of WMD and an easy situation for any of us. Let us until Milosevic quits will not work, in other asymmetric threats. It must respond get out of Kosovo. There is a much bet- across the full spectrum of crises, from my opinion. Even if there is a short major combat to humanitarian assistance halt in the peace, it will escalate again, ter way, a peaceful way, to achieve this and to work. operations. It must be ready to conduct and and I think that is wrong. sustain multiple, concurrent smaller-scale I look at other problems not only in I do not think there will be peace in the Middle East in my lifetime, there contingency operations.’’—The National Kosovo but around the world with for- Military Strategy of the United States. eign policy. may not be peace in Northern Ireland The National Military Strategy of the I would ask, Mr. Speaker, on Sunday, in my lifetime, but we have to keep United States requires that the U.S. armed read the New York Times about the lab working in that direction. But it does services be prepared to fight and win two secrets that were stolen for China in not mean that we have to put troops in major theater wars at the same time they our nuclear labs. It was found out. The Northern Ireland or the Middle East, or conduct multiple, concurrent smaller-scare gentleman pleaded guilty. He actually keep them in Korea or in Saudi Arabia, contingency operations and maintain a pos- because we have a lot of things in our ture of global engagement around the world. took secrets on our missile technology The sustained reduction in military force and submarine technology to China. He country that we need to do like social structure and defense budgets since the end gave it to the PLA, the communist security, like Medicare, like education, of the Cold War has seriously called into People’s Liberation army, showed it to like medical research. question whether the U.S. military is able to them and then burned it and came Mr. Speaker, I include for the execute the national military strategy. back. He has confessed. But is he up for RECORD the following articles: Since 1989, the Army and the Air Force have treason? No. The judge would not han- [From the Washington Post, Apr. 27, 1999] been reduced by 45 percent, the Navy by 36 percent and the Marine Corps by 12 percent dle it. He got a 1-year sentence and he ANALYSIS: WARNINGS OF AIR WAR DRAWBACKS is out this year from a prison in Cali- while operational commitments around the (By Bradley Graham) world have increased by 300 percent. fornia. Treason? With NATO leaders still wedded to a strat- Strained by the already high pace of day to Colonel Liu, who is General Liu’s egy of pounding Yugoslavia only from the day operations, as well as on-going contin- daughter, the head of technology trans- air, a top alliance commander warned yes- gency operations in Iraq and Bosnia, the U.S. fer for the People’s Liberation Army in terday that the relentless bombing could end military now faces a rapidly escalating com- China, Colonel Liu met with John up setting the country’s economy back sev- mitment in Kosovo. Indeed, the build-up of Huang. John Huang introduced Colonel eral decades and still not produce the desired aircraft for Operation Allied Force in the Liu to the President, gave the Presi- results. Balkans will soon approach the size of the dent, the Clinton and Gore campaign, General Klaus Naumann, outgoing head of air fleet required in a major theater war—in $300,000. NATO’s military committee, told reporters essence, Kosovo has become a third major Loral gave the Clinton-Gore cam- that alliance leaders came out of their sum- theater of war. The U.S. military is already paign a million dollars. Hughes gave mit conference here this weekend deter- feeling the strain in critical areas: mined to pursue and intensify the month-old Aircraft Carriers. The aircraft carrier USS the Clinton-Gore campaign a million bombing campaign. U.S. military com- Theodore Roosevelt, originally scheduled for dollars. The following week the Presi- manders differ, however, over when to start deployment to the Gulf region, has been as- dent waived, against the Department of using two dozen AH–64A Apache attack heli- signed to the Balkans and arrived on station Defense, the Department of Energy, copters now on station in Albania, he said. April 5. The gap in the Persian Gulf has been the National Security Agency, waived Some officers fear the low-level aircraft are filled by the USS Kitty Hawk, normally sta- and let the Chinese have, and what did still to vulnerable to Yugoslav anti-aircraft tioned in the Far East. She arrived in the he let them have, Mr. Speaker? Sec- missiles. Gulf on April 1, and will be relieved by the ondary and tertiary missile boost capa- With consideration of ground forces put off USS Constellation in June. With no carrier bility, which we were briefed by the for the time being, Naumann said he and deployed in the Far East in the foreseeable Gen. Wesley K. Clark, the alliance’s top mili- future, the Air Force has been compelled to CIA that Korea was 10 years away from tary officer, still look to the air campaign to put its fighter aircraft in the region on high- striking the United States. Guess force President Slobodan Milosevic to with- er alert in an effort to partially compensate what? They magically have that now draw Yugoslav forces from the embattled for the loss of the carrier-based Navy air- after we gave it to China. Serbian province of Kosovo, largely because craft. The Navy has 12 aircraft carriers in The laboratories, what was stolen? of a sense that no responsible head of govern- the fleet to cover commitments world-wide. The President was briefed in 1996 that ment would allow his country to be reduced With five currently in shipyards and the rest we had a spy at our laboratories, at our to rubble. either recently returned from deployment or nuclear labs, and they did nothing. ‘‘Of course, we may have one flaw in our just beginning pre-deployment training, Sec- What did they steal? They stole the W– thinking,’’ he added. ‘‘Our flaw may be that retary of the Navy Richard Danzig recently we think he may have at least a little bit of 88 warhead, which is a small nuclear testified that the service’s carrier fleet is responsibility for his country and may act ‘‘being stretched.’’ warhead. And what did the President accordingly, since otherwise he may end up Conventional Fighter and Attack Aircraft. waive, against the Department of De- being the ruler of rubble.’’ Including the aircraft aboard the USS Theo- fense and national security advisors? Naumann indicated he favors using the dore Roosevelt, and the 82 additional aircraft b 2100 Apache gunships against Yugoslav artillery just approved for deployment, approximately emplacements along Kosovo’s border with 500 total U.S. aircraft are currently involved The MIRVing capability, which now Albania, saying the Apaches stand a better in Operation Allied Force. This includes over allows China to put eight nuclear war- chance of finding and destroying these tar- 200 fighters and attack aircraft. General

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00153 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8646 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Wesley Clark, NATO’s Supreme Allied Com- programming of $51.5 million in FY 1999 military’s overall preparedness for the world mander, recently requested some 300 addi- funding to convert an additional 92 ALCMs it now confronts. If another military crisis tional U.S. aircraft in order to intensify the to CALCMs. In the White House’s recent were to erupt in the Middle East or Asia, air campaign. If approved, it will bring the emergency supplemental budget request, Hawley said reinforcements are still avail- total number of U.S. aircraft in the region to CALCMs were designated as the Air Force’s able, but he added: ‘‘I’d be hard-pressed to 800. In addition, the European Command re- number one shortfall. give them everything that they would prob- cently removed 10 F–15 fighters and 3 EA–6B Tomahawk Land Attack Missile (TLAM). ably ask for. There would be some com- Prowler electronic warfare aircraft from The TLAM has become the Administration’s promises made.’’ Incirlik Air Base in Turkey and deployed weapon of choice to strike heavily defended The Army’s ability to respond nimbly to them in Aviano Air Base in Italy. Press re- or high value targets while posing no risk to foreign hot spots also has been put in ques- ports indicate that in an April 1, 1999, meet- American pilots. During Operation Desert tion by the month it has taken to deploy two ing, the Joint Chiefs of Staff expressed con- Fox strikes against Iraq, 330 TLAMs were dozen AH–64A Apache helicopters to Albania. cern that General Clark’s growing require- fired from Navy ships. To date, approxi- While Army officials insist the helicopter ments for aircraft and other equipment will mately 178 additional TLAMs have been fired task force moved faster than any other coun- mean higher risks in other hot spots around against targets in Yugoslavia. The type of try could have managed, the experience ap- the world. TLAM that is being depleted most rapidly, peared to highlight a gap between the Penta- F–117 Fighters. The Air Force has deployed the Block IIIC model, is the most advanced gon’s talk about becoming a more expedi- 24 F–117 aircraft to the Balkans to support and therefore the most in demand by mili- tionary force and the reality of deploying Operation Allied Force. Because of their tary commanders. Further, the U.S. shut soldiers. stealth capabilities, F–117s are in high de- down the last remaining TLAM production Massing forces for a ground invasion of mand for the type of operations currently line in fiscal year 1998 and production of the Yugoslavia, officials said, would require two being conducted over Yugoslavia. However, follow-on missile system is not planned until or three months. Because U.S. military plan- the United States has a total of only 59 F– fiscal year 2003. The White House’s emer- ners never figured on fighting a ground war 117s to cover all requirements world-wide. gency supplemental appropriations bill iden- in Europe following the Soviet Union’s de- Joint Surveillance Target Attack Radar tified TLAM shortfalls as an urgent priority, mise, little Army heavy equipment is System (Joint STARS). JSTARS is a modi- and included funds to convert older cruise prepositioned near the Balkans. Nor are fied Boeing 707 aircraft equipped with a long- missiles to the more advanced Block IIIC there Army units that would seem especially range air-to-ground surveillance system de- model. designed for the job of getting to the Bal- kans quickly with enough firepower and signed to locate, classify and track ground [From the Washington Post, Apr. 30, 1999] targets in all weather conditions. Currently, armor to attack dug-in Yugoslav forces over HEAD OF U.S. AIR COMMAND WARNS OF the United States has just five JSTARS in mountainous terrain. STRAINED FORCES—GENERAL SAYS WAR the inventory. Two are supporting oper- ‘‘What we need is something between our STRETCHES U.S. FORCES ations in the Balkans, placing a strain on light and heavy forces, that can get some- the remaining three aircraft that must re- (By Bradley Graham) where fast but with more punch,’’ a senior spond to all other commitments around the The general who oversees U.S. combat air- Army official said. world. craft said yesterday the Air Force has been Yugoslav forces have shown themselves EA–6B Prowler. The EA–6B is used to col- sorely strained by the Kosovo conflict and more of a match for U.S. and allied air power lect tactical electronic information on would be hard-pressed to handle a second war than NATO commanders had anticipated. enemy forces and to jam enemy radar sys- in the Middle East or Korea. The Serb-led Yugoslav army has adopted a tems. It is also equipped with the HARM Gen. Richard Hawley, who heads the Air duck-and-hide strategy, husbanding air de- anti-radiation missile that is used to destroy Combat Command, told reporters that five fense radars and squirreling away tanks, enemy radar systems. The EA–6B is found in weeks of bombing Yugoslavia have left U.S. confounding NATO’s attempts to gain the Navy, Marine Corps and joint Navy/Air Force munition stocks critically short, not just of freedom for low-level attacks to whittle squadrons. With a total of only 123 in the in- air-launched cruise missiles as previously re- down field units. Yugoslav units also have ventory, nearly 20 are currently deployed to ported, but also of another precision weapon, shown considerable resourcefulness, recon- support operations in Yugoslavia. Combined the Joint Direct Attack Munition (JDAM) stituting damaged communication links and with the on-going deployments in support of dropped by B–2 bombers. So low is the inven- finding alternative routes around destroyed Operations Northern and Southern Watch in tory of the new satellite-guided weapons, bridges, roads and rail links. ‘‘They’ve employed a rope-a-dope strat- Iraq and other commitments around the Hawley said, that as the bombing campaign egy,’’ said Barry Posen, a political science world, the EA–6B fleet is considered by DoD accelerates, the Air Force risks exhausting professor at the Massachusetts Institute of to be ‘‘fully committed’’ at the present time. its prewar supply of more than 900 JDAMs Technology. ‘‘Conserve assets, hang back, KC–135/KC–10 Aerial Refuelers. Currently before the next scheduled delivery in May. take the punches and hope over time that the Air Force has over 50 KC–135 aircraft and ‘‘It’s going to be really touch-and-go as to NATO makes some kind of mistake that can approximately 15 KC–10 aircraft supporting whether we’ll go Winchester on JDAMs,’’ the be exploited.’’ operations in the Balkans. The refueler fleet four-star general said, using a pilot’s term Hawley disputed suggestions that the as- is heavily committed on a day-to-day basis for running out of bullets. sault on Yugoslavia has represented an air during normal peacetime operations. As a re- On a day the Pentagon announced deploy- power failure, saying the full potential of sult, the active Air Force relies heavily on ment of an additional 10 giant B–52 bombers airstrikes has been constrained by political the Guard and Reserve, who fly 56% of the to NATO’s air battle, Hawley said the con- limits on targeting. refueling missions for the Air Force. Nor- tinuing buildup of U.S. aircraft means more ‘‘In our Air Force doctrine, air power mally, the Air Force meets its world-wide air crew shortages in the United States. And works best when it is used decisively,’’ the commitments using volunteers from the because the Air Force tends to send its most general said. ‘‘Clearly, because of the con- Guard and Reserve. However, as the oper- experienced crews, Hawley said, the experi- straints, we haven’t been able to see that at ation intensifies, Air Force will be unable to ence level of units left behind also is falling. this point.’’ meet commitments with volunteers alone. With NATO’s latest request for another 300 NATO’s decision not to employ ground The pending Presidential Guard and Reserve U.S. aircraft—on top of 600 already com- forces, he added, also has served to undercut call-up is likely to contain a high percentage mitted—Hawley said the readiness rating of the air campaign. He noted that combat of KC–135/KC–10 crews. On April 26, 1999, the the remaining fleet will drop quickly and planes such as the A–10 Warthog tank killer Secretary of Defense announced that an ad- significantly. often rely on forward ground controllers to ditional 30 KC–135/KC–10 aircraft and crews, His grim assessment underscored questions call in strikes. both active and Reserve, will deploy to the about the U.S. military’s ability to manage ‘‘When you don’t have that synergy, things region. a conflict such as the assault on Yugoslavia take longer and they’re harder, and that’s Conventional Air Launched Cruise Missiles after reducing and reshaping forces since the what you’re seeing in this conflict,’’ the gen- (CALCM). Prior to Operation Desert Fox Cold War. U.S. military strategy no longer eral said. against Iraq in December 1998, the Air Force calls for battling another superpower, but it At the same time, Hawley, who is due to had approximately 250 CALCMs, the non-nu- does require the Pentagon to be prepared to retire in June, insisted the course of the bat- clear version of the Air Launched Cruise flight two major regional wars at about the tle so far has not prompted any rethinking Missile (ALCM) that are launched from U.S. same time. about U.S. military doctrine or tactics, nor bombers. The Air Force fired 90 against Iraq As the number of U.S. planes involved in has it caused any second thoughts about during Operation Desert Fox. In Operation the conflict over Kosovo approaches the plans for the costly development of two new Allied Force, 78 have been fired during the level of a major regional war, the operation fighter jets, the F–22 and Joint Strike Fight- first three weeks of operations leaving ap- is exposing weaknesses in the availability er. Despite the apparent success U.S. planes proximately 80 in the inventory. The Con- and structure of Air Force as well as Army have demonstrated in overcoming Yugo- gress recently approved an emergency re- units, engendering fresh doubts about the slavia’s air defense network, Hawley said the

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00154 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8647 next generation of warplanes is necessary be- this country, really has provided too optimistic projections of private cause future adversaries would be equipped health care for half the senior popu- sector performance. with more advanced anti-aircraft missiles lation. Bruce Vladeck, a former adminis- and combat aircraft than the Yugoslavs. In 1965 when Medicare was created, trator of the Medicare program and the If the air operation has highlighted any weaknesses in U.S. combat strength, Hawley only about half of America’s elderly Medicare Commission, a bipartisan said, it has been in what he termed a des- had health insurance. Today 99-plus Commission Member, doubted the perate shortage of aircraft for intelligence- percent of America’s elderly do. Commission plan would save the Fed- gathering, radar suppression and search-and- Mr. Speaker, many in Congress have eral Government $1. That same pro- rescue missions. While additional planes and been on a campaign to scare America’s posal under a legislative plan, under a unmanned aircraft to meet this shortfall are seniors into believing that Medicare is legislative title, will not succeed, ei- on order or under development, Hawley said going bankrupt. They say that Medi- ther. it will take ‘‘a long time’’ to field them. care must be improved in order to save Efforts to privatize Medicare are, of In the meantime, he argued, the United it. Once again, Medicare privatizers are course, nothing new. Medicare bene- States must start reducing overseas military ficiaries have long been able to enroll commitments. He suggested some foreign op- wrong. The Trustees of the Medicare erations have been allowed to go on too long, Trust Fund have just reported that in private managed care plans. Their noting that the U.S. military presence in Medicare will remain solvent through experience, however, does not bode well Korea has lasted more than 50 years, and the year 2015, up from its earlier pro- for a full-fledged privatization effort. U.S. warplanes have remained stationed in jection just a year ago of 2008. These managed care plans are already Saudi Arabia and Turkey, flying patrols over Republicans in Congress, the Wash- calling for higher government pay- Iraq, for more than eight years. ington, D.C. think tanks, and their ments. They are dropping out of un- ‘‘I would argue we cannot continue to ac- profitable markets, and they are cut- cumulate contingencies,’’ he said. ‘‘At some media supporters who want to privatize Medicare are wringing their hands over ting back on benefits to senior citizens. point you’ve got to figure out how to get out Managed care plans obviously are of something.’’ the Trustees’ latest report. They be- The Air Force blames a four-fold jump in lieve these new projections will lead profit-driven, and they simply do not overseas operations this decade, coming Congress to do nothing toward reform- tough it out when those profits are not after years of budget cuts and troop reduc- ing social security and Medicare. With realized. We learned this the hard way tions, for contributing to an erosion of mili- the programs projected to last longer, last year when 96 Medicare HMOs tary morale, equipment and training. The they tell us we cannot rest on our lau- unceremoniously dropped 400,000 Medi- Air Force has tried various fixes in recent care beneficiaries because the HMOs years to stanch an exodus of pilots and other rels. The real threat to Medicare, how- did not meet their profit objectives. airmen in some critical specialties. Before the Medicare program was It has boosted bonuses, cut back on time- ever, is not its alleged pending bank- launched in 1965, more than one-half of consuming training exercises and tried to ruptcy. The real threat is a proposal the Nation’s seniors were uninsured. limit deployment periods. It also has re- just rejected by the National Medicare Private insurance was the only option quested and received hundreds of millions of Commission to privatize Medicare and for the elderly. But these insurers did dollars in extra funds for spare parts. to deliver it to the private insurance Additionally, it announced plans last Au- not want senior citizens to join their market. gust to reorganize more than 2,000 warplanes plans because they knew that seniors Under a proposal soon to be intro- and support aircraft into 10 ‘‘expeditionary’’ use their coverage. The private insur- duced called premium support, Medi- groups that would rotate responsibility for ance market surely has changed con- care would no longer pay directly for deployments to such longstanding trouble siderably since then, but it still avoids zones as Iraq and Bosnia. health care services. Instead, it would high-risk enrollees and, whenever pos- But Hawley’s remarks suggested that the provide each senior with a voucher growing scale and uncertain duration of the sible, dodges the bill for high-cost med- good for part of the premium for health ical services. air operation against Yugoslavia threaten to care, for private health care coverage. undo whatever progress the Air Force has The problem is not necessarily mal- made in shoring up readiness. Whenever the Medicare beneficiaries could use this ice or greed, it is the expectation that airstrikes end, he said, the Air Force will re- voucher to buy into the fee-for-service private insurers can serve two masters, quire ‘‘a reconstitution period’’ to put many plan sponsored by the Federal Govern- the bottom line and the common good. of its units back in order. ment, or could join a private plan. Logically, looking at the bottom line, ‘‘We are going to be in desperate need, in To encourage consumer price sensi- our system leaves 43 million people my command, of a significant retrenchment tivity, the voucher would track to the in commitments for a significant period of without health insurance, 11 million of lowest cost private plan. Ostensibly, whom are children. Only Medicare can time,’’ he said. ‘‘I think we have a real prob- seniors would shop for the plan that lem facing us three, four, five months down insure the elderly and disabled popu- the road in the readiness of the stateside best suits their needs, paying the bal- lation because the private market had units.’’ ance of the premium or paying extra if failed to do so. f they want higher quality. The proposal If we privatize Medicare, we are tell- would create a system of health cov- ing America that not all seniors de- MEDICARE MUST NOT BE erage, but it would abandon Medicare’s serve the same level of health care. We PRIVATIZED fundamental principle, its fundamental are betting on a private insurance sys- The SPEAKER pro tempore (Mr. principle of egalitarianism. tem that puts its own interests ahead ISAKSON). Under the Speaker’s an- Today the Medicare program is in- of health care quality and a balanced nounced policy of January 6, 1999, the come-blind. All seniors have access to Federal budget. gentleman from Ohio (Mr. BROWN) is the same level of care. The idea that Look at efforts to privatize in other recognized for 60 minutes as the des- vouchers would empower seniors to parts of government, efforts to pri- ignee of the minority leader. choose a health plan that best suits vatize our public pension system. The Mr. BROWN of Ohio. Mr. Speaker, I their needs is simply a myth. The re- mission of a private pension system is am joined tonight by my friends, the ality is that seniors will be forced to to make a profit. The mission of a pub- gentleman from Florida (Mr. DEUTSCH), accept whatever plan they can afford. lic pension system, like social security, the gentleman from Texas (Mr. GREEN), The goal of the Medicare Commission is to provide a decent amount of the gentleman from New Jersey (Mr. was to ensure the program’s long-term money, a decent standard of living, for PALLONE). solvency. The premium support pro- people as they are older. For the next hour we are going to posal will not do that. Supporters of The mission of a private prison is the talk about efforts that the majority the voucher plan say it could shave 1 bottom line, to make a profit. The mis- party has tried to improve Medicare in percent per year from the Medicare sion of a public prison is public safety, this system, perhaps the single best budget over the next few decades. That punishment, and rehabilitation. government program of our lifetime, is still not enough to prevent insol- The mission of a privatized national that has brought half the population in vency, and it is surely based on much park system, as many Republicans in

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00155 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.005 H05MY9 8648 CONGRESSIONAL RECORD—HOUSE May 5, 1999 this body have proposed, is to make a The centerpiece of this scheme is them pushed out of fee-for-service and profit in commercialization. The pur- changing Medicare from a program into a managed care plan. pose of a public national park system with a guaranteed benefits package to The problem is that if we look at is to provide green space, to provide en- a program without a guaranteed bene- what has been happening across the tertainment, to provide places for fits package. country in terms of managed care Americans to go and enjoy life with Proponents of this plan would do this plans, we know that many people are their families in secluded areas in na- by converting Medicare into what they not satisfied with their managed care tional parks. call a premium support program. I plans, even when they are available, The point is, privatization of the would caution, and I know my col- and that many seniors, after a few greatest part of our health care sys- league from Ohio said, that seniors months or a few years in the managed tem, Medicare, the mission of privat- should beware of this proposal. Pre- care plan, find that the HMOs drop ization for insurance companies is the mium support is just a fancy phrase them because they claim that they bottom line, is to make a profit. But that the plan’s supporters like to use cannot afford to continue with the sen- the purpose of our public health care to hide the fact that they want to turn iors in the managed care plan. So we system, our Medicare system, is to pro- Medicare into a voucher program. It is have seen cases and cases across the vide a decent amount of health care so nothing more than a voucher program. country, particularly in my home that older people can live their lives Under this proposal, the Federal Gov- State of New Jersey, where seniors more productively, can live their lives ernment would pay a set amount to- have simply been dropped from HMOs longer, can live their lives in a more wards the cost of a beneficiary’s health or managed care plans. healthy sort of way. care. Any expense that exceeded what Why in the world do we want to push Mr. Speaker, Republicans earlier this the Federal Government contributes more and more American seniors into evening, two of my friends from Ari- would have to be paid by the bene- the managed care plans when people zona, talked about choice and how the ficiary. Seniors may still choose fee- have not been happy with many of great thing about privatization of for-service under this scheme, but their them, they have not had adequate pro- Medicare is choice. The fact is, under premiums will be more expensive. tections, and, in many cases, they have Medicare fee-for-service, people have I think this was designed delib- simply been dropped? choice in this system. They can choose erately. The goal of the proponents of I am very concerned that what we their doctor, they can choose their hos- this proposal is to eliminate fee-for- are doing with this voucher plan that pital. Managed care privatization of service as we know it and basically re- is being proposed is simply changing Medicare is taking away that choice, place it with a managed care-domi- Medicare to the point where it will not and ultimately it will reduce quality. nated system. be the type of quality program that we The goal is simple: Let us keep Medi- Ironically, the voucher plan’s pro- have had in the past. The other thing I wanted to mention, care the successful public program that ponents want to put seniors out of fee- and then I would yield back to my col- it always has been. for-service into managed care because Mr. Speaker, I yield to my friend, the they think the competition between league, is that the other aspect of this gentleman from New Jersey (Mr. managed care plans will drive health voucher plan that disturbs me a great deal is this idea of increasing the age of PALLONE). care costs down. But the information Mr. PALLONE. First of all, Mr. we have on the cost of health care in eligibility for Medicare from 65 to 67. We know there has been a steady in- Speaker, I want to thank my colleague, recent years indicates that the Federal crease in the number of uninsured the gentleman from Ohio (Mr. BROWN) Government is doing a better job of Americans. That is probably the great- for organizing this special order. It controlling health care costs than the est threat we see today is the number goes without saying that along with private sector. of people who are uninsured. The most social security, the Medicare program The figures we have, for example, for rapidly growing group of the uninsured is the cornerstone of the Federal gov- the first 6 months of fiscal year 1999 in- are people between the ages of 55 to 65. ernment’s commitment to America’s dicate that this trend is continuing. If we raise the eligibility, we are only seniors, and the importance of the pro- Medicare funding has actually declined exacerbating this problem and denying gram to the millions who are covered by $2.6 billion, compared to the first 6 even more people coverage at a time by it cannot be overstated. I do not months of last year. when they most need it. think there is any question that we in What I am basically putting forward If I could just say, in conclusion, the Congress have to continue to search for is that under this voucher plan, the fact of the matter is that the Medicare ways to strengthen Medicare. costs of fee-for-service would see a program has been enormously success- I just wanted to say a few words sharp increase. According to an inde- ful and does not need to be changed in today to agree with my colleague, the pendent Medicare actuary, the voucher the manner suggested by this voucher gentleman from Ohio (Mr. BROWN) proposal would be an 18 to 30 percent proposal. The voucher proposal is a so- about the proposal put forward by the increase in the cost of the traditional lution in search of a problem, and it ig- cochairs of the recently disbanded Bi- fee-for-service program. nores six key principles that most partisan Commission on Medicare. The So there should not be any doubt Democrats on the Medicare Commis- cochairs’ proposal fortunately did not here, the price increase would bully sion supported, that I support, and I pass the Commission because it did not seniors into managed care programs, think must be protected as Congress achieve the required majority in the and then we have a track, essentially, and the President consider ways to im- voting process, and I am glad that it for our seniors. Once seniors make the prove and strengthen the current Medi- did not, because I think that the co- switch to managed care, they will not care program. I just want to list them chairs’ proposal of this Commission only lose their freedom to choose their briefly, if I could. would drastically change Medicare as doctor, they will also lose the guaran- First, any revision of Medicare must we know it. teed benefits package today’s Medicare protect the right of individuals to The problem is that there is really beneficiaries enjoy. A voucher system choose their doctor by continuing the nothing we can do to stop the pro- is simply not going to provide the traditional fee-for-service program. ponents of this proposal from intro- guarantee. Second, any revision of Medicare ducing the bill in Congress. Here on the What we are seeing essentially with should not increase the number of un- House side, the gentleman from Cali- this proposal that has been put forward insured or reduce access to health in- fornia (Mr. BILL THOMAS), who was one by the Medicare Commission, and I surance. of the principal authors of that pro- stress again, it failed the Medicare posal that failed in the Medicare Com- Commission, is that we are going to see b 2115 mission, has vowed to move forward increasing costs, out-of-pocket ex- Third, any revision of Medicare must and pass this ill-conceived scheme. penses for seniors. We are going to see not increase burdens on beneficiaries

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00156 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8649 and should do more to help low-income one of my colleagues on the Republican And, in fact, the reality of what is beneficiaries. side was talking about how his mother occurring, and we have talked about Fourth, Medicare must always cover was frustrated and did not need Medi- some of the battles that we have a well-defined set of benefits that can- care because it was not a good pro- shared in fighting to save Medicare not be reduced or eliminated. gram. over the last several years, is that Fifth, Medicare must provide com- And I was shocked because, as the Medicare really has been and continues prehensive prescription drug coverage gentleman said, everyone that I talk to be attacked. In fact, literally there for all its enrollees; and to, including my own mother who is on is an attempt to destroy it on a con- Sixth, 15 percent of the budget sur- Medicare, tells me just the opposite. tinual basis. plus should be set aside to extend the They think Medicare is very valuable. That is what this whole voucher con- life of the Part A Hospital Trust Fund What they would like to see is maybe cept is about. And hopefully we will to 2020 and to combine the Part A and expanded coverage. have a chance to really discuss it at Part B Trust Funds to eliminate sol- I sort of thought it was ironic that it some length this evening, but the vency as an issue in Medicare. was close to Mother’s Day, as it is voucher concept is an attempt to de- I am afraid, I say to my colleague again today, and we had these opposite stroy Medicare. It would destroy the from Ohio and my other colleagues points of view about the Medicare pro- Medicare system because it would fun- here on the Committee on Commerce, gram. But, frankly, I get no one who damentally alter the Medicare system. that if we look at this voucher proposal suggests to me that they want to see a That is the intention of the pro- that is being put forth by the cochairs radical overhaul of Medicare. ponents of the voucher system. They of this Medicare Commission, it does One of the things I want to talk are not going to come flat out and say not satisfy these different enumerated about later, after my other colleagues we are proposing vouchers to destroy guarantees or principles that we should have spoken, is a report that just came Medicare, but the reality of what their be aspiring to. These principles will en- out by OWL, I guess the Older Women’s proposal will do is, in fact, destroy the sure Medicare is preserved and pro- League, that talks about Medicare and Medicare system. tected for the current and future gen- women, and this was in preparation for Again, I think we really need to talk erations. Mother’s Day. It has some significant about it in a detailed way so people un- I know my fellow Democrats want to insights into the problems that elderly derstand what really the Republicans, accomplish that goal, and hopefully we women face. in general, are talking about as their Mr. BROWN of Ohio. I thank the gen- will be able to withstand some of the solution to destroying Medicare. tleman from New Jersey, and now I efforts that are being put forward, pri- Medicare is presently a defined ben- want to yield to my friend, the gen- marily by the other side of the aisle, to efit plan. The statute specifically de- tleman from Florida (Mr. DEUTSCH), a change Medicare—from to what it has lineates what benefits a beneficiary, prominent member of the Sub- traditionally been: a good program, a those 30 million people, get under committee on Health and Environment quality program that covers all sen- Medicare. They get 80 percent of rea- of the Committee on Commerce, and iors. sonable cost. Under Part B they get thank him for his help. Mr. BROWN of Ohio. I thank the gen- Mr. DEUTSCH. Mr. Speaker, I appre- hospitalization coverage with a deduct- tleman from New Jersey. I want to add ciate the opportunity to be here this ible; under Part A they get certain that the leadership of the gentleman evening and really focus in on Medi- home health care benefits, nursing from New Jersey (Mr. PALLONE), espe- care and what it faces in the future home benefits, specific benefits that cially in his efforts to fight Republican and, in a sense, what it has done in its are delineated under the Medicare stat- efforts to privatize Medicare, have been past. ute. very, very important in our so far suc- Medicare’s creation is not ancient And, in fact, we have added, occa- cessful efforts to do that. history. We are talking about a pro- sionally. Just in the last Congress we One point, before calling on the gen- gram in effect for less than 30 years at have added some preventive coverage, tleman from Florida (Mr. DEUTSCH), this point in time. And the bad old and we have pushed and we have and that is that the gentleman from days, which many people still remem- pushed. And, in fact, if anything, what New Jersey (Mr. PALLONE) repeatedly ber, not in terms of reading about but we ought to be talking about is adding has talked about the success of Medi- hearing about, it almost seems like an- additional benefits. One of the issues care; that it is a program that almost cient history to us, of America prior to that this Congress should address is no one in this country, except for some Medicare; of seniors literally across the issue of prescription drug medica- insurance company executives, some the country not having health care tion being covered under Medicare. Wall Street analysts, and some Wash- coverage, period. In a sense, effectively That is a critical issue for us to pass in ington political pundits and their rep- dying by not having health care cov- this Congress. It is a gap in the Medi- resentatives in the Republican Party erage. That does not happen today. care system that we do not provide say that that Medicare is that broke. In fact, Medicare, as a government coverage. In fact, I think we can make There are not huge demands from program, is really government at its a very strong case that providing cov- across the country in any of our dis- best; government coming in and deal- erage will have a positive cost effect in tricts clamoring for Medicare to be so ing with incredibly serious problems on terms of the Medicare Trust Fund. radically changed. a societal level, on a community level But that is the present Medicare sys- Sure, it needs some changes; sure, it in the United States of America and tem. In fact, the way it is set up, re- needs some fixes; but it is not a broken changing the world. That in fact is gardless of how much hospitalization program. It is serving people in this what Medicare as a program has done. costs, that is the coverage that a Medi- country very well. And this kind of Over 30 million people are presently on care beneficiary gets. Obviously, people radical surgery proposed by Repub- Medicare. It is the largest health care also have the option, in most commu- licans is dead wrong. system in the world, and it has nities in the country, most urban cen- Mr. PALLONE. If the gentleman will changed the world. ters in the country, of choosing Medi- yield, I would like to say one more One of the things I think is inter- care HMOs, if those are available to thing before he yields to another col- esting to reflect on, just as we are talk- them. league. ing about this issue, is does anyone se- But what is the voucher system? The This Sunday coming up is Mother’s riously believe that Medicare would voucher system is a totally different Day. A few years ago I was on the floor have been created if my Republican concept. It says we believe that each talking about Medicare at the time colleagues were in the majority of the person should get X dollars, whatever when there was an effort by the Repub- United States Congress? I do not think that X dollars is, for their health care licans on the other side to try to cut that is a serious question because I coverage under Medicare. Theoreti- back significantly on the funding. And think we know the answer to it. cally, someone can then take that

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00157 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8650 CONGRESSIONAL RECORD—HOUSE May 5, 1999 voucher and go shopping in the private Here we have a Member from Ohio, eral funds and payroll taxes. Current sector for health care coverage. The our ranking member on our Sub- workers are taxed 1.45 percent of their theory of our colleagues is that the pri- committee on Health and Environment earnings and our employers are taxed vate sector is going to do better than who requested this hour, a Member 1.45, where the self-employed are at 2.9 this present system and they are going from Florida, a Member from New Jer- percent. This tax makes up 89 percent to provide individuals with more cov- sey, and myself, I am from Texas, and of the income for the Medicare Trust erage. it shows how it is not just a regional Fund Part A. And I would challenge Do not be fooled. Because the whole problem. any other Federal program to have concept of the voucher system, the way The Medicare program has been so that kind of taxpayer supported pro- it has been proposed continuously, is a important since 1965, and I am glad we gram. set amount of dollars. Now, from a are taking time out at the end of the We will talk tomorrow about the sup- strict budgeting point of view, if our day to talk about it and to hopefully plemental defense spending, what is only concern was outlays of dollars, raise the level of intensity for not only going on in Kosovo. I always like to then we could see supporting the senior citizens who are now Medicare give the example that if we did not ap- voucher system. But if our concern is beneficiaries but those of us who will propriate $1 for the Pentagon tomor- really impact on people’s lives, we just grow into being Medicare beneficiaries row, we would not be able to handle cannot be. over the next few years and realize the our commitments to NATO or buy an- But once that voucher system is set benefits of the current program. other missile or another tank or pay up and we pick that dollar amount, and My colleague, the gentleman from another service personnel, but the hos- today it might be a good dollar Florida (Mr. PETER DEUTSCH), men- pital portion of Medicare Part A, 89 amount, and we can really debate that tioned that Medicare does not pay for percent is funded by the taxpayers di- dollar amount, but what about tomor- everything. In fact, it does pay for 80 rectly. row, and what about the next day, and percent. There are a lot of things Medi- b 2130 what about the day after that? And the care should not pay for, but it does not reality is that no matter what the dol- pay for all the things that maybe It does not come out of necessarily lar amount in the voucher is, there will health care should. One in particular, general revenue. It is for the trust be a health care provider who will bid prescription medication, has risen now fund. Medicare Part B is a split be- for that service. to a new level of importance, because tween 75 percent and 25 percent, gen- So the voucher today is $4,000. Next prescriptions in 1999 are such that we eral fund 75 percent and 25 percent year it might be $3,500, or even next do provide delivery. It saves ultimately from the beneficiaries. So we see that year it might be $4,000. It will be below on going to the doctor or the hospital, Medicare is not just general funds, it is the average cost of Medicare bene- whereas in 1965 or 1975, some of the ad- a tax support. And that was created in ficiaries today. And there will always vances in medications were not there. the late 1980s and 1990s. be a private-for-profit provider of care So perhaps we should reflect and say, The deductible for Medicare Part A is who will bid for that. But what we are okay, let us do what we can do on pre- $768 per patient for Medicare Part A. saying, effectively, is that we are cre- scription medications and provide That is a deductible. So it does not pay ating a two-tier health care system, be- some type of copay for Medicare bene- for everything. Medicare Part B, the cause the wealthiest of the wealthy in ficiaries and not necessarily force sen- premium that seniors pay is $45 a America will not have to opt into that iors into managed care, an HMO, sim- month, with a $100 a year deductible. type of process. ply because they are paying $300 or $400 Actually, beneficiaries pay a co-pay of What will happen is the voucher sys- a month for prescriptions. 20 percent of the approved amount be- tem, inevitably, from a policy perspec- In some cases in my own district I cause Medicare pays for 80 percent and tive, will force the vast majority of have seniors who are paying that that 20 percent is the responsibility of Medicare beneficiaries into sub- much, and their minimum benefits on the senior citizen. They can buy them standard HMOs. That is the result of Social Security are just a little bit less a Medigap coverage that is regulated the voucher system that is proposed. than that. So thank goodness the fam- by State insurance commissions or And that is not Medicare. That is ily is still together, the husband and they can pay that 20 percent them- minimalist health care. That is a trag- the wife, and maybe the wife is the selves. edy of monumental proportions for this minimum beneficiary and they are The reason I think we are here to- country. paying her whole Social Security night, and I do look forward to the dia- I know the four of my colleagues check just for their prescription medi- logue that we have, and I could talk all here, and really almost everyone on cation. evening about the benefits of the cur- our side of the aisle, will fight with our Medicare is such an important pro- rent program in the fee-for-service pro- last ounce of strength, and I know the gram. Again, it started in 1965, and I gram, but the Medicare Commission I President is committed, to prevent was proud that in 1965 it was Lyndon think had a great many shortcomings. that from happening. And I look for- Johnson from Texas who originally I do not want to take anything away ward to really entering into a dialogue proposed it, although it was not a new from Senator BREAUX and his efforts to with those of us who are here this program. It had frankly been around try and come up with a compromise. evening and really defining this a little since the depression, but it was enacted But the concern I had was the premium bit more. in 1965 as a national health care insur- support proposal that they did come up I yield back to my colleague from ance program for people over 65. It was with. That is not something I could Ohio. expanded in 1972 under a Republican vote for on the floor of this House. And Mr. BROWN of Ohio. Mr. Speaker, I administration to cover the disabled I was glad that the Medicare Commis- want to thank my colleague from Flor- and the need for continuing dialysis, sion failed to get the number of votes ida, and I want to now introduce an- for permanent kidney failure, or a re- that they needed to. It would increase other good friend, the gentleman from ceived kidney transplant. So over the premiums for millions of beneficiaries. Texas (Mr. GENE GREEN), who has been years Medicare has been expanded to It would cause the traditional program a member of the Subcommittee on include disabilities. to rise, the premium, from 18 percent Health and Environment for 3 years The United States public and private to 30 percent. now and has done a good job. spending on health care far exceeds In rural districts, of course my dis- Mr. GREEN of Texas. Mr. Speaker, I that of other industrialized nations by trict is very urban, but in rural areas want to thank my colleague for re- roughly a trillion dollars. Medicare Medicare beneficiaries would pay dif- questing this special order. I think it is comprised 11 percent, more than $200 ferential premiums for the same tradi- so important that we recognize the billion of our Federal spending, and is tional Medicare for the first time. And Medicare issue. funded by a combination of both gen- also, the premium support system,

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00158 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8651 with what has happened with the man- ber of the House of Representatives at believe is that Government can be a aged care proposal issue now, we have that point because he knew it would force to literally make people’s lives managed care companies withdrawing not work and he wanted to defeat it. better. from rural areas predominantly, so we Literally the same day, then Speaker I think part of this history discus- could even see that as not as an option Gingrich said he wanted to see Medi- sion, for people who are watching us for rural areas in our country. care wither on the vine. It is the same this evening, and if they do not know it It was a lose-lose situation for urban group of people that opposed Medicare themselves, talk to their parents or beneficiaries because urban bene- in 1965. The conservative wing of the their grandparents and ask them about ficiaries who generally have access to Republican party which now dominates the time, it is only 30 years ago or a managed care would not be protected the Republican party are the people little bit over 30 years ago when Medi- against the higher traditional program that really do not like Medicare. care did not exist in America. premiums. They would also likely pay In 1993, when Medicare was in some I tell my colleagues, there is an anal- more for private plans, such as plans trouble, this Congress and I know the ogy of it as well if we go back of when that would raise premiums for bene- four of us all supported the efforts of Social Security did not exist in Amer- ficiaries to compensate for Govern- this Congress to make some relatively ica. I mean, it is not an accident that ment payments that do not cover the minor changes in Medicare, some cuts Social Security was created under a local cost. to some providers that were probably Democratic administration of Franklin And an unclear commitment on de- making too much money at the time Roosevelt. fined benefits. Again, we have a defined and some minor changes in the pro- I mean, do any of my colleagues real- benefit program instead of a defined gram of some significance but, by and ly believe that, philosophically, that premium program. And again, the con- large, did not affect Medicare bene- would have occurred in a Republican cern that we also hear is unfunded ficiaries particularly but made the pro- administration? And there is a real mandates for the States. Traditional gram a good deal fiscally stronger in parallel I think in terms of that. And it Medicare premiums would rise under 1993. Again, every Republican in this is not ancient history before Social Se- this proposal, and Medicaid cost for institution voted against it then. curity existed in America. Mr. PALLONE. Mr. Speaker, will the some States would actually go up for Then, 2 years later, Republicans tried to cut Medicare $270 billion. At the gentleman yield? the low-income beneficiaries. Mr. BROWN of Ohio. I yield to the So that is the concern. And again, I same time, they were giving a tax gentleman from New Jersey. know the Commission worked long and break mostly to wealthy taxpayers of Mr. PALLONE. Mr. Speaker, I just hard. Both Members of the House and roughly the same number of dollars wanted to say, I mean, I totally agree Senate were on it, along with private and it was another assault on Medi- with what the gentleman from Florida citizens. But I was glad they were not care. And every time we turn our backs (Mr. DEUTSCH) said and my colleague able to come up with a plan because or we forget to watch or we are not from Ohio (Mr. BROWN). the plan they ultimately came close to vigilant, we see the conservative wing, I think that the problem that we face was one that we would be fighting here not all Republicans, but the conserv- with this Breaux-Thomas voucher pro- every day to try to keep from hap- ative wing of the Republican party posal is the following: Right now, be- pening. which dominates that party in the cause Medicare applies to everyone Again, I thank the gentleman for 1990’s go after Medicare. over 65 and is a program that most peo- asking for this time. Medicare is so im- And before we think about radical ple can rely on and is a quality pro- portant to not only my district and our surgery on this program, the program gram, there is substantial support for Nation but to all our districts that we of Medicare, we need to think whom do it, I think, all over the country. But, as need to again continue this dialogue we trust? Do we trust the people that my colleague from Ohio points out, the and raise the intensity so people know never liked Medicare to begin with, the Republicans traditionally were not Medicare is challenged. It is in good far right of the Republican party? Do very supportive of Medicare from the shape until 2015 now. But it is still we trust them to make changes, the beginning. something we have to guard against voucher program that the gentleman And that statement about Medicare every day to see that the reforms do from Florida (Mr. DEUTSCH) talked withering on the vine that Speaker not literally do what we in Texas call about? Or do we trust people who sup- Gingrich made I think is exactly what throw the baby out with the bath ported this program, people like us would happen with this Breaux-Thomas water. that have supported it all along, main- voucher plan, it would wither on the Sure, we can have some reforms. But stream Democrats, the President who vine. Because once this voucher plan let us not lose the traditional support supports it? Do we trust this group of went into effect, people would be pay- that Medicare has for senior citizens. people to make some minor changes to ing more and getting less. Mr. BROWN of Ohio. Mr. Speaker, I continue to keep Medicare strong? So they are going to be paying more think that both the gentleman from Mr. DEUTSCH. Mr. Speaker, if the out of pocket because they are just Texas (Mr. GREEN) and the gentleman gentleman would yield, it really is a going to get a set amount of money from Florida (Mr. DEUTSCH) both philosophical chasm between us and which is not going to cover a lot of ex- touched on the history of Medicare and them in a sense, or at least part of penses. And as they pay more out of who really was responsible for this pro- them and most of us, that we really be- pocket and find that the benefits of the gram, and I think it begs the question lieve that Government can be a useful program, which are very vague under of whom do we trust to make changes vehicle to help solve problems, to Breaux-Thomas so it is not clear what in Medicare? change the world; and I think, philo- kind of benefits they are going to get, In 1965, Medicare, with an over- sophically, probably maybe a majority as they find that they are going to pay whelming Democratic majority in Con- of my colleagues on the other side of more and get less in terms of benefits gress, the Congress passed the program the aisle believe that Government or alternatively and at the same time setting up Medicare. Many Republicans would mess up a two-car funeral and be pushed into managed care, which opposed it. In fact, Bob Dole, who was Government should not be involved. they do not like or where they cannot then the leader of the other body and We can create a voucher system choose their doctor or they end up get- later was the Republican nominee for where effectively Government is not ting dropped, because, as my colleagues President in 1996, was in 1995 bragging involved in this process even though know, in many States managed care to a conservative group on whom he Government is paying the money. But has dropped seniors after a bit of time, counted for the Republican nomination it is a totally different concept of the they are going to become very dissatis- for President, bragging about who he role of Government. I think none of us fied with the Medicare program. was one fighting against Medicare believe that Government can solve And the kind of consensus that we against its creation in 1965 as a Mem- every problem. But I think what we do have now that says that this is a good

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00159 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8652 CONGRESSIONAL RECORD—HOUSE May 5, 1999 quality program will disappear. And maybe it is the difference between of mine is a carpenter. He started then we are going to have a race, if you someone who is predominantly a white- working when he was about 18, he is will, to see what is going to replace it. collar worker and somebody who is a about my age, in his mid 40’s. He can- And I think it, essentially, destroys blue-collar worker, I have a very indus- not quite lift as much as he used to be the program so that people will not trialized district. They load the air- able to. have faith in it anymore. They will be planes at Intercontinental Airport. If we let Republicans raise the Medi- looking for an alternative. They load the ships at the Port of care age to 67, then they will look at I do not want to be so cynical, be- Houston. They work in the petro- the actuarial tables and they will say cause maybe I am being a little too chemical facilities. Those folks cannot the average person is living another cynical. But if we look at that whole wait, they are just barely waiting now year longer and raise it to 68. It is sim- philosophy of withering on the vine, until they are 65 so they can get Medi- ply not fair to the large number of peo- that is essentially what would happen care. ple in this country who do not dress to this program. And also private business. If they like this when they come to work, The irony of it is that Breaux-Thom- have an early retirement and they have whose bodies really do not allow them as does nothing to solve the long-term some type of retiree health plan, let us to work until they are 67 or 68. It really solvency of Medicare. I think the infor- see what some of our large employers shows how out of touch people are in mation we have is that it extends are going to do in the country by say- this institution and in this city, and Medicare for 1 or 2 years, at the most. ing, by the way, their collective bar- especially on that side of the aisle that President Clinton and the Democrats gaining agreement is going to have to really do think, well, because people have said, we want at least 15 percent last 2 more years because once they be- are living longer, we will raise the So- of the budget surplus to go towards ex- come 65 their retiree health plan goes cial Security age, the Medicare age, be- tending the life of the Medicare pro- into Medicare. cause people are living to be 80 and gram. The Republican leadership has So raising it to 67 may be great for they can take care of themselves. refused to do that. They are not really some folks. But if my colleagues have a The fact is, as the gentleman from interested in extending the life of the district where people literally work Florida (Mr. DEUTSCH) is implying, peo- program. They just want to change it with their hands, they are not nec- ple between the ages of 55 and 64, the radically with this voucher system. essarily getting healthier. age that we want to move Medicare And I think ultimately it would wither Again, following my colleague from coverage and include them, those in on the vine. New Jersey when he said the proposed that age group, there are so many peo- Mr. BROWN of Ohio. Mr. Speaker, I Commission plan only extended the ple in that age group that are losing yield to my colleague from Texas (Mr. life, at the maximum, of 2 years. their health care coverage because GREEN). Mr. DEUTSCH. Mr. Speaker, if the they are getting laid off, their com- Mr. GREEN of Texas. Mr. Speaker, I gentleman would continue to yield, it pany is downsizing, their company is want to agree with my colleagues from is really interesting also just talking moving to Mexico or somewhere else. New Jersey and from Florida. about the present situation of Medi- There are people that have many Medicare was originally created be- care. I think we would agree that this more health demands, many more cause of the failure of the free is another area where benefits really health needs as they are 60 years old enterprize system for insurance. If I should be expanded, not cut back. compared to when they are 50 years owned an insurance company, I would I think what we really should be old. They are getting their health care not want to sell insurance to someone doing, and we have been involved in cut off from their employer when they over 65, although we do have some who supporting legislation to this effect, al- lose their job or when their employer only want to take the healthiest, as we though it has not passed, is giving op- cuts benefits when they are 59 years know, because we cannot afford the tions to buy into Medicare for that age old, right at the time they most begin premiums. group that my colleague from New Jer- to need their health care. Any actuary will tell us what is the sey talked about as people who retire For this body to endorse moving the quote of a premium for someone over early. age up to 67 is absolutely absurd. We 65, $1,500 a month, $2,000 a month, be- We have a phenomenon in America should be thinking of moving the oppo- cause they are ill. That is why Govern- now that, yes, people are living longer site direction, especially since the ment had to step in, free enterprise and some working longer. But some are President’s plan and the plan that all could not take up the need for some not working longer. And really the of us have worked on actually pays for type of health care for senior citizens. worst situation to be in is either by itself in the cost of the premium be- In fact, under the current system, al- choice or by forced circumstances, tween the ages of 55 and 64. It is no most half of all seniors have an income maybe by health, of retiring early and giveaway program, as Medicare is not, of below $15,000 a year. Approximately not having retirement benefit of health anyway. But particularly this part of 10 million widows have an income of care coverage and trying to buy private it, expanding it to 55 to 64, voluntarily less than $8,000 a year. So this is not a coverage in that 60-to-65 age group, pays for itself and will make a dif- program for the rich, as we sometimes where private coverage could literally ference in the lives of literally hun- hear we have all these rich seniors. be potentially 50 percent of someone’s dreds of thousands if not millions of Despite all the out-of-pocket costs income. Americans in that age group who no that seniors already have to pay, 52 longer have the health insurance cov- percent of Medicare’s costs now go to 5 b 2145 erage they figured that they would percent of the most sickest senior citi- It is an incredible box that we are in. have from their employer until their zens. So we are not talking about a Previously we have tried to expand 65th birthday, until they could move program for the wealthy. We are talk- that coverage, because that is another into Medicare. ing about a program for seniors who area where appropriately from what Mr. PALLONE. I totally agree with make less than or earn $15,000 a year Medicare should be doing, we should be the gentleman. I think you were hint- under their pension plans or Social Se- expanding the coverage to people who ing earlier about the fact that really curity. retire before 65, and not talking about what this is is like a social contract. In Let me talk a little bit about raising raising the eligibility to 67. other words, people were told when the age to 67. That may be something Mr. BROWN of Ohio. If I could re- they started out working at 18 that that the actuaries can say, well, we are claim my time for a moment, following when they got to be the age of 65, that living longer. I do not know if we are up on what you are saying and what Medicare would be there. I think it is living that necessarily healthier the gentleman from Texas (Mr. GREEN) grossly unfair after they have depended longer. Because I can tell my col- said about people that work with their upon that to say all of a sudden now leagues, in my own district, again, hands, that start working, a neighbor the age is going to be higher. Because

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00160 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8653 we know that in fact what is happening probably just as high but I think the is a darn good Chevy. It has worked is that many people in that near elder- focus this year is trying to get that ad- really well for over 30 million people in ly group, as you mentioned, are the ditional coverage. I think some of the this country. very ones that do not have any health things that the gentleman also men- It is an incredibly successful system. care coverage. tioned, this is sort of a high class prob- It has done innovative things over the In the beginning I talked about lem we have. last 10 years to make itself even more women, because this Older Women’s First of all, we have dealt with the successful. We could talk about some League put out this report in conjunc- actuarial issues and it is a good thing of the specific changes, probably not tion with Mother’s Day coming up this people are living longer. That is a high this evening but another night, that we Sunday. A lot of the people that are in class problem that we have in America. have done in terms of whether it is that near-elderly category that do not We can deal with it, we have dealt with DRGs or whether it is issues regarding have health care coverage or insurance it, in some of the changes that we that which have really saved the sys- are women, because what happens a lot talked about in 1994. I keep thinking as tem incredibly, tens of billions of dol- of times is that the spouse who is not we are talking, particularly in that lars to make it even better, to provide working, for example, is not covered pre-65 age group, where if we went from more benefits for people. when there is a buyout or somebody 65 to 67. Mr. BROWN of Ohio. The comments gets laid off at that age, and there is a One of the things about health insur- of the gentleman from Florida about tremendous amount of people that are ance is statistically people who do not people without insurance actually are in that category that are women. have health insurance actually get sick sicker, get sicker is particularly appli- The other thing I just wanted to say at a higher rate than people who do cable to prescription drugs. We all have very briefly is that instead of worrying have health insurance. In effect, heard stories in our district similar to about the aspect of this that how we whether you have health insurance or the one in the city of Elyria in my dis- are going to make benefits less for peo- not, statistically you have got a trict, a woman who is paying $400 for ple, as the gentleman from Florida (Mr. chance of getting sick. her prescription drugs, her Social Secu- DEUTSCH) said, we do not want to do What is going to happen when you do rity is about $800 a month, she has no that. What we want to do is look at the not have health insurance? What hap- prescription drug coverage. What she gaps that exist in Medicare and try to pens in America today? What happens does with her prescriptions is she typi- fill them. to real people in that category, 65, cally takes half the dosage that she We know that when Medicare started younger than 65, retired, for whatever needs. If she is supposed to take four in the 1960s, at least this is what I have reason, as you said, without health in- pills a day, she will take two or take been told historically, that prescrip- surance in America? What is happening four half pills a day so her prescription tion drug coverage was not that impor- to those people? The reality is not a lot will last twice as long. She is more tant because people did not rely on pre- of good things, things that we know for likely to get sick and end up back in scription drugs that much. The preven- a fact we can do better as a country. the hospital, more likely to suffer and tive care that comes with prescription We have made changes where we can more likely to cost the Medicare sys- drugs really was not available all that do things. It is going to be an approach tem more money because the system is much. Also the long-term care, adult of saying, hey, here is a problem, how not paying for prescription drugs and day care, which is another gap that are we dealing with it? As my col- not dealing with some of the preven- Medicare does not pay for, that did not league from Ohio mentioned, there is a tive care and wellness care and less ex- exist then because people did not live plan out there, there is legislation out pensive care, like prescription drugs, as long or they had a situation where there to do that without costing the than emergency room or hospital they maybe were at home and the fam- system any money. That is an actuari- stays. That is one reason, putting even ily would take care of them. the humanitarian element aside, look- The reality is that the gaps in Medi- ally based system, which I think is ing at the importance of taking care of care have resulted because of the something that people again need to changes in life-style, of people living hear and really need to understand. this woman and hundreds of thousands longer. It is absurd to suggest that in Medicare is not welfare for health. like her around the country. The order to accomplish and deal with that, Medicare is not a giveaway program. health of the Medicare system long- you should simply raise the age. You Medicare is a forced retirement sys- term will be in better fiscal shape if we should try to cover those gaps by pro- tem. It is Social Security for health. can do some of these things like pre- viding prescription drugs, providing for Every working American is paying into scription drugs, put a better system long-term care, providing for adult day the Medicare Trust Fund today, this out there for America’s elderly and care. week, in their paycheck, a certain make it more fiscally sound at the It is particularly important for amount of money that is going into a same time. women. I do not mean to keep stressing trust fund that is Social Security for Mr. GREEN of Texas. I know we are that, but I keep thinking about the health. getting close to the end of the hour, fact that Mother’s Day is coming up. I That is what we are getting back. It and there are things that can be done think about my own mother, and the is not an entitlement, it is an insur- with modernizing and making Medi- fact that there are so many women ance plan. That is a big difference. It is care more efficient. Of course we talk that particularly benefit from Medi- a forced insurance plan, yes. You do about prescription medication. It can care and that these gaps are particu- not have a choice in our salaries, or save ultimately people from going to larly important to them, and raising working people in America in their sal- the hospital if they can take the full the age even makes it worse for them. aries, whether to choose to pay the dosage instead of trying to self-diag- Mr. DEUTSCH. I could not agree Medicare payroll tax or not. You have nose and lower their amount. The with the gentleman more, literally got to pay that payroll tax. But that is President’s plan of dedicating 15 per- listing some of the areas where we going into a plan that we as Americans cent of the surplus to Medicare. Let me ought to legislatively increase bene- control, this body, this Chamber and say, and I know the dollars and the fits. That is really what the debate our colleagues on the other side of this numbers are on our side, but let us re- should be about. I think this year our building control. alize the humanity of it. I use this ex- focus, and I think really the Presi- I think also, just as we are coming to ample at my town hall meetings in dent’s focus is really trying to get that the close of this hour, to reiterate, is Houston. My dad will be 84 years old prescription drug coverage which is a people out there in the real world, in this year. I did not know his father. His necessary component of Medicare. America, who live with Medicare un- father died before I was born. He is part That is our number one priority. derstand the system. With all of its of the success of Medicare. If we can I could add and agree with the gen- faults and foibles, it is a darn good sys- talk about our constituents, talk about tleman on five other things that are tem. It is not Cadillac coverage but it our family, and instead of looking at

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00161 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8654 CONGRESSIONAL RECORD—HOUSE May 5, 1999 what we can do to say, well, how do we Mr. BROWN of Ohio. Preventive care I thought we would start out by cov- need to save money in Medicare, let us for prostate cancer, for breast cancer, ering several points. I want to give you also look at what impact that will have for osteoporosis, for diabetes, a whole just somewhat of a brief history, talk on our own constituents, on our own host of new preventive care programs about what are the real interests of the family. By living to 84 years, that is paid for by Medicare all in the last 2 or United States. successful. He is a product of the bene- 3 years. That is something people At this point in time, Mr. Speaker, I fits of our system, Medicare. His father should certainly take advantage of. would be happy, so that we could go did not have Medicare when he passed Mr. PALLONE. Those were put in as ahead and take care of the rule, to away in the late 1940s. We need to re- a result or with the balanced budget yield to the gentlewoman for the rule. member that. The better quality of life process. REPORT ON RESOLUTION PROVIDING FOR CONSID- for our senior citizens, they have paid ANNOUNCEMENT BY THE SPEAKER PRO TEMPORE ERATION OF H.R. 1664, KOSOVO AND SOUTHWEST their dues, the World War II generation The SPEAKER pro tempore (Mr. ASIA EMERGENCY SUPPLEMENTAL APPROPRIA- TIONS ACT, 1999 that my dad is part of. Let us remem- OSE). The Chair would remind the ber those folks, that they are the ones Members to direct their comments to Mrs. MYRICK, from the Committee that this was created for. It was cre- the chair and not to the members or on Rules, submitted a privileged report ated for that. Let us not forget those viewing audience outside the Chamber. (Rept. No. 106–127) on the resolution (H. folks that are still providing for our Mr. BROWN of Ohio. In closing, I Res. 159) providing for consideration of country, that we want to make sure think, Mr. Speaker, the commitment the bill (H.R. 1664) making emergency that they will have Medicare and a for all of us, all four of us that have supplemental appropriations for mili- good Medicare program when they re- been here tonight, the gentleman from tary operations, refugee relief, and hu- tire. Florida (Mr. DEUTSCH), the gentleman manitarian assistance relating to the Mr. PALLONE. I just wanted to fol- from Texas (Mr. GREEN), the gentleman conflict in Kosovo, and for military op- low up on what my colleague from from New Jersey (Mr. PALLONE) is start erations in Southwest Asia for the fis- Florida said also about low-income with the 15 percent budget surplus, put cal year ending September 30, 1999, and people, low-income seniors not being it in Medicare, put those over the next for other purposes, which was referred aware and therefore not applying for half dozen, dozen years, hundreds of to the House Calendar and ordered to some of the low-income protection pro- billions of dollars into Medicare. The be printed. grams like the QMB or the SLMB pro- trust fund already is solid until 2015. Mr. MCINNIS. Mr. Speaker, well, we grams that we have. Under Medicare will go back to the Kosovo discussion, and Medicaid, if you are below a cer- b 2200 but I do, first of all, want to acknowl- tain income, you can apply through We can even do better than that. edge the Committee on Rules. Medicaid so that you actually get cer- Make sure the preventive care is ex- As my colleagues can see, it is after tain prescription drugs covered and plained as well as the gentleman from 10 o’clock at night back here in the certain other benefits covered. But one Florida (Mr. DEUTSCH) did, and we con- East, and that Committee on Rules is of the things that is in this Older Wom- tinue to talk about that, and expand still working hard. They put in a lot of en’s League report that I mentioned for Medicare 55 to 64, and especially pro- late hours, and I know they are appre- Mother’s Day is that half the elderly grams like prescription drugs. ciated by the Members on this floor. women who are eligible for those low- I thank my colleagues for joining us Let us go back to my outline about income protection programs never tonight. what I am going to discuss this evening apply for them because they are not f on Kosovo and Yugoslavia. aware of them. And also because they First of all, we are going to talk a do not want to go to the welfare offices DISCUSSION ON KOSOVO little on the brief history, just give you where they have to go from what I un- The SPEAKER pro tempore. Under summary. derstand in order to get them because the Speaker’s announced policy of Jan- I am not a historian, I am not a they do not want to be part of a wel- uary 6, 1999, the gentleman from Colo- teacher or a professor, so I am not fare program. One of the reforms that rado (Mr. MCINNIS) is recognized for 60 going to go into great detail, but I do was suggested by OWL is that individ- minutes. want to summarize kind of the sce- uals be able to apply directly through Mr. MCINNIS. Mr. Speaker, I would nario or the historical perspective that Medicare or Social Security for those note that I will be happy to yield to I think is important for me to get to low-income protection benefits. Again the gentlewoman from the Committee the other points of this speech. We are that is a kind of reform that we should on Rules when the time is appropriate. going to talk about what are the inter- be looking at, something that is going Mr. Speaker, good evening. ests of the United States. to help people with prescription drugs I am pleased that I have an oppor- As my colleagues know, before the and some of these other protections tunity to visit with all of my col- United States enters any type of mili- rather than worrying about how we are leagues this evening about an issue tary action, we need to define, we need going to save money by raising the age that is very dear to my heart, an issue to have a clear interpretation and a of eligibility. that I am going to spend the next, say, clear definition of why it is that we are Mr. DEUTSCH. I just want to quickly 45 or 50 minutes talking to you on sev- doing what we are doing, what is it mention, because I think what the gen- eral different areas that I think we about the authority. Do you have the tleman said is really important, sort of should review, an issue that is not only authority to invade the sovereign terri- almost as a public service announce- dear to my heart but dear to tory of another country? Under what ment for whoever is watching us this everybody’s heart that is sitting on conditions does that authority exist, evening, that there are benefits in this floor. and do we meet those conditions? Medicare that unfortunately not As my colleagues know, I have never Talk about what the European re- enough people take advantage of. We been at a stage in life where I had chil- sponsibility is in this situation, what have put into Medicare some preven- dren that were of the age that could the cost is to the American taxpayers, tive coverage. Mammogram screening. now serve in the military. My wife, and I think you will be surprised by the Right now less than 50 percent of Medi- Lori, and I are very privileged to have numbers that I give you this evening as care beneficiaries who are eligible for three children: Daxon, Daxon is 22 to what it is going to cost the Amer- it take advantage of it. It is free, with years old; Tessa, who is 21 years old; ican taxpayers to complete this action no copayment, no deductible. We really and Andrea, who is 17 years old. As my over the next 2 to 3 years. need to push that, because that also colleagues can guess, my concern today We should talk about the humani- has its positive humanitarian, human is about the military action that is tarian effort. Clearly, no matter where side, preventing one but also the mone- being taken in that land far away you fall on the side of the policy that tary side as well. called Kosovo or Yugoslavia. is now being followed by this country

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00162 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8655 in regards to Kosovo, we can all agree and that is how are you going to ad- a battle that has been going on for a on one thing, and that is that there is dress this religious difference? What long time. a just cause for a humanitarian effort. are you going to say to those people? Take a look at the historical perspec- We will talk a little bit about the hu- What are you going to say to the Serbs, tive of the United States. How success- manitarian effort. the Serb citizens, by the way, not the ful have we been in our history when We will also talk about the deploy- leadership, but the Serbs and the citi- we have intervened in the civil war of ment of ground troops. I have read the zens of Yugoslavia, that they cannot go another country? We have never been press lately, I have read and been down to the territory and visit their successful in that kind of intervention. briefed and so on that there is an urge religious monuments. It is a point we Now there are times, if you get a to put ground troops in over there. Let ought to remember. mass of enough force, that we are able us talk a little about that this evening. Remember that in this country, and to step between two warring parties; What are the logistics involved? we have left the map now. We probably for example, Cyprus. On the island of What do ground troops really mean? will not have to come back to where we Cyprus we have something called the What kind of numbers of ground troops may come back a little later on to talk green line. It is the line that separates are we going to have to have to go into about Macedonia and Albania and so the Greeks from the Turks. We have this situation, not just to keep the on. But the history of this country, I been there for 27 years under the aus- peace, but do we ever stand a chance of have heard many people talk about pices of the United Nations. Have we making the peace? And tonight my col- this is a genocide. I have no disagree- made the peace between the Greeks leagues will see that I distinguish be- ment with these individuals when we and the Turks? No. We stood between tween keeping the peace and making talk about the tragedies that are going them. We have kept them apart from the peace. on, but I want to point out that this is each other. We will talk a little bit about NATO, different than Hitler. What will happen in my opinion the what the military facts are of NATO, I have seen a lot of comparisons to day that we will pull U.N. forces or and I want to visit about what I think Hitler. There are atrocities, but re- American forces or a peacekeeping how this conflict will probably end, member the atrocities and the histor- force out from between these parties? what my best guess is, what the wild ical perspective have occurred on both They are going to go back to doing card is. We know what the wild card is sides. We are in between two bad char- what they have done for a long, long out there. We are going to talk a little acters. time. In my opinion, they do not like more about the Russians; that is the Now I am not talking about the inno- each other any better today than they key, that is the wild card; talk about cent citizens of the country. I am talk- did 30 years ago when we put the green the refugee problem, and of course we ing about the leaders of the KLA, the line in. So the green line is able to will emphasize our support for the Kosovo liberation organization, and I keep peace between the parties as long troops. am talking about Milosevic and Yugo- as we are willing to continue this long- But let us talk a little about and let slavia, the leaders, the dictators, over term commitment, but they have never us look first at the map and talk a lit- in that country. They are both bad made peace between the parties. tle bit about the history. characters. Is the United States or NATO going This is Yugoslavia, just an outline And when we talk about the geno- to be able to make the peace between right here. cide, that would infer a Hitler type of these parties? To give you an example, right there situation where we went to an innocent You will note during my conversa- where the red dot is, that is Belgrade. population, the Jewish population. tion that I keep referring to the United Probably as we are speaking, as I am They were not engaged in a civil war. States. Well, the United States is, in speaking right now, there are bombing He just wiped them out because they fact, operating under the auspices of missions or sorties being taken over were Jewish. NATO. But take a look at what the the community or the city of Belgrade. In this particular country there is proportions are. The United States by The important region down here, this killing going on in both sides. It has far is carrying a minimum of 90 per- is Kosovo, right here where I am cir- been for hundreds of years. Take a look cent, in my opinion, a minimum of 90 cling with the red dot. That is called at the history 1389. The Serbs and the percent of the cost, 90 percent of the Kosovo. Turks engaged in the battle over the forces, 90 percent of the bombs, 90 per- The reason that I brought the map is disputed territory here in Kosovo. In cent of the equipment. So when I talk that my colleagues need to understand Yugoslavia, the Serbs lost that battle, about the United States, I understand there are some individuals who are but to this day they still celebrate it as that this is a NATO operation. But I talking about an occupation of this a holiday. also think it is fair for us to determine portion of Yugoslavia. By going in This conflict has lots of history. This what proportion the United States is there with a military force some have conflict has guilty parties, so to speak, carrying, and I think it is also fair for even suggested a partition, partition on all sides. us to explain to the American people, out this area called Kosovo away from I am going to talk a little more ex- whom I think already know, that the the sovereign mother country of Yugo- tensively about the KLA as we get into United States by far has the heaviest slavia. it, but what we are intervening in here weight on their shoulders. What is key about that is to remem- is not a genocide. We are intervening in Well, is the United States going to be ber that in any country and with any a war of which we know very little able to go into this country, into this of us sitting in these Chambers one of about, a civil war. To me, it makes as dispute that involves hundreds of years the things of which we have the strong- much sense as having the Mexican of history, that involves religion, that est fundamental views about is our re- Army come across the borders of the involves atrocities on both sides? Is the ligion. This is a key issue here. Re- United States to try and resolve the United States militarily going to be member that in Yugoslavia the Serbs, battle between the North and the able to go in and make the peace? I do many of the monuments of their reli- South. How well do you think that not think so. Is the United States will- gion, the birthplace of their religion, is would have gone over? What did the ing to go in and give the kind of long- in this very territory down here that Mexican Army really understand about term, expensive commitment, expen- some people are suggesting to separate the conflict between the North and the sive not just in dollars but, even more from the main country and to put South? What does the United States importantly, in human lives to try and under some type of partition or under really understand on the historical keep the peace? I do not know. I do not some type of occupation by a foreign conflict in Yugoslavia? think so once we have a clear under- force. I think our understanding is limited. standing of just how difficult this will That is a key issue, to see whether I think their understanding, it is their be and what the small chances of suc- we can resolve it by the occupation, home territory, it is their religion, it is cess are.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00163 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8656 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Now I do, as I mentioned earlier, be- to the European continent, meaning The question is, what role should the lieve that the United States has a very that it is going to flow throughout its United States play? I think the role of clear role from a humanitarian aspect. borders and create a war on the Euro- the United States would much better As my colleagues know, that is one of pean continent. If, in fact, that is true, be defined and much easier justified the things we can be awful proud about the Europeans ought to frankly pick up and would fall within the realm of our in this country. I am darn proud to be a little heavier load on this particular national interests for us to carry out an American. I am very, very proud of mission. the humanitarian mission, not to be our forefathers, of our children and of Maybe the Europeans ought to han- the 90 percent partner, 90 percent part- the obligations that this country vol- dle the military aspect of this mission ner, on a military action; 90 percent untarily takes on to help people in and let the United States handle the meaning we pick up the bulk of it. need. This country’s greatness is in humanitarian aspect of it. Now we have heard some people say, part built on our humanitarian efforts I frankly do not think the Europeans well, yes but the United States just has throughout history for other countries, are carrying their fair share of the load the heavy load on the beginning. Then but there is a large difference between here. Once again, it is the good old as this action proceeds, the other mem- humanitarian effort and the military United States that is carrying the load. bers of NATO will pitch in and carry effort. So we do not have a national security their fair share, but the United States Let me talk about the next issue that threat; we do not have a threat to the really needs to carry the burden be- I think we need to talk about, and European continent. Do we have an cause they have the equipment, they what are the interests of the United economic, a world economic threat? Do have the soldiers, they have the States? Of course, the United States, we have even a more specific economic money. we are God-loving people. We are peo- threat as a result of the actions occur- I can say this, Mr. Speaker, in my ple who, generally, we do believe in ring in Yugoslavia? The answer to that opinion, with all due respect to our Eu- peace. We oppose oppression. The ques- is, no, as well. ropean colleagues, they are going to sit tion here is, how do we distinguish be- Once we address what kind of inter- back and say, hey, let the United tween an action in Yugoslavia and, ests that we have, then we have to ad- States do it; let the taxpayers of the say, an action in the Sudan or Rwanda? dress how do we get out of it? What is United States pay for it; let the United Now granted Sudan and Rwanda are the exit strategy? What is the end States put its troops in harm’s way; let not on the CNN news every hour or game? Do we have one here? the United States supply the airplanes; every half an hour and have not been I think it is very confusing out there. let the United States supply the arse- for the last several months, but I can I think NATO is confused by it. I think nals; let the United States go in and re- tell you that the atrocities that are the American public is confused about build what the United States has being committed in those countries it. I can talk to any one of my col- bombed; let the United States put in greatly exceed the atrocities that were leagues out here and I do not think any what I think is going to be necessary, being committed in Yugoslavia before one of us have a unified exit strategy. a miniature Marshall Plan to rebuild we started the invasion. Now what are we going to do? That all of the destruction and try and cre- In fact, you will see that the punish- question keeps coming up, now what ate some kind of an economy over ment being dealt up unfairly in Yugo- are we going to do? Where do we go there if, in fact, we can get the refu- slavia to the Albanians, to the Kosovo from this point? How well did we think gees back in there. This partnership ratio, in my opin- Albanians, was actually much, much out the fact that hundreds of thousands ion, is not going to change as long as less prior to the NATO invasion, much, of refugees would be coming across much less than any of these other we sit on our hands and are content these borders; in fact, the possibility of countries, but the United States must with carrying 18 other partners, with creating now a political upheaval in make a very conscious decision on us carrying 90 percent of the load. It some of these other countries? should not work that way. This is a where the interests of this country are We have to figure out what our na- partnership. that are necessary for us to enter into tional interests are. I have a pretty a conflict. So we need to figure out, do we have simple test to do that. I think that be- national interests that, in fact, dictate, b 2215 fore the United States puts our young mandate, require, that we enter into a One of them is we do not like to see men and women in harm’s way, we military action? Well, we certainly did people being killed. We do not like it need to, as elected officials, as rep- not going into it. I would love to de- anywhere. We value human life at the resentatives of the people of this coun- bate any one of my colleagues, any- very highest of the rungs on the ladder. try, we have an awesome responsi- body in here, to really justify it. Now, It is supreme to us, human life. But we bility, we have a fiduciary responsi- remember, we have a humanitarian cannot be the world’s police officer. We bility, to the people of this country, be- mission justified but a military mis- cannot go to Rwanda tomorrow. We fore we commit those young people to sion, based on the history of this coun- cannot go to Sudan. harm’s way, I think we need to do this try, based on our lack of success, this The question is: What is the dif- test, and this is how I do it, this is the country’s lack of success in the inter- ference here? Why are we over there in burden I put upon myself: Can I look to vention of any civil war, I would like Yugoslavia? What justifies that any the parents of one of these young peo- to debate whether we have that na- more than acting or failing to act in ple right in the eye and tell them that tional interest going in. the Sudan or in Rwanda? Is it a na- the loss of the life of their young child Now, of course, the question arises, tional security interest? Is the Yugo- was necessitated by the best interests has the national interest been created slav Army capable of a military threat of this country, that this young person now that we are in? Should we just to the continental United States? The giving the ultimate supreme sacrifice, drop NATO? Does it hurt the alliance, answer is, no. their life, was necessary to protect the the defense alliance, for the United Is it a threat to the European con- national interest of the United States States to all of a sudden stop oper- tinent? I have heard over and over and of America? ations? over again about how this is going to My own feeling, my own deep per- Well, there is a debate there, and spread throughout Europe; this is how sonal belief, I do not think we can meet that is a logical question to ask. It is the world war started. It is not how that standard. I cannot meet that a question I do not fully know the an- World War I started by the way. And standard because I fail to see what are swer to, but I do think that the United this is going to lead to World War III if the national interests. States can step forward without jeop- we do not quickly get in there and con- As I mentioned earlier, clearly there ardizing the alliance, the importance tain this situation. are atrocities, and I do not want a mis- of the NATO alliance. I am a NATO I disagree with that very, very interpretation coming here, there are supporter as far as the concept of that strongly. I do not see this as a threat atrocities that are being committed. alliance.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00164 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8657 I do not think we jeopardize that alli- action, who say do not dare question to put in a mini Marshall Plan, there ance at all for us to step up to our Eu- the policy of the administration, they are other countries that are going to ropean neighbors and say, hey, the bal- will say this does not compare, but I have to participate in a very substan- ance is going to change here; you are am saying, and I put out there to all of tial way. going to start to carry a heavier bur- my colleagues the question, think The United States cannot be ex- den on your shoulders, European col- about it, try and think historically pected to spend a hundred billion dol- leagues, European partners, and we are where we have been successful in a lars at a minimum to put this country going to start to focus more on the hu- civil war; try and think of other fac- back on track. manitarian effort. That kind of shift, tors or other similar situations in the Let us talk about the cost because I in my opinion, needs to take place. country, like in the world, like Quebec just mentioned a hundred billion dol- Let us talk about the legal author- and Canada, and ask the questions lars. I mentioned that earlier in my ity. Remember what we had here in what if, what kind of precedent, what comments. Now I am putting aside the Yugoslavia? See the red dot there? kind of history are we setting with the cost of human lives. Obviously the What is that following? There is a lit- action that we have undertaken? most painful, the most regrettable and tle tiny line. That little tiny line is Let us move on. I have talked about the toughest cost out there is the loss what humans have decided to use as a what I think the European responsi- of a human life. designation of what? Of a border, of a bility is. I think that a lot of our col- With all due respect, we lost two of boundary. Someone wants to find a leagues, a lot of our partners in NATO, our military people last night in a heli- border, as a line drawn in the sand, to need to pick up a bigger load. I have copter accident. We had our first two see how close they could get to it with- said that repeatedly during my com- fatalities in this action. I regret those out going on to the other side of it. ments but it does bear repeating again. losses and to me they are, and to I am Well, that is what this is. This is a The United States is a good guy. It is sure every colleague I have here, repub- sovereign country. Every party in- a good country. It is a great country. lican and democrat, it is a loss that is volved in this conflict acknowledges We truly have been the leaders of the substantial to us. Every time we lose a that this right here, Yugoslavia, it is a free world for a long time. human life in an action like this, it is sovereign country and that to go into I think our country is very capable a substantial loss. the region called Kosovo, borders have and I think our country has a responsi- Let us talk not about that cost, but to be crossed; the sovereign territory of bility on humanitarian aid when we see let us talk about the dollars. For a mo- another country has to be crossed. tragedies, by the way on both sides of ment let us talk about the less impor- NATO has never gone, without invi- this conflict, tragedies on both sides of tant cost, which is the dollars; let us tation, across a sovereign territory of this conflict, we have a humanitarian just go to that category and talk about another country, but they did this responsibility. it. Are we in this country prepared to time. How do we measure out just how Now remember not too many years spend at least a hundred billion, billion much weight we put in the backpack ago the Persian Gulf War? Remember not million, billion dollars on this ac- that the United States is expected to the quotes from our leaders back then? tion? carry compared to the Europeans? How could Iraq possibly think it is a 2230 I frankly think a lot of our partners b violation of international law for Iraq in NATO are getting a free ride. It is That is what I think it is going to to invade the sovereign territory of Ku- not their planes that are at substantial cost. wait? So the United States went to war risk. Take a look at the money that Let us talk about the cost for a with Iraq because Iraq violated that this country will pay now. minute. I estimate, and now, there are boundary, a boundary very similar to Speaking of money, and we are going lots of accounting shifts that go on out this in definition; violated that bound- to talk about cost here in a minute, re- there in government books. They will ary, invaded a sovereign country. say, there is a carrier out there, for ex- So the United States, justifiably I member there are lots of ways to shift might add, went to war to push Iraq numbers about but when we get to the ample, that we have assigned to this back across this sovereign territory. bottom line, the bottom line is this is mission, but we do not really assign Once the United States pushed Iraq an action by the United States of the costs of the carrier to this action back out of Kuwait and back into its America. The United States is going to because we would have had to pay for own boundaries, the United States pay a bigger part of it, and I think it is this carrier to be somewhere, anyway. ceased the action because the theory of time to have another partnership meet- So we do not add this up. the action was simply to defend the ing. I think in that partnership meet- There are all kinds of little tricks sovereign nation, not exclusively but ing it is time to say to our partners that go on. Some of them are legiti- somewhat simply to defend those that they are going to have to carry a mate, so maybe the word ‘‘tricks’’ is boundaries of Kuwait. larger share of the burden here. We are not correct, maybe ‘‘maneuvers.’’ What kind of precedent do we set by happy to help on the humanitarian ef- There is all kinds of maneuvering that allowing NATO to invade the sovereign fort but from a military point of view, goes on to allocate these costs in dif- territory of Yugoslavia and maybe they have to participate more; they ferent slots. even carve out a part of the country have to take a bigger chunk of this. The fact is, I think if we looked at a and say we are taking this part of the When I talk about military, I am not true cost accounting of what this ac- country from them? What kind of just talking about the bombing raids, tion is incurring, I would say it is precedent do we set? the missions, the sorties we are car- about $1 billion a week, $1 billion a What happens, for example, if Que- rying out over there. I am talking week. Tomorrow on this House floor we bec, in its effort to seek independence, about the time after. Once this thing are going to have a very healthy debate decides to secede from Canada? Does reaches a cease-fire, and I think it will on supplementing, on the first down that give the United States justifica- at some point reach a cease-fire, I am payment or one of the first down pay- tion to bomb Canada? How are we talking about rebuilding that territory ments to pay for this project. going to address that. That is not a far- that has been destroyed by NATO The expense is not just, as I men- fetched scenario. bombs, or by the Yugoslavia Army. tioned earlier, our military mission. What if some of the people in Mexico How is that rebuilt and whose obliga- When the bombs stop falling, this deal want Texas either to be independent or tion is it then? Is it once again going is not over. In fact, we just signed on to go back to Mexico? Does that give Mex- to be 90 percent of the United States of a long-term contract. One of the first ico the right to bomb the United America? I propose that it probably things that will be demanded is that States? will be, unless we have an administra- America, is that the United States, Sure, a lot of people who are very tion and a Congress that is strong in through the auspices of NATO or some supportive of the action, the military saying to NATO, look, to rebuild this, other organization, perhaps they will

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00165 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8658 CONGRESSIONAL RECORD—HOUSE May 5, 1999 bring the United Nations into this, has for the United States to put in ground Albania is a very, very poor country. an obligation to rebuild, to go in there troops that were not of sufficient quan- Their airport does not have radar. and build those bridges, to go in there tity and strength to expect a ground Their harbor does not have the capa- and build an economy. war over there. Going into Yugoslavia bility for cranes to reach in and lift Remember, these refugees who have is not going to be like going into Iraq, tanks out of ships. We cannot move all left this country, why have they left where you have a flat desert where you of this equipment by aircraft. It would the country? One, because of NATO can see your enemies for a long ways. take significant infrastructure place- bombs; two, because of the Yugoslavian It is not like the Colorado moun- ment in Albania for us to utilize that army and the slaughter that is going tains. My district is in the State of as a staging area. on over there as a result of a wartime Colorado, but it is probably very much The other countries are not very ex- action, now; three, their bridges have like the Blue Ridge mountains in Vir- cited, and maybe Macedonia will come been destroyed, their drinking water ginia. I have been over there. I have around, but the other countries are not has been contaminated, they do not seen it. This is rugged territory. This is very excited about the United States or have any communication abilities, their home territory. NATO staging a military action out of they do not have heating capabilities. As I mentioned earlier, this is the their country. They do not have roads, bridges. You birthplace of the Serbs’ religion. This So the number one problem we have name it, it has been destroyed. Some- is not going to be an easy place to oc- is, aside from the political commit- body has to rebuild it. Guess who it is cupy. In order to do that, we cannot ment or the commitment to put those going to fall upon? send in 28,000 troops and accomplish troops in there in the first place, is In my opinion, it will fall upon the job. If we send in 28,000, we will be logistically, where do we start? Where NATO, and NATO, of course, will look grossly undermanned, we will take is headquarters? Who has the logistical at the United States and say, look, many, many casualties, and we will capability to help us move that equip- really, you are a wealthy country. You wish to God we had sent in three, four, ment from throughout the world, most really should pay for this. And part of or five times that amount of force. of it coming from the United States of it I think we should. I think we should In order for us to really sustain the America, into that area, servicing that help the refugees. I think we do have kind of military ground operation that equipment, fueling that equipment, an obligation to help get that country would be necessary, I would say that at manning that equipment, and then dis- on its feet. But I do not think that ob- a minimum we need to send in 100,000 persing that equipment where we need ligation extends to the percentage of 90 ground troops, and probably, more to have it dispersed for a successful percent. I do not agree with that. likely than not, closer to 200,000 than ground operation? I think it would But let us take a look. If it remains 100,000. take several months for us to get that at about that 90 percent, or we con- Are we prepared to move those kinds capability in place. tinue to carry the large, of troops into Yugoslavia? Putting Now, once that is mentioned, keep in unproportionate burden of this, the aside the political argument or the dis- mind that we just do not have unlim- costs of this action will exceed $100 bil- pute whether or not they should be ited equipment in the United States. lion. I can tell the Members, we could there, take a look at the logistical When we dedicate that type of equip- do a lot with Medicare, we could do a challenges that we face. ment to support that large a ground lot with social security, we could do a It is an immense project to move just force in this country, we have to get it lot with education with an extra $100 a division, and a division, a light army from somewhere. Where do we get it billion. division, has say 10,000 to 12,000 sol- I have addressed the humanitarian from? We get it from other military diers. What they call a heavy division effort. I want to tonight acknowledge bases, other U.S. military bases. everyone from the Red Cross to the dif- contains about 17,000 troops, 17,000 in a My point is this: We are diluting the ferent religious organizations to all of heavy division and then 5,000 to 15,000 military force in this country to ad- the people throughout this country more troops in support facilities. dress this particular problem. I do not The equipment necessary to move a who have collection boxes at local gro- agree with the policy, but let us just, cery stores to send clothes and books division would stretch 700 miles. If we for the sake of the argument, say that and food to the refugees and to the in- put all of the equipment that is nec- the policy is correct, so we move all of nocent citizens that are involved in essary to support a division bumper to that equipment over there. We have to this conflict. That is what has made bumper, we could probably run a line keep in mind what kind of dilution do America great. That is what will con- 700 miles. We have to move that equip- we now have in Korea, for example? tinue to keep America great. ment from the United States or from What kind of dilution do we have in the As strongly as I question the policy other military bases throughout the United States? Are we taking the very of military intervention, I feel that world into that region. best equipment away from our main strong about humanitarian interven- Take a look at how long it took to forces in the United States? tion. It is appropriate for us to be in move the Apache helicopters over We know that the President has al- there on a humanitarian effort. Our there. What did we have, 24 heli- ready called up the reserves, so we country can handle it. Our country can copters? It took a month, 6 weeks? It know that our military forces, our carry it out. Our country can put a lot was not because we were reluctant to troop numbers, are being significantly of smiles on these refugees’ faces. We move them over there, it is because it diluted. The President asked for 30,000 can clothe them, we can feed them, and took a lot of manpower, it took a lot of more troops, 28,000 or 30,000 more. It is we can help them rebuild their coun- mechanical, logistical planning to get my opinion if we were to launch a mas- try. But where our expertise will get those 24 Apache helicopters over there. sive ground invasion, which I think the biggest return is not the military Take that factor and multiply it by would be the safest route to go, if in intervention but the humanitarian several hundred, if you want to move a fact we agree with ground troops in intervention. division. Just assume several divisions. there, and I do not, and I do not agree During the discussions we have had, We are going to have to put several di- with the policy, but if that decision we hear a lot of people talk about or visions in place if we want to have a were made, I think it is very realistic debate whether or not we should have successful military intervention on the for us to expect that the President ground troops. By listening to some of ground. We cannot ignore that. would have to call up draftees. the government officials or by reading Now, where do we stage it? This is a Is this country prepared to reengage some of the articles in the media, we large staging operation to move that in the draft? The draft is already in ex- would think we could put ground equipment over there. A lot of people istence. As we know, 18-year-old males troops in there tomorrow if we decided. say, let us go to Albania. Albania have to register for it. Is this adminis- Let us talk about ground troops. seems to be a logical location to put tration, is this Congress, prepared to First of all, it would be a huge mistake the equipment in. The difficulty is that draft individuals to put that kind of

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00166 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8659 force in place in Yugoslavia while action. Some people will say it is to de- of military involvement, they say to maintaining our strength in Korea, fend a spread throughout the European us, look, any kind of action outside our while maintaining our strength in the continent. I do not think it is, I think boundaries, we must speak as one mainland United States, while main- it is an offensive action. voice; do not dare question the admin- taining our strength throughout the But nonetheless, we are there. How istration’s policies. other areas in Europe? do we resolve this conflict? What do we We have an obligation to question a That is a significant question for us do to get out of this conflict? Well, we policy if we in our heart do not think to ask ourselves, what kind of dilution are in it. While we are in it, I think we that policy is right, and that is exactly can we afford? Even if we want to go in have an obligation to support our what I intend to continue on doing. there with ground forces, even if we troops with the best equipment we can Granted, outside our borders we are a think this cause justifies an American possibly get over to them. Granted, it very strong country, and within our military action, we still must stand dilutes us. We have to keep a very keen borders we are a very strong country. back and say, can we afford or to what eye on how to work that. But as long But what makes us as strong as we are extent can we afford to dilute our cur- as we have one American soldier over is that we have the checks and bal- rent military forces? That is an impor- there, we have to make sure they are ances in this country; that we are free tant question. properly equipped and we support the to speak, to question authority. And As we know, or maybe Members have troops. We may disagree with the pol- that is exactly what has made us as not read in the newspapers, for the icy, but we have to give the support to strong as we are. first time in I don’t know how many those troops. Now, the wild card we have to worry years we no longer have a carrier in I think at some point Russia is going about is if this bombing continues and the Pacific arena. We moved that car- to play a key part in bringing a cease- if Russia is ignored. And to the admin- rier. Orders were given to that carrier fire to this situation over there. It is istration’s credit, I do not think they to move over to assist in this oper- my opinion that Russia was not in- are ignoring Russia. I think the admin- ation. That is dangerous. volved in the earlier stages to the ex- istration and NATO, and, frankly, Take a look at the deploying of our tent that Russia should be involved. NATO got in way over its head as far as military forces. In my opinion, some of Why do we say Russia? I know there the refugees were concerned. They these cuts have gone way too deep. In is a lot of resentment or a lot of ill will never expected these refugees to come my opinion, our military could not sus- towards Russia. Some people will say, over, they never expected to have prob- tain, contrary to what the administra- they are bygones, they are minute lems with balance of power in the tion says to us, our military cannot players in this. They are just the play- countries which these refugees go into. sustain two simultaneous major ac- er we need, in my opinion, to bring a NATO did not know what to do with tions at once. It could not do it because cease-fire. They have credibility with them. the military has been so downsized. I think NATO is looking for a way Now, to further dilute it for this kind the Serbs, they have some credibility with the United States, they have out. And I think the administration is of action, even if it is a just action, we treating Russia with respect, and I give have to assess that responsibility and credibility with the United Nations, the administration credit for that. But what the cost of doing that is. and they have some credibility with we have to be very tender with Russia, I wanted to very quickly cover the members of NATO. members of NATO. We have Belgium, Russia may just be the player at the because at some point Russia may say, Canada, the Czech Republic, Denmark, right time and in the right place to all right, we are going to go ahead and France, Germany, Greece, Hungary, bring this thing to a cease-fire. I think sail Russian oil tankers through our Iceland, Italy, Luxembourg, the Neth- what will eventually happen is that the so-called oil blockades. And what will erlands, Norway, Poland, one of the air war, which apparently right now is NATO do? What NATO will do is they new members, Portugal, Spain, Tur- being stepped up, and I can say that, will not stop that ship. If Russia de- key, the United Kingdom, and the while I disagree with the policy of cides they are going to start supplying United States of America. being there, while we are there, we the Serbs with weapons or, worse, they Let me say, in that list of NATO might as well carry out the mission are going to put a few Russian troops members, they are all well-intended. I that the President has sent those in Belgrade and say, do not bomb Bel- am not sure that our fellow partners, troops over there for. grade any more, Mr. President, that is as I mentioned earlier, are carrying So while this is going on, the sus- the wild card of Russia. their fair share, but I will say that, for tained bombing, I think Russia will That is why I emphasized that Russia example, the United Kingdom, I think eventually, through negotiations that is an important player. They may not they have been tremendous. I think could be going on right now, bring us have the military significance that proportionately they are probably car- to a cease-fire. But there are several they used to have, they may not be the rying their fair share. elements of that cease-fire that are threat from a ground force standpoint But some of these other NATO mem- going to be necessary to carry it out. or from an operating naval standpoint bers are going to have to step up to the One, there is going to be a huge, a that they used to be, although clearly plate. In my opinion, the United States huge financial obligation put on the maybe they are even more of a threat of America is going to begin to ques- members of NATO, primarily the from a nuclear capability because of tion this policy more and more, espe- United States, one, to help bail Russia our concern of an accidental launch, cially when they see lives of American out of its economic problems; and two, but they still have all those missiles, soldiers, we lost two of them last to rebuild Kosovo, and to rebuild the so they are a player. It is appropriate night, when that begins to become infrastructure and put an economy in to get them right in the middle of this. unproportionate, and even one death in place that will sustain that country. I want to talk for a moment and then my opinion is unproportionate; when I will wrap it up. I know I have gone on b 2245 they begin to see, the American tax- for a while here, but I have because I payers, what these tax dollars are cost- So that is where I think this action is feel so deeply about this, but I want to ing, when they begin to see what the heading. I do not think this conflict talk about the Kosovo Liberation dilution is to our current military, I will spread like Vietnam spread, but I Army, the KLA. think some serious questions are going hope I do not later eat my words. In 1998, remember this is 1999, in 1998 to be asked: What are the other mem- By the way, speaking of Vietnam, I the United States State Department bers of NATO going to carry? What is want to say to all of my colleagues, listed the Kosovo Liberation Army on their burden? What is their responsi- that some people have said to those of the international terrorist list. It is bility? us who question the policy of putting amazing to see the spin that is being NATO, remember, was formed as a ground troops in Kosovo, who question put on these people in this Kosovo Lib- defense alliance. This is not a defensive the policy of the United States’ extent eration Army.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00167 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8660 CONGRESSIONAL RECORD—HOUSE May 5, 1999 Remember that the latest flareup Mr. Speaker, I yield to the gentleman meet in that city and discuss the issue started when the KLA, that is what we from Pennsylvania (Mr. WELDON). to see if we could find common ground. will call them, the KLA started sniping Mr. WELDON of Pennsylvania. Mr. The Russians decided that Vienna and assassinating Serb police officers. Speaker, I thank my distinguished col- would be that city. I sent a letter to all So the Serbs, in a typical over-re- league for yielding to me, and I thank 435 Members of the House a week ago sponse, started shooting innocent civil- him for his efforts on behalf of the un- Monday outlining in three pages what ians. The KLA in our country would be derstanding of the situation in Kosovo. we had done, and I invited Members to known as terrorists. Our State Depart- I would add that I think I have some join with us. Eleven Members came for- ment defined them as terrorists a year pretty provocative answers to the ques- ward, 6 Republicans and 5 Democrats, ago. But take a look at what is hap- tions he raised, and I think we have from liberals like the gentleman from pening on the spin. All of a sudden the good news on the horizon, perhaps as Vermont (Mr. BERNARD SANDERS) to KLA are no longer terrorists, now they soon as the coming days, if not tomor- conservatives like the gentleman from are being known as rebels or as free- row. Pennsylvania (Mr. JOSEPH PITTS) and dom fighters. Let me first of all start out, Mr. the gentleman from Maryland (Mr. The Washington Times this week, I Speaker, by saying that we have been ROSCOE BARTLETT). think in Monday’s publication, did a calling for Russia’s involvement in the The 11 of us left on Thursday night, detailed article about how the Kosovo Balkan crisis in Kosovo for about 5 Mr. Speaker, and we traveled all night Liberation Army is running a heroin weeks. It was 5 weeks ago that I was by air. We arrived in Vienna on Friday operation, the selling of drugs, to fi- first approached by Russian leaders morning. We immediately went into nance their military goals. We are from the Duma who asked me to open meetings with the President of the about to jump in bed with these folks. new channels with the administration Austrian Parliament to get a feel for We have taken sides with these folks. to see if we could find some common what he thought should occur as an We have to be very, very careful before ground for a solution to this crisis. I independent nation. And then, Mr. we hold hands with a partner like the got information from them, I started Speaker, we started meeting with the Kosovo Liberation Army. working with the National Security Russians. Let me wrap it up, because I would Council, the White House, Leon We started in the afternoon, went like to yield to my colleague, the gen- Fuerth’s office, the State Department, into the evening, continued over din- tleman from Pennsylvania (Mr. as well as Democrat Members of Con- ner, and came back Saturday morning. WELDON). gress so that no one could say we were And during our discussions with the My summary will be this: Number doing something in a partisan way. Russian leadership, which included the one, what is the policy of the United Those discussions and faxes went broad basis of Russia’s political spec- States? What are the national interests back and forth for about 3 weeks, and trum, Russia has 7 major political par- that require our investment, require they culminated 2 weeks ago in a re- ties and 90 percent of those political our commitment in this country? What quest by the Russians for me to bring a factions were represented in our discus- is the history of Yugoslavia? Is it a delegation to Budapest and then to sions. The leader was Vladimir Civil War, is it a genocide? We should travel down to Belgrade to jointly Ryshkov, who was the First Deputy ask ourselves what is the authority, meet with Milosevic to convince him Speaker and Chairman of what is the precedent we are setting that he should, in fact, come to terms Chernomyrdin’s party. He was in direct out there? Are our European partners with the requirements that NATO has contact with Victor Chernomyrdin carrying their responsibility? Are they laid down. throughout our discussion. We had carrying a fair share of the burden? Are I asked the Russians to put that re- Vladimir Luhkin, the former Soviet we supporting an organization that, in quest in writing, Mr. Speaker. They did Ambassador to the U.S., who rep- fact, are drug dealers, the Kosovo Lib- that. I asked them to meet five specific resents the Yabloko faction. We also eration Army; that is, in fact, guilty of requests that I had. The first was to had the third ranking Communist in the same atrocities or many of the put the request in writing for us to be the State Duma, Alexander Shapanov, same atrocities as the Yugoslavian involved, the second was to identify representing Seleznyov and the Com- troops? And if we are, how do we make the Russian leadership that would be munists, as well as the region and that distinction? involved in discussions with us. The Agrarian members of the Duma. Of great importance to this country: third was to give me a date and time Ninety percent of the leadership in Are we diluting our military forces to certain for a meeting with Milosevic. Russia’s political spectrum was rep- an extent that we are putting our coun- The fourth was to meet with our POWs. resented in our discussions with the 11 try in danger of another military risk We had not met with them yet. And Members of Congress. But also, Mr. because we have shifted these assets the fifth was to travel with me to a ref- Speaker, we had two Serbs there. We too much in this direction? How will ugee camp where they could see the had the largest financial contributor to the conflict end? What role should Rus- devastation caused by Milosevic. The Milosevic, who sat through our meet- sia play? Russians agreed to all five points. They ings as an adviser to the Russians in Mr. Speaker, this is a very serious put it in writing. our discussions. Dragomir Karic, whose conflict. We lost two American soldiers We then went to the State Depart- family, in fact, owns a significant last night. They died. We have a lot of ment, the gentleman from Maryland amount of business interests in both decisions to make. This is a very seri- (Mr. STENY HOYER) and I, a week ago Serbia and Russia sat through the ous situation for each and every one of this past Thursday. We met for an hour meetings and kept in phone contact us, and the final test, before I yield to and a half with Strobe Talbott. We ex- with Milosevic himself. the gentleman, the final test is could plained the opportunity. We said we Now, Mr. Speaker, these meetings any one of us, as an elected official, as were prepared to take a bipartisan del- were not to negotiate. Our purpose in a government authority, knock on the egation to Budapest and then down to going to Vienna was to see if we could door of a family and say to the father, Belgrade to meet with Milosevic. The find common ground on which negotia- the mother, or the spouse or the chil- State Department said, please don’t go. tion could take place. We prepared a dren, say to them that their loved one We were rebuffed by the State De- document and went through that docu- lost their life in this conflict and that partment, but they did open the door ment line by line. During the time of the loss of their life was necessary for for us to meet in a neutral city with going through that document, Mr. the national interests of this country? the leadership of the Russian Duma. Speaker, both the representative of If my colleagues cannot now answer With that being said, over the weekend Milosevic and the Russians were asking that question in the affirmative, then I continued discussions with the Rus- our delegation to travel to Belgrade, they ought to be questioning this pol- sians and suggested that they pick a because they thought there was an op- icy the same way I do. city and that on Friday of last week we portunity for us to bring at least one of

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00168 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8661 the POWs out, perhaps two of the push this document, as we are doing. c. Agreement on the composition of the POWs, as well as to meet with We sent copies to the Pope, the head of armed international forces which would ad- Milosevic and to get him to accept the the Muslim faith, the head of the Or- minister Kosovo after the Serbian withdraw. report that we were working on. thodox religion, the U.N. Secretary The composition of the group should be de- cided by a consensus agreement of the five Mr. Speaker, at 1 o’clock on Satur- General Kofi Annan, the parliamentary permanent members of the U.N. Security day, this past Saturday, we reached leaders of every other country, as well Council in consultation with Macedonia, Al- agreement with the Russians; an his- as Ukraine and Russia, and tomorrow, bania, the Federal Republic of Yugoslavia, torical agreement. The Russians agreed Mr. Speaker, there will be an an- and the recognized leadership of Kosovo. to a multinational peacekeeping force nouncement. d. The above group would be supplemented that had weapons. The Russians agreed The announcement that I predict will by the monitoring activities of the Organiza- to have Milosevic remove the Serbs occur tomorrow, Mr. Speaker, is that tion for Security and Cooperation in Europe from Kosovo. The Russians agreed that Russia and NATO will announce that (OSCE). they have reached agreement on a mul- e. The Russian Duma and U.S. Congress we use the term ethnic cleansing. And will use all possiblities at their disposal in even though the Russians agreed, and tinational force; the beginning of the order to successfully move ahead the process we still did not have the support of end of the conflict, partly because of of resolving the situation in Yugoslavia on Milosevic, they took the document we the work of this Congress and people the basis of stopping the violence and atroc- signed and faxed it to Milosevic at 1:30 like my colleague and people on the ities. on Saturday afternoon. other side like the gentleman who is 2. We recognize the basic principles of the Milosevic responded if we were to go going to speak next, who have been territorial integrity of the Federal Republic to Belgrade he would publicly embrace talking about the need to end this of Yugoslavia, which include: the framework of our agreement and bombing, to end this hostility that is a. wide autonomy for Kosovo b. a multi-ethnic population would, in fact, support what we and the causing us problems with Russia and c. treatment of all Yugoslavia peoples in Russians came up with. We then called look for a way to solve this crisis accordance with international norms the State Department. I talked to the peacefully. 3. We support efforts to provide inter- head of NIS Affairs, Russian Affairs, Mr. Speaker, I include for the CON- national assistance to rebuild destroyed Steve Sestanovich, told him about the GRESSIONAL RECORD the document homes of refugees and other humanitarian offer that was being made to us, he had signed by the members of the Russian assistance, as appropriate, to victims in Tom Pickering, the Under Secretary of Duma and by the Members of Congress Kosovo. State, call me back. I read our docu- who were in attendance at the meet- 4. We, as members of the Duma and Con- ings I referred to earlier. gress, commit to active participation as fol- ment to each of them. lows: Pickering told me that he did not REPORT OF THE MEETINGS OF THE U.S. CON- Issue a Joint U.S. Congress-Russian Duma think it was advisable that we go to GRESS AND RUSSIAN DUMA, VIENNA, AUS- report of our meetings in Vienna. Concrete Belgrade, even though I told him that TRIA, 30 APRIL–1 MAY, 1999 suggestions for future action will be issued Milosevic’s representative and the Rus- All sessions centered on the Balkan crisis. as soon as possible. sians were telling us that if we went we Agreement was found on the following Delegations will agree on timelines for ac- points: complishment of above tasks. would bring out all three of our POWs; I. The Balkan crisis, including ethnic and if we went, Milosevic would pub- Delegations will brief their respective leg- cleansing and terrorism, is one of the most islatures and governments on outcome of the licly embrace the document that we serious challenges to international security Vienna meetings and agreed upon proposals. had agreed to. since World War II. Delegations will prepare a joint resolution, Mr. Speaker, that was 2 p.m. on Sat- II. Both sides agree that this crisis creates based on their report, to be considered simul- urday. When we told the Russians and serious threats to global and regional secu- taneously in the Congress and Duma. Milosevic’s rep that we could not go be- rity and may undermine efforts against non- Delegations agree to continue a working proliferation. group dialogue between Congress and the cause our government did not trust III. This crisis increases the threat of fur- Duma in agreed upon places. Milosevic, and after one of our Demo- ther human and ecological catastrophes, as Delegations agree that Duma deputies will crat Members had talked to Podesta in evidenced by the growing refugee problem, visit refugee camps and Members of Congress the White House, I told the Russians and creates obstacles to further development will visit the Federal Republic of Yugo- and I told the representative of of constructive Russian-American relations. IV. The humanitarian crisis will not be slavia. Milosevic that we would not travel to Members of Congress: Belgrade. That was at 2 p.m., Mr. solved by bombing. A diplomatic solution to the problem is preferable to the alternative ——— ———, Neil Abercombie, Jim Speaker. of military escalation. Saxton, Bernie Sanders, Roscoe Bart- In fact, in that telephone conversa- Taking the above into account, the sides lett, Corrine Brown, Jim Gibbons, Mau- tion from Pickering, he said this to me: consider it necessary to implement the fol- rice Hinchey, Joseph R. Pitts, Don ‘‘Why do you think that Milosevic lowing emergency measures as soon as pos- Sherwood, Dennis J. Kucinich. would be open and candid with you and sible, preferably within the next week. Im- Duma Deputies: plementation of these emergency measures ——— ———, ——— ———, ——— ——— live up to what he is telling you about ——— ———. giving you the three POWs and agree- will create the climate necessary to settle the political questions. f ing to the document that you have in 1. We call on the interested parties to find fact signed with the Russians?’’ He practical measures for a parallel solution to b 2300 said, ‘‘After all, there have been other three tasks, without regard to sequence: the KOSOVO attempts to free the hostages. In fact, stopping of NATO bombing of the Federal the mission being held by Jesse Jack- Republic of Yugoslavia, withdrawal of Ser- The SPEAKER pro tempore (Mr. son right now has been a failure. bian armed forces from Kosovo, and the ces- OSE). Under the Speaker’s announced Milosevic has decided he will not give sation of the military activities of the KLA. policy of January 6, 1999, the gen- This should be accomplished through a series the POWs to Jesse Jackson’s mission.’’ tleman from California (Mr. SHERMAN) of confidence building measures, which That was at 2 p.m., Mr. Speaker. We should include but should not be limited to: is recognized for 60 minutes. told them we would not go. And 21⁄2 a. The release of all prisoners of war. Mr. SHERMAN. Mr. Speaker, I want hours later the Milosevic government b. The voluntary repatriation of all refu- to thank the gentleman from Pennsyl- announced on CNN that they would re- gees in the Federal Republic of Yugoslavia vania (Mr. WELDON) for his hard work. lease the hostages to the Jackson dele- and unhindered access to them by humani- It did not just start recently. He has gation within a matter of 3 or 4 hours. tarian aid organizations. NATO would be re- been building bridges between the Mr. Speaker, those are the facts and sponsible for policing the Federal Republic United States Congress and the Rus- of Yugoslavia’s borders with Albania and the time lines. We have reached agree- Macedonia to ensure that weapons do not re- sian Duma for many years. And I think ment with Russia, and that agreement enter the Federal Republic of Yugoslavia he speaks well of the need for us to with Russia is very close to what with the returning refugees or at a later break out of this stranglehold that our Milosevic will accept. Now we must time. policy is in where it seems like not

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00169 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8662 CONGRESSIONAL RECORD—HOUSE May 5, 1999 only are we reluctant to compromise, in to achieve a humanitarian result. We should be building camps as quick- we may even be reluctant to take And clearly, looking at the carnage in ly as possible. We should not be over ‘‘yes’’ for an answer. the Balkans, it is hard to call this, optimistic and assume that we will I would like to focus my remarks on even if it were to end tomorrow, a vic- bring Milosevic to our terms in a few my recent trip, along with a delegation torious humanitarian effort. days, for it is that kind of optimism from this Congress, to the Balkans. I should point out that certainly that has led to some of the difficulties Putting it into context, there were those of us at that meeting came away we face now. three different groups from this House with the belief, I think most of us did b 2310 that went to the Balkans over the at least, that the interference or delay weekend. involved in NATO being involved in se- I should point out that one of the The gentleman from Pennsylvania lecting targets has been reduced sub- biggest problems as far as accommo- (Mr. WELDON) reported from his group. stantially and that our military is now dating new refugees is the fact that hu- A second group, a group of only one carrying out the air war in a manner manitarian organizations, both govern- Member of this House, the gentleman very close to the manner that they mental and nongovernmental, both the from Illinois (Mr. BLAGOJEVICH), our would carry it out if there was no po- private charities, often called NGOs colleague from Chicago, went with litical involvement or diplomatic in- have a tradition in dealing with ref- Reverend Jesse Jackson with a delega- volvement in their decisions at all. ugee camps, that they never pay tion that included Rabbi Steven Jacobs We then, after a night’s sleep, pro- money to rent the land on which those of my district in the San Fernando ceeded that morning to Tirana, Alba- camps will be constructed. This tradi- Valley in California; and they, as ev- nia. We landed at the international air- tion is founded on the belief that when eryone knows, secured the release of port, the only significant airport in you build a refugee camp that is sup- the three American soldiers. that country. But to give my col- posed to be there for weeks, it may be The delegation that was the largest leagues an idea of how poor and unde- there for decades. But Albania is a of the three visiting the Balkans has veloped Albania was and is, Tirana mountainous country, there is very lit- received the least coverage, perhaps be- International Airport prior to this war tle flat land. What land is there is cause we were kind of the most estab- was dealing with an average of seven being farmed. And it is absurd to think lishment oriented trip. Our itinerary flights a week, one flight on the aver- that we will slow down the process of was put together with the full involve- age day for the entire country of Alba- providing even basic tent shelter for ment of the administration and the De- nia. the refugees that are still streaming partment of Defense. But given the im- The Albanians have basically turned across the border because of some tra- portance of what is going on in Kosovo, their country over to NATO and the dition of not going to this farmer or I would like to take the next 40 min- United States both for our humani- that farmer and renting their farm so utes, perhaps even an hour, to report tarian efforts to provide refugee camps that a camp can be constructed. I on my observations on that trip. and military efforts to provide bases should also point out that it is some- Our delegation was led by the gen- for us to carry the war to Serbia. what deceptive how the initial refugees tleman from Texas (Mr. ARMEY) the I want to first focus on discussions were dealt with and might lead us to majority leader and included, I believe, regarding the camps. We need to build the conclusion that we can go at a 17 or more Members of this House. I more. Over half the Kosovars are still moderate rate at building refugee fa- want to point out that this speech will inside Kosovo, and every day thousands cilities. not only be a description of what we stream over that border. Yet it will be You see, Mr. Speaker, many of the saw in some of my observations but months before that stream necessarily refugees that came at the beginning of will also act as a convenient pretext comes to an end, even if it continues at this conflict had close relatives to for me to once again address this House the rate of 4,000 or 5,000 or even 10,000 northern Albania who opened their about our policy in Kosovo and some of every day. homes and many of the towns in Alba- the steps I think that we ought to be Now, we will be passing from this nia took every available public build- taking in order to bring this conflict to House a supplemental appropriations ing and opened it up to refugees. a conclusion. bill, a bill which I am told by my col- Mosques, local gymnasiums are now Mr. Speaker, our trip began here in league and friend the gentleman from full. So every new refugee needs a place Washington at 6 a.m. at the Rayburn New Jersey (Mr. SMITH) who heads the to stay that has to be provided through House Office Building just across the Subcommittee on Human Rights of the humanitarian effort. And so we need to street from this House. And we pro- Committee on International Relations, move forward and recognize that we ceeded to Ramstein, Germany, the site on which I serve, that that bill may are going to have to build these camps of our large Air Force base there, in very well not contain the funds we more quickly than we have in the past. fact, the largest group of Americans need to build two more camps in Alba- One issue that has come up that I had living anywhere outside the United nia. a chance to discuss with the prime States. Well, we will need to build far more minister of Albania, Mr. Majko, is the There we were briefed by General than two camps. And when I say, ‘‘we,’’ idea of resettling refugees in western John Jumper and his professional staff, I mean not only the United States but Europe and in the United States. Our and we were indeed impressed by every NATO and the other countries of good- hearts go out to these refugees. It part of that plan and operation, from will. Japan has chipped in I think a would take a hard-hearted Member of the intelligence to weather. And in modest insufficient amount, but even this House to criticize the administra- fact, I came out of that briefing believ- that amount will be helpful in building tion in opening up our country to 20,000 ing, as I did not believe when I went more refugee camps. And when we look Albanian refugees from Kosovo. How- into it, that perhaps there is some at this supplemental, we should look ever, I do think that I should point out chance that bombing alone will bring forward to a conference committee to this House my discussions with the Milosevic to his knees. which will hopefully add whatever prime minister of Albania in which he But we should not kid ourselves. funds are necessary to make a full made it clear that he was willing to That is still only a chance. And fur- American effort toward building camps make available his country to provide thermore, bringing Milosevic to his now. refugee camps for all of the refugees. knees and bringing Serbia to its knees, Because we clearly misjudged this ef- There is no shortage of land or space or and I will talk about this a little later, fort at the beginning and we did not ex- political willingness to accommodate is itself not a total victory for what we pect a large number of refuges. We these refugees subject to the need to set out to do. Because this is not a war were behind the curve in preparing to rent farmland to build the camps. to acquire territory or secure strategic absorb those refuges. There is no rea- Moreover, he actually opposed the re- position. This is a war that we engaged son for us to be behind the curve still. settling of these refugees in western

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00170 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8663 Europe and the United States, pointing particular village has been burned to not yet been released, and so I do not out that as long as the Kosovars live the ground during this ethnic cleans- know whether it was one of the young close to Kosovo, the pressure will con- ing. men that I spoke to who lost their lives tinue and the likelihood will continue After our meeting with the Albanian and taught us what the ultimate, that they will return to Kosovo. In con- prime minister, we went to visit the showed us what the ultimate sacrifice trast, we only have to look at Bosnia, American Apache helicopters and more was and also showed us that this is not where after years of terrible struggle, importantly the men and women of the a casualty-free war. peace has been restored and the Bos- United States who are there to man Now it is true that this helicopter nian Muslims can now live in security. those helicopters. I was very much im- was not lost in combat, but it was lost But 70 percent of those Bosnian Mus- pressed with the quality of our mili- in a training mission done on an accel- lims who left Bosnia have not returned, tary forces. The generals, the officers erated basis under hazardous condi- even though security has been pro- and even the enlisted men are well tions, hazardous conditions that were vided, even though it is possible to live aware of their mission and of the com- necessary in order to prepare for immi- and to make a living, they have not re- plexities. Walking the streets of Amer- nent combat. These two soldiers are turned and show no likelihood of re- ica, you hear people say, ‘‘Well, let’s the first casualties of this war. turning. And so any Albanian nation- just get it over with right away.’’ Or, As I mentioned, there are mountains alist, and the prime minister of Alba- ‘‘Let’s pull out right away.’’ Or, ‘‘What that we had a chance to see, albeit nia certainly fits in this category, are we doing somewhere unless we can from a distance, on the Albania-Kosovo would want to keep the Albanian get our way all the way?’’ border. Now that is particularly impor- Kosovars in the Balkans, a few miles or These military men and women that tant when we think of the possibility at least 50 or 100 miles from Kosovo I talk to understand the complexity of of deploying ground forces. rather than see these people relocated the world and understand the com- It is true that the KLA lightly-armed to far distant areas. Keep in mind that plexity of their mission. They recog- guerrilla fighters are slipping over that Milosevic’s objective is to cleanse the nize that whether it is the Balkans or border now and carrying on operations, Balkans of Albania or at least of the perhaps some other crisis at some but we did not win Desert Storm by Kosovars and perhaps we make that other time, they may be called upon to sending a few lightly-armed guerrilla easier if we absorb refugees or urge our provide modulated levels of force, fighters up against Saddam Hussein’s western European allies to do likewise. peacekeeping, warmaking, retaliatory Army. Even after that Army was sub- As far as the logistics, I think that if strikes or humanitarian efforts as nec- ject to a level of bombardment that we put the same effort into building essary to achieve our diplomatic and may be impossible in the terrain of the camps that we are going to have to put humanitarian purposes. And they do Balkans we sent in a very heavily into absorbing refugees from other not insist that the world be made sim- armed armored force. countries, that we could build the ple, for they recognize how complex it And those who talk about starting a camps necessary. But whether we ab- is. ground war must explain to this Con- sorb another 20,000 refugees to the We were briefed by Lieutenant Gen- gress how that ground operation will United States or not is a drop from one eral Hendrix and we learned some very operate. bucket into another bucket. For 20,000 interesting facts. The first is about the Will it be airborne? Kosovars is but 1 percent of those who mountains that separate northern Al- And what are the casualties of para- may become refugees if this matter bania from Kosovo. The general as- chuting into hostile territory? continues as it has. And 20,000 refugees sured us that the Apache helicopters Will it be some lightly-armed force, to the United States is but a small por- under his command could go over those and what are the casualties of sending tion, perhaps only 20 percent of the ref- mountains, many of them over 9,000 a lightly-armed force against a heav- ugees that we will absorb every year, feet high, and into Kosovo, and that he ily-armed adversary? not to mention that it is an infinites- thought it was important that they be Will we be trying to put heavy armor imal fraction of our great country’s trained, that they go through some through mountain passes, and if so, population. So whether 20,000 Kosovars ground exercises before they were de- how easy will it be for the Serbs to set come here or not is but 1 percent of the ployed. We questioned the general be- up defenses to that armor? Kosovars, and we have to focus on the cause there was some concern that in Or finally, is it possible that we will other 99 percent. order to get these Apache helicopters convince some country other than Al- While I am mentioning my discus- into Kosovo, that they would need to bania to be the jumping-off point for sions with the Albanian prime min- fly through the two or three passes any ground action? ister, I should mention one very inter- that are in these mountains that sepa- As to that last point, as I said, Alba- esting idea, and this is one idea to rate Albania from Kosovo. nia has turned its territory over to solve two problems. The first problem NATO, both for military and humani- is that as winter arrives, it is possible b 2320 tarian operations, but I do not expect that the Kosovars will still be refugees. Mr. Speaker, I think we all recog- any other country that borders Yugo- If this is the case, we need more than nized that any force going through the slavia to do the same thing. For no simple tents to provide shelter. In addi- passes is going to have a tough time other country has all without com- tion, we would hope that perhaps be- since that is the easiest place for the plaint even accepted refugees. The fore this winter, the Kosovars returned Serbs to set up defense. He assured us former Yugoslav Republic of Mac- to Kosovo, where they will find deci- that those Apache helicopters could in- edonia has accepted refugees but has mated and burned-out villages and per- deed either go through the passes, if made it very clear that after accepting haps no place to stay. What the ambas- that was visible, or instead go over the almost 200,000 they are not necessarily sador of Albania suggested, and this is mountains. willing to accept more, and I think a matter that I look forward to dis- But keep in mind that just 2 days those who observe diplomatic affairs in cussing with the Manufactured Hous- after we left, after we had a chance to the Balkans would have great doubts ing Institute and other experts, is that talk to the brave men and women who that American soldiers or NATO sol- we acquire portable housing, some- pilot those helicopters and who serve diers based in that republic or based in thing more solid than a tent, that we the United States by operating those Hungary or Romania would ever be al- erect it in Albania for the refugees, and helicopters, that one of those heli- lowed to assemble and attack Serbia that it be designed so that when peace copters crashed and two of them lost from those countries. comes to Kosovo or even part of their lives, and when I began, right as Mr. Speaker, I should point out that Kosovo, that we can tear this housing of the time I began trying to put to- I put this speech together because I down and reassemble it so the Kosovars gether my thoughts for this speech, the thought it was important to report on will have a place to live even if their names of those two first casualties had our trip, how that report would still be

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00171 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8664 CONGRESSIONAL RECORD—HOUSE May 5, 1999 current and worthy of the attention of that the former Yugoslav Republic of the residents of the camp spoke our colleagues. I have not had the time Macedonia or FYRO Macedonia, was a English at a sufficient level to commu- I would have liked to make this speech much more developed country than Al- nicate. as concise as possible. bania with, for example, a much larger So I went around the camp asking But continuing with the description airport. whether they could put me in touch or of our trip, we then, after visiting with introduce me to a refugee who had per- b 2330 General Hendrix and his men and sonally seen rape or murder. We were women, we then went on to be briefed We visit almost immediately from not able to find, at least I was unable by Colonel Bray of Task Force Hope. that airport, we went by bus just a few to find, a refugee with such a story, ei- Both of these generals and their forces miles and after that trip we were a few ther one who spoke English or one who are deployed there at Tirana Inter- miles away from the Kosovo border, could speak to me through the trans- national Airport where the first thing which gives you an idea how close that lator. they have to do is provide security airport and the capital of the former The story we heard instead, again around the perimeter lest some sapper Yugoslav Republic of Macedonia is to and again and again, was that Serb or commando or terrorist force seek to the Serbian border, just a few miles paramilitary told people in this or that destroy them on the ground. away. town or this or that neighborhood to In any case Task Force Hope is When the buses stopped, they took us get out and get out quickly, often on as America at its best using our heli- to the Stenkovec refugee camp, little as 20 minutes notice, and the peo- copter and other logistical efforts to Stenkovec 1, and that is a camp that is ple decided to leave. Clearly, the sto- take humanitarian supplies from visited by many of those dignitaries or ries of rape and murder from other Tirana in central Albania to northern visitors who visit refugee camps. In towns and villages inspired such imme- Albania where most of the refugees un- fact, just 2 days after we left, Tony diate compliance with such an out- fortunately still are, the part of Alba- Blair was at the same camp. rageous order. nia that borders Kosovo, and so the What we saw at that refugee camp I should point out that the refugees we met came chiefly from eastern part that initially receives the refu- was, if anything, heartening. We went Kosovo, and it is quite possible that in gees. there expecting to see the worst. We What was driven home to us by this saw, I think, the best we could have ex- the more rural parts of western Operation Task Force Hope, Mr. Speak- pected. The people there were well fed Kosovo, where naturally rural people are even more tied to the land, more er, is that this is a humanitarian ef- and there was a huge store of food visi- reluctant to accept an order to evac- fort. If you are waging a war against a ble for future consumption. There were uate not just their homes but the country because of some strategic rea- smiles on the faces of almost everyone farms, the soil that they have lived on son that if you beat the country and I talked to. Think of that. These people for generations and centuries, perhaps achieve your strategic objective you have lost everything and they smile in those areas there are greater levels could call it a complete victory. If you and they joke, and there was even a lit- tle entertainment off to the side of the of atrocity. are waging war for money and gold, We then left Skopje for Aviano Air then if you capture the money and gold camp, not for our benefit but for theirs, where they sung, singing and smiling. Force base in Italy, the most active you can call it a victory. base for our planes and other NATO This war is not part of the Cold War I have friends, I myself feel this way, the market goes down by 50 points and planes to conduct this air campaign. or not fighting for some strategic ad- There, we talked to more than one we are in a bad mood. These people vantage over a larger adversary. This staff or general officer about the sto- have lost everything and they smile. war is not a war of imperialism. This ries of collateral damage for just, I be- Perhaps the best symbolic moment war is a humanitarian effort, and that lieve it was, 2 days ago a bus had alleg- was I visited one tent. They invited me is why it is so important to end it as edly been hit by U.S. bombs and scores in for some refreshment. This is a ref- soon as possible. of people, or a score of people, were ugee camp where people have genu- An even total victory 3 months from killed allegedly. now is less important than a reason- inely found refuge, but it is getting I use the word allegedly. We never able outcome reached today because warm. They live in tents. They have hear the word allegedly on CNN or on every day Kosovars are killed, every been there for a month. There are more any of the news networks, because day they die of exposure before they on the way. We have to recognize that what the Serbs do is they take western are able to reach refuge on the other while there may be smiles today, there reporters out to a site, there is a cra- side of the border, and while the Serbs could be the natural trouble of too ter, there is a destroyed vehicle, there are our adversaries in this conflict, hu- many people and too little space with are dead individuals in civilian cloth- manitarianism is not served by their too little sanitation and too much heat ing. It is reported as uncontroverted destruction. in the coming weeks and months. fact that that crater was created by a We are unfortunately treated to the That is why, as I will say it again, we NATO bomb, that that vehicle was de- videos of the collateral damage, and I must go forward and build more camps stroyed by that particular bomb and will discuss later whether we can be- as quickly as possible to prevent the that those bodies are people who were lieve all those videos, but clearly there current camps from becoming over- in the vehicle at the time when it was are civilian Serbs being killed every crowded. hit by such a bomb, none of which is day by our bombing, and if not every Many of the families I visited, they verified by forensic experts. I will say day, then every second or every third had over 6, 7, sometimes 10 people in a that our people in the military are jus- day. single tent, 12 feet by 12 feet. The fact tifiably skeptical of the Serb propa- And over $100 billion is the estimate that this camp remains calm and the ganda effort. of the damage that we have done to people smile is a testament to the While we are talking about a propa- Serbia, and clearly that country’s abil- goodwill of the Kosovars and to a level ganda effort, I should say that we have ity to provide for its people and to cure of resilience that is remarkable. been remiss in our own propaganda ef- its sick will be diminished and lives I could go on about the camp, but fort, and here I am simply echoing the will be lost as a result of the huge scale there is one other thing I want to men- views of my colleague and friend, the of the economic destruction. tion and that is I went there looking gentleman from California (Mr. ROYCE) Mr. Speaker, that was our visit to Al- for verification of the stories of atroc- who came with us on this trip. For bania. We then boarded military trans- ities. I spent two hours at that camp. years, the gentleman from California port for the former Yugoslav Republic My colleagues, about 18 of them, spread (Mr. ROYCE) has been trying to get of Macedonia with its capital at out throughout the camp. Each was as- Radio Free Europe and similar outlets Skopje. When we landed at Skopje Air- signed our own translator, and I would controlled by the U.S. Government to port, it became apparent immediately say one out of 20 or 1 out of 40 or 50 of broadcast in Serb into Serbia.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00172 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8665 Finally, finally, they have started Asia, the vast majority of the work lution that killed millions; who were broadcasting on radio only, but keep in necessary in Africa, and bear virtually there to order the deaths and execu- mind over half the Serbs have tele- all the burden in the Middle East. tions at Tiananmen Square; who were vision satellite dishes. We could, For us to do half of what needs to be ordering the continued oppression and should, have not, and must listen to done in Europe is absurd unless the Eu- were there to order the death of mil- the gentleman from California (Mr. ropeans are willing to do half of what lions of people in Tibet. ROYCE) when he says that we need to be needs to be done outside of Europe. But The fact of the matter is that we are broadcasting our message on tele- the ability of Europe to do its fair not powerful enough, and I do not have vision, because this war is a war fought share is limited, limited by small de- a magic wand, we are not powerful in the air but not just by military air- fense budgets, in which America has enough to arrest and try all of the planes but also by television broadcast. acquiesced, or rather, our State De- murderers that run countries, so it is This war may be decided by propa- partment has acquiesced; furthermore interesting to talk about some rambo- ganda as much as it is decided by limited by how those budgets are style effort to arrest Milosevic. bombs. spent. But in reality, arresting him would Then having been in four countries In order to ensure that they have a require deploying NATO troops and already that day, we flew at the end of large trade surplus with the United fighting all the way to Belgrade, and Saturday to Brussels, Belgium, where States, not as large as Japan and then fighting to whatever mountain we stayed overnight. We then pro- China, but a large one, nevertheless, hideout Milosevic sought shelter in. We ceeded to NATO headquarters, where European countries insist on not buy- are talking at that point of thousands we heard from General Clark, who is ing American military planes, not buy- and thousands, perhaps tens of thou- NATO’s chief commander, and Sec- ing American electronic military tech- sands, of dead and wounded American retary General Javier Solano, who is nology, but building it in Europe, no and NATO troops. the chief officer, in a way the Presi- matter how poorly it performs, no mat- Those who talk glibly of arresting dent, of NATO. ter how little they will be able to do to Milosevic should reflect on what is in- defend our values, our shared values in b 2340 volved in that level of defeat, a level of Europe. defeat that we did not inflict upon Sad- There, every effort was made to con- So a desire to spend less and to spend dam Hussein. vince us of three things: it less efficiently has hobbled Europe’s We, instead of trying to increase our First, that we are winning, and I re- ability to participate in this war, a war objectives in this war, should seek the main unconvinced. The most I am con- that we are carrying on to end ethnic minimum objectives consistent with vinced of is that there is a possibility cleansing in Europe. the real reason we are there: to stop that after more bombing we will even- Finally, at NATO they insisted upon the killing of the Kosovars, and to tually achieve our stated goals, though reviewing again and again the five make sure that Kosovars have a place this is hardly a humanitarian victory, NATO points of negotiation. Basically, in Kosovo to live in security where and that there is even a greater likeli- those points require the Serbs to com- they can build lives. We should demand hood that we cannot achieve NATO’s pletely surrender all of Kosovo to no more and we should demand no less. stated goals through bombing alone. NATO. I think this is not exactly a This does not mean that Serbia has Second, each of the speakers tried to compromise position. to surrender all of Kosovo to NATO. It convince us that the European allies of But I will point out that the prime does not mean that Milosevic must be NATO were doing their fair share. This minister of Great Britain, Tony Blair, turned over for trial, because, as won- is hardly the case. Eighty-five percent has made comments that can be inter- drous as those results would be, the ad- of the airplane flights, the sorties preted as setting forth an even more ditional deaths not only of NATO being put forward in this air war, are extreme objective, as he has called, troops, but every day this war goes on American. somewhat obliquely, for the arrest and more people are killed, not in the ref- If we stretch the numbers as hard as trial of Milosevic. Now, if that could be ugee camps, where they are well taken we can, and being a CPA I have seen done with the wave of a wand, I would care of, but in Kosovo itself. them stretched, but I am almost will- wave that wand immediately. No one, We have to stop the killing and reach ing to give an honorary CPA certificate very few people on this planet, deserve a peace agreement, consistent with the to those in NATO who have worked a trial for war crimes more than Mr. real objectives of this campaign, as these numbers over very hard, we can Milosevic. quickly as possible. argue that 50 percent of the total ef- The rhetoric gets so extreme that In fact, the two sides’ stated posi- fort, refugee, military plane strikes people say, how can we live in a world tions are not that far apart. We heard and support military effort, that some- where murderers rule countries? It is just before I began this long speech, how maybe 50 percent is being borne by time for America to get realistic in its and I apologize for its length, from our the Europeans. Even that is an out- rhetoric. Half the world is run by mur- colleague, the gentleman from Penn- rageously small percentage. derers. Let us recount just a few. sylvania (Mr. CURT WELDON), who de- General Clark argued to us that, The government of Sudan, which has scribed a possible settlement to which well, 50 percent of NATO’s GDP is killed 1.9 million of its own people, and Russian Duma members agreed and found in the United States, and 50 per- has probably killed more people in a which we have reason to believe cent of the wealth of NATO is found in genocidal war against its own citizens Milosevic will agree. the other countries, the European in southern Sudan than all of the That agreement calls for a multilat- countries of NATO. So if America is Kosovars total, 1.9 million; not to men- eral force that will be there to protect half of the economic strength of NATO, tion the well-known genocide of Tutsis the Kosovars. We should explore that why should America do anything less in Rwanda; the recent killings on Bor- opening instead of saying no, no mat- than 50 percent of the total refugee and neo. ter what Milosevic proposes; that he military effort? But perhaps the best example of the has to accept our five points unilater- By this logic, America, with an equal fact that murderers run countries is ally, unconditionally, or we keep the GDP to Europe, or at least the Euro- the fact that we welcomed with open bombing continuing. pean members of NATO, should do half arms, not just as a negotiating partner of all of what needs to be done in Eu- but I think the administration called b 2350 rope; ninety-nine percent of everything him a strategic partner, the prime min- We ought to explore the possibility that needs to be done in the Americas, ister of the People’s Republic of China, that there would be two separate like taking out General Noriega out of pretending that that government does peacekeeping forces. And I say that be- Panama. We should do the over- not include some old men still in power cause the biggest sticking point be- whelming work of what is necessary in who played a role in the cultural revo- tween the parties is about who is going

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00173 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8666 CONGRESSIONAL RECORD—HOUSE May 5, 1999 to be in the peacekeeping force. The NATO nation is pulling out, the others is, believe it or not, even more to be Serbs propose that it be under a U.N. must. So it is important that we try to said, but I notice that it is nearly mid- flag. America has indicated maybe the set our objectives consistent with the night, it is time for this House to ad- U.N. flag is acceptable. real humanitarian reason for our being journ, and so I will yield back. Both sides have agreed that the kill- involved in the Balkans. f ing should stop. Both sides have even Finally, Mr. Speaker, I would like to LEAVE OF ABSENCE said the Kosovars should go home. The address an issue that has been ad- disagreement is over the makeup of the dressed on this floor several times, and By unanimous consent, leave of ab- force. The Serbs want to see a lightly that is the role that Congress should sence was granted to: armed force of Russians, Greeks and play in making our foreign policy. Ms. CARSON (at the request of Mr. others who have not waged war against Now, Mr. Speaker, our constitution GEPHARDT) for today before 12:30 p.m. them recently, and America and NATO clearly provides that it is Congress on account of official business. Mr. LUTHER (at the request of Mr. insist on a NATO-led force that is that can declare war. And I believe GEPHARDT) for today after 4:00 p.m. on heavily armed. that once and if we declare war, at that One possibility is to have two peace- point all Americans should support account of family matters. Mr. BECERRA (at the request of Mr. keeping forces patrolling two different that war, and Congress at that point GEPHARDT) for today on account of offi- separate peacekeeping regions within has signed the blank check and should cial business. Kosovo. One region could be patrolled butt out and let the Commander in Mr. SIMPSON (at the request of Mr. by Russians, Greeks, and others ac- Chief proceed. But unless that happens, ARMEY) for May 4 and 5 on account of ceptable to the Serbs. And it could be we have a decision-making process. If a death in the family. said that the Kosovars would be reluc- we are not at war, if we have not de- Mr. YOUNG of Florida (at the request tant to return to that region, and I will clared war, if it is not an all-out war, of Mr. ARMEY) for today on account of get to that in a bit, but that first re- then there is a decision-making process family medical reasons. gion could include the areas of Kosovo as to what level of hostilities should f which are most sacred to the Serbs and exist and what we should demand for are the reason or the stated reason peace. SPECIAL ORDERS GRANTED they are fighting so hard to retain that Mr. Speaker, I am told that dictator- By unanimous consent, permission to territory. ship is efficient; that dictatorship is si- address the House, following the legis- That area, which I would think would lent and secret and does not show its lative program and any special orders be maybe 20 percent of Kosovo, could enemies what it is thinking. But, Mr. heretofore entered, was granted to: include the famous monasteries, or at Speaker, that is not our government. (The following Members (at the re- least the most important famous mon- Even decisions within the administra- quest of Mr. PALLONE) to revise and ex- asteries. The City of Pec, where the tion are subject to public input, public tend their remarks and include extra- Serbian Orthodox church began, could discussion and a press leak every day. neous material:) be included. We could negotiate, others But our Constitution does not vest all Mr. LIPINSKI, for 5 minutes, today. could decide, whether the mines in power in the administration. And con- Mr. DAVIS of Illinois, for 5 minutes, northern Kosovo would be included, trary to popular belief, virtually every today. and of course the battlefield at Kosovo U.S. Supreme Court decision says that Mr. PALLONE, for 5 minutes, today. Polje, the famous battlefield where the it is Congress, not the President, that Mr. BLUMENAUER, for 5 minutes, today. Serbs were defeated by the Turks in has the primary role of determining Mrs. CAPPS, for 5 minutes, today. the 14th Century, could all be included what our foreign policy is, though not, Mr. BERRY, for 5 minutes, today. in an area where Serbs would feel they of course, of determining how our Ms. SANCHEZ, for 5 minutes, today. had not given up their rights, where troops should be deployed. Mrs. MINK of Hawaii, for 5 minutes, the territory would be patrolled only So, Mr. Speaker, I know that there today. by friends, or at least countries with are those who have come to this floor (The following Members (at the re- whom they continue to have cordial re- and said that our enemies would trem- quest of Mr. PAUL) to revise and extend lations. ble in fear if they thought that one their remarks and include extraneous The other 80 percent of Kosovo man could deploy 100,000 American sol- material:) should be patrolled by heavily armed, diers without the consent of this Con- Mr. BURTON of Indiana, for 5 minutes, NATO-led, perhaps U.N.-flag-flying gress. But, Mr. Speaker, I would trem- on May 12. troops where Kosovars could feel very ble in fear, the founders of this Repub- Mr. PAUL, for 5 minutes, today. safe. This would allow them to return lic would tremble in fear, if they Mr. ENGLISH, for 5 minutes, today. to Kosovo and, with some American thought that one man could send Mr. WHITFIELD, for 5 minutes, today. and European economic aid, to rebuild 100,000 or more men and women into Mr. HULSHOF, for 5 minutes, today. their lives. battle without the approval of the Mr. GOSS, for 5 minutes, on May 6. Mr. TALENT, for 5 minutes, today. If we insist on totally crushing all United States Congress. Mr. TANCREDO, for 5 minutes, today. Serb claims to Kosovo, we insist that I call upon the President to modify this war will go on until they are his equivocal letter. There was a letter f forced to give up. And I am not sure addressed to the Congress just a couple SENATE ENROLLED BILLS SIGNED that is even 2 or 3 months away, and I weeks ago saying, in essence, that The SPEAKER announced his signa- am not sure that that does not involve ground troops would not be deployed ture to enrolled bills of the Senate of ground troops over those Almadian without congressional approval. But the following titles: mountains, and I am not sure that it those of us who looked very carefully S. 453. An act to designate the Federal can be done at a level of casualties that at that letter realized that it did not building located at 79 West 9th Street in Ju- are acceptable to the NATO countries say what it seemed to say at first read- neau, Alaska, as the ‘‘Hurff A. Saunders Fed- involved. ing, and that in fact the President had eral Building.’’ Because keep in mind, if a multilat- not promised what he should promise, S. 460. An act to designate the United eral NATO military ground force is de- and that is that before deploying States courthouse located at 401 South Michigan Street in South Bend, Indiana, as ployed, perhaps a British unit suffers American troops in a battle that may the ‘‘Robert K. Rodibaugh United States casualties or a German unit or an cost hundreds or thousands of lives, Bankruptcy Courthouse.’’ Italian unit or an American unit, and that he should come to this Congress f the country that sent those particular and ask for approval. soldiers demands an end to hostilities, Mr. Speaker, believe it or not, I have ADJOURNMENT then we will have the domino effect as even other observations from my trip. Mr. SHERMAN. Mr. Speaker, I move each NATO nation says, well, if one This issue deserves a full debate. There that the House do now adjourn.

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00174 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8667 The motion was agreed to; accord- 1856. A letter from the Assistant General mitting a copy of Transmittal No. 05–99 ingly (at 11 o’clock and 59 minutes Counsel for Regulations, Department of Edu- which constitutes a Request for Final Ap- p.m.), the House adjourned until to- cation, transmitting the Department’s final proval for a Project Agreement with Sweden morrow, Thursday, May 6, 1999, at 10 rule—Preparing Tomorrow’s Teachers to Use for research into methods to develop and Technology [CFDA No. 84.342] received demonstrate the priniciple of altering the a.m. March 24, 1999, pursuant to 5 U.S.C. original path of an artillery shell in flight to f 801(a)(1)(A); to the Committee on Education a specific and desired coordinate, pursuant and the Workforce. to 22 U.S.C. 2767(f); to the Committee on EXECUTIVE COMMUNICATIONS, 1857. A letter from the Director, Office of International Relations. ETC. Regulatory Management and Information, 1867. A letter from the Acting Director, De- Environmental Protection Agency, transmit- fense Security Cooperation Agency, trans- Under clause 8 of rule XII, executive ting the Agency’s final rule—Revisions to mitting notification concerning the Depart- communications were taken from the Reference Method for the Determination of ment of the Army’s Proposed Letter(s) of Speaker’s table and referred as follows: Fine Particulate Matter as PM25 in the At- Offer and Acceptance (LOA) to the Nether- 1847. A letter from the Administrator, mosphere [AD–FRL–6326–5] (RIN: 2060–AI48) lands for defense articles and services Grain Inspection, Packers and Stockyards received April 13, 1999, pursuant to 5 U.S.C. (Transmittal No. 99–10), pursuant to 22 U.S.C. Administration, Department of Agriculture, 801(a)(1)(A); to the Committee on Commerce. 2776(b); to the Committee on International transmitting the Department’s final rule— 1858. A letter from the Director, Office of Relations. Official Testing Service for Corn Oil, Pro- Regulatory Management and Information, 1868. A letter from the Assistant Secretary tein, and Starch (RIN: 0580–AA62) received Environmental Protection Agency, transmit- for Legislative Affairs, Department of State, April 12, 1999, pursuant to 5 U.S.C. ting the Agency’s final rule—Hazardous Air transmitting the Department’s final rule— 801(a)(1)(A); to the Committee on Agri- Pollutants: Amendment to Regulations Gov- Amendments to the International Traffic In culture. erning Equivalent Emission Limitations by Arms Regulations—received April 5, 1999, 1848. A letter from the Administrator, Permit [AD–FRL–6326–4] (RIN: 2060–AI28) re- pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- Farm Service Agency, Department of Agri- ceived April 13, 1999, pursuant to 5 U.S.C. mittee on International Relations. culture, transmitting the Department’s final 801(a)(1)(A); to the Committee on Commerce. 1869. A letter from the Comptroller Gen- rule—1998 Marketing Quotas and Price Sup- 1859. A letter from the Director, Office of eral, transmitting a list of General Account- port Levels for Fire-Cured (type 21), Fire- Regulatory Management and Information, ing Office reports from the previous month; Cured (types 22–23), Maryland (type 32), Dark Environmental Protection Agency, transmit- to the Committee on Government Reform. Air-Cured (types 35–36), Virginia Sun-Cured ting the Agency’s final rule—Approval and 1870. A letter from the Board Members, (type 37), Cigar-Filler (type 41), Cigar-Filler Promulgation of State Plans for Designated Railroad Retirement Board, transmitting a and Binder (types 42–44 and 53–55), and Cigar Facilities and Pollutants: Kentucky [KY111– copy of the annual report in compliance with Binder (types 51–52) Tobaccos (RIN: 0560–AF 9914a; FRL–6326–1] received April 13, 1999, the Government in the Sunshine Act during 20) received April 13, 1999, pursuant to 5 pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- the calendar year 1998, pursuant to 5 U.S.C. U.S.C. 801(a)(1)(A); to the Committee on Ag- mittee on Commerce. 552b(j); to the Committee on Government Re- riculture. 1860. A letter from the Director, Office of form. 1871. A letter from the Secretary of the 1849. A letter from the Administrator, En- Regulatory Management and Information, Treasury, transmitting the Financial Report vironmental Protection Agency, transmit- Environmental Protection Agency, transmit- of the United States Government for Fiscal ting a report to Congress on the 1993 Survey ting the Agency’s final rule—Approval of the Year 1998 (Financial Report), pursuant to 31 of Certified Commercial Applicators of Non- Clean Air Act, Section 112(1), Delegation of U.S.C. 331(e)(1); to the Committee on Govern- Agricutural Pesticides; to the Committee on Authority to Puget Sound Air Pollution Control Agency in Washington; Amendment ment Reform. Agriculture. 1872. A letter from the Chairman, Ten- 1850. A letter from the Deputy Under Sec- [FRL–6326–2] received April 13, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on nessee Valley Authority, transmitting a retary of Defense, Office of the Director Of copy the report of the Consumer Product Defense Research and Engineering, transmit- Commerce. 1861. A letter from the Director, Office of Safety Commission in compliance with the ting the Annual Report of the Scientific Ad- Regulatory Management and Information, Government in the Sunshine Act during the visory Board of the Strategic Environmental Environmental Protection Agency, transmit- calendar year 1998, pursuant to 5 U.S.C. Research and Development Program; to the ting the Agency’s final rule—Approval and 552b(j); to the Committee on Government Re- Committee on Armed Services. Promulgation of Air Quality Implementa- form. 1851. A letter from the Assistant to the tion Plans; Virginia; Reasonably Available 1873. A letter from the Director, Fish and Board, Board of Governors of the Federal Re- Control Technology for Major Sources of Ni- Wildlife Service, Department of the Interior, serve System, transmitting the System’s trogen Oxides [VA024–5042; FRL–6318–5] re- transmitting the Department’s final rule— final rule—Availability of Funds and Collec- ceived April 13, 1999, pursuant to 5 U.S.C. Endangered and Threatened Wildlife and tion of Checks [Regulation CC; Docket No. 801(a)(1)(A); to the Committee on Commerce. Plants; Emergency Rule to List the Sierra R–1027] received March 25, 1999, pursuant to 5 1862. A letter from the Secretary of En- Nevada District Population Segment of Cali- U.S.C. 801(a)(1)(A); to the Committee on ergy, transmitting a report recommending fornia Bighorn Sheep as Endangered (RIN: Banking and Financial Services. renewal, repeal, or modification of the Price- 1018–AF59) received April 19, 1999, pursuant 1852. A letter from the Managing Director, Anderson Act; to the Committee on Com- to 5 U.S.C. 801(a)(1)(A); to the Committee on Federal Housing Finance Board, transmit- merce. Resources. ting the Board’s final rule—Prohibition on 1863. A letter from the Director, Defense 1874. A letter from the Deputy Assistant Payment of Fee in Lieu of Mandatory Excess Security Assistance Agency, transmitting Administrator For Fisheries, National Oce- Capital Stock Redemption [No. 99–21] (RIN: the Department of the Air Force’s proposed anic and Atmospheric Administration, trans- 3069–AA83) received April 9, 1999, pursuant to lease of defense articles to Singapore (Trans- mitting the Administration’s final rule— 5 U.S.C. 801(a)(1)(A); to the Committee on mittal No. 07–99), pursuant to 22 U.S.C. Fisheries Off West Coast States and in the Banking and Financial Services. 2796a(a); to the Committee on International Western Pacific; Western Pacific Crustacean 1853. A letter from the Chairman, Federal Relations. Fisheries; 1999 Harvest Guideling [Docket Trade Commission, transmitting the Twen- 1864. A letter from the Director, Defense No. 990304061–9061–01; I.D. 022599B] (RIN: 0648– ty-First Annual Report to Congress on the Security Cooperation Agency, transmitting AL63) received March 23, 1999, pursuant to 5 administration of the Fair Debt Collection notification concerning the Department of U.S.C. 801(a)(1)(A); to the Committee on Re- Practices Act, pursuant to 15 U.S.C. 1692m; the Air Force’s Proposed Letter(s) of Offer sources. to the Committee on Banking and Financial and Acceptance (LOA) to Australia for de- 1875. A letter from the Secretary of the In- Services. fense articles and services (Transmittal No. terior, transmitting a report of the U.S. Fish 1854. A letter from the Secretary of Edu- 99–07), pursuant to 22 U.S.C. 2776(b); to the and Wildlife Service and the Biological Re- cation, transmitting Final Regulations— Committee on International Relations. sources Division of the U.S. Geological Sur- Federal Family Education Loan Program, 1865. A letter from the Director, Defense vey, Department of the Interior, on the ad- pursuant to 20 U.S.C. 1232(f); to the Com- Security Cooperation Agency, transmitting ministration of the Marine Mammal Protec- mittee on Education and the Workforce. notification concerning the Department of tion act of 1972; to the Committee on Re- 1855. A letter from the Assistant General the Air Force’s Proposed Letter(s) of Offer sources. Counsel for Regulations, Department of Edu- and Acceptance (LOA) to Egypt for defense 1876. A letter from the Secretary of Hous- cation, transmitting the Department’s final articles and services (Transmittal No. 99–13), ing and Urban Development, transmitting rule—Federal Family Education Loan Pro- pursuant to 22 U.S.C. 2776(b); to the Com- the Department of Housing and Urban Devel- gram (RIN: 1840–AC55) received April 13, 1999, mittee on International Relations. opment’s 1996 Annual Report to Congress on pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- 1866. A letter from the Acting Director, De- the State of Fair Housing in America, the ra- mittee on Education and the Workforce. fense Security Cooperation Agency, trans- cial and ethnic composition of participants

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00175 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8668 CONGRESSIONAL RECORD—HOUSE May 5, 1999 in HUD programs, and the enforcement ef- 1885. A letter from the Program Support the Service’s final rule—Warehouse With- forts of the Fair Housing Initiatives Pro- Specialist, Aircraft Certification Service, drawals; Aircraft Fuel Supplies; Pipeline gram, pursuant to Public Law 102—550, sec- Department of Transportation, transmitting Transportation Of Merchandise In BOND tion 504 (106 Stat. 3781); to the Committee on the Department’s final rule—Airworthiness [T.D. 99–33] (RIN: 1515–AB67) received April 6, the Judiciary. Directives; Dornier Model 328–100 Series Air- 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the 1877. A letter from the Assistant General planes [Docket No. 98–NM–157–AD; Amend- Committee on Ways and Means. Counsel for Regulations, Department of ment 39–11114; AD 99–08–08] (RIN: 2120–AA64) 1896. A letter from the Acting Chief, Regu- Housing and Urban Development, transmit- received April 12, 1999, pursuant to 5 U.S.C. lations Branch, U.S. Customs Service, trans- ting the Department’s final rule—Implemen- 801(a)(1)(A); to the Committee on Transpor- mitting the Service’s final rule—Exportation tation of the Housing for Older Persons Act tation and Infrastructure. Of Used Motor Vehicles [T.D. 99–34] (RIN: of 1995 [Docket No. FR–4094–F–02] (RIN: 2529– 1886. A letter from the Program Analyst, 1515–AC19) received April 7, 1999, pursuant to AA80) received April 8, 1999, pursuant to 5 Office of the Chief Counsel, Department of 5 U.S.C. 801(a)(1)(A); to the Committee on U.S.C. 801(a)(1)(A); to the Committee on the Transportation, transmitting the Depart- Ways and Means. Judiciary. ment’s final rule—Standard Instrument Ap- 1897. A letter from the Director, Office of 1878. A letter from the Director, Federal proach Procedures; Miscellaneous Amend- Personnel Management, transmitting notifi- Emergency Management Agency, transmit- ments [Docket No. 29521; Amdt. No. 1924] re- cation that the Office of Personnel Manage- ting notification that funding under title V ceived April 12, 1999, pursuant to 5 U.S.C. ment has approved a proposal for a personnel of the Stafford Act, as amended, will exceed 801(a)(1)(A); to the Committee on Transpor- management demonstration project for the $5 million for the response to the emergency tation and Infrastructure. Naval Research Laboratory, pursuant to declared on September 28, 1998 as a result of 1887. A letter from the Program Analyst, Public Law 103—337, section 342(b) (108 Stat. Hurricane Georges, pursuant to 42 U.S.C. Office of the Chief Counsel, Department of 2721); jointly to the Committees on Govern- 5193; to the Committee on Transportation Transportation, transmitting the Depart- ment Reform and Armed Services. and Infrastructure. ment’s final rule—Standard Instrument Ap- 1898. A letter from the Chairman, Federal 1879. A letter from the Program Support proach Procedures; Miscellaneous Amend- Election Commission, transmitting its FY Specialist, Aircraft Certification Service, ments [Docket No. 29522; Amdt. No. 1925] re- 2000 Budget Request for consideration by Department of Transportation, transmitting ceived April 12,199, pursuant to 5 U.S.C. Congress; jointly to the Committees on the Department’s final rule—Airworthiness 801(a)(1)(A); to the Committee on Transpor- House Administration and Appropriations. Directives; Avions Pierre Robin Model R2160 tation and Infrastructure. 1899. A letter from the Director, Office of Airplanes [Docket No. 98–CE–82–AD; Amend- 1888. A letter from the Program Analyst, Insular Affairs, Department of the Interior, ment 39–11104; AD 99–07–20] (RIN: 2120–AA64) Office of the Chief Counsel, Department of transmitting a report entitled ‘‘Impact of received April 9, 1999, pursuant to 5 U.S.C. Transportation, transmitting the Depart- the Compacts of Free Association on the 801(a)(1)(A); to the Committee on Transpor- ment’s final rule—Standard Instrument Ap- United States Territories and Common- tation and Infrastructure. proach Procedures; Miscellaneous Amend- wealths and on the State of Hawaii,’’ pursu- 1880. A letter from the Program Support ments [Docket No. 29520; Amdt. No. 1923] re- ant to 48 U.S.C. 1681 nt.; jointly to the Com- Specialist, Aircraft Certification Service, ceived April 12, 1999, pursuant to 5 U.S.C. mittees on Resources and International Re- Department of Transportation, transmitting 801(a)(1)(A); to the Committee on Transpor- lations. the Department’s final rule—Airworthiness tation and Infrastructure. 1900. A letter from the Secretary of En- Directives; AlliedSignal Inc. TFE731–40R– 1889. A letter from the Acting Associate ergy, transmitting a report on the Clean 200G Turbofan Engines [Docket No. 99–ANE– Administrator for Procurement, National Coal Technology Demonstration Program; 08–AD; Amendment 39–11103; AD 99–07–19] Aeronautics and Space Administration, jointly to the Committees on Appropria- (RIN: 2120–AA64) received April 9, 1999, pursu- transmitting the Administration’s final tions, Science, and Commerce. rule—Application of Earned Value Manage- ant to 5 U.S.C. 801(a)(1)(A); to the Committee f on Transportation and Infrastructure. ment— received April 5, 1999, pursuant to 5 1881. A letter from the Chief, Office of Reg- U.S.C. 801(a)(1)(A); to the Committee on REPORTS OF COMMITTEES ON ulations and Administrative Law, Coast Science. PUBLIC BILLS AND RESOLUTIONS 1890. A letter from the Acting Associate Guard Headquarters, Department of Trans- Administrator for Procurement, National Under clause 2 of rule XIII, reports of portation, transmitting the Department’s Aeronautics and Space Administration, final rule—Special Local Regulations for Ma- committees were delivered to the Clerk transmitting the Administration’s final rine Events; Atlantic Ocean, Ocean City, for printing and reference to the proper rule—Electronic Funds Transfer—received Maryland [CGD 05–98–088] (RIN: 2115–AE46) calendar, as follows: April 9, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); received April 9, 1999, pursuant to 5 U.S.C. to the Committee on Science. Mrs. MYRICK: Committee on Rules. House 801(a)(1)(A); to the Committee on Transpor- 1891. A letter from the Acting Associate Resolution 159. Resolution providing for con- tation and Infrastructure. Administrator for Procurement, National sideration of the bill (H.R. 1664) making 1882. A letter from the Program Support Aeronautics and Space Administration, emergency supplemental appropriations for Specialist, Aircraft Certification Service, transmitting the Administration’s final military operations, refugee relief, and hu- Department of Transportation, transmitting rule—Designation of Contracts for Notifica- manitarian assistance relating to the con- the Department’s final rule—Airworthiness tion to the Government of Actual or Poten- flict in Kosovo, and for military operations Directives; Aerospatiale Model ATR42 Series tial Labor Disputes—received March 18, 1999, in Southwest Asia for the fiscal year ending Airplanes [Docket No. 98–NM–175–AD; pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- September 30, 1999, and for other purposes Amendment 39–11115; AD 99–08–09] (RIN: 2120– mittee on Science. (Rept. 106–127). Referred to the House Cal- AA64) received April 12, 1999, pursuant to 5 1892. A letter from the Regulatory Policy endar. U.S.C. 801(a)(1)(A); to the Committee on Officer, Bureau of Alcohol, Tobacco & Fire- f Transportation and Infrastructure. arms, transmitting the Bureau’s final rule— 1883. A letter from the Program Support Delegation of Authority [T.D. ATF–409] PUBLIC BILLS AND RESOLUTIONS Specialist, Aircraft Certification Service, (RIN: 1512–AB87) received April 12, 1999, pur- Under clause 2 of rule XII, public Department of Transportation, transmitting suant to 5 U.S.C. 801(a)(1)(A); to the Com- bills and resolutions were introduced the Department’s final rule—Airworthiness mittee on Ways and Means. Directives; Boeing Model 747–100, -200, -300, 1893. A letter from the Chief, Regulations and severally referred, as follows: -SP, and -400F Series Airplanes [Docket No. Unit, Internal Revenue Service, transmitting By Mr. RUSH: 97–NM–325–AD; Amendment 39–11116; AD 99– the Service’s final rule—Electronic Funds H.R. 1684. A bill to amend the Consumer 08–10] (RIN: 2120–AA64) received April 12, Transfer—Temporary Waiver of Failure to Credit Protection Act and other banking 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the Deposit Penalty for Certain Taxpayers [No- laws to protect consumers who avail them- Committee on Transportation and Infra- tice 99–12] received March 23, 1999, pursuant selves of payday loans from usurious interest structure. to 5 U.S.C. 801(a)(1)(A); to the Committee on rates and exorbitant fees, perpetual debt, the 1884. A letter from the Program Support Ways and Means. use of criminal actions to collect debts, and Specialist, Aircraft Certification Service, 1894. A letter from the Chief, Regulations other unfair practices by payday lenders, to Department of Transportation, transmitting Unit, Internal Revenue Service, transmitting encourage the States to license and closely the Department’s final rule—Airworthiness the Service’s final rule—Administrative, regulate payday lenders, and for other pur- Directives; Boeing Model 747 Series Air- Procedural, and Miscellaneous [Revenue Pro- poses; to the Committee on Banking and Fi- planes [Docket No. 98–NM–292–AD; Amend- cedure 99–22] received March 25, 1999, pursu- nancial Services. ment 39–11125; AD 99–08–19] (RIN: 2120–AA64) ant to 5 U.S.C. 801(a)(1)(A); to the Committee By Mr. BOUCHER (for himself and Mr. received April 12, 1999, pursuant to 5 U.S.C. on Ways and Means. GOODLATTE): 801(a)(1)(A); to the Committee on Transpor- 1895. A letter from the Chief, Regulations H.R. 1685. A bill to provide for the recogni- tation and Infrastructure. Branch, U.S. Customs Service, transmitting tion of electronic signatures for the conduct

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00176 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 May 5, 1999 CONGRESSIONAL RECORD—HOUSE 8669 of interstate and foreign commerce, to re- By Mr. EHRLICH (for himself, Mr. tain or dispose of a firearm; to the Com- strict the transmission of certain electronic WELDON of Pennsylvania, Mr. mittee on the Judiciary. mail advertisements, to authorize the Fed- CUNNINGHAM, Ms. HOOLEY of Oregon, By Mr. NEAL of Massachusetts: eral Trade Commission to prescribe rules to Mrs. MORELLA, and Mr. ENGLISH): H.R. 1703. A bill to amend the Internal Rev- protect the privacy of users of commercial H.R. 1693. A bill to amend the Fair Labor enue Code of 1986 to prevent the conversion Internet websites, to promote the rapid de- Standards Act of 1938 to clarify the overtime of ordinary income or short-term capital ployment of broadband Internet services, and exemption for employees engaged in fire pro- gain into income eligible for the long-term for other purposes; to the Committee on tection activities; to the Committee on Edu- capital gain rates, and for other purposes; to Commerce, and in addition to the Committee cation and the Workforce. the Committee on Ways and Means. on the Judiciary, for a period to be subse- By Mr. FRANK of Massachusetts (for By Mr. NUSSLE (for himself, Mr. quently determined by the Speaker, in each himself and Mr. NEAL of Massachu- LATHAM, Mrs. MINK of Hawaii, and case for consideration of such provisions as setts): Mr. SHOWS): fall within the jurisdiction of the committee H.R. 1694. A bill to provide Public Safety H.R. 1704. A bill to amend the Internal Rev- concerned. and Community Policing Renewal Grants, enue Code of 1986 to provide a tax credit to By Mr. GOODLATTE (for himself and and for other purposes; to the Committee on primary health providers who establish prac- Mr. BOUCHER): the Judiciary. tices in health professional shortage areas; H.R. 1686. A bill to ensure that the Internet By Mr. GIBBONS: to the Committee on Ways and Means. remains open to fair competition, free from H.R. 1695. A bill to provide for the convey- By Mr. PALLONE: government regulation, and accessible to ance of certain Federal public lands in the H.R. 1705. A bill to amend the Clean Air American consumers; to the Committee on Ivanpah Valley, Nevada, to Clark County, Act to waive the oxygen content require- the Judiciary, and in addition to the Com- Nevada, for the development of an airport fa- ment for reformulated gasoline and to phase- mittee on Commerce, for a period to be sub- cility, and for other purposes; to the Com- out the use of MTBE, and for other purposes; sequently determined by the Speaker, in mittee on Resources. to the Committee on Commerce. each case for consideration of such provi- By Mr. GIBBONS: By Mr. PAUL (for himself, Mr. SOUDER, sions as fall within the jurisdiction of the H.R. 1696. A bill to direct the Secretary of Mr. NORWOOD, Mr. MCINTOSH, Mr. committee concerned. the Interior to convey the Griffith Project to FLETCHER, and Mr. TANCREDO): By Mr. SHADEGG (for himself, Mr. the Southern Nevada Water Authority; to H.R. 1706. A bill to prohibit the Federal HOSTETTLER, Mr. LARGENT, Mr. the Committee on Resources. Government from planning, developing, im- WAMP, Mr. DOOLITTLE, Mr. ARMEY, By Mr. GILMAN (for himself, Mr. plementing, or administering any national Mr. SMITH of Michigan, Mr. GRAHAM, OBERSTAR, Mrs. JOHNSON of Con- teacher test or method of certification and Mrs. EMERSON, Mr. TANCREDO, Mr. necticut, and Mr. INSLEE): from withholding funds from States or local NORWOOD, Mr. SALMON, Mr. WELDON H.R. 1697. A bill to provide for the review educational agencies that fail to adopt a spe- of Florida, and Mr. COBURN): and classification of physician assistant po- cific method of teacher certification; to the H.R. 1687. A bill to amend the Internal Rev- sitions in the Federal Government, and for Committee on Education and the Workforce. enue Code of 1986 to allow individuals a re- other purposes; to the Committee on Govern- By Mr. RAMSTAD (for himself, Mr. fundable credit against income tax for health ment Reform. GUTKNECHT, Mr. MINGE, Mr. VENTO, insurance costs, to allow employees who By Mr. HILL of Montana (for himself, Mr. SABO, Mr. LUTHER, Mr. PETERSON elect not to participate in employer sub- Mr. LATOURETTE, Mrs. EMERSON, Mr. of Minnesota, Mr. OBERSTAR, and Mr. sidized health plans an exclusion from gross MCHUGH, and Mr. WATKINS): RAHALL): income for employer payments in lieu of H.R. 1698. A bill to amend the Federal Meat H.R. 1707. A bill to amend the Internal Rev- such participation, and for other purposes; to Inspection Act to provide that a quality enue Code of 1986 to provide that the con- the Committee on Commerce, and in addi- grade label issued by the Secretary of Agri- ducting of certain games of chance shall not tion to the Committees on Ways and Means, culture may not be used for imported meat be treated as an unrelated trade or business; and Education and the Workforce, for a pe- and meat food products; to the Committee to the Committee on Ways and Means. riod to be subsequently determined by the on Agriculture. By Mr. RAMSTAD (for himself and Speaker, in each case for consideration of By Mr. HILL of Montana: Mrs. THURMAN): such provisions as fall within the jurisdic- H.R. 1699. A bill to direct the Secretary of H.R. 1708. A bill to amend the Internal Rev- tion of the committee concerned. the Treasury to issue war bonds to pay for enue Code of 1986 to provide a simplified By Mr. ABERCROMBIE: H.R. 1688. A bill to amend the Internal Rev- Operation Allied Force and related humani- method for determining a partner’s share of enue Code of 1986 to restore the deduction for tarian operations; to the Committee on Ways items of a partnership which is a qualified the travel expenses of a taxpayer’s spouse and Means. investment club; to the Committee on Ways who accompanies the taxpayer on business By Mr. HOSTETTLER (for himself, Mr. and Means. travel; to the Committee on Ways and WELDON of Pennsylvania, Mr. By Mr. RANGEL: Means. MCINTOSH, Mr. BARTLETT of Mary- H.R. 1709. A bill to authorize the President By Mr. ANDREWS: land, Mr. GREEN of Wisconsin, Mr. to award a gold medal on behalf of the Con- H.R. 1689. A bill to prohibit States from ADERHOLT, Mr. PITTS, and Mr. BUR- gress to Jesse L. Jackson, Sr. in recognition imposing restrictions on the operation of TON of Indiana): of his outstanding and enduring contribu- motor vehicles providing limousine service H.R. 1700. A bill to provide that a national tions to the Nation; to the Committee on between a place in a State and a place in an- missile defense system shall not be subject Banking and Financial Services. other State, and for other purposes; to the to an otherwise applicable statutory require- By Mr. SALMON (for himself, Mr. Committee on Commerce. ment that a major defense acquisition pro- HAYWORTH, Mr. GARY MILLER of Cali- By Mr. ANDREWS (for himself and Mr. gram not proceed beyond low-rate initial fornia, Ms. PRYCE of Ohio, Mr. FOLEY): production before completion of initial oper- MCINTOSH, Mr. SENSENBRENNER, Mr. H.R. 1690. A bill to amend the Internal Rev- ational test and evaluation and that an envi- LARGENT, Mr. FORBES, Mr. PICKERING, enue Code of 1986 to exclude from gross in- ronmental impact statement prepared for Mr. CUNNINGHAM, Mr. LATOURETTE, come of individual taxpayers discharges of the construction of any element of such a Mr. SHADEGG, Mr. HOSTETTLER, Mr. indebtedness attributable to certain forgiven system shall not be subject to judicial re- HILL of Montana, and Mrs. WILSON): residential mortgage obligations; to the view; to the Committee on Armed Services, H.R. 1710. A bill to amend the Internal Rev- Committee on Ways and Means. and in addition to the Committee on Re- enue Code of 1986 to allow a credit against By Mr. CANADY of Florida (for him- sources, for a period to be subsequently de- income tax for expenses of attending elemen- self, Mr. EDWARDS, Mr. HYDE, Mr. termined by the Speaker, in each case for tary and secondary schools and for contribu- WEINER, Mr. SENSENBRENNER, Mr. consideration of such provisions as fall with- tions to such schools and to charitable orga- HUTCHINSON, Mr. GREEN of Texas, Mr. in the jurisdiction of the committee con- nizations which provide scholarships for chil- SMITH of Texas, Mr. ROGAN, Mr. PE- cerned. dren to attend such schools; to the Com- TERSON of Minnesota, and Mr. CAN- By Mr. MCDERMOTT: mittee on Ways and Means. NON): H.R. 1701. A bill to suspend temporarily the By Mr. SHUSTER (for himself, Mr. H.R. 1691. A bill to protect religious lib- duty on certain polyethylene base materials; OBERSTAR, Mrs. FOWLER, and Mr. erty; to the Committee on the Judiciary. to the Committee on Ways and Means. TRAFICANT) (all by request): By Mrs. CAPPS: By Mrs. MINK of Hawaii (for herself, H.R. 1711. A bill to amend the Robert T. H.R. 1692. A bill to direct the Secretary of Mr. GEORGE MILLER of California, Mr. Stafford Disaster Relief and Emergency As- the Interior to study the suitability and fea- ANDREWS, Ms. WOOLSEY, and Mr. sistance Act to authorize programs for sibility of including the Gaviota Coast of PAYNE): predisaster mitigation, to streamline the ad- California in the National Park System; to H.R. 1702. A bill to amend title 18, United ministration of disaster relief, to control the the Committee on Resources. States Code, to ban using the Internet to ob- Federal costs of disaster assistance, and for

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other purposes; to the Committee on Trans- By Mr. GALLEGLY: H.R. 721: Mr. HOSTETTLER and Mr. MCNUL- portation and Infrastructure. H. Res. 160. A resolution congratulating TY. By Mr. STUPAK (for himself, Mrs. the Government and the people of the Repub- H.R. 732: Ms. LEE, Mr. HALL of Ohio, Mr. LOWEY, and Mr. BROWN of Ohio): lic of Panama on successfully completing MALONEY of Connecticut, Mr. LARSON, Mr. H.R. 1712. A bill to amend the Federal free and democratic elections on May 2, 1999; LEACH, Ms. HOOLEY of Oregon, Mr. CONYERS, Water Pollution Control Act to authorize an to the Committee on International Rela- Mr. FARR of California, Ms. STABENOW, and estrogenic substances screening program; to tions. Mr. MATSUI. the Committee on Commerce, and in addi- f H.R. 750: Mr. SABO. tion to the Committee on Transportation H.R. 765: Ms. DUNN, Mr. PHELPS, Mr. WYNN, and Infrastructure, for a period to be subse- MEMORIALS Mr. HILLEARY, Mr. CLYBURN, Mr. BAIRD, and quently determined by the Speaker, in each Mr. GILCHREST. Under clause 3 of rule XII, memorials case for consideration of such provisions as H.R. 772: Mr. OWENS, Mrs. NAPOLITANO, and fall within the jurisdiction of the committee were presented and referred as follows: Mr. GUTIERREZ. concerned. 47. The SPEAKER presented a memorial of H.R. 775: Mr. CALVERT. By Mr. THOMAS: the Senate of the State of New Hampshire, H.R. 777: Ms. MILLENDER-MCDONALD, Mr. H.R. 1713. A bill to amend the Internal Rev- relative to Senate Resolution number 2 urg- BISHOP, Mrs. CLAYTON, and Ms. NORTON. enue Code of 1986 to treat certain dealer de- ing the President of the United States and H.R. 803: Mr. GIBBONS, Mr. KOLBE, and Mr. rivative financial instruments, hedging Congress to prohibit federal recoupment of FROST. transactions, and supplies as ordinary assets; state tobacco settlement recoveries; to the H.R. 804: Ms. WOOLSEY. to the Committee on Ways and Means. Committee on Commerce. H.R. 828: Ms. DANNER and Mr. HOLDEN. By Mr. BATEMAN: f H.R. 838: Mr. GARY MILLER of California. H.J. Res. 51. A joint resolution authorizing H.R. 842: Mr. YOUNG of Florida and Mr. the use of United States Armed Forces ADDITIONAL SPONSORS GOSS. against the regime in power in the Federal Under clause 7 of rule XII, sponsors H.R. 844: Mr. COYNE, Mr. KNOLLENBERG, Mr. Republic of Yugoslavia to meet certain ob- COLLINS, Mr. COX, Mr. GIBBONS, Mr. PASTOR, jectives; to the Committee on International were added to public bills and resolu- Mr. STARK, Ms. STABENOW, Mr. LUCAS of Ken- Relations. tions as follows: tucky, Mr. KOLBE, Mr. WATKINS, Mr. OSE, By Mr. HAYES: H.R. 8: Mr. LATOURETTE. and Mr. DAVIS of Florida. H. Con. Res. 96. Concurrent resolution ex- H.R. 53: Mr. SHIMKUS and Mr. HORN. H.R. 845: Mrs. CHRISTENSEN and Mr. BER- pressing the sense of the Congress that the H.R. 172: Ms. LEE. MAN. President, working with the other member H.R. 179: Ms. EDDIE BERNICE JOHNSON of H.R. 868: Ms. KILPATRICK. nations of the North Atlantic Treaty Organi- Texas. H.R. 872: Mr. WAXMAN, Mr. STARK, and Mr. zation (NATO), should use all available dip- H.R. 206: Mr. ALLEN. CAPUANO. lomatic means to negotiate a fair, equitable, H.R. 212: Mr. BEREUTER. H.R. 875: Mrs. MORELLA. and peaceful settlement between warring H.R. 218: Mr. BLUNT, Mr. ENGLISH, and Mr. H.R. 902: Mr. WYNN and Mr. BORSKI. factions in Yugoslavia without the introduc- GILLMOR. H.R. 903: Mr. HOEKSTRA, Mr. EVERETT, Mr. tion of ground elements of the United States H.R. 262: Mr. CRAMER, Ms. DELAURO, Mr. LIPINSKI, Mr. HYDE, Mr. COLLINS, Mr. MORAN Armed Forces; to the Committee on Inter- JACKSON of Illinois, Mr. FARR of California, of Kansas, Mr. HASTINGS of Washington, Mr. national Relations. Mr. WALSH, and Mr. MORAN of Virginia. ROYCE, and Mr. MICA. By Mr. KENNEDY of Rhode Island (for H.R. 274: Mr. MATSUI, Mrs. CUBIN, Mr. H.R. 919: Ms. KILPATRICK and Mr. himself, Mrs. LOWEY, Mr. LANTOS, WICKER, Mr. SHERMAN, Mr. MCGOVERN, Mr. WEYGAND. Ms. MCKINNEY, Mr. EVANS, and Mr. KILDEE, Mr. COSTELLO, and Mrs. FOWLER. H.R. 922: Mr. MANZULLO, Mr. SKEEN, and HALL of Ohio): H.R. 315: Mr. ABERCROMBIE, Ms. NORTON, Mr. GARY MILLER of California. H. Con. Res. 97. Concurrent resolution urg- Mr. FATTAH, and Mrs. CLAYTON. H.R. 932: Mr. WYNN. ing the prohibition on military assistance H.R. 329: Mr. GRAHAM. H.R. 948: Mr. GARY MILLER of California. and arms transfers to the Government of In- H.R. 346: Mr. HILL of Montana. H.R. 959: Mr. RODRIGUEZ, Mr. CAPUANO, and donesia until the President certifies that the H.R. 347: Mrs. MYRICK. Mr. BORSKI. Government of Indonesia is no longer arm- H.R. 351: Mr. NETHERCUTT and Mr. CAL- H.R. 961: Mr. MATSUI and Ms. RIVERS. ing, financing, or supporting paramilitary VERT. H.R. 998: Mr. CHAMBLISS, Mr. NEY, and Mr. units in East Timor and has taken certain H.R. 354: Mrs. TAUSCHER, Mr. CANNON, Mr. MCINTYRE. other actions relating to East Timor, and for SUNUNU, Mr. HOBSON, Mr. FOLEY, and Mr. H.R. 1041: Mr. SENSENBRENNER. other purposes; to the Committee on Inter- VENTO. H.R. 1044: Mr. EWING and Mr. JOHN. national Relations. H.R. 371: Mr. WATTS of Oklahoma, Mr. PAS- H.R. 1046: Mr. DEUTSCH and Mr. ENGLISH. By Mr. TOWNS: TOR, Mr. KOLBE, Ms. EDDIE BERNICE JOHNSON H.R. 1071: Mr. HASTINGS of Florida, Mr. H. Con. Res. 98. Concurrent resolution ex- of Texas, and Mr. TAYLOR of North Carolina. CUMMINGS, Mr. KILDEE, and Mr. RODRIGUEZ. pressing the sense of the Congress regarding H.R. 372: Mr. OBERSTAR, Ms. WOOLSEY, Mr. H.R. 1085: Mr. BRADY of Pennsylvania. the regulatory burdens imposed by the FROST, Ms. MCKINNEY, and Mr. WISE. H.R. 1098: Ms. RIVERS, Mr. WELDON of Health Care Financing Administration on H.R. 380: Mr. ROGERS, Mr. EHRLICH, Mr. Pennsylvania, and Mr. HILL of Montana. suppliers of durable medical equipment MURTHA, Mr. HOEFFEL, and Mr. WOLF. H.R. 1111: Mrs. KELLY. under the Medicare Program; to the Com- H.R. 423: Mr. HORN. H.R. 1129: Mr. HINOJOSA, Ms. EDDIE BERNICE mittee on Ways and Means, and in addition H.R. 424: Mr. GUTIERREZ. JOHNSON of Texas, Mr. ACKERMAN, Mr. WYNN, to the Committee on Commerce, for a period H.R. 516: Mr. WAMP. Mr. RAHALL, Mr. WAXMAN, Ms. ROYBAL-AL- to be subsequently determined by the Speak- H.R. 523: Mrs. KELLY. LARD, Mr. DEFAZIO, and Mr. RUSH. er, in each case for consideration of such pro- H.R. 555: Ms. VELAZQUEZ and Mr. H.R. 1172: Mr. CRAMER, Mr. WYNN, Mr. visions as fall within the jurisdiction of the RODRIGUEZ. DICKS, Mr. MEEHAN, Mr. GILCHREST, Mr. LI- committee concerned. H.R. 557: Mr. GARY MILLER of California PINSKI, Mr. MICA, Mr. CANADY of Florida, By Mr. WELDON of Pennsylvania (for and Mr. CASTLE. Mrs. CHRISTENSEN, Mr. HASTINGS of Florida, himself, Mr. ABERCROMBIE, Mr. BART- H.R. 564: Mr. ARMEY. Mr. HOEFFEL, and Mr. VENTO. LETT of Maryland, Ms. BROWN of Flor- H.R. 588: Mr. FORBES. H.R. 1195: Mr. UPTON, Mr. MALONEY of Con- ida, Mr. GIBBONS, Mr. HINCHEY, Mr. H.R. 608: Mr. LEWIS of Kentucky. necticut Mr. SENSENBRENNER, Mr. SHAW, Mr. SAXTON, Mr. KUCINICH, Mr. PITTS, Mr. H.R. 623: Mr. MORAN of Kansas. COOK, and Mr. NETHERCUTT. SANDERS, Mr. SHERWOOD, Mr. HAYES, H.R. 625: Mr. MCGOVERN, Mr. CAPUANO, Mr. H.R. 1215: Mr. CUNNINGHAM. Mr. CONYERS, and Mr. WHITFIELD): ABERCROMBIE, Mr. HOLDEN, Mr. TAYLOR of H.R. 1256: Mr. FORBES and Mr. RADANOVICH. H. Con. Res. 99. Concurrent resolution ex- North Carolina, and Mr. QUINN. H.R. 1260: Ms. DUNN, Mr. METCALF, and Ms. pressing the sense of the Congress that the H.R. 682: Mr. ISTOOK. STABENOW. congressional leadership and the Adminis- H.R. 688: Mr. PACKARD, Mr. DEMINT, Mr. H.R. 1278: Mr. SANDLIN. tration should support the efforts and rec- SUNUNU, Mr. SCARBOROUGH, and Mr. TAYLOR H.R. 1281: Mr. LEWIS of Kentucky. ommendations of the United States Con- of North Carolina. H.R. 1300: Mr. JEFFERSON, Mr. HOLDEN, Mr. gress-Russian Duma meeting in Vienna, Aus- H.R. 691: Mr. UDALL of New Mexico. LATOURETTE, Mr. LAHOOD, and Mr. RANGEL. tria, held April 30 to May 1, 1999, in order to H.R. 692: Mr. POMBO. H.R. 1317: Mr. GREEN of Wisconsin. bring about a fair, equitable, and peaceful H.R. 699: Mr. HINCHEY. H.R. 1342: Mr. HOLT, Mr. HOEFFEL, Ms. settlement between warring factions in H.R. 714: Mr. CROWLEY, Mr. DEFAZIO, Mr. DELAURO, Mr. MOAKLEY, and Mr. MATSUI. Yugoslavia; to the Committee on Inter- EVANS, Mr. KUCINICH, and Mrs. MINK of Ha- H.R. 1344: Mr. HOEKSTRA and Ms. DANNER. national Relations. waii. H.R. 1355: Mr. SABO.

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H.R. 1358: Mr. FROST. urging the federal communications commis- OPERATION AND MAINTENANCE H.R. 1363: Mr. GILMAN. sion to restore approval for low-power FM OPERATION AND MAINTENANCE, ARMY H.R. 1366: Mr. DIXON AND Mr. GARY MILLER radio broadcasting; to the Committee on For an additional amount for ‘‘Operation of California. Commerce. and Maintenance, Army’’, $69,500,000: Pro- H.R. 1373: Mr. GREEN of Wisconsin and Mr. vided, That the entire amount is designated ROHRABACHER. f by the Congress as an emergency require- H.R. 1385: Mr. KUCINICH, Mr. WEYGAND, Mr. ment pursuant to section 251(b)(2)(A) of the KIND, Mr. FROST, Mr. SANDLIN, Mr. JENKINS, AMENDMENTS Balanced Budget and Emergency Deficit Mr. FOSSELLA, Mr. CLEMENT, Mr. TAYLOR of Under clause 8 of rule XVIII, pro- Control Act of 1985, as amended. North Carolina, and Mr. BOEHLERT. posed amendments were submitted as H.R. 1402: Mr. CAMP, Mr. SNYDER, Mr. OPERATION AND MAINTENANCE, NAVY LAHOOD, Ms. MCKINNEY, Mr. HASTINGS of follows: For an additional amount for ‘‘Operation Florida, Mr. STUMP, Mr. LUCAS of Oklahoma, H.R. 1664 and Maintenance, Navy’’, $16,000,000: Pro- Mr. CONDIT, Mr. SMITH of Michigan, Mr. BILI- OFFERED BY: MR. DEUTSCH vided, That the entire amount is designated RAKIS, Mr. MORAN of Kansas, Mr. WEXLER, AMENDMENT NO. 1: After chapter 4 of by the Congress as an emergency require- Mr. WELDON of Florida, Mr. BURTON of Indi- the bill, add the following new chapter: ment pursuant to section 251(b)(2)(A) of the ana, Mr. COOK, Mr. BACHUS, Mr. FROST, and Balanced Budget and Emergency Deficit Mr. BOUCHER. CHAPTER 4A Control Act of 1985, as amended. H.R. 1430: Mr. BRADY of Pennsylvania. DEPARTMENT OF JUSTICE OPERATION AND MAINTENANCE, MARINE CORPS H.R. 1459: Mr. PAUL and Ms. WOOLSEY. IMMIGRATION AND NATURALIZATION SERVICE For an additional amount for ‘‘Operation H.R. 1476: Mr. HOLDEN. SALARIES AND EXPENSES and Maintenance, Marine Corps’’, $300,000: H.R. 1484: Ms. LEE and Ms. MCKINNEY. Provided, That the entire amount is des- H.R. 1494: Mr. BACHUS and Mr. HILL of Mon- ENFORCEMENT AND BORDER AFFAIRS ignated by the Congress as an emergency re- tana. For an additional amount for ‘‘Salaries quirement pursuant to section 251(b)(2)(A) of H.R. 1560: Mr. LATHAM. and Expenses, Enforcement and Border Af- the Balanced Budget and Emergency Deficit H.R. 1587: Ms. BROWN of Florida. fairs’’ to support increased detention re- Control Act of 1985, as amended. H.R. 1590: Mrs. CLAYTON and Mr. HOEFFEL. quirements for Central American criminal H.R. 1593: Mr. CUNNINGHAM. aliens and to address the expected influx of OPERATION AND MAINTENANCE, AIR FORCE H.R. 1594: Mr. ROHRABACHER, Mrs. MINK of illegal immigrants from Central America as For an additional amount for ‘‘Operation Hawaii, Mr. OLVER, and Mr. CROWLEY. a result of Hurricane Mitch, $80,000,000, and Maintenance, Air Force’’, $8,800,000: Pro- H.R. 1600: Mrs. CLAYTON and Ms. KAPTUR. which shall remain available until expended vided, That the entire amount is designated H.R. 1627: Mr. LARGENT. and which shall be administered by the At- by the Congress as an emergency require- H.R. 1643: Mr. DELAHUNT, Mr. YOUNG of torney General: Provided, That the entire ment pursuant to section 251(b)(2)(A) of the Alaska, Mr. TIERNEY, Mr. LOBIONDO, amount is designated by the Congress as an Balanced Budget and Emergency Deficit H.R. 1644: Mr. PRICE of North Carolina, Mr. emergency requirement pursuant to section Control Act of 1985, as amended. ABERCROMBIE, Ms. DELAURO, Mr. 251(b)(2)(A) of the Balanced Budget and OPERATION AND MAINTENANCE, DEFENSE-WIDE FALEOMAVAEGA, Mr. HINCHEY, Mr. JACKSON of Emergency Deficit Control Act of 1985, as For an additional amount for ‘‘Operation Illinois, Mr. UNDERWOOD, Mr. WALSH, Mrs. amended. and Maintenance, Defense-Wide’’, $46,500,000: EMERSON, Mr. CRAMER, Ms. VELA´ ZQUEZ,, Ms. DEPARTMENT OF DEFENSE—MILITARY Provided, That the entire amount is des- SCHAKOWSKY, Mr. RANGEL, Mr. TIERNEY, and MILITARY PERSONNEL ignated by the Congress as an emergency re- Mr. SABO. quirement pursuant to section 251(b)(2)(A) of H.R. 1649: Mr. ARMEY, Mr. BUYER, Mr. COL- RESERVE PERSONNEL, ARMY the Balanced Budget and Emergency Deficit LINS, and Mr. HOSTETTLER. For an additional amount for ‘‘Reserve Control Act of 1985, as amended. H.R. 1657: Mr. MOORE. Personnel, Army’’, $8,000,000: Provided, That H.R. 1671: Mr. CARDIN, Mr. CUMMINGS, Mr. the entire amount is designated by the Con- OVERSEAS HUMANITARIAN, DISASTER, AND EHRLICH, Mr. WYNN, Mr. SHOWS, Mrs. CLAY- gress as an emergency requirement pursuant CIVIC AID TON, Mr. OLVER, Mr. UNDERWOOD, Mr. FROST, to section 251(b)(2)(A) of the Balanced Budg- For an additional amount for ‘‘Overseas Mr. KING, Mr. GUTIERREZ, Mr. CUNNINGHAM, et and Emergency Deficit Control Act of Humanitarian, Disaster, and Civic Aid’’, Ms. DANNER, Mr. GILLMOR, and Mr. BORSKI. 1985, as amended: Provided further, That of $37,500,000: Provided, That the entire amount H.R. 1675: Mr. OWENS, Mr. MARTINEZ, and such amount, $5,100,000 shall be available is designated by the Congress as an emer- Mr. GEORGE MILLER of California. only to the extent that an official budget re- gency requirement pursuant to section H.J. Res. 1: Mr. CALVERT. quest for a specific dollar amount, that in- 251(b)(2)(A) of the Balanced Budget and H.J. Res. 42: Mr. SANDERS, Mr. BROWN of cludes designation of the entire amount of Emergency Deficit Control Act of 1985, as California, and Mr. LIPINSKI. the request as an emergency requirement as amended. H.J. Res. 47: Mr. ENGLISH, Mr. SHOWS, Ms. defined in the Balanced Budget and Emer- BILATERAL ECONOMIC ASSISTANCE DELAURO, Mrs. JOHNSON of Connecticut, and gency Deficit Control Act of 1985, as amend- FUNDS APPROPRIATED TO THE PRESIDENT Mr. BARRETT of Wisconsin. ed, is transmitted by the President to the H. Con. Res. 8: Mr. SUNUNU and Mr. HYDE. Congress. AGENCY FOR INTERNATIONAL DEVELOPMENT H. Con. Res. 17: Mr. FRANK of Massachu- NATIONAL GUARD PERSONNEL, ARMY INTERNATIONAL DISASTER ASSISTANCE setts, Ms. ESHOO, Mr. THOMPSON of Cali- For an additional amount for ‘‘National Notwithstanding section 10 of Public Law fornia, and Ms. MCKINNEY. Guard Personnel, Army’’, $7,300,000: Provided, 91–672, for an additional amount for ‘‘Inter- H. Con. Res. 60: Mr. MEEKS of New York, That the entire amount is designated by the national Disaster Assistance’’ for necessary Mr. KUYKENDALL, Mr. ANDREWS, Mr. ABER- Congress as an emergency requirement pur- expenses for international disaster relief, re- CROMBIE, Mrs. CHRISTENSEN, Mr. SANDLIN, suant to section 251(b)(2)(A) of the Balanced habilitation, and reconstruction assistance, and Mr. GORDON. Budget and Emergency Deficit Control Act pursuant to section 491 of the Foreign Assist- H. Con. Res. 76: Mr. MOORE, Mr. of 1985, as amended: Provided further, That of ance Act of 1961, as amended, $25,000,000, to KUYKENDALL, Mrs. KELLY, and Mrs. BIGGERT. such amount, $1,300,000 shall be available remain available until expended: Provided, H. Res. 41: Mr. FRANK of Massachusetts. only to the extent that an official budget re- That the entire amount is designated by the H. Res. 97: Mr. LANTOS. quest for a specific dollar amount, that in- Congress as an emergency requirement pur- H. Res. 144: Mr. HINOJOSA, Ms. VELA´ ZQUEZ, cludes designation of the entire amount of suant to section 251(b)(2)(A) of the Balanced and Mrs. CAPPS. the request as an emergency requirement as Budget and Emergency Deficit Control Act H. Res. 147: Ms. LEE, Mrs. TAUSCHER, Ms. defined in the Balanced Budget and Emer- of 1985, as amended. JACKSON-LEE of Texas, Mr. GEORGE MILLER gency Deficit Control Act of 1985, as amend- CENTRAL AMERICA AND THE CARIBBEAN of California, Ms. NORTON, Ms. MILLENDER- ed, is transmitted by the President to the EMERGENCY MCDONALD, Mrs. MORELLA, and Mr. FOLEY. Congress. DISASTER RECOVERY FUND f NATIONAL GUARD PERSONNEL, AIR FORCE Notwithstanding section 10 of Public Law PETITIONS, ETC. For an additional amount for ‘‘National 91–672, for necessary expenses to address the Under clause 3 of rule XII, petitions Guard Personnel, Air Force’’, $1,000,000: Pro- effects of hurricanes in Central America and vided, That the entire amount is designated the Caribbean and the earthquake in Colom- and papers were laid on the clerk’s by the Congress as an emergency require- bia, $621,000,000, to remain available until desk and referred as follows: ment pursuant to section 251(b)(2)(A) of the September 30, 2000: Provided, That the funds 12. The SPEAKER presented a petition of Balanced Budget and Emergency Deficit appropriated under this heading shall be sub- Detroit City Council, relative to a resolution Control Act of 1985, as amended. ject to the provisions of chapter 4 of part II

VerDate Aug 04 2004 13:39 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00179 Fmt 0688 Sfmt 0634 E:\BR99\H05MY9.006 H05MY9 8672 CONGRESSIONAL RECORD—HOUSE May 5, 1999 of the Foreign Assistance Act of 1961, as and Emergency Deficit Control Act of 1985, (2) any mission specifically limited to res- amended, and, except for section 558, the pro- as amended: Provided further, That the cuing United States military personnel or visions of title V of the Foreign Operations, amount provided shall be available only to United States citizens in the Federal Repub- Export Financing, and Related Programs Ap- the extent that an official budget request lic of Yugoslavia; or propriations Act, 1999 (as contained in divi- that includes designation of the entire (3) any mission specifically limited to res- sion A, section 101(d) of the Omnibus Con- amount as an emergency requirement pursu- cuing military personnel of another member solidated and Emergency Supplemental Ap- ant to section 251(b)(2)(A) of the Balanced nation of the North Atlantic Treaty Organi- propriations Act, 1999 (Public Law 105–277)): Budget and Emergency Deficit Control Act zation in the Federal Republic of Yugoslavia Provided further, That up to $5,000,000 of the of 1985, as amended, is transmitted by the as a result of operations as a member of an funds appropriated by this paragraph may be President to the Congress: Provided further, air crew. transferred to ‘‘Operating Expenses of the That funds in this account may be trans- In the matter proposed to be inserted by Agency for International Development’’, to ferred to and merged with the ‘‘Forest and the amendment, insert after the section des- remain available until September 30, 2000, to Rangeland Research’’ account and the ‘‘Na- ignation the following: ‘‘(a) PROHIBITION ON be used for administrative costs of USAID in tional Forest System’’ account as needed to USE OF FUNDS FOR DEPLOYMENT OF UNITED addressing the effects of those hurricanes, of address emergency requirements in Puerto STATES GROUND FORCES IN FEDERAL REPUB- which up to $1,000,000 may be used to con- Rico. LIC OF YUGOSLAVIA.—’’. tract directly for the personal services of in- H.R. 1664 H.R. 1664 dividuals in the United States: Provided fur- OFFERED BY: MRS. FOWLER OFFERED BY: MR. ISTOOK ther, That up to $2,000,000 of the funds appro- AMENDMENT NO. 5: At the appropriate place priated by this paragraph may be transferred AMENDMENT NO. 2: At the end of chapter 2, in the bill insert the following new section: to ‘‘Operating Expenses of the Agency for insert the following new section: SEC. 213. (a) ADDITIONAL APPROPRIATION None of the funds appropriated by this Act International Development Office of Inspec- may be used to initiate or conduct military tor General’’, to remain available until ex- FOR CONTINUATION OF ES–3 AIRCRAFT.—In ad- dition to amounts appropriated or otherwise operations by the United States Armed pended, to be used for costs of audits, inspec- Forces except in accordance with the war tions, and other activities associated with made available elsewhere in this Act for the Department of Defense or in the Department powers clause of the Constitution (article 1, the expenditure of the funds appropriated by section 8). this paragraph: Provided further, That funds of Defense Appropriations Act, 1999, appropriated under this heading shall be ob- $94,400,000 is appropriated as follows: H.R. 1664 ligated and expended subject to the regular (1) For ‘‘Military Personnel, Navy’’, OFFERED BY: MR. ISTOOK notification procedures of the Committees $29,000,000, to remain available until Sep- AMENDMENT NO. 6: At the appropriate place on Appropriations: Provided further, That tember 30, 2000, to be used for ES–3 aircraft in the bill insert the following new section: funds appropriated under this heading shall squadron staffing. ‘‘None of the funds appropriated by this be subject to the funding ceiling contained (2) For ‘‘Operation and Maintenance, Act shall be available for the implementa- in section 580 of the Foreign Operations, Ex- Navy’’, $30,000,000, to remain available until tion of any plan to invade Yugoslavia with port Financing, and Related Programs Ap- September 30, 2000, to be used for ES–3 air- ground forces of the United States, except in propriations Act, 1999 (as contained in Divi- craft operations and maintenance. time of war.’’ sion A, section 101(d) of the Omnibus Con- (3) For ‘‘Aircraft Procurement, Navy’’, H.R. 1664 $31,500,000, to be used for procurement of solidated and Emergency Supplemental Ap- OFFERED BY: MR. ISTOOK propriations Act, 1999 (Public Law 105–277)), critical avionics and structures for ES–3 air- craft. AMENDMENT NO. 7: At the appropriate place notwithstanding section 545 of that Act: Pro- in the bill insert the following new section: vided further, That none of the funds appro- (4) For ‘‘Aircraft Procurement, Navy’’, $3,900,000, to be used for procurement of crit- None of the funds in this act may be used priated under this heading may be made to invade Yugoslavia with ground forces in available for nonproject assistance: Provided ical avionics spares for ES–3 aircraft. (b) EMERGENCY DESIGNATION.—The entire contravention of the War Powers Resolution further, That the entire amount is designated (Title 50 U.S.C. Chapter 33). by the Congress as an emergency require- amount made available in this section is des- H.R. 1664 ment pursuant to section 251(b)(2)(A) of the ignated by the Congress as an emergency re- Balanced Budget and Emergency Deficit quirement pursuant to section 251(b)(2)(A) of OFFERED BY: MR. SMITH OF MICHIGAN Control Act of 1985, as amended: Provided fur- the Balanced Budget and Emergency Deficit AMENDMENT NO. 8: At the end (before the ther, That the entire amount shall be avail- Control Act of 1985. Such amount shall be short title), add the following new section: able only to the extent an official budget re- available only to the extent that an official SEC. 502. Such funds borrowed from the So- quest for a specific dollar amount that in- budget request, that includes designation of cial Security Trust Fund surplus to finance cludes designation of the entire amount of the entire amount of the request as an emer- this Act shall be repaid. the request as an emergency requirement as gency requirement as defined in such section Whenever there is an on-budget surplus for defined in the Balanced Budget and Emer- 251(b)(2)(A), is transmitted by the President a fiscal year, the Secretary of the Treasury gency Deficit Control Act of 1985, as amend- to the Congress. is authorized and directed to use such funds ed, is transmitted by the President to the (c) STUDY.—The Secretary of Defense shall to retire public debt until $12,947,495,000 of Congress. conduct a study to examine alternative ap- such debt is retired. proaches to upgrading the ES–3 aircraft sen- H.R. 1664 DEPARTMENT OF THE TREASURY sor systems for the life cycle of the aircraft. OFFERED BY: MR. SOUDER DEBT RESTRUCTURING The study shall include comparative costs Notwithstanding section 10 of Public Law and capabilities, and shall be submitted to AMENDMENT NO. 9: Page 4, line 24, strike 91–672, for an additional amount for ‘‘Debt the Congress by October 1, 1999. ‘‘$5,219,100,000’’ and insert ‘‘$1,919,000,000’’. Page 6, line 15, after the dollar amount in- Restructuring’’, $41,000,000, to remain avail- H.R. 1664 able until expended: Provided, That up to sert the following ‘‘(plus an additional OFFERED BY: MR. ISTOOK $25,000,000 may be used for a contribution to $825,000,000)’’. the Central America Emergency Trust Fund, AMENDMENT NO. 3: At the end of the bill, Page 6, line 23, after the dollar amount in- administered by the International Bank for insert after the last section (preceding the sert the following ‘‘(plus an additional Reconstruction and Development: Provided short title) the following new section: $825,000,000)’’. Page 7, line 6, after the dollar amount in- further, That the entire amount is designated SEC. 503. None of the funds appropriated in sert the following ‘‘(plus an additional by the Congress as an emergency require- this Act may be used for the deployment of $825,000,000)’’. ment pursuant to section 251(b)(2)(A) of the ground elements of the United States Armed Page 7, line 14, after the dollar amount in- Balanced Budget and Emergency Deficit Forces in the Federal Republic of Yugo- sert the following ‘‘(plus an additional Control Act of 1985, as amended. slavia. $825,000,000)’’. DEPARTMENT OF AGRICULTURE H.R. 1664 H.R. 1664 FOREST SERVICE OFFERED BY: MR. ISTOOK OFFERED BY: MR. SOUDER RECONSTRUCTION AND CONSTRUCTION (To the Amendment Offered by Mr. Istook of AMENDMENT NO. 10: Page 5, line 5, strike For an additional amount for ‘‘Reconstruc- Oklahoma) ‘‘of such amount $1,311,800,000’’ and insert tion and Construction’’, $5,611,000, to remain AMENDMENT NO. 4: At the end of the matter ‘‘such amount’’. available until expended, to address damages proposed to be inserted by the amendment, from Hurricane Georges and other natural add the following new subsection: H.R. 1664 disasters in Puerto Rico: Provided, That the (b) EXCEPTIONS.—The limitation estab- OFFERED BY: MR. SOUDER entire amount is designated by the Congress lished in subsection (a) shall not apply to— AMENDMENT NO. 11: At the end of the bill, as an emergency requirement pursuant to (1) any deployment specifically authorized insert after the last section (preceding the section 251(b)(2)(A) of the Balanced Budget by law enacted after this Act; short title) the following new section:

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SEC. 503. None of the funds appropriated in Transfer Fund’’ may be used for military op- the United States has entered into a nego- this or any other Act may be used for mili- erations in the Federal Republic of Yugo- tiated settlement to end hostilities in the tary operations in the Federal Republic of slavia, except operations specifically limited Federal Republic of Yugoslavia (Serbia and Yugoslavia, except operations specifically to rescuing United States military personnel Montenegro) or otherwise with respect to limited to rescuing United States military or United States citizens. Kosovo. personnel or United States citizens. H.R. 1664 H.R. 1664 OFFERED BY: MR. SOUDER H.R. 1664 OFFERED BY: MR. SOUDER AMENDMENT NO. 13: At the end of the bill OFFERED BY: MR. SOUDER AMENDMENT NO. 12: At the end of the bill, (before the short title), insert the following insert after the last section (preceding the new section: AMENDMENT NO. 14: In chapter 2, strike sec- short title) the following new section: SEC. 503. None of the amounts appropriated tion 201 (relating to additional transfer au- SEC. 503. None of the funds appropriated in by this Act may be obligated until the Presi- thority). this Act for ‘‘Operational Rapid Response dent submits to Congress a certification that

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HONORING ANGELA LOIS GREEN Award in 1997. He did clinical research at Me- schools to provide support for improving edu- AND ALEXANDER TODD HEWLETT morial Sloan-Kettering Cancer Center in New cation for all our children. I am committed to York City during the summer of 1997. He is ensuring that public education is among our HON. CHET EDWARDS currently doing clinical rotations at St. John highest budget priorities. OF TEXAS West Shore Hospital in Cleveland, Ohio, f IN THE HOUSE OF REPRESENTATIVES where he is the CORE Site Representative. As Angela and Alex begin their new life to- TRIBUTE TO THE WOMEN OF Wednesday, May 5, 1999 gether, may they always remember I Corin- LAWTON Mr. EDWARDS. Mr. Speaker, I rise today to thians, which states: Love is patient and kind, offer my best wishes to Angela Lois Green love is not jealous or boastful; it is not arro- HON. J.C. WATTS, JR. and Alexander Todd Hewlett on their upcom- gant or rude. Love does not insist on its own OF OKLAHOMA ing wedding. Miss Green and Mr. Hewlett will way; it is not irritable or resentful; it does not IN THE HOUSE OF REPRESENTATIVES be united in holy matrimony on May 8, 1999 rejoice at wrong, but rejoices in the right. Love Wednesday, May 5, 1999 at seven o’clock in the evening at St. Paul’s bears all things, believes all things, hopes all United Methodist Church in Houston. Rev- things, endures all things. Love never ends. Mr. WATTS of Oklahoma. Mr. Speaker, I erend L. James Bankston will officiate the can- I would like to express my congratulations to would like to recognize the efforts of the dlelight double-ring ceremony. Congressman GREEN and his wife Helen. I women of Lawton who are organizing ‘‘Lawton The bride is the daughter of Congressman also ask that the House join me in wishing An- Women Unity ’99,’’ a day to recognize the ac- and Mrs. GENE GREEN of Houston. She is the gela and Alex a long and fruitful marriage. complishments, the strengths, and the very granddaughter of Mrs. Mildred Albers and the May their love continue to grow. being of womanhood. Hosted by ‘‘Created in late Leon Albers of Houston, and Mr. and Mrs. f His Image Ministries,’’ on Saturday, May 8, Garland Green of Bedford, Pennsylvania. The 1999, the women of Lawton are invited to groom is the son of Mr. and Mrs. Robert Hew- MEETING OUR COMMITMENT TO meet at the Lawton City Hall and encircle the lett of Tucson, Arizona. He is the grandson of FUNDING SPECIAL EDUCATION building with a human prayer chain. They will the late Mr. and Mrs. Frank Watkins, and of pray for the women in Littleton, Colorado who the late Mr. and Mrs. Floyd Hewlett, both of HON. DAVID E. BONIOR have lost their children, as well as for others Tucson, Arizona. OF MICHIGAN who have lost their children to violence. They Serving as Matron on Honor will be Sarah IN THE HOUSE OF REPRESENTATIVES will lift up the women in Kosovo and the lead- Goggans. Melissa Murray will serve as Maid ers of the United States and the Lawton local- Wednesday, May 5, 1999 of Honor. Bridesmaids will include Marina ity. They will pray for the needs of Lawton and Monteforte, Erin Mireur, and Karen Zientek. Mr. BONIOR. Mr. Speaker, as I meet with Fort Sill. Members of the House Party will be Karen teachers, school administrators and school The women of Lawton celebrate woman- Rudich, Amy White, and Nichole Sepulvado. board members in Michigan’s 10th Congres- hood in the name of God and offer this open Serving his brother as Best Man will be An- sional District, one thing becomes clear—pay- invitation to all women. It is the compassion of drew Hewlett. Groomsmen will be Scott Davis, ing for the costs of teaching children with spe- a woman, the deep love of a woman, and the Brian Somers, Babak Mokari, and Chris cial needs is expensive. tears of a woman that God calls for to affect Green, brother of the bride. Tony Chacon, Families with special needs children face change in the land. The Lawton women would Brian Ledden, and Matt Thompson will serve unique challenges. I believe their children like to encourage other groups with common as ushers. should be able to learn in the least restrictive interests in the name of women and God to Angela is a 1993 Honor graduate of Aldine environment. But that also means we have an organize similar events. It is the hope of the High School in Houston. She was a member obligation to help provide our schools with the women of Lawton that the ‘‘Lawton Women and section leader of the Aldine Band, a mem- tools they need to do the job. When it comes Unity ’99’’ will set a precedent in the celebra- ber of the Honor Society, and served as Presi- to educating our children—particularly for tion of the unity of womanhood and that the dent of the Student Council. In 1998, she those who have special needs—we all have a event will blossom to include statewide and earned a Bachelor of Arts in Biology from the role to play. nationwide participation in like events. University of Texas at Austin, where she was When the Individuals with Disabilities Edu- Mr. Speaker, it is with great pride that I rec- a member and President of Alpha Xi Delta, cation Act (IDEA) was first enacted in 1975, ognize the efforts of the women of Lawton. and was a Robert C. Byrd Honor Scholar. She Congress committed to funding 40 percent of These women set an example for women, and also served as Executive Vice President of the the cost. Unfortunately, the federal govern- men, across the nation to follow at a time Panhellenic Council in 1996–97. She was re- ment has consistently fallen short of this goal. when our nation cries for restoration and unity cently elected President of the American Med- As special education costs continue to rise, of our people is of utmost importance. ical Students Association at the University of we fall further behind. Currently, federal sup- f Texas Medical Branch in Galveston, where port for special needs education is at 12 per- she is currently a second-year medical stu- cent. During such a prosperous moment in our STOP THE INHUMANE TREATMENT dent. history, surely we can do more to help our OF DOGS AND CATS Alex is a 1992 graduate of Sabino High local communities and educators provide a School in Tucson, Arizona, where he was a thriving learning environmental for our children HON. GERALD D. KLECZKA member of the state champion Sabino who face the most challenges. OF WISCONSIN Sabercats football team. In 1996, he earned a We need to step up to the plate and fulfill IN THE HOUSE OF REPRESENTATIVES Bachelor of Arts in Chemistry from Pomona our commitment to our local schools. That is College in Claremont, California, where he why I have joined a number of my colleagues Wednesday, May 5, 1999 was a member of Sigma Tau fraternity, and in writing the President asking him to support Mr. KLECZKA. Mr. Speaker, on April 29, played football for the Pomona College a substantial increase in federal funding for 1999 I introduced the Dog and Cat Protection Sagehens. Alex is a fourth-year medical stu- special education, and it is why I believe we Act. I was appalled to learn about the use of dent at Ohio University College of Osteopathic should fully fund the IDEA Act. dog and cat fur on coats, toys, and other mer- Medicine in Athens, Ohio. He received the As we debate our budget priorities, I will chandise as profiled in a recent segment of Tucson Osteopathic Foundation Scholars continue to work with our families and local ‘‘Dateline NBC’’. Immediately thereafter, I

● This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

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began drafting legislation to end this abusive and snowboards at its Vashon Island, Wash- leadership of Chairman GOODLING), the admin- practice. While crafting this measure, I con- ington facility. In fact, all K2 snowboards and istration is now trying to implement a national tacted the Humane Society of the United virtually all K2 and Olin-brand skis sold curriculum through the backdoor with national States for their input. As a result of these ef- throughout the world are individually crafted by teacher testing and certification. National forts, I introduced H.R. 1622, the Dog and Cat technicians on Vashon Island. Moreover, K2 teacher certification will allow the federal gov- Protection Act. sources almost all of the components for its ernment to determine what would-be teachers An estimated 2,000,000 dogs and cats are skis and snowboards in the U.S. stimulating need to know in order to practice their chosen slaughtered and sold annually as part of the the U.S. economy through its purchases of profession. Teacher education will revolve international fur trade. Many of these animals raw materials from U.S. suppliers, especially around preparing teachers to pass the national are raised in deplorable conditions. Unfortu- in the Pacific Northwest region of the country. test or to receive a national certificate. New nately, there are no federal laws to prohibit the However, for a key ski and snowboard compo- teachers will then base their lesson plans on importation, manufacture, transport or sale of nent—polyethylene base materials—K2 has what they needed to know in order to receive any product made with dog and cat fur. The been unable to find a supplier of these prod- their Education Department-approved teaching only provision in law to regulate the importa- ucts in the U.S. that can meet its needs. certificate. Therefore, I call on those of my col- tion of products made with cat and dog fur is Therefore, K2 has been forced to import this leagues who oppose a national curriculum to the Fur Products Labeling Act (FPLA). The product, which is subject to U.S. customs du- join me in opposing national teacher testing FPLA and its regulations simply require that ties upon importation. This legislation provides and certification with the same vigor with any product with a value of more than $150 for a temporary suspension of customs duty which you opposed national student testing. contain a label informing a consumer that it on the raw material which is vital to the U.S. Many educators are already voicing opposi- contains animal fur. Any product worth less production of skis and snowboards and which tion to national teacher cerification and testing. than $150 is exempted from the labeling re- are unavailable from domestic producers. The Coalition of Independent Education Asso- quirement. K2 is working hard to remain viable in the ciations (CIEA), which represents the majority My legislation would impose a ban on all highly competitive international market for skis of the over 300,000 teachers who are mem- products entering the United States made with and snowboards. In fact, K2 has endured as bers of independent educators associations, cat and dog fur. In order to prevent a foreign a U.S. ski manufacturer in the face of fierce has passed a resolution opposing the national- importer from establishing operations in the price competition, while several other major ization of teacher certification and testing; I United States, H.R. 1622 would also prevent ski companies no longer manufacture skis in have attached a copy of this resolution for in- the sale, manufacture, transport, or advertise- the U.S. This temporary duty suspension leg- sertion into the CONGRESSIONAL RECORD. As ment of any product made domestically with islation would support jobs in the region, as more and more teachers realize the impact of cat and dog fur. well as K2’s ability to continue developing in- this proposal, I expect opposition from the Furthermore, H.R. 1622 would give addi- novative, fine quality products. Equally impor- education community to grow. Teachers want tional authority to the Customs Service to in- tant, a temporary duty suspension would help to be treated as professionals, not as minions spect products entering the United States to K2 preserve and increase its competitiveness of the federal government. Legislation has already been introduced in ensure they do not contain cat and dog fur. in the global marketplace. the Texas State Legislature prohibiting the use Violators of the ban would be subject to both K2 is the only major exporter of skis made of any national certification or national exam- civil and criminal penalties. Furthermore, per- in the U.S. In addition, K2 is one of three prin- ination to determine if someone is qualified to sons found to be in violation of the ban would cipal exporters of U.S. made snowboards. teach in Texas. While I applaud this legisla- face the prospect of being permanently prohib- Thus, K2’s exports of U.S. manufactured skis tion, I wonder if Texas would change its’ poli- ited from selling any fur product in the United and snowboards represent a substantial per- cies if the Department of Education threatened States. centage of U.S. skis and snowboards sold to deny Texas federal funds if Texas failed to The Dog and Cat Protection Act also worldwide. If K2 is unable to remain competi- adopt the Department’s chosen method of amends the Fur Products Labeling Act to re- tive in global and domestic markets, skis man- teacher certification and testing. It is up to quire all fur products entering the United ufactured in the U.S. may disappear from the Congress to see that the Department of Edu- States—regardless of their value—to contain a global marketplace. The temporary duty sus- cation does not bully the states into adopting label showing their true content. This means pension proposed by this legislation would the method of teacher certification and testing those persons who try to mislabel products in help prevent the shutdown of the only remain- favored by DC-based bureaucrats. order to get around the ban contained in my ing U.S. producer of skis. In conclusion, Mr. Speaker, I once again legislation would face additional penalties f urge my colleagues to join me in opposing na- under the Fur Products Labeling Act. The ad- OPPOSING NATIONAL TEACHER tional teacher certification or national teacher ditional labeling requirements will also help the testing. Training and certification of classroom Customs Service in their enforcement efforts. CERTIFICATION OR NATIONAL TEACHER TESTING teachers is the job of state governments, local Mr. Speaker, it is time to put an end to the school districts, educators, and parents; this inhumane treatment of dogs and cats once vital function should not be usurped by federal and for all. I urge my colleagues to become HON. RON PAUL bureaucrats and/or politicians. Please stand cosponsors of H.R. 1622. OF TEXAS up for America’s teachers and students by f IN THE HOUSE OF REPRESENTATIVES signing on as a cosponsor of my legislation to INTRODUCTION OF LEGISLATION Wednesday, May 5, 1999 ensure taxpayer dollars do not support na- TO SUSPEND DUTIES ON IM- Mr. PAUL. Mr. Speaker, I rise to introduce tional teacher certification or national teacher PORTED RAW MATERIAL legislation to forbid the use of federal funds to testing. develop or implement a national system of COALITION OF INDEPENDENT EDUCATION ASSO- HON. JIM McDERMOTT teacher certification or a national teacher test. CIATIONS—STATEMENT ON NATIONAL TEACH- ER LICENSURE, FEBRUARY 26, 1999 OF WASHINGTON My bill also forbids the Department of Edu- The licensure of teachers should remain IN THE HOUSE OF REPRESENTATIVES cation from denying funds to any state or local education agency because that state or local the responsibility of each state’s Board of Wednesday, May 5, 1999 Education and any attempt to authorize the educational agency has refused to adopt a federal government to govern this process Mr. MCDERMOTT. Mr. Speaker, today I am federally-approved method of teacher certifi- should be opposed. introducing legislation which supports impor- cation or testing. This legislation in no way Secretary of Education Richard Riley’s tant regional and national interests. interferes with a state’s ability to use federal proposal (February 16, 1999) to empower a My home, the 7th Congressional District of funds to support their chosen method of teacher panel to grant licenses for teaching Washington, is also the home of the K2 Corp., teacher certification or testing. would remove the separate state’s authority to protect the welfare of the general public. the last remaining major U.S. manufacturer of Having failed to implement a national cur- Teaching is a public enterprise and not a skis and one of three major makers of riculum through the front door with national private profession. snowboards in the United States. K2 conducts student testing (thanks to the efforts of mem- Such high stakes licensure decisions must all significant manufacturing operations for skis bers of the Education Committee under the be controlled by a body that is responsible to

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This right should be left to the states outside of the classroom preparing lessons, Mr. Speaker, it is with pride that I rise today to best determine how they license state reading and correcting papers, and working to acknowledge the Fourth Annual Blue Mass teachers. with students who need just a little extra help. and the law officials being honored. It is a be- Congress should oppose any movement to- They do this because they love their job, care fitting celebration to remember and acknowl- ward federalizing educator licensure, teacher about their students and are committed to en- edge those who do so much. appraisal, and employment contracts. suring that our children have the best chance The undersigned representatives of the Co- at success. alition of Independent Education Associa- f tions strongly urge our members of the Con- I believe that we can go a long way in im- proving our country’s education system by ex- DEMOCRACY AS A UNIVERSAL gress and the Senate to vigorously defend VALUE the rights of states to control their edu- hibiting respect for our teachers and by letting cational destiny. them know how much we value their contribu- Arizona Professional Educators, Associa- tions. I urge my colleagues to recognize HON. DAVID E. PRICE tion of American Educators, Associa- teachers for the significant role they play in OF NORTH CAROLINA tion of Professional Educators of Lou- our lives and in the well-being of our nation. IN THE HOUSE OF REPRESENTATIVES isiana, Association of Professional As a Member of this House, as the co-chair of Oklahoma Educators, Association of Wednesday, May 5, 1999 Texas Professional Educators, Ken- the Education Caucus and as a parent of two tucky Association of Professional Edu- high school daughters, I thank the thousands Mr. PRICE of North Carolina. Mr. Speaker, cators, Keystone Teachers Association, of teachers who have dedicated themselves to I wish to call to the attention of my colleagues West Virginia Professional Educators, educating and believing in our children. a piece by Stephen Rosenfeld from the Wash- Mississippi Professional Educators, Na- f ington Post of March 12, 1999. It highlights tional Association of Professional Edu- the eloquent words spoken by India’s Nobel cators, Palmetto State Teachers Asso- IN COMMEMORATION OF THE laureate economist Amartya Sen at the ‘‘World ciation, Professional Educators Net- FOURTH ANNUAL BLUE MASS work of Florida, Professional Edu- Movement for Democracy’’ conference re- cators of Iowa, Professional Educators cently held in New Delhi, India. of North Carolina, Professional Edu- HON. JAMES P. McGOVERN I attended the conference and served on an cators of Tennessee. OF MASSACHUSETTS opening panel with my colleagues Represent- IN THE HOUSE OF REPRESENTATIVES ative GARY ACKERMAN, Representative JIM f Wednesday, May 5, 1999 MCDERMOTT, and Representative LLOYD PERSONAL EXPLANATION DOGGETT. The international event was cospon- Mr. MCGOVERN. Mr. Speaker, I rise today sored by the National Endowment for Democ- HON. JULIA CARSON in order to recognize the celebration of the racy (NED), as well as two Indian partner or- Fourth Annual Blue Mass in Worcester Coun- ganizations. I was impressed by the extraor- OF INDIANA ty. The Diocese of Worcester will host this IN THE HOUSE OF REPRESENTATIVES dinary commitment of the participants, rep- event on Sunday, May 2, 1999, in tribute to all resenting over 80 countries from all parts of Wednesday, May 5, 1999 law enforcement personnel who honorably the world, to the shared values of freedom, Ms. CARSON. Mr. Speaker, I was unavoid- serve our local communities. rule of law, and human rights. The conference ably absent on Tuesday, May 4, 1999, and A special memorial service will be held prior adopted a founding document establishing a early today, Wednesday, May 5, 1999, and as to the Mass to honor those who have died ‘‘Worldwide Movement for Democracy,’’ the a result, missed rollcall votes 105 through 109. since last year’s Blue Mass. Those being re- purpose of which is to develop new forms of Had I been present, I would have voted ‘‘yes’’ membered are Lieutenant Joseph R. Ripel of cooperation to promote and strengthen de- on rollcall vote 105, ‘‘yes’’ on rollcall vote 106, the Massachusetts State Police, Sergeant mocracy. ‘‘yes’’ on rollcall vote 107, ‘‘present’’ on rollcall John J. Lesczynski of Worcester Police De- NED deserves commendation for organizing vote 108, and ‘‘no’’ on rollcall vote 109. partment, and Patrolman Mark McEachern of this conference. NED grants have supported f the Boylston Police Department. They served nongovernmental, pro-democratic programs in with pride and are true role models for our dozens of countries around the world. The EXPRESSING SENSE OF HOUSE IN youth. ‘‘World Movement for Democracy’’ is yet an- SUPPORT OF AMERICA’S TEACH- Four new awards are being instituted this other example of NED’s outstanding work to ERS year in dedication to law enforcement. advance the cause of democracy worldwide. The Distinguished Law Enforcement Award SPEECH OF will be presented jointly to Sergeant Vincent [From the Washington Post, Mar. 12, 1999] HON. BOB CLEMENT Gorgoglione, Supervisor of the Worcester Po- THE ECONOMIC USES OF DEMOCRACY OF TENNESSEE lice Department Domestic Violence Unit and (By Stephen S. Rosenfeld) IN THE HOUSE OF REPRESENTATIVES Christine Kelly, Program Coordinator for the The political blessings of democracy are Worcester Intervention Network. manifest, but that leaves many poor coun- Tuesday, May 4, 1999 The Award for Excellence in Law Enforce- tries still worrying whether democracy is a Mr. CLEMENT. Mr. Speaker, as the co-chair ment Education will be bestowed upon former burden or a benefit to their economic devel- of the House Education Caucus and as a par- Attorney General Robert Quinn in recognition opment. This nagging question was tackled ent, I rise today to honor the outstanding work of the establishment of the Quinn Law. in New Delhi last month by a leading stu- dent of the affairs of the poor, India’s Nobel our teachers do every day. Their dedication The Outstanding Community Service Award economist Amartya Sen. There for the and expertise form the cornerstone of our na- is being presented to the entire Holden Police founding of a ‘‘World Movement for Democ- tion’s education system. They are there for our Department. The Holden police officers have racy’’ by the U.S. National Endowment for children, often under trying circumstances and committed themselves to serving the students Democracy, he took up the congenial theme with less than adequate resources and sup- of Holden, MA. Through such programs as the of ‘‘democracy as a universal value.’’ port. They perform daily miracles in their Adopt-A-School Officer for every grade school, Sen acknowledged the high growth deliv- classrooms. Thursday night basketball, and public safety ered in Singapore by the authoritarian ap- Few other professionals touch as many in days, these officers have made outstanding proach identified with former president Lee Kuan Yew. But a view of ‘‘all the compara- as many different ways as teachers do. contributions to their town, paying special at- tive studies together,’’ he said, suggests Teaching children math, English, science and tention to the needs of the student population. there may be no relation between economic history is only the beginning of what teachers Finally, the Interfaith Award is being award- growth and democracy in either direction. do. They are listeners, advocates, support ed to Lieutenant Paul Bozicas of the Fitchburg Still, none of the policies proven helpful to people, role models, mentors and motivators. Police Department, who is active in a variety development—openness to competition, use

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00003 Fmt 0689 Sfmt 0634 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8677 of international markets and so on—is incon- IMPROVING MEDICARE QUALITY As a legislator and as a parent of three sistent with greater democracy. ‘‘Over- THROUGH PURCHASING: THE young children, I am concerned about the whelming evidence’’ indicates that what gen- OHIO EXPERIENCE overall environment in which today’s kids are erates growth is a friendlier economic cli- mate, not a harsher political system. being raised. Today’s fast-paced world of the Democracy has further economic uses. Sen HON. FORTNEY PETE STARK Internet, video games, and increasingly violent noted ‘‘the remarkable fact’’ that in the ter- OF CALIFORNIA pop culture bears little resemblance to the rible history of famines in the world, no sub- IN THE HOUSE OF REPRESENTATIVES America in which so many parents from my stantial famine has ever occurred in any generation were raised. The increase of the independent and democratic country with a Wednesday, May 5, 1999 incidences and ferocity of school violence are relatively free press. Immense famines have Mr. STARK. Mr. Speaker, three weeks ago, a cause for deep concern—and a call to ac- afflicted countries with dictatorial or alien I introduced H.R. 1392, the ‘‘Centers of Excel- tion. regimes. Dictorial: the Soviet Union in the During the coming weeks and months, here 1930s, China in 1958–61 (30 million dead) and lence’’ bill. H.R. 1392 would allow Medicare to the two current cases of North Korea and provide incentives for beneficiaries to use cer- in the Halls of Congress—and in school board Sudan. Alien: British-ruled Ireland and tain high-volume, high-quality facilities. This meeting rooms, city council chambers, and in India. initiative would both save lives, and save state legislatures around the country—our Na- Meanwhile, even the poorest democratic money for Medicare. tion will discuss what we can do to prevent countries have avoided threatened famine. It is a widely acknowledged fact that facili- another tragedy like Littleton. Some of the The difference is that the democratic places ties that perform large numbers of complex ideas we will discuss will be helpful and have a responsive government able to inter- procedures have lower mortality rates and should be adopted. Other proposals will make vene to alleviate hunger. India had famines us feel as through we’re doing something, but under British rule right up to independence. fewer adverse outcomes. These facilities, With the establishment of a multiparty de- known as ‘‘Centers of Excellence,’’ have be- will do nothing to prevent the root causes of mocracy and a free press, they disappeared. come an important private sector tool for qual- school violence. What Sen calls the ‘‘protective power of de- ity improvement and cost containment. Throughout this national dialog, I hope we mocracy’’ has spared many countries a ‘‘pen- An April 22 article in the Wall Street Journal do not overlook the one obvious and essential alty of undemocratic governance.’’ highlighted an Ohio HMO with a Centers of ingredient to preventing these senseless acts The pattern extends to Asia’s current trav- Excellence program for heart procedures. of violence. There is nothing more powerful ails. Sen believes that financial crisis in After automatically removing facilities that per- than an active, concerned, and caring parent. South Korea, Thailand and Indonesia is formed fewer than 250 heart procedures per I’ve seen it personally in my work on the prob- closely linked to a lack of transparency, to lem of reducing teenage substance abuse and the lack of public participation in reviewing year from their list of preferred providers, the financial arrangements. And once the crisis HMO conducted an extensive quality survey to have read it in countless studies on reshaping degenerated into recession, ‘‘the protective determine the rating of the remaining facilities. adolescent behavior. power of democracy’’ was simply not avail- This resulted in several more facilities being Mr. Speaker, I would like to enter a thought- able to ensure spreading the burden of a removed from the list, including some very ful and insightful piece by author and col- cruel economic contraction. reputable hospitals in the area. The Ohio ex- umnist Laura Pulfer from yesterday’s Cin- Such a protective power, Sen argues, is of perience showed that facilities with the best cinnati Enquirer into the CONGRESSIONAL particular importance for the poor, for po- reputations for excellence did not necessarily RECORD which addresses the urgent need for tential famine victims, for the destitute new parenting. thrown off the economic ladder in a financial have the best outcomes. earthquake: ‘‘People in economic need also Being removed from the Ohio HMO’s pre- [From the Cincinnati Enquirer, May 4, 1999] need a political voice.’’ With evident pride he ferred provider list was a strong competitive CAN PARENTS UTTER HARDEST WORD OF ALL? notes that in the mid-1970s, the Indian elec- incentive for lower-quality facilities to improve (By Laura Pulfer) torate—‘‘one of the poorest of the world’’— their procedures. For one facility, the rate of Some hard things must be said if we are to affirmed its democratic disposition by voting heart attack following bypass surgery dropped be honest about this thing that happened in out a government that had proclaimed emer- from 2.8 percent in 1993 to 0.9 percent in Littleton. If we are to learn anything, if we gency rule and abridged the people’s rights. 1997. A national ‘‘Centers of Excellence’’ pro- are to let it be important. As for cultural differences, a common The first thing is that the young men who claim is that Asians traditionally value dis- gram would likely have the same result, spur- killed the children at the high school do not cipline over political freedom. Sen finds that ring facilities with a lower quality rating to im- belong among the victims’ names—even if hard to accept. He is in a position, as few of prove their services and raising quality stand- the in-crowd made their lives a living hell. us are, to range over the texts of diverse ards overall. At the memorial site near Columbine High Asian cultures and to contend with assorted Not only will H.R. 1392 improve quality, it School, an Illinois carpenter erected a set of practitioners and scholars in the field. will also lower costs for Medicare. Fewer com- 8-foot-high wooden crosses, 15 of them, in- His conclusion: ‘‘The monolithic interpre- plications after surgery mean less follow up cluding two memorializing the killers. tation of Asian values as hostile to democ- care and fewer medical expenses. Targeting FEELING GUILTY? racy and political rights does not bear crit- patient volume to certain facilities can also re- An angry father of one of the victims took ical scrutiny.’’ Such an interpretation comes down the crosses for Dylan Klebold and Eric from politicians, not scholars: ‘‘to dismiss sult in discounted prices. Although ‘‘Centers of Excellence’’ passed Harris, saying it wasn’t appropriate to honor the plausibility of democracy as a universal the shooters in the same spot. Well, of course value on the ground of the presence of some the House in 1997, political motivations have not. What the killers did at this high school Asian writings on discipline and order would kept it from becoming law. quality health care is monstrous. We might forgive then, but we be similar to rejecting the plausibility of de- should not be a pawn in the political chess will not award them martyrdom. mocracy . . . on the basis of the writings of game. We have a second chance to imple- And however, nervous—however guilty—we Aquinas or Plato.’’ ment this important change for Medicare. I suburban people of means are prepared to be The many merits of democracy, Sen con- about our skills as parents, about our two- cludes, ‘‘are not regional in character. Nor is strongly urge my colleagues’ support for H.R. 1392. paycheck homes, we can say so aloud. Mon- the advocacy of discipline or order in con- strous. The murderers took guns of incred- trast with freedom and democracy. Hetero- f ible destruction—weapons built to perform geneity of values seems to characterize exactly as they did—and moved from class- most, perhaps all, major cultures. The cul- CAN PARENTS UTTER HARDEST WORD OF ALL? mate to classmate, blowing them away, sure- tural argument does not foreclose, nor in- ly with bits of bone and brain and blood deed deeply constrain, the choices we can clinging to their celebrated black trench make today.’’ HON. ROB PORTMAN coats. It was a felicitous stroke for the National OF OHIO This is something evil. And we need to say Endowment for Democracy to recruit so. This is not the time to be our famously Amartya Sen as the herald of its attempt to IN THE HOUSE OF REPRESENTATIVES flexible selves with our flexible time, flexible put achieved and aspiring democrats in clos- Wednesday, May 5, 1999 mortgages, flexible morals. er touch with one another. The Internet Right and wrong. Good and bad. Yes and makes the mechanics of it easy. The wisdom Mr. PORTMAN. Mr. Speaker, the recent no. of the man illuminates the core idea: Democ- shootings at Columbine High School in Little- We can say these words, especially to our racy is universal. ton, CO, have shocked the entire Nation. children. In fact, it is our duty. There is a

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00004 Fmt 0689 Sfmt 0634 E:\BR99\E05MY9.000 E05MY9 8678 EXTENSIONS OF REMARKS May 5, 1999 reason human offspring are sent home from that would cost far more in dollars and human TRIBUTE TO SYLVAN RODRIGUEZ the hospital with a couple of parents instead suffering than WIC’s preventive nutrition serv- of a Visa card and the keys to an apartment. ices. They are unformed. And uninformed. We’re HON. TOM DeLAY supposed to fill them in. I am especially proud of Hawaii’s WIC pro- OF TEXAS KEEPING TABS gram, which has increased its caseload by IN THE HOUSE OF REPRESENTATIVES They don’t need us to be their buddies. some 34 percent while absorbing a budget cut Wednesday, May 5, 1999 They have younger, cooler people willing to of 30 percent over the past two years. This re- Mr. DELAY. Mr. Speaker, hypothetical quan- do that. They need snoopy, pushy, loving, markable accomplishment resulted in Faye daries always elicit interesting answers. Over know-it-all parents. Nakamoto, director of Hawaii’s WIC program, A study presented Monday to the Pediatric two hundred years ago, Thomas Jefferson Academic Societies convention reports that being named 1998 Hawaii State Manager of wrote that if he had to choose to have a gov- children of parents who keep close tabs on the Year. ernment without the press or the press without them are less likely to get in trouble. Do you As we celebrate the 25th anniversary of a government, he would without hesitation suspect our parents already knew this? You prefer the latter situation. This position reflects know, the generation who set curfews, made WIC, I urge all my colleagues to support the president’s funding request of $4.1 billion—an that great founder’s understanding of the im- us work for our spending money, made us an- portant role of journalism in the American ex- swer a lot of annoying questions before they increase of $181.5 million from the funding periment. Sylvan Rodriguez also understands would allow us out of the house, nagged us levels of FY 1999 and 1998—so that this valu- this role and has dedicated his life to making about our hair and clothes. able program will be able to serve more both journalism and the country better to- Dr. Susan Feigelman, a University of women and children in need. Maryland researcher who led the study, ad- gether. vised parents to check up on their children’s Sylvan Rodriguez is a giant in the world of friends. This is a shocking notion for many f Houston broadcasting. Since 1977, he has enlightened former flower children. graced the city’s airwaves with crack reporting A TRIBUTE TO DR. WILLIAM R. Researchers surveyed children ages 9–15 on politics and a special focus on space oper- over a four-year period. The group was asked MAGILL whether their parents knew where they were ations. His coverage of the space shuttle pro- after school, whether they were expected to gram and the exposure from the tragic Chal- call and say where they were going and with lenger explosion opened up many doors for whom, whether their parents knew where HON. CURT WELDON him, including a stint as a Los Angeles cor- they were at night. OF PENNSYLVANIA respondent for ABC News. His expertise has Children monitored by their parents were been sought by David Brinkley for the This IN THE HOUSE OF REPRESENTATIVES less likely to sell drugs or use them. They Week program, by Ted Koppel for Nightline, were less likely to drink alcohol or have un- protected sex. Dr. Feigelman said the study Wednesday, May 5, 1999 by Peter Jennings for ABC World News To- showed that peer groups became more influ- night and for Good Morning America. ential as children get older. Mr. WELDON of Pennsylvania. Mr. Speaker, Such a lion of the press did not start at the Probably peer groups and everything else. I rise today to pay tribute to a longtime educa- top however. Rather, Sylvan Rodriguez is an So it only makes sense for parents to mon- tor, Dr. William R. Magill. This evening, friends American success story whose love for jour- itor that, too. That’s not repressive. That’s and family will gather to pay tribute to Dr. nalism struck in early age and was nurtured not illegal. That is our job. Magill’s long and distinguished career as he over time. This boyhood love for the industry If a Marilyn Manson concert is unsuitable matured and was honed while attending the for viewing now, why not next month? If a retires after 46 years of service. University of Texas at Austin where he tire- gun show is inappropriate in the wake of the A retired Army officer, Dr. Magill has always lessly scribed for several newspapers and a terrible crime committed with them in shown a great willingness to serve his com- wire service. At this time, his appetite for big Littleton, why not forever? If a violent tele- munity. Even after he put away his military vision show is too graphic today, how about news was wetted by covering the powers that tomorrow? uniform, Dr. Magill continued his service to the were in Washington as an intern for the United And when it becomes apparent that chil- people of Pennsylvania as an assistant prin- States Information Agency where he learned dren are tormenting each other, adults need cipal and Director of Federal programs at the ins-and-outs of the White House, the Pen- to intervene. Stop it. Even if the tormentors Steelton-Highspire School District in Steelton, tagon, the State Department and Capitol Hill. are popular athletes. PA and as principal of Annville Cleona Jr. and We have to start saying some hard things. This foundation was bolstered by experience To each other. But especially to our chil- Sr. High Schools in Cleona, PA. as a reporter and photographer covering state dren. Dr. Magill then joined the faculty of Cheyney and national politics in San Antonio and Hous- Beginning with ‘‘no.’’ University where he has played a vital role in ton. f expanding the minds of his students and intro- But the passion for reporting was not all ducing them to other cultures. As part of his consuming for Sylvan Rodriguez. Throughout RECOGNIZING THE 25TH ANNIVER- role as Chair of the graduate school’s Edu- his life, he has understood that a balance SARY OF THE WIC PROGRAM cational Administration and Foundation De- must be made between giving and taking. He partment, Dr. Magill has hosted graduate stu- has given much to the community and to his profession to match all the opportunities he HON. PATSY T. MINK dents from China and led study groups to earned for himself. While his list of philan- OF HAWAII England to study at Cambridge University. IN THE HOUSE OF REPRESENTATIVES thropic activities is a book long, he has given Beyond his career in education, Dr. Magill particular attention to foundations that give op- Wednesday, May 5, 1999 also worked for a variety of community organi- portunities to children and fight cancer, diabe- Mrs. MINK of Hawaii. Mr. Speaker, I am zations. He serves as a board member of the tes, arthritis, Tourette Syndrome and Cerebral very pleased to note that today marks the 25th Fellowship for Christian Athletes in Delaware Palsey. A great example to any budding jour- anniversary of the Special Supplemental Pro- and Chester Counties and as a precinct com- nalist, he is a founding member of the Hous- gram for Women, Infants, and Children—bet- mitteeman in West Goshen, PA. ton Association of Hispanic Media Profes- ter known as WIC. Dr. Magill has served his country as a mili- sionals. I was a member of Congress when the WIC tary officer, a teacher, and a volunteer in his Journalism has been described as an ability program was created and am very proud of to meet the challenge of filling space. This local community. Over his 46 year career as what it has accomplished. The hopes we had definition does not only apply to column an educator, he has influenced and made an for the program have been achieved. WIC as- inches or airtime. It also touches on the space impact on the lives of the countless young sists millions of lower-income pregnant, within ourselves where our heart and love of postpartum, and nursing women, infants, and people. country should rest. Through his dedication to children who are at risk of poor nutrition and Mr. Speaker, I ask my colleagues to join me his profession and to others, Sylvan Rodriguez health problems. The WIC program results in in today recognizing the accomplishments of has filled all of these spaces for many years. healthier babies and prevents health problems Dr. Magill. He is a true American patriot. Today, it is my honor to ask Congress to pay

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00005 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8679 tribute to Sylvan Rodriguez for being such a I want to thank the working men and women hedge fund, and you pay taxes only at the end hero to journalism and to the community. of Central New York in particular for their in- of the contract, and the profit is taxed at the f valuable contributions to our community. lower long-term capital gains rate. The bill I f am introducing today states that if an investor IN HONOR OF CHILDREN’S FRIEND indirectly owns a financial asset like a hedge CONSTRUCTIVE OWNERSHIP fund through a derivative, they cannot get HON. JAMES P. McGOVERN TRANSACTIONS more long-term capital gain than if they owned OF MASSACHUSETTS the investment directly. In addition, there is an IN THE HOUSE OF REPRESENTATIVES HON. RICHARD E. NEAL interest charge to offset the additional benefit Wednesday, May 5, 1999 OF MASSACHUSETTS of the deferral. IN THE HOUSE OF REPRESENTATIVES The effective date for this legislation is for Mr. MCGOVERN. Mr. Speaker, I rise today gains realized after date of enactment. This is to acknowledge the 150th anniversary of Chil- Wednesday, May 5, 1999 a more generous effective date than that con- dren’s Friend, a proud institution of my district Mr. NEAL of Massachusetts. Mr. Speaker, tained in the Administration’s budget. Still, which promotes the emotional, social, and today I am introducing legislation to prevent a some would argue that this is retroactive, be- physical health of a needy and diverse popu- transaction the goal of which is tax avoidance cause they signed contracts prior to the date lation of children and advocates for their by means of converting ordinary income or of introduction of the Kennelly Bill and there- rights. short-term capital gains into income eligible for fore were not on notice that a change in the Few organizations serving children are as long-term capital gains rates. law might occur. enduring as Children’s Friend or have sus- Since Congress enacted legislation to lower Since I announced my intention to reintro- tained such a record of initiating new solutions the capital gains tax below that of ordinary in- duce the Kennelly bill, it is my understanding as the needs and problems facing children come, the press has written about a number that a number of contracts have been, and have changed. Whether it is helping to create of transactions that have been developed to continue to be, signed under the theory that the first modern adoption legislation passed by recharacterize income primarily for the avoid- the legislation may not pass Congress, and if Massachusetts in 1851, pioneering placing ance of tax. Congress closed one loophole in it did the transaction could simply be children in foster care, preventing the dropout 1997 involving constructive sales or so-called unwound. This may explain the recent com- of pregnant and parenting teens from school, ‘‘short-against-the-box’’ transactions. In those ments of Robert Gordon, President of 21st Se- counseling children with attachment disorders transactions investors were effectively selling curities, as reported in this month’s edition of or providing specialized psychological services an asset and receiving the benefits of a sale MAR/Hedge, which states: ‘‘Gordon says that to infants and toddlers, Children’s Friend has without calling it a sale for tax purposes. The the penalty is so low (in my legislation) that he been at the forefront of innovations in child Taxpayer Relief Act of 1997 termed these would advise clients thinking about synthetic welfare services. transactions constructive sales and restored hedges (italics are mine) to go ahead. ‘‘There Children’s Friend restores hope and oppor- the appropriate tax treatment, determining that is not a lot of cost if the bill does become ret- tunity to children and families whose lives are if it looks like a sale and acts like a sale, it roactive, you just unwind the swap.’’ The pen- challenged by emotional abuse and neglect, should be treated as a sale for tax purposes. alty is the difference between the two interest domestic violence, family instability, economic Consistent with that approach, our former rates—the one charged in the swap by the hardship and the stresses of modern living. colleague Barbara Kennelly developed addi- dealer and the interest rate earned by money One cannot overlook the critical societal needs tional legislation in 1998 that could be termed in the investor’s hands. Because the interest child welfare institutions—like Children’s ‘‘constructive ownership’’ legislation. In this today and the interest rate when the law Friend—fulfill. case, an investor effectively purchases an changes, say several months from now, will Therefore, Mr. Speaker, it is with pride that asset and has the benefit of ownership, but be relatively small, it is a small penalty to I rise today to acknowledge the 150th anniver- does not pay taxes on income from the asset pay.’’ sary of Children’s Friend and to wish them in the same way as if the investor owned it di- It is hard to be sympathetic to an investor continued success in the years ahead with rectly. The solution that was proposed was to who enters into a particular so-called ‘‘syn- their valuable community and child-oriented treat that investment no more favorably than thetic’’ transaction purely for purposes of tax work for the people of Worcester and Central the treatment ownership in the underlying avoidance. It is even harder to be sympathetic Massachusetts. asset would have received. In addition, while when the investor signs a contract after he f this treatment would assure appropriate capital was on notice that there was a legislative APRIL 28—WORKERS’ MEMORIAL gains treatment, these transactions could still change under consideration. It is hardest of all DAY UNDERLINES IMPORTANCE be attractive for deferring the recognition of or- to be sympathetic to an investor who delib- OF OCCUPATIONAL SAFETY dinary income—in contrast to direct owners erately signs a contract betting that the poten- who pay taxes annually on ordinary income. tial for tax avoidance far outweighs a potential HON. JAMES T. WALSH To correct this, the bill imposes a deferred in- loss attributed to unwinding a contract if the terest charge to recapture the benefits of de- OF NEW YORK law does change, and then claims ‘‘retro- ferral. activity’’ in a last attempt to secure the bene- IN THE HOUSE OF REPRESENTATIVES As many in the industry will recognize, the fits of tax avoidance. Wednesday, May 5, 1999 legislation I am introducing today is based on Nonetheless, the fact remains that some Mr. WALSH. Mr. Speaker, today I ask my the Kennelly bill, but makes several technical contracts were signed prior to the date of in- colleagues to join me in recognizing April 28 improvements which were suggested last troduction of the Kennelly bill. I have therefore as Workers’ Memorial Day in the State of New year, primarily by the New York State Bar As- added a grandfather clause to this legislation York. This is a wonderful opportunity for us to sociation. Additional comments, of course, are that exempts all contracts from changes in this remember an important issue in today’s work- certainly in order. bill if the contracts were signed prior to the place, occupational safety. Investors in a hedge fund (and other pass date of introduction of her bill on February 5, Every city, town and village in this country through entities) are required to pay taxes an- 1998. The grandfather clause would cease to was built by the proud efforts of working peo- nually on their share of the income from the exist if the contract was extended or modified. ple. They have contributed to our Nation’s fund regardless of whether they receive a dis- Mr. Speaker, all capital gains differentials in- wealth and reputation, our national defense tribution. In the transaction covered by the bill, vite attempts to recharacterize ordinary in- and quality of life. investors indirectly invest in the fund through come or short-term capital gains into long-term In some instances in the past, they have en- a derivative that is economically equivalent to capital gains. The transactions I am talking dured harsh and even perilous conditions in a direct investment. However, the derivative about are, of course, not available to the ordi- pursuit of excellence and their livelihood. allows the investor to defer his tax liability. In- nary investor who must pay his fair share of Today, we must continue the fight to ensure vest in a hedge fund, and you pay taxes every taxes, but only to a small number of sophisti- the safety of all workers. The sacrifices of the year, and those profits are taxed at the higher cated wealthy investors. Any perception that past will not be forgotten as we strive to elimi- short-term capital gains rate. Place that same being sophisticated and wealthy enough al- nate dangers at the workplace. money in a derivative wrapped around a lows some to avoid paying their fair share of

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00006 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 8680 EXTENSIONS OF REMARKS May 5, 1999 tax undermines the entire tax system, as well small business in New Hampshire. As a small grown up in El Portal, the gateway to Yosem- as the capital gains differential. I believe it is business owner myself, I clearly understand ite, where he has climbed and skied since a important to shut down tax shelters as we un- how necessary small business is to our econ- babe in the backpack. He recently earned his cover them, and if we in Congress do not omy, our community, and, most important, to Eagle Scout badge as a member of Yosemite have the courage to do that, then maybe al- our way of life. New Hampshire is indeed for- Troop 50. As a musician and writer in the lowing the Department of the Treasury to have tunate to have individuals of this exceptional punk/shredder genera his contributions, like broader power to characterize tax shelters and caliber as members of the small business his skiing, are full of the zest and drive of true shut them down through the regulatory proc- community. I hope that the House will join me youth. ess needs to be seriously considered. in extending our congratulations to this year’s Tim Messick has spent his adult life teach- f small business award recipients. ing others the joys of skiing the Sierra f backcountry. As a guide for the Yosemite RECOGNIZING THE IMPORTANCE Mountaineering School and Yosemite Cross- OF SMALL BUSINESS AND PAY- HIGH ODYSSEY II: THE SIERRA IN County School since 1980, Tim has skied and ING TRIBUTE TO THIS YEAR’S THE WINTER OF 1999 guided extensively in the Sierra. He skied one SMALL BUSINESS AWARD RE- of the first three-pin descents of LeConte Gully CIPIENTS IN NEW HAMPSHIRE HON. GEORGE RADANOVICH at Glacier Point and the Y notch on Mount OF CALIFORNIA Conness. His classic book, ‘‘Cross-Country HON. CHARLES F. BASS IN THE HOUSE OF REPRESENTATIVES Skiing in Yosemite’’ (now in its second print- OF NEW HAMPSHIRE Wednesday, May 5, 1999 ing), is a tribute to his skills as writer, teacher, IN THE HOUSE OF REPRESENTATIVES and skier. Mr. RADANOVICH. Mr. Speaker, seventy Wednesday, May 5, 1999 Art Baggett has spent the past 25 years liv- years ago, while Californians were experi- ing in the Yosemite community. His mountain Mr. BASS. Mr. Speaker, I am pleased to encing the security and success of the roaring adventures include hiking the 2,040-mile Ap- have this opportunity to recognize several twenties, a lone mountaineer was skiing his palachian Trail from Georgia to Maine in 1973, small business leaders from my home state of way up the 300 mile crest of the Sierra Ne- a 21 day ski of the Sierra Crest on wooden New Hampshire. As we all know, small busi- vada from south of Mount Whitney toward Yo- Bonna 2000 skis with a makeshift three pin nesses in the United States serve as the semite Valley. This little known feat in the an- set up, and numerous big wall climbing as- backbone of our economy, accounting for nals of American Mountaineering was accom- cents. Art’s background as a teacher-natu- more than ninety-nine percent of America’s plished prior to the existence of the John Muir ralist, field biologist, small town attorney and employers and employing fifty-three percent of Trail, the advent of organized search and res- former Mariposa County Supervisor provides America’s workforce. The role of small busi- cue teams, or cell phones. another unique perspective from which to view nesses, especially in New Hampshire, is es- Orland Bartholomew carried a 70-pound the terrain. Art’s published works include pa- sential in strengthening our economy, expand- pack, a folding bellows camera and a double pers and lectures on the public policy and ing opportunities for employers and employ- bit ax. He skied on custom made wooden skis legal conflicts between the practice of pre- ees, and providing goods and services that without metal edges with only a crude wax scribed burning and the Clean Air Act. are second to none. system for climbing. He slept in a down robe The team would not be complete without a This year, five individuals from New Hamp- with a half-tent and no stove. Fortunately, true historian and mountain sage. Howard shire have been recognized by the U.S. Small Orland wrote extensive journal entries and Weamer brings not only the wisdon of a life- Business Administration for their exemplary shot over 320 photographs of his adventure. time spent traversing the Range of Light on contributions to small business in New Hamp- Thanks to his son, Phil, these documents skis and on foot, but the keen eye of one of shire. In addition, 1999 marks the thirty-fifth have been preserved. the best known Sierran photographers. His anniversary of the Service Corps of Retired This spring, to celebrate this historic trip, a book, ‘‘The Perfect Art,’’ the history of the Executives (SCORE) and the fifteenth anniver- team of four skiers recreated this great adven- Ostrander Ski Hut and skiing in Yosemite is a sary of the New Hampshire Small Business ture. In completing this trip they were success- tribute to those that have gone before and the Development Center. At the annual ‘‘New ful in drawing attention to the legacy of this 25 years he has spent as the hutkeeper of this Hampshire’s Salute to Small Business’’ dinner lone skier’s accomplishment and its proper Yosemite institution. and awards ceremony, these two groups and place in the history of mountaineering. Their I commend the courage and resolve of the following individuals will be honored for stated goal was to encourage the U.S. Geo- these present-day mountaineers to help us to their overall promotion of small business and logical Survey to name a peak for Orland. By learn more of those that came before and that for their individual successes during the past taking over 2,000 photographs and keeping are part of the heritage of the great state of year: detailed journals they also documented the California and the United States frontier. Fur- Frederic A. ‘‘Rick’’ Loeffler, CEO of Shorty’s state of the High Sierra during the last winter ther, based upon their efforts, I will renew my Mexican Roadhouse in Manchester, will be of the 1900’s. efforts to ensure that the United States Geo- presented with the New Hampshire Small The Fresno Bee has established a website logical Survey name a Sierra peak in honor of Business Person of the Year Award; to provide information on both of the trips and Orland ‘‘Bart’’ Bartholomew, a Sierra High Ad- Christine Gillette, business and economic to report on the findings from their research. venturer. development editor of the Portsmouth Herald, (www.fresnobee.com/man/trek) f will be presented with the Media Advocate of The High Odyssey II team followed as accu- the Year Award; rately as possible the original route of Orland MS. KINYA EFURD WINS THE Jeffrey M. Pollock, president of the New Bartholomew based upon his original journals VOICE OF DEMOCRACY SCRIPT- Hampshire Business Development Corporation and photographs. They were assisted in their WRITING CONTEST in Manchester, will be presented with the Fi- research by Phil Bartholomew and Sierra his- nancial Services Advocate of the Year Award; torian Gene Rose. The Team left Cottonwood HON. TOM A. COBURN Arlene Magoon, owner of American Nanny Creek on April 2, 1999 and arrived in Yosem- OF OKLAHOMA & Family Care Services in Amherst, will be ite Valley on April 28 after skiing 290 miles IN THE HOUSE OF REPRESENTATIVES presented with the Woman in Business Advo- and crossing 20 passes over 10,000 feet. cate of the Year Award; and The four members of the Team are accom- Wednesday, May 5, 1999 William T. Frain, Jr., president and chief op- plished ski mountaineers and climbers with ex- Mr. COBURN. Mr. Speaker, each year the erating officer of the Public Service Company tensive winter experience in the areas in Veterans of Foreign Wars of the United States of New Hampshire, will be presented with the which Orland Bartholomew skied. They and its Ladies Auxiliary conduct the Voice of Special New Hampshire District Advocacy crossed high passes, did winter ascents of Democracy script-writing contest. This year Award. peaks en route, including Mt. Whitney, and more than 80,000 secondary school students Mr. Speaker, I am extremely pleased that forded rushing streams. across the nation competed for fifty-six na- Rick, Christine, Jeff, Arlene, and Bill have At 17, Fritz Baggett represents the next tional scholarships by writing about the theme been recognized for their contributions to generation of mountain adventurers. He has ‘‘My Service to America.’’ It is with great

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00007 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8681 pleasure that I announce that the winner from I may never understand how my uncle felt to his family, his job and his community and the State of Oklahoma is Ms. Kinya Efurd, a that dreadful day and I probably never will. will be missed by all. Junior at Eufaula High School in Eufaula, I do know that sitting through a movie that Oklahoma. Kinya, the daughter of Jerry and portrays war that real has changed the way I feel for him, and the many other veterans. f Vicki Efurd, is active in the Honor Society, The respect I feel for my flag has also been Student Council, Band, and Future Farmers of enhanced. It was increased when I attended WOMEN, INFANTS, AND CHILDREN America. Kinya’s description of how her uncle, an FFA camp. I had the honor of being se- (WIC) PROGRAM CONTINUES TO a veteran of World War II and the Normandy lected as a speaker for the flag lowering IMPROVE THE HEALTH CARE OF Invasion, served our country and her vision of ceremony. MILLIONS personal service to America is both a reminder The small part I said made me realize what of those who have sacrificed so much and a our flag really means. It stands for the free- call to all Americans to strive to continually dom, the happiness, and the sadness for HON. JAMES P. MORAN serve our great nation. I am submitting Ms. which our country stands. I realized that putting my hand over my heart and saying OF VIRGINIA Efurd’s essay for the RECORD, so that my col- the Pledge of Allegiance is not a chore, but IN THE HOUSE OF REPRESENTATIVES leagues may have the opportunity to review an honor. Our flag is a precious symbol for and reflect upon her inspirational comments. America, and it is my duty always to be Wednesday, May 5, 1999 ‘‘MY SERVICE TO AMERICA’’ proud of it. Like many other Saturday nights, I was on I hope one day I can stand up and speak to Mr. MORAN of Virginia. Mr. Speaker, as a my way to the theater and decided to see the thousands of people all over the world. I cochair of the Congressional Prevention Coali- new hit movie ‘‘Saving Private Ryan.’’ My know that I cannot help everyone, but if I tion, I stand in strong support today of a pro- parents stopped me before I went in and can help at least one person my dream will gram that makes a tremendous contribution to warned me that what I was about to see was be fulfilled. I would also love to speak with disease prevention and health promotion. The extremely graphic and violent. Evidently, teenagers and let them know that our nation does care for them and believe in them. Peo- Women, Infants, and Children (WIC) program they were visibly shaken by what they had has been educating woman and children just viewed. My parents were unsure if they ple may think that this is a big dream for wanted me to see what some say is the most such a young women, but I say dreams are about basic nutrition that can help them lead accurate portrayal of war ever filmed. I told limitless. I also believe with the Lord’s healthier, and therefor happier lives. Chronic them I would be fine because I had seen power and his will behind me, and the en- disease is the cause of 70 percent of deaths those other bloody movies before, so in fact, couragement of my church and family mem- in the United States and nutrition is a primary I thought I had seen it all. bers, the sky is the limit. form of prevention for chronic disease. From the very beginning this became more I may never stand on the field of honor as than just a movie to me. I immediately re- my uncle did and receive a bronze star, but Nutrition education can start very early in membered the story of my great-uncle being if my service to America or my community life. WIC educators help expectant mothers to part of the Normandy Invasion. I have been can make a difference in one persons’ life, give their babies good nutrition, even before told that he was awarded the bronze star, for then my responsibility for serving my coun- they are born, through prenatal counseling an act of bravery, during that battle. No one try will have begun. and care. After the baby is born, WIC edu- knows what he did to gain that district f cators continue to serve low income women, honor. He has never told anyone about the infants and children with pediatric health care horror that he experienced. After seeing this TRIBUTE TO KEN STRAIN movie I feel I have a stronger appreciation of services and nutrition education. WIC edu- not only what my uncle did, but also the cators help babies get a healthy start on life thousands of others who have served Amer- HON. ROBIN HAYES through breastfeeding education and support. ica. OF NORTH CAROLINA The first food a baby gets could be the most Perhaps, I may never serve my country in IN THE HOUSE OF REPRESENTATIVES important. Breastfeeding is almost always the headed battle. However, I know other ways best form of nutrition for a baby and WIC edu- to serve with honor and dignity. I strongly Wednesday, May 5, 1999 believe that as an American citizen I can and cators help mothers to learn the wide benefits must serve my country in my own way to Mr. HAYES. Mr. Speaker, I rise today to of breastfeeding including its nutrition and ex- benefit future generations. honor the life of Ken Strain, a man dedicated cellent source of antibodies that protect As a teenager what can I do now to serve to serve his community. against infection. my country? The answer to this question is Mr. Strain passed away this week while The preventive care that WIC provides as simple as getting an education. This serving the community of Hemby Bridge, means going, participating, and believing saves us money in the long run. the National North Carolina as a volunteer fireman. His fire Association of WIC Directors estimates that for that this is not a right, but a privilege. At- truck flipped while Mr. Strain was returning tending school and filling my head with every dollar spent on pregnant women in the knowledge that will prepare me for the real from a rescue call. WIC program, we save $1.92 to $4.21 in Med- Mr. Strain comes from a long line of fire- world is critical. Undoubtedly, school and icaid costs. For every low birth weight pre- fighters. His father Bill and his youngest broth- education will give me the values and knowl- vented as a result of WIC’s prenatal program, edge I need to reach my goals. Also, edu- er Darren both have served as firefighters in Medicaid costs are reduced $12,000 to cation has given me the power to believe North Carolina. $15,000 per infant. that I can become whatever my heart leads Mr. Strain is survived by his wife, Sharon me to be. I may want to be a doctor, a teach- and their 18-month-old son Kristopher. Mr. More importantly, WIC works in helping low- er, or even a social worker. I might even be- income mothers and children to live healthy come the best stay-at-home mom there is. Strain kept a picture of his son in his tool box and often visited the fire station with lives. For example, according to CDC, WIC My parents have always told me that edu- children showed a 16-percent decrease in the cation is the key to success. Kristopher. How can I serve America? Exercising my Mr. Strain will be deeply missed as a mem- anemia rate at their 6-month recertification right to vote is a responsibility of being an ber of the Hemby Bridge business community. screening than in their initial screening. WIC American citizen. When electing politicians, He along with his colleague, close friend and babies have fewer low birth weight babies and people should expect that their voice will be fellow firefighter, Paul Ramsey, were partners fewer fetal and infant deaths. WIC also helps represented with honor and dignity. My one at their business, Neighborhood Automotive. spur normal childhood growth, increases im- vote is just one step in the stairway to better munization rates, improves access to pediatric America. While Ken’s death is tragic, I must com- How else can I serve America? Personally, mend his partners at the Union County Volun- health care and readies children to learn with I would love to become a politician. A great teer Fire Department for their exemplary proven higher test scores. honor for me would be standing up and record of safety and reliability. This is the first I want to thank the National Association of speaking out for what I believe in. I might death the department has suffered in 30 WIC directors and all of those at WIC who do become the first woman President of the years. so much in improving the health care needs of United States of America or maybe just the president of the PTA. No matter what I be- Mr. Speaker, I want to express my deep re- the millions of women, infants, and children come, I know that I will carry with me the morse to the family and friends of Mr. Ken who participate in this lifesaving program. same honor, loyalty, and respect portrayed Strain, but also honor him for his selfless serv- Thank you for 25 years of vital work and serv- by my forefathers for their country. ice to his community. Mr. Strain was dedicated ice.

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00008 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 8682 EXTENSIONS OF REMARKS May 5, 1999 WHY WE NEED CAMPAIGN ishable food by leaving the donations outside PERSONAL EXPLANATION FINANCE REFORM their mailboxes on May 8. Letter carriers will collect the food during their normally sched- HON. TODD TIAHRT HON. JAY INSLEE uled mail routes. The food collected will ben- OF KANSAS efit CDC’s Orange County Food Bank and the OF WASHINGTON IN THE HOUSE OF REPRESENTATIVES IN THE HOUSE OF REPRESENTATIVES Second Harvest Food Bank of Orange County. These two food banks serve over 240,000 Wednesday, May 5, 1999 Wednesday, May 5, 1999 people each month. Mr. TIAHRT. Mr. Speaker, on May 4, I was Mr. INSLEE. Mr. Speaker, the faith of the ‘‘Stamp Out Hunger’’ is the largest one day unavoidably detained back in my congres- American people in their elected government food drive in the nation. This is the seventh sional district due to the devastating tornado is slowly slipping away. The cause of this mal- year of participation by Branch 737 of the storm and missed roll call vote numbers 105 aise is our defective, broken campaign finance Santa Ana letter carriers. Last year letter car- (H. Con. Res 84), 106 (H. Con. Res. 88) and system. The astronomical costs of Federal riers around the nation collected more than 52 107 (H. Res. 157). Had I been present I would campaigns are having extremely detrimental million pounds of food. All went to local food have voted yes on passage on each of the effects on our democracy; qualified candidates banks in their communities. In the Santa Ana three bills. are discouraged from running, and special in- district alone, 69,000 pounds of food was col- f terest dollars continues to drown out the voice lected for the Second Harvest Food Bank and of the average citizen. This outrage is evident the Community Development Council, the two TRIBUTE TO THE CONABLE to everyone, except, members of the leader- food banks in our region. FAMILY ship. Unfortunately, hunger continues to be a The shortest route between our campaign fi- problem in Orange County. There are still over HON. THOMAS M. REYNOLDS nance system and reform is the opportunity to 30,000 men, women, children and senior citi- OF NEW YORK vote on the bi-partisan Campaign Finance Re- zens who go hungry every night. We are hop- IN THE HOUSE OF REPRESENTATIVES form Act, otherwise known as the Shays-Mee- ing to reduce that number as much as pos- Wednesday, May 5, 1999 han bill. We have garnered over 188 signa- sible, by getting every citizen involved in the Mr. REYNOLDS. Mr. Speaker, I rise today tures on our campaign finance discharge peti- food drive. tion. We mean it when we say we want reform on the occasion of the dedication of the Wyo- I commend Branch 737 of the National As- and we want it soon. If we can’t get a sched- ming County Courthouse in Warsaw, New sociation of Letter Carriers for their valiant ef- uled vote from the Republican Leadership, we York, in the name of the Conable family, forts to make a difference in our community reform-minded Members will force a vote whose members have a long and proud his- and to stamp out hunger. through this petition. tory of dedication to public service. Mr. Speaker, this is a truly modest proposal, Family patriarch Barber Conable served as but its impact could be nothing short of ex- f Wyoming County judge from 1924–1951. Fol- traordinary. First, this legislation will finally ban LUBBOCK LETTER CARRIERS PAR- lowing his retirement, his son, John Conable ‘‘soft money.’’ With this past election cycle, we TICIPATE IN FOOD DRIVE FOR assumed the judgeship from 1952–1983. saw ‘‘soft money’’ contributions more than NATION’S NEEDY John’s brother, Barber Conable, Jr., went from double since the last off-year election, totaling practicing law in nearby Batavia to this House over $220 million. of Representatives, where he served for 20 Second, this legislation also includes the HON. LARRY COMBEST years as a Member of Congress. Following his Campaign Ad Fairness Provision, reigning in OF TEXAS service in the House of Representatives, Bar- ber Conable, Jr. served as President of the the unregulated ‘‘issue campaigns’’ to require IN THE HOUSE OF REPRESENTATIVES them to play by the same finance laws as fed- World Bank, from which he retired several eral campaigns. Wednesday, May 5, 1999 years ago. As we noted at the building’s dedication Third, this legislation gives teeth to the FEC Mr. COMBEST. Mr. Speaker, I rise today to ceremony on April 27th, no other family in Wy- and provides greater, timelier public disclosure commend the National Association of Letter oming County’s history has come close to the of individuals contributing to campaigns. Carriers for their tremendous efforts to help level and commitment of public service as the Mr. Speaker, this bill is not an infringement the hungry in communities across the nation. Conables. of free speech, but a restoration of the public On May 8th, 1999, local branches of the Letter Mr. Chairman, I ask that this House of Rep- trust. American people are tired of watching Carriers, in conjunction with the United Way resentatives join me in saluting the Conable Congress sit back and do nothing as the and the United States Postal Service, will par- family for their tremendous dedication to public amount spent in elections grows higher and ticipate in a drive to collect non-perishable service, and to salute all the residents of Wyo- higher, and trust in the system sinks lower and food and other needed items to stock the ming County on the occasion of the dedication lower. We need to get big money out of the shelves of local food pantries. This endeavor of the Wyoming County Courthouse. electoral process, and give power back to the will fill pantry shelves for the coming summer people. months in more than 10,000 hometowns in f I know that the people of the 1st congres- every corner of the United States. sional district of Washington want real, mean- TRIBUTE TO MRS. MARY JANE ingful reform, and I urge you to support the Bi- This worthwhile event has taken place for RODGES partisan Campaign Finance Reform Act. countless years in the past, and this year’s drive promises to be one of the most success- f HON. BENNIE G. THOMPSON ful. The Lubbock, Texas branch of the Letter OF MISSISSIPPI STAMP OUT HUNGER Carriers is rolling up its sleeves and preparing IN THE HOUSE OF REPRESENTATIVES for a first-class turnout on May 8th. I am con- HON. LORETTA SANCHEZ fident that the good citizens of Lubbock will Wednesday, May 5, 1999 rise to the challenge to ensure that this year’s OF CALIFORNIA Mr. THOMPSON of Mississippi. Mr. Speak- drive is an overwhelming success. IN THE HOUSE OF REPRESENTATIVES er, I rise today to honor a life long resident of The Lubbock branch of the National Asso- Cleveland, Mississippi and my constituent, Wednesday, May 5, 1999 ciation of Letter Carriers is deserving of our Mrs. Mary Jane Rodges. Mrs. Rodges will cel- Ms. SANCHEZ. Mr. Speaker, I rise today in full support and praise for their work in the ebrate her 85th birthday on May 22, 1999. support of the National Association of Letter fight against hunger in the 19th District of Mrs. Rodges, a devoted mother, dedicated Carriers and Anthony B. Morell Branch 737 in Texas. Their efforts truly exemplify the spirit of church woman, and retired educator of local Santa Ana as they prepare for their ‘‘Stamp service and giving that draws our community acclaim has much to be thankful for and is Out Hunger’’ food drive. This event will take together. With a little help from us all, the May well deserving of our high praise. She taught place on Saturday, May 8. The letter carriers 8th food drive can touch the lives of the many in the Mississippi public school system for 40 have asked area residents to donate non-per- West Texans who are in need. years, helping to prepare thousands of young

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00009 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8683 people for a brighter future. Mrs. Rodges was EXPOSING RACISM You know the rhetoric . . . victimized by just as devoted to her church as she was to preferences, victimized by employers, vic- timized by political correctness that accepts building the minds of others. She shared her HON. BENNIE G. THOMPSON a Miss Black America pageant or an Ebony talents and uplifted the congregation of St. OF MISSISSIPPI magazine but, darn it, would have hissy fits Paul Baptist Church in Shaw, Mississippi, as IN THE HOUSE OF REPRESENTATIVES over Miss White America or a magazine its musician, for more than 50 years. called ‘‘Ivory.’’ The most virulent of modern Wednesday, May 5, 1999 white bigots will tell you with a straight Mrs. Rodges’ greatest accomplishment Mr. THOMPSON of Mississippi. Mr. Speak- face and evident sincerity that he is only though has to be the five children she er, in my continuing efforts to document and fighting for equality. And never mind that raised—who all became valuable and produc- expose racism in America, I submit the fol- by virtually every relevant measure, white men—still!—enjoy advantages that go well tive citizens of our country. One of her daugh- lowing articles into the CONGRESSIONAL beyond simple parity. ters, Mrs. Bobbie L. Steele, who is a Commis- RECORD. Most people—black, white and otherwise— sioner for Cook County in Chicago, Illinois, is MISSING POINT OF AFFIRMATIVE ACTION; understand this and recognize cries of white planning a grand celebration for her mother. BLACK HENS SHOULDN’T CATER TO WHITE victimization for what they are: only the lat- est effort to turn the language of the civil FOXES This is a well-deserved event for an excep- rights movement to the cause of intolerance. tional woman and I stand here on the floor of (By Leonard Pitts, Jr.) Only the most creative attempt to dress rac- the House of Representatives today and ask As if Florida didn’t already have problems, ism up as reason. all to join me in wishing Mrs. Mary Jane here comes Ward Connerly to pick a fight There are valid reasons for disliking af- over affirmative action. firmative action. That it’s divisive is not one Rodges ‘‘Happy 85th birthday’’. The thing that makes you sit up and take of them. And while it’s troubling that some notice, of course, is that Connerly is black. white guys won’t understand this, dis- f Who isn’t fascinated at the sight of a hen concerting that they would embrace an campaigning for the foxes? image of themselves as powerless and put- WIC: 25 YEARS OF BUILDING A This particular hen is pretty good at what upon, it’s downright galling to see that igno- HEALTHIER AMERICA he does. The Sacramento businessman has rance validated by a black man. spearheaded ballot measures that overturned Some would call Ward Connerly an Uncle affirmative action in Washington state and Tom. It is, to my mind, an unfortunate term his native California. Monday, Connerly an- that’s been too often used to discourage HON. BENJAMIN A. GILMAN nounced a petition drive aimed at doing the black intellectual independence. I won’t call OF NEW YORK same thing in Florida. God must hate the Connerly that. Sunshine State. I will, however, suggest that he is a con- IN THE HOUSE OF REPRESENTATIVES Don’t get me wrong. I think there’s good fused Negro who should know better than to reason to question affirmative action, if not allow his skin color to be used as moral Wednesday, May 5, 1999 to oppose it outright. It seems fair to ask if, cover by those whose truest goals have little by setting aside contracts and classroom to do with liberty and justice for all. Mr. GILMAN. Mr. Speaker, I rise today to seats for minorities and women, government If this hen has any sense, he might wonder express my support for WIC, the special sup- does not inadvertently reinforce in them a at the motive of the foxes at his back. victim’s mentality—an insidious sense that plemental nutrition program for women, in- CHILDREN GROW EMOTIONALLY AS THEY ENACT they lack the stuff to earn those things on fants, and children. It is vital that, in order to HISTORY’S STRUGGLES ensure that people grow up and live healthy their own merits. That observation, however, must be bal- (By Naomi Barko) lives, they receive proper nutrition. anced by the observation that white men NEW YORK.—An argument erupted in a New WIC is an indispensable organization that have long enjoyed a kind of de facto affirma- York middle school recently over a subject that in most classes would have elicited only serves over 7.4 million pregnant women, new tive action. After all, for generations, the nation used every legal and extralegal means a yawn: the Treaty of Versailles that ended mothers, infants, and preschool children in to deny women and racial minorities—blacks World War I. The class had been divided in over 10,000 clinics nationwide. Thankfully, in particular—access to education and entre- half, with one side asked to look at 10 spe- WIC is designed to aid those who regrettably preneurship. It retarded the progress of those cific points of the treaty through German have an income level of 185 percent of pov- groups while offering white men set-asides eyes, the other through the eyes of the Al- and preferences that allowed them to move lies. erty or less, are enrolled in Medicaid or have An immediate murmur ran through the been recommended by a health professional. ahead by prodigious leaps. It’s not too much to ask the country to room: ‘‘It isn’t fair!’’ could be heard from It is essential that we ensure healthy children make right what it made wrong. Especially many corners—and not only from the ‘‘Ger- mans.’’ and adults by making sure that mothers re- considering that the hostility toward blacks Besides losing most of their army and and women has hardly ended, but only be- ceive proper nutrition long before their children navy, substantial territory and all their are born and during their early years of devel- come more subtle. If we don’t redress the in- colonies, the Germans had been forced to ac- opment. Children will perform better in school equity through affirmative action, fine. But cept both the responsibility and the expense how do we do it? Because it’s crucial that we for all the loss and damage suffered by the and lead more productive lives when they re- do. ceive the proper nutrition from the very begin- Allied governments and their civilian popu- It’d be good if Connerly showed any grasp lations. ning. of this. Instead, his stated reason for oppos- But were the Allies really only after re- ing affirmative action is that it’s racially di- venge, teacher Veronica Casado asked her A common theme in all branches of govern- visive. ment today is that of the importance of the students. ‘‘No,’’ argued one of the Allies. Which is such an asinine assessment that ‘‘We wanted to make sure that Germany family. WIC strengthens families by providing you hardly know where to begin responding would never again be strong enough to start low-cost services to families who are at risk to it. Perhaps it’s enough to simply ask a war, and we wanted to safeguard all the due to low income and nutritionally related which campaign to open closed doors was new little countries that had been created— ever anything but divisive. The Civil Rights health conditions. Because two-thirds of all Austria and Poland and Czechoslovakia!’’ Movement? That was divisive. Feminism? In this class, called Facing History and WIC families live below the poverty level, the Yep, divisive, too. The United Farm Workers Ourselves, the emotions these seventh and services they provide are essential in making boycott? Pretty darn divisive. The Civil eighth graders were feeling were as impor- sure that these families stay together. War? Golly gosh, that was about as divisive tant as the facts they had learned, said as it gets. Casado, who teaches at the Dual Language The strength of any nation comes from the Hell, division is predictable. Those who Middle School, an alternative public school strength of its people. In order for us to assure enjoy privileges seldom surrender them eas- in Manhattan. They were beginning to un- that the United States remains strong we must ily or willingly. derstand the German anger and resentment be sure that all of our citizens are healthy, But it’s not simply the abject stupidity of that helped to seed the rise of Nazism and starting from the time when they are very Connerly’s reasoning that offends. Rather, the onset of World War II. it’s the way that reasoning offers aid and Cited by both the U.S. Justice Department young. WIC is a program that ensures just comfort to the new breed of white bigotry. and the Department of Education as an ex- that. Accordingly, I urge all of my colleagues The one which tells us that white people are emplary program, Facing History and Our- to support it. the true victims of racism. selves was founded in 1976 in Brookline,

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00010 Fmt 0689 Sfmt 0634 E:\BR99\E05MY9.000 E05MY9 8684 EXTENSIONS OF REMARKS May 5, 1999 Mass., to help middle and high school teach- ers in other cities. A particularly poignant History, along with a similar number of ers throughout the country learn to teach story is told by Terry NeSmith, an English whose teachers ‘‘cared and taught about so- not only the facts, but the ‘‘why’s’’ of his- teacher at Craigmont High School in Mem- cial issues, but who didn’t use the program,’’ tory. ‘‘The goal is to help people understand phis, Tenn. ‘‘This youngster came to class al- explains Dennis Barr, Ph.D., a Harvard de- that history is not inevitable, that indi- ways looking worn and troubled,’’ he re- velopmental psychologist who headed the re- vidual decisions and actions matter,’’ said called. ‘‘But as we talked about books and search team. The study found that Facing the program’s executive director, Margot the curriculum she began to open up and ex- History does affect the way young people re- Stern Strom. press herself.’’ late to their peers and think about social ‘‘Facing History concentrates on preven- At the beginning of the term, NeSmith issues and their role as citizens. tion, not memorializing history,’’ she says. asked the class to write an essay about their ‘‘It’s a very impressive program,’’ says ‘‘It helps students to engage with it. We heroes. The students wrote about people like Barr. ‘‘It has an impact on something that is learn that it is hard work to keep democracy the singer Whitney Houston and the basket- very hard to have an impact on—what you alive and what happens when it fails. We ball player Shaquille O’Neal. After that, could call character development.’’ learn that myth and misinformation tend to they studied the Holocaust and also read the This effect seems to last. Among those distort judgment, that sometimes people re- book, ‘‘A Gathering of Heroes,’’ by Gregory quoted in Facing History’s last annual re- spond to complex issues by simply dividing Alan-Williams, who rescued a Japanese- port are Derrick Kimbrough of Cambridge, the world into ‘Us’ and ‘Them.’ American man at the height of the Rodney Mass., now 25 years old, who took part in the ‘‘It is the students themselves who contin- King riots in Los Angeles. program when he was only 13. Three sum- ually raise the questions of responsibility In the book, Williams tells of his anger at mers ago, Kimbrough, who is African Amer- and whether one person can make a dif- hearing of the acquittal of the policemen ican, founded the Survival & Technology ference,’’ she emphasizes. ‘‘When the stu- who had beaten King, and how, driving home Workshop, a nonprofit group that involves dents stop playing the game of education— he began to think of his own troubling expe- teens in improving their local communities. ‘‘Our workshop graduates have renovated a just raising their hands or filling in the riences as an African American. But his local teen center and movie theater, estab- blanks—and see their teachers struggling memories also led him to think of the people lished a local recycling project and created with difficult and complex material, they see who had helped him to get where he was now as a writer: his courageous mother, a neigh- an after-school jobs project,’’ he said. that these issues aren’t easy, and that they Kimbrough added, ‘‘Facing History taught don’t go away.’’ bor who had acted as a wise surrogate father. These and others were his heroes, and he re- me the value of teaching kids responsibility Using not only texts but novels, drama, art and the importance of letting them think of and personal reminiscences, the program be- alized that everyday people like himself could be heroes if they acted justly. He found themselves.’’ gins by exploring how people develop a sense Twenty-nine-year-old Seth Miller of Bos- of identity, both personal and national, and himself driving toward the center of the riot where he rescued the man who had been ton remembers that as the only Jewish mem- how they come to the sense of the ‘‘other,’’ ber of a school hockey team he had played on the ‘‘different.’’ Then using the history of beaten by the mob and was being dragged from his car. a Jewish holiday because he’d been embar- Germany in the ’20s and ’30s as a case study, rassed to tell his teammates that he had to it shows how the Nazis came to power, how ‘‘At the end of the term I gave the same as- signment,’’ said NeSmith. ‘‘And the essays go to services. Since then he has not only peer pressure was used to make people con- faced his own identity but has founded the form, how other nations responded or failed were so amazingly different They wrote about their moms, their dads, ordinary, ev- Rocky Mountain Youth Corps in New Mex- to respond, how the Holocaust developed, ico. and how individuals made choices to go eryday heroes. ‘‘And this young lady,’’ he said, ‘‘wrote ‘‘At 13, Facing History was a real break- along, to resist or simply to do nothing. such a moving essay that I sent it to Facing through for me,’’ he said ‘‘I was suddenly Just how immediate these lessons can be- History in Brookline, and they published it turned on to academics in a way I hadn’t come was illustrated in another middle in a study guide. She mentioned that often been before. It seems that my whole interest school here a few days later by a discussion the car in which she was driven to school was in pursuing a career that was fulfilling to me of stereotyping and the role it had played in the place where she had slept at night. This as a human being and not just for gaining an explosive case reported that day in the was a biracial child,’’ says NeSmith, ‘‘and money or status started then.’’ New York City press. Four white undercover she confessed that she had always been torn policemen had fired 41 shots, killing an inno- about her own identify. Now she thought it PROSECUTORS SAY RACIAL HATE WAS MOTIVE cent and unarmed West African immigrant was wonderful to be able to experience both FOR MAN INDICTED IN FATAL SHOOTING who they thought might have been a crimi- cultures. And she realized that even when nal with a gun. The class composed of black, FORT LAUDERDALE, FLA. (AP).—A man ac- she slept in a car she always had a home be- brown, white and Asian preteens agreed cused of shooting and killing a black woman cause her father was there and made it a unanimously that racial stereotyping had as she sat in a car with her white fiance has home. And that was why he was her hero.’’ been indicted on charges of murder and at- played a large part in the killing. Facing History has six regional offices in ‘‘I never heard of a white person being shot tempted murder. Boston, New York, Chicago, Los Angeles, And while the accused wasn’t charged with so many times!’’ exclaimed a white boy dur- Memphis and San Francisco that help teach- ing a class session in February at the Center a hate crime, ‘‘We will argue hate as a mo- ers with the program. To date it has reached tive for the murder,’’ said assistant state at- School, a performing arts magnet school in some 22,000 educators from throughout the Manhattan. torney Tim Donnelly. country and has also held institutes in Eng- Robert Boltuch was indicted Thursday for ‘‘Well, I think it was racially motivated, land, France and Sweden. About a million the slaying of Jody J. Bailey, 20. She was but the guy should have frozen,’’ objected a students have taken part. killed Feb. 24 when the driver of another car white girl. The teachers, who are trained in weeklong pulled up and opened fire. ‘‘They always say they thought there was sessions during summer vacations, come Her fiance, Christian Martin, 20, who a gun!’’ argued a black girl. ‘‘How come they from private as well as public schools and wasn’t hit, told police the shooter had tailed always say that?’’ from disciplines other than social studies, their car, screaming at the couple before fir- ‘‘What are we saying about the prejudices since the program can be adapted to many ing seven shots when they stopped at a red of our society?’’ observed teacher Rhonda kinds of curricula. light. Wilkins. ‘‘A policeman may not be a racist, For instance, NeSmith’s assignment to Martin and Ms. Bailey were high school but in this kind of a situation he may tend write about heroes was connected with a sweethearts who had dated for three years. to prejudge because of color. unit on Greek mythology in his English Both were students at Florida Atlantic Uni- ‘‘And is it only black people who are class. At the Center School here, where Wil- versity. stereotyped?’’ she asked. ‘‘What about a man kins teaches, students made elaborate and Boltuch, 23, had been working as a waiter you see walking down the street with a moving posters and dioramas about their at a restaurant until the shooting. He was yarmulke and a beard? Do you immediately family history to illustrate their sense of arrested March 2 at a friend’s house in Plan- think he must have money and be sharp in identity. A few blocks away, Casado of the tation. business?’’ Dual Language School, teachers Facing His- While the words ‘‘hate crime’’ appear no- ‘‘It happens to me too,’’ called out a girl in tory as part of the regular social studies cur- where in the indictment, prosecutors said a wheelchair—one of three such in the class- riculum. they intend to tell a jury that hate was a room. ‘‘People always stare at me as if I’m The value of Facing History was recently factor. different. Why do I have to be the different judged independently by an intensive two- A hate crime classification upgrades the one? Maybe they’re different.’’ year research study on intergroup relations possible penalties if there are convictions. ‘‘What’s normal?’’ mused a classmate. among youth funded by the Carnegie Cor- But since a capital murder case already in- ‘‘Maybe normal doesn’t exist.’’ poration of New York. volves the ultimate punishment, the hate The course’s exploration of identity em- The nonprofit foundation surveyed 246 crime statute ‘‘really is inapplicable,’’ Don- powers many ‘‘different’’ children, say teach- eighth-graders who had enrolled in Facing nelly said.

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00011 Fmt 0689 Sfmt 0634 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8685 About 25 minutes before the shooting, two of the United States Armed Forces still miss- Shelter Care, and the Salvation Army. He also men allegedly overheard Boltuch say he was ing and unaccounted for from the Vietnam has been a professional educator in a wide going to go out and kill a black person, po- War. Like so many Americans across our variety of capacities: a teacher, a principal, a lice said. The manager of the restaurant where land, I have come to deeply respect and ap- school superintendent, and a professor at both Boltuch worked called the police the day preciate all that the League has done for the University of Akron and Kent State Univer- after the shooting when he saw the com- those who have done so much for our Nation. sity. He was instrumental in bringing together posite sketch of the suspect in the newspaper I have been a strong advocate of obtaining our regional institutions of higher learning to and Boltuch failed to show up to work. the fullest possible accounting of our POW/ create the Northeastern Ohio Universities’ Col- MIA’s since I first came to the Congress in lege of Medicine. He capped his educational HATE CRIME SENTENCING 1973. As a junior Congressman, my first trip service with three terms on Ohio’s State Board CLARKSBURG, W. VA. (AP)—A 20-year-old overseas was to Laos to visit the Hmong peo- of Education. Harrison County man convicted of pouring ple who protected our downed airmen during This breadth of service to youth is impres- gasoline in the shape of a cross on a black the war. I proudly supported the creation of sive by itself. But alone, it does not capture family’s yard and lighting it on fire has been the Select Committee on Missing Persons in Oliver Ocasek’s contribution to the people of sentenced to 200 hours of community service. Southeast Asia, the National POW/MIA Rec- Ohio. Oliver Ocasek was one of the most in- Michael Vernon Wildman must complete ognition Day, and POW/MIA legislation be- fluential legislators in the Statehouse, where his community service at Mount Zion Bap- cause I believe the families of those who are he served in the Senate for 28 years from tist Church. He also must take a course on missing deserve no less. race, class and gender relations at Fairmont 1958 to 1986. In the 1970’s, he became the State College. In my trips to Vietnam over the years, I first Senate President elected by his peers Wildman was convicted Feb. 2 of violating have shared the League’s frustrations with the due to a change in the Ohio Constitution. the civil rights of Raymond Parker Jr. and accounting process. I am aware of the steps Along with Republican Governor James his family and destruction of property. the Vietnamese government has recently Rhodes and Democratic House Speaker Harrison County Circuit Judge Thomas Be- taken to address the concerns of our POW/ Vernal Riffe, Sen. Ocasek made many of the dell originally sentenced Wildman to spend MIA families, but I believe further steps—steps decisions to keep state government moving 10 years in state prison, one year in the the League has long recommended—should forward. He was an expert on Ohio’s complex county jail and pay $5,500 in fines. be pursued. Regrettably, by normalizing rela- However, Bedell suspended the sentence school funding system and used his knowl- saying sending Wildman to prison may tions with Vietnam, I believe that we have edge, experience, and position to benefit local ‘‘teach him more hate and racism.’’ withdrawn our leverage with the Vietnamese students. His enormous influence came from ‘‘I feel that if we sentence him to the max- Government on this issue. Once again, I his savvy and from the hard, tedious work of imum, we may be creating another racist,’’ strongly urge the Governments of Vietnam, studying, debating, refining, and reaching deci- Bedell said during Wednesday’s sentencing Laos, and Cambodia to engage in serious dia- sions on difficult and often contentious state hearing. logue to improve the transparency, account- issues. Bedell said requiring Wildman to work ability, effectiveness and efficiency of POW/ He is astute, well-steeped in history, a gifted with the church and take the class would be MIA investigations. more beneficial. orator and a man of heart-felt compassion. I am thankful to have had the opportunity to Oliver Ocasek’s larger-than-life ambitions f have worked with the League on this impor- drove him hard in politics and in civic life in tant issue. It is a pleasure to bring recognition PERSONAL EXPLANATION general, not in search of personal gain and to one of our family groups which has toiled glory, but in order to use his talents and posi- so long and so hard in support of our service- HON. TODD TIAHRT tions to care for the least of his brothers and men and women. I wish Ann Mills Griffith, Dick sisters. Last year in the Akron Beacon Jour- OF KANSAS Childress and their team a safe and produc- nal, Sen. Ocasek expressed his philosophy: IN THE HOUSE OF REPRESENTATIVES tive visit to Southeast Asia and I look forward ‘‘Nothing breaks my heart more than for a Wednesday, May 5, 1999 to their report upon their return. child to not have parents who care or to not Mr. TIAHRT. Mr. Speaker, on May 5, I was f have a chance for a good education. That’s unavoidably detained and missed roll call A TRIBUTE TO THE HONORABLE been my commitment—my life—to provide a votes number 108 (Approval of the May 4 OLIVER OCASEK good education for all children.’’ His leadership Journal) and 109 (Calling the Previous Ques- has inspired tens of thousands of young peo- tion on H. Res. 158). Had I been present I HON. TOM SAWYER ple touched by his commitment to education would have voted yes on both votes. and to the YMCA youth programs over the last OF OHIO half-century. f HON. RALPH REGULA Today, many people disparage public serv- NATIONAL LEAGUE OF FAMILIES OF OHIO ice and doubt that one person can make a dif- OF AMERICAN PRISONERS AND IN THE HOUSE OF REPRESENTATIVES ference. Oliver Ocasek would profoundly dis- MISSING IN SOUTHEAST ASIA agree. And more importantly, his efforts and Wednesday, May 5, 1999 their recognition by the YMCA are the evi- HON. BENJAMIN A. GILMAN Mr. SAWYER. Mr. Speaker, my colleague, dence to the contrary. His service to the peo- OF NEW YORK Mr. REGULA, and I rise to honor Oliver ple—and particularly the youth—of Ohio IN THE HOUSE OF REPRESENTATIVES Ocasek—one of Ohio’s most distinguished citi- shows that, with hard work and commitment, zens. On May 20, Oliver Ocasek will receive one person can make a difference. And we Wednesday, May 5, 1999 the YMCA of the USA’s Volunteerism Award— are grateful for the difference that he has Mr. GILMAN. Mr. Speaker, after 26 years of the YMCA’s highest honor. The YMCA is hon- made. working closely with the National League of oring Ocasek for his more than 50 years of Families of American Prisoners and Missing in service to youth organizations. We rise today, f Southeast Asia, it should come as no surprise not only to recognize his deserved selection that I rise today to express my full support for for this award, but to recognize a lifetime of TOP TEACHERS their forthcoming trip to Vietnam, Laos, and service to the people of Ohio. Sen. Ocasek’s Cambodia scheduled from May 12–20, 1999. devotion to education extends well beyond his HON. MARTIN T. MEEHAN For more than a quarter of a century, I have volunteerism with the YMCA. He co-founded witnessed, firsthand, the league’s tireless ef- the Ohio Hi-Y Youth in Government Model OF MASSACHUSETTS forts and faithful dedication to those who have Legislature program with Governor C. William IN THE HOUSE OF REPRESENTATIVES selflessly served our country during the war in O’Neill in 1952 and supervised it throughout Wednesday, May 5, 1999 Southeast Asia. For 30 years, the National his service on the Ohio-West Virginia Board of League of Families has remained vigilant in its the YMCA. He has served on the greater Mr. MEEHAN. Mr. Speaker, I insert the fol- goal of determining the fate of those members Akron area boards of Goodwill Industries, lowing letters into the RECORD.

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00012 Fmt 0689 Sfmt 0634 E:\BR99\E05MY9.000 E05MY9 8686 EXTENSIONS OF REMARKS May 5, 1999 HOUSE OF REPRESENTATIVES, ices in all local exchanges where the deploy- practice of web site operators of collecting in- Washington, DC, April 15, 1999. ment is both technolgicially feasible and eco- formation from web site users either directly Ms. CAROL SHESTOK, nomically reasonable. Today, only 50,000 sub- through a registration form or indirectly Norman E. Day Elementary School, scribers nationwide have DSL service. Our Westford, Massachusetts. through the implantation of a ‘‘cookie’’ on the legislation will result in those numbers increas- DEAR MS. SHESTOK: Congratulations on user’s hard disk, the legislation requires that being honored as one of the top teachers in ing dramatically. all web site operators post their information Massachusetts. This is a well deserved re- We also seek to encourage competition in collection and use policies in a conspicuous ward for your special ability to really make the provision of DSL services by reducing the manner so that web site users will be informed a difference in the lives of your students at regulatory burden on the offering of DSL for of the information collected and the use to Norman E. Day Elementary School in telephone companies which agree to make re- which that information is put and have an op- Westford. conditioned loops for the provision of DSL portunity to exit the web site without any infor- Too often, talented teachers go unrewarded services available in a timely fashion to com- mation being collected if the visitor objects to for the valid work that they do. That is why petitors. I am so pleased that you were deservedly that collection and use of information. The pro- To ensure an increase in Internet backbone vision will be enforced by the Federal Trade honored for all the attention, care and dedi- capacity and to stimulate competition in the of- cation that you have given to your students. Commission. Again, congratulations on your recent hon- fering of backbone services, the legislation en- Finally, we propose to assure that all Ameri- ors. ables Bell Operating Companies to carry data cans retain complete freedom to select the Sincerely, across LATA boundaries to the extent that the Internet access provider of their choice. As the MARTY MEEHAN, data is not a voice-only service, whether or Internet has grown and developed, most Member of Congress. not the Bell Operating Company has obtained Americans have connected to the Internet approval to offer inter-LATA services under over telephone lines. While the telephone HOUSE OF REPRESENTATIVES, section 271 of the 1996 Act. This provision will company has provided the transport, everyone Washington, DC, April 16, 1999. strongly encourage investment in the Internet has been free to select the company that will Mrs. GAIL FITZGERALD DOWNING, backbone and the creation of greater competi- provide the Internet access. Even in instances Tewksbury, Massachusetts. tion among Internet backbone providers. That where telephone companies offer both trans- DEAR MRS. DOWNING: Congratulations on competition is essential to assure the retention port and Internet access services, the law has being honored as one of the nation’s top 40 of the current peering arrangements which teachers through USA Today’s annual ALL– protected the right of the telephone company’s promote low-cost Internet services. customers to select an Internet access pro- USA Teachers Team Award. It is a well de- Our legislation gives legal voice to the poli- served tribute to your special ability to real- vider other than the telephone company. cies of Internet Service Providers which are ly make a difference in the lives of your stu- Unfortunately, as the cable industry begins designed to protect their facilities from bulk dents at Russell Street Elementary School the deployment of cable modem services, a mailings of unsolicited electronic advertise- in Littleton. different model is being pursued. At the ments. Spam can seriously degrade the per- Too often, talented teachers go unrewarded present time, there is no federal law restricting for the work that they do. That is why I am formance of the Internet and clog the facilities the ability of cable companies to package their so pleased that you were deservedly honored of Internet Access Providers to the disadvan- transport services and their affiliated Internet for all the attention, care and dedication tage of all users. In some instances, Internet access services and require that customers that you have given to your students. Service Provider facilities have even crashed purchasing high-speed transport also pur- Again, congratulations on your recent hon- due to the onslaught of spam. If service pro- ors. chase the cable company’s affiliated Internet Sincerely, viders have restrictive policies concerning the use of their facilities by spammers, those poli- access service. The largest cable multiple sys- MARTY MEEHAN, tem operators are, in fact, bundling transport Member of Congress. cies should be enforced, and our legislation provides the mechanism for the enforcement. with Internet access and requiring that the af- f Our legislation also makes it a criminal of- filiated Internet access services be purchased by cable modem customers. THE INTRODUCTION OF THE fense intentionally to falsify Internet domain, header information, date or time stamps, origi- There are more than 2,000 Internet access INTERNET GROWTH AND DEVEL- providers nationwide. The vast majority of the OPMENT ACT OF 1999 nating e-mail addresses or other e-mail identi- fiers or intentionally to sell or distribute any ISPs are startup companies who have brought computer program which is designed or pro- a new level of entrepreneurship to the tele- HON. RICK BOUCHER duced primarily for the purpose of concealing communications industry. Many of them will OF VIRGINIA the source of routing information of bulk unso- become the competitive local exchange car- IN THE HOUSE OF REPRESENTATIVES licited electronic mail. This provision strikes at riers who will offer competition not only in the provision of Internet access, but in the offering Wednesday, May 5, 1999 the practice of bulk e-mailers who through the use of specially designed software change the of local telephone service and other tele- Mr. BOUCHER. Mr. Speaker, I rise today origination information in e-mail messages as communications services as well. They will be with my Virginia colleague BOB GOODLATTE, each small cluster of messages is sent. That important contributors to the competitive local with whom I am privileged to cochair the Con- practice is used to defeat the blocking soft- exchange industry we envisioned when we gressional Internet Caucus, in the introduction ware of Internet Service Providers which de- wrote the Telecommunications Act of 1996. of two bills which taken together will address flects from their facilities large volumes of But these ISPs are severely threatened by the major challenges confronting the Internet messages originating from a single source. the deployment by cable television companies today. The legislation will encourage electronic of broadband Internet transport connections Heretofore, congressional debates on issues commerce by giving full authorization to prop- which also bundle affiliated Internet access affecting the Internet have been ad hoc and erly authenticated electronic signatures. A va- services. The broad bandwidth of these serv- have addressed single issues only. The legis- riety of laws require a written document with a ices will surely attract a large clientele, much lation we are introducing today will provide the written signature for the enforceability for cer- of which will be the existing customer base of first comprehensive framework for debate by tain kinds of contracts. Our legislation will give independent ISP’s. the Congress of the major current Internet pol- full legal effect to contracts constructed online If the cable television companies are per- icy challenges. and prevent either party from disavowing the mitted to force their cable modem customers The passage of both bills will truly promote contract due to the absence of a physical writ- to purchase their affiliated Internet access the growth and development of the Internet: ten signature, if the identity of the contracting services as a condition of subscribing to their First, passage of the legislation will result in parties is properly authenticated and if cer- high speed transport service, many inde- greater broadband deployment and an in- tainty is created that the text of any document pendent ISP’s will be foreclosed from a large crease in the speed by which people connect they construct has not been changed. The leg- portion of their existing customer base and to the Internet from their homes and their islation sets forth specifics for obtaining that from market growth opportunities. The legisla- places of work. Telephone companies will be authentication. tion we are offering today assures that this required to file plans with state public service We propose to create a new right of privacy anticompetitive practice will not occur and that commissions for the deployment of DSL serv- for Internet users. In response to the growing all Internet transport platforms in the future will

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00013 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8687 be open, much as telephone company trans- service, in a variety of forms, for as low as FCC. The bill achieves this goal by giving a port platforms are open today. $40 a month. The development of broadband private right of action to ISPs who have been I am pleased to be participating on a bipar- technology has the potential to not only make unable to compete fairly against other ISPs by tisan basis with Representative GOODLATTE in fast Internet access available to consumers broadband transport providers. For example, if offering this legislation, the enactment of and small businesses, but to make it afford- a company limits the ability of an ISP to offer which will assure that the Internet more rapidly able as well. its services over their facilities on the same achieves its potential to be the multimedia The FCC is currently ignoring its responsi- terms and conditions that the cable company platform of choice for the delivery of voice, bility under the Telecommunications Act of offers to another ISP, the first ISP would be video and data. 1996 to provide regulatory relief to incumbent able to seek relief in the courts. f phone companies by removing existing regula- tions on data traffic that were originally in- The section also preserves competition THE INTRODUCTION OF THE tended to encourage competition in voice traf- among ISPs by using existing antitrust law. INTERNET FREEDOM ACT OF 1999 fic. The FCC regulations currently prohibit the Under this section, evidence in a civil action incumbent phone companies from competing that a broadband access transport provider HON. BOB GOODLATTE in the Internet backbone market. The ‘‘back- with market power has limited the ability of an OF VIRGINIA bone’’ is the very high speed, high capacity Internet service provider to compete in the ISP IN THE HOUSE OF REPRESENTATIVES lines that crisscross the country linking major marketplace would be presumed to have vio- lated the Sherman Act. This section recog- Wednesday, May 5, 1999 cities. Existing suppliers of Internet backbone are simply unable to keep up with the demand nizes that each type of broadband transport Mr. GOODLATTE. Mr. Speaker, I rise today for high speed, high capacity backbone band- provider technology is unique, whether two- to announce the introduction of the Internet width. They also have little incentives to invest way cable, copper wire, sport-beam satellite or Freedom Act of 1999. This bipartisan legisla- in many parts of the country that are far away wireless transmission. Each technology is rec- tive initiative, which I am introducing along from the main backbone routes. Our legisla- ognized under this bill as a separate type of with Congressman BOUCHER of Virginia, ad- tion would allow local phone companies into broadband market, and therefore providers dresses the challenge that face the Internet by the backbone market, increasing competition cannot under current antitrust law abuse that building on the strengths that have made the and lowering prices for businesses and con- power to limit the competitive marketplace of Internet the major engine of growth and devel- sumers. Internet service providers. opment in the new Information Age. The legis- In addition, many areas of the country are The second section would also ensure lation ensures that the qualities that have pro- located far from these backbone pipes (often openness and competition among broadband vided the explosive growth of the Internet in but not exclusively in rural areas). Traffic from Internet transport providers by ensuring that recent years will continue into the new millen- these areas must be hauled to the closest the same rules apply to the incumbent phone nium. The initiative addresses the crucial chal- backbone connection point (often miles away) companies, which are already required to lenges currently facing the Internet and its fu- and the connections used for this are of much open their networks to ISPs. In return for re- ture: providing freedom from burdensome gov- smaller capacity than those on the backbone. moving rate and price regulations on data traf- ernment regulation, ensuring consumer choice More backbone investment will mean that fic for local phone companies after meeting through open competition, and protecting con- more facilities will eventually become available sumer-friendly open access to the Internet. certain rollout requirements, this section would in more places than ever before. Local phone presume a Sherman Act violation if the phone The Internet is currently at a crossroads. companies and others may be able to justify company failed to make its ‘‘local loop’’ avail- One path continues to encourage the prin- building major connection points to the Inter- able to other carriers who wanted to compete ciples mentioned above: freedom, competition, net in more locations, allowing traffic to be ag- in the provision of DSL broadband technology. and consumer choice. The other path, which gregated by ISPs and encouraging the build- is looming on the horizon, is characterized by out of more connections closer to customers. Finally, the Internet Freedom Act encour- heavy government regulation, limited competi- This will make it possible for more customers ages open consumer access for consumers by tion, higher prices and less choice for con- to be able to access the Internet without being making the Internet a more user-friendly envi- sumers. Following this path could mean that required to make a long distance call. ronment. The third section addresses the any company with market power can restrict The second goal the Internet Freedom Act problem of illegal mass e-mail, also known as the ability of businesses to compete on the accomplishes is freedom of competition: One ‘‘spamming.’’ This section would make it a fed- Internet, and the ability of consumers to ac- of the main goals of the Telecommunications eral crime for a person to knowingly use an- cess the Internet provider and content of their Act was to open the local phone markets to other person’s Internet e-mail address, or ‘‘do- choice could be subject to the control of a sin- competition to ensure non-discriminatory ac- main name,’’ to send unsolicited mass e-mails. gle company. The Internet as we know it— cess and safeguard against anti-competitive The penalty for violating the section would be open, competitive, and easily available to con- behavior. However, certain networks unaf- the actual monetary loss and damages of sumers—will cease to exist. That path, unfor- fected by the Act remain closed to competitors $15,000 per violation or up to $10 per mes- tunately, is the one we are following now. and other closed networks could be just sage, whichever is greater. Congress must act now to ensure that the around the corner. Under this scenario, a con- The principles of free-market competition, qualities that made the Internet a revolutionary sumer who wants high-speed broadband serv- tool for both business and users—deregula- ice, whether by cable, satellite, or copper wire, low government regulation, and open con- tion, competition, and easy consumer ac- would be forced to buy it from their access sumer access have guided the growth of the cess—remain fundamental components of the provider’s ISP. If they wanted service from Internet. If this growth is to continue, we must Internet for future generations. The Internet AOL or another ISP, they would either not be ensure that public policy reflects the best inter- Freedom Act accomplishes this by achieving able to receive it or would essentially have to ests of the consumer. The environment that three goals. pay twice. has nurtured the early growth of the Internet The first goal of the Internet Freedom Act is A closed network also provides undue lever- must be preserved and strengthened to spur deregulation: the bill gets the FCC out of the age over Internet content, since one company continued innovation and ensure that the Inter- business of regulating the Internet. It accom- would possess the ability to give content pro- net and information-based economy continue plishes this by eliminating existing FCC regu- viders preferential access to their ‘‘hostage’’ to flourish. But, there are several inefficiencies lations that are inhibiting the development and customers. This ability to leverage its monop- currently in the marketplace that could stifle rollout of certain types of broadband Internet oly vertically can curtail competition and inno- the continued development and innovation of service in non-urban and rural areas. vation in the content market and raise prices the Internet and the growth of our economy. Broadband technology is up to twenty times for such information or programs. It could also We must fix these problems now, before they faster than the old modems used for Internet limit the variety and availability of content that require heavy-handed regulations that slow access, and can be compared to the old ‘‘T– has made the Internet so successful. down the Internet, drive up costs, hinder con- 1’’ telephone lines offered for $1,000 a month, This legislation preserves competition sumer access to information, and cause this but at a fraction of the cost. In some areas, it among broadband Internet providers without engine of potential economic growth and fu- is now possible to obtain broadband Internet involving the heavy-handed bureaucracy of the ture prosperity to sputter and fail.

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00014 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 8688 EXTENSIONS OF REMARKS May 5, 1999 CONGRATULATING FRESNO RES- fellowship at Harvard in the fall, at the world’s of humor. She will be sorely missed by clients CUE MISSION ON THEIR 50TH AN- oldest mid-career fellowship program for jour- and colleagues alike. NIVERSARY nalists. Because of this level of dedication, it is with A graduate of Syracuse University, where great pleasure that I commend Carmel HON. GEORGE RADANOVICH he earned a bachelor’s degree in journalism, Casabona for 20 years of hard work and pub- OF CALIFORNIA and American University, where he received lic service. I join with her daughter Tracy, her IN THE HOUSE OF REPRESENTATIVES his Master’s Degree in Political Science, Jerry three grandaughters, family members, and Zremski has distinguished himself in his pro- friends in thanking her for caring so much for Wednesday, May 5, 1999 fession, and I ask that this House of Rep- her clients, and in wishing her a very enjoy- Mr. RADANOVICH. Mr. Speaker, I rise resentatives join me in honoring Jerry’s able retirement. today to congratulate the Fresno Rescue Mis- achievement in earning the Nieman Fellowship f sion on occasion of its 50th anniversary, and at Harvard University. IN HONOR OF BARBARA KIRIE its plans for expansion. The mission has long f served the homeless and downtrodden of STEWART Fresno. HONORING THE RETIREMENT OF The Rescue Mission began in 1949 as a CARMEL CASABONA AFTER 20 HON. HENRY J. HYDE YEARS OF DEDICATED SERVICE non-profit religious organization to be an arm OF ILLINOIS of the churches of Fresno County. Over the IN THE HOUSE OF REPRESENTATIVES past 50 years, the mission has been open 24- HON. ROSA L. DeLAURO Wednesday, May 5, 1999 hours-a-day 365-days-a-year helping the des- OF CONNECTICUT titute of Fresno, with three meals a day, shel- IN THE HOUSE OF REPRESENTATIVES Mr. HYDE. Mr. Speaker, education is in cri- sis today in America. That is why I think it is ter, clothing, bedding, appliances and fur- Wednesday, May 5, 1999 niture, all free of charge. important to recognize an outstanding teacher. Though it began as a ‘‘men only’’ organiza- Mr. DELAURO. Mr. Speaker, tonight we cel- I rise today to recognize Barbara Kirie Stew- tion, over the years, the mission has pro- ebrate Carmel Casabona, who retired from art, daughter of a colleague and friend of gressed to helping families who are in need of Area Cooperative Educational Services mine, James C. Kirie. Mrs. Stewart teaches at emergency shelter. The mission works with (ACES) on January 22, 1999 after 20 years of Brentwood Academy in Tennessee where an the Fresno County Department of Human So- dedicated service. As a committed vocational endowed chair for history has recently been cial Services in ‘‘Rescue the Children/ education teacher with ACES’ Secondary Pro- established in her name. This honor could not Craycroft Youth’’ a collaborative effort to serv- gram and later as a Job Coach with the AC- have been bestowed on a more deserving or ice, abused, neglected and abandoned chil- CESS program, she has worked tirelessly to dedicated woman, one who truly understands dren. assist adult clients with disabilities, and en- the joy of giving—to her students, her friends There is also a year-long live-in recovery gage them in their community. It is with tre- and family, and to future generations. program for men with various dependency mendous pleasure that I rise today to salute The endowment chair lets the rest of the problems. After completion of the program, a this incredible woman, who has been a dear world know how integral Barbara is to Brent- transition home provides housing, and employ- friend to me and has contributed so much to wood Academy. Mrs. Barbara Stewart came to ment as staff members of the mission. At the the Greater New Haven area. Brentwood Academy in the fall of 1972, in home, men are encouraged to save their For more than two decades, ACES has time to see the first class graduate the fol- money so they can be reunited with their fami- been a crucial source of support and assist- lowing spring. She brought with her a B.A. de- lies, or be able to afford their own housing. ance for people with a range of disabilities. gree from Lindenwood College and the gift of Most important to the mission is its primary Many individuals have benefitted from the nur- making history come alive through her effec- purpose, to provide love, and bring the Gospel turing, caring environment, and innovative ap- tive classroom teaching style. of Jesus Christ to those who have nothing left proach that ACES offers. From employment Barbara’s work with the Youth in Govern- in this world. In front of the mission building opportunities to residential skills, this institution ment program and as the founding sponsor of hangs a sign which reads, ‘‘If you don’t have is an invaluable resource for the disabled. the R.O. Beauchamp chapter of the National a friend in the world, you will find one here.’’ Carmel certainly reflects these goals. Honor Society are just some of the many com- Mr. Speaker, I rise today to congratulate the Carm’s long career with ACES is character- munity enrichment activities with which she Fresno Rescue Mission on the occasion of its ized by a lifetime of dedication to her adult cli- has involved herself. Barbara’s devotion to 50th anniversary. The services provided are a ents. Although supervising 28–30 clients, students and education has taken her through boon to the community, and a blessing to Carm carefully assessed each person’s abili- 25 years as the History Department Chair at those in most need. I urge all of my col- ties, and chose the appropriate work experi- Brentwood Academy. Along the way, she also leagues to join me in wishing the Fresno Res- ence. By focusing on each individual’s specific earned an M.A.T. from Vanderbilt. Those who cue Mission many years of continued success. needs, she has helped her clients reach their have known Barbara in the classroom have f full potential, while providing positive reinforce- discovered qualities that cannot be captured: ment. She also offered each participant in- an enthusiasm that stamps her presence into TRIBUTE TO JERRY ZREMSKI creased independence, encouragement and their memories forever. dignity. Mrs. Barbara Stewart’s former students say HON. THOMAS M. REYNOLDS Aside from her daily work responsibilities, it best: OF NEW YORK Carm offered her personal time in organizing I became a teacher because of your inspira- tion. Thank you for all you did for me as a IN THE HOUSE OF REPRESENTATIVES the annual Christmas party for her program participants, their families and friends. This student and all you have inspired me to do as Wednesday, May 5, 1999 event was eagerly anticipated every year as a a teacher. Mr. REYNOLDS. Mr. Speaker, I rise today time to come together to enjoy the holidays. I can still hear your voice and recall the enjoyment of learning history from you. to honor the achievements of one of Capitol When called upon by Carm to assist with party You taught me to always ask why, not just Hill’s most hard-working and talented report- plans, volunteers could not refuse. Carm, who and when. That has made all the dif- ers. through her volunteer crew, prepared all the ference. As a member of the Washington Bureau of food, provided music and hung decorations, all Yours is the one class from my high school The Buffalo News, Jerry Zremski’s Wash- of which were done with tremendous energy days that continues to capture my imagina- ington dispatches are an important and invalu- and care. tion and still sends me to the bookshelves able source of information for my constituents On a personal level, I have witnessed scrambling for more information. Carm’s interaction with her clients. It is easy to No teacher in high school or college taught on the activities of this Congress. me as much as you. No teacher taught me Jerry was recently named a Nieman Fellow notice her genuine affection for them, as well how to learn as well as you. And no teacher at Harvard University, a prestigious honor af- as their fondness for her. She always ap- was ever as hard as you either! forded to only 12 journalists throughout the proached her work with a compassionate Every once in a while there is a teacher United States of America. Jerry will begin his heart, a cheerful smile, and a wonderful sense who, with contagious enthusiasm, is able to

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00015 Fmt 0689 Sfmt 0634 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8689 impart knowledge and show genuine interest CONGRATULATING THE RAPE Over 600 blind and virtually handicapped lis- in her students, thus earning their affection COUNSELING SERVICE OF FRES- teners are informed of local events, news, and respect in return. Thank you for being NO ON THEIR 25TH ANNIVER- sales, and a variety of other information only one of those rare teachers. SARY by volunteers. The longer I live, the more I realize that Oftentimes, we take the gift of sight for your hard work, dedication, and selfless serv- granted. With the convenience of being able to ice has enriched my life in countless ways. HON. GEORGE RADANOVICH OF CALIFORNIA watch the television or read the newspaper to Mr. Speaker, the Barbara Kirie Stewart En- IN THE HOUSE OF REPRESENTATIVES learn about the world around us, we have little dowed Chair for History preserves the legacy reason to think about the world around us in of academic achievement lived out at Brent- Wednesday, May 5, 1999 any other way. However, for the blind, the wood Academy through Mrs. Barbara Stew- Mr. RADANOVICH. Mr. Speaker, I rise world of television and radio is not an option. art—an exemplary citizen whose excellence in today to congratulate the Rape Counseling For the blind residents of the Mid-Hudson, teaching is unsurpassed. Service of Fresno, Inc. (RCS), on occasion of turning on the radio provides an equal alter- its 25th anniversary. native to the paper and the TV. f Rape Counseling Service is a victim advo- Over the past 19 years over 105 dedicated cacy agency. Its mission is to alleviate the volunteers have kept Radio Vision running for TRIBUTE TO UNITED BROTHER- trauma due to sexual assault and/or child mo- the more than 600 who have no other option. HOOD OF CARPENTERS AND lestation, to educate the public and to raise These people have given their time, their JOINERS OF AMERICA, LOCAL the level of awareness regarding rape and hearts, and their voices to those in need. Mr. UNION NO. 433 child abuse prevention. Speaker, I am pleased to have been given the RCS made its start with a small core of vol- opportunity to speak about the commendable unteers meeting in a dorm room at California deeds of those at Radio Vision and I invite all HON. JERRY F. COSTELLO State University Fresno. It now has a staff of of my colleagues to join in praising their de- OF ILLINOIS 33 members, and 52 volunteers who aid in cri- voted work in serving the blind. IN THE HOUSE OF REPRESENTATIVES sis intervention, prevention education, a 24- f hour hot-line, hospital and court advocacy and Wednesday, May 5, 1999 individual counseling. JOHN WESLEY A.M.E. ZION For the past seven years, RCS has been CHURCH ‘‘THE NATIONAL Mr. COSTELLO. Mr. Speaker, I rise today to CHURCH OF ZION METHODISM’’ pay tribute to the United Brotherhood of Car- ranked the number one rape crisis center in the state of California by the Office of Criminal CELEBRATES 150TH ANNIVER- penters and Joiners of America, Local Union SARY Number 433. Local 433 is celebrating their Justice Planning, and for the past six years, 110th anniversary. has been the number one funded agency by Fresno County. The U.S. Department of Jus- HON. ELEANOR HOLMES NORTON On May 11, 1889, 12 carpenters were tice has named the RCS Sexual Assault Re- OF DISTRICT OF COLUMBIA granted a charter by the United Brotherhood, sponse Team (SART) as one of only two pro- IN THE HOUSE OF REPRESENTATIVES forming Local 433. This small group of 12 has grams in the state to be listed in Promising Wednesday, May 5, 1999 grown significantly in membership, to its Practices, a report to improve the criminal jus- present total of 435 members. tice system’s response to violence against Ms. NORTON. Mr. Speaker, I rise today to The impact of Local 433 is highly visible in women. ask my colleagues to join me in saluting the the Belleville community, as Local 433 has Over the years RCS has established a John Wesley A.M.E. Zion Church, ‘‘The Na- been instrumental in the construction of Belle- strong working relationship with the Fresno tional Church of Zion Methodism,’’ on the oc- ville Area College, the St. Clair County Court- Police Department, the Fresno County Sher- casion of their 150th Anniversary. house, and Scott Air Force Base, among oth- iff’s Office and the District Attorney’s office. It Mr. Speaker, the John Wesley A.M.E. Zion ers. Local 433 is currently working on the ex- also interacts with other community-based or- Church was established in the nation’s capital pansion of the MetroLink light rail system. ganizations: Sanctuary, House of Hope, during a period when free black Americans From its inception to today, the men and Human Services Coalition, Fresno County began and expanded a major effort for self-ex- women of Local 433 have made invaluable Child Abuse Prevention Council, The Fresno pression, self-esteem, and freedom. Free contributions to the community, through their Policy Academy and Comprehensive Youth blacks established their own churches after contributions to charity and civic events. One Services. they became dissatisfied with their treatment of Local 433’s greatest achievements is its ap- Mr. Speaker, I rise today to congratulate the in white-controlled churches, treatment which prenticeship program. This four year program Rape Counseling Service of Fresno on the oc- included their segregation in religious services gives young carpenters the chance to learn casion of its 25th anniversary. The services and disqualification from holding church offices from the community’s established carpenters. provided are invaluable to the well-being of and preaching. Founders of John Wesley ex- There are currently 44 apprentices in this pro- the community and victims of assault. I urge perienced this treatment, and were led to gram, which was established over thirty years all of my colleagues to join me in wishing RCS leave churches that were discriminating ago. many years of continued success. against them. f Led by John Brent and John Ingham, a Mr. Speaker, I ask my colleagues to join me group called the ‘‘Little Society of Nine’’ with- in congratulating Local Union Number 433 as THE VOLUNTEERS OF RADIO VI- drew from Asbury Methodist Episcopal Church they celebrate their 110th anniversary. SION: 19 YEARS OF DEDICATED which was under the ministry of white leaders. SERVICE They met in the home of John Brent at 1800 f L Street, NW and formulated plans, which cul- PERSONAL EXPLANATION HON. BENJAMIN A. GILMAN minated in the Organization of John Wesley OF NEW YORK Church in 1849. At that time, John Wesley IN THE HOUSE OF REPRESENTATIVES was a dependent church which selected its HON. MARK GREEN own locations and ministers. One member of Wednesday, May 5, 1999 the group, Martha Pennington, organized a OF WISCONSIN Mr. GILMAN. Mr. Speaker, it is my pleasure ‘‘Woman’s Aid Society,’’ and raised $300.00— IN THE HOUSE OF REPRESENTATIVES to rise today to pay tribute to the volunteers of the greater part of the down payment of Wednesday, May 5, 1999 Radio Vision of Orange County, New York for $349.00 required to purchase the church site their 19 years of dedicated service. Radio Vi- at 1120 Connecticut Avenue NW. It took two Mr. GREEN of Wisconsin. Mr. Speaker, I sion Volunteer Day this year is Saturday, May years to build the church. The congregation, was unavoidably detained this morning, and 15th. Radio Vision is a closed circuit service led by Rev. Abraham Cole, the first minister, missed roll call vote #108. Had I been present for the blind and sight impaired of the Mid- moved into the new church in 1851. In that I would have voted ‘‘Aye.’’ Hudson region of southeastern New York. same year, the Board of Trustees and the

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00016 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 8690 EXTENSIONS OF REMARKS May 5, 1999 Board of Stewards were created. The church ber of the Interfaith Council and Downtown THE CENTER FOR CIVIC EDU- established a relationship with the A.M.E. Zion Cluster of Churches. Outreach programs at CATION AND THE ‘‘WE THE PEO- Church, and was legally confirmed in 1904. John Wesley include workshops on domestic PLE: THE CITIZEN AND THE CON- Mr. Speaker, founders and early members violence, care for the senior citizens, feeding STITUTION’’ PROGRAM of John Wesley, like those of many other the homeless, and awarding scholarships to black churches, were attracted by the doctrine high school seniors and college students. HON. DALE E. KILDEE of Methodism. This doctrine, expressed Mr. Speaker, I salute the pastor, The Rev- OF MICHIGAN strongly in the sermons of John Wesley and in erend Vernon A. Shannon, the officers and IN THE HOUSE OF REPRESENTATIVES the hymns of his brother, Charles, proclaimed members of the John Wesley A.M.E. Zion Wednesday, May 5, 1999 that no one was too poor, too humble, or too Church, ‘‘The National Church of Zion Meth- Mr. KILDEE. Mr. Speaker, I want to bring an degraded to share in the privilege of divine odism’’—a Washington monument beyond the editorial in today’s Washington Post about the grace, have a personal intimacy with God, and monuments. have assurance of eternal life. Pioneering recent Center for Civic Education National Competition to the attention of Members. For black Methodists in New York City, led by f James Varick, paved the way for the creation 12 years, the Center for Civic Education has of the African Methodist Episcopal Zion HILLSBORO HIGH SCHOOL TEAM developed and promoted its ‘‘We the People: Church. From the founders of this church, the COMPETES IN NATIONAL FINALS The Citizen and the Constitution’’ program to organizers and leaders of John Wesley OF WE THE PEOPLE . . . THE increase student understanding and knowl- Church in Washington, D.C. were destined to CITIZEN AND THE CONSTITUTION edge of the Constitution and this document’s draw their inspiration and guidance. Since PROGRAM impact on today’s society. Over this period, 1851, the leadership of the church has been the program has provided instruction to 26.5 vested in forty ministers. million students, distributed more than 89,000 Mr. Speaker, from 1855 to 1866, John Wes- HON. BOB CLEMENT sets of free textbooks, and trained more than ley Church was an important community facil- OF TENNESSEE 82,000 teachers in 24,000 elementary and secondary schools across the country. In light ity for black education during a time when IN THE HOUSE OF REPRESENTATIVES public schools in Washington were not avail- of the tragic recent events surrounding our able to blacks. The church, with the support of Wednesday, May 5, 1999 Nation’s schools, this editorial shows the posi- tive impact that this program is having on our philanthropic groups, provided substantial ele- Mr. CLEMENT. Mr. Speaker, I rise today to Nation’s students and their sense and under- mentary education under instruction from recognize my alma mater, Hillsboro High standing of citizenship and its responsibilities. black and white teachers. School, for their participation in the We the The early growth of the church was stimu- People—The Citizen and the Constitution pro- [From The Washington Post] lated by a remarkable group of able ministers. gram. On May 1–3, 1999 more than 1200 stu- A CLASS ACTION Five of them had been elected bishops of the dents from across the United States will be in (By David S. Broder) A.M.E. Zion Church by 1904. Very substantial Washington, D.C. to compete in the national The topic was the constitutional guarantee growth was indicated as early as 1884, when finals of the We the People—The Citizen and of freedom of association, and the questions the church expanded its edifice by adding a the Constitution program. I am proud to an- from the Kentucky college teacher, the Vir- second story. The architectural expansion was ginia judge and the Charleston, S.C., lawyer nounce that the class from Hillsboro High made under the supervision of Calvin Brent, came thick and fast. School from Nashville will represent the state the son of founding member John Brent who ‘‘Given the volatile nature of the atmos- of Tennessee in this national event. These was one of Washington’s first black architects. phere in Colorado following the Columbine For a dozen years before its move to its young scholars have worked diligently to High School tragedy, do you think the Den- ver City Council would have been justified in present location in 1914, John Wesley Church reach the national finals and through their ex- perience have gained a deep knowledge and saying, ‘We do not want the NRA [National was located at 1121 18th Street, NW. The re- Rifle Association] meeting here this week- location to 14th Street provided a beautiful, understanding of the fundamental principles and values of our constitutional democracy. end?’ ’’ ‘‘Could it have restricted the number large edifice that many persons felt was an of people at the meeting?’’ ‘‘Could it have appropriate place to have a national church of The We the People—The Citizen and the asked for the names of those attending?’’ Zion Methodism, just as other denominations Constitution program is the most extensive The five Hempfield High School students had a national church in the nation’s capital. educational program in the country developed from Landisville, Pa., facing them were not rattled. One by one, they made their points At the General Conference of the A.M.E. Zion specifically to educate young people about the Constitution and the Bill of Rights. The three- in quick, incisive fashion, referring twice to Church, held at John Wesley in 1940, John the controlling Supreme Court cases: Bar- Wesley was officially designated the National day national competition is modeled after ring the convention would have been justi- Church of Zion Methodism. hearings in the United States Congress. fied only if there were a real threat of retal- During the twentieth century, the history of These hearings consist of oral presentations iatory violence. Limiting its size was not John Wesley Church has been characterized by high school students before a panel of sensible—‘‘It should be all or nothing.’’ Ask- by increasing concern for the social welfare adult judges. The students testify as constitu- ing for names could not be justified by any and the general quality of life of its members. tional experts before a ‘‘congressional com- compelling state interest. The discussion moved to the issue of The church has shown this concern while mittee,’’ that is, the panel of judges rep- resenting various regions of the country and a youths wearing symbols or clothing that maintaining a strong interest in the spiritual others in school might find intimidating— well-being of its members and others. The variety of appropriate professional fields. The and once again, the students spoke calmly ministerial and lay leadership of the church student testimony is followed by a period of and clearly about the issues that have agi- has been in the vanguard of the civil rights questioning during which the judges probe stu- tated the country since the Littleton mas- movement and the general effort to make dents for their depth of understanding and sacre. Washington and the nation a better place in ability to apply their constitutional knowledge. On Sunday, the second day of the annual national competition sponsored by the Cen- which to live. Two former pastors, The Right Administered by the Center for Civic Edu- ter for Civic Education, a downtown Wash- Reverend Stephen Gills Spottswood and Dr. cation, the We the People . . . program has ington hotel was the place to have your faith E. Franklin Jackson, national civil rights lead- provided curricular materials at upper elemen- in the younger generation restored. ers, were instrumental in the desegregation of tary, middle and high school levels for more For 12 years, the center, funded by a $5.5 public accommodations in Washington, D.C. than 26.5 million students nationwide. Mem- million annual grant from the Department of The church has held sustained leadership bers of Congress and their staff enhance the Education and six times that much in state, roles in the NAACP, assisted in the coordina- program by discussing current constitutional local and private support, has promoted se- tion of the 1963 March on Washington, hosted issues with students and teachers and by par- mester-long curriculum called ‘‘We the Peo- ple. The Citizen and the Constitution,’’ and President Bush in 1989, and will be hosting ticipating in other educational activities. I wish trained thousands of teachers to use it in the cultural program for the National Trust for the student team from Hillsboro High School classrooms across the country. Historic Preservation’s National Conference the best of luck at We the People—national Each class is invited to compete at the later this year. John Wesley Church is a mem- finals. congressional district and state level, and

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00017 Fmt 0689 Sfmt 0634 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8691 last weekend about 1,250 students from all 50 ary and dedicated public servants, Mr. John CELEBRATING THE 75TH ANNIVER- states and the District of Columbia gathered Peter, who will be retiring next month as SARY OF THE SANTA BARBARA for the national finals. The format is a simu- CARRILLO COMMUNITY RECRE- lated congressional hearing on an issue re- President and CEO of KidsPeace. ATION CENTER AND THE GRAND quiring application of constitutional prin- As many of you know, KidsPeace is a 115- OPENING OF THE SENIOR INFOR- ciples. Each team has four minutes to year old, not-for-profit organization which MATION AND REFERRAL SERV- present its prepared position and then must helps young people face personal crisis and answer unscripted questions from a trio of ICE contest judges for another six. prepare for life’s daily challenges. When John ‘‘The whole class comes to Washington,’’ first started working at KidsPeace in 1974, the Chuck Quigley, the program director, ex- organization provided a refuge for about 40 HON. LOIS CAPPS plained. ‘‘This is not like a debate meet, troubled kids in northeastern Pennsylvania. OF CALIFORNIA where the best and brightest represent the IN THE HOUSE OF REPRESENTATIVES school. Each class divides into six teams— But John had a greater vision for the organi- one for each unit of the course—and each zation than that. He realized that children ev- Wednesday, May 5, 1999 team ‘testifies’ once in each round. You erywhere were coming under increasing pres- Mrs. CAPPS. Mr. Speaker, I rise to cele- can’t have cliques or factions. Everyone has sure from broken homes, violence, drugs and brate Older American’s Month and to bring to to cooperate for the school to do well.’’ In a 1994 evaluation of the program, Stan- other troubling influences in society. He knew the attention of my colleagues the 75th Anni- ford political scientist Richard Brody found that in order to truly help the children it was versary of the Carrillo Community Recreation it particularly successful in promoting toler- serving, KidsPeace had to find a way to get to Center of Santa Barbara, California. ance of dissenting views and active partici- them before trouble set in, and provide a The City of Santa Barbara has long placed pation in the political system. Carly Celmer, structure to help them cope with the added a high priority on providing a safe place for a member of the team representing Florida, senior citizens to engage in health education said, ‘‘It teaches you that people can make burdens in their lives. and recreations pursuits. It is due to this com- mistakes, but our structure of government is Utilizing his skills as a businessman and so- mitment that the Senior Information and Refer- really sound.’’ cial worker, and inspired by his training in the- Elaine Savukas, who teaches the Pennsyl- ral Service has been established. This project ology, John set out to expand the KidsPeace vania students I watched, said her husband, represents a strong partnership between the the principal of Hempfield High—‘‘a school mission nationwide. The results have been City of Santa Barbara Parks and Recreation of exactly the same size as Columbine in the spectacular. Under John’s leadership, Department, the American Association of Re- same kind of suburban community’’—values KidsPeace has grown from a single facility in tired Persons, the Area Agency on Aging and the course because ‘‘it shows kids there are Pennsylvania to the nation’s leading organiza- the Retired Senior Volunteer program. Now ways to work through disagreements other tion helping kids overcome crisis. than violence.’’ seniors in Santa Barbara will have a ‘‘seam- Mary Catherine Bradshaw, the teacher of KidsPeace now helps more than 2,000 chil- less’’ referral system where their questions will the Hillsboro High School entry from Nash- dren a day at 25 centers across the country, be answered and their needs met. ville, Tenn., said ‘‘Taunting is pervasive in and serves millions more each year through I am also proud to tell my colleagues that every high school.’’ But her class, on its own public education and outreach programs. Hun- this year represents the 17th Anniversary of initiative, came up with a checklist of ac- tions federal, state and local authorities dreds of business leaders, doctors, enter- the 90+ Club which celebrates all citizens in might take to prevent another Littleton. tainers, athletes and civic figures donate their Santa Barbara who are 90 years of age and And then one student said, ‘‘There is some- time and support to the KidsPeace mission. older. This Club has been sponsored by the City Parks and Recreation Department, the thing we can do as individuals.’’ And the At a time of increasing violence and turmoil class began circulating a pledge that ‘‘as Valle Verde Retirement Community and the in our society, children across the country part of the community . . . I will eliminate Southern California Gas Company. I commend know they can turn to KidsPeace for help in taunting from my own behavior. I will en- these fine organizations for their contributions courage others to do the same . . . and if facing tough situations at home, problems with to seniors and our community. others won’t become part of the solution, I friends or in school, or for guidance in becom- Mr. Speaker, I am honored to join the City will.’’ ing stronger, wiser and healthier kids. They put the pledge on their Web site and of Santa Barbara and the senior citizens now are hearing that it’s been adopted at I have had the privilege of working closely whom I represent on the Central Coast in high schools all over the United States. with John and the KidsPeace organization celebration of Older American’s Month. I wish The competition—and the underlying over the years through the Childrens’ Working the Carrillo Community Recreation Center course—have attracted celebrity backers. many more years of success and prosperity. Henry Hyde has coached classes in his dis- Group, which I founded to help give voice to trict; Hillary Clinton, Kenneth Starr and America’s kids. We hosted two major press f conferences at which KidsPeace released the several Supreme Court justices met with PERSONAL EXPLANATION schools in this year’s competition. results of its national surveys of American Anthony Corrado, a distinguished political teenagers and pre-teens. scientist at Colby College in Maine, has HON. MARK UDALL judged the contest for eight years and has We also joined together to unveil the latest OF COLORADO helped train teachers at summer institutes KidsPeace initiative: a Web site for young IN THE HOUSE OF REPRESENTATIVES on using the curriculum. He takes the time, people called TeenCentral.net. I am pleased he told me, because ‘‘the best antidote to to note that since its inception, this site has re- Wednesday, May 5, 1999 cynicism is understanding the basic prin- ceived more than a million visits by kids, and ciples of our system of government and being Mr. UDALL of Colorado. Mr. Speaker, I was challenged to apply them to today’s prob- has been named one of the top Web sites in unable to be present for rollcall vote 94 ‘‘On lems.’’ the country. Agreeing to the Conference Report on the This is a course most of us adults could Mr. Speaker, Helen Keller once observed Education Flexibility Partnership Act.’’ use. Had I been present, I would have voted (The phone numbers of the Center for Civic that optimism is the faith that leads to achieve- Education are 818–591–9321 or 202–861–8800.) ment. In my view, John Peter is the ultimate ‘‘aye’’ on rollcall vote 94. optimist. He believes that every child in Amer- f f ica deserves a chance to reach his full poten- IN HONOR OF CHILDCARE IN HONOR OF JOHN PETER, RETIR- tial, and that no child should be left behind. He PROVIDER APPRECIATION DAY ING PRESIDENT OF KIDSPEACE has dedicated his life to this cause and our nation has benefited greatly from his efforts. HON. TIM ROEMER HON. RODNEY P. FRELINGHUYSEN I congratulate John on his many accom- OF NEW JERSEY OF INDIANA plishments with KidsPeace and the out- IN THE HOUSE OF REPRESENTATIVES IN THE HOUSE OF REPRESENTATIVES standing work he has done to help children Wednesday, May 5, 1999 and families overcome crisis. He may be retir- Wednesday, May 5, 1999 Mr. ROEMER. Mr. Speaker, I rise today to ing from KidsPeace, but his contributions will Mr. FRELINGHUYSEN. Mr. Speaker, I rise pay tribute to one of our nation’s most vision- endure for decades to come. today to honor the Nation’s childcare providers

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00018 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 8692 EXTENSIONS OF REMARKS May 5, 1999 as nationwide, childcare centers have joined cial Security Administration office in Somerset. possibility of recovery from the unemployed together to declare Friday, May 7, 1999 to be During this 25 years of dedicated service to homeowner. Although the homeowner has lost Provider Appreciation Day. the agency he has earned the admiration of a home, as well as all equity investment, the It is estimated that of the 21 million children his coworkers and the gratitude of thousands income tax laws require that unemployed under the age of six in America, 13 million are of his neighbors for his effectiveness. His ca- former homeowner pay taxes on the amount in childcare, at least part time. An additional reer with the Social Security Administration is of the mortgage forgiven by the lender. The 24 million school age children are in some an inspiration to all Americans and is a ster- tax laws treat this forgiven amount as if it had form of childcare outside of school time. ling example of what public service is all been paid to the former homeowner by the By calling attention to the importance of about. Mr. Dalton’s career has been built lender. So, even though the former home- high quality child care services for all children around a single idea: that reaching out and owner does not have money to maintain or and families, the Nation’s child care providers helping one’s neighbors is still a noble under- pay off the mortgage, the tax laws require this hope to improve the quality and availability of taking. unfortunate person to pay tax on the forgiven such services. In the Pulaski, Wayne and Clinton County amount. This day of recognition has been celebrated area, thousands of citizens can testify to the This outcome is patently unfair, particularly annually, since 1996, on the Friday before fair and efficient service they receive from Mr. when we consider that the income tax laws Mother’s Day. The idea was spearheaded by Dalton and the staff of the Somerset Social allow better-situated homeowners to exclude a group of volunteers from my home state of Security Office. This compassion for neigh- up to $250,000 ($500,000 for married couple New Jersey because they saw the need for a bors, combined with his dedicated and effec- filing jointly) of gain on the sale of a home. It day of recognition and appreciation for tive leadership, have built a solid reputation for seems ironic that under current income tax childcare providers. It takes a special person the office that is well known across Kentucky laws, the only two classes of homesellers re- to work in this field and their contribution to and the entire agency. maining in the tax system are: Taxpayers with the quality of family life frequently goes unno- Born in nearby Monticello, KY, Walter D. capital gains in excess of $250,000/$500,000; ticed. ‘‘Dee’’ Dalton earned a bachelor’s degree in and Taxpayers whose home values have de- One such place, where many special people business from Campbellsville College in Taylor clined below the outstanding mortgage. have helped improve the lives of children and County, KY. The majority of his career has The ‘‘Mortgage Cancellation Relief Act of parents in my district is ‘‘Children on the been in service to the Somerset office of the 1999’’ rectifies this injustice by exempting tax- Green’’ in Morristown, New Jersey. Children Social Security Administration. More than payers from including in ordinary income any on the Green is a special place. It is a center 19,000 of the citizens I represent rely upon mortgage amount forgiven by a lender, pro- that provides quality, developmentally appro- Mr. Dalton and his fine staff of 14 for the time- vided the proceeds of the home sale are insuf- priate childcare and early education to families ly administration of their Social Security bene- ficient to satisfy the qualified outstanding mort- living or working in the Morristown community. fits. More than 6,300 Kentuckians who rely on gage. This legislation introduces fairness in At the same time, this center offers some of Supplemental Security Income (SSI) also de- the taxation of a home sale, extending equity its slots to children from area shelters. Chil- pend upon the hard work of the employees of to those (former) homeowners most in need of dren from the Morris Shelter, Jersey Battered the Somerset Social Security office. This fine tax relief. Women’s Services, and the lnterfaith Council tradition of neighbor helping neighbor is why I f for Homeless Families of Morris County are in believe Mr. Dalton is a fine example of the attendance each day. This type of child care Federal employee we recognize during Na- HONORING THE CONTRIBUTION OF provides some stability to these children while tional Public Service Recognition Week. WIC PROGRAMS offering their parents time to pursue opportuni- Countless citizens join me in saluting Walter ties that would help them to improve their liv- D. ‘‘Dee’’ Dalton. We all share the pride of his HON. CAROLYN MCCARTHY ing situations. wife, Clorenda, and their two children, 17- OF NEW YORK Mr. Speaker, I ask you and my colleagues year-old Rachel and 9-year-old Chip. I join his IN THE HOUSE OF REPRESENTATIVES to join me in honoring the dedicated child care family, friends, coworkers, and neighbors in Wednesday, May 5, 1999 providers at Children on the Green in Morris- saluting him for his career of public service. town, and the child care providers all over We thank him for his dedication, his hard Mrs. MCCARTHY of New York. Mr. Speak- New Jersey and across our nation who each work, and his commitment to make our region er, I rise today in honor of WIC’s 25th Anniver- day give a little bit of themselves to help a of Kentucky a better place to live. sary and to commend WIC for their years of child learn, make friends and feel safe and se- f sterling health and nutrition service to the na- cure. tion’s low-income women, infants and children. MORTGAGE CANCELLATION f In the last 25 years, WIC has dramatically RELIEF ACT OF 1999 improved the nutrition and health of millions of SALUTE TO WALTER D. ‘‘DEE’’ Americans. WIC provides quality education DALTON IN COMMEMORATION OF HON. ROBERT E. ANDREWS and services to over 7.4 million pregnant HIS 25 YEARS OF FEDERAL OF NEW JERSEY women, new mothers, infants and preschool SERVICE IN THE HOUSE OF REPRESENTATIVES children through 10,000 clinics nationwide. It serves as a short-term intervention program HON. HAROLD ROGERS Wednesday, May 5, 1999 designed to influence lifetime nutrition and OF KENTUCKY Mr. ANDREWS Mr. Speaker, economic con- health behaviors in a targeted, high-risk popu- IN THE HOUSE OF REPRESENTATIVES ditions in my district have resulted in de- lation. WIC provides quality education and creased home values, and in many situations, services to over 7.4 million pregnant women, Wednesday, May 5, 1999 homeowners find that the value of their home new mothers, infants and preschool children Mr. ROGERS. Mr. Speaker, we in the is less than their outstanding mortgage. Gen- through 10,000 clinics nationwide. House of Representatives are in the midst of erally homeowners who are forced to sell their As a nurse, I understand the importance of celebrating the 15th annual Public Service home for less than the amount of the out- preventative care. Whether we are talking Recognition Week sponsored by the Public standing mortgage must find additional funds about health care, education or crime, serv- Employees Roundtable. This week—in cere- to pay off the lender for the mortgage shortfall. ices that focus on preventative care save monies on the National Mall here in Wash- However, in some situations, the lender might money in the long run. That is why the WIC ington and in communities all across Amer- forgive the shortfall as an accommodation to program is so important—it just makes sense. ica—we pay tribute to the inspiring work of the homeowner. Studies have shown that pregnant women countless public servants who give of them- For example, a homeowner who has be- who participate in WIC have longer preg- selves to make this Nation a better place. I am come unemployed might be forced to sell be- nancies leading to fewer premature births, proud to recognize one such pubic servant cause there is no income to make the mort- have fewer low and very low birth weight ba- today. gage payments. If the proceeds are insuffi- bies, experience fewer fetal and infant deaths, Mr. Walter D. ‘‘Dee’’ Dalton of Somerset, cient to pay off the mortgage, the lender might and seek prenatal care earlier in pregnancy. KY, is currently the District Manager of the So- forgive the shortfall—particularly if there is no WIC helps to assure normal childhood growth,

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00019 Fmt 0689 Sfmt 9920 E:\BR99\E05MY9.000 E05MY9 May 5, 1999 EXTENSIONS OF REMARKS 8693 reduces early childhood anemia, increases im- ronment. May you new co-workers and clients rying on this tradition are two Alabama song- munization rates, improves access to pediatric value you as much as we do. Thank you for writers named Eddie Martin and Susan health care, and readies children to learn. your many years of service, and may God Welborn. The two Shoals-area artists have Every dollar spent on pregnant women in bless you in your future endeavors. collaborated on a song called ‘‘Listen for the WIC produces $1.92 to $4.21 in Medicaid sav- f Wings.’’ The song was written as a gift of ings for newborns and their mothers. Consider hope for the people of Littleton as they work the following: it costs $22,000 per pound to A TRIBUTE TO AMERICAN NURSES to rebuild their community and restore order to raise a low (less than 5.5 pounds) or very law DURING NATIONAL NURSES WEEK their lives. (less than 3.25 pounds) birth weight infant to Mr. Speaker, I would like to enter into the normal weight. It costs $40 per pound to pro- HON. WILLIAM O. LIPINSKI CONGRESSIONAL RECORD the lyrics to the song vide WIC prenatal benefits. Furthermore, Med- OF ILLINOIS ‘‘Listen for the Wings’’ so that others might icaid costs were reduced on average $12,000 IN THE HOUSE OF REPRESENTATIVES have the opportunity to read these words and to $15,000 per infant for every very low birth take solace in the song’s message. Wednesday, May 5, 1999 weight birth prevented. LISTEN FOR THE WINGS These statistics illustrate that WIC works. By Mr. LIPINSKI. Mr. Speaker, I would like to (By Eddie Martin and Susan Welborn) providing short-term preventative services, pay tribute to a remarkable group of dedicated Just a Tuesday morning WIC improves the health and quality of life for health professional—the 2.6 million registered At a school in the heartland millions of low-income women and children nurses in the United States. ‘Til they walked in with bombs while at the same time saving the federal gov- These outstanding men and women, who And guns in their hands ernment money. We need to ensure that WIC work hard to save lives and maintain the It was all too familiar continues to provide these important serv- health of millions of individuals, will celebrate Another horrible mistake ices—I know that I will continue to fight for National Nurses Week, May 6–12, 1999. I be- To see their future funding for this important program. lieve that all Americans who have ever been Explode in such rage Again, I want to congratulate WIC on their cared for or comforted by a nurse should cele- We need some help to understand 25th anniversary and I urge them to keep up brate National Nurses Week. And lead us back to truth again the good work. According to the American Nurses Associa- Do you believe in angels? tion, National Nurse Week was first observed Well, I do f I’m praying that the angels October 11–16, 1954, the 100th Anniversary HONORING THE DISTINGUISHED Wrap their arms around you of the founding of modern nursing by Florence CAREER OF KREDA FRIERSON If you could just believe in angels Nightingale during the Crimean War. National YOKLEY Like I do Nurses Day and Week was eventually moved Then you’d know there’s always hope for you to May to incorporate Florence Nightingale’s No matter what life may bring HON. BART GORDON birthday, which is May 12th. Take time to listen for the wings OF TENNESSEE Using this year’s theme ‘‘Nursing: Healing If Moses needed angels IN THE HOUSE OF REPRESENTATIVES from the Heart,’’ the American Nurses Asso- What about you and me? Wednesday, May 5, 1999 ciation (ANA) and its 53 constituent associa- In the middle of the violence tions will highlight the diverse ways in which And the crazy lives we lead Mr. GORDON. Mr. Speaker, I rise today to Gotta bring some love back recognize the tremendous contributions Kreda registered nurses, the largest health care pro- Gotta have a little faith Frierson Yokley has made to the Sixth Con- fession, are working to improve health care. Find some forgiveness gressional District and to her community on Studies show that the higher the ratio of ’Cause it’s the only way this her last day as my field representative. nurse-to-patients in a hospital, the lower the So many times we pass right by Since November 1995, Kreda has worked in patient death rate. In short, registered nurses The simple answers to our whys my Murfreesboro District office. Although my provide top-quality, cost-effective health care Do you believe in angels staff and I are sad to see her go, it is com- services for their patients. Well, I do forting to know that she will continue her ca- Mr. Speaker, I salute America’s nurses dur- I’m praying that the angels reer in public service as a director for the Mid- ing the week of May 6–12, 1999 and encour- Wrap their arms around you Cumberland Community Action Agency. age my colleagues to do the same. If you could just believe in angels Like I do For the past 131⁄2 years, Kreda has helped f Then you’d know there’s always those who served our country. Veterans from THE STATE OF ALABAMA OFFERS Hope for you across the Sixth District relied on her to help No matter what life may bring get their medals and serve as a liaison in their A ‘‘GIFT OF HOPE’’ FOR THE PEOPLE OF COLORADO IN THE Take time to listen for the wings efforts to receive compensation and medical When everything goes wrong assistance from the Veterans Administration. WAKE OF THE LITTLETON SHOOTINGS Seems all hope is gone She has helped not only those who served, Remember, you’re not alone but those just starting a career with the Armed We’re all gonna feel some pain Forces. Kreda has been instrumental in secur- HON. ROBERT E. (BUD) CRAMER, JR. And walk through the wind and rain ing the appointments of scores of young men OF ALABAMA But no matter what life may bring and women in the Sixth District to the acad- IN THE HOUSE OF REPRESENTATIVES Take time, and listen for the wings emies at West Point, Annapolis and Colorado Wednesday, May 5, 1999 f Springs. Traveling to Williamson and Marshall coun- Mr. CRAMER. Mr. Speaker, I rise today to SENATE COMMITTEE MEETINGS ties, Kreda reached out to constituents offer my deepest sympathies to the people of Title IV of Senate Resolution 4, through my Mobile Congressional Office. I al- Littleton, Colorado, in the wake of the shoot- agreed to by the Senate on February 4, ways get my best ideas from home and Kreda ings at Columbine High School that left 15 1977, calls for establishment of a sys- served as a constant conduit for peoples’ people dead. tem for a computerized schedule of all ideas and concerns. This tragedy stands as the worst case of meetings and hearings of Senate com- My staff and I will miss Kreda. Constituents, school violence in the history of the United mittees, subcommittees, joint commit- friends, family and staff describe her as pro- States. The people of Alabama share in the tees, and committees of conference. fessional, a class act and dependable. Most of grief of all of those in Colorado who were This title requires all such committees all, she always seems to have the knack for touched by this horrific event. Our hope and to notify the Office of the Senate Daily saying just the right thing, whether to calm a prayers are with them. Digest—designated by the Rules com- frustrated or hunting constituent or to encour- Over the course of Alabama’s history, our mittee—of the time, place, and purpose age a friend or co-worker. state has developed a rich tradition of music of the meetings, when scheduled, and Kreda, congratulations on your new job. and songwriting that have helped people cope any cancellations or changes in the May you prosper and thrive in your new envi- during times of great loss and sadness. Car- meetings as they occur.

VerDate Aug 04 2004 13:43 Oct 02, 2004 Jkt 069102 PO 00000 Frm 00020 Fmt 0689 Sfmt 0634 E:\BR99\E05MY9.000 E05MY9 8694 EXTENSIONS OF REMARKS May 5, 1999 As an additional procedure along 2 p.m. 2:30 p.m. with the computerization of this infor- Commission on Security and Cooperation Energy and Natural Resources mation, the Office of the Senate Daily in Europe Forests and Public Land Management Sub- Digest will prepare this information for To hold hearings to examine the status committee printing in the Extensions of Remarks of the International Criminal Tribunal To hold hearings to examine fire pre- paredness on Federal lands. section of the CONGRESSIONAL RECORD for the former Yugoslavia. on Monday and Wednesday of each SD–2255 Cannon Building SD–366 week. MAY 19 Meetings scheduled for Thursday, MAY 12 May 6, 1999 may be found in the Daily 9:30 a.m. 9:30 a.m. Indian Affairs Digest of today’s RECORD. Indian Affairs To hold oversight hearings on HUBzones To hold hearings on S.614, to provide for MEETINGS SCHEDULED implementation. regulatory reform in order to encour- SR–485 age investment, business, and eco- MAY 10 Health, Education, Labor, and Pensions nomic development with respect to ac- 1 p.m. To resume hearings on proposed legisla- tivities conducted on Indian lands; and Judiciary tion authorizing funds for programs of S.613, to encourage Indian economic de- Administrative Oversight and the Courts the Elementary and Secondary Edu- velopment, to provide for the disclo- Subcommittee cation Act, focusing on Title I provi- sure of Indian tribal sovereign immu- To hold oversight hearings on the inves- sions. nity in contracts involving Indian tigation of TWA Flight #800. SD–628 tribes,and for other purposes. SD–226 Energy and Natural Resources SR–485 Business meeting to consider pending 2 p.m. Energy and Natural Resources MAY 11 calendar business. National Parks, Historic Preservation, and 9 a.m. SD–366 Recreation Subcommittee Environment and Public Works 10 a.m. To hold oversight hearings on the status Business meeting to consider pending Judiciary of Youth Conservation Corps and other calendar business. Technology, Terrorism, and Government job programs conducted by the Na- SD–406 Information Subcommittee 9:30 a.m. tional Park Service, Bureau of Land Business meeting to consider S.692, to Energy and Natural Resources Management, Forest Service, and the To resume hearings on S.25, to provide prohibit Internet gambling. U.S. Fish and Wildlife Service. Coastal Impact Assistance to State and SD–226 SD–366 local governments, to amend the Outer 2 p.m. Continental Shelf Lands Act Amend- Judiciary MAY 20 Immigration Subcommittee ments of 1978, the Land and Water Con- 2 p.m. To hold hearings to examine workforce servation Fund Act of 1965, the Urban Energy and Natural Resources needs of American agriculture, farm Park and Recreation Recovery Act, Energy Research and Development, Pro- and the Federal Aid in Wildlife Res- workers, and the United States Econ- duction and Regulation Subcommittee toration Act (commonly referred to as omy. To hold hearings on S.348, to authorize the Pittman-Robertson Act) to estab- SD–226 and facilitate a program to enhance lish a fund to meet the outdoor con- Intelligence training, research and development, servation and recreation needs of the To hold closed hearings on pending intel- American people; S.532, to provide in- energy conservation and efficiency, and ligence matters. consumer education in the oilheat in- creased funding for the Land and Water SH–219 Conservation Fund and Urban Parks dustry for the benefit of oilheat con- sumers and the public. and Recreation Recovery Programs, to MAY 13 resume the funding of the State grants SD–366 program of the Land and Water Con- 9:30 a.m. 2:30 p.m. servation Fund, and to provide for the Energy and Natural Resources Energy and Natural Resources acquisition and development of con- To hold hearings on S.698, to review the Energy Research and Development, Pro- servation and recreation facilities and suitability and feasibility of recovering duction and Regulation Subcommittee programs in urban areas; S.446, to pro- costs of high altitude rescues at Denali To hold joint oversight hearings with the vide for the permanent protection of National Park and Preserve in the House Committee on Government Re- the resources of the United States in state of Alaska; S.711, to allow for the form’s Subcommittee on National Eco- the year 2000 and beyond; S.819, to pro- investment of joint Federal and State nomic Growth, Natural Resources and vide funding for the National Park Sys- funds from the civil settlement of dam- Regulatory Affairs, on the Administra- tem from outer Continental Shelf reve- ages from the Exxon Valdez oil spill; tion’s fiscal year 2000 budget request nues; and the Administration’s Lands and S.748, to improve Native hiring and for climate change programs and com- Legacy Initiative. contracting by the Federal Govern- pliance with various statutory provi- SD–366 ment within the State of Alaska. sions in fiscal year 1999 appropriations 10 a.m. SD–366 acts requiring detailed accounting of Judiciary 10 a.m. climate change spending and perform- To hold hearings on how to promote a re- Environment and Public Works ance measures for each requested in- sponsive and responsible role for the To hold hearings on issues relating to crease in funding. Federal Government on combatting the Clean Water Action Plan. SD–366 hate crimes. SD–406 SD–226 MAY 25 Foreign Relations Health, Education, Labor, and Pensions 9:30 a.m. East Asian and Pacific Affairs Sub- To hold hearings on the nomination of Energy and Natural Resources committee Richard M. McGahey, of the District of To hold oversight hearings on state To hold hearings on the policies between Columbia, to be an Assistant Secretary progress in retail electricity competi- the United States and China, focusing of Labor. tion. on business and trade. SD–628 SD–562 2 p.m. SD–366 10:30 a.m. Judiciary MAY 26 Governmental Affairs Administrative Oversight and the Courts Oversight of Government Management, Re- Subcommittee 9:30 a.m. structuring and the District of Colum- To hold hearings to examine the Depart- Indian Affairs bia Subcommittee ment of Justice’s refusal to enforce the To hold oversight hearings on Native To hold hearings on multiple program Law on Voluntary Confessions. American Youth Activities and Initia- coordination in early childhood edu- SD–226 tives. cation. 342 SR–485

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